The Business Of
By Josh Moir
From working in the Financial Markets to trying to democratise Wealth Management with his company SwissBorg, an interview with Cyrus Fazel.
The Business Of Interview Series
5th February 2021, 14:00 GMT
Ok, thank you for coming on, Cyrus, so we'd like to begin before you got involved in the Blockchain Space. Could you talk to us about your work in the financial markets and sort of what you were doing there?
Yeah, for sure, I mean, I got into the financial markets in early 2007, enjoying the last, you know, bubbles of champagne, it was a really weird time because, you know, it was the last bull run until it burst. And mainly, I was doing portfolio management with various banks. And then After 2008 I understood that it was extremely important to go long and short. So I'm like, OK, and private banks, people usually most building, you know, investment mandates that are long only. So how can I get more experience of shorting the market and hedging the market? So I moved into hedge funds. I worked there for eight years, different hedge funds, systematic hedge funds, CTA's, a lot of different type of asset management boutiques. And yeah, I realized that I knew a lot of the market, but I knew a lot about myself as well, that I was not fulfilling my own purpose. And that's why I decided to make a move and get into Blockchain assets.
Yes, and then going on to that, what was your first interaction with Bitcoins. How did you become aware of what was it about the blockchain space in particular that really caught your interest?
Yeah, I think it was in the trading room. There was like, what some of our guys in the trading room they really liked FX I was never into FX myself. And one was always talking about Bitcoin a bit. And he was playing around with a small amount of volume, but it was only his personal money. And he told me the story about it. And I was like, oh, that's interesting. But I didn't really touch it until I had to. And I discovered it's not by a speculative investment, but more as a great product. And it was the day I wanted to essentially my dad is based in Iran and to send out money is very complicated. And long story short, I wanted to to buy him a present. And the only way I was able to buy him a present is by sending Bitcoin to a friend of his that he would buy the present for him. And that's why that's how it happened. So I sent out Bitcoin, my friend bought the present for my dad in Iran. And there you go.
That's a great story so then becoming aware of blockchain and Bitcoin, what was the process from that point to then coming up with the idea and then subsequently launching SwissBorg and what was that process?
Yeah, I think so I understood quickly, you know, that Bitcoin, you had the ownership that was decentralized and I really like the mindset that was behind it. When I started to think about it, I'm like, wow, this is the first time that I could I have real ownership over my assets and I could send it to whoever I want in the entire world, even in Iran. So I started like the more like the geo political economical cool thing about that product. And I, I saw a bright future for it. But to be honest, when the co-founder Anthony, which is more engineering background, he started to really explain to me more about smart contracts. And this is really when I was like I had a moment and I felt like, oh my God, I'm missing. This is this is it. This is it's not about cryptocurrency. This is about digital assets and how this beautiful blockchain technology could essentially create whatever you want. And back then we were looking at robo advisors and all these different models and we saw that, you know, there was always many things missing the infrastructure layer, which was horrible from the banking, which was not good.
The mindset behind Robo advisors, the product itself, the user experience. There were so many things that we said we could change and we thought that a smart contract would be exactly one of the ways to really create something much better and much greater and for the entire world. And I think that's the moment we're like, OK, now we don't need to just work with one bank and just create a new robo advisor. We can do this for the entire world. And then going to 2016 or 2017 and we're trying to fundraise back then. And then, you know, in February, we're like, oh, what are these ideas going on? All I'll participate in this one, and participate in this other one. And then in early March, we're like, OK, I mean, it's great about participating, but let's just do our own. You know, we all have the skill sets for this and we have the great vision. Why not just launch our own white paper and create an amazing community and and go for an ICO.
Yeah, so then could you give a brief overview of what you would say SwissBorg and then going on from that, what was it that attracted you to almost try to democratize wealth management in a way.
Yeah, I think so. Really. You know, you just you just pin pointed our mission, it is to democratize wealth management by making it fair, fun and community centric. And why did I want to do this is because I worked 10 years in finance within likely the best private banks and hedge funds. And I met a lot of smart people, don't get me wrong, but we were always, you know, never very much aligned to what we were doing. I think so for many of us, not everyone, but many of us, which is making money for the sake of making money. And potentially that money could become power. But, you know, that's not a real purpose. Right. What are you going to do with money? Not much. Money's not going to buy you a better world. It's not going to buy you it's going to buy you fancy cars, but that's it.
And and then the wort part of this mission that was sold before is that we were essentially making wealthy people wealthier. And it's not wrong, but it is if you are actually accelerating the wealth inequality gap. And that's the case. And and that's where with SwissBorg, we started saying, like, OK, how can we create the most awesome community together, grow together, launch products, make it as fair as possible, and fun, too, because a lot of people, even smart people. I mean, you know, a lot of friends around you, they have a fair amount of cash or a fair amount of time. And they rather spend it on, you know, saving fifty dollars, looking at different Amazon TVs than actually looking into crypto or looking into stocks or investments. Most people don't want to spend time in investment because why first you think it's not fair. And then second, they don't think it's very fun either.
And that's where we saw it is like, OK, this is exactly the way to bring it is to make something fair, make it very transparent, make it have a great user experience to it and put some fun attitude to it and maybe build this not on your own vision only, but build it with the community and for the community. And I think so that was the game changer at SwissBorg. And why today I think a lot of our community members are super excited about what we're doing.
Yeah. So then going onto the community, SwissBorg conducted a very impressive ICO. You know, you raised over fifty two million dollars, I think with over twenty three thousand participants. It's really the community that seems to be a large focus for you. Can you talk about how you initially launched the community app towards the beginning and then also the voting rights with the CHSB token. Can you talk about and explain that for a bit?
Yeah, I think so. You know, what we always want to do with the community is educate, train and give them the voice. You know, obviously, a lot of people see that referendum is a good thing or a bad thing. I really think it's the only direct democractive tool that exists in the world. And we've seen very much that Switzerland has been doing phenomenally well for the last five hundred years and has done like direct democracy for that. And but you need to train people, obviously, you know, if you don't train people and just do one referendum every ten years, that might not work.
And I think so, you know, that was the story about SwissBorg. We we really wanted to have referendums to make sure that we are we're bringing the swarm intelligence and we are building things that people really want to use. And the first question was about the wealth app is it going to be desktop or mobile based. Coming from my background, I wanted desktop for multiple reasons and the co-founder wanted anthony wanted it to be mobile based and. You know, the community voted for mobile based. It took more time to launch, but in the long run, who's going to be the winning one? People spending time on a desktop? Most probably not. And I think it was a very wise move to do this.
And therefore, we are you know, the product is very different, you know, and and I think that was great and the community app. The idea behind it was to launch a fun game where you could learn how to trade Bitcoin is it going up or down? And based on those prediction, you win points and win those points, you earn money. And in the next few months, you're going to be able to withdraw that money within our wealth app. And again, that edutainment is something very important. And people realize after two years playing this game that some did very well. You know, it's if you're consistent in what you're doing, you're looking at the right numbers and the right, you know, indicators. Trading is not the hardest thing. It's like everything you have to be consistent. And some people on the other side say like, oh, man, this is really difficult. I rather focused on just buying and just never sell and just keeping it as it is. I think so that that has been a lot of great experience of this community app and the governance regarding these referendums.
Yes, and then could you talk about what the wealth is and the thought process behind the unique feature of creating a meta exchange that optimizes users trades.
Yeah, exactly, so, I mean, the Nasdaq has been most probably one of the biggest evolutions of trading in the last 50 years, and we thought about doing the same thing. We said, why would we need to create another exchange? Or maybe, like Nasdaq has done, take different order books of different brokers, put those different order books together and make sure that you're creating one platform that integrates all of that. And that's exactly what we did, is we integrated Binance, HitBTC, Al, LMAX and Kraken and different FX exchanges as well. And the idea behind it is to provide the best liquidity to any person that wants to get into crypto or get out of crypto.
And at the same time, what we're doing is we're really doing smart routing. So if you're you're I don't know, you want to buy, let's say, one thousand pounds of SwissBorg tokens? Well, we are going to calculate instantly what would be the best route from going from that thousand pounds to CHSB token. And it will do multiple trades for you by really exploiting inefficiencies and therefore providing you, again, the best experience because you're getting the best price. But at the same time you're just pressing one button. And that's where we are more and more focused at SwissBorg is crypto wealth management. We want to help people with smart routing and on our smart engine, we have a lot of indicators that enables you to see if it's good time, bad time to to buy different cryptos. And now more as we're growing, we're offering different yield products, which enables people to just relax and get the best yield on, for example, USDC and and now SwissBorg Token as well. And I think so that's really what we want to specialize is how to provide the best investment experience to traders, seasonal traders, to investors and to Mr. Everyone.
That's really what we believe is the best, is how we could provide to anyone around the world to like on Spotify you say what is your genre of music? What is know, what do you like? And then you just click and it creates an automatic playlist for you and you enjoy the best.
Yeah, I mean, that's really one of the interesting features of SwissBorg, is the CHSB smart yield and the smart yields you provide and also the protect and burn program that you run. Could you explain what these are to all of viewers?
Yeah. So I mean for the SwissBorg token, you know, we always think very opportunistically and as well, very creatively at the same time. And since day one we always said, how can we make sure that SwissBorg Token is really the heart of our ecosystem? And we looked at multiple different projects and what they were doing. And by launching our own products, we always felt like, OK, if you have a SwissBorg token, it will enable you to do this and that. And so far we really extracted, let's say, five different ways where people could get rewarded by earning, by having SwissBorg token. And the first one, as we talked about it, is the governance rights. Very soon we're going to have new governance rights with that, that's going to be more than just doing referendums. We're actually going to create SwissBorg nation where there's like a parliament that will take place and super token holders will be able to actually decide on the features and the road maps. A lot of cool things regarding governance. We have then the staking program, which essentially we have right now one premium level which enables people to pay less fees while they're trading on the SwissBorg wealth app, but as well to double up the yield. So it has that great way of reducing fees, but as well, enhancing yield, which is really great. Then we have the protect and burn, as you mentioned. So 20 percent of trading fees.
Revenues of trading fees actually goes to the protect and burn program, which enables us to accumulate a big amount of dollars over like a half a million dollars right now, which would buy back the token when it's losing some momentum. And not only it puts a buy pressure when things are going south, but at the same time we're as well burning those tokens, which again, is amazing thing for making our token deflationary and therefore it helps to essentially grow.
And last but not least, we have the DAO itself. There's a lot of things you could get rewarded on DAO.SwissBorg.Com with our tokens, and the best, I would say one of the best features we've launched recently is the staking mechanism, which again is if you are staking SwissBorg tokens into the sustainable yield or the SwissBorg yield program, you could yield SwissBorg tokens additionally. And we looked at what other people are doing. So how do you do yield farming in a more sustainable way? Is that we thought about building a community index which will give you a score, which will actually give you the rights APY.
And, you know, a lot of different mechanisms are very arbitrary. They may only give you three percent or four percent yield if you stake. We said, no, let's not do that, because this means it doesn't really make sense. It will not work on the long run. But what if we create this community index that actually gives you a very good measure of if the SwissBorg network, is it healthy or not healthy? And it's a multifactor ranking process, which you look at six different metrics that enables you to build that score. And those metrics essentially is the token itself. Is there a good volume? Is the price going well? The activity on the wealth app, if we're getting more and more users, more and more premium people, if there's good amount of volume within the wealth app, that means we're generating revenues. Is the community app growing? Is there more and more downloads and people look at great retention rates?
Is it based as well on the DAO activity that we're having? More and more people? We I think several thousand people that are contributing right now different missions on the DAO. And last but not least, is the social media happening? So is our Web is YouTube, Twitter this wonderful podcast are all these things are working in terms of growth? Well, then you would have a great score. And our score right now, it's at an all time high. We just gave it like yesterday's nine point six out of ten, which is amazing. And that's score we always calculate it on a weekly basis, it can change all the time. If people want to know what's the score, they could check out the power videos that I do every Tuesday night, nine o'clock Swiss time.
Yeah, that's great. And then going into sort of like a wider industry wide on decentralised finance, you know, it's really grown at a very impressive right. What do you think about the long term impact of DEFI on the economy and the current financial institutions?
It's fantastic. We're a big partisan of DEFI since the early days and 2020 has been really the you know, we went from a few millions to over 26 billion and of assets that are there.
But it's only the beginning, right. When you think about it, it's only two point six million. It's like three less than three percent of actually total market cap of crypto. So it's still very, very, very small. However, what I do believe is that, you know, having one layer of banking and one good layer that could be decentralized for banking purpose is fantastic. We know those limitations right?
You just said it yourself. I mean, Ethereum is doing great. But at the same time, with GAS prices, at 100 dollars it doesn't make a lot of sense. So, you know, on the smart yield of USDC, for example, right now, a lot of juice is taken from Binance smartchain and all these chains that have forked a bit Ethereum. And obviously they're more centralized. They're not as decentralized as Ethereum, but most probably as we evolve, Ethereum 2.0 will come in. I think so, Cardano are talking about a lot of things on the DEFI space.
The very upcoming one, obviously, is polkadot, and there's more and more now potential power chains that'll be developed there. And DEFI projects are growing at least being mentioned and working on it. And I strongly believe that DEFI is going to is just going to grow to 2 trillion assets within the next three, four years.
And I think that's a great way, especially for people that don't have access to these, you know, like if you're a bank in Nigeria, I mean, your chances of working with other banks are very small. And that's when you're going to see more and more institutional money coming in is from all the emerging markets, Philippines, Thailand, all of these different nations that have like a big economy, but are literally now a little bit alienated because they're not part of the big game. And and they're going to come more and more. And obviously they're going to be high net worth individuals, family offices and hedge funds and things like that. But where I see that growth of DEFI is really coming from those emerging markets that want to go there and for legal reasons should go there.
Yeah, and then onto regulation regarding cryptocurrency, just being very varied around the world. What is your experience with SwissBorg being like with these regulators? And do you think that some of this almost negative regulation could slow the adoption of blockchain and DEFI?
I mean, regulation, regardless of whatever it is, it could only be good because regulation means that it legitimates towards big investors and that's what we've seen in 2020, a lot of S.E.C. approving, the CFTC approving a lot of American accredited investors like, OK, guys, I mean, they're telling us that Bitcoin is legal. So now let's put some on our cash balance. And we've seen that with a lot of difference you know, not only investors, companies right? And PayPal and all those firms. So it's always something good. The unfortunate part of regulation is that very often we know that regulators are not the most tech savvy or they're you know, it just takes a lot of time for them to get into crypto to understand the different loops and the different ways, how we interact. So regulation is great. And there's some countries like Switzerland that's very much open to it. But we're seeing France as well. Germany is doing great job. U.K. is opening up you know, Singapore is great. Hong Kong is great. The US is growing as well. So we're seeing a lot of these big, big countries that are willing to not only discuss but start to make this legitimate. So it's really good. That's why we chose Estonia for Europe for activity, which is a very progressive in terms of digital ID and just fintech in general. Transfer wise, there's a lot of companies that are based and coming from there. So we're very fortunate to be there.
And then the flip side of the regulatory, I would say, is that you want to spend time, but you never want to be the first, because if you're doing the R&D for regulation, you're going to spend a lot of resources. And that's one thing, at SwissBorg, that, you know, we're always going to be regulated. However, we don't want to spend the time and resources of being the first ones regulated. Right. And I think so that's probably a tactical and smart move for us.
Yeah, yeah, I mean, it's quite tricky at the moment, you know, to to work out, you know, you don't want to be the first one to pull them in, but at the same time, you want to keep your your company looking legitimate with the regulations.
So then going into some closing and more general questions about you, who is someone that you look up to and what is it about that person that inspires you?
I mean, Elon Musk for me is most probably the most influential person I've had since I was a kid. Um, yeah, I've seen him after PayPal, seeing that everyone always turned him down, says never going to work and putting all his money into different ventures. And, you know, I think so he's really been one of these futuristic guys that. Yeah, that made it and I really have strong respect for him and, you know, whatever he touches becomes gold and and look at Bitcoin, right, 20 percent within the same same day that Elon Candlestick.
And, you know, the good thing about him is that not only he's a visionary and he puts the hard work and he makes it happen. He has that way of like doing I do the fuck I want to do and that's it. Because a lot of people in the world tell me you should not do this, this and that. And he's like, you know what? I don't really care about it. I think so that you're telling me not to do that because you're rather afraid or jealous or you just don't want to change the fate of the world. And and we know that we are blowing up this world. And is it good to go to Mars and to escape from this world? Maybe it's a good one but it's a Plan B, making solar panels to change the world forever? I think so. It's amazing.
And I think so when you have that mindset of saying that the sky's the limit and you could change it whatever you want. And I think so that that's what people have to look up to. And for me, definitely, Elon is. Yeah. The most I mean, him and Gandhi, the combination of those two.
And so going on to what are three major attributes, you would almost contribute to your success thus far? Maybe your work ethic, for example, or something like that.
Living with Anthony before and so the co-founder before the ICO, we lived a year together and then after that we lived two years together. I mean, we just we just I changed flats recently, but. But I think so the obsession, I mean, being obsessive about really working together and making sure that we're always aligned and being transparent and fair to everyone that you're working with and making sure that you're distributing rewarding the people on this real meritocratic ways is what has and.
And being mad, I mean, you know, whatever you're building, you have to be mad. I mean, right now we can't see it, but I have to bracelet's with SwissBorg tokens. I have a necklace. I have a shirt wearing on it. OK, I don't have socks, but but I have pretty much everything that is that is on me and being really looking at this all the time and putting a lot of energy in work, but as well mainly love things. So when you put love in what you do, then it's authentic and once authentic. You know, it usually works. People need authenticity and authenticity is when you find your purpose. And my purpose today is really to democratize wealth management and eventually to decentralize nations and create something that is for the greater good of of Earth. And I think so that's, you know, a quest that makes you happy.
Yeah, I mean, and then the final question is, apart from the blockchain space and so forth and decentralizing and things like this, are there any other industries that you have a particular interest in and you really think could shape the future and you sort of keep an eye on maybe artificial intelligence or you mentioned Elon Musk, maybe space travel? Is there anything like that you really have an interest in?
I mean,AI has always been something that I really like into. And, you know, SwissBorg is coming from Cyborg, right? So that's always been how we as humans could essentially get to be better and how that AI that Borg enable us to have a better life. And and definitely AI is something I really like very, very much. There's energy as well. I think. So this planet is we're getting using too much energy. So we need to to find new ways to make it. Yeah. More renewable energies. And definitely AI is something I believe that the Borg could really help us to get to another stage and and spirituality in general. I think. So that's something on top of it all into this ice meditation and deep breathing and how we're all interconnected through the different networks.
Yeah, that's really interesting, I think SwissBorg is a really exciting project, I'm sure a lot of our viewers and listeners will be signing up after this interview as it goes live on our website. Thank you very much for taking the time coming on today.
Thank you so much. Is really great. And please check out our Wealth App. I'm sure there's a referral link that you guys could scratch and and make it happen and enjoy the crypto, many of those.