finews.asia interviews the co-founders of a start-up bringing traditional market risk methods to the world of tokens.
Cloudwall should be having an easy job right now explaining why it has a vital role to play in the fledgling universe of institutional digital finance.
After all, the start-up is simply trying to get a sector massively disrupted by this year’s so-called «crypto winter» to better capture and manage its risks. And to do that, it is using the tried and tested tools and methods of traditional finance, particularly in the realm of market risk.
finews.asia had a brief discussion with the two co-founders, Kyle Downey and Jia Yng Wee, after they debuted their risk management platform, aptly dubbed Serenity, at the Singapore Fintech Festival.
Improving Management
Downey, who has an extensive background as a senior IT executive at a major US investment bank, said that Cloudwall currently employs market risk tools to better capture the risks of about 120 tokens.
«The key thing is to cover anything that is tokenized. We want to apply quantitative techniques that have been applied for years in classic finance,» Downey indicated.
That includes traditional scenario analysis, stress testing, and even tabulating Value at Risk (VaR) data in a palatable format that allows institutions to better handle them.
Poor Data Quality
Given the industry is so new, one of the main challenges Cloudwall faces is the poor quality of data in the crypto ecosystem, particularly when it comes to historical price data.
«The techniques need to be modified as tokens do not behave, for example, as stocks do. What we do is stitch this all up together and put it out as a service,» Downey said.
Wee indicated that Serenity currently has three beta clients, with two more coming online this week.
finews.asia is a supporting media partner of the conference.
