Lorien Gabel has spent many years constructing web infrastructure corporations, from ISPs to cloud safety corporations. In 2018, recognizing the transformative potential of proof-of-stake networks, he co-founded Figment, which has since develop into one of many world’s largest unbiased staking suppliers, providing know-how and companies that allow customers to stake their tokens with out having to make use of a centralized change or custodian.
As we speak, the corporate manages $15 billion in belongings and serves over 500 institutional shoppers.
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Right here, Gabriel, who shall be a speaker at Consensus Hong Kong, discusses Figment’s enlargement into Asia, bitcoin staking experiments and his firm’s cautious course of for deciding which new crypto networks to help.
This interview has been condensed and evenly edited for readability.
What led you to begin Figment?
That is the fourth firm my co-founders and I’ve constructed collectively over three many years. Our earlier ventures have been all in web infrastructure. Once we began exploring blockchain in 2018, staking was barely a factor — Tezos had launched, and Ethereum was nonetheless solely discussing it. However we noticed a pure alignment between our experience in community safety, cloud infrastructure and scaling B2B options and what proof-of-stake (PoS) may develop into. If PoS gained traction, we believed our expertise in constructing safe, institutional-grade networks can be invaluable.
We initially deliberate to begin a fund, and now we do have a VC fund. However the fund didn’t come first — the staking infrastructure firm did, after which we launched Figment Capital. We mainly took a flyer on proof-of-stake, believing it had some benefits over proof-of-work, and we have been fortunate sufficient that it really labored and took off.
How giant is Figment now?
We presently handle $15 billion in staking belongings and serve 500 institutional shoppers. Whereas worker rely isn’t all the time a significant metric, we’ve got about 130 staff and anticipate to succeed in 150 by year-end. Asia is our subsequent massive enlargement focus. We opened our Singapore workplace final 12 months, and we’re including Japan, Hong Kong and different key markets. Whereas North America stays our base, Asia’s demand for staking companies is rising quickly.
What challenges do you see to Asia’s adoption of staking in comparison with different areas?
First, Asia isn’t one market — it’s a set of vastly completely different economies and regulatory landscapes. Japan, Indonesia and Korea, for instance, have distinct enterprise cultures, adoption ranges and regulatory frameworks. We’ve all the time been compliance-focused, working solely with institutional shoppers fairly than retail customers. However in Asia, compliance varies broadly by nation. In contrast to the U.S., the place you primarily navigate SEC and CFTC guidelines, every Asian market has its personal regulators and insurance policies.
Additionally, Western corporations usually fail when increasing into Asia by not understanding native hiring, scaling methods or buyer habits. I used to be born in Kuala Lumpur, and I’ve seen North American corporations overinvest too shortly or misinterpret market wants. That’s why we began small in Singapore with three folks, so we may be taught earlier than scaling.
Training is one other problem. In lots of Asian markets, staking just isn’t well-defined and is typically misconstrued as DeFi lending. We spend a whole lot of time at conferences, shopper conferences and media interviews explaining what staking is and why establishments ought to take into account it over riskier yield-generating options.
What has been the largest problem in scaling what you are promoting, and the way did you overcome it?
The toughest a part of any startup is the “zero to one” section — determining whether or not an concept will work, what clients want and the way the enterprise mannequin will evolve.
Early on, we ran a number of experiments — we had a distant process name (RPC) infrastructure enterprise, a developer data portal and completely different income streams. However as soon as we discovered a powerful product-market slot in staking, we shut down the remaining and targeted completely on scaling one core providing.
The second main problem is crypto’s volatility. Our enterprise operates like a mixture between a knowledge heart firm, a fund and a software program enterprise, however with variable pricing in dozens of unstable digital belongings. That complicates planning. I joke that my unofficial title is “Chief Stoic” — I don’t get too euphoric when markets are booming, and I don’t panic when issues go south. Whether or not it’s FTX’s collapse or bitcoin hitting $100,000, we deal with long-term execution.
Are you seeing elevated institutional curiosity in staking in Asia?
Sure, institutional adoption is accelerating, significantly from banks and telecoms. We’ve had institutional fairness buyers from Asia for some time — massive names like Monex and B Capital—however over the past 12 months, we’ve seen extra conventional monetary establishments actively coming into staking. Every market has its personal dominant exchanges and custodians, and we frequently associate with them fairly than coping with finish customers. As extra banks discover staking, we anticipate adoption to snowball — much like how establishments within the U.S. began cautiously investing in staking earlier than scaling operations.
How do you resolve which tokens to help for staking? Do Asian markets affect this?
We have now an analysis framework that we’ve refined over the previous six years. Since we will solely help a restricted variety of new tokens every year, we’ve got to be selective — final 12 months, we added help for 12 or 13, which is rather a lot given the complexity of every integration. Proper now, we’re supporting round 40 networks, however each new addition requires cautious evaluation.
The method begins with the fundamentals: is that this an actual challenge or a rip-off? Does it have a powerful thesis and a crew able to executing it? In some ways, it mirrors a VC framework. From there, we dig deeper, talking with the muse and founders, assessing the extent of custody help out there — since that’s essential for institutional adoption — and evaluating the broader ecosystem.
In some unspecified time in the future, although, when you’ve 20 sturdy candidates however can solely help 10, you need to make a guess. Generally we get it proper, typically we don’t. Through the years, we’ve seen sufficient community launches to develop a powerful instinct about what works and what doesn’t. We attempt to supply steering to tasks the place we will, although in the end, it’s as much as them whether or not they take our enter.
Buyer demand is one other consider our decision-making, and the Asian market is a vital a part of this. Often, a serious institutional shopper will request help for a challenge we’d not have in any other case thought-about — and even heard of — so we conduct an expedited analysis. In some instances, we’ve needed to inform shoppers no, both as a result of we don’t see the challenge as professional or we suspect it is perhaps a rip-off. These are robust conversations, however they’re crucial. In the end, we additionally take a look at what number of of our shoppers are more likely to maintain or stake a given token, which performs into our remaining choice.
With many Asian buyers looking for high-yield alternatives, how does Figment guarantee aggressive returns whereas staying safe and dependable?
Staking just isn’t the highest-yield exercise in crypto, nevertheless it’s the most secure approach to earn yield with out counterparty threat. We deal with offering the very best risk-adjusted staking rewards. Whereas some suppliers chase larger returns by slicing corners (e.g., ignoring OFAC compliance or MEV dangers), our shoppers — primarily establishments — prioritize safety and compliance.
In crypto, staking is the equal of a 10-year Treasury bond — it’s the steady, dependable choice in comparison with high-risk DeFi methods. Some buyers choose liquidity pooling or lending for larger yields, however establishments sometimes select staking for its safety.
Are there any staking-related developments or improvements in Asia that excite you?
A number of the most fun developments in staking proper now embody liquid staking and re-staking, with EigenLayer main the cost globally in these areas and having a powerful presence in Asia. Bitcoin staking is one other space of curiosity, with tasks like Babylon exploring its potential, although demand stays unsure. Moreover, we’re seeing new chains with important Asian affect, corresponding to BeraChain, which is quickly rising its consumer base within the area. We’re actively supporting BTC staking whereas intently monitoring new staking fashions rising from Asia.
