Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Seeking Impact, From Dairy To DeFi | Srikumar Misra @ Aarna Protocol
91 Plays3 days ago
If you want to understand the evolution of Entrepreneurship in India over the decades, then there is really no better story than this.
Srikumar Misra is the son of an entrepreneur who made the mistake of taking a bank loan backed by him home, and his untimely death ended up teaching the young Sri a valuable lesson about the risks of entrepreneurship.
And you might think that this experience would scar him for life, but it was actually the opposite - despite having a successful global career in the Tata Group, he decided to quit his well-paying job and come back to India to set up a consumer brand in the dairy industry in his home state of Odisha.
And after a 2-year struggle to raise funds to get his business off the ground - Sri finally succeeded in launching Milk Mantra which sells its products under the Milky Moo brand name and is one of the few profitable players in the premium dairy segment.
After scaling Milk Mantra, Sri was bitten by the entrepreneurial bug again and he is currently building Aarna Protocol - the first of its kind AI powered crypto investing platform.
This conversation is a gem in which Sri took us from the very offline and traditional world of selling dairy products to building a tokenized decentralised finance platform to invest in crypto currency.
Stay tuned and subscribe to the Founder Thesis podcast with Akshay Datt.
Recommended
Transcript
Sri's Background and Family Influence
00:00:00
Speaker
Hi, I'm Shree. I'm the founder of ARNA protocol and the second time founder having founded Milk Mantra earlier. If you want to understand the evolution of entrepreneurship in India over the decades, then there is really no better story than this. Srikumar Misra is the son of an entrepreneur who made the mistake of taking a bank loan back by his home and his untimely death ended up teaching the young Shree a valuable lesson about the risk of entrepreneurship. And you might think that this experience would scar him for life, but it was actually the opposite. Despite having a successful global career in the Tata Group, he decided to quit his well-being job and come back to India to set up a consumer brand in the dairy industry in his home state of Odisha. And after a two-year struggle to raise funds to get his business off the ground, Sri finally succeeded in launching Milk Mantra, which sells its products under the milky Moo brand name and is one of the few profitable players in the premium dairy segment. After scaling Milk Mantra, Sri was bitten by the entrepreneurial bug again, and he is currently building Arna Protocol, the first of its kind AI-powered crypto investing platform. This conversation is a gem in which Sri took us from the very offline and traditional world of selling dairy Podcast with Akshay Dutt.
00:01:24
Speaker
Do you have some like a rural background or rural connection which made you get into dairy? or like you know like Did you grow up in a city or like in a village? Where did you grow up? No, I actually do not have any such rural connection. yeah i grew up but I grew up in a small town in India, Katak.
00:01:45
Speaker
ah which probably most people would know for the Barawati Stadium where a lot of cricket ah used to be played earlier, not not not so much in the more recent past, but one of the legacy cricket stadiums. yeah so I grew up in Qatar. And like to a business family or your parents were in jobs? or Yeah, so I would normally have been a second time um what oh you know, family entrepreneur. However, my father actually passed out of IIT Kharagpur and started in the 70s, one of the first high KVA transformer manufacturing companies in in the eastern part of the country, probably in the country, I guess there were like 10 of them back then. And he's founded that in Orissa.
00:02:42
Speaker
However, and he did very well just fresh out of college, but unfortunately. He passed away in a car accident in 1985 when I was 8 years old and I had two sisters who were older than me. So we had a very difficult time growing up and you know I actually saw what happens to an entrepreneur in India, a genuine entrepreneur in India who takes a bank loan and
00:03:15
Speaker
and has to mortgage his house to to fund the business and grow it and if something like this happens, what happens? We were actually probably going to lose the house on our heads and I had to kind of battle all of that in the courts throughou all my growing up years and all that stuff happened. So yeah, so normally, like I said, I would have been a part of a family business, but it was a second time come around as as ah not or completely different. So yes, in that sense, no, yes, a business background, but no business background. and Like you were like a teenager who was trying to settle his father's affairs and trying to like get some residual value out of what he built.
00:04:00
Speaker
ah keep the banks away, like to project and repossess your house. Yeah. Yeah. Yeah. um Yeah. and That's that's what happened. So like any sort of usual, you know, stories that we keep hearing about when one of the something happens to one of the main business founders and then everyone strips everything away.
00:04:27
Speaker
So the my father had some financial partners, obviously he came from a very yeah he came from a rural background, very you know middle class family growing up, going to IIT and then coming back to do that. So he had these financial partners who after He passed away, they stripped all the company's assets and stuff, so they now took out all the money. So we could not pay to the, I mean the bank could not.
Tata Experience and Entrepreneurial Leap
00:05:01
Speaker
Bank also, by the way, I mean it's, now that you asked about it, ah we had, I remember back then also, and and my own my family, you know, they were my uncle and some of them were kind of supporting and kind of very grateful for that.
00:05:14
Speaker
they We wrote to the bank saying that, you know yes, this has happened. it's ah Nobody can run this company. And you should close the loan and liquid the assets of the company and close that. was What had happened is six months prior to his accident, my father had to extend the loan for something else, I understand, as in for a higher limit. So he had just six months prior given in that house papers as an extension.
00:05:48
Speaker
So the bank, instead of doing anything with the company assets, happily went straight after our house sending us a notice and stuff, all of that. So, and and in the meanwhile, over the next couple of years, all the assets was were stripped of away so the company had nothing left to repay And I grew up, ah my my sisters, and I grew up sort of fighting this in the courts over years. And in a way, the slow... I mean, obviously, there was ah there was a merit to the whole case because, you know, here was a genuine entrepreneur who who died, and here the bank had everything to go and recover it, but they didn't. sort of But because of the slow process of our Indian courts,
00:06:36
Speaker
ah we fought and ultimately after I started earning which was 15 years later, or thereabouts, as in earning and making enough money, I had the opportunity. I joined the TAS, the Tata Administrative Service, after my MBA and went on to head emergency acquisitions for the consumer business strategy that leads to emerging markets. But prior to that, so i I was working in South Africa for TAS.
00:07:07
Speaker
I along with my wife Roshana we saved enough ah to then settle out of court um with the bank after 20 years of my father passing away to to get back the house and all growing up years were like ah you know with this sword hanging whether you know you you lose the house and then what do you do?
00:07:33
Speaker
Did that shape your belief system and turn you off entrepreneurship or like? so um it It impacts a lot of what I do right now ah in decentralized finance. And we'll come to that. And how the financial system is rigged and created in a way. So just imagine you just take this as an example. And this happens hundreds of times. right There are genuine people who try to build things, take a loan. And there are all these fraudsters who take mega loans and just
00:08:11
Speaker
enrich them themselves and banks don't do anything about that. So all all this stuff sort of happens um um you multiple times. ah but But to your specific um question, A, yes, um what? So it was in a way I had to close out all of these affairs and I felt there was sort of unfinished business.
00:08:32
Speaker
And I had this calling you know after eight years of working at TASS and going on to Lead M&A that you don't pay I had to go back and sort of do something which which is is really building and creating something. So I always wanted to do that, but there was this unfinished business of closing this up in
Building Milk Mantra: Challenges and Innovations
00:08:55
Speaker
that sense. So that that that was sort of the inception of Milk Mantra, which was my far first company, which I founded.
00:09:02
Speaker
back in 2010. But, you know, I really admire the fact that you didn't get turned off the whole entrepreneurship deal in India. And, you know, I mean, you were obviously earning well if you were heading ah Africa for Tata, Tata Techly, right? but what What exactly were you doing there? like Like, how many years did it take you to reach to that level where you were heading a country for them or multiple countries for them, I guess?
00:09:32
Speaker
So I spent eight years with TAS. So I was at that point in time, the Tata Tea Chetley merger, you would remember, it was the first large acquisition of a global acquisition from an Indian company. And that's how it began, the Tata groups internationalization as far as their inorganic approach was concerned, which became much bigger.
00:10:03
Speaker
aggressive subsequently led by you know Ratnata and K.K. Krishnapumaru who used to be the chairman of Tarat, Karthi, Tetli and Indian hotels all that. so oh um i so I joined in 2001, that's when the the whole acquisition had just happened and I was working in the global business for Tarati after my first year at TAS and I had the opportunity to work in multiple countries. ah though The first country I went on to essentially sort of set up the channel distribution partnership, all of that and launched.
00:10:48
Speaker
The Teti brand was Kazakhstan. yeah so and that's the yeah i that's That's the first country I visited.
00:10:58
Speaker
ah i'll take outside India and I still remember that that flight. Your first international flight? Yeah, the first international flight to Kazakhstan and I think I could not get the direct flight and this is fresh freshly joining joining this new job and so I took this flight by I was booked on this flight by Uzbekistan Air or something like that um and this this plane stops at
00:11:30
Speaker
So I forget the Tashkent, where it's supposed to, we're supposed to take the connecting flight. And suddenly we get off the plane and and this is what, probably 2002,
00:11:43
Speaker
ah to thousand two after my first year at TAS into the one and two I joined. and yeah So I get off the plane in Tashkent and we arere all huddle together, into um all the bastards are huddled into a plane. hall with all these you know defense personnel with guns and just sort of told to just hang around there in Russian and this is like wow what's going on and there's no place to sit or anything and we had to spend the connecting flight just was much later and you know you imagine the airports in India back then and you can think what Uzbekistan would be so sat on the stairs or something like that through the night wondering what's going on with all these you know all the army personal sort of
00:12:35
Speaker
hanging around there and then in the in the early morning we are so we got into another small plane ah which was going from Tashkent to Almaty and yeah that I still remember that sort of wondering whether you know are you going to make it out on the other side course so yeah it it was and and that small ah plane had you know was was was some one hill of a ride very turbulent so so so even more exciting so that's how I started with that but essentially then what happened is um so my role was opening up all of these countries and then when when the mergers just happened so I moved over to Tetley side and I was working on South Africa as well to open up the South African
00:13:28
Speaker
market for tet and i was leading that traveling frequently out of india two things happen i think the the jey team then they they I wanted me to move over to Tetley. So why I moved over to a Tetley UK and I was based in, I moved to Joburg. In the meanwhile, so I had been, so a during that whole phase was ah was was very interesting. I worked across Kazakhstan, China, Southeast Asia, many of these markets to open up distribution agreements. Then South Africa was the big one that we were working on. And um I went on to,
00:14:12
Speaker
lead that and ultimately we we acquired the the third largest tea company in in South Africa and created a JV Co. over there and subsequent to that I so that that was like spent two and a half years also in South Africa and after having done that I moved to London to you know take it forward from there on. So yeah and then i so from 2006 I think 6 to or 5 there abouts till 2009 I
00:14:56
Speaker
I was based in London. And then when the M&A team was formed out there, I became one of the key members there. So yes, um did very well within those eight years. And I think I
Strategic Growth and Capital Challenges
00:15:11
Speaker
went on to become one of the youngest director, celebrity execs. So those things were good things to sort of celebrate back then um and at the group. And in 2008,
00:15:26
Speaker
is is you know this I just realized that you know I could be doing this forever. But somehow I was not just getting the fulfillment. And and I started thinking of what um what I want to really do, which is which has become an entrepreneur. So just before I think moving to London from South south Africa sometime around um what must be around five, as i as I was mentioning, that's when I settled um all the bank debt and all that having having earned enough and saved enough to to do that. yeah ah
00:15:58
Speaker
portpus like Did you have an idea in mind or was it just that I want to do entrepreneurship? No, I was i was i was quite clear. A lot of my experience with with the Tata's was obviously in the consumer food and beverage ah space and I had the opportunity to meet for some fantastic you know um entrepreneurs across multiple countries I was reading a large transaction in Turkey and everywhere um you know I found a great set of food entrepreneurs who sold
00:16:40
Speaker
real problems in those markets, scaled up their businesses and had had supply chains which sort of you know had an impact across it. So I was very clear about doing something in the food side in India. ah my My grounding in the Tata group, um clearly I think in sort of further influenced my thinking around ethics um and the whole idea of purpose. And I think that's that was sort of the the inception of the thought. I really wanted to go back to India, solve the problem of trust deficit in food, between consumers and food, because I could see in global markets
00:17:37
Speaker
The retail shelves were full of so many packaged products many of them high quality products but India back then had the retail was growing but we did not have the Products are there so that that that was the thinking and I then I realized that The biggest trust deficit in food is actually in dairy in milk. Everybody has milk um from from you know a newborn child to a to an older person. And in India, there's a big trust deficit around ah milk and food. And it is the largest, sync but perhaps the single largest food category anywhere in the world. $50 billion dollars category at that point in time. So my idea was, yes, I want to fix this problem. it um And do it in a way, which which and do it in the eastern part of the country, in Orissa, where I'm from.
00:18:33
Speaker
Do it in a, so build a purpose-driven brand, premium brand. Do it in a way which impacts the old supply chain. So, you know, as as the brand grows and scales, it will also impact the lives of ah hundreds of thousands of farmers as we do. So the thinking was very much there. And when I put in my papers, my wife, Rashima, also, she did our job. She used to work in in the kinetic space over there, and ah we we both went back.
00:19:00
Speaker
So you know there's this concept of founder market fit. And I mean, any VC looking at you would have probably said, where's the fit? You have no idea about dairy, right? Like what like you would probably need to learn everything from scratch on how dairy operates. Yeah, so I mean, the founder market fit is obviously ah and an important um ah one.
00:19:28
Speaker
i think i think actually given my background in consumer and um and also um you know that the ah ability to have launched consumer brands in multiple countries are or to have Like the the demand side of the business or something which you yeah understood well. yeah and and Having executed sort of m and a transactions where there is a lot of diligence of execution needed.
00:20:03
Speaker
so i think my A lot of the, actually a lot of the VCs found my ah fitment to that space high. Of course, dairy in India, as sector, extremely complex, intense, a lot of misgovernance in in many ways. And you know that was the the the other part. But I i think and think that part was the lesser of the challenge. The bigger challenge was, ah you know imagine doing a startup back in 2010 in India in a non-tech space you know what and a completely a seed um round requirement, of essentially a almost like a pre-seed funding, you you could call it. And in Odisha, so sector
00:20:57
Speaker
um stage of funding and in ah in a region sort of so and the quantum of the funding I needed so I needed back then around 5 million dollars I think that that that was the sort of conversion for 2025 crores I
Investment Ecosystem and Founder's Control
00:21:13
Speaker
needed that much to just get started because it was capital intensive, it wasn't something I could do in my house garage. ah You had to build all this infrastructure, do everything before a single packet came out at the sort of other end. So I think that was the sort of the bigger challenge getting started.
00:21:32
Speaker
fascinating illegal Even though they were interested folks too, because ah my my my background was pretty accomplished, so let's say everybody liked that, but for them to fit it into their checklist was was very difficult.
00:21:52
Speaker
How did you arrive at 5 million? What all did you need to spend on? The bulk of was all infrastructure, like the build-all plant. and i And again, I didn't want to cut corners. So I actually ended up building the first fully integrated Tetra Pak processing line in Eastern India. Nobody had done that. And there was nothing in West Bengal, Golgotha also. They were all sort of, you know, put together cheaper pieces of equipment. We built a fully integrated tetra track processing line
00:22:25
Speaker
and that so So the plant was the big expense. The whole supply chain, you know when you when you build a FMCG company, um you know a moving consumer food company, especially in the food side, you will have to take care of a lot of the whole supply chain to to ensure the quality. And our focus was to be very clear about the quality to have control across supply chains. structure on the back end supply chain was also essential. And obviously the way I was doing it was was used using technology to be able to aggregate all the farmers and all the the checks and balances. so So all this sort of the the cost, um a lot of the cost went into the infrastructure. It was still a tight small team, not too much over there. and under
00:23:21
Speaker
Third part was really launching the brand. You know, launching a brand is and is is an expensive affair, but we were very tight and disciplined them on that front. So big chunk went to the infra. Like you read tracks with the cold storage capabilities, which would go pick up the milk from the farmers and yeah bring it to the plant. And then of course the plant itself. ah How did you...
00:23:46
Speaker
ah How did you make your business plan? Like like you researched and studied this yourself or you got in an expert who helped you ah set up the supply part because you didn't understand supply as you yourself admitted. So how did you figure that out? Yeah, although all this research, you know, everything we had to do ourselves and of course talking to other people in the space. I and i i brought on board ah co-founder as well so he was also deeplyly interested
00:24:18
Speaker
in this space he he he went on to become a you for in the the early part of third days and so both of us did a lot of research on the on the sourcing side kind of put that structure so essentially three four of us that the early only team that I put together and and prior to that I had all my preliminary sort of high-level research but then once on the ground you we did and also it some of these spaces you need to actually discard legacy knowledge
00:24:57
Speaker
in in ways if you go a lot if i had employed any expert from that space we would have never built milkman through the way we did same thing i'm seeing in when i'm building arna protocol right now as you know the convergence of ai and tokenization in DeFi and you know what happy to share we just launched two months back we launched the crypto world's first AI quant tokenized structured product and if you came with a lot of ah preconceived ideas ah notions from the space you would not come up with
00:25:38
Speaker
an alternative approach um and the same thing I am seeing over here in whilst building Arna and why what's different why are why didn't we end up just building another yet another staking and yield farming and you know or a restaking platform, um but but going into complete AI and tokenization for ah building an advanced AI quant product and in in crypto. So similarly, the same thing with dairy. So my I was very conscious, especially in that space, ah because there's a lot of baggage and bad practice to have very few people who came from dairies. So in fact, when the senior team, there was only another person who had a dairy background who
00:26:26
Speaker
was our head of production, still continues in Milk Mantra as the head of sort of compliance and projects. So I say it was like that. What was it that you did different from legacy companies? Like like what made Milk Mantra unique? Okay, so we we did multiple. So firstly, um the whole idea of coming up with a Premium product in milk, everyone who used to launch them used to sell cheaper than the cooperatives. We came in saying, if we have to fix this problem, we have to give a far better product and price it higher.
00:27:10
Speaker
And I was written off from day one by this expert saying, you'll never be able to sell anything higher than a cooperative. That is the gold standard and all of that. So we said, there are a lot of issues in that product. If you have to fix this, you have to do that. We have to be able to charge that A, build a high quality product and be able to charge a premium. B, to build, to create that high quality product, we have to come up with A, product packaging innovation.
00:27:40
Speaker
and have a proposition as well, which is believable by the consumer, right? So you can do the best thing, but if nobody believes you. So we did, we came up with this very interesting proposition that here's Milkimo is our brand. We said, here's Milkimo. You don't need to boil it. You can have it straight. So everyone in India like like you know yeah boils milk, right so especially back then, more than a day and back. And it's because no one trusts the quality of the milk. okay So they have to, even if it's pasteurized milk, they they want to make sure that everything. So we said, this is we use this this as a surrogate.
00:28:24
Speaker
don't need to boil, just have it straight. So this, and we did a lot of innovation on the packaging front, where we actually re-engineered a five layer film into a three layer film, which prevents light exposure damage to milk. I realized that if you can do that, then the quality of the shelf life of milk extends substantially by another day and in Colchin. This was a sort of a Colchin product, of course.
00:28:53
Speaker
And if we could do that yet and have this proposition and how I call it a product, then we could disrupt the space. So we did multiple such innovations which were very different and contrarian in the space. And also it's a dual problem in some of these supply chain, you know, led businesses. You've got to solve a consumer problem.
00:29:20
Speaker
And you also have to fix a problem of the supplier. So how do we use technology to aggregate farmers? We launched an ethical milk sourcing program and I explained to farmers why why i it made sense for them to supply to a milk mantra.
00:29:38
Speaker
and we paid them higher. And so so I think there's a bunch of things that were done differently in communicating with the consumer and and build a product which was very differentiated. We were able to charge the premium to the consumer, consumer tried it, believed it, and and we could that's why pay a higher fee to the farmer. um and And at the same time, be one of the highest contribution margin companies in the whole space. So, in spite of having all the higher costs and everything. So, you have to fundamentally restructure the thinking around the entire so supply chain and product of the company. You know, I grew up in Delhi, so maybe by ah maybe I don't understand what was the consumer problem to me, like the cooperative milk, like say Mother Delhi was what we grew up on. I mean, there was no
00:30:38
Speaker
trust issue there. And I find it hard to imagine my mother paying one rupee more for a packet of milk, which is not mother dairy. She might have paid one rupee more for mother dairy as opposed to some other local brand. but But was the situation different in Odisha? It was different everywhere ah everywhere in the country, actually. I think a lot of the cooperatives started with good intent, great structure, good products, high quality, but very few of them actually maintain that over time. So so it became it's it's a large problem. because Even today, there are only, I think, three cooperatives in the country which run well. I think even mother dairy in Delhi is probably under pressure. I think they ended up buying everything through aggregator.
00:31:32
Speaker
in in northern india as opposed to having their milk sourcing directly from farmers, which invariably leads to challenges. So yes, so in short, without taking names, um there were large problems around it. like Yes, the packet milk available was not like consumers were probably opting to buy directly from farmers like like because they didn't trust the the packet milk.
00:32:01
Speaker
Yes, so that's the reason why various high quality, good quality private dairy companies have come up in the country. And it's not just because of lack of supply, it's it's also because of lack of quality. And also, you'll have to see how the quality quality perceptions also change over time. right so 30-40 years back what the parents were used to having at one point they had the best, the purest which came. right And then there were some some you know package formats and stuff which generally everybody kind of started believing that anything that is packaged is good.
00:32:47
Speaker
right and then but Over time, people then realize that, no, actually it's not. Now this package stuff is has the has a lot of stuff which which is not good. So I think we hit that point where people had become to nobody was expressing it. If you ask, people will have the same view, like you said. But the moment you kind of go deeper, people knew that you you know that there was an issue. And actually, now that we are talking so much about food now, I'm seeing um
00:33:18
Speaker
There's so much stuff happening around influencers talking about how such shoddy quality and poorly labeled food is kind of dumped across. And it's not just a problem in India, in many of the markets, which are not, which are kind of some, you know, many markets are over regulated and under enforced. So the regulation is high, but the enforcement is only on on some.
00:33:46
Speaker
not enforced properly and it lacks so a lot of these problems happen even if you take more advanced markets like like ah say the US where the labeling and other requirements for for food are I don't know what what's sort of not in sync that you get so much of food so you know the majority of food products which are probably not healthy for for us to consume so I think it's it's a problem which goes through or there sitetal to it in some sense. ah You feel India is over-regulated and under enforced in the food packaged food category? I think India is over-regulated and under enforced in almost every every sector. right So compliant players kind of face a lot more stringent and focus and the ones who do not comply or around
00:34:44
Speaker
you know have their ways and means of managing it, do not face any of it. So, the enforcement obviously is is something that that can be much better and I am sure you know.
00:34:57
Speaker
that's just something which the governments also realize it. So that's why you know that the the reforms are all check comment and Take me through the ah milky the the milk mantra slash milky moo journey. like What kind of revenues were you doing yearon year-on-year? What were some of the broad ah lessons from that journey? What worked? What did not work?
00:35:21
Speaker
Akshay this image is blurring, is there any issue? ah See, we will get the recording directly from your local hard disk. So yeah it might be blaring due to a bandwidth constraint, but that will not affect the final output because this tool, it stores the data locally on your hard disk and then it uploads it to the Cloud. So I'll get the original recording. So that will not affect.
00:35:54
Speaker
right and just give I'll repeat my question.
00:35:59
Speaker
Yeah, I got it. But if you want to record it, you can do it. Yeah, for the recording. Yeah, for for my editor. So take me through that Milky Move slash Milk Matra journey. like you know what How was the revenue growing year on year? What were the things that you learned in terms of this worked, this did not work?
00:36:19
Speaker
a
00:36:23
Speaker
Right. So yes, so I think um in In a short period, we found product market fit at Milk Mantra. I was delivering a lecture at one of the institutions here in Singapore two weeks back on product market fit. So how in Milk Mantra we found product market fit, here I am seeking as as a founder in product market fit in Arna. So I think
00:36:55
Speaker
We found that fairly quick, and the moment you reach that point. So we have packet milk, ah the the yeah mass market packet milk kind of, ah that was a product which found acceptance. Yeah, mass premium. So we were around 20% premium, so and that's how our positioning has always been. So mass premium, and so so milk can be the other way. We launched Probiotic, we we launched Freshman years all of that stuff in in this German packaging technology. So All this stuff we we took around I think so ah Kind of two two years to kind of find a per market fit to 22 and a half years and then it we started through the space where we we were going very well and High 30%
00:37:50
Speaker
growth year on year through through the the first initial period. Then I think 2015, what kind of revenue would you have been, roughly? 2015, I think we were already at 100 crore plus revenue. Wow. Within two, three years of, about three like three years of launch basically you crossed 100 crore. So we launched in 2000,
00:38:23
Speaker
at level eleven or well i think three four years so yeah I think we took around 4 years to reach ah close to 100 crores. Within 4 years we we were at sort of close to 100 crores in that range and then we continued that sort of growth Till around, when COVID came about, that was what, 2019, right? 20. 20, yeah. 20. And our growth was, had tapered off, growth rates had tapered off. However, during that time, we took a conscious call, probably also with the impact of COVID,
00:39:17
Speaker
Here were two routes for us. one is two again you know Unfortunately, we were doing very well, so there was a lot of inbound interest for um raising more capital and and taking it forward. What was the revenue in 2020? 2020, we were close to, I think, 200 crores.
00:39:38
Speaker
and robotics um yeah I think yeah yeah have around around those numbers and and um we started, um we took a conscious call at that point in time that we need to be fully profitable and we might not get our 30-40% growth, we might get low single digit or rather single digit to a lean double digit growth But A, we will enhance the contribution margin and B, be fully sustainably profit. So we changed a bit of our approach at that point in time and and pursued that trajectory. and And we sort of hit all of those objectives largely. Yes, we did continue to grow you know in in that scale. So that was one of the sort of, what shall I say?
00:40:33
Speaker
a strategy, pivot of some sense that we undertook. One of the other other thinking for this was also that this sector,
00:40:50
Speaker
um you know, a certain consumer food spaces in India, they take time to mature and reach a certain scale and then after that they kind of start taking off.
00:41:04
Speaker
good a complete um you know driving, trying to get some exponential growth out of some of these which have supply chain
Transition to ARNA Protocol and Blockchain
00:41:17
Speaker
constraints. For example, you can't just scale them across the country. By the way, in India, there is no national fresh dairy player. and you know they're They're all regional. um So so we we took a conscious call that you know it's it's we will follow that path, make me fully profitable, have ah have have growth rates which which are moderate, um but build that whole foundation to reach a scale after which it can then you know really take off. Instead of raising more capital and just pumping into it and then just growing top line and not getting your unit economics right.
00:41:57
Speaker
which has happened with with multiple consumer companies which startups which launched in India and they they took that trajectory and never sort of reached or will find it challenging to reach that point. But consumer is like a well accepted story for investors. And I don't think, say,
00:42:24
Speaker
For example, EdTech was a COVID phenomenon, and then investors ah kind of changed their mind about funding EdTech companies. And we can see the impact of that. But consumer has been like an accepted story about India, India consumer story. ah So I mean, I'm just wondering why you took the call to reduce growth. And you also told me that this is like a $50 billion dollars market opportunity.
00:42:54
Speaker
ah I mean, you could have continued to be aggressive. Yes. So yeah, so like I was saying, so definitely consumer in India, yes. Like I was saying, ones which do not have supply chain constraints. So beach okay so if if we if we built a product which didn't need an equal chain and you kind of it and i went national. So the Indian market is in any consumer category you see, whoever has scaled, they have to have distribution across you know going into your B, C, D towns as well. So that's that's the challenge with consumer to scale. So the the challenge is with perishable, more supply chain driven sort of
00:43:48
Speaker
products to be able to do that. Oh, fast. Can you do it fast? Yes, you can do it fast. Throw a lot of capital, replicate the whole model in then multiple geographies, i you know and and have parallel approaches in that. is I don't think sort of in in this space it would have worked.
00:44:13
Speaker
i think probably the The decision to be ah like ah at a 20% premium would also limit you to urban centers only. I'm assuming maybe it may not have been worth it to go into tier 2, tier 3 cities.
00:44:30
Speaker
So actually, um yes, but definitely not say say rural or tier 3. But you know having said that, one of the interesting things we we we saw, and even in the cities, in some some pockets, we used to sell, ah which were very i know non below the radar in terms of their economic strata. And we were surprised early on to find a Milky Moon selling there. and once we Checked what was driving it realize that even a very modest family household Which had a child? they wanted to get the best product for the and thereby the locals or the there were you know existing brand for themselves for their tea or whatever else and So I think that was there. But yes, you're right. And and very consciously, we were also priced in that 15-20% premium and not higher. My thesis was that if you are not you have a mass premium in India at that level, the moment you are more than 30% plus in India, you're no longer mass premium, your addressable market just falls off the cliff.
00:45:49
Speaker
Now you're only targeting now 10% of the market. So it was important to be able to do, be able to do everything that we did in that 15, 20% scale. The other aspect is, and and this is something as as a founder, everyone, you know founders have to deal with raising capital, having having cap tables, which have multiple investors. Everything has to be aligned well for you to be able to drive growth.
00:46:18
Speaker
We were very early and in in the space I have ah three investors who came in at different stages. even Even the structuring and all of that, all those were evolving in in India, especially you know in a space like Arso. It was sort of difficult to align also everyone to pursue a certain high-growth trajectory. So those were other constraints. that as a founder i had to you know, operate with them. So we we took a conscious call which kind of was the best fit fara ah for the the company's structure. How much had you diluted by 2020 when you took this call? I think we we were already at less than 15%. I had done my last raise already back then and we were already less than 15%.
00:47:18
Speaker
Which is, I guess, a like just the fact that you started early meant that you did not get the kind of valuages with someone who started a couple of years after you would have got. Yeah, that's right. like that that was The dilution expectation was much higher in 2010 than it is today, like ah for similar, like even if you factor in inflation, 5 million round today would need a much lower dilution than a 5 million round would have needed back then yeah yeah absolutely and and i went through three three rounds of you know funding in fact my first round of funding was was very interesting with twenty two angel investors one in fact ah investor so there was a case study in Stanford which was done on the old fundraise and and my impact investor Ravishkar which was called impact sort of VC funding VC investing in India, Ravishkar and milk mantra so all that sort of happened but I think actually I think if you see founders of
00:48:25
Speaker
my vintage the guys who started um you know in in at that point in time everyone got hugely diluted okay even so the ones um who built really successful large um companies like let's take Sachin and Vinny Bonsall they were in single digits right so yeah this is not the right approach of building and investing and scaling up startups. I think the investor ecosystem itself was not a has not been evolved enough to understand and appreciate this. I think they are recognizing all this that you cannot dilute founders beyond a point where it it doesn't make sense for for for anyone.
00:49:19
Speaker
i mean take The problem is that we took a lot of the copy-paste approaches from from the U.S. and kind of ah the VC industry kind of evolved in in that way. oh However, in the U.S., if you see most of the, you know, the founders, no founders get diluted to that extent at all. I mean, they're all in high 20s, 30s, 40s, even after multiple rounds of funding. So I think that's it's an important part from from an alignment perspective.
00:49:52
Speaker
okay ah This first round which you raised, ah this was purely through like personal networking and hustle and like relentless cold calling and stuff like that. like How did the first round come about? Yeah, it took me about 18 months to raise my first round back then. ah Individual investors, angels.
00:50:15
Speaker
some you know friends, family, a lot of others who kind of just got introduced. So and yeah so so plenty of outreaches and a chunk. So half of it came from a bank debt, which you know I had to sign off my shirt. I'm surprised you had the courage to go for a bank debt after your father's experience.
00:50:45
Speaker
Yeah, so there was no choice and but i so i still so i was so I still structured it in a way where ah you know it wasn't some open. So we we obviously collateralized whatever we had including my wife's jewelry. as She put put up all of that stuff. So we took the bank debt and Again, that was sort of even the bank officials were like, we'd never give a loan to a new entrepreneur. It's just your background and stuff. otherwise unless ah so far that That was also one some experience. so a bated then the majority came from individual angels
00:51:30
Speaker
And then an impact investor, Avish Karuk, who came on board with the final check on that. So that's that's how the whole four and a half million plus got made up. Were subsequent rounds easier? I think there were three more big rounds I can see. There was a 10 million round and a 13 million round.
00:51:53
Speaker
Yeah, so yes, the the subsequent rounds were definitely easier. My my second round, I raised from Fidelity. They came on board. So we actually became one of those very few companies which raised not only from impact investors, but mainstream private equity investors as well. And along with it but then the third round,
00:52:17
Speaker
you know All my existing investors always participated in in the rounds. They were supportive in in in those rounds. And then in the third round, I had SBI Neve come on board. So yes, a very different set of investors. in and and subsequent rounds you had like numbers to back you like if you touch 100 covers in four years then obviously the growth must have been pretty sharp yeah that's right yeah okay yeah okay okay okay so i guess like i can kind of guess that maybe the reason why you are now full-time into arna protocol is the fact that your
00:53:03
Speaker
control over the destiny of milk mantra was so diluted, you had like single digit percentage stake in it. as And I think entrepreneurs have that itch to control the destiny of what they are building. ah Is that what happened? No, I don't think that's the main is one of the reasons for sure.
00:53:25
Speaker
on um However, so I still have, like I said, you know, double digit sort of
00:53:33
Speaker
share stake in the and the company between me and my wife who's a co-founder as well, Rashma. So ah the um no i think the more I am a more a creation The joy of creating something exciting, putting it down and then scaling it up is is something much more interesting and kind of is in sync with who I am. As as opposed to doing nuts and bolts.
00:54:11
Speaker
down you know So the the the nature of the business of mil monthro is where it's very now nuts and bolts operations so I felt it's actually it's right to get a professional or whatever but you know a management team to run that who who enjoy doing that as opposed to me me leading that I think that was a B I was clearly also interested in and looking at what what I can do next and you know my whole approach to solving a large problem and here was something which was I stumbled upon DeFi and I realized wow, this is so this is what next generation finance will be and you know and I was studying AI back then, ah four years back and it sort of happened at a time.
00:55:05
Speaker
where I kind of fit in with where I was at Milpantra as well. So I decided to kind of then vietnam was the most consciously move out of my executive roles over there, put the whole team in place and and have everything aligned so that the company continues to scale. And then we will take it eventually to to to the right sort of destiny whilst I pursue what I'm sort fully passionate about right now. One more question to kind of wrap up the milk mantra story. The ah exit would be an IPO or like what what do you see is the the way forward and what is the ARR now? What kind of revenue is it doing currently? So so I think the ARR would be around 50 million thereabouts and
00:56:00
Speaker
um and and we generate close to $2.3 million profit. wow yeah and oh yes and So to to your question around um what would be the... so obviously one is to scale it up to a stage where at that point in time we we go to an IPO. So that is that is one option for us. The second is that as we are kind were kind of, as you were saying, these sort of businesses, they need a certain foundation scale. After that, you can do a lot more. You can sort of have a lot more financial leverage, for example, to kind of grow. For example, last year, or two years back, the USDFC also
00:56:58
Speaker
so you know came on board as a a financial partner for us at Milpantra with a structured debt of $10 million dollars line.
DeFi and Tokenization Potential
00:57:07
Speaker
So all those will open up for us to be able to do a lot more once we have a scale, which will then enable us to grow aggressively and profitably.
00:57:16
Speaker
without without burning cash and take the company to a scale to do an IPO, that is one. the The other is clearly also finding the the potentially the right strategic partner, somebody who can you know come in and in some some form, sort of really partner with us at Milpantra or even to find the right home, the right acquirer for Milpantra who can take forward the the vision, the purpose with which Milpantra has been built. Both those routes are sort of open routes for us, which is a good thing because we are not we are not ah married to one particular route.
00:58:01
Speaker
And the fact that you're profitable means you would not be forced into either route also. You can take your time to decide. and Amazing. oh What does 50 million ARR mean in this industry, in the dairy industry? Like how would it compare to like say, maybe we say like a country delight? What would they be at? or So ah we'd be a mid-sized company in in the in the space. The biggest dairy company, for example, is a private dairy company, Hatson. They're close to a billion dollars. so And there are a lot of smaller companies who are typically the 100 crore range, which they never get out of that scale.
00:58:45
Speaker
and then and there are there There is a small spectrum of mid-sized companies like ours and some of them break through into the big ones. Who are the others in this mid-sized comparable peers?
00:59:01
Speaker
um there are there are um so so that mid-size I would define let's say from anything from 300 odd crores to 500 thousand crores in that range. okay that there There'd be sort of there there are multiple regional and regional brands and companies. And this industry as you said is essentially regional like there is no pan India player.
00:59:29
Speaker
That's right. And also a lot of them are, what, old, old, much earlier established family businesses and stuff like that. So they don't generally get on the radar of of the way we look at investors. Got it. Got it. Got it. Okay. Okay. So 2020, you got interested in crypto and AI. ah What next? How did that lead to Arna?
00:59:56
Speaker
Yeah, so actually, my first tryst with the blockchain um was in a very different context. And again, I think this was during just before COVID actually, just before COVID happened.
01:00:18
Speaker
um um The government of India, led the Prime Minister's office, started an initiative to build an Agri stack along with Niti IOO. And I was fortunate to be invited um with the four or five industry you know leaders. They were all much larger companies like like ITC, for example. To be part of this group, small group, to engineer the Agri stack for India.
01:00:55
Speaker
and And we worked very closely with Nithya Yog and um made three presentations to Prime Minister Modi. And it was a very exciting our time. And i at that point in time, I started researching into and seeing what were kind of problems from a supply chain perspective. and And you know, blockchain was sort of emerging, had already sort of emerged sort of as as as ah as one
01:01:27
Speaker
distributed approach of solving the traceability issue of food. And and once you fix traceability, you can actually fix several other things in terms of price discovery, in terms of certification quality, multiple things. okay so i So I proposed our blockchain based certification for the food supply chain.
01:01:55
Speaker
and we which which was one of the main constructs in the Agri stack. And that pilot, that whole or plan was piloted and designed and piloted Milk Mantra. So we led that initiative. We built that whole ah whole blockchain platform, which we called Bharat Food Assure and the whole objective was that you could pick up any food category pack and you scan it and see where it came from and it came from what other the certifications they should. So essentially ah food certification quality stamps could be issued as tokens, all of that stuff was sort of, yes that was my my initiation into that. ah What happened I think, and always we keep going back to
01:02:48
Speaker
move it because that sort of change changed so many things in between so I think that came about and then I think i think the government also faced all the the farmer reforms they introduced which unfortunately i didn't see the light of day and you know I think at that point in time, the the focus on this whole Agri Stack also went down. So it didn't and didn't go forward. But we actually implemented that fully at Milpantra. And you could, on our Daily Moo app, which is our D2C app, consumer code had the option to kind of the ability to scan QR code or input a serial number and see.
01:03:29
Speaker
and the whole thing so that was my first initiation on blockchain and and ai I was really fascinated with that but at that point in time I also was um what was's was deeply got interested reading and researching machine learning and the more I went into it just purely from let's say kind of more of ah kind of an academic interest And I realized that this is something I want to study at a deeper level. So I came about this one-year program and I ended up doing this post-grad program to get fully hands-on understanding and building models, coding in Python, and you know understanding
01:04:24
Speaker
um the the entire application side of AI machine learning. And as I was i suspect i was doing that ah sometime during 2020,
01:04:41
Speaker
train thereabouts I stumbled upon DeFi. it Just I think use some of these things will just happen like that. Of course, new crypto, but I never really did any crypto stuff. um and i But I stumbled upon DeFi. I found this amazing technology where everything could be settled by smart contracts in a completely decentralized architecture. And this this was this had the whole ability to redefine financial markets and systems.
01:05:18
Speaker
And that sort of takes us back to, you know, what I shared about my growing of yours and how wrong that sort of how banking systems have been sort of flawed in many ways and we've seen that and the soul, it's somehow struck a deep chord within me is to see that here is this sole approach to solve the Of course, nothing i mean I don't sort of believe in that some radical thing will happen, that banks will disappear. But there is there is an alternative system here which will become strong over the years.
01:05:53
Speaker
and The more I got involved in it as a user and participant, and there were all these very degen approaches to defy all the yield farming stuff. And so at one end, it's it's a very contrarian space. You had deep thinkers, um ah researchers in crypto who are who are kind of talking about the the the big impact that crypto as a foundational technology, decentralization as as as a philosophy and and and technology and how DLTs could actually solve all of this. um And at the other end, you had you had a highly speculative casino-like culture ah evolving.
01:06:41
Speaker
and and So it was a very interesting spectrum. and i the more i more i saw that so I realized that as a user, i yeah if you want to participate in this space or if you want to kind of really participate as an investor also in this because it's not just technology it's an asset class right that's what that's the whole sort of foundation of of web why it is web3 in the first instance and I realized that you know either you become a degen and what is a degen sorry a degen so it's a whole cultural phenomenon in crypto
01:07:23
Speaker
where it's like a degenerate. ah So a degenerate is, all they are doing is 24 hours, ah ah you know, doing some stuff around staking, farming, ah you know, um doing doing sort of pushing the boundaries of, of oh but you know, The layering of multiple of financially engineered ah products built on crypto, okay a lot of it is all scammy stuff as well. and But a lot of it is also very culturally driven. For example, you see the whole meme coin explosion happening right now. is This is largely driven by the the whole legion culture as well.
01:08:11
Speaker
So, there is there is good to it and there is a bad to it. It drives this sort of innovation envelope. But at the same time, it it it drives a very speculative sort of casino-like culture. not not So, yeah not not very healthy in in many many ways. So, I think that whole spectrum was like that and I realized that for anyone who really access this, either you become this or you will kind of on the other end of the spectrum spectrum as a sort of academic, almost of course academic and in that sense. But to, so how do I fix for myself if I wanted to participate in this at scale? You know, if I wanted to invest or or deploy a few thousand dollars, if I wanted to do some staking,
01:08:57
Speaker
or participate in DAO governance by locking in my DAO tokens or any of that stuff. There is so much DeFi stuff that is possible to engineer governance, engineer finance. If you were to do that,
01:09:18
Speaker
There was no real abstracted, easier way for me to participate. I can do that with smaller quantum, take that risk. But if I want to do that with larger amounts, there was no real trusted platform in DeFi. or or an ability for um a user to do that. that's that's So I started thinking about that and you know as from from my perspective as a user and then I realized that this is a big problem for a lot of other people as well. It's not just for people who are
01:09:50
Speaker
crypto aware or crypto curious still not in and um for them to have access to a platform to do this but also for crypto natives who have been in the space for for ah for a while but are not traders or you know our degens, but they they'd like to kind of participate it in um in a more informed structured way. And that's how my sort of whole journey into engineering, designing or architecting a DeFi asset management platform began. And the whole thesis of how we could then bring AI, because here all the information is on blockchain.
01:10:32
Speaker
All the transactions are there. Everything is visible. If we could have the right machine learning or ah deep learning framework to be able to make sense of that, you could actually bring ah you know a lot of sense into a highly speculative volatile space and bring risk management frameworks in de-risk that in in in some sense and create structured products you're using deep learning insights.
01:11:03
Speaker
and tokenization built on smart contracts. So here, you're able to do two things together using the technology. the A, the one the technology enables ah you know supports with with open data. And B, the technology also provides for the execution of transactions through smart contracts and tokenization. So that's that's when this thought around i DeFi asset management to address the large problem of users to participate in this space at scale, to to create to participate in the whole wealth creation that that can happen in this space and be part of their technology and culture as well, but in a more organized, risk-managed way. And that would that will be possible by bringing AI and tokenization together. so
01:11:57
Speaker
then sort of start Obviously, it didn't happen overnight, as you can understand. It took a long time to kind of figure this out, try different things. Started building a small team to kind of work with me, code it out, implement various things through the process, and then we arrived at on the whole construct of it and and started building over the last add two years plus. yeah OK, OK, I'm going to recap a little bit of this just in a slightly more layman friendly approach. oh So ah your exposure to decentralized ah finance or ah blockchain or distributed ledger technology was with traceability of milk. Like a consumer should be able to look at a packet of milk and figure out which which district or which farm that milk came from.
01:12:47
Speaker
which you built a blockchain solution for that? Right, so now I think there are two distinct things. So my my initiation into blockchain was through that, blockchain as a technology. ah Decentralized finance is obviously built on blockchain, but... right etc yeah Okay, got it.
01:13:07
Speaker
and why does so Why do you need the blockchain for traceability of milk? why Why can't it just be a spreadsheet that is or ah or ah any kind of a backend database that is doing this? So that that's the sort of whole of fundamental of of why if you have a backend database which is managed by a company, then the company can very much men manipulate.
01:13:37
Speaker
manipulate and change that which happens again I have seen it up close in this space large respected companies change expiry dates of products and dump them back in the market. okay I was astonished after entering the space to kind of CEC, you know, Weizbildung, Bildung-Mentra. So all this stuff happens. ah If you have a distributed ledger, which records transactions, which become immutable because of the just decentralization, so then no particular
01:14:16
Speaker
operator is able to change the data that is recorded on the block. That kind of brings in the immutability of it, firstly. okay So so so there's there's one reason why that database needs to be on on that in that architecture.
01:14:34
Speaker
Secondly, imagine a supply chain, let's say, where there are multiple vendors. you know Whenever you're making any product, there are you know hundreds of vendors. so Here, you could have all all these inputs coming in into the system being verified by multiple vendors, the one who is sending, the one who is receiving. And there's a whole time stamp and record of that, which is immutable as well. So it becomes distributed into that extent.
01:15:11
Speaker
Thirdly, all the certification part as well, where ah ah you know a certifying authority can also see all the records and then you know issue certification then which cannot also be changed as well. So, there is a bunch of advantages of why blockchain as a technology has immense application, not just in decentralized finance, but also in supply chains, also in how how distributed computing and storage is evolving. Also in the ONDC also built on like a decentralized protocol? I'm not very familiar, but I don't think so. I don't think so. they're They're all built on a web to architecture.
01:16:05
Speaker
ah um but But again, you know, and blockchain, for example, is is can be used for raw property rights, for example, DNA record. So so that the application of that, where it has to be stored in a decentralized form forever, is is we know how records can be changed, for example, right. So all this other the applications are sort of events in that sense. And at Milk Mathru, did you build it on Ethereum, your blockchain for traceability? or like No, it it was on a private blockchain. It was on Hyperledger Fabric. okay okay Which is like a blockchain solution for corporates, I think.
01:16:51
Speaker
but yeah So, so then there are public permissionless blockchains like Ethereum for example, which is completely decentralized public permissionless. So, yeah you know transactions can happen without any intermediary being there and there are private Permissioned blockchains as well and of course a combination of all that and then this this is a sort of private so what could happen for example in in a private permissioned blockchain like like that a solution built on a Hyperledger fabric could be where and the the permission is being issued by a governance body or by or by let's say the food certifying authorities and stuff like that and and it is on a
01:17:39
Speaker
private blockchain where for example certain information obviously which is confidential to companies which um let's say their inventory levels of certain new launches and stuff like that which should not be out there. So you can manage all of that stuff. So so it's it's that's how eight it was designed. So it has immutability but it also has the added benefit of permissions on who can see the data. ah Yes. so Depending upon this side of the table, you said it's a benefit or yeah same night yeah and less So yeah, absolutely. Okay. Got it. Okay. so
01:18:19
Speaker
What you realize as a gap in the market is essentially like if we compare it with equity as an asset class. So if ah I'm too busy to actually go and study annual reports of companies and figure out which company I want to invest in, for me the easy way to invest is a mutual fund. ah Something like that does not exist for crypto. Either you will invest in like a blue chip, like say a Bitcoin, Ethereum.
01:18:49
Speaker
oh Or you will maybe do high risk investments in meme coins, which may give you great return or may not. But like a de-risked product like say a mutual fund does not exist for ah investing in crypto as an asset class. That was the gap that you saw. which ah what And the way that you decided to fill it is would be, I guess, similar to like say a quantitative mutual fund, like like there are these funds which are quant funds where the it's not a fund manager as such who's managing the the investments, but they create algorithms and those algorithms are running that investment and using machine learning and so on. So so you you built something comparable to that in the crypto space.
01:19:39
Speaker
So yes, I think what what you asked Akshay is like, has multiple layers which need to be sort of unpacked. Short answer, yes. So A, if you see Kripa and digital assets as they are evolving, there are, I'd say three components in terms of the the instruments that that are coming out of it.
01:20:05
Speaker
So one is obviously Bitcoin okay and and maybe add Ethereum to it. It deserves its own own space, especially with Bitcoin as as a store of value, inflation edge, sort of the digital gold. So that needs its own own space. if you look at If you look at entire asset classes, starting from bonds, equity, real estate, cash so gold So if you if you could look at the whole spectrum, Bitcoin deserves its own space.
ARNA Protocol Innovations and AI Integration
01:20:41
Speaker
imagine like a like a sort of a two axis where there are legacy legacy or new assets on on um sort of a legacy or future assets on on sort of the Y axis and on the X axis, imagine a risk reward. So if all these older ones are in this quadrant, the newer ones which are evolving are in in that quadrant, Bitcoin sort of out there.
01:21:11
Speaker
along with that Bitcoin are crypto utility tokens ah which which are solving large problems using crypto technology. and And the tokens, the Euclid tokens are for securing those solutions or those networks or all the server multiple utility for those protocols or projects. and And these are built on multiple.
01:21:37
Speaker
blockchain so those tokens um are are there which is largely the crypto universe and then there is along with that tokenization by using smart contracts to tokenize multiple underlying assets which could be crypto tokens which could be real world assets which could be you know Anything from from paintings to real estate and stuff like that. So So if you look at those three components of digital access, that's Bitcoin, crypto tokens and and tokenization. And when I say crypto tokens, it's not necessarily it could be also meme coins and stuff like that as well. So those three, the the the latter two is where, ah you know, which which is
01:22:27
Speaker
i you know where where people are participating in almost like a punt. It's just highly speculative. So it's very, very difficult to assess. It's a new technology. it's It's difficult to assess and understand. And and it's it's unlike and it's very easy for anyone to release tokens. So there are like 15,000 tokens today right so or or even more and this whole long tail of assets which are completely speculative so how how how does a a user or investor kind of participate in this so that's where structured products ah are necessary just the like the analog analogy you gave be it mutual funds or ah more sophisticated quant products or even simple indexes and stuff like that so that's
01:23:20
Speaker
Solving that is is is important for this entire category using tokenization and this solving it also for not just crypto assets but also for other assets that will get tokenized. okay So that's that's one part of it. The second part of it is this has been attempted earlier and and It has existed also, it still continues to exist in in in small and large ways, but in a very centralized fashion, where you know there are other companies which say that, okay, we are going to create this product or manage this strategy, ah which will invest in such a thesis, let's say. And they take the assets from the users and they manage it directly.
01:24:09
Speaker
All the blow up that has happened in crypto is by centralized entities. The technology is designed to be decentralized, self-custodied in a permissionless architecture. right So those are like the basic principles of how it should be. um However, the the you know but and all the you know ah much of the crisis that has happened in crypto is because of centralized entities who took assets from investors and took leverage do with whatever on on top of that. And then the governance mechanisms are not, oversight mechanisms are not evolved in the space. It's a highly, highly volatile space. So it introduces a lot more risk in in in in that sense. So that's why it was important to not just
01:25:04
Speaker
solve this or address it by creating these structured products, but also do it in a in a very in a decentralized DeFi architecture, where it's all run by smart contracts, the counterparty risk is is to an entity is is limited. Of course, there may be a risk in terms of the or but But in terms of a counterparty handling those assets, it is limited. It is permissionless. Anybody can come in and come out at any any point in time. Your funds are not stuck. You are seeing an example sort of happening back in India as as we as we speak. So all these issues are not there. So that is how it needs to be designed. So we took that whole approach.
01:25:54
Speaker
of making it completely these creating structured product which are completely decentralized, so the user really has the control over them, they are able to participate in how these are run or managed, or or rather how they can access them. and And the other approach we we brought to it is the AI quant approach, because how do you, you can do all of this, but to identify and de-risk the volatility in this space,
01:26:26
Speaker
you need ah a sophisticated pattern recognition system, an AI deep learning framework which is able to do that and is is acting on not 15,000 tokens but is seeing the top end of it 30, 40, 50 tokens and stuff like that. So all this all this kind of went into the design of of a completely decentralized protocol which ARNA protocol is and then this is is this infrastructure of ARNA protocol is is used to create different structured products. R5 802 is the first product which we launched after two years of research and building two months back we we launched that. That's the goal crypto world's first AI quant tokenized structured product.
01:27:10
Speaker
which gives users access to a ah deep learning framework, which which predicts top assets. And those are all transacted upon directly by smart contracts and users can come in and come out any point in time. So in a nutshell, not in a nutshell, I think as I spoke quite a bit. So that's what sort of on a protocol is and how how these products will emerge going ahead. ah Okay.
01:27:37
Speaker
ah Again, let me try and attempt to recap. um so There are three asset classes within the crypto world. One is like the blue chip, Bitcoin, Ethereum. And then you said tokenization, which by which you refer refer to NFTs. Am I right?
01:27:54
Speaker
No, tokenization is sort of structured products. Let's say you know when you tokenize something, there is an underlying asset. You're tokenizing it and putting it on the blockchain. um So so it it it can be then it's got liquidity. It can be then traded, and you all of that stuff can happen. So that underlying asset can be, for example, other crypto tokens, utility tokens. so you So you can create a structured product which has, let's say,
01:28:23
Speaker
um thematic crypto tokens based on a particular strategy or they are the top tokens based on certain AI account algorithms and stuff like that. okay the the ah Also all the RWS stuff that's happening, real world assets, bonds can be for example tokenized and then there they can be and what happens? Why would you need to do that? Because A, then you can have much more easier access on ah on a public blockchain.
01:28:53
Speaker
So, and they are fractionalized. So, support for something which you needed to deploy, let's say, $200,000, now you can buy $2,000 or even less worth of it. okay So, tokenization brings in fractionalization, liquidity, a lot of efficiency into that. In fact, you know, as you might have learned, Larry Fink, BlackRock CEO has gone record saying how tokenization, every asset in the world will get tokenized. So everybody's kind of seeing the future of how financial markets will evolve. Piyush Gupta from DBS, he spoke about how DeFi is a foundational technology like AI is and how it will kind of impact. So everybody's kind of seeing seeing that.
01:29:44
Speaker
now
01:29:47
Speaker
ah to To answer, going back to your question, so yes tokenization is is is ah essentially how um multiple asset classes can be put on the blockchain in in a form which makes it much more liquid, accessible, fractionalized and and and ah can be and it also brings in the other dimensionality of composability.
01:30:12
Speaker
where one smart contract can talk on the smart contract so you can build, you bring in sort of efficiency in in in terms of transaction structures or our governance mechanisms and stuff like that as well.
01:30:26
Speaker
okay ah okay okay Yeah, okay. So is there like a mainstream example of tokenization in India? I mean, for me as a lay outsider, my understanding of tokenization was essentially like the board ape club or something. that I think there are these like the board ape, you know. Those are NFTs, yeah. Those are NFTs. Which is an example of tokenization, which I'm aware of. What is like a more serious example of, that's like a frivolous example you could say, but what's a more serious example of tokenization?
01:30:58
Speaker
mainstreamish so So in India, no, but the the big um mainstream examples are, I mean, there are there are multiple RWA projects which are called real world asset projects.
01:31:12
Speaker
who are tokenizing, let's say you wanted to invest somebody's tokenizing real estate in New York and London, let's say. And so now it's tokenized into into a structured product and these the tokens represent a fractional ownership of a portfolio real estate, let's say. okay so the so So that's that's one. but how How legally strong is the claim of the token on the underlying asset?
01:31:41
Speaker
Yeah, so those are those are all those are all in place evolving fast in place coming into ah Not not everything can be tokenized surely right now, but but more multiple assets financial assets more easier for example, you asked about an example take black rocks oh oh Biddle, sort of which, or UBS has recently launched a money market fund, U-Mint, I think that's called. So these are all tokenized products ah with underlying assets, which are financial market products, like money market products and stuff like that. so
01:32:26
Speaker
this This is how tokenization is evolving. okay and like i like I was giving you the example of how tokenization will have multiple underlying assets. It could be crypto utility tokens, it could be um financial products like bonds, money markets and stuff like that. It could be real world assets as they are called, like like real estate.
01:32:51
Speaker
all For example, imagine imagine a portfolio of expensive paintings that are are difficult to afford for most people and we could we could actually own a fraction of that if it is tokenized. So now you know I think that that probably is an example which which is more relatable is in that sense. yeah right guard it so so ah Yes, so you can imagine a portfolio of artists let's say you who you always are admired you wanted to own a piece of that and I could never afford that but now I own a piece of let's say um Picasso token and and and somebody has tokenized that and which has five underlying
01:33:33
Speaker
Hussein paintings or Picasso paintings or or something like that. So, the advantage is not only does it enhance accessibility, democratize accessibility, um it also brings in liquidity because now, let's say I own it and now it's its price, it reflects the underlying assets price and I i want to, I need the capital sometime and I need to kind of sell it.
01:34:00
Speaker
na sorry I can sell that on ah on on ah on any platform or ra which which enables that. And now you can buy it from me. And and so there is much more liquidity. um So all this will evolve fast. The regulatory framework needs to be there as well. um I think in India, we have we have to take reach, you know move move a lot lot faster on on all of these fronts.
01:34:30
Speaker
The cryp crypto has its negatives, no doubt. 80% of crypto is speculative stuff. Some part, half of it is some probably scammy stuff as well. But imagine when the equities markets would have evolved 100 years back, you had all sorts of scamsters trying to you know ah sponder or scamp the public ah with with penny stocks and stuff like that. So those there's an evolution to it. So to throw the you know baby out with the bad water or is is not not the sort of best approaches. This is a foundational technology. People have researched it over a decade. I mean, in the last decade or so, it's it's it's very new compared to, let's say, AI, which has been around for three, four, four decades.
01:35:29
Speaker
So I think it's important to understand that aspect of it. And and the the regulatory framework, so so and we talk about yeah know money laundering, for example. Money laundering is happening across every other every other ah transaction enabling mechanism, including banks.
01:35:53
Speaker
ah and you know They have been huge settlements by the biggest banks for ra how they have kind of been involved in intentionally or on intentionally in money laundering.
01:36:06
Speaker
in In blockchain, actually, all transactions are visible. So you can see where what has moved from where to where. Of course, people exploit that. But it's a fringe. it's not it's not the So for that to not be ah to kind of kind of completely kill the innovation in the spaces is probably not the right approach. And I'm sure the right people recognize that. OK, got it. OK, I understood tokenization.
01:36:35
Speaker
The third asset class within crypto is crypto utility token, which I guess Ethereum technically would be that, like essentially a utility token is where you are not looking at it purely as a store of value, like Bitcoin is purely a store of value, whereas a utility token is maybe got a smart contract functionality attached to it, ah like Solana or Ethereum would be like the more prominent examples here.
01:37:03
Speaker
Yeah, so so yes, those are sort of native blockchain, or you know, coins, for example, so the world were the blockchain token itself. But there are also multiple projects which are DeFi protocols, projects which are built.
01:37:20
Speaker
on on those chains. For example, when we when we release the um ARNA token, it's it's a utility token which has specific utility for for the ARNA ecosystem, the ARNA protocol for multiple dimensions within that. So similarly, ah so so there are all these utility tokens are an important part of the whole crypto ecosystem. Just like let's say memes are, for example, in a different context, and then there are the number multiple types of tokens, but utility tokens are around ah the other ones that will, which are really driving, the innovation is really behind them in in and multiple ways. Like say a decentralized exchange would have, like say a Uniswap would have a yeah governance token and that is what you are referring to here as a utility token. Yes, that's right okay that's right. Okay, got it, got it. Okay, so these are the three asset classes within crypto and
01:38:17
Speaker
what i'd say I'd say these are the, in the digital assets ah spectrum, I think these would be three ways of looking at it, is how how I'm kind of saying it, not necessarily three different assets. Got it, got it, got it. Okay, yeah, fair point. um ah So now, what you're saying is that there have been examples of ah like the the mutual fund analogy which I gave and you said that a the and like there there was a crisis. I think you're referring to the three arrows crisis or similar such crisis where ah if you trust a human being to manage your investments for you, then there is a chance of ah
01:39:04
Speaker
I mean, it's fundamentally against, let's say it's fundamentally against a DeFi philosophy, trust a human being to manage investments. Like the DeFi philosophies, code is law, so ah code should manage your investment, not a human being. And that is what caused the problems, the crypto crisis, because people trusted human beings to manage their wealth instead of code. So you are essentially building code to manage wealth, which is getting invested in crypto, ah in digital assets.
01:39:35
Speaker
So yeah yes, I think i think it's it's not about really interesting code to manage oh you know you are your digital assets. It's also about having self custody, for example, you know being on a permissionless architecture. So there are multiple sort of dimensions to it. And yes, a DeFi asset management a protocol like ARNA which is decentralized built on a completely decentralized architecture um and
01:40:12
Speaker
is built on AI and tokenization for the smart contracts to hold all the assets and undertake all transactions directly. And that is how that's how it it is built and defined. The analogy of centralized entities is is important in two ways. Here there is a technology and a philosophy which is designed to be to be decentralized.
01:40:39
Speaker
b the The governance guardrails and and regulatory framework is of of traditional financial markets and crypto is is is is different, right? So you cannot copy paste that here. And that's where you know an architecture like this makes it much more suitable for ah for users to be participating.
01:41:09
Speaker
and accessing okay like traditional finance is highly regulated and therefore you can trust a mutual fund because it is a regulated entity whereas said the digital asset wealth management space is under regulated and therefore you cannot trust an entity to manage wealth for you and the wealth management should be run on top of a decentralized platform itself.
01:41:36
Speaker
Okay, let me give, so I'll i'll answer that in this in two ways. So any interracial finance, any exchange, let's take an equity exchange, for example, the exchange is sort of the market maker, they are facilitating the transaction.
01:41:59
Speaker
They are not holding your assets. Yes, NSE doesn't hold ah your equity. It's split up. Different players are doing different things. there's The custody is different yeah yes across the world. In the crypto world, the exchanges are holding the assets.
01:42:18
Speaker
okay which is a large point of contention or rather conflict and ah seen since the inception. Yeah, which is what went wrong with FTX and yeah the Wazir-X problem which is happening is also stemming from this, ah like this is the root of all evil in a way you can say. Yes, it does introduce efficiencies in in other ways, for example liquidity, um but but i mean fundamentally it it introduces other, because the structure of oh custody and exchange sort of is challenged. So that's one thing. Secondly, highly regulated, final I mean we tend to have, I think short memories also.
01:43:10
Speaker
highly regulated financial markets, most advanced markets have also screwed ah you know the the ah the the the real retail user multiple times. okay ah the I think the most recent one would be probably know so you saw that the whole GameStop and how Robinode users and with Citadel at the back, for example, um switching off them their ability to transact. So that would not be possible in a DeFi architecture at all. right So that's ah that is a fundamental difference. And these things don't
01:43:57
Speaker
come to light as much and and even in the most regulated financial markets, the structure, the incentivization, the governance model is all designed in a way which repeatedly has led to issues.
01:44:16
Speaker
it's not It's not now, it's happened over time every decade okay and and in big and small forms. And if you go back to sort of folks of our vintage, ah we know what happened in the global financial crisis. Younger people today in crypto may not know about it.
01:44:37
Speaker
But and that that was sort of the whole inception of why Satoshi in you know came came out with Bitcoin as as a pure payment of system which which is which is sort of decentralized and and not privy to any any any control or manipulation.
01:44:59
Speaker
so i think I think we have there are multiple sort of such instances where regulation is not enough. I think structurally they need to be designed in ways so that you don't need so much of regulation and and that's where um the architecture of DeFi comes in.
01:45:23
Speaker
Right. Defy is essentially like trustless. It does not depend on you trusting somebody. It is designed in a way that you don't need to trust, but like it is immutable, verifiable, transparent, et cetera. Okay. Got it. So I'm not clear on what is the difference between the protocol and the product. You have ARNA as a protocol and you have AFI 802 as your product. What's the difference between them?
01:45:53
Speaker
Right, so a protocol um is is the infrastructure, the the smart contracts infrastructure or set of smart contracts built on the chain, let's say Ethereum, which which are designed for a particular ask let's ah Let's say Uniswap smart contracts act as a DEX to perform as an automated market maker. Smart contracts, the protocol is the infrastructure.
01:46:33
Speaker
and It has, it's it's obviously built on a decentralized architecture. You actually, once it is deployed, um a user doesn't need to even go through, for example, on the ARNA protocol. We have nine smart contracts which are deployed for as a tokenization platform. A user can actually interact with any protocol or smart contracts directly You don't need to go through the UI of Uniswap to interact with Uniswap contracts. or So that's one part of it or are not two our our application, our DAP, our mobile app, which is all there to facilitate it much more easily, smoothly. It's an important part of it, but a user can actually go right up to the to the smart contract, the protocol directly to interact. The second part is as a protocol,
01:47:19
Speaker
has inter-operability. So um you know the smart contracts talk to each other. That's the composability function. And for example, when we are our smart smart contracts, all the swaps that we do, they our our contracts are composable with Uniswap V3, as far as Ethereum is concerned, and also on on multiple DEXs, on Arbitrum, where we will be deploying. What is DEX?
01:47:48
Speaker
DEX is a decentralized exchange like like the crypto exchange. stock and So our smart contracts talk directly to Uniswap smart contracts and make all the swaps and exchanges you know through that. so So that's the interoperability is the other part. And of course it is permissionless, trustless so so users can come directly interact with that in a trustless format, ah structure and and it's permissionless there is no intermediary there. So that's the protocol in a nutshell and that's what ARNA protocol is an AI tokenization sort of protocol. Now that infrastructure we are able to use to design multiple products. products okay So the first product is AFI 802 which can be seen is is the our first product which we launched
01:48:41
Speaker
and do a lot of applause at token 2049 at Singapore two months back because it's a crypto D5 world's first AI quant tokenized structured product. so so So there's seeing a lot of appreciation interest.
Functionality and Products of ARNA Protocol
01:48:55
Speaker
ah People are also curious about how this this sort of works. It's it first of its kind. So this is all designed by by leveraging the protocol. okay So that's that's the product that is done. Similarly, we will have multiple such products products which are built using the ARNA protocol.
01:49:16
Speaker
I'm going to try and simplify it and maybe murder the definition a bit but let me give it a shot. You heard of Zapier? So ZAPIR allows you to build your automation on top of it. But ZAPIR is like an infrastructure layer which has done the hard work of connecting with tons of apps. And then on top of ZAPIR, you can build your own custom automation workflows. ah So would that be a fair and logy like ah very laman is analog analogy? analogy.
01:49:49
Speaker
of sorts, but see if you ever see it in the blockchain context. So look at Ethereum as ah as a network. okay So that's that's the core foundation, the the whole network, the L1. And there are sort of all these other blockchains, L2s, which bring in efficiency, solving for the state. Polygon. and yeah Yeah, polygon is a side chain, but L2s like Arbitrum, which are built on Ethereum. So so like that.
01:50:19
Speaker
now That is the sort of foundation and i think the consensus layer, that is where all these sort of transactions get approved, all the validation happens, that is all in the seems the network, of the the base network. Now, all these these protocols are built on them okay and because they are built on on them, they are able to talk to each other.
01:50:43
Speaker
and have that interoperability. And now, these protocols also allow for others to kind of build on them. For example, when we create ARNA AFI 802, the structured product,
01:50:58
Speaker
When a user comes and deploys stablecoins into that, so what happens? Let me define alpha 802. So what is alpha 802? Alpha 802 is this AI quant tokenized structured product. So essentially what it does is the smart contract contracts have created a product. There is our deep learning model called alpha 37, which has been trained over sort of more than two years of data from blockchain transactions, social sentiment.
01:51:27
Speaker
from ah ah technical indicators. So ah more than close to 100 features have been taken to train um Alpha 37, which is a deep learning framework built on VAE and LSTM architecture.
01:51:42
Speaker
And this model is now able to, with all all the training, is able to have predictive power to identify top crypto assets in the short term. okay So that's what it does. um And we work more than two and a half years on on building that.
01:51:59
Speaker
And that alpha37 prediction then goes into the alpha80 to smart contract product, the smart contract. And does does this then the smart contracts, the alpha80 to text those inputs. And when a user comes in through the DAP or directly interacts, as I said, when a user will, for example, come to the ARNA DAP or the ARNA mobile app,
01:52:26
Speaker
and and deploy stablecoins, usdc or usdt into the alpha 8 0 2 and get alpha 8 0 2 tokens as ah in in return and now those those smart contracts our take the AI input, ah take those stablecoins and go to Uniswap and do all the transactions to rebalance their whole portfolio and acquire exchange those stablecoins for ah those you underlying recommended tokens.
01:53:04
Speaker
And this happens over and over again. They keep on swapping, rebalancing. All of this stuff is managed completely by the AI and R5-802. The user is is i holding onto R5-802 tokens in their wallets, DeFi wallets like Metamass or any DeFi wallet. um Many of the exchanges have come up with their own DeFi wallets, any of those. Or even a user can come and open a DeFi wallet on RNA, which is web built on Web3Auth.
01:53:31
Speaker
ah which is also completely in their sort of custody. And they use that wallet, they're holding down to the ASAP 802 tokens, and whenever they want to exit, depending upon how the value is moving and stuff like that, they can exit. And also there are multiple things like new you for benefits for users like the half-eyed time lock and staking program where a user not only comes and deploys and accesses the strategy but they can stake the half-eyed zero token for six months, twelve months and get an additional APY or an additional yield um to through that mechanism.
01:54:10
Speaker
So this is how the smart contracts sort of operate and everything is managed through core and smart contracts directly. And that's that's that's how um one has to think of how the base layer of ah the the blockchain network, the protocols and and how the products built on those protocols on the kind of interact with each other and how the user and sort of and and tokens and of flow through the whole ecosystem.
01:54:41
Speaker
okay okay so ah Like, FI 802 is a trading strategy running on top of the infrastructure of the ARNA protocol, which has an FI 802 has its own token. ah And the way to invest into FI 802 is to buy that token. Can I buy the token with fiat currency? or No. So, we are completely on a DeFi architecture. So, you have to get a DeFi wallet, get stable coins like USDC, USDT or DAI and then use the connect the wallet to AFI to the ARNA protocol and and then from your wallet deploy the stables into Why can't I just buy F5802 tokens from an exchange like a uniform or a YDCX? Yeah, no, that's that's a great that's a great question. I think that is where we will head to in the in the next phase of ARNA protocols sort of as as we kind of um move into different levels.
01:55:53
Speaker
and in the We have already have the functionality of AFI 802 as a product to be tradable on a DEX or for the matter on a centralized exchange as well. So once we we reach a certain stage, we will be able to enable that where you can actually go and buy directly from an exchange as well. But ah why the the question to ask is also, yes, that gives you easier access in many ways, but here you are also able to access it directly from from your wallet. Also, the other point to note is if WinAFA 802 or other structured product tokens are available on centralized exchanges,
01:56:42
Speaker
When you buy on the centralized exchange, again, the custody is with the centralized exchange. So that's that's the other dimension. By interacting directly with the protocol, you are having self custody. Okay. it Is there an edge case scenario in which I'm not able to sell my F802 tokens? Because they are not on an exchange, it would be very easy for me to just sell them in an exchange.
01:57:11
Speaker
No, since this is a structured product, so they have these underlying assets. So whenever you come and let's say redeem it, then you you kind of queue it for redemption. So the smart contracts then are designed to already take queued redemptions and Exchange, let's say you had 100 R5 802 tokens and you queued them for redemption. The R5 802 smart contracts will then take the take an equivalent amount of the underlying assets as per the prevailing NAV and swap it into stable points.
01:57:50
Speaker
okay and give when when you redeem it exchange your alpha 802 and give you back the stable points at that value so it's all designed to be like that. Now to your question um Where can there be an edge case? There can be an edge case if those underlying assets that AFA 802 is holding do not have liquidity. okay and And so then that they cannot be exchanged. So that is exactly where the whole risk management framework comes into play.
Ensuring Trust and Security in DeFi
01:58:24
Speaker
Alpha 802 is designed to only trade the top, ah to consider in the portfolio and trade the top 30-40 tokens currently which will expand, which have sufficient deep liquidity on Microsoft v3.
01:58:41
Speaker
and sufficient you and and there are large tokens. It cannot be some random token suddenly has emerged and has our liquidity. So so liquidity is ah is a key aspect that is one of the risk metrics that the product, the contracts and the AI algorithm also checks for.
01:59:04
Speaker
ah you know There would be no difference and ah this may sound a little offensive but just treat it as a hypothetical question. um There would be no difference between what you are saying and what a con man is saying. There ah have been a lot of these cons like you would have heard of that crypto queen con who say that they have decentralized, ah ah you know like like everything is decentralized and there is nothing we can do to manipulate it and the contract will execute because it is coded that way. How do I know that you're not a con man?
01:59:41
Speaker
and yeah so and No, so I think i think it's ah it's a valid question. And I keep saying a few things, in fact, on on this piece. who One is, it's important for users, investors, to actually ah diligence teams behind DeFi projects and protocols, founders, teams. you know A lot of these projects which have Anon founders and teams have all been rugged. okay right So ah this this happens um and you know quite often. ah Like I was saying, half of the space unfortunately has a lot of scammy stuff going on and it needs to kind of settle down and and be cleansed in some form. So definitely, diligence in teams is an important part of it. okay
02:00:38
Speaker
The second part, this is I mean, DeFi is supposed to be trustless. It shouldn't matter who the team is. and so and so like the The Satoshi Nakamoto is the perfect example of that. Exactly. I know that's the argument that people sort of come up with. Now that comes, where the second part comes in, is the cold.
02:00:59
Speaker
okay so You have to understand the code. If you understand the smart contract very clearly, then that's fine. then you you need not And if it has been vetted over time, like let's say the Bitcoin code, then then that's that's fine. but But if it is not, then you have to have the ability. Now how how do you how do you judge that then?
02:01:22
Speaker
So, that is where security audits come in. So, third parties deep security audits are absolutely essential for any DeFi protocol and even for exchanges or whoever is there you have the must check that security audit report ana is completely transparent. All our smart contracts have been audited by two of the secured audit forms. One of them is the topmost of the secured audit form. sort and All the reports are publicly available on the Skynet ah platform. We make all of those accessible for users. So A, users have the access to certification to, obviously, nobody know most people will not get into the code and understand, but there is a whole third party.
02:02:10
Speaker
certification verification of the code which is very, very important. Along with that, diligence in teams is important. So, either you kind of do both of these or one of these two to be able to kind of know that there are no con men sitting at the other end and you are right, there are quite a few.
02:02:33
Speaker
un unfortunately it there So like like there is like an ISO equivalent body which if you carry a sort of like an audit certificate from that body then it pretty much assures investors that this is kosher. Yes, um that's true. Having said that, there are there are is does that mean it is 100% secure? So there are there are hacks that have happened on smart contracts, right? so sometimes So A, if they are not designed properly or not audited properly, those ah those have happened. and And there have been more sophisticated sort of um vulnerabilities in smart contracts, which have been exploited. But over time, you know all this has sort of strengthened the whole ecosystem, the audit rigor, the the rigor of testing. So all those are important.
02:03:29
Speaker
aspects but yes that's a third A proper security audit for any any crypto project is absolutely important. Okay, got it. How do you ah make money out of this whole thing? What is your path to wealth by building Arna?
02:03:51
Speaker
so a um are objective or the whole mission is to really create informed intelligent access to crypto and digital assets. okay that's ah that's That's my mission. Informed intelligent sort of access to crypto digital assets because thats that is essential to bring trust, scale, efficiency, and you know a lot more capital and and users into this space. And ah for foright though what was i just lost my channel but your path to well but back well so so for us to to do this, we have to create we are creating
02:04:47
Speaker
very you know ah advanced products built on technology both deep learning and tokenization which would normally be accessible only at higher quantums right the minimum tickets and stuff like that but my with the mission in view we have democratized that by keeping access open because the technology also enables us to Be able to do that. Okay, so that's that's that's one part of it. The fee structure is very aligned with that So we we our fee structure is completely aligned to having skin in the game. Okay, so the protocol revenues Are there are no, you know typical you'll find many of the Such such projects or products in both ways will have annual fees and stuff like that. We have only So the annual fees are all waved off
02:05:44
Speaker
We have a 1% deposit fee whenever a user comes in and deploys stablecoins. The protocol owns 1% of that and when the user ah redeems ah and generates a profit okay and then the protocol has access 2% or 10% performance fee of that. okay So that's how that's how it's kind of a designed. And also, the idea is that to progressively decentralize the protocol. So for example, alpha 802 is one product where we've built this a real IP around the, um well, IP is the wrong word sort of because we don't know what kind of word
02:06:35
Speaker
close and yet. But the the whole feature set that we've we've developed for it, our idea is to open that up, to open source the feature set on which the AI model is trained on. And we will invite data science experts, crypto experts to come and work on that.
02:06:53
Speaker
and um and generate and and come up with their own strategies or AI models to be able to discover alpha. okay and And this will go through the R&R tab and will be will be sort of productized and go go to the tokenization platform and be be available for users. So the whole idea is to decentralize the entire process over time of product creation. And this fee share will will go to the all the alpha creators who will who will come on board. So there there's a clear decentralization ah roadmap so that the objective isn't to build one centralized entity, employee, 100 PhDs, and do that, but actually decentralize. And the protocol is exactly, to your earlier question, is designed ah to be able to do that.
Entrepreneurial Advice and Future Vision
02:07:52
Speaker
Got it. So let me just like conclude like ask you a concluding question. you know What's your advice to young aspiring entrepreneurs, people who are listening into this episode? What kind of opportunities should they be looking at? Where should they be building? What are some mistakes which you think they should avoid, which you made in your journey? Yeah, so I think one thing I have learned and I kind of ask all young entrepreneurs is to build for the future.
02:08:25
Speaker
ah either Either you have a motivation to build something, which to create something which kind of solves a problem, has ah has a clearle clear corpus behind it. For example, when I look at my milk mantra journey, it it was very much purpose driven and I wanted to kind of create something which is not only solving a consumer problem, but also kind of having impact in the ecosystem and you know very happy that you know what we build in our ethical middle sourcing program actually impacts close to a million people, million farmers in Orissa today in the ecosystem. However it's not something which is built for the future. so either so Purpose is very important in whatever one pursues. So either you do something which is very purpose driven or or you're you're completely building something for the for the future. right I think that would be my my one one core message because I find such founders, entrepreneurs, n times just
02:09:28
Speaker
just just get into the whole entrepreneurial journey because it seems very sexy, exciting, adrenal and filled. It is one of the one of the most hardest. As a second time founder, I'm i'm sharing this. the fun Second time is not anything easier. The first time was was hard. Second time is also hard. okay So it it is ah it's difficult sort of journey. see i'm um i'm
02:09:59
Speaker
sitting here in sort of says Singapore, the but the you know we're building out of Arna, I have Arna Lab back in India, where my tech team is. My my family is decentralized. So I live a nomadic, decentralized life. The kids are in boarding. My wife, Rashmi, she's looking after me in a mantra back there. so And and you you have to rebuild things.
02:10:26
Speaker
to build things from scratch. So it's a hard journey. So it's essential to have purpose and the future, building for the future in clear sight when one is doing it. Yeah. And don't buy the hype of entrepreneurship. Amazing. Thank you so much for your time, Sri. It was a real pleasure. Thanks. Thanks, Afshay. Likewise. Thanks for having me on the podcast and enjoy the conversation.