Interview with Simetria: Secondary Markets liquidity management through tokenization

Simetria is one of coinIX portfolio companies which offers Secondary Markets liquidity Management with a Proprietary Trading Platform; as well as a Blockchain-based Tokenization and exchange platform. Simetria enables private companies to digitize and trade non-bankable Securities. Mahsa Doorfard, the sales and marketing manager of coinIX has interviewed Ziv Keinan, the CEO of Simetria. In this article, we will share his insights from the interview.

 

 

Mahsa: Could you please introduce yourself and tell us how you ended up in the blockchain industry? What is your story?

Ziv: I started my career as a corporate and securities lawyer. In 2017, I began practicing in the blockchain space, focusing on the connection between blockchain technology and the financial industry. We observed the ICOs happening at the time and, as a securities expert, we were amazed by the technology. While not compliant, the technology and settlement worked, allowing people to raise money globally simultaneously. Seeing this as the potential future of finance, a U.S. securities lawyer named Sam Katz and I founded a law firm focused on blockchain digital securities technology and regulation. After a few years, one of my clients, a trading company named eToro, became my main client.

I joined them as a legal lead for the Good Dollar Project, a non-profit universal basic income (UBI) initiative using a cryptocurrency which was backed by a stable coin. After launching the project with legal backing from major law firms, I left eToro to become the COO of the blockchain infrastructure company Ownera.io which is backed by JP Morgan. Initially created in partnership with Ownera, Simetria later became an independent company, separate from Ownera’s technology and vision.

 

 

Mahsa: Interesting. Using stablecoins for universal basic income sounds interesting.
What Simetria does might be tangible for people in the financial market, but how would you explain it to someone who doesn’t understand financial markets?
For example, if your grandmother asks you about your job. how would you answer that?

Ziv: I think the simplest answer is that we help people sell shares that they hold in private companies. That would be the one-line answer. The more complicated answer is that we’re building a new railway and information system for trading private assets — direct trading of private assets, not through funds but direct holdings. We’re making the secondary market for Pre-IPO more efficient. Additionally, we are working to provide layers of information that do not currently exist on those assets.

 

 

Mahsa: secondary market, liquidity management and blockchain-based tokenization exchange platforms are necessary in our ecosystem.
Did anything special happen that the idea of Simetria came to your mind?

Ziv: I believe the biggest problems in the financial markets are illiquidity and the way private assets are traded. I don’t see any problem bigger than that because the public market is highly liquid and sophisticated with various instruments and derivatives. In contrast, the private market, although large, has almost no instruments and lacks liquidity. Most of the problems are in the private market due to lack of information and insufficient tools. There’s no sophisticated railway which makes this market more efficient. This is where Simetria comes into the game; it is building new railways for the private markets.

It’s already operating today with an initial product, a private market for secondaries.

What Simetria market offers is investment opportunities in different assets. Through Simetria you can connect to the broker or investor looking to sell/Buy those assets and create a bid through the system. We launched this product about three or four months ago. We have about 115 investors and brokers linked to our network.

 

 

Mahsa: Really interesting. The equity market seems broken in some ways.
Startup employees struggle to easily convert their equity compensation into cash, and often, only high-level executives can do so.
Simetria’s idea appears to be a potential solution to help private companies manage their equity more efficiently.
are there any specific updates, partnerships, or advancements that Simetria has made during the the past months that you would like to share?

Yeah, sure. The most significant part is that we’re continually developing our trading system, which includes a settlement solution for investors. We’re currently marketing it to financial institutions. The idea is to have a wealth management system and a portfolio management, where you can view all your assets. This serves as an abstraction layer for DLT ownership ledgers, listing the entire portfolio of the investor and all the transactions the investor has taken place. It also includes a marketplace allowing instant, one-click trading of assets. For instance, you can buy or sell open AI shares in your portfolio.

The main system we’ve been developing is shared through a monthly newsletter, covering new assets listed with us and new partnerships. Currently, we have partnerships with five exchanges from Canada to Germany, the Netherlands, Singapore, and more. These partnerships, along with other platforms working with us, efficiently distribute assets, not relying only on our small pool of investors but also publishing them through platforms with even larger exposure. Eventually, we believe an asset could be listed on one EU exchange and then be acquired by investors from the US or Canada, sharing the same order book.

 

 

Mahsa: Simetria seems to address the hiring and retention problem for companies as well,
improving employee compensation and experience, making secondary transactions more seamless.

Ziv: It’s very intuitive. With an efficient secondary market, the value of employee stock options becomes similar to RSUs in public companies or even salary compensation. Employees know that with an efficient secondary market, they can sell at any time. Simetria has also developed a product, a tender offering management system, allowing a company to lead a secondary event enabling the entire team to participate in a single sale event. It cleans the cap table, allowing employees to sell their shares during a sale event in accordance with US tender offer regulations. We see how this marketplace interacts with the tender management system in the future.

 

 

Mahsa: Right. However, there might be other companies trying to do the same.
Are there any competitors you can mention, and could you elaborate on the differences that make Simetria stand out?

Ziv: I think the most sophisticated market in the world in that respect is the US market. The usual suspects are Nasdaq Private Market and Forge Global, the biggest players in this space. What sets Simetria apart is that it started as a technology company in the blockchain space. Its mission is not just to source liquidity but to develop better railways. Companies like Forge Global and Carta are potential clients for Simetria, as it brings new infrastructure for their current practices and more efficiency, ultimately making more money.

 

 

Mahsa: Indeed. Equity Zen also support secondary processes, but it is not focused on the employee experience like Simetria.
Their primary focus is on serving companies and investors, and I think that’s one of the things that sets Simetria apart.

Ziv: Yes, we have to remember that public markets are closed now. IPOs are not as common, and the number of private companies is growing exponentially. IPOs are no longer a viable exit strategy. A secondary market becomes a more viable exit strategy, allowing early investors to sell to mid-stage investors and then to late-stage investors. It makes more sense to have this type of market rather than waiting for an IPO that may not happen, or if it does, might result in the company’s stock crashing on the secondary market. So, I believe making the secondary market more efficient should be the highest priority.

 

 

Mahsa: Indeed. is there anything else that you would love to mention about Simetria that I overlooked in my questions?

Ziv: Yeah, Simetria is fundraising for the purpose of further building its platform, developing a DLT strategy, and implementing an information-sharing system that would shed more light on the value of private assets and provide some working capital. Also, to acquire some of the assets and tokenize them. So, we’re happy to connect with anyone who believes in the mission.

 

 

Mahsa: my final question is related to the general blockchain ecosystem.
There are a lot of people who have not invested in the blockchain industry yet and are a little skeptical about it.
They don’t really believe in it, even though they are following the news and they see the hype and how everybody is talking about the potentials of blockchain technology.
What is your message to the people who have not invested in blockchain technology yet?

Ziv: you have to go to the leaders of the financial world and see what they’re saying. those leaders are people like Larry Fink, the CEO of BlackRock, who said that the entire finance world and the trading of shares, is going to move to blockchain infrastructure. You can go to the CEO of Goldman Sachs, who has expressed a similar opinion. You can see the investment that Morgan is making in this space. they have launched a POC together with Apollo Fund, where they demonstrated what’s called Project Guardian. So, they demonstrated how private assets funds are being distributed through the Onyx chain with the use of different players like Oasis, a digital securities exchange of the US Bridging solution like Axela and Layer. And we actually see it happening. We see the traditional world experimenting and building products on blockchain technology, and I think it’s a huge opportunity to take part in the future railways of the financial system. when you can join the first waves; Why not? Why wait until adoption happens, and then you’re going to be one of the last ones.

Watch Mahsa Doorfard’s interview with Ziv Keinan on coinIX Youtube Channel:

 

About coinIX

coinIX GmbH & Co KGaA, based in Hamburg, is a listed In company and has been investing in the broad spectrum of blockchain innovation since 2017. This includes the next level of digitalization in traditional industries, as well as new fields such as Decentralized Finance (DeFi). For this purpose, coinIX invests in equity of startups, early token projects and liquid cryptocurrencies. It offers a listed share that is traded on the open market of the Düsseldorf Stock Exchange.

(WKN: A2LQ1G | ISIN: DE000A2LQ1G5 | Ticker: XCX)