YouSaid · the spoken record

Ben Forman

lines on the record: 93
first: 2025-04-21
most recent: 2025-04-21
sittings or episodes: 1
sources: podcast

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“Someone once said no one's going to help you, but no one's going to stop you. That's some of the best career advice I've ever received. I was of the mind that the path to success was maybe staying on the paved road. And that involved the least amount of risk. But the reality is that sometimes like staying in that safest path is actually the riskiest path of all. And so really it's two things. It's don't rely on anyone else to create your success. You have to really push for it yourself. And the second thing is if you can add value to a person or a company, do it. They're not going to stop you. They're not going to limit your responsibility because you're too young or you don't totally know what you're talking about. If you're doing a good job, people are going to be more than willing to give you responsibility. And so I think that's an empowering message because”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's really the importance of hard work. My parents always taught me that little by little does the trick. If you do the right thing over and over again and focus on practice and consistency, you'll get to where you want to go. So every big thing that's ever been built is the collection of lots of small things being done right over and over again. And my dad has said, you know, sometimes you need to swing the hammer a hundred times to get the nail in. And that's always resonated with me.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“In fifth grade, I was playing in the Washington State Chess Championship, and it was a five-game tournament. I'd won the first four games, and I was in the fifth game playing for the title. And I was in a position that 99 out of 100 times I would win. But I let my guard down and I kind of rested on my laurels and I lost focus. I ended up losing. And it was an absolutely devastating experience because I had worked so hard to get to that point. I'll never forget it. My takeaway from it is you have to take a job end to end. You can't take something to the one yard line. You have to get it across the finish line. Otherwise, it doesn't count.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Henry Kravis is one of them. He was a day one investor in Parify and was a mentor to me and believed in me. I think when someone believes in you, it's very humbling and empowering. I think he believed in me. I'm not sure how much he believed in crypto at the time, but he respected the entrepreneurial journey. And so that means a lot to me. The second, I've had a number of bosses over the years that have been extremely challenging to work for and extremely neurotic and have held me to a very high standard. It was painful to work for them at times, but I don't think I'd be where I am today if it wasn't for being in the trenches with them.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think for me, it's dogma and it's having a very strong rigid view without doing work. I remember when I learned about Bitcoin, I was immediately dismissive. And my friend said, wait a second, have you done any of your own diligence on Bitcoin? And I was like, okay, no, it's a fair point. I can't have a view without actually having done my homework. In order to have a view, in order to have the right to have a view, you have to have done your work.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I think when people overrate talent and underrate the importance of hard work, I've seen a lot of extremely smart people underperform. They aren't willing to work hard. And I think it's incredibly rare to find people that are willing to put in the work to succeed. I think the best people at what they do work incredibly hard to get there, whether it's like LeBron James or Michael Phelps or musicians, artists, investors, et cetera, they don't televise LeBron James practicing 16 hours a day, focusing on his diet, meditating in the gym, in the weight room with trainers. You just see the games and he makes it seem easy. But hard work beats talent when talent doesn't work hard is the way I look at it.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I learned how to play chess from my dad when I was four years old. I played competitively growing up. I still play at chess clubs or in the park. And I take lessons online. And I just love chess. It's the consummate game of strategy, skill, decision making. I'm trying to teach my four-year-old son, but he is not interested at all.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pandemic crypto took another tumble, but in mid-2020, you had DeFi Summer, 2021, NFTs, Metaverse, tons of talent came in, and now in 2022, we're kind of back in a bear market. Now, it's happened at a time when capital markets are also trading off. So I think that the best way to approach the space is really to think long term. And it's never been more clear to me that all the fundamentals are in place for a lot of growth.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very clear to me these networks are growing, they're working, there's never been more talent entering and building in this ecosystem. The technology is to a large extent been de-risked. I think regulation is more of an opportunity at this point than a risk. And price is going to bounce around. Prices rarely like a leading indicator for fundamental progress and traction. When I got into the space in 2014, there had been a bull market in 2013. Then there was a bear market in 2014-15. People kind of rode off Bitcoin and crypto at large. In 2016, people were excited about the blockchain space, but not Bitcoin. In 2017, there was a boom, the ICO boom. Then 2018, 2019, another bear market. A lot of stuff was built, but it was a bear market for price.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So look, I take the view that if you're investing capital really over a timeframe of quarters or even a year, it's really difficult to predict what's going to happen in the space. If you take a view of like what will this world look like 10 years from now in the year 2032,”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Leading indicator. But I think to build an enduring asset management firm, you need to be good during times of war and also during times of peace. And in a way, we're back in a time of war right now. So it's been exciting and I feel pretty fortunate just to be where we are with the team that we have.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Almost feel like we're just in the middle of climbing the mountain, and every once in a while you have to pause and look behind you. It's been one of making a lot of mistakes and learning from them. It's also been a very humbling experience overall because you realize you can make great decisions and you don't necessarily see the results of those decisions for a while. One of the things I've just learned as we look to back founders in the space is just the value of perseverance. Sometimes if you just stick with things a little bit longer, they end up working. It's been really exciting. I see I'm just so excited about what's happening in the space. I mean, the amount of talent that's building in applications in Web3, the number of resumes we're getting from people on Wall Street and the hedge fund world or engineers at big tech companies that want to enter and spend their career in the blockchain space, I think is a really powerful.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, if we circle back to Parify and where you were at the beginning two years ago, roughly, you had battled through those first couple years and then hit this inflection in this last wave. And I'd love to get your sense of what that journey was like to go from battling it out on very small assets to where you are today.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“It used to be that everyone just ran a crypto fund, like a generalist crypto fund. Now the landscape is segmented by geography and by theme and by strategy. So there's obviously quant and fundamental and quantum and a number of different flavors in between, whether it's closed end venture or more trading oriented strategies. But then even a step further, there are now funds that are solely focused on investing in blockchain projects in Africa or focusing on backing teams building DeFi applications out of Asia. We're not going to be able to cover everything at Perify. The world's way too broad within this space. And so we want to back other managers that are pursuing orthogonal ideas, themes, and we can learn from them, share ideas, and then we can kind of help them grow and scale along the way.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Over the years, is a number of these asset managers in crypto were incredible technologists but had never managed capital. So they didn't know what a financial audit was. They weren't familiar with valuation policy or what a PPM even was. And so they just needed guidance. And I enjoy kind of helping and mentoring people that are launching funds in the space. And so we started to take very small minority GP stakes in a number of new emerging funds.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So when I launched Parify, there were maybe 150 to 200 crypto funds in the world. There were a handful that were over 100 million of AUM. Today, there are roughly 2,000 crypto native funds globally that collectively represent caught 50 to 75 billion of capital. And there are also a number of other crossover funds, traditional funds that are now investing in crypto. Perhaps there's been more money from crossover funds, traditional funds investing in crypto than there actually has been from crypto native funds. But I am obsessed and love the art of building an asset management firm. I'm just very interested in it and like all the different things that it takes, culture, team building, processes, compliance. And what we kind of saw.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Kind of give one example. I mean, there are so many ways to answer that question. I think a lot of time there's a quoted yield in yield farms where it say, hey, if you deposit this token, you'll earn 100% APR. And what I think the market has done a bad job at historically is understanding the risk associated with that return. The capital tended to aggressively move towards the highest return, almost agnostic to risk. When you really dig into these stated returns in yield farms, one, there isn't always the right disclosure around the risks that you're taking, but also a lot of time the return is coming in the form of a token that may not have liquidity and there may be lockups associated with it. It's really messy. And so like just taking a return at face value and not thinking about all the other factors that go into it is”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“A certain amount of capital behind them. But there were all these pennies and nickels and dimes to pick up scattered across this new kind of economy. And that was very interesting to us. And so one of the things we do at Perify is we have a strategy that's focused on capturing those tenths of a penny that are scattered across different blockchains. And we do it, one, to make money. We think it's an interesting market neutral strategy, but also it's an incredible mechanism to learn about the space, about what's working. Because again, when you're using these things every day, you really understand them at a deeper level.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So back in the early days of Perify, one thing we forced ourselves to do whenever we invested in any token is we wanted to use the product that was actually behind it. And so we were tinkering around with compound and Uniswap and some of these first generation DeFi protocols. And what we found by using these products is we determined whether or not they actually worked. We understood then from first principles more how they worked and where they fell short. But then we identified that there were all these inefficiencies within DeFi. You may be able to borrow a stablecoin on one application at 4% and then lend it out that same stablecoin on another at 6% and make a spread. Those spreads can be episodic in nature. They come and go and maybe they only account for.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“A different type of investing, it's more quantitative, it's more technical, but it does help inform how we make decisions and how we build theses across the board.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think the lines are blurred between tokens and companies. Sometimes we'll invest in a company and they'll end up issuing a token. Sometimes we'll invest in a protocol, but a lot of value ends up accruing to a company that's really helping build products on top of a network. The actual exercise of understanding those two is very similar. The liquidity profiles can be very different. The risk return can be different, but I think the muscle groups that you're using in terms of evaluating teams, products, markets tend to overlap quite a bit. On the credit side, in terms of using these products, market neutral returns, that is helpful in the sense that we end up becoming users of the networks that we're investing in. And when you use something, you learn a lot, you understand it more deeply.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Curious in your activities, you do call it venture equity investing. You're actively engaged in kind of arbitrage type trading. You buy tokens. In the traditional markets, you often think of these as very different skill sets. There's a venture investor. There's arbitrage hedge quant hedge fund or whatever it is. Is that the same or is it different as you're participating across the spectrum of kind of traditional activities in the crypto landscape?”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“But that's how I look at it as the markets traded down. I think what we've seen is in crypto when the market trades down, everything trades down. And then when the market trades up, things tend to kind of diverge. So over short periods of time, you tend to have a lot of convergence or correlation. But over long periods of time, there's a tremendous amount of return dispersion in this asset class.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“You have to scribe at a lower multiple. Because if you're looking out like five years, 10 years and saying how much cash flow will this protocol do, well, we can make assumptions, but we know we're likely going to be wrong or our confidence interval is much lower. So you have to ascribe a higher discount rate to those cash flows very far out. So because of that uncertainty, I think DAOs probably trade at lower multiples than companies, at least in the near term. Now offsetting that, these networks tend to not have any CapEx. There's no balance sheet. Some of them have very high cash flow conversion. Some of them are effectively 100% margin because they'll just clip a little fee of every transaction and they kind of run on their own. So there's a wide range and everyone requires like very individual underwriting.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've seen things that have traded at like one time's earnings or two times earnings. We've also seen things that are trading at 100 times earnings plus. And all of them have very differing growth rates. I think that it's helpful to be mindful of fundamental analysis in crypto, but you also don't want to rely on it too much for a specific reason, which is in crypto things are changing very quickly. You can have a protocol that's growing 10x year over year and then all of a sudden earnings”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“We've had this big sell off in the prices of tokens and crypto assets. And I'm curious, for those that are generating cash flows as you're looking at them, what are the range of multiples if you're comparing it to equity multiples that you see in the DeFi space?”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“We're constantly reassessing our investment thesis. One big difference in this asset class is you don't only have to decide what to buy. You have to decide what to sell and when to sell. Inventure, you typically just make a decision of what to buy. And then you wait. You help a founder and then you wait. Yes, you can take off money in a secondary, but generally you don't control the decision of when to sell. In crypto, you make a decision of what to buy, but then you can also decide to change your mind if your thesis doesn't play out.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or not? Are they working on multiple things or not? So we look at like all the same types of things that you would look at if you were looking at a company. In addition, you look at the integrity of the smart contracts and code that's been written and you vet that. And then the other point that I think is sometimes lost is most of these tokens are claims on cash flows. We think about them that way. Most of these DAOs, you can either look at a book value or look at fee capture and you could run a discounted cash flow, look at a price-to-earnings multiple, and you can see all these metrics in real time. There's not quarterly reporting, but every, at least on Ethereum and at various blockchain by blockchain, every 15 seconds, you get a new 10Q with new information. And so you can digest this in real time.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Very fragmented and it takes a lot of work to really get your arms around what these networks do, why a token accrues value, and really what a roadmap looks like and what the team around these projects looks like. So the way I look at our research process is we look at tokens not dissimilar from the way someone at KKR or TPG the way we would evaluate a company. So we are understanding like, is there a solid use case and product here? What do the competitive modes look like? Is this company or product gaining market share losing market share? And why? What's the value capture and the margins associated with the product that's being offered? Who's the team working around the product? Are they incentivized?”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, yeah, tokens are really interesting because they're very much a new asset class. They're the fifth asset class in the world. Pre-tokens, there were equities, fixed income, currencies, and commodities. And really every asset could be put into one of those four categories. Interesting about tokens is they're really a brand new category. There are thousands of tokens now that exist. And what's interesting about this market is There's no gap financial statements, no 10Ks or 10Qs, no investor relations department to call and ask questions to. You can ask people in a Reddit forum or on Discord or talk to core developers, but because there's no person calling the shots, you have to talk to a lot of people to really understand what's going on. But this market is one where non-standardized information, the information”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ever again. No one contributed to it. What would that future look like? Would it still continue to accrue cash flow earnings? Or is it reliant on people? Because if it's reliant on people, there tends to be more challenges with that. And you're taking a different type of risk.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“The Dow and the Dow space and DeFi, et cetera, the more decentralized the network tends to be the slower it moves. But everything's very much on a spectrum. We've seen a lot of challenges in building DAOs. I suspect that 98, 99% plus of the blockchain applications, the DAOs that exist today are not going to be around long term. It's extremely challenging. And in some ways governance and human involvement is almost a bug. It's not a feature. You want these systems and networks to stand on their own two feet almost as public utilities. So one of the frameworks that we apply when we evaluate projects in the space, and sometimes this is more as a thought experiment, we said if no one touched the code of this network,”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“It's very messy and it's very challenging. It's much slower to build a decentralized network than it is to build a centralized company. I think about decentralization really on a spectrum. Even in the world of companies, when an entrepreneur founds a business and it's his or hers, they make every decision. on the furthest end of the spectrum, they have complete control. But as that business grows, they delegate more responsibility to others. There may be a board. There may be venture capitalists. Decision making is more decentralized. Ownership is more decentralized. Through that process, things may move a little bit more slowly because you have to get more approvals. Communication isn't seamless. So there's a trade-off. Centralization, it produces more speed. Decentralization tends to produce less speed. Same in”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, a network like MakerDAO has something on the order of 50 different core units that are each responsible for the finance and accounting of the DAO, the growth marketing strategy of the DAO, the core engineering services, and they all have to apply to the DAO for compensation on a periodic schedule. So there's like roughly $40 million a year of expenses that are being paid out to over 100 different individuals contributing to that DAO. So it's very similar to a company in that sense, but there's no board of directors, no management team, and the workforce is very decentralized and distributed.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Token holders. And then the last category is just sometimes in certain cases these earnings just accrue to a treasury over time. And people can apply to DAOs and say, hey, I'm a developer or we're a group of five developers. We want to perform and write this type of code or perform these services for the DAO. We'd like to earn.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think about these DAOs and these applications almost as being toll booths on the internet. Like if people interact with them, they take a small cut. And that value accrues to a smart contract and accrues to a treasury. Very similar to if a company in the real world earns cash, it accumulates in their bank account. If a company wants to return that cash to their shareholders, they can either issue a dividend, they can use that cash to buy back stock, or they can decide to invest in growth and distribute that value to employees or people building, people helping their company. So it's very similar in the DAO space. So some of these earnings get funneled to token buybacks, which are akin to stock buybacks. Others are just distributed as a dividend to”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sounds like, sorry, in that NXM example, that the DAO ends up being used as a form of capital allocation in the sense that you're deciding on what policies to write. You're deciding on how capital gets spent. So I'm curious how capital allocation works in DAOs.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Plus, they theoretically have a future claim on all the premiums paid in from people buying insurance policies, less the claims paid out. And with respect to what types of insurance policies should be provided, if the Dow should be paying anyone, any fundamental changes to the protocol need to be voted on by NXM token holders. So anyone that owns an NXM token is theoretically part of the DAO, whether or not they want to participate in governance is a different story. I think most people within DAOs or who own a token tend to just be completely passive. There tend to be a small group of people that really care and then a long tail of people that really don't care. So everything in DeFi really fundamentally is a DAO.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So DAOs are really just a new way to organize people and capital. It's really just a new step forward, a new evolution of an LLC or corporation. Really, everything in DeFi is a DAO, whether it's a money market platform or a decentralized exchange or an insurance protocol. A DAO really refers to the equity, almost the equity piece of the capital structure that governs that piece of software. So one example back on the point on insurance, I was mentioning Nexus Mutual. So there's a token called the NXM token. And anyone that owns NXM has a direct claim on the money in the capital pool, which is roughly $400 million.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the INGs you didn't mention but that comes up a lot is governing. And we hear about DAOs as a governance mechanism on the blockchain. It strikes me that it'd be pretty important within DeFi and would just love to hear how that kind of governing piece with DAOs, when it's important in DeF”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Effectively mitigating that risk. And so it's an interesting product. Within Nexus Mutual, there's this capital pool that pays out claims. There's roughly $400 million in the capital pool. There's roughly $20 million a year of annualized premiums being paid in. And it's an interesting experiment. It's gone on for a couple years. It hasn't really scaled. Again, I think people are most of the capital in crypto today, it has been more risk-seeking. rather than focused on risk mitigation. So insurance is still kind of finding its legs.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“There's no FDIC insurance in crypto. So there are a few different insurance related protocols that are popping up. One is called Nexus Mutual. This is an Ethereum-based insurance marketplace. It's regulated in the UK. And the way it works is you can show up to Nexus Mutual and you can buy a policy that ensures against a particular protocol having a bug. So one example is let's say you're lending out stable coins on Aave earning 5%. Ave being a decentralized money market. And you're uncomfortable with the software risk of Aave. You could buy an insurance policy on Aave from Nexus Mutual for, say, 50 basis points a year. Rough numbers. So instead of making 5% uninsured, you're making four and a half.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So hedging is really interesting. I think about hedging in the same category as insurance. It's how do people buy financial products that protect them? And one of the things that we've seen in talking to institutions is that they want to use blockchain-related products, but they're uncomfortable underwriting smart contract risk and software bugs and hacks.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Think indexing is this idea of being able to buy a token that represents an asset management product. And so that could be an ETF, that could be a more actively managed product. And I think if you think about that category today, it's grown quite a bit, but it still has, I would say, limited product market fit. I mean, if you think about the financial system, Vanguard, Fidelity, BlackRock, State Street, ETFs are pretty efficient. You can buy S&P 500 exposure for a few BIPs. So I think we'll continue to see growth in that area. There hasn't been as much demand for people that want to buy index funds in crypto. People want to pick tokens and catch the next 100x.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“And so, those are, I think, the types of things that really make markets more efficient. You can build all sorts of new bespoke structured products because really you're only limited by the human imagination. It's really the intersection of software and finance. So anything that can be thought of can be designed through code. So for all those reasons, I still think permission DeFi is incredibly interesting, incredibly powerful. probably will be orders of magnitude larger than the DeFi that we know today.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“The next thing that comes to my mind is really that all the activity within permission DeFi is completely transparent and open. It's not in dark pools. So everyone can see tick-by-tick data, activity of all the participants in traditional finance, that data you have to pay exchanges for, or they don't disclose it. And you're thinking about the traditional financial system. You have 13F and 13G files.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's not t plus two settlements for equities or t plus 20 for bank loans. These are all bearer instruments. So there's no global working capital drag from all the unsettled trades in the world. It happens instantly. That's powerful. The second is that within permissioned DeFi, there's still reduced platform risk. So we all saw what happened with the LME when they canceled nickel trades or what happened with Robinhood and GameStop when they simply said, you can't buy GameStop. And there is judgment risk or platform risk you're taking whenever you're interacting with any financial product today because you're doing it through a centralized authority and in permission DeFi, there's not that same degree of risk because you have the trust guarantees of interacting with a blockchain application.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think there's always a trade off. We've decided on a global scale that money laundering is a bad thing and we don't want criminals, terrorists interacting with the financial system. So there is a trade-off between just being totally open and letting everyone interact with financial products and being inclusive. It's interesting because sometimes when you think about this state of the world, many would say, well, what's the point? Isn't that the world we have today? The whole point of this is that it's permissionless. And the reason I'd push back is I would say that's one benefit of DeFi and blockchains is that their censorship resistant, they're permissionless, anyone can use them. But there are a laundry list of other really important benefits as well that I would highlight. So one, you have instant settlement when you're using DeFi.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“If we need this permissioned DeFi in order to scale, I'm curious what that implies for the large percentage of the world you mentioned earlier that are unbanked. Does that somehow the need for KYC type things for certain types of trading come in the way of those people entering a banking system through DeFi?”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source
“Through KYC AML. So just an example of this is imagine the big banks in the US, Goldman, JP Morgan, Bank of America coming together and saying, hey, we want to build trading venue on top of Ethereum. But the only people that can participate in it are those that have gone through KYC AML. And if they do make it through that process, they'll get an NFT in their wallet. If they're qualified purchaser, they'll get a certain NFT. If they're an accredited investor, they'll get another NFT, depending on which country they're located in US, non-US, they'll get maybe a third NFT. And based on these identity verifications memorialized to these NFTs, they'll be allowed to use our architecture and our system. So it's permissioned, it's whitelisted. These are closed smart contracts, but they're still built on top of open network.”
2025-04-21 · Capital Allocators · [REPLAY] Ben Forman – Opportunities in DeFi (EP.256, Crypto for Institutions 2, EP.03) · IDENTIFIED FROM THE TRANSCRIPT · source