Crypto, Wealth-Tech, and the Creator Economy: Unpacking the Mudrex Model
Retail investor behaviour is changing, and with it, so are global capital markets. One company sits at the intersection of three powerful trends driving these changes.
Author’s note and disclaimer: If you were one of the 20k people who read my last write-up about Polygon/Matic, thank you…and you’re welcome… or I’m sorry! It depends on if and when you bought/sold 😅 Many of you reached out to say that you purchased $MATIC after reading that post, and while I am happy that my writing was able to introduce a few of you to an important project in the blockchain world, I must reiterate that these articles should not be construed as financial advice. Although I often talk about fintech and investments (and I somehow even steal a living as a VC investor), this blog is merely a fun vehicle for me to share my musings and learnings. Please do your own research before making investments of any kind. Furthermore, you should be aware that I am an equity investor in Mudrex, the company featured in this article. I invested in this company back in 2019, for the same reason I am writing about them now - I believe the work they are doing is interesting and worth spotlighting. In other words, you are drinking my Kool-aid here. I hope it tastes good.
Yes, I started this article with a monkey pic. Monkey pics seem to be quite the rage these days. This pixelated simian portrait sold for $5.45 million on 30th July. And this laser-eyed chad just fetched 400 ETH ($1.2m) on OpenSea (the premier marketplace for NFTs) on August 12th. To some people, that might seem crazy. Those people are probably sane, well-adjusted individuals. Good for them.
But overly sane and cautious individuals don’t often forge the future, and it is increasingly evident that some of the most talented and creative thinkers of our generation are becoming besotted with this new technology. So maybe there is something really interesting to unearth here. And that is exactly what I will aim to do in my next article, which will shine a spotlight on the weird and wonderful world of NFTs. I’m actually cooking up an NFT project myself, so I would love to share my perspective on all the different use cases and utilities of this new medium. If you are working on or know of something cool that’s NFT-related, please send it across so that I may feature it in the next post. If my current publishing timeline is anything to go by, the next Tigerfeathers drop will be soon - no later than the summer of 2069 (probably).
Anyway, enough jokes, monkey pics, and horseplay. The purpose of this piece is to highlight some powerful trends reshaping finance, and to examine one company that straddles the vertex where these trends meet. I want to draw your attention to three phenomena in particular:
Technology is democratizing access to hitherto exclusive investment opportunities
Young people are taking a much keener interest in their financial health and wellbeing, driven partially by a more personal, fun, and community-oriented aspect of investing
Crypto is growing into an increasingly mature asset class thats is too big to ignore
Let’s break down each of these trends and see how they tie together.
#1 Tech Is Breaking Down (Asset) Class Barriers
As the great and oft-misquoted Karl Marx once said, “something something capitalism entrenches class inequality something something”. Leaving aside the fact that I just made that up, there is possibly some truth to that assertion. In the past few decades, the wealth gap between the rich and the rest has widened worldwide. Although the human race has seen even more cavernous wealth gaps in its millennia-long history, I think it would be fair to say that a constant feature of societal income disparity has been IRR disparity. The rich have always been able to deploy their capital towards the most lucrative asset classes and fund managers, while the not-rich have had a hard time gaining exposure to even the most basic of financial products and service providers.
Thankfully, technology is changing the status quo by eliminating many of the cost bottlenecks in the financial services industry. The main costs associated with delivering financial services have historically been risk, compliance, and operations. It is painful and expensive to onboard many small-ticket investors, service them, and continually share or collect documents, data, and feedback. This is why many investment managers prefer working with a smaller group of high-ticket investors rather than the inverse. But automation and internet-powered distribution are making things better. A new generation of investment platforms is on the rise, with a mission of democratizing access to alpha. Consider the following examples:
Private Equity & Venture Capital - In the US, Artivest allows individuals to gain exposure to PE funds for a fraction of the normal cheque size. A recently-funded company called Allocate does the same thing for venture capital funds. Along similar lines, Angel List allows people to invest in micro-VC funds and syndicate investments in select startups that may have otherwise been out of reach or too expensive.
Stock Markets - When companies issue public offerings, the allotment of new shares is usually gobbled up by large funds and banks, leaving little-to-no room for individual retail investors. Companies like PrimaryBid aggregate these small retail investors into a single hefty bloc, resulting in better allocations in the IPO or secondary offerings. This model has the added benefit of allowing power-users of a particular product to become stakeholders in the business as well; imagine if some % of every company was always owned by the most passionate users of that company’s product. Corporate decision making would be more empathic and attuned with users’ needs.
Real Estate - Around the world, companies like hBits, Strata, and Propshare (based in India) are working to fractionalize real estate so that retail investors can get exposure to this asset class without the historically high capital requirements, liquidity lockups, and operational hassle.
Litigation Finance - This is an interesting one. Litigation finance works like this: “Hey, I see that you are considering suing Cheese Emporium for $1m dollars. Since you don’t have the money to pay for good lawyers, let me pay X% of your legal fees in return for Y% of any potential award you receive from the judge”. This is a $10bn+ industry with a high return profile (50% annualized median returns for some funds), but typically only the super-wealthy and specialist litigation finance funds engage with this asset class. This is due to large ticket sizes, uncertain holding periods, and low liquidity for investors. One blockchain startup (Ava Labs, makers of the Avalanche blockchain) is targeting this use case through something known as an ILO - Initial Litigation Offering. Investors can ‘invest’ in specific lawsuits, receive tokens in return, and redeem those tokens for a slice of any case payout. Crucially, these tokens come with built-in transferability and liquidity, so the market can price them based on the goings on of the case. I wrote about ILOs in this Twitter thread, in case you wish to learn more.
Fixed Income - There are dozens of interesting companies cropping up which allow retail investors to get exposure to things like corporate invoices (KredX), corporate leased assets (Grip Invest), future corporate cashflows (Klub, Wintwealth), and all kinds of other debt products that were previously only funded by banks and large lenders.
I could probably keep going here for a long time because it seems that as we speak, every asset is being financialized and every asset class is being democratized for maximum distribution. You can literally buy shares in farmland or first edition 1963 X-Men comics in a few clicks today. Isn’t that amazing?
In the future, I believe we will see the tokenization of multiple forms of cash flows, receivables, rights/benefits, and many other kinds of assets, both physical or digital. Blockchains are natural candidates for this endeavour because they come with transparency, interoperability, and liquidity built in from the start. To go further on this topic would be to digress from the story at hand; the point is merely that everything is becoming investable for the common man, and retail money is waiting to flow into new and exciting opportunities as a result.
#2 Your Dad’s Broker Isn’t On TikTok, But Maybe He Should Be
There are two points I would like to make here:
There is an enormous amount of talent flocking to wealth-tech
Investing is becoming a more fun, personal, and social experience
On the first point, I offer the anecdotal evidence that a large number of talented entrepreneurs I know are building products in the wealth-tech space. Many of them are inspired by their own personal struggles. Having gone through school and college without a whisper of financial literacy training, they find themselves in their mid-20s with a growing list of bills and a flatlining savings account (Jar is a white-hot Indian startup that has this origin story).
One of my favourite venture capital quotes comes from Marc Andreessen, who says that his firm a16z tries to study “what the nerds do at night and on weekends”. The intuition here is that if you keep a pulse on what the esoteric technophiles are doing in their free time, you will find the seedlings of some transformative mainstream trends. To paraphrase Mr. Andreessen, if tons of smart founders are being driven up the wall trying to save and grow their own wealth, then millions of similarly-frustrated users will probably resonate with the products those founders build. Watch this space.
One the second point, we have a recent, unforgettable example that typifies the trend towards social investing: r/wallstreetbets. The infamous subreddit was responsible for singlehandedly pumping the price of GameStop shares from $18 on January 10th, 2021 to $347 on January 27th. In the process, this group of ‘degenerates’ (a self-styled moniker) brought hedge funds, regulators, and stock brokers to their knees.
Why did they do all this? Initially it was because one of the community’s users, a trader called Keith Gill AKA u/DeepFuckingValue, highlighted some positive signals for the stock. But what started out as a thoughtful analysis soon turned into a FOMO-fuelled rocket ship. As the stock shot past all of Gill’s price targets, more and more buyers jumped onto the gravy train.
What’s most telling here is that many of the newer buyers didn’t care too much about the returns to be made from their investment - they were just investing to feel like part of a community. They invented their own slogans, slang, and hivemind. Eager to push the boundaries of their market influence, they decided to support ‘meme-stocks’ like AMC, Nokia, and Blackberry. These are all companies that had their heydays during the millennial era; millennials being the largest user demographic of r/wallstreetbets. This is an important, and perhaps worrying, trend to be aware of - investing as a form of entertainment and cultural signalling.
Looking past r/wallstreetbets, we can see other forms of social investing on display all over the Internet. One of the hottest companies in the US is a platform called Public. They just raised $220m in February to help “change the culture of investing”. A notable competitor to Public is CommonStock, which bills itself as a “community to get verified investing knowledge” from top investors. Across the planet in India, platforms like Trinkerr, Threedots, Fundfolio, and FrontPage aim to offer similar value to users. On these platforms, users can view and ‘copy-trade’ the portfolios and investment theses of their friends, peers, and maybe even some celebrities.
Speaking of celebrities, there are thousands of ‘finfluencers’ currently making their names on Instagram, Youtube, and TikTok. Just like other kinds of creators, these people build up fanbases by making their own content, except they do so by talking about investing in various asset classes.
This is a phenomenon that needs to be taken seriously. Imagine you are somebody who is passionate about finance and enjoys talking about your passion to the world. Would you rather be Greg, suit-wearing soldier from the 500-strong research team of Bland Corp, or Roaring Kitty, who wears a headband, no underwear, and monetizes by engaging with a loyal coterie of supporters? Yeah, I thought so. Now think about the same dichotomy from the perspective of a young investor. Who would you trust more, the guy with a murky corporate business model and dubious personal enthusiasm, or the guy who livestreams every week to wear his heart on his sleeve and put his head on the chopping block of public opinion? Exactly.
We already know that in today’s paradigm of infinite choice and omnipresent distribution of content, anything that grabs eyeballs can and probably will be monetized. If the subject matter is already money and investment to begin with, then the monetization avenues seem all the more natural (eg. carry, take rate on AUM, syndication). The wealth-tech creator economy is not to be slept on.
#3 Crypto Is The Cool Kid At The Party
It’s August 2021 - I’m going to go out on a limb here and say that everybody reading this is already well aware that crypto has arrived at the threshold of mainstream culture and finance. I don’t think I need to say any more.
So what exactly is the point of highlighting these trends?
Hopefully the three trends described above are interesting and worth thinking about in their own right. Personally, I am bullish on companies building in each of those categories. So then what happens if one company sits squarely in the middle of all three categories? What would that company even look like?
The answer is that company would probably look something like Mudrex. In the next sections, we will understand what Mudrex does, who is behind it, and why it fits in to the trends we have described. By the end of the article, I hope your outlook towards wealth-tech has changed and that you have gained an appreciation for the marriage of wealth-tech, crypto, and the creator economy. At the very least, I hope that you find it worthwhile to subscribe to this blog and check out the Mudrex website :)
Alright you self-promoting snake, what does Mudrex do?
Mudrex is a two-sided marketplace for crypto investors and crypto fund managers. At least, that’s how I see it. To unpack this, let’s bifurcate the Mudrex product and begin with the fund manager side (note - I will interchangeably refer to crypto fund managers as ‘creators’ in this post).
Each of you reading this is probably in some kind of crypto trading group or community. Whether it’s on Whatsapp, Telegram, or Twitter, you definitely interact with somebody who spends time talking about crypto trading. Sometimes, the people who chirp on about this topic can be uninspiring. Other times, they have incredible insights, instincts, and analytical skills. Meeting the latter kind of person often elicits a wistful hypothetical such as “damn, if only I could give her money to invest on my behalf”. I know I have felt that way when speaking with a few smart crypto investors. Maybe you have thought the same thing. Well, this is exactly what Mudrex enables.
The starting point for this is the creator platform. Using the Mudrex platform, anybody can build and deploy a trading strategy. This strategy can be automated and algorithmic, or it can be manually managed by the creator.
The manual strategy is fairly simple to understand - the would-be fund manager simply takes their own decisions on when to buy or sell. Although the manual fund product is still in beta, it should be rolled out soon. Once it is live, creators will be able to build their own crypto micro-funds. They can invest across assets, across exchanges, and without taking actual custody of users’ coins. This is a massive breakthrough that solves our wistful hypothetical, and we will come back to this point later. In the meantime, allow me to elaborate on the last point about custody of user funds; this is quite an important detail.
Mudrex has struck partnerships with multiple exchanges, allowing users to either purchase coins on Mudrex (using 50 different fiat currencies in 90 countries) or send existing funds to the platform. In the backend, these funds are held in custody by Mudrex’ partner exchanges like Binance. Although these exchanges allow the appointed fund manager to buy/sell assets on behalf of the user, withdrawals are prohibited, so there is no risk of a fund manager pulling a runner on investors. I mention this because safety of funds is often the first and most important question that arises when evaluating fund managers for crypto.
Anyway, lets come back to the creator side of the Mudrex platform. As we just learned, creators can either run manual trading operations or automated ones. The automated strategies are the ones which are already live on the platform, and they work in the following way.
First, a creator must come up with the strategy they wish to implement. The thrust of a strategy can be as simple as ‘sell BTC every time price rises > 3% in 24 hrs, buy BTC when price falls > 2% in 24hrs’, or it can be a complex strategy that incorporates various technical and fundamental indicators such as stochastic oscillators and other complicated-sounding things that you should totally assume I understand.
Once the creator has a decent idea of the strategy they wish to employ, they can build out the strategy using Mudrex’ no-code editor. This is a simple interface that allows a creator to program a strategy without knowing or writing any code. The creator merely has to drag and drop various UI elements to build a flow chart that represents their strategy.
Once this piece is done, the creator can backtest their strategy against historical price data. This helps in understanding how the strategy would have done over some time period in the past, and how it would stack up against certain benchmarks such as simply holding the coin or buying a thematic basket of crypto-currencies (more on this later!).
The algorithmic strategies which show promise in the backtesting phase get shortlisted to feature in the Mudrex marketplace. The strategies which eventually get greenlit are ones which boast attractive profits, a high percentage of profitable trades, good Sharpe ratios (a measure of risk-adjusted returns), and acceptable drawdown levels (in other words, does the strategy erode its gains abnormally fast). At the time of writing, over 30,000 strategies have been created on Mudrex, but only 300 of them have passed the quality checks, demonstrating the rigour of the quality-control process.
Once the strategy goes live on the marketplace, it’s visible to all investors who visit the platform. Presently, Mudrex supports users of Coinbase, FTX, Bitmex, Binance, Deribit, OKex, and ByBit, with several more exchanges in the pipeline. The fee structure for a particular strategy is determined by each individual creator, but the average fee is approximately 1% of AUM per month. Of this gross amount, Mudrex’ take rate is 30%, meaning that the creators keep a hefty 70% of all fees.
This model is quite remarkable to me, as it sets the stage for many amateur and professional traders to build an independent income stream fuelled by their passion and knowledge for crypto. I spoke with a number of creators on the Mudrex platform, ranging from 20-year old finance students to experienced crypto traders in their 40s. The 20-year old student I spoke with runs a strategy on Mudrex with roughly $1m in AUM. This strategy bags him almost $7K a month, which he can take home in the form of fiat currency or stablecoins. Not bad for a bit a college pocket money!
At last count, over 1200 creators from over 40 countries applied to publicly list their strategies on the Mudrex marketplace, with only 5% receiving approval (see the checklist for public strategies here). In the coming months and years, I expect the number of applicants to multiply as the benefits of this exciting new model become apparent to crypto investors and crypto traders alike.
In summary, this is the creator side of the Mudrex marketplace. Anybody can leverage their passion for crypto trading by building, distributing, and monetizing crypto investment products on Mudrex. This is a quintessential example of the passion economy/creator economy, and something I expect to see a lot more of, not just within crypto markets, but also within equities, bonds, and other capital markets.
Huh. That does sound like a fascinating idea. What about the trading strategies themselves? What kind of products do you get on Mudrex?
When the manual strategies go live, investors will have the ability to invest in the erudition and judgement of individual fund managers. This may be manifested in the form of great coin selection, or perhaps a good sense of timing the market.
With reference to the algorithmic strategies, one must understand that the gist of any algorithmic trading strategy is to buy and sell an asset at opportune moments, thereby reducing volatility risk and crystallising gains. This means that by definition, successful algo strategies offer better down-side protection than holding regular coins, but they do miss out on some of the upswings as a result. Having said that, there is variance between strategies, depending on their differing bases for action. The ones I saw on Mudrex ranged from indicator-driven strategies built off things like RSI and MACD, to more intuitive strategies that focused on price action patterns such as wedges, cups, and handles.
If you ask me, MACD refers to McDonald’s, and cups are things you use to fill alcohol. But then again, entire industries are built upon these techniques from technical analysis, and I’m the kind of guy that advocates for the purchase of monkey pics. In other words, my ignorance makes me a suboptimal advisor when it comes to quantitative trading strategies. Investors would be better served looking at numbers and data.
Thankfully, bringing numbers to the fore is something Mudrex does well. To make sure it churns out a safe product, the company dogfoods its own strategies. Put simply, Mudrex invests its own money into the top strategies made by its creators. As part of this exercise, the company produces periodic reports like this one to help investors gain more comfort with this new and exciting product category.
OK, I guess that’s cool. What about the investor side of things?
So far, we have discussed the creator side of the product. Now, we turn our attention to the investor side of things. Given what we know about the creation of trading strategies, this is super easy to understand.
Investors simply sign up and select a strategy they wish to back, be it an automated one or manual one. The Mudrex dashboard gives them a number of ways to evaluate a particular strategy, and also gives them updates about their portfolio position. As we mentioned earlier, the funds remain in the investor’s custody, so a user always has full control over their coins and can withdraw or exit whenever they want.
The team behind Mudrex (who we will meet in a moment) are determined to build the fairest and best possible experience for investors. As a result, they have introduced two new products: Mudrex Protect and Coin Sets.
First up, we have Mudrex Protect. This is an optional feature that can be triggered by strategy creators. When enabled, Mudrex Protect helps safeguard investors if a particular strategy incurs heavier losses than the market does over a given month. If this condition is met, Mudrex Protect refunds the entire management fee for that month to investors. For example’s sake, imagine a given ETH strategy has yielded losses of 10% in May, while the ETH price fell by only 8% over the same period. In this scenario, Mudrex Protect would be invoked, and any investors in the strategy would have their management fee refunded for that month. As you would expect, this feature is very popular amongst investors. Surprisingly, it is also popular amongst creators! 80% of all strategies on Mudrex enable this feature, including all of the top 10 strategies by AUM. It turns out that transparency and aligned incentives go a long way towards building user trust and attracting investment!
The second feature I would like to highlight for investors is called Coin Sets. Users of the stellar Indian fintech product Smallcase would find this very familiar, but for the uninitiated, Coin Sets are basically thematic baskets of assets that investors can deploy funds into. This feature is still behind a waitlist on mudrex.com, but imminently, Mudrex customers will be able to invest in buckets like ‘Crypto Blue Chips’, ‘NFT 6’, or ‘DeFi 10’. When investing in these Coin Sets, investors are basically deploying capital into a weighted index of crypto-assets that conform to a particular theme. Initially, the first few Coin Sets will be built and managed by the Mudrex team, but shortly thereafter, any trader will be able to come up with their own Coin Set. Incidentally, the tech powering Coin Sets is the same as the tech powering manual crypto funds: investors subscribe to a given fund/Coin Set, Mudrex ensures the investor’s assets mirror those of the fund-manager/Coin Set, and the take rate is set by the fund manager/Coin Set creator. The only difference is that Coin Sets seem to connote a focus on a particular vertical whereas manual funds can be more generalized. Here is an interesting fact about Coin Sets: I will be launching my own Coin Set on Mudrex soon, so in the (unlikely) event you wish to give me funds to deploy into cryptocurrencies on your behalf, keep an eye out for updates on my Twitter 👀
Notwithstanding the details like the investor dashboard, Mudrex Protect, and Coin Sets, the big takeaway from this section is that Mudrex allows individuals to support talented fund managers with small cheques. This is revolutionary because it is nigh-on impossible for the average investor to gain access to a top-quality crypto hedge fund. Sure, there are a bunch of token indexes and ETFs out there like the DeFi Pulse Index or Bankless’ BED token, but what if you want to give your money to a crypto hedge fund for active management? Why can’t you just invest in Polychain Capital, Paradigm, Blocktower, or any of the other amazing funds run by those smart guys on Twitter? The answer is… the top funds won’t talk to you unless you have millions of dollars. And even then, they probably still won’t talk to you.
But now, thanks to products like Mudrex, there is a workaround. Not only can you park money with top crypto fund managers and quant algorithms, you can also do so with a $100 ticket. Plus, you can exit the investment at any time you want! This is how Mudrex embodies the trend of democratizing access to hitherto exclusive investment opportunities.
Hmm, fascinating.. A marketplace where crypto fund-managers can get access to capital, and investors can find appealing crypto products to deploy their capital into. Who are the people behind this?
Mudrex was started in January 2018 by Rohit Goyal, Edul Patel, Prince Arora, and Alankar Saxena. The quartet initially set out to build a crypto exchange based out of Bangalore, but the Reserve Bank of India poured cold water on those plans when they announced the withdrawal of all banking services for crypto companies in April 2018.
Not to be deterred, the four co-founders pivoted to building a global product and shifted the business to San Francisco in 2019, the same year they were accepted into Y Combinator. Something I find cool about the team (aside from their humility, smarts, and passion for crypto) is their origins: Rohit hails from Tonk, Edul from Nagpur, Prince from Chandausi, and Alankar from Alwar. These are all small towns with rich histories, and I personally really appreciate the fact that working in the Indian startup scene exposes you to such a diverse and interesting milieu.
Even more heartening is the fact that 4 lads from provincial India are now building a pioneering crypto business aimed at a global audience. Although bred in India and based in SF, Mudrex has users in over 75 countries. 40% of the users come from the Americas, 35% come from Europe, and Asian users make up the bulk of the remainder. Once upon a time, India’s only contribution to the global tech industry was IT services and the cloning of foreign business models. Now, we seem to be pioneering more and more product ideas that are leaving a mark on the collective startup consciousness. Long may this continue.
Anyway, let us come back to the journey and roadmap for Mudrex. After shifting to the US and raising a small angel round after Y Combinator, the company began to enjoy really explosive growth last year. In order to capitalize on this rapid growth and scale even faster, the company recently raised a financing round from Nexus Venture Partners, Village Global, and some A-list angel investors, some of whom are too privacy-conscious to be named publicly 😜
This round will hopefully enable Mudrex to bring in the best talent, market themselves to a wider audience, and keep building out ‘the investment layer for crypto’. By the end of the year, the company expects to be managing $100m in user funds, and their overarching mission is to make crypto investing easier, safer, and more accessible to all.
Yeaaaa, so how much did they pay you, puppet?!?
Nothing, I actually got paid nothing for writing this (or, for that matter, any of my other articles). In fact, they don’t even give me a discount on the Mudrex platform, so maybe I should be having words with them… 🤬
Jokes aside, my interest in the company is twofold: I have a financial interest in the company as an angel investor, and I have an intellectual interest in the company because it marries three of my favourite topics: the creator economy, wealth-tech, and crypto.
While we are on the topic of investing, let me take a moment to share with you how VCs think about potential investments. In this instance, I will share the rationale employed by Pratik Poddar, Principal at Nexus. In my view, Pratik is one of the best VCs in India, so this should be an interesting look behind the curtain for people curious about top-tier VC decision-making.
There are three things that a VC typically wants to see in order to build conviction in a deal:
A great team
A product-led approach to solving problems
A differentiated offering in a large market
The first point is fairly subjective, so we can gloss over that one. Suffice to say that the Mudrex team had enough x-factor to win over an impressive array of backers. For the curious, here are the LinkedIn profiles of Rohit, Edul, Prince, and Alankar. Over and above the four co-founders, there are 31 other builders in the Mudrex team, with 16 of these folks bringing entrepreneurial experience to the table 🚀 Side note: If anybody wants to check out the open jobs at the company, you can find that here.
Coming to the second point, the problem Mudrex is trying to solve is the accessibility of crypto as an asset class. Today, investing in crypto isn’t the easiest exercise. Yes, there are various fiat on-ramps through which people can buy tokens using their local currency, but what should your average investor do after that?
Do they just buy and hold one coin? Should they buy a basket of coins? How should they weight this basket? When should they buy and sell an asset? What even is a soft fork lol? To most people, that sounds like a useless piece of cutlery…
Speaking from experience, the uncertainty around these questions is a major stumbling block for new investors coming to crypto. I often speak to businesspeople about crypto, and by the end of these discussions, many of the participants are ready to make a foray into this new asset class. The caveat is that they want me or somebody like me to invest their money for them.
The trouble with this is that setting up a structure to take custody of external capital is a huge legal and financial head-ache. Consequently, there are very few crypto fund managers out there, and the ones who do exist are elusive, especially if you don’t have millions of dollars. If there was an easier way to source, evaluate, and back the best crypto fund managers without having to sell both kidneys and a spleen, we would probably see many more inflows from fiat to crypto. This is the problem that Mudrex aims to solve, and their approach to solving it was to build for the creators first.
That is why they got started with a no-code algorithmic strategy builder. And that is why they are now adding new products like manually managed funds and Coin Sets. This is what it means to have a product-led approach to solving the problem of crypto investability.
As for the defensibility and differentiation of this product, Pratik sees strong network effects in Mudrex. To illustrate his view, indulge me the following presumption. The market for crypto investing is clearly big - a lot of people wish to hold crypto in their portfolios. For precisely this reason, finance juggernauts like JP Morgan and Goldman Sachs are offering crypto products to their clients.
As the demand for these crypto products swells all over the world, how do you ensure that you don’t get washed away by the waves created by the big dogs? Answer: by having the best supply - ie. getting the best fund managers on your platform. And how do you do that? Give them the tools to easily build and monetize their own crypto funds. It comes back to the question we asked earlier in the article: would you rather work as somebody’s underling at a corporate sweatshop or build your own name, business, and community? Yep 🎯.
Building the best platform for traders allows you to attract good fund-managers. The presence of good fund managers attracts capital. The presence of large volumes of capital in turn attracts even better fund managers. At a certain point, the best fund managers want to be on Mudrex because it has the best platform and highest prospects for making money, and all the retail investors want to be there because it has the most flexibility, diversity, and quality when it comes to crypto fund managers. This virtuous cycle is the hope for the VCs backing Mudrex.
Yo man, there’s only so much a normal person can take from a VC talking about a portfolio company 🤢🤢🤢 Why don’t you wrap this up so we can move on to other things?
Sorry if it felt like I was stuffing things down your throat, that wasn’t my intention. I am simply excited by the future this business represents. Over the next few years, there are many changes I would like to see in the world of crypto. For one thing, I would love to see many more newcomers dipping their toes in this exciting new asset class. Secondly, it would please me greatly if crypto-lovers could find more and more ways to turn their passion into fulfilling and lucrative careers. Lastly, I’d like it if the best crypto investment products remained accessible to all investors, not just the ultra-rich. Companies like Mudrex are trying to bring this future to life, and that is why I am spending my energy telling you about this.
Before ending, I’d just like to clarify that I am not suggesting that readers should go and invest in Mudrex products. Always do your own research before investing your money. I am writing this only to magnify an idea that captured my imagination. I love crypto, and I want to keep writing about cool things being built in this exciting and vibrant arena. For me, the goal of simplifying crypto investing and democratizing access to the best crypto traders is definitely really cool. I hope the idea thrives and many teams pick it up.
The fact that the first team to try this (at least to my knowledge) was Indian makes it even more awesome for me. I hope that Rohit, Edul, Prince, and Alankar can pull this off, but regardless of the outcome, I’m proud of them. Indian crypto, and indeed crypto globally, will be better off for having seen an idea like Mudrex. I can’t wait to see what other cool innovations are spawned in this mad crucible we call the crypto-economy.
I’ll be back in your inbox soon with some NTF-flavoured smoke, but until then, stay safe and thank you for reading ✌
Disclosure: I have invested in Klub. I really like the work they are doing. I strongly encourage you to check out the fixed income opportunities on their platform.
Disclosure: I have invested in Jar too. I think you will begin hearing a lot more about them soon :)
Thank you very much for penning down the Mudrex story. It is amazing to see the level of financial innovations. I had a doubt; you started with the Bored Apes at the beginning of this article. Can you write about BAYC or other NFT projects and why NFTs are exciting for so many people worldwide? I've tried researching on my own, but there are many things I'm confused about this entire ecosystem. It will be great to know your thoughts and ideas about this growing technology.
Great write up. Keep up the good work!