Polygon Alpha Podcast - The Emergence of Crypto Intelligence | Arkham Intelligence | Miguel Morel
Primer: It’s difficult for people to understand blockchain data despite its transparent nature. Find out how Arkham Intelligence provides a smoother interface for people to understand and act on the insights of blockchain data in this episode of the Polygon Alpha Podcast.
Background
Grew up in Philadelphia then moved to the Bay Area to start his first startup
Ended up working for Reserve Protocol, a stablecoin project focused on hyper-inflationary economies
In 2020, he co-founded Arkham, a software for crypto intelligence
Lessons Learned From Reserve Protocol
In the traditional startup landscape, you have the ability to know more about your market and your customer
In the crypto space, you don’t have much info about your users, how to target particular kinds of individuals who you want to market to
Arkham
Use Case
Main use case is to explore blockchain data
Used to make crypto data more readable and accessible
They run their infrastructure to collect the on-chain data, clean it up, attempt to find attributes/labels for them, and put it all into one platform
Many people use their Visualizer feature that presents data like a network analysis
The Benefits Of Transparency
Can be used to identify what kind of risks you are taking on by associating with a counterparty (e.g. trading with them, holding funds with them, etc.)
Transparency VS Privacy
People in crypto belong to one of two camps:
Ideologues who are big believers in crypto libertarianism and privacy-preserving tech
People who believe that it’s a more efficient financial system and that it’s a good way to make money
Believes both groups can exist in tandem
The latter is 10,000x larger than the former
Thinks that crypto will continue to have privacy-preserving tech, but that they won’t be widely adopted
Identifying Malicious Actors On-Chain
At Arkham, they do not just do retrospective analysis
Want to encourage people to be proactive, aware, and do analysis in real-time
Companies and projects have made public claims about their positions and funds
Have an alert feature to set alerts on activities that might be considered anomalous
Differentiating Themselves From Their Competitors
The analytics market can be broken down into different sectors:
Regulatory and compliance players (e.g. Chainanalysis)
Platforms for crypto traders (e.g. Arkham)
There are differences in business models:
Some companies have large services, contracts, or consulting-like models
SaaS companies
Consumer-facing companies (e.g. Messari, Dune, Nansen)
Arkham provides depth and entity analysis in a single portfolio view
Government Attitudes Towards Crypto
Many different governments have a cautious view towards crypto that is outdated
It’s the crypto industry’s job to educate both the government and the mass market
The US Regulatory Environment VS Others
Each US state does things differently. However, in terms of hierarchy, the SEC and the chairman takes precedence over everything
They are ruling by enforcement (e.g. suing and arresting) rather than ruling by law (e.g. provide clear guidance)
The US is very different from other countries. In UAE, they have more clear guidelines
UAE and Singapore are great options in terms of regulatory clarity
Being An Entrepreneur In The Web3 Space
Most important thing is to be focused on one’s business, users, and customers
Have to also understand that there are going to be other players who make the space worse
“The way to think about it is you're in an industry where there are a ton of landmines all over the place where you're constantly having to assess people, constantly having to do diligence, understanding what people's activity looks like, in order to mitigate your counterparty risk.”
- Miguel Morel
Trends He Is Paying Attention To
People should be paying attention to DeFi
Will TradFi Integrate Into DeFi?
Most important thing about TradFi right now is on/off-ramps
There are 2 outcomes:
DeFi replacing TradFi
Segregation between TradFi and DeFi (thinks that this is very likely)
Business During The Bear Market
Much more difficult to fundraise in the bear market
Users are moving around their money in DeFi
What Does He Focus On When He’s Using Arkham?
Always look through the top entities (e.g. whales, OGs, important people, etc.)
People also look at exchange reserves
Where Can People Find Them?
On Twitter, YouTube, and their website
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