Cega, which deals with structured bonds in DeFi, has raised a total of 1.3 billion yen ──Future development and the future of DeFi from the CEO | coindesk JAPAN | Coindesk Japan

Cega Genesis Corporation (Cega), which develops structured bonds for crypto assets in DeFi (decentralized finance), is
The company announced that it has raised additional funds of approximately 700 million yen with Capital Partners and others as underwriters. The cumulative amount raised in the seed round has reached about 1.3 billion yen.

As a pioneer of crypto-asset structured bonds in DeFi, Cega launched services on the Solana blockchain in June 2022. Transaction volume and TVL (Total Vale Locked: assets in custody) of structured bonds using options are ranked first in the Solana blockchain and second in comparison among all blockchains.

How will Cega develop after receiving a large funding round? We asked the founder and CEO, Arisa Toyosaki.

What are the “shortcomings of DeFi today”?

Originally, Mr. Toyosaki built his career as an options trader. Taking advantage of that knowledge, I started to think that I wanted to create a “properly structured bond that provides a safe yield” for DeFi option trading, which was the impetus for founding the company. Launched Cega gained popularity by accurately grasping user needs.

Mr. Toyosaki says, “I love DeFi,” but he says that he has seen “shortcomings” in the current DeFi in the course of business development.

First, the lack of liquidity. The market itself is still quite small, and DeFi options in particular tend to have a one-sided trading volume. Cega plans to increase the volume of both parties and develop innovative DeFi products that can further develop the market.

“We believe that DeFi derivative TVL will grow at least 1,000 to 10,000 times at a stage where it is not even billions of dollars,” Toyosaki analyzes.

Existing in parallel with existing finance

The other is that many protocols do not decentralize operations in the back office or middle office. Since the DeFi market has a short history, he says that he sees situations where “only front applications are being made.”

Mr. Toyosaki said, “I think we need something like a ‘toolkit’ that summarizes the necessary functions such as on-chain risk management. It’s time to work together, and we want to work together for the development of the market.”

“Currently, DeFi tends to focus on the pursuit of short-term profits, but I think it is very likely that it will spread as a technology. The future of DeFi is that it will be used by people in developing countries who do not have bank accounts and by people who are not wealthy but need wealth management. ”

DeFi Penetration Timeline and Risk Management

“The current state of DeFi is similar to the early days of the Internet. The Internet bubble burst and new services appeared one after another at the same time as the Lehman Brothers collapse. If you compare it to the spread of the Internet, the first adoption curve will occur in about seven years, and mass adoption will occur in about the next 15 years. Isn’t there

In order to penetrate the mass, the accumulation of trust is necessary above all. In that regard, Cega said that it succeeded in protecting 100% of customer assets while many players suffered losses due to the collapse of FTX in November 2022. Mr. Toyosaki talks about the background as follows.

“Cega’s trade risk-offs users staked crypto assets with market makers, but we had ISDA master agreements with all market makers in Cega’s favor, which is why the FTX situation happened. We were able to settle all trades on the spot on the same day.As a result, we were able to not only protect 100% of the customer’s assets, but also protect the interest rate.”

“In terms of risk management, we are at the forefront of the industry. For example, we conduct transactions with market makers after carefully checking their balance sheets. , We also have a third-party custodian included.As a result, neither Cega nor the market maker can move assets arbitrarily on its own.When raising funds, such risk management is also considered. Highly rated.”

What to aim for in large-scale fundraising

In response to the large-scale funding, the first goal is multi-chain development.

“On the Solana blockchain, we became number one immediately after launch. Even compared to the second place, it is about seven times higher, and we are ranked second in all chains. There must be a need for multi-chain development.” Mr. Toyosaki. Details of the expansion will be announced in the near future.

Next, we will develop products that match various risk rewards. The structured bonds that Cega has been working on were products that were born out of the idea that “I want to create a product that manages safe yields” (Mr. Toyosaki). However, while receiving feedback from users, it turned out that many hardcore users wanted products with greater risk and return.

“When we analyzed the voices on Cega’s Discord, we found that the user base had a wealth of trading experience and a strong risk appetite,” says Toyosaki. In the future, we will expand and expand a variety of products for more experienced users, such as high leverage products.

Furthermore, as a new business, it is said that it is planning to launch a “trading team” that brings together experts in structured bonds and to develop diversified businesses such as investment advisory business.

In order to actively develop business, not only funds but also excellent human resources are essential. Recruitment is also going well. Toyosaki said, “For example, the engineering team has doubled in size since November 2022. Engineers from major cryptocurrency exchanges and other famous DeFi protocols are also participating. Thank you.

“In hiring, we also place importance on matching values. What we value are things like producing results, working independently, and being a ‘good person.’ Skills are of course important. We are focusing on hiring engineers, and we are narrowing down to “5 ~” at the level of GAFA. The requirements are high, but the rewards are well prepared. No matter where you are in the world or what tax system you work for, our protocol offers Silicon Valley-level salaries and benefits. Even bigger, you can sometimes see real traction. The idea that if you are interested in options trading in DeFi, Cega is the way to go, and I’m glad that there are people who come because of it. As a result, many of the engineers who join us have master’s or doctoral degrees in mathematics, and they like options trading itself.”

“Completely remote work, complete results-oriented, and an environment that is easy to work for. The members are scattered all over the world, so we actually meet somewhere in the world twice a year and do team building. Last time. The meeting was in Lisbon, but next April will be in Tokyo.I’m looking forward to seeing some of the members for the first time in person.We plan to go see the Yakult Swallows vs. DeNA game together.”

Interview/Text/Composition: Kazuki Watanabe
Editing: Coindesk JAPAN Editorial Department
Photographer: Keisuke Tada