Kamino让代币化资产真正派上用场的计划 | Michael Weisz

Nothing said on Empire is a recommendation to buy or sell any investment or product. So, hello everyone. Welcome back to Empire. We've been wanting to do this for a long time. People at Kamino could see that Kamino had a new CEO. His name is Michael Weisz. I've known about this for some time.

Some Kamino investors have told me over lunches and dinners that they are extremely excited about Kamino. They were from different liquid funds and venture funds, and every time I asked why, they said I just needed to meet this guy, Michael, who was joining the team as CEO. They said he was a true professional. He has experience working at large companies and real-world experience in fintech, and now he joins Kamino. So today I wanted to invite Michael on the podcast. Michael, welcome.

Thank you. I'm glad to be here. I think this is the first time we're going to have a real conversation about why I joined Kamino and what the vision is, and I couldn't think of a better place to do it.

1. Why Leave Fintech For Crypto?

Perfect. Let's get started. Maybe we should discuss your experience, because you are the co-founder and CEO of Yieldstreet, right? You've been doing this for 10, 11, 12 years. You are a real fintech founder who scaled a real platform, and now you are coming into the cryptosphere.

It seems to me that talent is often going into AI now, and you decided to come into crypto and lead this DeFi protocol, which probably seems strange to your fintech colleagues. Tell me—let's start with the most general thing: What are you doing here?

I've been asked this question often over the past few months, and I think it's actually a lot more obvious than people think. If you look at my career path and how I've spent the last 20 years, I've always been at the forefront of where exciting new technologies meet financial services and investments.

The first decade of my career was devoted exclusively to investing in interesting alternative assets—things that were differentiated and interesting. It all started with litigation finance, loans for professional athletes, trade finance, consumer lending, commercial lending, aviation, and a lot of really interesting assets.

Then I started to realize pretty early on that the people I held most dear—my close friends and my family—had never had access to private markets. Around that time, in 2014, the JOBS Act appeared: a new regulatory framework that allowed for the promotion of these types of investments, which essentially meant the possibility of democratizing access to private-market products. I was very excited about it.

At the same time, technology had radically changed how people interacted with the digital ecosystem. I know it sounds crazy today, but back then people were just starting to use Facebook, while Instagram and LinkedIn were just becoming significant. So I imagined a world where we could simplify the investment experience and democratize access to these products.

I like it.

I seem to usually find myself at the forefront when there's a big moment, when there's a huge market, a significant niche, and an opportunity to create a value proposition.

In fintech, we've seen a real revolution in how users view investing, but the backend has not always kept up with these changes.

What I see in this ecosystem, when I look at the on-chain space, is a whole new paradigm of opportunities for financial markets on the blockchain. To me, this is an incredibly exciting direction for creating liquidity, lending, and distribution on infrastructure that was previously unavailable. So this seems like the perfect place for me.

What do you think is the current image of crypto? I'm sure you have a group chat with other friends—founders and CEOs of fintech companies. What is the attitude toward crypto in the fintech community today?

I will tell you how I think about it and where I think we're heading. I think it's really important to recognize the work that the crypto community, developers, and participants have done over the last decade. In many ways, this was a long stage of scientific research and development work.

When you want to change markets as huge as financial markets—trillions and trillions of dollars, hundreds of trillions—it's not going to happen overnight. This must be verified, tried, and proven in practice. It should go through several cycles.

So when I look at the crypto ecosystem, I see 2 things. First, I see a group of incredibly talented, smart, and resilient people who believe in what on-chain ecosystems can become, and they have created something amazing.

I also think that with that often come things that we're perhaps less proud of. It's possible that certain entities are using this in ways that don't quite meet the standards acceptable to traditional finance.

So I think the moment has come. There's an opportunity today to really decide what you want to be when you grow up, if you want to. The opportunity I see is to push back or expand the boundaries of current use cases in the crypto ecosystem, saying, "Hey, we've created some of the most incredible technologies and capabilities that could support the entire financial ecosystem, and that's the direction I want to go."

We need to think about what this means for our approach to the financial ecosystem, regulators, traditional finance, distribution platforms, investment management platforms, payment platforms, and so on. There's an opportunity to think about how we present it and how to change the narrative a little bit.

2. Why Join Kamino?

Yes. How did you get recruited into Kamino?

It's a great story, and I think it's very much my style. I have an idea or a thought: always get on a plane. I'm still very committed to in-person meetings. I want to meet people, share a meal with them, and see who is sitting across from me at the table.

I was lucky enough to work hard for almost 20 years and then get the opportunity to take a little break. During this time, I began to seriously think about what I was missing most in the creative process and how that compared to how I was spending my time.

I've invested and done a lot of interesting things personally and through the family office, and I've realized that what I miss most is working in the trenches with a team, building something amazing, and chasing huge opportunities. So I started thinking about what this world looks like.

Long story short, I met Kyle Samani, and we discussed various things. I went to Breakpoint in Abu Dhabi and started attending the Digital Asset Summit and other events, just to try to learn and see what people were creating and doing.

At that time, I was forming a vision of where I thought there could be huge benefits in blockchain and what real problem existed there. There was a vision, which I have now published as the Kamino vision, of where I wanted to go.

Kyle had the foresight to say, "Hey, don't build this on your own. Let's talk to the guys at Kamino and see what they think, because they're doing something similar, but focused on the crypto ecosystem."

I give credit to the founders and the Kamino team because, first of all, I didn't initially set out to become the CEO of Kamino. I came in to pitch the idea and get feedback, and they jumped on it and said, "Hey, we need someone who has real experience in regulated markets. We need someone who has built large-scale distribution platforms. We need someone who knows asset management and distribution platforms."

They said, "We think we've built a great business so far, but we need help to make it a success, if you will." I think it takes a lot of humility to be the founder of a company and hand over the reins to someone else.

Here's a little bit about how I got into Kamino, and a big thank-you to Kyle. I think there were a lot of people along this journey who gave me confidence that what was happening here was real and that I should dedicate the next 7–10 years of my life to building on the blockchain.

Yes.

It's definitely a lot of people who, in some way, gave me confidence that there was something very real and important here.

Before we get to Kamino, because we're obviously going to spend most of our time talking about Kamino, what do you think about fintech? I'm trying to compare fintech and crypto in my head. I often see crypto almost as an extension of fintech in some aspects. What do you think fintech does better than crypto, and what does crypto do better than fintech?

It's very simple. Fintech, in many ways, is all about the interface. We understood that the user journey and consumer experience left much to be desired, so we created user-friendly interfaces and simple tools for people to interact with their money, the financial ecosystem, and their financial lives.

The cryptosphere, in my opinion, lacks this. Instead, it has placed a huge emphasis on the backend, systems, and the ability to work on new rails.

Mhm.

In my opinion, the opportunity lies in combining these 2 directions.

Mhm. So fintech updated the front end, but it was still based on outdated rails from the 1970s and 1980s. Crypto, on the other hand, is probably too focused on the backend and doesn't pay enough attention to the frontend. Combine these 2 things.

3. Kamino’s Vision For Onchain Finance

For those of us who are not crypto-native but have tried using crypto platforms, including our own, let's just say it's not the easiest user experience. I understand what you mean, Michael. I don't know what you're talking about.

What is the vision for Kamino?

I want Kamino to become the most important DeFi liquidity solution for all assets on-chain.

Okay. What does this mean?

This means that any of your assets that are on-chain should bring you more value. You should be able to take out a loan or earn more income from them. If you think about a lot of assets in people’s portfolios, you buy the asset, take the risks, and then just wait. This is a very, very irrational use of the asset’s potential.

For example, if I invest in a private lending strategy or have tokenized equity, why can’t I take out a loan against it? Why can’t I use it as leverage? Why can’t I generate more income? This was impossible on traditional financial rails. It becomes much easier on-chain, and it’s already happening.

Especially for crypto assets, right? You can use leverage for Bitcoin, SOL, and ETH. Kamino has the largest markets for borrowing and lending against tokenized shares, so this possibility already exists. All that’s missing is bringing the institutional traditional financial ecosystem on-chain and providing benefits to the clients who own these assets.

To me, this means you can do a lot more with your money and build a healthier, better portfolio over time. In my mind, it looks like a road: great asset managers on one side and great allocators on the other. You want these assets to be easily accessible to all users—institutions, individuals, wealth management platforms, retirement platforms, and so on.

But you don’t want these assets to just sit idle. You want to be able to provide credit and leverage for these products, and I believe that Kamino is perfectly positioned for this.

Okay, so you’re somewhere in the middle between distribution and asset management. Do you consider this a marketplace?

No, I consider it an infrastructure solution.

And who are your clients?

Clients are people who want to lend against excellent assets to generate income, as well as people who want to borrow against existing assets to use their funds more efficiently.

A great analogy to understand the lack of efficiency in this area is that wealth is created in many ways, and one of the most important is not selling assets too early. If you own real estate or stocks and believe in that asset, you will continue to take out loans against it and invest further.

If a stock I own has gone from $10 to $100, but I think it will reach $1,000, I won’t sell it for $100. But if I can borrow $75 against it and invest in the next project that I think will grow, it’s incredibly effective. This is a non-taxable event. It helps me continue to balance my portfolio, and it also helps other people say, “Hey, I want to invest more in these products now that I know I can benefit from them.”

One of the problems with not having that kind of utility is that the share of wallet you’re going to be able to get from a customer is going to be limited until they’re confident that they have access to liquidity.

Okay. So, the essence of your game is to attract as many good strategies as possible from asset managers into Kamino, and then push them to the front end and distribution platforms—whether it’s a brokerage firm, a fintech, or a crypto exchange—so that their tens or hundreds of millions of users can access them. This is the flywheel you want to start.

I think great assets will lead to great distribution, which will lead to better assets and greater reach. All this liquidity and all these credit funds should be concentrated inside Kamino.

We become an extremely important part of the ecosystem because people borrow and lend against assets on the network, and they do so with our help.

4. Who Owns The Customer Relationship?

Do you have an interest in directly controlling the relationship with the user?

I don’t think this is the main issue. Let’s look at America, for example. There are 100 million Americans out there who use a dozen or fewer distribution platforms. I don’t know where you keep your money—take, say, Robinhood, a bank, or anything else.

Fighting to get a small portion of your portfolio to come straight to Kamino, and trying to sell you on that solution over time, is a very uphill battle. The reality is that we provide only one small part of the overall financial experience you need, so I don’t think this is the best approach.

I believe we need to empower distribution platforms, asset managers, investment platforms, and pension platforms to offer a value proposition that matters to their clients and deepen relationships with them through our distribution solution and on-chain lending solution.

This is how I think about the value you create. I would classify this as wanting to be an infrastructure platform, not a front-end platform for users. Kamino’s long-term success lies in becoming the API front-end solution for all distribution platforms that provide these products to their customers.

Okay, so I think that’s an important part, and we can delve into that more.

I have this vision in my head of four modules, or four pillars. The key for these platforms is that they need to know they can offer their clients these products integrated into their current experience, taking into account their requirements—whether it’s compliance and legal aspects, a certain type of training they want to give their clients, asset selection, modeling, and so on.

I want to build such a solution for these front ends in a way that feels most natural to their current customer experience. For example, I’m looking right now at my computer, and Binance Wallet users have deposited $100 million into Kamino vaults. In the Binance system, this happens seamlessly. They don’t need to go anywhere; they don’t go onto Kamino.

Okay, so this is a dream.

Yes. If you know who Kamino is, great. If you don’t know who Kamino is, it doesn’t matter. The main thing is that we create real value for the client, and I’m thrilled.

The biggest competitors here are Jupiter Lend on Solana, Morpho, Aave, and all the others?

It’s all competition, but it’s still just the beginning.

Who are these platforms?

I think the competitive environment is so interesting to talk about at this stage of the market. Why? Because this is just the beginning. We are all actually helping each other more than we are hurting each other, meaning we are in the early stages of a huge ecosystem.

The market I’m targeting is $50 trillion. Each platform that goes online makes it easier to create the next one. But in the long run, I think competition will balance out between other on-chain lending protocols and prime brokers.

5. Bringing Institutions Onchain: Four Pillars

What four pillars did you mention?

The four pillars are the user journey, regulation and compliance, the asset manager lifecycle, and credit and liquidity.

Okay, so this is what you need to scale Kamino to what you want to build. You probably only have one of them today.

We have credit and liquidity today.

That’s right—that’s Kamino. Now you need to create the legal side, the compliance and regulatory framework, the user journey, and all of that.

I look at it this way: let’s look at it from the perspective of an asset manager, or you can choose an asset manager or a distribution platform.

If you’re an asset manager and you want to go on-chain, you want your fund to have liquidity, and you think that’s going to be great for your LPs and for the growth of new assets under management and distribution, what are you doing? You have to deal with 25 different parties.

First, in no particular order, which network do I choose? Who is my tokenization partner? Who is my custodian? We saw this with Apollo going on-chain. I might say, “Okay, I’ll use Securitize, I’ll go to Morpho, I think it’s Polygon.” You have to make all these decisions.

The entire path is completely fragmented. This should be the only platform they turn to. First, there is no quality control in this process. Second, each part of this stack has unique components.

So let’s think about it in order. First, let’s focus on the user journey. We mentioned this a few minutes ago. Take Schwab, for example. I’m Schwab, and I want clients to have access to 7% per annum in liquid form. This doesn’t exist anywhere.

You either get the federal funds rate or invest in stocks or bonds, but you won’t find high liquidity with a 7% yield. You look at this opportunity and think, “This is great. I want my clients to have that.”

Now you want them to have that experience at Schwab, in Schwab’s native interface. You want to provide some level of training. You want to set criteria for the types of customers who should see it. Perhaps they are accredited investors or qualified purchasers.

I think the phrase we like to use is “whitelisting” for a certain audience. There are many different requirements. There is a choice of assets. I don’t want all on-chain assets to be available on Schwab. Maybe I only want to see a certain type of on-chain asset, or I want different things for different audiences.

Someone has to build this. It doesn’t exist anywhere. If you think about it, this even applies to the nuances of interaction. If I have $100,000 in my Schwab account and I want to invest $50,000 in a triple-A credit product, consider what its track record is right now.

I need to open my digital wallet. I need to transfer fiat to a stablecoin. I should take that stablecoin and buy a Prime token. I should take the Prime token and use leverage. It could be 30 steps. This is not the experience we should have.

True. All this complexity needs to be removed.

Drawing on my experience building a successful fintech business, I have a unique opportunity to create a great and simplified user journey. I’m very excited to do this and provide access via API.

This is how, in general, I look at the user journey. Then comes regulation and compliance. You come to the asset manager and say, “Hey, here are all the benefits. Join the network.” The CEO might be very excited about this. They think big and look years ahead. You haven’t considered compliance and regulatory requirements yet, and they say, “No.”

So what will be our strategy to accelerate learning and get people involved in the ecosystem? I think, in a very simple way, we need to create a guide for on-chain finance. We should do it with law firms and partners they already trust.

It will show these asset managers—and this is the same strategy that I used when the JOBS Act came out and we brought the largest asset managers to Yieldstreet—that they need to know they have a partner who understands the intricacies of regulation and compliance and will help them navigate this new, emerging ecosystem. So we will create this and work with them to move them on-chain and create a comfortable environment for them.

Then we move on to the asset manager lifecycle. Now you’re ready to go, and the questions arise: What blockchain should you use? Who is the tokenization partner? Who is involved in pricing, valuation, and NAV? Do you need to think about taxes? How do you take into account asset reports? All of this requires experience.

Now they’re on their own, trying to figure out who to turn to. I don’t want to build or create my own tokenization. There are great companies that are already doing this. What I want to do is determine what the SLAs and requirements for our customers will be and who our priority partners will be.

So, if we’re going to use our connections and reputation to attract the best managers on-chain, we need to know that they will be served at the highest level, that the experience will be uniform, and that the quality of the service will be consistent. It’s important for us to really understand the nuances of the entire lifecycle at every stage, build partnerships, prioritize those partnerships along the way, and manage this project with our partners in the system.

So you’re ultimately telling the asset manager: If you go on-chain through Camino, we’ll first make you available to all distribution partners that have an API, and we’ll help you go through the whole process effortlessly. What you’re telling your front-end API solutions and distribution partners is: If you’re integrated with Camino, you’ll have access to a world-class investment product that you can offer to your clients.

Yes. That’s why I see 4 modules. If we implement the first 3, I believe that all of this credit and liquidity will benefit Camino, because people will use our infrastructure and platform for borrowing and lending solutions. Liquidity begets liquidity. The revenue model is net interest income.

So, the current income model is a spread on interest?

6. Why Private Assets Need Onchain Credit

Yes. Good. This is exactly what it will look like. If you think about what Camino will look like in 5 years, the revenue model will be some percentage of commission on net interest income—some percentage of, maybe, I don’t know, something else. I think that will always be the main source of revenue, but I think there will be opportunities to scale, where we can generate revenue and where the platform can earn more by providing more value.

So, if you’re bringing all this private credit online, there’s a reason why most people don’t lend against illiquid assets, right? Namely, they’re illiquid. You can do it if you’re served by Morgan Stanley, Goldman, or someone like that. You can do it if you’re a high-net-worth client. The vast majority of retail customers cannot do this.

Let’s use an example. Let’s say I’m a limited partner, or LP, in a venture capital fund. Should I be able to take this stake in a venture fund and put it through Camino, or maybe I’m in it from the start? Maybe a venture fund is working through Camino, tokenizing it, and giving me access through Kraken.

I’m investing and trying to keep track of it in my head. I’m trying to trace the entire lifecycle. So the fund is placing a venture capital fund on Camino. Then I can access the fund through Kraken. Then, on Kraken, I can find a lender to whom I can pledge this share in the fund. I can do it all through Camino.

The most important part that goes through Camino is the ability to borrow or lend against these products on Camino. You can tokenize your fund and distribute it in various ways. We start providing solutions at the protocol and infrastructure level when you want to take out a loan or provide the asset as collateral for something.

Yes, but I want to take a step or two back from where you are now. First: Why do people want to borrow? Why can’t they do it? And where can they get a loan?

In my experience, you can’t get a loan against private assets, even at UBS or Goldman. I’m a customer at these institutions. You can take out a loan against your portfolio, but you personally act as the guarantor. This is not exactly a loan secured by an asset, especially a private one.

You can get very effective financing for public assets. You can get margin and lines of credit against securities. They offer excellent real estate and lending solutions. But it is still very difficult, if not nearly impossible, for them to provide credit against your private-market products.

Why?

Because it’s just a piece of paper. This is an agreement between a general partner and a limited partner. You sign the subscription documents. I don’t know if you’ve tried lending to 10 friends. I don’t know what you own and what you don’t.

The system of accounting, storage, transfer, liquidation, and enforcement is not there. I don’t want to sue you for 5 years if you don’t pay back the debt. I just want to be able to sell the asset and get paid. I don’t want to worry about whether you still own it or whether you’ve over-pledged it.

In the US, for example, the mortgage market works great because the registration system is very efficient: You either have ownership and encumbrances, or you don’t. We don’t have such a built-out ecosystem. We don’t have the infrastructure for private markets.

Yes. And this is now appearing. This is tokenization. This is network technology.

Of course. Once you build that, you can create a market to maintain liquidity. First of all, I don’t think there’s a place today where you can get credit and liquidity at scale against private assets.

The new infrastructure that inspires me will make it possible to create the markets we’re talking about. When you create a marketplace, you have a thriving ecosystem. More people want to hold and own these assets. More people want to have access to these assets.

7. Which Assets Make Good Collateral?

Yes. Good. So that’s part 1. The second part is: Should I take out a loan for this? You gave the example of a venture fund. I guess the first question is: What are the right use cases? And secondly, importantly, what will be the order of those use cases?

If you were to ask me whether Camino is going to provide loans to venture capital funds in the near future—say, within the next 6 months—

No.

Why?

Because they’re too volatile. Pricing, net asset value, or NAV, and reporting there are likely to be quarterly. So it’s hard to build a market there, and it’s hard to understand exactly what I’m lending against and how I can ensure clarity on the value of the asset.

Of course. But if we look at something, for example, let’s take existing cases that are currently working well. Take, for example, Figure Prime or Figure Auto.

The common denominator is a large pool of loans. It’s very diversified. The underlying yield is attractive, and it brings in more than the cost of borrowing against those assets. It’s quite clear what the underlying assets are.

There is current income—that is, there is cash flow—and there is transparency within these pools, so I know how to value them. Extrapolating from that, the next iteration I’m focused on is bringing in more assets like that.

This could be aircraft leasing, consumer financing, point-of-sale financing, trade financing, accounts receivable, commercial credit solutions, and factoring. These are all the types of things where you would expect the same behavior.

Over time, the market will mature, and other assets such as private equity and venture capital will have better pricing, better NAV estimates, and models in which asset managers will see growth and opportunity once they move online. They will be active participants, wanting to access this ecosystem and help create better NAV, better transparency, and better pricing.

But it will be a long road.

Yes, yes, yes. This won’t happen overnight.

Yes. So, for me, the question is: What will be the order of the investment products that we want to bring to the network? And who are we trying to serve with each of the products we introduce into the network?

Okay. Let me try to repeat it to you. Today, all this information in traditional capital markets, especially in lending, is scattered across a bunch of different systems. Maybe it’s not even in the systems; it’s just in written documents.

If you tokenize it, you create a kind of shared, programmable layer, right? A record of the right to claim, a record that you have the right to it. Then, for credit markets, it allows this claim to be used as collateral.

Of course, as you say, this has its limits. You can’t just take and pledge a venture capital investment—a stake in a venture fund. You can, but I don’t think it will develop into a liquid market overnight.

I agree. There will be a shortage. If you want to pick 1 word, the entire financial ecosystem is built on trust.

Yes. Tokenization and on-chain ecosystems bring a new level of trust.

Yes. Now it’s fixed who owns the asset and what can be done with it.

Ultimately, the question arises: Is the price accurate? Is the net asset value (NAV) accurate? The further these assets are from mark-to-market pricing, the harder it will be to provide deep liquidity for them until they get close to it. This will happen over time.

That is the first point. The second is that there are already players who see this and say, “Hey, I can make good money on this.” If there is a discrepancy between what the world thinks an asset is worth, what people are willing to pay for it today, and what I think it is worth, I will provide you with liquidity at a discount. I’ll hold it until someone else is ready to buy, then raise the price.

So you will see different people creating liquidity and trading solutions, even in markets where pricing and efficiency are not as high. All of this will be part of the journey toward making it more ubiquitous, normal, and stable in financial markets.

What type of credit should be on the blockchain today but isn’t there yet? Something that, theoretically, should be a fairly liquid market. Aircraft leasing—I don’t know anything about it.

Fifty percent of commercial airlines do not own their fleet; 50% of the commercial airline fleet is owned by private investment funds or securitized markets.

I didn’t know that.

Airlines don’t want to keep all this risk on their balance sheet. There is a fairly stable income stream there. They pay rent for the use of the plane, like a building. The aircraft is often in a bankruptcy-protected structure. Depending on your position in the securitization, you receive a fixed stream of payments from the airline to the owner of the aircraft.

This is interesting to me: auto loan markets, factoring markets, and expanding housing solutions beyond standard real estate loans. Commodities are a very deep market. There are many assets with stable pricing and high liquidity that people should use for their benefit.

There are also large, leading credit or income funds. If you’re in such a fund and getting a steady income, why not borrow $40 or $50 against your $100 investment?

Yes.

My goal in creating lending and liquidity is not to fuel the gambling ecosystem. There are other places for that online and in the cryptosphere. My goal is to increase utility—to enable people to do more with their growing assets instead of having them just sit in a portfolio.

I think this is an important nuance.

I don’t want to offer people 98% leverage.

8. Can DeFi Attract Top Asset Managers?

I understand. As far as I understand, this market has historically developed in such a way that mainly funds that do not have sufficient demand are transferred on-chain. If you come to Howard Marks and say, “Hey, Howard, move your fund on-chain,” he’ll answer, “I have so much demand that I can barely manage the off-chain demand. I don’t need to go on-chain.”

You could go to the Apollo Diversified Credit Fund. They don’t need to go on-chain because demand already exceeds supply. So, in your opinion, how can we attract quality projects to the network?

A few points—that’s a great question. First, a big part of the importance of the four modules is that you want to move from being a consumer to being a creator. If you think about a lot of network protocols, you’re basically sitting around waiting for someone to say, “Hey, I have this token. Would you like to create a marketplace for it? Can we add it to your platform?”

Instead of saying, “This is an amazing asset. I want people to have access to it. How do I do this?” I want to get the best assets in the world and use my connections and experience to do that. So that’s number one.

Number two, I disagree with the idea that these big asset managers don’t want AUM growth. Look at the shift in their energy and focus over the last few years. They’ve gone into the wealth management channel to continue accessing new markets, new distribution, and new AUM growth.

The question is, can you make a difference for them? Can they access a large enough market to justify reprioritizing or going on-chain?

So then the question becomes, how do we do that? What’s the value proposition? I started looking at tokenization in 2021, and I was really excited and interested in it because I thought it would start to create liquidity and credit for these products.

At that time, there was no DeFi, there were no protocols, and there was no liquidity at scale. So I came to the same conclusion as many other great platforms have: “Tokenization is cool, but it doesn’t do anything for me.”

If I already offer my clients a digital experience, they just look at a webpage or mobile app where all their assets are displayed. They don’t care if it’s a token or something else. What can be done about this? Where is the utility?

Right.

I think the reason why a lot of asset managers will want to go on-chain and do it with Kamino is because we will provide the initial liquidity for them. I’ll tell them, “Hey, if you have a $1 billion fund, I want you to start by tokenizing a few hundred million, and we’ll provide credit and liquidity to those markets.”

The other question is, as an asset manager, how do I know that if I tokenize my fund, people will be able to use it for loans? If token holders can’t take out loans against it, what’s the point? Then it turns out that I did all this in vain.

Until we see organic growth in lending and liquidity in the markets, we will have to support that and help provide the liquidity. That way, as an asset manager, from day one when I’m on-chain, I have an opportunity for people or LPs to take out loans against it.

And what will your LPs do about it?

I hope they invest in your next fund launch. They will rebalance their portfolios. Think about pension funds, endowments, family offices, and institutions—they have relatively strict, if not overly strict, requirements for what a portfolio should look like.

Over time, the secondary market supports this portfolio rebalancing. You can use credit, liquidity, and loans against your positions to rebalance as well, without having to sell and without incurring a taxable event. There are a lot of use cases that are really interesting.

Or think about wealth management, for example. Wealth management has two sides to the experience: asset-rich clients and cash-rich clients. If you’re an LP in Blackstone or BlackRock funds and I have a bunch of cash, you can’t get any liquidity against the LP shares you have with these great managers.

Maybe I’m willing to lend you money at 5%, and it yields over 10%. This is quite a good deal for you. You don’t need to sell, and you don’t have a taxable event. Maybe you’re buying a house, maybe you’re getting a child married, or maybe you want to reinvest in something else that interests you. Now your portfolio has many more useful features.

Where can I get a liquid 6% return? I can’t. The bank cannot provide this because it’s bad for capital. So there’s no solution there right now.

Interesting. I understand. Who does the underwriting?

Asset managers. You just need to make sure you partner with the right asset managers. We want to focus on creating quality infrastructure, technologies, solutions, and software that will help ecosystem participants, both borrowers and lenders, interact with us in the most convenient way.

At the same time, it’s extremely important for the entire ecosystem that we work primarily with best-in-class assets. The goal should be to attract really interesting products from institutions with a proven reputation—institutions that are regulated and have billions of dollars in assets.

9. Running Kamino Like A Public Company

Good. Can we talk about the token?

Perhaps. Let’s talk about the token.

The token increased by 57% when your job posting went up, when the position was announced, or in the days after. So, what I want to say about the token is—

Yeah. Almost all of my potential profit and prospects in Kamino are represented by Kamino tokens.

Interesting.

Something I’ll share without getting too far ahead of myself is that I’ve spoken to 15–20 investors in the last 2 months. Perhaps this is one of the reasons why the Kamino token is showing growth: They heard about our vision, it captivated them, and they are ready to invest.

I think we got—or rather, I got—pretty clear feedback that can be summed up by the question, “What is this token?”

That was my next question. How should I think about this? What is this?

I don’t want to go into detail now because I don’t want to get ahead of myself.

Of course.

But I intend to publish a paper in the next 2 weeks about how people should perceive this token and why I’m so excited about it.

Of course.

That’s still ahead, but I want to leave it for that moment.

Perfect. One more question about you and your compensation. What are the incentives? Do you have incentive mechanisms?

Let’s say the token is trading at X today. If it reaches 3X, is it just a one-time bonus in Kamino, and you simply want it to grow? What is the incentive mechanism, actually?

No. I and the entire team should be focused on the success and development of Kamino. Therefore, we have different unlocking conditions depending on the fully diluted value, or FDV.

I tried to find 1 KPI that could unite the entire team, and I believe the best KPI for this is FDV. As we reach $1 billion, $2 billion, $3 billion, $5 billion, and $10 billion in FDV, we will have different unlocking stages along the way.

10. How Do Collateral And Liquidations Work?

My goal is quite clear: to build an incredible business that creates real value for real customers, so that the Kamino token continues to grow along with that success. This is how I achieve incredible financial results, and I want the whole team to be involved in this plan.

This is cool. I like it.

I like it. One more question about security: How do you set the price in real time? Can you explain how liquidation happens? For example, if there is no current price for a HELOC pool, a reinsurance note, or something similar that is valued quarterly or semiannually, how do liquidations work? And maybe this is a very stupid question.

No, this is not a stupid question, but it assumes that tokens without a valuation will have access to loans. I understand. So the answer is to go back a little bit to our conversation. It’s a long way, right? We want to move $100 trillion worth of assets to the blockchain.

These assets range from highly liquid markets, such as securitization or tokenized shares, to objects that have no price at all today. We do not take on opaque assets where the valuation is not clear. It is worth starting, as we said, with assets that have the components and characteristics for high-quality and effective valuation. Over time, as prices are updated and better-priced assets are added to the blockchain, liquidity will become deeper.

So you’ll see us doing credit or loan solutions, like Prime, for example. You won’t see us taking an individual company that doesn’t have a real net asset value or a real price right now.

Yes, okay.

It will take time to get to this point. So that’s a good question, but I don’t think we’ll find ourselves in that situation because, right now, people are unlikely to actively lend like that.

Yeah, okay, that makes sense. Do you have a company or business that you look at when you think about what the future of Kamino will be? I ask because some of the things you talk about remind me a little of iCapital—for example, connecting wealth managers with distribution platforms. The fourth, credit part—it’s like a margin table in an asset.

In any case, without naming specific companies, do you have an example company? I’m not saying it’s iCapital, but is there a company that you look up to and study?

I am always a learner, so I study many companies and try to find inspiration, leadership qualities, operational excellence strategies, customer value propositions, and culture in many different places. I don’t think there is a specific company that we are trying to emulate or support.

It’s interesting that you mentioned iCapital. I think, for example, Kamino’s solution would be extremely valuable for iCapital.

I agree. That’s right. So, they have it?

Correct. I think, at this point, they have over $1 trillion or so of assets under management or advice for a whole range of clients. Almost all of these are illiquid private assets.

So imagine that they can now offer people the chance to access liquidity and then use it to reinvest or make further purchases. Think about the large brokerages or wealth management platforms that iCapital supports. This could be a huge tool for them.

So when you think about the scope of opportunities for iCapital, is this a one-off? Are these retirement platforms? Are these brokerage services? Are these other assets?

The use cases for our infrastructure span the entire spectrum of financial markets and ecosystems.

11. Why Choose Tokens Over Equity?

If you had to raise funds today, would you sell stocks or tokens?

Token.

Yes. Yes. Okay. Exactly. Because you’re thinking about making the token the driver of value. We said we would announce or write a document explaining what a token is, and I think people would be really excited about it.

Perfect. The reason I like the token, going back to your previous question, is that I am really inspired by the idea of telling a story and bringing investors on our journey. That’s the first thing. Secondly, I think it’s a great tool for employee retention and recruitment.

There is huge growth potential in private markets that is exciting for employees. If I build this and own a share, it could change my life. But those assets are also very illiquid. I think the ability to hire or retain talent by showing them, “Hey, here’s a token. As you invest, as we succeed, and as we cross different FDV milestones, you unlock different parts of your total token allocation and get the opportunity to monetize them,” is very valuable.

As someone who was a founder and builder, I can say that it’s hard to convey the joy you get from watching a team grow.

Mhm.

I have people who have been working at Yieldstreet for 7, 8, 9, or 10 years. They came when they were in their early 20s. They were single. They got married. They had children. Their life needs have changed. They want to buy a house. They want to be able to access some of the value they have created over time.

The token gives them the opportunity to do this. So I think the token has a lot of benefits, and I think if we respect the community, communicate, act transparently, and help people understand how that value can be created over time, it could be a huge asset for us in the future.

Yes. Are you currently working exclusively on Solana? Do you plan to expand to other networks?

Solana has been an incredible partner for me, and this is manifested in several aspects. First, the question arises: Why Solana in the first place? Solana has speed and scalability. It’s real, tried, tested, and it works. Financial markets need this confidence when they enter the ecosystem. Therefore, I believe that Solana has every chance of success, especially in the areas that I strive to implement and build.

Second, Solana in particular, Lily Liu, and the rest of the foundation team have been great partners for me as I came into this ecosystem, helping me think and act in a way that accelerates my growth and realizes my vision. So I think we have a lot to do on Solana in the foreseeable future.

Yes.

Regarding your question about other networks, it’s a broader strategic question for the long term: What will asset managers and distribution platforms need over time? I think we’ll have to wait as the industry develops and as this space grows to see what it looks like for them.

12. Building Kamino’s Team

You’re hiring people and opening an office in New York. Tell us.

We need the best professionals we can find. I think it’s a combination of people who are immersed in the crypto ecosystem, who understand it well, and who can help us leverage that knowledge, as well as expand and enlighten the traditional finance ecosystem. I also look for people who are at the forefront of fintech or financial services innovation and want to create something amazing and unique.

To me, this looks like a qualitative leap that happens in financial markets once every 10–15 years. The previous case, I think, was related to the JOBS Act, when we started building Yieldstreet, and this is the next one. We are starting to see some regulatory clarity, and the path for development is opening up for us.

The research and development phase, as we discussed earlier, has now changed: institutions are ready to go onto the blockchain and use these rails. We want to be there. So I need the smartest and most talented people on both sides to make this happen.

Now, I’m convinced that when you’re working in the midst of events and building a business, a personal presence matters. That’s why I want to have an office in New York. I want talented people here. I want to build with them.

We have a lot of great roles that we’re looking to fill in New York. I’ll list a few of them, if you don’t mind. I hope people will be interested. First, I need a great partner in the legal field. I need a VP of Legal or a general counsel, someone who can help implement the vision and define, from a legal perspective, what the product roadmap should be.

I want to open in the United States as soon as possible and develop my product range there. What will be required of us? This is number 1, and we have broader authority for this role. Number 2 is the global head of business development and support from a BD perspective. Number 3 is financial planning and analysis, or FP&A.

We have an excellent candidate for the institutional strategy position, which we will announce soon. We need project managers, product managers, and a vice president of products. Outside of New York, we need more engineering talent, both frontend and backend, as well as management.

Communications and content are very important to me. We want to be at the forefront of thought leadership. We want to be able to clearly express our vision and continue to create content for stakeholders in general and for the industry as a whole.

We’re looking for a lot of people, and we need a lot of people. What I’m mostly looking for is curious people who have initiative, who are eager to build, who see opportunities just like we do, and who want to be a part of something amazing and build a great team.

I like it. Where can people find these vacancies? I’m on your website now.

13. Final Thoughts

That’s a good question. I’ll let you know soon.

Yes, you need to publish them. So, to conclude, Michael, I have 2 questions to close with. First, if an asset manager is listening to this—and I ask the same question, but for the other side, which is the distribution partner—what would you like the asset manager to take away from this conversation?

The main message I would like to convey to the asset manager is that the ability to bring your products online and create credit and liquidity is an extremely important point. This is an opportunity that will expand your distribution, increase the volume of assets under management, and create more value for the fund and the products you invest in and offer.

Second, you have a partner in Kamino and me who understands your nuances and requirements from a legal and regulatory perspective, as well as your middle- and back-office operations. We are designed to solve this, build with you, accelerate your go-to-market, and help you create value for your customers and beyond.

For me, if you are an asset manager and you are thinking about how to go online, I want to be your partner.

Mhm. What about the other side? If a distribution partner listens to this, what would you like them to take away for themselves?

If a distribution partner is listening, it's not just about regulation, compliance, and confidence in the technology, which is something we should talk about, by the way, because the track record and safety of Kamino are just amazing. Zero bad debts with over $20 million in loans issued. So it's true, tried and tested.

But what's important is that we understand your brand and your customers' experience are critical to everything they encounter and feel. The API solution we create will be native to you and your brand. We will work together to design a user journey that makes this experience seamless and enjoyable.

But most importantly, we will help you offer a new value proposition that you don't currently have. This will strengthen relationships, as well as increase the profits and revenue you will receive from these customers.

Perfectly. Michael, how many days have you been in this position?

I think it's somewhere around 90–100 days.

90–100 days. First day, friend. First day.

Yes, I am very grateful. I was incredibly lucky. The team is simply wonderful. The ecosystem is amazing, and there are a huge number of opportunities for development.

I admit, I was nervous when I took on this position because I was the founder. You know all your skeletons in the closet.

Mhm.

And when you come into someone else's closet, you think, “I wonder when something unexpected will happen?” So far, nothing like that has happened.

I see huge opportunities for building and improvement. I haven't had any critical moments that make me say, “Oh my God.” And that really inspires me.

Well, Michael, we're rooting for you. We really need successful people who are moving to us from fintech.

Yes, show us the promised land.

I like it. Thank you.

I appreciate how welcoming the community has been. And I want to bring talented people into the ecosystem who see the same thing as me and strive to build. So please, I hope we see a lot more people here.

Please. Absolutely.

Thanks, guys.