NEM is well-positioned to be a key player in future iterations of the blockchain space, CIO Dave Hodgson said.
Mr. Hodgson, who doubles as the managing director of NEM Ventures, the platform’s VC arm, has spent 15 years as an enterprise architect. He was working on a P2P trading solution involving domestic solar generation and batteries with a company which opted for NEM’s technology. Mr. Hodgson liked what he saw so much that he joined NEM.
NEM is a relatively new chain in DeFi but is well-positioned to answer questions industry will have about the technology, Mr. Hodgson noted. Some of those troubles were self-induced, as the ICO craze highlighted the importance of an appropriate governance model that doesn’t require a regulator or centralized agency.
“It makes a ton of sense particularly with some of the learnings that came out of 16, 17 and 18 would tend to imply we needed to mature in that space,” Mr. Hodgson said.
NEM was not originally a big DeFi player. NIS1 did not feature on-chain lockups which would allow on-chain decentralized swaps and did not support on-chain smart contracts, Mr. Hodgson explained. The new chain addresses those issues, and NEM’s Symbol, a public blockchain scheduled for release in December, will be considered along with Polkadot and Cosmos by platforms looking to develop new solutions.
NEM’s new functionality allows tokens to be wrapped into Ethereum and other ecosystems, Mr. Hodgson explained. This was harder for NEM at its beginning, as it debuted six months before Ethereum, when there was little smart contract activity.
Soon-to-be-implemented partnerships with Stakehound and Hummingbot will allow the XEM token to be wrapped onto Ethereum”, Mr. Hodgson said. “Stakehound will hold XEM in a custodial solution where XEM will be protected by Copper.co, which is fully regulated and insured out of the United Kingdom. Ecosystem participants will buy XEM tokens and send them to Stakehound, who return staked XEM and also run Staking as a Service which results in a yield that is paid to staked XEM holders in the form of more tokens. The staked XEM holder always has the right to reclaim the custodied XEM. Any earnings generated whilst the coins sit in the operating nodes will be distributed out in staked XEM in the form of a yield proportional to the size of the staked XEM holding.”
Mr. Hodgson said he expects the DeFi ecosystem to accelerate over the next three to six months as the effects of recent hacks and, hopefully, a couple of macroeconomic events fade.
“Symbol’s very much positioning to line up with that as well,” Mr. Hodgson said.
He added Stakehound will support both XEM and XYM (Symbol’s native token), and Hummingbot will support added liquidity.
“One could imagine the arbitrage between the wrapped token and the native token is likely to bring them roughly to parity,” Mr. Hodgson said.
Mr. Hodgson said NEM Ventures has both a narrow and wide focus. While they invest in companies building on the NEM blockchain or which expand the ecosystem in some way, there are many sectors where the technology can be deployed. Support typically is provided between the seed and Series A rounds at sums ranging between $150,000 and $300,000.
“We’re less aggressive contractually than a straight VC looking at financial return. We also want to see ecosystem adoption,” Mr. Hodgson said. “We want to find that balance between the two.”
NEM recently integrated with Propine, who will provide full custody and issuance support for the Symbol platform on its mainnet launch. Symbol users will benefit from Propine’s full suite of services, including custody, issuance, asset servicing, reporting and the facilitation of trade settlement. See a blog post here with more info.
The Monetary Authority of Singapore integrated Symbol to launch a security token. NEM technology also supported Wave Financial’s Wave Whiskey Fund 2020, which allows investors to earn a projected 20 per cent IRR over six years by investing in craft Kentucky whiskey.
Supply chains are going to radically benefit from blockchain technology and unlock liquidity, Mr. Hodgson believes. But to fully unlock that potential systems have to be horizontally integrated. Symbol will play a key role in this added functionality, as it can be deployed between public and private blockchains and swap data between the two.
“It’s entirely possible to run a private chain, enterprise-grade supply chain product that is effectively free aside from your servers internally and use the public chain in order to gather the information,” Mr. Hodgson said.
If you wish to get to the point where you can scan a product in Walmart and gather good background information on it, that data cannot be walled off in a private chain, Mr. Hodgson said. Either a public chain or sufficiently open consortium chain is needed.
Is there value in being able to transfer information between different blockchains? While I have spoken to some who question the premise, Mr. Hodgson believes there is and cites Ren, whose RenVM open protocol does just that.
With blockchain technology rapidly maturing, perhaps in four or five years we’ll see a few key players, but until then, partnerships will drive the most progress.
“I think we’d all be quite pigheaded if we all thought our chain was the best for every single scenario,” Mr. Hodgson said. “And realistically most solutions require multiple scenarios. They’re not single-use case solutions.”