Stéphane Reverre, CEO and co-founder of SUN ZU Lab, shares his hope for a more regulated crypto world with FinMag.fr.
This article has been written by Sarah Kirton, financial writter at Finmag.
What is the mission and wish of SUN ZU Lab?
Our mission is to bring transparency to the digital asset market. This means allowing, or even forcing, each of the market participants (investors or intermediaries) to disseminate information in order to make the investment mechanisms more fluid, to ensure that the end investor can make investment decisions with all the information available.
We want to shed light on the system, to ensure that the prices traded, that the commissions are made public, so that the price that emerges from supply and demand is a price that better reflects the macro-economic balance. As a consequence, the market functions better, the allocation of resources is done better, and we therefore we have a more efficient market.
This is the economic theory that is used in traditional markets that we decided to apply to digital asset finance.
We also hope that participants’ mindsets will change, and that they will realize how much they have to gain by adopting a more transparent approach, as this will greatly expand their market.
What difficulties has SUN ZU Lab encountered since its creation?
The difficulties we encounter are essentially difficulties of conviction linked to an asset class perceived as too opaque and complex.
We are evolving in an unregulated world, with the contradiction between the desire to regulate it which comes up against the constraints that this entails.
Trying to convince clients that crypto will only emerge from its maturation phase by being adopted by the greatest number, and that this can only be done through greater transparency, is not accepted by all.
Customers are tempted to continue innovating without constraints, without reporting, without pressure, and they don’t like the idea of a framework.
What is the definition of transparency in the crypto world?
Market transparency is first and foremost data on transactions that take place in the capital markets. It is a question of publishing a certain amount of information on what they do, on the price and the volumes of the operations they do.
The actors that are the Stock Exchanges, that are the investors, whatever their nature (individuals or institutions), the brokers, or the investment funds,
ask themselves the question every day of how to sell, what is the best price, and they need someone to compile data and publish it, without conflict of interest so that the information is reliable, and let it serve as a guide.
What is the definition of transparency in the crypto world?
Market transparency is first of all data about transactions that take place in the capital markets. It is about publishing a certain amount of information about what they do, about the price and volumes of the transactions they do.
The different actors – stock exchanges, investors, whatever their nature (individuals or institutions), brokers, or investment funds – ask themselves every day how to sell, what is the best price, and they need someone to compile data and publish it, without any conflict of interest, so that the information is reliable, and that it serves as a reference.
Which market is SUN ZU Lab mainly aimed at?
It’s a BtoB market / institutional market, that is to say all the market players who carry out transactions.
Those who buy because they invest, those who speculate, those who take orders (RTO: order routing and transmission) like the real estate agent for example, the exchanges, which allow liquidity to be expressed and concentrated in the orders, and then the liquidity providers, which are entities capable of providing liquidity to clients: a client who would like to carry out a transaction for a large size, needs someone who can provide a price.
How do you analyze liquidity in crypto markets and what impact does it have on market efficiency?
It’s all about data. We record everything that happens, as much as we can.
We say on average, for this type of asset and for this size, this is the market price you should pay.
The price of the digital asset, if it’s different from the market price, may have some tradeoffs, so it’s “a priori” standardized.
We make the data talk by compiling prices, which are real time prices (best execution prices), that allow an investor to know what he should buy, the price he should pay, to allow him to discuss, or negotiate with his intermediary if it is different.
This gives all market participants the ability to assess the margin, or the quality of the price given to them, or even to trade with confidence, with informed players.
How do you see the future of SUN ZU Lab?
We are tied to the future of crypto. We are a service provider operating on the basis of available data, serving a set of customers.
We are not so much tied to the price of bitcoin, but rather to the evolution of the crypto ecosystem: will it mature, will it accept some regulation, whether self-inflicted or imposed by the regulator?
If we want to access the retirement savings of the French, we cannot extract ourselves from a financial system that works in a certain way.
At the moment, crypto represents only 1% of the total addressable savings, there is a place and a colossal opportunity for growth and adoption for digital assets, if and only if the ecosystem and the people who compose it accept a certain form of convergence in practices and in regulation.
And, in these practices and in this regulation, our core focus is on transparency.
So if the market evolves and matures in the direction of more transparency, we have a bright future ahead of us, otherwise… we will have tried!
You can retrieve the full article on Finmag!
