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Risk Management In A Bull Market
Recorded: Aug. 6, 2025 Duration: 0:57:58Space Recording
Short Summary
In a recent discussion, crypto experts emphasized the critical role of risk management in navigating bull markets, highlighting the upcoming Token Generation Event for flagship on August 21st and the launch of Centora's new risk assessment dashboard for DeFi protocols.
Full Transcription
Thank you. Thank you. I get a feeling that I never, never, never get a feeling, yeah.
Oh, sometimes I get a feeling, yeah.
I get a feeling that I never, never, never get a feeling, yeah.
I get a feeling, yeah. Thank you. Thank you. Thank you. Thank you. Music So gmgm everybody welcome back to another banger show with centora the institutional defi layer
today we're here talking about risk management in a bull market and we've got some incredible
guest speakers to dive into the conversation with today. We've got Omniti with us.
Omniti Network, the BTC5 on-chain APIs, L1PSBTUTXO.
That is a lot of letters.
On-chain signer and open bridge.
We've got flagship with us today.
TGE is August 21st.
Alpha agents trade crypto sentiment in real time.
We've got Kuma with us today proof of
liquidity perpetual dex high performance in the streets decentralized in the sheets that's a great
bio i love reading bios because you never know what you're gonna get here people and let's get
the likes let's get the retweets of the show out this should be a really fun one and we have g
with us also today research and risk at centaur hq um let's get the mic over to g how is
it going gablob how do we sorry how do i pronounce that name uh just want to make sure everyone can
hear me yeah yeah you're coming through crystal clear yeah it's uh gablobo because i'd like to
blab but uh yeah gablobo i got it i got the real the real name is Gabriel so just to play on
the actual name that makes some sense cool well I like it I like it but yeah we'd love to throw
the mic back over to you um and just get a take on where you think the show is going to go today
risk management in a bull market is the title where do you think this one's going to take us?
As a risk person for Centaur,
I'm probably going to give you the most boring answer,
which is it would go the same way as if we were in a bear market.
Risk management is just as important.
Either direction just presents itself differently.
And so you need to understand how to adjust
to where risks are risks are always there just where are they which ones are more acute and
whatever you know market trend there is and adjust well dude i don't know what was boring about that
i do love the take though and i really can't wait to dive into this. I think we can all do better at managing risk in this space. And yeah, bull markets give you some
really crazy opportunities, but I have fallen prey to like trying to just, you know, make
that top, call that top and it never, ever works. So I'm actually interested in this
selfishly as well for our listeners. If you're excited for this show, let's get the likes,
let's get the retweets of the show out. be a really fun one to dive into today and for our speakers if you've
not been on a show with myself or centaur before quick rundown of how we try and do these shows
and then we're going to just jump straight in and basically going for organic conversation today
which means you guys get to bring to the conversation whatever you want to bring to
the conversation only thing is it is a spaces. It's not a video
show. So I do need a little bit of help from our speakers. And that is by giving me a heads up if
you do want the mic. And you do that by getting the hand in the air. Bottom right-hand corner,
just before the comment section, is a heart plus function. Click that hand. I'll get the mic
straight over to you. That's really the deal we're going for today. If that isn't intensive enough,
we do also have jackpoints. Jackpoints are the most worthless point system in the entire crypto space, maybe even the world,
but you do get jack points for every time you raise your hand in the air. And at the end of
the show, we'll bundle all those points together and we'll see who gets the W. Now, the winner
won't get anything. I hope I've made that very clear. Utility is zero. Please don't hit me in
the DMs after the show, but you will get my love and respect for contributing a ton to the
conversation today. Listeners will love it. Speakers will like it
too. So let's just dive in. Okay. What do we need to know guys? Why is risk management
as important regardless of the market conditions, but in a bull market as well? Why,
there's more upside to get, right? That's why we call it a bull market as well why you know there's more upside to get right like that's why we call it a bull market like that there is there's big opportunities out there if you just hold on
and and you take that bull market for a ride so why do we still need to be really careful about
how we do manage our risks in this sort of market i think flagship's hand was up first love to see
it mike over to flagship yeah thanks for for having me on the space Love to see it. Mike, over to Flagship. Yeah, thanks for having me on the space.
Good to see you again, Jack.
Good to see the rest of the panel as well.
Great to see the audience.
I hope it will be valuable to you guys.
But what I think, there's many, many, many ways to approach this, right?
So I think in a bull market, you rapidly become your own enemy
because people that have been around for
multiple cycles or multiple bull markets is risk management. It actually gets punished in the bull
market. The further you get into a bull market, the more risk management and prudency gets punished
by the price action, right? So you're going to have a lot of the opportunities or assets that you buy.
You sell them and they will go up more.
And then they will go up more and they will go up more.
So psychologically, it's extremely difficult.
So that's something to be very, very mindful of is that the bull market will start conditioning
you into taking more and more risk until the tide turns,
and then you're going to get punished for your lack of risk management.
So that's why in bull markets, I think especially, because in bear markets, people are generally so risk off
that the risk in the assets to purchase is relatively low.
So I do think that, although I agree that on both bear and bull markets,
risk management is extremely important.
I think in bull markets, it's more important because your psychology,
the hurt, your social feed, everything will convince you
to let go of your risk management, price action especially.
So I'd say that is one thing that is really important.
The second thing is realize that most of the things are unsustainable.
So have a plan to ladder out.
You know, the older Dutch, nobody ever got poor from taking some profits.
Really important.
But what I see people doing over and over again, what is a mistake,
is if you take profit actually take profit get it
off uh preferably get it off any wallet that you can touch because what happens is if you make a
good trade or you make good money in a bull market you start treating it like house money it's a it's
it's a saying in in gambling this house money is you win money and because you've won that money it feels
like ah you know i can take more risk it's not my money anyways but a dollar is a dollar it really
doesn't matter how you got that dollar but what people tend to do is it's house money and they
take profits on one good trade so well done you know you you took out your profits and then they invested often even something that's even riskier than the asset they took profits from.
So what happens is you take on more risk than you initially did with your winning trade.
You take on more risk and everything is correlated in crypto.
So the correlation, especially during very extreme events, when everything goes up or everything goes down, the correlation trends towards one.
So it doesn't matter in which cryptocurrency you are.
They will all go down equally.
So if you take profits, take them.
Don't touch them.
Wait for the market to completely panic, for fear and greed to hit 15, to let everybody say it's over.
Then think about
touching that again. But until then, don't touch it. Yeah, look, that's a really great take. I
resonate in heavily with that from my past experiences too. I think, look, I don't know
what taking profit realistically should mean. I think we could define that a little deeper because
yeah, does taking profit mean like it's in your bank
account does it mean it's in bitcoin at this point you know like is it in a stables like
at what point does taking profit really become taking profit because i think what i found in my
own past is that if unless it's in my bank account and i can spend it on things other than nfts and
like stuff that you can buy with crypto
um then it's not really profit like that's you know that's money i am going to put back into
the market um and yeah that's that's the big thing for me so i think if you're going to have
that strategy my only addition to that take which i think was fantastic is that you probably should
also have like your definitions pretty set out like
what what percentage are you happy take like do you need a salary like are you doing this full
time if not okay are you literally just like trying to accumulate wealth over the next couple
years tens of years whatever okay well that's different that reinvestment absolutely fine but
if you're saying you want to better your life at that moment in time then i think think sometimes you're saying, look, I'm going to take at least this portion out
and it's going to hit a bank account. I've heard that from so many traders over the past couple
of years where they were initially just taking it in USDC or USDT, or they were taking it in
some other crypto that was a little bit more stable, ethereum solana um and realized pretty quickly
when the market absolutely tanked especially when solana for example hit like 11 12 dollars
that oh no i didn't take profit because if i took profit i i wouldn't be down 90 right now or 50
or whatever it was and omnity your hand was raised i would love to hear your thoughts on this
mic over to you.
Yeah, I think when you're taking profits,
a 50-20-30 rule is probably good for most folks who are not super seasoned traders in here.
But from a risk management perspective,
there's two ways that you see this really dogleg left
during a bull market.
One of them is from projects who have new unscoped risks.
There's all kinds of buzzwords.
There's fancy math.
There's lots of things that are appealing, whether it's trying to catch a
narrative or start a new one. You know, there's a lot that projects see that incentivize them to
take on more risk, you know, spend faster and effectively burn hotter and burn out faster.
On the user side, I think, you know, what is the definition of taking profits is a pretty good route of discussion.
And I think that taking profits into BTC is extremely safe.
I think that people have taken profits into stablecoin for a long time.
And that used to be a more risky business.
It's not as risky as it once was, thanks to the New York AG pressuring Tether every quarter and all kinds of things like that.
But I think that taking profits into Bitcoin is probably the legally safest.
There is stablecoin regulations popping up in the US.
There's stablecoin regulations popping up all over the world, not just Europe's MICA and other things like that.
Europe's MICA and other things like that. But there's a complex, let's say, assessment that
you need to make when you're handling stablecoin as part of your risk-off strategy. I think that
Bitcoin is the risk-off crypto asset, and we do treat it that way here at Omniti. So I think that's
the short of it is that there's always going to be a higher incentive to take risks when the rewards seem that much higher.
But if anything, the risks are still rising too.
We just need to be conscious of them.
Look, again, I think this is really talking to 2025 right now, you know, like talking about Bitcoin as a risk of asset.
I think that's definitely a shift I have had of late.
You know, I used to be a complete stables guy.
And now I'm definitely
more sort of proportioning to Bitcoin because look, again, this isn't any sort of profits that
I need to touch in the next couple of years. This is more like from the investment side,
but if I'm going to hold it in stables or if I'm going to hold it in Bitcoin at this point in time,
it's a lot more looking at Bitcoin for that longer term,
stables more for like, okay, I need to,
I'm going to spend this in the next couple of months
or, you know, 12 months even.
Gablabo, throwing the mic over to you.
Yeah, I think that in terms of the profit taking
and what to take profit in,
there's also an aspect that maybe
still works quite well in the bull market, but can kind of hedge some of those upward risks, which is like, for example, with a lot of the institutions that deploy through Centora,
they're usually coming with one specific asset, Bitcoin, ETH, stables, and they're looking to accumulate any sort of yields that they earn through DeFi onto that asset.
employed, it kind of makes, allows you to be more strict with yourself on how you take
profits and how you perform your strategies.
But also there's certain different strategies that they still have risks.
But if you want to keep upside exposure in a bull market on certain assets like Bitcoin
or ETH, but maybe perform strategies throughout
DeFi that aren't using those assets or you don't want to necessarily touch these assets
specifically, but you do still want to perform some sort of trades is using these assets
as collateral and borrowing the other assets that you're looking to deploy as a strategy.
of borrowing the other assets that you're looking to deploy as a strategy.
And then any sort of gains or yields you take back into those.
From Centaurus standpoint, we usually maintain a delta neutral strategy for almost all of
our strategies that we deploy.
But this also can be something where you can do some sort of directional risk if you want but that is
muted from a risk standpoint not just like a 100x perp leverage one direction or the other
look really enjoy getting into the weeds already on this and love the the takes and really breaking
down exactly how we put this in practically for our listeners if you like this type of show and
you're getting any value out of it likes retweets all that good stuff to show support as we get the
mic over to kuma kuma over to you hey hey um well i just wanted to say that i think uh you know
like people mentioned here uh you know transferring some money into bitcoin is probably a good idea
um all the time because you know it's the one that
stood a test of time it's you know if we have any any type of correction uh bitcoin is probably
going to do the best um but when talking about risk management and just um you know rf ramping
and things like that the way i see it is um in in crypto there's this thing where people really, really put a lot of effort and really rush into trying to make as much money as they can.
But when it comes to trying to keep money, nobody really cares.
Nobody really puts enough thought into that.
So people rush trying to make money and really don't care about protecting any of their money.
I think one of the best strategies and one of the best ways of looking into it is you know i i think if you're
you know let's say you started with 10 grand 100 grand whatever that is and you made a bunch of
money in the bull market um you you should be cashing out you should be you know taking money
out of this risk that you have because you know just like when you're playing a video game
um you want to have those those checkpoints right if you're playing a video game um you want to have those
those checkpoints right if you're playing like elden ring or something you want to before you
go to the next boss you're gonna you know sit and and just make sure um you know you can come back
to it a little bit closer and keep it you know try again uh so i think very similarly to video
games you should have some type of like checkpoints or
like milestones where once you reach them you make sure that you raise um your previous checkpoint a
little bit closer to where you are right now because in trading and in this market where
you know we're all very optimistic we all believe this is the future of finance and whatever you
want to believe um you still have like exchange collapsing you still can get your wallet drained by
you know clicking an invitation for a space right and and that's it those things can happen and
those things will eventually happen to almost every single person participating in the space
so i think like you know you made 100 grand this is all of your money, cash out like 25k. Yeah, you can turn this into way more money. But you know, if you look at it statistically, it's way more likely that you're going to give it all back. And I believe that in crypto, especially you have to be a cautious, optimistic person, right? So this caution is where you keep raising your
checkpoint while still being optimistic and leaving the majority of your portfolio
on risk on assets until you believe it's over. Yeah, look, great start to the conversation
again here. I do like that we've just immediately gone
into, look, first things first, like take the money out. I think that is something I have
started doing a lot more aggressively and bull market, bear market. I think the problem with
bull markets is there's still an argument that we're not in one today, which is wild to consider
when you look at the US regulation changes, when you look at the u.s regulation changes when you look at
bitcoin's price and its new lows um but like it's dependent on which part of the industry you're
looking at if you're looking at defi if you're looking at other areas of the industry or you're
looking at alts that haven't quite like ripped off like they did last time i think that's the
other thing right is there's this underlying I can't take the money out right now
because it's about to do a 10X
based on what history shows me has happened
or what the previous all-time highs were
or some other reason as to why you have to keep that money in.
But great, great start to the conversation.
I heavily agree with that standpoint.
Again, for our listeners,
this is not a financial advice show. This is a bunch of builders in the industry who are passionate
about the industry and obviously also have their own funds in it, most likely. So just want to put
that out there. You do need to do your own research, but you know, who can really argue with?
Yeah, take some money out. You know, we're not telling you to put it anywhere. We're telling you
to put it in crypto or anywhere else. We're literally telling you yeah take some money out you know we're not telling you to put it anywhere we're telling you to put it in crypto or anywhere else we're literally telling you to take some
profits and make sure that when you take those profits it means actually in a bank account or
somewhere you can spend it on more than just things you can buy crypto with although that
list is getting smaller so ggs to the companies that are doing that flagship your hand came back
up there would love to get the mic back over to you and then we'll keep diving into a couple more practical strategies for that risk management yeah absolutely so uh just something
that that i'd like to touch on and it was like i you said it jack but other speakers said it as
well and that is taking profits into bitcoin and taking profits into stablecoins. What I've noticed, I've been around since 2016 in the space, right?
And the industry does really, really well at creating this existential fear
for the collapse of fiat currencies.
So especially during the bull market, it feels very scary to take profits
into dollars because Bitcoin is a hedge against dollar devaluation.
And I know that right now Bitcoin is, I don't think it's risk off.
I think it's slowly evolving from a risk on to a risk off asset.
And I think we're somewhere in the middle.
But I'm just curious with how you guys look at it when you take profits.
If you see that as just parking them in fiat or parking them in a money market fund or gold or real estate,
like really completely taking it out?
Or are you slowly starting to see Bitcoin as like,
okay, I'm totally fine with putting my profits into Bitcoin.
I'm fine with a 30% decline from here.
Yeah, very curious.
Look, great question.
I've saw a couple of hands come up,
so I'm just going to leave it to the experts
to speak on this one. I think Coom's hand came up there, so we'll get the mic over to them and then we'll hear from Gablabo.
will keep losing their value but i feel like this this whole argument of like oh the dollar
is losing its value so i'm not going to cash anything out because you know because the dollar
is going to become worthless um you know eventually it will have crazy inflation and you know who knows
what's going to happen with it but saying that the dollar is is like on its route to becoming
worthless i think is very silly the
dollar is still here it's still the biggest military in the world it's still one of the
biggest economies and that's all that matters right um like i feel like people who are worried
about uh you know the the devaluing of any currency just like have a basket of currencies
like buy some dollars buy some euros buy some buy some like, I don't know, Japanese yen, whatever, wherever you live, just buy the currencies and just keep
a basket of like, you know, let's say you're keeping a hundred grand. So like put 25 grand
into each of those currencies and then you're pretty much hedged. You know, crypto is like,
I've been here for nine years, right? I've seen Bitcoin thousand dollars i've seen it at 120 and um you know it's still a a risk on asset like we still will have like the moment s p 500
starts dropping bitcoin will start dropping as well um the moment we have a bear market bitcoin
can still drop 80 percent uh we will still have liquidation days and we still are gonna see
10 um you know volatility days it's not you know you still live in the real world you're still
buying a house with currencies you still buy a car with currencies like there's very few places
in the world where they're like okay give us bitcoin we're cool with that um so like you're
trying to like you have to
you need to have a balance between being able to like kind of look into the future and think to
myself okay bitcoin is the future like 50 years from now bitcoin is what's going to be like the
central currency or like reserve currency of the world whatever that is but you kind of have to
remind yourself but i'm here right now right like this is like the world i'm living it is in is not that world um so yeah love that take i look i i i have that moment and then i do have
the moment where i'm like nah like the dollar like i'm british but i do predominantly get paid
in usdc i do most of my work globally and speak to global brands.
And therefore, I just say, yeah, USDC tends to be the easiest.
It's definitely, I think, the most used currency in crypto space right now.
And I have seen the dollar very, very poorly perform against the pound over the past, honestly, just the whole of 2025.
It was worth about 10% more at the start of this year.
This year.
So when we talk about volatility and spending power,
it really does get interesting.
Now, I've always just consistently, if it's pay,
obviously I have a salary in mind,
that money just goes, converts straight into my local currency.
But this thought process of dollar versus bitcoin has never been stronger for me in
terms of oh like how do i balance this out um and yeah this is really interesting to hear some
experts talk on this one gablabo mike over to you what's your take on this i mean i'll start off saying that coming from a risk researcher in crypto, inherently I'm pretty cynical.
But the work that we're doing at Centora is trying to bring institutions, whether it's just larger institutions that already have or are building in the space, whether they're centralized
exchanges or maybe treasuries, DAOs, et cetera, and also traditional finance institutions.
We're trying to act as a bit of this bridge to onboard a lot of these institutions into DeFi.
And so it's going to take time, of course, but there is going to be a convergence.
So in terms of what you hold your assets in, I think any sort of regular portfolio strategies
for traditional finance probably also apply to crypto in terms of like, you want to have X amount of money to cover your basic needs and then the rest can be something that's
harder to touch or you are not going to be touching it and continuing to let that grow.
But coming to what Kumo was saying is like, and, and for yourself Jack, we're going to start seeing
more assets be used and accepted.
The FX risk is always going to be there between any sorts of currencies, whether crypto or
other fiats.
And so if you know that you're going to be primarily spending in one asset or another,
just making sure you have that amount set aside. I think there's been quite recently a big growth
spurt in different applications and protocols that have payment cards that can be used that are,
have payment cards that can be used that are connected through Visa or MasterCard.
And so holding your money on chain can actually be quite easy.
And as long as you're managing all the exploit risks or hacks or any scam risks quite well,
this can start to be something that you can do without having to constantly
move back to your bank because there can also be risks trying to pull everything back into
a bank because depending on what bank you use, they start to see inflows that are large
from certain entities and they're going to flag your account.
So the risks are still there trying to take
profits and come back into your bank because your bank might just decide to freeze your account.
Where these other opportunities, like Gnosis Pay, for example, is kind of the one that comes to mind.
This is a way that you can start making payments in real world without having to have those
complications of changing rails honestly this it feels like we're almost at like a real turning
point in time like i think i've you know just in terms of infrastructure everything you've just
said like there's the there is it's becoming very easy i'll just give i'll give a prime example for from my
perspective here i'm a creator i do shows like this i love hopping up on spaces i love meeting
new projects that we can talk about i will travel quite a lot with this role so i will go all over
the world i'll go to most of the crypto events that i can attend which will be you know token
2049 singapore dubai it'll be a couple of the American
ones. You've got our Basel NFT NYC, um, and some other more crypto focused ones. And then there's
the Bitcoin Vegas and all of these events. So immediately that is, you can imagine a huge
expense from the UK, especially with the length of those flights. I can basically predominantly just use crypto to pay for all of that now,
if I would like to. The companies are out there, the businesses are out there.
I've used them before. They're honestly absolutely great to work with. All of a sudden,
all of those expenses that I used to have to move elsewhere, if I wanted to, I could just put them all through crypto at this point.
Now, I don't do that entirely. I have dabbled with it, NFT Paris, because it was
one of those events where the flight was pretty cheap because I'm quite close to Paris and the
hotel as well. I thought, you know what, if this business for some reason doesn't work out,
I'll just rebook stuff and it's not going to cost me an
arm and a leg if i did that for like vegas you know you're talking thousands of dollars so i
haven't taken those risks yet and but that is now out there and i do think when we talk about
bitcoin more broadly that sentiment shift of no this is the place to just store your money like
just almost a full stop at this point is becoming like more and more of a reality to people.
Like I know that from my experience, I know that from people I speak to would love to
dive into like what, what the dangers are of that, especially, you know, over the next
couple of years, but Omnity though, whose hand came up during that take fair.
So I want to get the mic over to Omnity and hear what they had to say previously, and
then we'll keep throwing the mic around.
Yeah, I think there's a part of this that we're missing a little bit, and it's not that Wells
Fargo is so good at managing risk. They've got a pretty disastrous history, actually,
but there's two forms of risk that we're maturing into as an industry to recognize and not just
sort of, oh, hey, the third party auditor will tell us what we need,
or some lawyer will tell us what we need. There's a part of risk management in an IT shop of any
type, whether it's a blockchain or an IoT shop or whatever VPNs, it doesn't matter.
And part of that is appealing to larger entities, which is a lot of standards. It's a lot of,
hey, we met this third party's assessment of risk, and it was good enough. which is a lot of standards. It's a lot of, hey, we met this third party's
assessment of risk and it was good enough. There's a lot of that stuff that's on the
sort of institutional side. And in a lot of ways, it's actually easier to manage. You can think of
it as sort of B2B risk, right? B2B business is easier to do at scale because it's more structured.
Each deal is more valuable, all that kind of stuff. The other side of it is retail
oriented risk. When banks need to serve corporate clients, but they don't need to have a user
friendly web portal that works on all major mobile devices, that's less work for them to do.
So when we have to, you know, develop interfaces, contracts, on-chain tooling, anything that we're building,
and seeing that as both risk-managed enough for an institution and for an individual,
that's a really different scale of business.
That's a really different level of, hey, can we get support in the chat? When you are a relatively successful startup and you've got more than a thousand
customers at once who need service, you really can't just use a telegram.
Like it's not enough to just have an open forum where people, you know, sort of bring
their complaints.
So I'm not saying that you need to make complaints private.
I think that doesn't solve the problem.
It usually keeps the problem unsolved for longer.
But I think that there is part of the risk management
for this industry that is not just the consumer getting used to the difference between 12 and 24
word seed phrases because there is a cryptographic and secure difference.
We're in a world where you have to be able to provide these in one interface
to both people at different cost levels, the same kind of
risk. And I think that's really difficult to do because today in the modern era, when you want to,
as a business, connect with PlayStation Online, you sign up with their cloud partner business,
you have this little, you know, review you've got to get into, and then you have like a sort
of private connection to their systems. You know, as a retailer or as a, you know, interoperability in an on-chain software business,
we don't have those same opportunities today.
We have to be using open source.
A lot of times we'll use the same front ends as retail will use or we're connecting to
the same materials that that front end is using for a retail user.
All that stuff is really different to how tech's been built over the past 10 to 20 years.
So that means that we actually need higher standards for cybersecurity than traditional industries do
because we don't have the same sort of easy mode where there's a bunch of computers that are sort of behind a wall.
There's like a moat style security architecture that's very famous from back in the
day. We don't have that kind of opportunity anymore. So I think there's a really different
way that we have to manage the more tactile parts of security, literally exploits and vulnerabilities.
Major companies, they have these dashboards and tools that help them work on these. Those are
starting to come out for crypto companies as well. So I think we're going to see more of that sort of infinite threat surface or infinite threat and
risk mitigation model for crypto companies. And it's going to make it seem even harder. People
will recognize that when you make a good crypto business, you're competing within the margins,
even tighter than a SaaS business was 10 years ago. Right. Okay. Let's dive into that a little bit more. I've got a follow-up for you here. What
do you feel that means for the retail side? Are we talking about security in the forms of like,
hey, I'm self-custodying and therefore there's all those additional risks? Is it the risks of
the exchanges themselves because of the competitive nature of the industry and the fact that those margins are getting so, so tight?
What is the takeaway for a retail investor right now where they're trying to mitigate
their risk and this is a concern?
Well, I feel like this is the most umbrella way that I can approach that, which is every
transaction is irreversible.
Maybe you can get somebody to send you your money back if you make an oopsie. Maybe there's a base where you can call them and
say, hey, can you roll back a couple of blocks? We need some help. But there's a really good
adage in crypto that you can test first, but you can't undo what you just did. So I think that's
a good lesson to learn for projects as well.
I think there's a lot of projects who've tried to do good work and then made an oopsie. It's okay.
Nobody's perfect. But testing things before you jump into some risk, instead of just saying,
okay, I'm the lead dev of this project. Everybody, cover your ears. I'm going to hit the button.
I understand that feeling
believe me i've been that guy more than once and it's it's exhilarating but we got to slow things
down and say okay let me test this first that'll solve a lot of trouble it's bringing flashbacks
to that dev who um you know put a profanity on the timeline on x and had accidentally locked up
i think it was millions and millions and he i'm not going to call out the dev just because I can't. I'm not sure I actually remember specifically, but I think
I can picture the PFP. But yeah, look, and I think this is an open question again to our speakers,
but Omniti, feel free to jump back in here. It's sort of a dialogue, but how important are ETFs
going to be moving forward? Because this is something I'm thinking
of. I can't get exposure right now in the UK to Bitcoin ETFs or if they're in ETFs or like any
real way to make it a little bit more centralized. But I think if I was in the US right now,
I would probably be doing that. And I know that goes against a lot of the centralization talk.
I know that goes against a lot of like the, you know, some of the core principles of why we're here. But if I start
getting a portfolio that the Bitcoin value is higher than any other asset that I own,
and it becomes, you know, a not small amount of my net worth, at a certain point, I just don't trust myself to self-custody it. I just would be absolutely heartbroken if I did lose that Bitcoin at that point.
And I think for most people, that's probably the right sense. Now, if you can give me a
decentralized product that does the same thing as an ETF, and I can trust 100% if they lose the money, whatever,
I'm going to get not the dollar value back, I'm just going to get the Bitcoin back,
then absolutely fine. But I think that's probably when we talk about risk management,
if we want to go down the security angle here, how important is it for the average person to
look at other opportunities outside of self-custody?
Or is it more just about self-custody protocol and how you do protect those assets, cold wallets, etc.?
I think Kuma's hand was up, and then I'd love to get it back to Omniti here.
But first, over to Kuma.
Yeah, well, there's a lot of benefits with ETFs, especially for people in the US.
Yeah, well, there's a lot of benefits with ETFs, especially for people in the US.
You know, they can access it with their IRA accounts and like pension funds and whatever with zero tax.
But I think it's all about a question of pros and cons, right?
If you want to hold crypto, knowing that you have some sort of guarantee, I'm not even sure what kind of guarantees they're actually giving people.
have some sort of guarantee.
I'm not even sure what kind of guarantees
they're actually giving people.
But basically somewhere where you can just throw
your responsibility on someone else,
then I guess it's a fantastic product.
But at the end of the day,
it's the same as holding your crypto
on a centralized exchange.
It's exactly the same thing.
There's literally no difference.
I would even argue that it's probably safer
to hold it in like a central, a big centralized exchange that is public or something like that, because they probably know a little bit better about like how to do things.
But it's a net negative.
You lose money, right?
Because you pay them fees, right?
All the ETFs have a certain fee.
I think currently it's really, really low because they have it really discounted for the first year or something like that and then
they start uh raising the fees and you end up paying them like i don't know like half a percent
a percent a year um so you know first it's all a question of what is important to you right um
self-custody not lose any money throw it into some cold wallet if you're planning
to hold it for a decade and then that's it but if you're planning to hold an etf for a decade
you're losing 10 um essentially really interesting point so now it becomes a profit bear security
um situation as well i think the only only push back on the centralized
side is although you know coinbase if if they were at risk very very true probably do know more
um than some of these providers right now at least or i don't know maybe they're even partnered with
them you would hope but that could be the case the problem i know of is i know a couple of people who've been scammed through coinbase
you know like as in like they still have a level of ownership and if they get scammed because it
is on an exchange but it's still you know their account their login i'm not you know 100 sure how
etfs work in the us so correct me if i'm wrong but that feels like another degree of separation
that if you really just want to sleep at night and don't want to touch that thing, then that's the only sort of security difference that I would look at is, you know, there's all of those.
Actually, scammers are predominantly focused on trying to get people who do hold most of their assets on those exchanges at this point.
But like you see, it's a combination of it's always funny for me to see that because, see that because you know on one hand people are like listen i i don't want to get scammed so i'm like
i'm worried about it so i'm holding my money with like an etf or like holding it in like
coin made custody or something like that but then again when when you're trying to make a transfer
from your bank and your bank is doing exactly what it's supposed to do safeguarding your money and
they're like whoa confirm where are you sending this money what's going on then people freak out oh it's my money send it at my
command and so like because you know so it's always about balancing things out you know what
i mean yeah because like you know sometimes you're trying to make a withdrawal out of your you know
centralized exchange account or something and they freeze your account for like i don't 24 hours to like verify everything and you're so pissed off you're fuming but then your account gets gets hacked and
you're like please freeze my withdrawals for like 24 hours um so yeah that's a really really good
observation yeah that that's a great observation it's one i have dealt with you know i talked at
the start of the show about being paid in usdc I'm just trying to do it legitimately, people. I'm not here to fuck with
the HMRC over in the UK. I'm just not smart enough. They'll get me. So I have just been like,
look, I am moving it into my business account. My accountant has told me to do this. But because
my business account is under my business name, Coinbase will not let me transfer
it to myself. So I have to go through my traditional account because that is my name.
And my goodness, the headache that I got to just make sure I put my money where I need to,
to pay taxes effectively and properly at the end of the year, I was outraged. And these guys are
asking me some very detailed questions under the guise of protecting me for security, but very, very clearly looking at how do we get this guy for fraud or something.
The questions did not align at all with, oh, let's make sure this guy is safe.
And very much, I was just like, hey, guy, look, I've been paid.
I've told you the money is income.
The HMRC can ask all
the other questions. They're regulated. That's exactly what they're there to do when I do my tax
at the end of the year. You don't get to just pepper me with questions and hold on to my funds
at this point. This is my money. I'm entitled to it. Move it into the business account, which is
also my, it was crazy. It took me about three days um and a lot of like a lot of
can i speak to your managers to actually get that money up and i'm still pretty sure i'm on their
radar pretty hard um so i wouldn't be surprised if that doesn't happen in the future and i just
look i thought that was some good context to add because kuma you're dead right i was on one side
and then i've just flip-flopped and but it was a great take, a great observation. Let's get the mic over to Omniti here. Omniti, what's your take on this? I think balance is a good phrase for
where any normal person would be at for this. I'm a cybersecurity guy of going on 20 years,
political of well more than that. I have my ideas about why I would self-custody,
more than that. You know, I have my ideas about why I would self custody. But I think it makes
perfect sense why some folks would also want to, you know, have different other layers of risk
as part of protections for them. And I do want to separate them a little bit, because your
Coinbase account in most jurisdictions doesn't have any legal protection. You know, it's not
a recognized type of asset account. It's sort of a generic type of asset account, right?
It's probably coming from VASP regulation or VASP regulation, which is an OFAC guideline about how to treat sort of every individual crypto holder like a bank.
Which means if you ever make a withdrawal or deposit into a centralized exchange account, you run that risk of being that person who has their account frozen
or your funds just can't move. But I think that that's one type of risk management where you trust
a technology specialist to help you manage digital assets. The other type is an ETF where you're
getting into a pool where multiple people have trusted the same custody or usually Coinbase or
Valkyrie or whoever, you know,
few at the top big companies. If you're trusting them to manage your assets through an ETF,
you're also trusting that if something goes wrong with that asset management,
that the parts of the program of that ETF document will sort of make you whole.
So today, if someone, you know, let's say steals my phone and my computer, they won't necessarily get my Bitcoin.
But if someone steals my phone, my computer and my identity today, they can absolutely call up anywhere where I hold stocks and say, hi, I really am Sheldon.
I'm going to go ahead and, you know, do this.
And, you know, don't mind me.
I'll pass the security certification.
I have my phone. You know, that's a very different level of risk management than using cryptography and security tools like IT security tools to protect your assets.
So I think the majority of people in this spaces have had banks managing their assets for at least a significant portion of their life, probably more than 50 percent.
significant portion of their life on the more than 50%, unless you're used to managing a password
like your life depends on it, then having some of that value also sort of co-secured or we could
say co-insured by somebody like an ETF, I think that makes a lot of sense. And if you hear people
saying that ETFs are the new layer twos, you can understand what's happening with those ETFs is
they're not just sitting in an account.
They become eligible for all kinds of other fintech silliness that's been building up for the past 20 years. Yeah, that's actually a point that I missed, Omniti. And I do, again, in the UK,
that's just the definitive thing. Like Coinbase, I'm not sure if they do protect your assets,
but if they do, it's from their business standpoint.
It isn't from a regulatory or a UK government standpoint.
But if I lose my money to a scam or a drain or anything nefarious in my bank account, I am insured for £85,000.
So just over $100,000 as standard.
That's just something
that comes with the regulation here in the uk so yeah there are those additional risks as well
um what that would mean for an etf very unsure of but i definitely think probably just diversifying
for the most part i would still look i want more opportunity with the bitcoin and for now that has to remain decentralized like
you just you're not gonna you know i can't leverage loop um with my bitcoin and etfs as
far as i'm aware and if i can i'm not sure what that would look like um but realistically i do
think at a certain point in time just moving those assets somewhere that are either insured or you
know as protected as they can be is definitely a good move.
I like that we have taken that direction with this conversation today as well.
Because it's very true risk management.
People think it's just about where your investment is.
And that is true, but it also means where it's located.
So great, great takes today.
great takes today. Gabalabo, I'll throw the mic over to you. Would love to hear your thoughts on this.
Gabalabo, I'll throw the mic over to you.
Would love to hear your thoughts on this.
Yeah, I think both of you guys covered most of the things I was going to say, but
I think we have to, sometimes we're a little too deep in the forest and we forget that
there's quite a large spectrum of retail users and also institution users and how they are, you know, adjusting their
risk preferences, et cetera. And for someone who's really, I think that it's more important,
but I'm not an absolutist on any fronts usually. And so it's important to be able to self-custody,
but it is also important for the people who don't want to self-custody to be able to also access the same opportunities.
So ETFs kind of offer this.
And while there is a fee that you end up paying, which people that are really focused on sovereignty and self-custody would want to avoid,
would want to avoid.
You can see it.
I don't know if there's any sort of guarantees, but usually if BlackRock is or Franklin Templeton,
they have an ETF on Bitcoin, they surely have insurance on this being lost.
So in an indirect way, these fees can also be covering that to some extent, which I think
Amundi was explaining a bit.
So you lose, like if they get hacked, they not only are losing assets for their clients,
but there's a reputational risk that's quite large for these entities.
So they're surely insuring these things.
And I think a lot of the institutions we work with, that's one of their biggest questions
coming into DeFi is, how do do we ensure against a lot of items?
Which is, you know, something that hasn't really been successful. It's one of the core primitives in D5 that is still lacking at scale.
But for, you know, your grandma who
asks you how to log into email every day.
It's if you imagine them trying to self-custody,
their assets will be lost immediately.
And so an ETF with a small cost,
but if you look at Bitcoin,
you have a small cost on it,
but you still have a lot of upside
and you're potentially going to be more secure
in terms of an insurance
and not losing your funds perspective.
This is where ETFs, I think, play a large role.
No retirement pension funds, 401k is going to ape into some DeFi stuff if there isn't
insurance because it's livelihoods that they're working with.
I mean, of course, people self-custiding, it's their livelihoods as well, but they're assuming those risks, the pensioners are.
And so that's where ETFs can really become quite beneficial in my opinion.
Yeah, look, I'm so aligned here. And you mentioned grandma or your grandpa. For me,
my mom and dad, dude, I would be i would be sweating i'd be sweating
if i heard any of those guys had any of their assets in self-custody it was only the other day
my mom was like oh there's this new thing the bank of england are doing um where they give you forex
the return on your investment and through some ai thing i was like that's that's definitely a scam
where have you seen this what were you talking about It was a YouTube advertisement on a Huberman podcast where they had basically like scammers had like used AI
to get to like, I think it was Piers Morgan for those in the US who will know that name
and someone else to like promote this scam. And it was a QR code. And I was just sat there like,
yeah, you guys don't hold any of the crypto, do you? I hold all your crypto.
Yeah, good, good, good, good, good.
So yeah, absolutely couldn't agree more here.
I can't wait to move it all to ETFs for those folks and for broader family.
I'll do what I want with mine.
I think it's when you are trying to get exposure for your family where it really does come into focus on mitigating those risks, which is, I don't know if that's a good or bad
thing. It probably says something about me that I should talk out in therapy that I'm more concerned
about everyone else's than my own, but you know, we'll get there. We'll get there guys. Look,
absolutely fantastic show today. Really, really balanced show both on the risks, the appetite,
the bull market and how you should be spreading yourself right now, but also from a security
perspective, which we do not talk enough about.
And in a bull market, people, they are coming for your assets more than they are in a bear.
I think that's one thing that is definitively true. There is a higher risk there because they're seeing those media posts, they're seeing Bitcoin hit all time highs. And they're like, oh, this
is worth a lot more of my time now because I've got way more upside if I get some of these assets.
So yeah, absolutely great show. Gabalabo, I'll throw the mic over to you before we do close out.
Any updates, any milestones, anything you'd like to share on behalf of Centauri today?
And then I'll play this one out.
I mean, if we're talking about risk management on DeFi,
we have a really cool dashboard looking at a lot of major protocols across different blockchains to give you a more global risk perspective.
Since, you know, if you're doing any sort of DeFi trade, you're not touching just one protocol.
In the end, you're touching probably three or four.
And so understanding global risks can be quite important.
And so understanding global risks can be quite important.
So not for your grandma, but for everybody here
that is running their own DeFi strategies,
it's worth checking out.
Any updates aside from that?
I don't think there are any updates just yet.
Oh yeah.
So one of the new dashboards that will be launching quite soon on this is Morpho.
So this is gonna join Aave, Spark, Euler,
as some of the large lending protocols
that we track different risk indicators on.
We do have some other things that are in the pipeline.
So I'd say just follow Centora
and see what we have cooking
because we have several different verticals
that are going to be launching quite soon
through us and other things that we build.
Look, again, really, really enjoyed this conversation today
and massive shout out to Centora and Galbago
for giving us their hour today and
bringing these amazing guest speakers up to the stage speakers omnity flagship kuma thank you
guys so much for all the value and all your time today as well honestly i know it's a busy season
and i just think it's tremendously valuable to get you guys on for an hour and be able to dig
into your brains a little bit on what we should be doing in these markets and of course the listeners
guys thank you so much for tuning in thank you for all the likes and retweets and support we've to dig into your brains a little bit on what we should be doing in these markets. And of course, the listeners.
Guys, thank you so much for tuning in.
Thank you for all the likes and retweets and support.
We've seen the show grow from the start to finish.
So massive, massive shout out to everyone here.
Hope you got value from the show.
If you didn't, DMs are open.
If you want me to ask other questions, if there's anything else that you feel
Centauri should be talking about right now,
do hit me up.
Thank you so much.
We'll catch you on the next one.
Thank you. Bye, everyone. .
