Umami Labs CEO Alex O’Donnell grew up on the outskirts of Philadelphia earlier than attending Temple College to check literature and economics. That path led him to commit seven years of his life as a monetary journalist at Reuters, the place he specialised in M&As IPOs.
He mentioned his educational focus created a “fairly pure synthesis” when it got here ot monetary journalism. Nonetheless, he mentioned he turned “disenchanted” along with his business whereas he was cooped up at dwelling throughout the Covid-19 pandemic. “There actually was a three-way alliance between journalists, authorities officers and know-how firms making an attempt to manage the circulation of data,” O’Donnell mentioned in an interview with Cointelegraph.
He started tinkering with cryptocurrency, which led to his introduction with Umami DAO — and in the end his creation of Umami Labs.
O’Donnell and his spouse, Sanjana, are making ready for a “third, smaller particular person” to affix their household subsequent 12 months. Within the meantime, he mentioned he’s additionally gearing up for one more crypto-related enterprise. The small print aren’t totally public but, however he mentioned he plans to launch extra data the months forward.
1) How’d you make the transition from journalism to crypto?
I’d been a journalist for the higher a part of a decade primarily masking mergers and acquisitions. I at all times had an curiosity in finance and tech. However I began turning into a bit disenchanted with the mainstream media across the time of the pandemic. That was the primary time I began turning into a bit extra cynical about my very own business’s position within the data economic system. So I began paying extra consideration to points like privateness, censorship and different issues I had not taken as a lot curiosity in earlier than.
In 2020 I spent most of my time masking the Covid-19 pandemic. There actually was a three-way alliance between journalists, authorities officers and know-how firms making an attempt to manage the circulation of data. It wasn’t even that the official line was unsuitable. It was that dissent was being stifled within the first place. That basically peaked my curiosity in decentralized platforms.
At that time, I began to change into meaningfully excited by crypto. Provided that I got here from monetary journalism, decentralized finance (DeFi) particularly caught my curiosity. I actually began actively investing in numerous crypto protocols as a retail investor in 2021. I used to be getting extra concerned in DeFi communities, and one in every of them was the predecessor to Umami — ZeroTwOhm.
2) How did that result in you creating Umami Labs?
I obtained concerned in ZeroTwOhm as an everyday retail investor aping in as many individuals did. It was a reasonably small neighborhood, so I used to be in a position to fairly rapidly get in touch with the builders constructing the protocol.
However they didn’t actually have a transparent sense of course about what they wished to do subsequent. That they had bootstrapped a number of hundreds of thousands of {dollars} in capital that was largely simply sitting there. It felt like any individual wanted to step in, and the builders had been, frankly, very happy at hand accountability off to another person, which ended up being me.
3) What are you targeted on now?
What I’m most excited by now could be zeroing in on an issue that turned very clear to me throughout my time at Umami. Basically, as Umami Labs geared as much as launch our first product in early 2023, I used to be assembly with lots of crypto-focused hedge funds and enormous particular person traders. There was this gaping want for some technique to securely earn curiosity on USDC, USDT, and different stablecoins with out having to simply utterly transfer off-chain.
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I already targeted at Umami on growing one other product that was designed to generate returns on stablecoins, however the actual want is for one thing that’s as safe and boring and dependable as a standard financial savings account, however for individuals who had been holding stablecoins on on-chain wallets. There have been forays into that space by different gamers, however I’ve but to see an entire resolution to that drawback. It takes a mix of getting the suitable regulated entities off-chain and seamless mechanisms for on- and off-ramping on-chain.
That’s one thing I’m personally targeted on now. I’m collaborating with some others on growing one thing, and getting suggestions from potential early customers. We’ll have extra particulars to share throughout the subsequent couple of months. However for now, it’s nonetheless within the early phases.
4) What do you assume would be the greatest crypto developments in 2024?
In my private opinion, I do assume that the excessive level of the crypto market in 2021 actually was the high-water market of this period of very DIY, unregulated, type of community-run bootstrapped protocols. I feel that getting in subsequent years, together with now, we’re going to see a reasonably stark shift by which DeFi stops trying a lot like a very separate ecosystem. It’ll for all intents and functions change into a subset of TradFi.
Associated: Coinbase launches regulated crypto futures companies for US retail merchants
I don’t assume the DeFi versus TradFi distinction goes to final. Clearly, we’re seeing numerous ETFs present process the registration course of. Within the background, main gamers are acquiring licenses to interact in a wider array of monetary actions within the U.S. Coinbase, for instance has, registered as a Futures Fee Service provider and likewise as a Designated Contract Market with the CFTC. That authorizes them to function an alternate and open accounts throughout the futures markets. These will probably be focus, in fact, on Bitcoin and Ether.
Coinbase and Circle are accumulating totally different elements that may enable them to change into deeply built-in operators inside conventional finance. I feel that may be very attention-grabbing. In parallel to that, you will have of us reminiscent of Constancy and Franklin Templeton and BlackRock growing regulated crypto funding merchandise. Franklin Templeton is growing its personal tokenized Treasury Invoice ETF. It’s fairly clear that will probably be a supply of momentum for the business over the subsequent a number of years.
5) What’s probably the most attention-grabbing to you as an funding proper now?
Actually, the one factor in crypto that I’m excited by as a long-term funding is Ether and its staking and re-staking derivatives. I feel we’re nonetheless at some extent the place the overwhelming majority of potential investments in crypto are extraordinarily speculative. The underlying worth proposition of the tokens remains to be unclear. I feel ETH is without doubt one of the few exceptions. So I do maintain ETH, and I’m snug with it as a long-term funding.
I’m listening to the staking protocols like Lido and Eigen Layer. Eigen permits individuals to take ETH they’ve already staked and re-stake it to any variety of associated staking protocols. That very considerably expands the vary of actions that may be accomplished trustlessly. I count on to see, over time, lots of constructing on prime of Eigen and different comparable protocols. I feel we’ll see a proliferation of funding funds and ETFs specializing in taking ETH and staking it and re-staking it.
6) What do you assume is the principle hurdle to mass adoption of blockchain know-how?
There must be an entire fusion of protocols on the bleeding fringe of blockchain, and extra established firms which are built-in into the normal monetary sector and able to working compliantly from a regulatory perspective. We must see established gamers integrating refined sensible contracts and taking full benefit of blockchain’s potential. Then we’ll begin to see blockchain turning into a part of on a regular basis monetary transactions and actions.
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