Jill Carlson, Meltem Demirors Back $3.3M Round For Non-Custodial Settlement Protocol Arwen
Arwen, a non-custodial settlement protocol developer, has raised $3.3 million in a funding round including Meltem Demirors at CoinShares and Jill Carlson at Slow Ventures. Jill Carlson, Meltem Demirors Back $3.3M Round For Non-Custodial Settlement Protocol Arwen
Meltem Demirors of CoinShares at CoinDesk Invest:NYC 2019
According to Arwen CEO and co-founder Sharon Goldberg, Slow Ventures led the round, which also included Collaborative Fund, Underscore VC and DG Lab Fund.
The funding will help the Boston-based startup expand its non-custodial settlement system, a layer-2 protocol that secures “assets in motion” via atomic swaps, Goldberg said. In simpler terms, Arwen allows users to settle trades via an exchange’s hot wallet without actually handing over custody of the underlying asset.
The protocol currently supports bitcoin, litecoin and ethereum trades on the KuCoin exchange, though Goldberg said her company is in talks with “institutional partners” interested in using the service. Demirors said an announcement is expected in Q2 2020.
Arwen’s non-custodial solution plays to high-dollar investors, according to Demirors – the type of trader that wants quick access to liquidity, but wants to avoid the risks associated with hot (online) wallets. She pointed out that hackers have proven time and again through 2019 that centralized honeypots are vulnerable, valuable targets to strike.
However, “this settlement technology can be used more broadly than just with centralized exchanges,” Goldberg said. In the long-term, she sees Arwen providing settlement services to a wider market.
Jill Carlson, who led the funding round with her firm Slow Ventures, is also bullish on the technology’s long-tail potential to impact markets beyond crypto.
“This problem of efficient clearing and settlement without more risk, it’s not crypto specific,” she said, adding that traditional capital markets rely on a sluggish settlement process that could also stand to benefit.
Carlson also identified another aspect of Arwen funding round, one she said came more by circumstance than design: the deal’s major players are all women.
“I think it’s really cool to see more and more female entrepreneurs in crypto,” she said.
Meet The Benevolent Mischief-Maker: A Q&A With Meltem Demirors of CoinShares
It seems Meltem Demirors does a little bit of everything.
The crypto journeywoman has served as vice president of Digital Currency Group, a member of the World Economic Forum’s Blockchain Council, an advisor to MIT Media Lab, and a lecturer at the University of Oxford’s business school. She even co-hosts a well-subscribed podcast with her friend and fellow crypto hound Jill Carlson, though that project is on hiatus.
These days Demirors mostly wears the hat of Chief Strategy Officer at CoinShares, a digital asset management firm that provides financial products and services for professional investors. But she’s also an investor herself, advising fintech startups like Ocean Protocol and Shyft Network on which moves to make in the emergent sectors of blockchain and cryptocurrency.
Her personal site suggests that she is “making benevolent mischief” in the generally stuffy world of fintech. With an iconoclastic approach and all the crypto street cred in the world, it’s no small wonder that Cointelegraph placed Demirors near the top of our list of the 100 most influential people in the space.
We caught up with Demirors via email for a quick Q&A — here’s what she had to say.
This interview has been lightly edited for context.
What Is Your Pre-Crypto Background? How Did You First Hear Words Like “Cryptocurrency” And “Blockchain?”
I worked in oil and gas M&A and corporate finance. I heard about Bitcoin in 2012, and went down the proverbial rabbithole while working 100-hour weeks as a corporate consultant traveling 250 days a year. I had never really considered myself a political person, but the strong ideology of the Bitcoin community in the early days resonated with me.
How Did You Come To Join Digital Currency Group In 2015?
I was in graduate school and had decided I didn’t want to go back to corporate America. I was working with startups in the fintech space in Boston while also wrapping up my degree. Dan Elitzer, who was my co-founder of the MIT FinTech Club and had started the MIT Bitcoin Club, connected me with Ryan Selkis, who was working with Barry Silbert to set up Digital Currency Group.
It felt like an interesting opportunity and I liked the ambition of the vision and decided, “Why not?” I had never really been a risk-taker in my professional life, so it felt like an asymmetrical risk/reward bet that would be interesting, intellectually stimulating (unlike analyzing spreadsheets and finding ways to improve capital efficiency), and filled with lots of characters, so I jumped in.
Could You Unpack Your “Making Benevolent Mischief” Soundbyte For Us, Especially As It Pertains To The Future Of Finance?
I’ve always been a mischievous person — my friends and family have experienced my penchant for fun and games firsthand. For far too long, finance has been buttoned up, dulled down, and made very boring and inaccessible. It feels very joyless to many people, but I find finance is absolutely fascinating and is so crucial to understand, especially for young people.
My goal is to continue to have a spirit of adventure and lightheartedness as we build this new ecosystem of financial products and services.
How Important Is It For The Us To Become A Cryptocurrency Leader? Why Might It Be Bad If China, For Example, Beats Us To The Punch On A Working CBDC?
The US is still the place where people want to start and build companies, but it’s been an incredibly challenging environment for entrepreneurs and innovators. Regulators are not in the business of picking winners and losers, and sometimes it certainly feels that way in this industry in the US.
While China has made incredible strides in pushing progress on digital renminbi (and in fintech broadly), it’s important to remember that nothing in China happens without the blessing of the government. It’s a very different environment and a very different culture — one that has both benefits and drawbacks.
At the end of the day, people, capital and ideas flock to markets where they can flourish. I continue to believe the entrepreneurial ecosystem in the US is unique, and that the values of the US — free speech, fundamental and inalienable rights and free commerce — are aligned with the values of the crypto ecosystem.
You Recently Participated In A Funding Round For Non-Custodial Settlement Protocol Arwen. What Made That An Easy Investment Decision For You?
Arwen is part of CoinShares’ broader thesis that the structure of markets will evolve as we obviate the need for trusted intermediaries. Obviously, crypto is the first place where this is happening, but it won’t be the only place.
Arwen has built technology that enables peer to peer, direct, bi-lateral settlement while enabling execution on any venue or exchange. In the past, exchanges have been vertically integrated, meaning execution, clearing and settlement all happened on one platform.
With Arwen, the settlement layer can be removed and become a settlement network powered by Arwen’s technology and provide the settlement guarantees and finality that bitcoin offers, while providing users the choice to hold their assets wherever they like — either on a platform like an exchange, to self-custody, or to use a third-party custody solution.
You Co-Host A Great Podcast With Jill Carlson Called “What Grinds My Gears.” What’s The Genesis Of That Show?
Jill and I have been friends for a long time. We went on a ski trip with our friend Dan Held and we kept joking about all of the stupid BS in blockchain and saying, “You know what grinds my gears?” Dan was sitting there watching this, and at some point he said, “You two should really just do this for an audience.”
We started thinking about it, and at the first Crypto Springs conference I organized I said to Jill that we should try it out, and people seemed to like it. That’s where it came from! Mostly it was just me and Jill talking about stuff we thought was funny or interesting, and it was a labor of love. We did 28 episodes and had a lot of fun, but now we’re taking a break.
From Your Perspective, Where Can Crypto Media Improve?
Nuance, nuance, nuance. The devil is always in the details, and I feel like crypto media tries to get the quick quotes in via catchy ledes, but doesn’t grasp the nuance. So a lot of stuff in this industry is misunderstood or misreported because the media cares more about eyeballs and clicks than the truth. It’s a hard balance, but the nuance matters so much.
Your Name Is Very Evocative — Could You Tell Us Something About Its Meaning Or Derivation?
Hah, thanks! Meltem is actually quite a common Turkish name. The meltem is the strong wind that comes from the sea.