Finance and economics

Finance and economics would typically be add-on domains of expertise within a wider project. For example we might look at company valuation or derivative pricing. In the crypto world in particular we might say look at the tokenomics or incentive structure of the crypto token, or the stability of a stable coin or market making protocol.

Finance and economics is a vaste topic, and our advisory work in this area is typically adjacent to or in conjunction with some of our other core areas as opposed to on a stand-alone basis. Our main area of expertise in this field is derivatives pricing and quantitative finance, company and asset valuation, and microeconomics, in particular market microstructure. Example projects are

• a crypto protocol wants to design a token and needs to understand the tokenomics of it, ie how it is most likely to behave once independent agents are free to deal with it as they fit in line with the rules of the protocol. We can help them design it as well as challenge their own designs based on our deep experience and all relevant areas of finance. Additionally we can help them look at regulatory and compliance issues.

• a crypto team is attempting to build a stable coin, ie a token that is meant to track the value of another asset, typically a fiat currency. We can advise them about the stability of that peg and whether it is a multiple equilibria design that is prone for runs. Again we can help them look at regulatory and compliance issues.

• an investment fund wants to play in the decentralised finance space using a combination of short- to medium term investments and deploying defi bots that automatically profit from flash-loan market arbitrage opportunities. We can help them set those structures up, and we can advise them also on the risk and pitfalls that can be inherent in that strategy.

• a mid-to-late stage start-up is trying to raise financing to finance their growth. We can help them in the associated valuation exercise by helping them build robust and meaningful models. We can also help them structure the fundraising terms in a manner that are an “increase the pie” win/win, helping them lower their financing cost.

Our approach in this area is very much hands on. We understand financial and economic theory at a fundamental level, and we also understand where it can be applied and where care must be taken. More importantly however we are able to translate theory into practice, and are equally at ease building robust models for valuing a company, valuing a financial or real option, or to model market behaviour based on its market microstructure.