Despite digitization and progress in the last decade, Capital Markets continue to be plagued by a set of long-standing challenges. Meanwhile, Blockchain technology has gone mainstream and now Decentralized Finance (DeFi) offers a next-generation platform to transform Capital Markets. Based on open protocols and DApps, DeFi can help transform the global financial infrastructure and lead Capital Markets into the post Covid-19 ‘Digital’ era

1. Floyd DCosta
Crafting integrated next-gen Decentralized Finance (DeFi) based
Capital Markets infrastructure
Faster, smarter, liquid, and inclusive
Powered by open protocols and capital market DApps
Built atop smart-contract enabled Blockchain networks

2. 2
Aside from the recurrent challenges of heightened regulations, security demands, and lengthy compliance and onboarding procedures, capital markets firms must also battle
internal apprehensions about emerging technology adoption and push backs against shifts to more agile digital business models
The Challenge: Despite digitization and progress in the last decade, Capital Markets
continue to be plagued by a set of long-standing challenges
Slow
T+2 markets, even
today
Costly
Too many
intermediaries
Restrictive
Participation based
on archaic norms
Illiquid
Limited liquidity
across asset
classes

3. 3 The Trigger: Blockchain technology has gone mainstream and now Decentralized
Finance (DeFi) offers a next-generation platform to transform Capital Markets
Among others, DeFi based management and trading of tokenized securities will provide for democratization of investment opportunities, faster improved settlement times, lower
costs, and increased access to capital - all, with a 24/7/365 market
Transparent
Programmable
Decentralize
d
Censorship
Resistant
Trustless
Permissionle
ss
Key tenets of DeFi

4. 4
The Technology: DeFi uses open protocols and decentralized applications to
enforce agreements, facilitate trades and immutably record transactions on the
Blockchain
Blockchain Network
Settlement Layer
Asset Layer
Tokens
ERC - 21
NFT
ERC - 721
Wrapped
Assets
Stablecoins
Tokenized
Real World
Assets
…
Native
Blockchain
Protocol
Asset
DApp Layer
Borrowing
and Lending
Payments
Prediction
Markets
Derivatives &
Synthetics
Registries …
Decentralize
d Exchanges
Insurance
Aggregation Layer
Non
Custodial
Wallets
Yield
Aggregators
…
Multi Protocol
Interfaces
Tools and Non-
User Facing
Protocols
Price Oracles
Asset
Wrapper
Services
Tokenization
Services
Relayer
Networks
KYC and
Identity
….
The DeFi Technology Stack
Image: Adapted from the original by Fabian Schär, BCG

5. 5
The Opportunity: According to the World Economic Forum, up to 10% of global
GDP is expected to be stored and transacted through distributed ledger technology
by 2027
Source: Finoa, World Economic Forum
Projected tokenized market volume (in $trn by asset class)

6. 6
Apart from standard equity and debt offerings, the infrastructure will also facilitate the setup, management, and transactions of novel tokenized investment funds, including
alternative assets - Private Equity, Hedge Funds, Venture Capital, REITs, and more
The Solution: Next-gen Decentralized Finance based Capital Markets infrastructure;
powered by smart contracts on a Blockchain
Gen-3Blockchain
networks
… with nodesoperated
by platformoperators
aswell asvarious
market participants
DigitalIdentity
and KYC
… enablingindividual
andorganizationsto
comply andseamlessly
participatein markets
OpenProtocolsand
CapitalMarketDApps
… to helpcreate,structure,
manage, andtrade
varioustokenizedasset
classeson-chain
Cybersecurity
and Compliance
… with ZeroTrust
securityandintegration
intoenterprisetools
forregulatorycompliance

7. 7
Collaboration among the various stakeholders will be key to craft, develop, and deliver truly integrated and decentralized Capital Markets infrastructure
The Architecture: Underpinned by open protocols and decentralized applications, the
system will deliver the network and applications required to operate capital markets
Blockchain Network
Aggregator
/ Brokers
Integration
External
Systems
Integration Network
Smart Contract based Decentralized Finance Protocols Private
Blockchain
Network
Structured
Products
Security &
Compliance
Issuance and
Trading Services
Enterprise
Apps
Regulator
Reporting
Oracle
Services
Multi-sig Wallet
Accounts
Ext. Services
Multi Protocol Interface
Investors
Auditors
Registry
User
Management
Financial
Network
Banks
Blockchain Network
Asset
Wrapper
Services
Relayer
Networks
Liquidity
Pools
Custodial
Services
Issuers

8. 8
Driving Adoption: A simple intuitive user interface should provide aggregated access
to decentralized financial market applications along with native integration via open
API’s
Blockchain-based Digital Identity, multi-sig wallets and Zero Trust cybersecurity will ensure enterprise-grade security and compliance with regulations

9. 9
Liquid
Increase
access to
global capital
Faster
T-instant
settlement
Lower
Costs
For parties
involved
Inclusive
Democratize
participation
Peer-2-
Peer
With no
middlemen
All-new
Vibrant
secondary
markets
Smarter
With smart
contracts
Always on
24/7 Capital
Markets
The Benefits: Decentralized Finance (DeFi) can transform the global financial
infrastructure and lead Capital Markets into the post Covid-19 ‘Digital’ era
Harnessing the potential of DeFi can help transform the archaic centralized global financial infrastructure into a more modern internet-based decentralized model based on open-
source protocols, help liberate trillions of dollars worth of non-liquid assets and create all-new secondary markets - on the Blockchain

10. 10 It’s time to build next-generation decentralized financial markets infrastructure - faster,
smarter, liquid, and inclusive
Drop a line or reach me via any of the channels below:
+65 96536243
@floyddcosta
floyddcosta@gmail.com
Get in touch