Jon Wiesblatt, CEO of Liquid Meta
By Exec Edge Editorial Staff
Liquid Meta Capital Holdings (NEO:LIQD), a decentralized finance infrastructure and technology company, is the latest DeFi company to go public. Unlike its competitors such as WonderFi Technologies Inc. (NEO: WNDR) (OTCMKTS: WONDF) and Defi Technologies Inc. (NEO: DEFI) (OTCMKTS: DEFTF) who focus on retail consumers, Liquid Meta is focused on the institutional side of the ledger. That makes it the first pure-play public DeFi company to concentrate in this domain.
The news of Liquid Meta listing on the Canadian exchanges was made official on December 20, when the company received final approval to list its common shares on the Neo Exchange. Over the next 12-months, the company will be focused on scaling its niche liquidity mining operations, while advancing the development of tools and software products to onboard other pools of capital seeking to monetize the growth of DeFi.
The core objective of its liquid mining operations is to generate consistent fees—not necessarily through exposure to the volatility of digital asset prices themselves. This can be achieved in various ways, although liquidity mining is expected to be Liquid Meta’s primary area of focus.
Liquidity mining—also known as yield farming—refers to farming cryptocurrencies inside liquidity pools, which are domains where investors offer liquidity (liquidity providers). They are eligible to receive a percentage of the fees paid while trading in a specific currency pair. Each liquidity pool is specifically designed for a particular currency pair, such as ETH/USDT, ETH/DAI, ETH/USDC. Money put in these liquidity pools is exchanged or borrowed by other users on other platforms.
While Liquid Meta is still in the development stages with its technology platform called Meta Bridge, it will undergo a comprehensive test-out of internal systems before casting a wider net to institutional clients. This will serve to execute and validate a real-world profit model before engaging the sales channel. If successful, Liquid Meta stands a fair chance of generating positive cash flow even before the first partnership or licensing agreement has been signed.
Obviously, providing a robust fintech platform for use in the highly-regulated banking industry is a monumental task. Any new platform must satisfy a vast array of regulatory and security benchmarks before institutions will engage, such as analysis, reporting & accounting, pre-trade compliance and network security. Providing Liquid Meta can systematically resolve these sticky issues during the buildout of Meta Bridge, it should be in a prime position to engage institutions once the platform matures.
Leading Liquid Meta is CEO Jon Wiesblatt, who has over two decades of experience in the financial industry in various roles specializing in equity research, portfolio management, capital markets, hedge funds, and investment management. Mr. Wiesblatt has spent the last 15-years as an institutional investor working as a Portfolio Manager for several multi-strategy funds, a Canadian Equity Mutual Fund at Sprott Asset Management, as well as recently serving as an advisor to one of Canada’s largest Family Offices, Reichmann International Development Corp.
Decentralized Finance Is a Booming Market
Liquid Meta believes that the broader trend towards digital assets is secular and will increase exponentially over time. This macro belief in market potential is shared by other prominent industry players which have made fortunes purchasing cryptocurrencies before it became fashionable.
For example, crypto investor Matthew Roszak told Business Insider in August that he expects DeFi can top $800 billion in notional assets in 2022. Roszak, whose net worth is approximately $1.5 billion according to Forbes, thinks mainstream crypto adoption, a global chase for yield, and elevated inflation can all expand DeFi’s profile.
Of course, we’re in a time when a chase for yield is exceptionally coveted. Most banks essentially offer zero yield on regular consumer savings accounts while inflation is soaring at generational clips. For November, the Consumer Price Index increased 0.8 percent on a seasonally adjusted basis after rising 0.9 percent in October, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all items index increased 6.8 percent before seasonal adjustments, which was the highest level in almost 40 years.
It is in such low interest and high inflation environments that consumers are scrambling for higher-yield investment in order to retain purchasing power.
Another datapoint capturing the success of DeFi is represented in the Total Value Locked (TVL) across the various protocols and applications. At present, the TVL is US$155 billion, which is up from less than $1 billion as of June 2020. That’s an aggregate increase of 11400% growth in about eighteen months.
Total Value Locked, in the context of cryptocurrency, represents the sum of all assets deposited in decentralized finance (DeFi) protocols earning rewards, interest, new coins and tokens, fixed income, etc.
It’s the promise of insatiable growth that is driving outsized interest in the space. Particularly in first-mover companies such as Liquid Meta, which is seeking to compress incredibly complicated and fragmented technological protocols under one platform. Should it succeed, the returns for patient investors could be well worth the wait. At the very least, Liquid Meta has increased the odds of success, by raising money through the public listing and having the ability to raise more publicly in the future, should it so choose.
The strong relative performances in associated DeFi competitors such as WonderFi Technologies Inc. and Defi Technologies Inc. has only raised expectations further.