Hi everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Edul Patel. He is the CEO of Mudrex.
Mudrex has been around for a while. They are trying to solve for accessibility basically in crypto. They have a plethora of products that help investors and traders make more informed choices, better decisions with a great user experience.
This was a very interesting conversation for anybody who is looking to build in the Indian ecosystem for Indian users. I can’t wait for you guys to hear this. Let’s deep dive right in.
Hi Edul, thank you so much for taking out the time to speak to me today. How are you doing? Doing great, Tarusha. It’s a nice bright and sunny day in Bangalore.
Awesome, awesome. I think we are all looking for nice bright and sunny days. In Delhi, it’s been overcast for days now and yeah, it’s really gloomy.
I was there yesterday and it was actually pretty gloomy. I just felt that I was in Bombay instead of Delhi. Exactly, it’s been giving those same vibes.
This time around, I think the monsoon has been pretty brutal in Delhi. But we’re hoping for some bright days. But now for our listeners, can you tell us a little about yourself and just give us a little context about your journey? Because I feel how people get into Web3, that’s usually a very interesting journey.
And you’ve had quite an interesting journey as well. You worked at Deuce Bank and then you were working at Liftload. So can you tell us a little about that and how did you basically conceive Mudrex and what you’re doing there as well? Correct.
So just to give you the audience a bit of context, I’m Edu. I’m the co-founder and CEO of Mudrex. We’ve been helping people invest in crypto for the last seven years now.
We are a 7-year-old company. We started in 2018. Prior to that, my journey, my entrepreneurial and professional journey really starts in 2011 when I left IIT Bombay to join Deuce Bank.
I worked at Deuce for a couple of years in the trading and risk teams with the FX desks at Deuce. And that’s where actually I learned a lot about how many moves, what are the global factors that influence it, what are the risks behind it and so on and so forth. Having said that, I left Deuce in 2013 to start my own company called Niffler.
We were building a hyperlocal deals and discounts app, something like a Groupon for India, way back in 2013. Did that for a couple of years, raised a million dollars from Saif Partners, built out an office in Bombay and Pune, eventually got acquired by this company called Tabso. So joined Tabso in 2015, became head of product there, did that for three years.
Tabso eventually got acquired by Amazon. I personally never wanted to go to Amazon. And just around then is when I started Mudrex with three of my other co-founders.
At Mudrex, the real attraction to joining Web3 or getting into crypto originally just started with Bitcoin. So first, I read about Bitcoin in 2011, bought my first Bitcoin in 2012 via some friend who was in the US, who bought it from his own pocket, sold it from his own pocket and just gave me the thrill of owning some Bitcoin for a very short time. And this seemed very interesting, but really forgot about all of it for the next three, four years.
Because Bitcoin wasn’t going anywhere at that time. Then in 2017, 2018, when I was thinking of starting or doing something next and wanted to do something in financial services space, that’s when I revisited Bitcoin and really understood how Bitcoin is truly making money movement in the world, decentralized, without borders, without the need for any intermediaries, and why that is so powerful. And what’s so attractive to it that we said that crypto is going to be a part of the future simply because it makes money movement and value store and value transfer in the age of the internet a much more efficient thing to do.
And if it’s efficient, the world will adopt it. That was the very broad thinking that it’s making money move at the speed of the internet, and that it’s helping to do that because it’s efficient. And if it’s efficient, the world will adopt it.
So we should try and get as many users as we can into crypto. So that’s kind of the origin of the entire journey. Wow, that’s wonderful.
I think a lot of us got into the space by getting to acquire a first Bitcoin or at least reading the Bitcoin white paper. And that’s how I got into the space back, you know, in the early mining days, 2011, 2012. So this is a journey that I can actually completely resonate with.
But now, you know, talking a little about, yeah, please go ahead. Yes, I was saying that, like, I read the Bitcoin white paper a long time back. And at that time, I didn’t really understand it.
But when I read it again in 2017, 2018, really got into why it makes sense. And in our office, there is literally a six feet by four poster of the Bitcoin white paper hanging at the lobby of the office. Right, I think, yeah, I think everybody should try to give that paper a read.
And now there are many, like, you know, people have simplified versions as well. So, you know, just going and looking them up online, I think can be very beneficial, because it does open up your eyes to a different way of doing things. Correct.
So, you know, you had, like, Niffler was acquired by TabzO. And then later, obviously, TabzO was acquired by Amazon. But what are the kind of key lessons did you take away from this acquisition experience? And how have they shaped your approach with Mudrex? Correct.
Yeah, so actually, both those journeys and now the journey of Mudrex, all three have been very different in reality. So Niffler, when we were doing Niffler, there were not many startups around, not many people were building. And actually, this was a time when actually mobiles also had not penetrated that much.
This is all pre-Geo era, kind of. And maps were horrible. And like, you wouldn’t get more than 10 meters of accuracy as to your location, and so on and so forth, right? So really different problems.
But with Niffler, I think the biggest learning was just learning about the zero to one journey as to what is important when you’re starting companies, understanding that it’s a lot about the team and getting the team together and getting and then rapidly iterating, based on your understanding of the consumer and what the consumer really wants, and so on and so forth, right? Like, in Niffler, in a period of two years, I think we would have broadly done three different pivots. And if I look back at my journey in Mudrex, I think that is the other thing that stays constant. Like in our seven year journey at Mudrex, we probably done five different pivots, like the version of the company that we are working on is maybe the fifth version of everything.
And each version is basically an upgrade to the last based on the understandings of consumers better. Every time we build, launch and go out something, we reach out to a much larger audience that tells us a much more deeper truth about what the users really want. And as a result, we rethink how do we solve that problem from first principles and go ahead.
So yeah, so that constant journey of learning and improvement, I think was the underlying learning maybe at Niffler really. At TabZone, it was different. At TabZone, when we joined, the company already had 4-5 million users.
And although the iteration pace and the level of iterations continued, at that level, it was more about how does a company with 100 people work? How should it be organized? What are ways in which it can continue to perform at a very high level and continue to grow and improve? And then there were different problems that we were trying to solve. It was about how do we make sure it’s a sustainable business, how can it grow, how can it be profitable and can scale? And the understanding that, okay, you not only need to build a good product, but you also need to build a good business, was I think very deeply understood when I was there at TabZone. So two very different companies, two very different stages.
And I think, and of course, a very different journey now with Mugrex as well. Right, absolutely. I think, you know, you started your journey with the giving you a lot of insights into how the consumer behaves and how should you perhaps push the product out and the narrative that you want to create around it.
And as you mentioned on TabZone, I think it was such a good rite of passage for you that, you know, you kind of learned about how to solve these problems at scale. Because, you know, the problems that you face when you have a smaller team as against a larger team are very different. Yeah.
So now talking a little about Mugrex, I know the product, I’ve used the product, but for our listeners, can you tell us a little about what the platform does? And you mentioned that, you know, your core mission is to onboard a lot more users into crypto and give them a least resistive way of getting onboarded there. But can you tell us a little about the services? Absolutely. So Mugrex, at Mugrex, our aim is to be the world’s largest detail focused crypto trading and investing platform.
That’s what we want to do. So as a result, when you talk about trading and investing, it’s about availability of options on Mugrex. And what can a user do? So at this point in time, Mugrex has the widest, the widest number of options for users to trade and invest in.
We have about 700 different assets that users can buy and sell in the spot market. They can trade on 200 plus futures contracts. They can do long term investing on a product called CoinSets that is proprietary only to Mugrex, which is basically modeled on the lines of mutual funds, but for crypto, they can do staking on various crypto assets, close to nearly 100 crypto assets now.
And of course, we’ve got another product called Bit15, which is like an options product that helps people understand the volatility of crypto and also trade in like a short term Bitcoin option. So that’s a wide variety of things that users can do. But I think the highlight of Mugrex is seamless deposits and withdrawals both across fiat and crypto.
So Mugrex is the only like the only product in India that offers users to deposit via UPI, deposit via IMPS instantly, withdraw their INR funds back to their bank account instantly and do crypto deposits and crypto withdrawals across close to 500 different assets. And that I think is something that users really value. It becomes really hard to explain, like one of the consistent feedback that we have got is that like, of course, the trading and investing all of that is great.
But because we allow users to come in and go out so easily and seamlessly, users continue to stay with Mugrex for much longer and that trust gets built much longer. Mugrex is also an FIU registered company in India. So we are a registered virtual asset service provider in India.
We are also a registered virtual service provider in the EU and have effectively a global audience on our platform. Lovely. That was actually going to be my next question.
Is Mugrex registered with the FIU? So you are already registered there. So what are the kind of, were there obstacles in the way when you had to go about doing this registration? Yes, actually, we were one of the first companies to register with the FIU. We were one of the original set of people that the FIU was also working very closely to even formulate a framework for crypto companies, guidelines for crypto companies, even understanding of what should companies be doing, what should they not be doing.
So we were very closely involved in the entire setup process of FIU. Of course, at the end of the day, it’s a compliance requirement. The good part was that because we were already registered as a virtual asset service provider in the EU, we were already doing all the compliance requirements.
We were already taking care of all the transaction monitoring, the KYC, the sanctions checks, and so on and so forth. So as a result, the additional overhead of building for us was not that high. And for us, it was a relatively seamless process.
And it was more about just getting SOPs and processes in place rather than building newer things. That’s what the case was for us. Right.
You had been established for a while, right? So, you know, you’ve been here for a while, as like you mentioned, you were already dotting your I’s and crossing your T’s from your experience in EU. And that is why it was probably a lot easier while doing something similar in India. Correct.
So now, you know, you mentioned like a plethora of services when it comes to Mudrik and you know, you guys are doing a phenomenal job there. What about educating the end-user or fostering like a real community? Because there are a lot of other exchanges that are there in the country. Obviously, there is a little bit of resistance in terms of, you know, whether you can withdraw and all of that.
So would you consider that as your US thing? Or is there something else as well that you would like to highlight? So I think Mudrik, I think is built on three pillars. We’ve already spoken about two of them. We’ve spoken about that we want to offer widest options at lowest prices.
That is one. Right. The second is always make sure that users have seamless fiat and crypto deposits and withdrawals.
And I think the third is basically help users make more confident investing choices. Okay. And that’s the part that where we’ve invested in different, different formats is a very long time.
So just to give you an example, at Mudrik, we’ve created a proprietary product called Mudrik Insights. Because, you know, a couple of years ago, the most common question that people will ask us here would be, crypto is not like a stock. In stocks, I do fundamental analysis and I can figure out who the, who this is and who that is and how and take a long-term view on an asset and so on and so forth.
But actually, in reality, that was completely wrong. You could do fundamental analysis on the nature would be different. Just like how the fundamental analysis of a bank versus an infrastructure company versus a cement manufacturer is different.
The fundamental analysis for crypto tokens are different. It’s that we didn’t know how to do it. So about a year, year and a half ago, we launched a product called Mudrik Insights, where we actually started offering fundamental analysis, technical analysis and sentiment analysis across 600 different assets to users in a very quick snippet, so that users can go and very quickly understand what this particular token is, what is it that it’s doing, what are the reasons why it should grow from a fundamental point of view and also from a technical point of view, etc, etc, etc.
So that’s one part, right? Another part is that we’ve been publishing now research articles for an in-depth research articles, which typically are over a two to three month horizon for every single as for for close to 100 different assets now for about a year, year and a half. We focus a lot on research, we focus a lot on educating the customer and helping them make the right investing choices. So that you know, at the end of the day, they make those investing choices with confidence.
Because in reality, see, no one can control the market, no one can control the direction in which it is going. All one can control is whether it is whether they have enough information before making the choice or not, so that the choice that they make is made with confidence, and you have lesser regret with that. So that’s what we focus on more and more.
So learning, education, research is a big part of what we do at Mudrex. No, that’s, that’s good. Because, you know, that kind of instills confidence in the user as well that you know, they’ve made an informed choice.
Then once you made an informed choice, you are, it’s easier to bear the consequences of that choice, because you did your part, right? And when a user feels that, okay, they’re kind of shooting in the dark, obviously, then the whiplash effect that any kind of mishappening or the market’s going down, then that would be larger, I think for the user. Correct, exactly. So you mentioned about how you know, there are plenty, again, plenty of, you know, products that you have, which kind of simplifies crypto investing.
If you had to, you know, give advice to somebody who’s perhaps signing up on the platform for the first time, what would be the user flow that you would suggest to them? Like, how should they go about utilizing it? And this is the first time? Yeah, so anyone who’s entering into crypto, my advice always is, join a platform first, that is compliant, that is FIU registered, and make sure that you are working with Indian platforms, simply because in that case, you’ve got a better way or better pathway of recourse in case something goes wrong. That is one. The second is that once you’ve chosen your platform, I recommend just start with Bitcoin, don’t go here and there, don’t try and invest in too many different assets.
Start with Bitcoin, start with a small amount, let’s say, anywhere from 3000 to 5000 rupees. And then over the course of a month, month and a half, slowly and steadily increase your position. The reason I recommend taking this pathway is once you invest in something, it automatically creates like a curiosity.
And the intent is that over the next few weeks and months, you should just start learning a bit more about the asset that you’re investing in, understanding the volatility and the volatile nature of crypto, understand and get comfort with the risk reward that you might get with this asset before you put in any meaningful sums of money into the asset class itself. Ideally start with Bitcoin, start small, and effectively do an SIP. And while your SIP continues to grow in value, start learning so that then you can make choices about whether you want to now invest in Ethereum or Solana or some AI coin tracker or some meme coin.
Yeah, I think that’s very good fundamental advice. I think this is something that I tell people as well when they ask me that, you know, you just start with the blue chip coins, you start with Bitcoin, maybe you start with Ethereum, but you know, you start small, and you let it compound. I think that’s good advice no matter which market you’re investing in.
Like, and that’s, like, again, right, at the end of the day, it’s investing. And the principles of investing are the same. If someone was going to start investing in the Indian stock markets, I would say start with nifty 50.
Right? That’s what I would say. Just put in money in the nifty index and do an SIP and just regularly invest. In reality, that’s actually the same principle over here, that you should either invest in Bitcoin, or you can invest in there is a coin set on Mudrex called as crypto blue chip, which is basically a nifty 50 index, but for crypto, where we get the top five tokens in crypto and then just help people invest in it in the format of an SIP.
So, so those principles never change. They are the same irrespective of asset is that your understanding of risk and reward for that asset needs to be aligned better. Right, absolutely.
I would want to talk a little bit more about the coin sets because I find that as a very fascinating product. But before that, let’s touch a little upon the security and safety of the funds. Obviously, you know, you do have insurance.
But in this day and age, especially this is what happened with WazirX, which I’m sure that you know, you’re very aware of. How do users feel at ease when it comes to using Mudrex? Correct. So what, just to give the audience a bit of info, what happened with WazirX was that they had parked a significant portion of their funds in a single self-custody wallet.
And then they were subject to a very sophisticated set of hackers going out and hacking them, as a result, draining their wallet to a tune of 230 million dollars, which is roughly about 2000 crores. And at 2000 crores, that’s probably the largest cyber crime in India ever. Right? Yeah.
But to simplify all of this, effectively, what happened was that WazirX had basically put in half of their wealth into a locker inside their house. And in reality, the prudent thing for most people to do is that if you’ve got a lot of wealth, you actually don’t keep it in your house, you go to a bank and put it inside a safe deposit locker of a bank. Right? That’s like the obvious thing to do.
And at Mudrex, the way we look at securing users’ assets is that approach. That we know that it’s risky. And we know that it is going to be, that we cannot keep a lot of user funds in this place in self-custody.
So instead, what we do is that we partner with some of the world’s largest crypto custodians. So we work with exchanges like Binance and Bybit. We work with custodians like Sifu, who actually custody hundreds of billions of dollars.
Right? Right. As a result, they invest a lot in security, they follow all the top practices, and they offer us a simple solution through which we can park our users’ funds in safe custody with them. And then what they offer us is an API-based interface.
And securing an API-based interface is just much, much, much easier. Of course, we pay a fee. Of course, we pay a cost for doing all of this.
It’s like how you pay the fee, a fee to a bank to have your bank locker. But at the end of the day, funds are going to be safe, right? And that I think is very important. And that’s a very important difference of approach that Mudrex takes with while securing funds.
I think a very another approach that we take is that we also assume that, okay, if something happens, like, of course, the first thing you do, you try and make sure nothing happens. But if something happens, then the loss is limited. And unfortunately, what happened in WazirX’s case was that half of the wealth was in one single wallet, right? And there was no monitoring or no kind of limit checks on top of the wallet to prevent very quick withdrawals.
So on WazirX, what happened is that all of that half of the wealth got stolen in under 10 minutes. And that’s the other thing that we do differently. We keep the assets in various different wallets.
We make sure that there are sophisticated limits on top of those various wallets for withdrawals, so that the withdrawal amount can’t go beyond some amount. And that also is useful. Because even in that case, even if someone gets access to all of this, the damage that they can do is very small.
And that also helps out, right? At the end of the day, all of these things that you do to mitigate risk and to mitigate loss is what is valuable. Because the way we think of is that these things are not a matter of if, but when. Like, WazirX is not the only crypto exchange that’s been hacked.
Every single exchange has been hacked. Binance has been hacked, Kucoin has been hacked, Bybit has been hacked, OKEx has been hacked, and so on and so forth, right? But what really makes them resilient and continue to move forward are all the checks and balances in place. So even if something like this happens, the impact is much smaller and much more limited.
And I think that dual approach is what makes Mudrex different and much more secure. Right, OK. I’m sure this would instill a lot of confidence in the user’s head.
And especially, I think, as an Indian user myself, the fact that you kind of highlighted how important it is for you as a platform to be able to provide users clarity in terms of how they can deposit and withdraw the INR, which is, again, something that becomes a little sketchy with a lot of exchanges. I think this would instill a lot of confidence in their head vis-a-vis Mudrex. Another question related to this, so CoinDCX recently created a CIPF, I think, Crypto Investors Protection Fund.
Do you have something similar, you know, that Mudrex is planning to do? Again, because we leverage infrastructure of Bybit, Binance, and the custodial provider, all of those already have much larger funds. Like the entire CIPF of CoinDCX is 50 crores. That’s what I remember.
Yeah, yeah, it is 50. Yeah, yeah. Yeah, whereas the Sefu Fund of Binance is a billion dollars.
That’s like, that’s almost 8,500 crores. So you understand the difference? Because we leverage this common infrastructure, we actually get access to all of the security inherently. And as a result, we don’t need to do something separately.
Of course, all of this comes at a cost. At Mudrex, we spend close to 10 crores a year on just compliance, custody, security, and so on and so forth. But that is worth it.
That investment, the investment just scales and works really well for everyone. Right. Yeah, I think that is absolutely true.
And I think your reasoning is very solid there as to why you don’t have a CIPF, perhaps, because, you know, you’re relying on the infrastructure and the larger funds of these bigger players, which is fair enough. So now let’s talk a little about Coinsets. And, you know, how do they help users in diversifying their portfolio? And what is the mechanism behind it? Like, how does it really work? Correct.
So I think the idea behind Coinsets simply came in from the fact that one of the common user questions for retail users, you know, people were getting started, was that where do I invest? How do I manage my funds? All of this crypto is very volatile and complicated. And I just want something simple, something like what I do in equities. And then we ask a very simple question, okay, what do people do in equities? And in reality, everyone in equities just puts in money in the mutual fund or an index fund.
Right. Yeah. And that’s how people get started.
That’s how they get an understanding of the market. And after that, they do start trading. So the step one for any typical investor who’s wanting to invest for the longer run, and that’s actually what most users want to do these days, they want to invest for the longer run, is to put in money in effectively an index fund or a mutual fund.
And we said, and then we just quickly thought that, okay, why do mutual funds and index funds for crypto don’t exist? And if they don’t exist, what can we do to solve for them? We realized that such kind of products do not exist, because they require a lot of regulatory compliance and guidance. And after three years after we launched coin sets, the Bitcoin ETF finally went live in December this year. That’s the amount of time that it takes.
But you can offer the same promise of an index by effectively allowing users to invest in a basket of tokens. Because at the end of the day, what’s an index? What is Nifty 50? When you’re investing in Nifty 50, what you’re effectively doing is putting in the money that you are putting in across the top 50 stocks on the NSE by market cap. That’s what you’re doing when you’re investing in Nifty 50.
This is a very simple thing to do via technology. And because crypto is open, and because crypto is accessible, and because in crypto, you can do a lot of fractional investing till whatever end, we felt that it’s just very easy for us to create such a product and offer this product to our users. And that’s what we’ve done with coin sets.
Our most popular coin set is a coin set called Crypto Blue Chip, which has the top five assets in crypto by market cap. So when you invest in Crypto Blue Chip, you actually get exposure to Bitcoin, Ethereum, Solana, BNB, XRP, and so on and so forth, all together in one basket. The second thing that’s interesting for index funds and mutual funds is that the fund manager of an index fund just continues to manage, which means that they continue to rebalance an asset periodically, which also takes away the second problem of users, which is, okay, I entered now, do I need to change my portfolio? Do I need to exit my portfolio? Do I need to do something like that on a regular basis? So we also implemented that on coin sets.
So once you invest, every month, the coin set rebalances, which means that it goes back and looks at what are some new assets that have come in, which assets are not performing well, and automatically adjusts the coin set to give you the freshest investment possible. And then I think the third thing that we did was that, was again taking a leaf out of the mutual fund and index fund investing is that almost everyone should just be doing an SIP, because there is no time in, there is nothing called as timing the market. You cannot figure out that, okay, right now is the bottom, right now is the top.
What you have to do is maximize time in the market. How long do you, are you staying there so that you reduce chances of going in and going out at the wrong time? And for that, what people do is that they do an SIP. So we started implementing SIPs in coin sets.
And that’s basically what it is. It’s like investing in a mutual fund that’s rebalanced every month in the format of an SIP. Awesome. I think that, I think I would definitely recommend to the, you know, newer set of users that, okay, this is something that, you know, you can do, because it’s very difficult.
I truly feel that, you know, people who do day trading are a different class altogether. You know, not everybody can do that. Yeah, you really can’t, Tarusha.
97% of people who do trading end up losing money. That’s a fact. Exactly.
And the longer you do this, the more likely you are to lose money. So, because that’s how, that’s how the world is. That’s how markets are.
It’s very, very difficult to be consistently reliable and consistently be making money. And as a result, everyone should just be investing. If your broad bet is this market is going to grow, the asset is going to grow over a long time, then why are you even thinking of exiting? Just continue to add, add, add.
That’s actually what I’ve done. I’ve never ever sold my Bitcoin. Never.
Till date. And I’ve been investing in it for the last six, seven years. And now, slowly and steadily, because crypto has also grown and prices have also grown and the asset has grown, that daily small, small, small investment has grown to effectively about 20-25% of my net worth.
Yeah, no, I totally get that. I think, you know, selling Bitcoin, I think, in my head would be akin to perhaps for the last generation selling their gold. I think that’s like, you know, the last resort.
Yeah, you just go on and accumulate because I think that is something that, you know, you’re not, you’re not just doing for yourself, but you’re doing for just, you know, your family. And perhaps, you know, if you, if you are keen on having kids, perhaps for them, that is just something that, you know, you’re building. Yeah, yeah.
So every, so over the last three years, there have been a bunch of babies that are born in my circle, right? Like I also became a father last year. My niece was born two and a half years ago. A bunch of my friends have had kids.
And to every single one, I think there is only two things that I’ve gifted. The first two things that I’ve is basically a small amount of gold and a small amount of Bitcoin in their accounts. And the thought process is exactly that, that you just keep it, you hold it and let it grow through your life.
Exactly. Yeah, you don’t see, you know, when you have like, I don’t know, like some blue chip stocks, you don’t really sell them, you know, you hold and accumulate because you know that, okay, the potential for it to grow is going to be far bigger than what you know, you kind of get. By liquidating at the wrong time.
So yeah, I think, you know, you and I are really on the same page there. Now, I know, you know, your perspective here to a large degree, because you’ve only spoken about this on panels and even otherwise, but I would be remiss if I don’t talk about the regulation and the regulatory landscape in India. What is your perspective on the regulatory landscape right now in India? And then, you know, maybe you can touch upon globally as well.
Got it. So, before we get into regulatory landscape, what I would want to touch upon is actually just, you know, to help people understand and empathize with the regulator a bit. Everyone understands the user’s perspective, everyone understands the company’s perspective.
But I think very few people are able to give the perspective of the regulator. The job of the regulator is to safeguard people’s money. Period.
That’s their first. And protect the weakest, right? Like, that is exactly the point. The purpose of a regulator is to make sure that they’re able to protect the common man, the common man, the weakest people, who are very likely to be susceptible to scams, who might be enticed by large gains, who might be driven by greed or fear much more easily than the people who are sophisticated, right? So, so that is one part.
And they need to do it at the same time, while they encourage an industry that is so nascent and so early as crypto, and also so different as crypto, right? Like, crypto is not a currency, it’s not an asset, it’s not a commodity, it’s not property, yet somehow it is all of these things together. So, it’s so complicated as well, right? For a regulator to understand, for anyone to understand, even on just the regulator, right? So, with that in mind, I think the approach that the regulators in India have taken over the last generally extend the regulator, the government, and basically, the parties under control have taken over the last two, three years, I think is actually pretty commendable. It starts off with the Supreme Court overturning an RBI ban, that happened in 2020.
Then that followed with a large increase in crypto investing and trading and just crypto volumes in India growing significantly, which led to the government bringing in a taxation setup and a taxation layer in India, where actually they could have just gone out and banned it. But instead of that, what they said, okay, we’ll take a measured approach, we will set up a taxation structure that can A, help us understand who is doing what, and B, set up a taxation in a manner where people are not doing a lot of where people are disincentivized to do a lot of speculation, which is disincentivized to do trading. If you’re investing, then a 1% TDS doesn’t matter.
If you’re investing for the longer run, then a 30% tax right now on exit will not matter. So, the thought process in the approach really was that, okay, people want to invest in the longer run, let them invest. If people want to, and people want to grow their wealth for the longer run, let them grow it.
What we want to do is we want to understand what this market is, at what rate is it growing. And we want to really stop people from speculating too much, because that’s when people lose money. Ah, that’s what they did in 22.
In 23, after a year after that was done, there was much better understanding of what people do, how do they trade crypto, and so on and so forth. That’s when the FIU came into picture. The FIU also came into picture because globally regulators started coming together and started saying that, okay, we need to do something about crypto.
So, step one of that was now to do deeper transaction monitoring and reporting. So, just to give everyone some sense, in India, there is a body called as the FIU. It’s called as the Financial Intelligence Union.
It sits under the Ministry of Finance in India. And the FIU’s job is basically to collect intelligence for every single financial transaction in the country. So, all banks, all payment gateways, all basically wallets, all money movement entities, report suspicious transactions to the FIU.
And it is their job to make sure that KYC, AML, and so on and so forth is followed on that platform. So, March last year, all crypto companies also had to start reporting to the FIU, which I think was a great step. So, we at this point in time, have clarity from the Supreme Court in India that holding mine selling crypto is completely legal.
We have a tax setup in India. We’ve got a body where all crypto companies need to report into and basically laws that all crypto companies need to follow for the highest standard of compliance and the highest standard of KYC and AML, things that need to be followed. So, from that perspective, actually, we’ve seen a lot of progress in India.
We’re basically just one step away from there now being a clear regulator that regulates who is able to do what, which is the last step. And over there, I would like to start to point out what India’s stance was in its G20 presidency. So, India had also the presidency for G20 last year.
And in that G20 presidency, India actually put in a very strong vote towards getting to global consensus for crypto. And that’s where I think all the effort is going right now. Globally, crypto is moving very quickly.
In Japan, Australia, Canada, Singapore, Hong Kong, all of these places that are regulators for crypto. Europe is the second largest market for crypto and Europe has come out with a very new and very different approach to regulating crypto via the ECA regulations, which is going live now in January 2025. And Mudrex will already be a part of that regulations via our users in EU and via our licenses in EU that we are applying for.
So, once Europe comes in, basically, every single large nation apart from the US will have some format of regulatory clarity. It is expected that in the next two to three years, crypto in the US will just start seeing a lot of adoption and a lot of acceptance from a regulatory standpoint, simply because at this point in time, there is now political will to make crypto acceptable in the US as well. If you look at both the top two contenders who are contending for the presidential elections in the US, the Trump campaign and the Harris campaign, both of them have publicly come out and said that they want to make sure that crypto is legal and people who want to invest in crypto have a safe space where they can invest in.
So, almost surely some clarity in regulations will come in the US. And because by then, EU would have done it for a long time, US would have done it for a long time. I think India will also start going ahead on that front and work towards figuring out a regulator and regulatory body for crypto regulations over the next two to three years.
Whether it will be some of the same entities like SEBI, RBI who regulate it or will be a different entity is still open to conversations. Both those models have been tied world over and there are pros and cons of both. But the movement is happening very quickly.
And sometimes people think that it has been two years, three years, nothing has happened. People need to also understand that two years and three years from a regulator’s perspective is actually very rapid and very fast. Just to give people context, it took close to 15 to 20 years for a strong body like the SEBI to be formed in India for equities regulations.
And comparing that with crypto, we have just been three, four years into the cycle. So, I think we are moving very fast. I actually see a lot of positive signs, which is why every single large exchange is coming back to India and opening up its gates and registering with the FIU.
And I think this does continue to drive adoption because regulations bring trust, it brings clarity on what can happen and then it removes this small doubt in the minds of the user that they cannot invest in crypto. Right. Yeah, I think it does provide a lot of credibility and it opens up the floodgates for the larger populace to perhaps look at it as a valid asset class to really make investments in.
So, I think what you’re saying makes a lot of sense and this is a very refreshing new perspective. I think there is, you know, on Twitter and on other social media channels, you see a lot of chatter about basically the taxation and, you know, how people are unhappy about it. But your perspective is fresh and I think it does add to that, you know, perception that you mentioned that, okay, SEBI took years and years to form and, you know, they’re really trying to perhaps move in the right direction and hopefully, you know, good things will come out of it.
Correct. So, now talking a little about the next big milestone for you guys. So, I’ll combine two questions.
I wanted to ask you about the next big thing that, you know, for Mudrex. How are you expanding? Are you expanding vertically, horizontally? What is the way forward? And with, you know, the kind of products that are being created in DeFi, are you looking to integrate any DeFi solutions into your offerings on Mudrex? Correct. So, at Mudrex, we want to solve for access to crypto.
That’s the mission. That’s the goal that we want to work towards. And we want to do it globally.
We are today pretty large in India. We are a top three player in India. And our goal is to continue to grow the pie and get more and more and more users in crypto in India.
We are also, we feel that the problems of users in crypto are the same because it’s a global asset class. The issues are the same, the features that people are looking for the same. As a result, it’s a very large global opportunity for Mudrex as well.
So, our goal right now is to scale up in India rapidly and also start acquiring and scaling up our presence outside India, primarily in Europe over the next few quarters or so. That’s number one from like a direction standpoint. From a product integration standpoint, I think a lot of things in DeFi are fairly early and still need a lot of testing at scale that needs to happen.
Some pieces that have been there since some time are interesting to look at. For example, credit is interesting to look at. Payments are interesting to look at.
And those we might integrate into Mudrex in the future. But I think what we would definitely want to work towards is offering users a more seamless self-custodial experience at Mudrex. And that’s one of the big sort of directional things that we want to do over the longer run, that users get access to crypto in the same way in which how they get access to crypto on Mudrex today, but everything is non-custodial, everything is in their self-custody.
And I think that’s the main user challenge that we are focused on solving before we work towards solving anything else. That’s brilliant. I think that is something that, you know, would attract a lot of users onto your platform because obviously some of them are purists and they want to have self-custody.
And considering you’re working on that. Actually, in reality, Taruja, I don’t think it’s necessarily, I mean, of course, it will attract users, but the reason why we are actually doing it is very selfish. I told you, right? Custody is a cost.
Exactly. Yeah. And if you get it wrong, and it’s a large responsibility to take custody of users, right? And the reason why we would want to move to self-custody is basically so that that cost goes away and users get an incredibly good experience of how the future of asset storage is going to be like.
The only reason why we haven’t done it yet is because the tech is still hard and the tech is still expensive. So we are working towards making that better and better and better. And as we become better at it, we will launch it for our users.
And I think you’re right. I don’t know about, see, some people are purists and they do want something like this, but I think for most people, accessibility, like that is what you’re solving for. So, you know, you’re staying true to your mission, right? By creating something that’s usable by the users.
And I think a larger population still has a little resistance when it comes to just understanding, they want to understand before they get into it and they find it hard. So, you know, perhaps pushing them into this self-custody, you know, little niche that might alienate them further. So I understand your point of view completely there that, that is something that you’re building for, but obviously, you know, you need to really perfect it in a way so that the user doesn’t feel burdened.
And because, you know, they’re already used to a fabulous interface that you’re providing them right now. Yeah. Because in reality, that’s the bigger challenge with self-custody wallets.
Ideally, everyone should be doing their own custody with their own wallets. Yeah. But because that interface is so complicated today, you are actually safer putting your money on a centralized exchange, because otherwise the user experience challenges over there are such that you might actually end up losing a lot more money.
Just because you either forgot your password, misplaced your private key, or send a transfer unknowingly to some random person by clicking on a link, right? You don’t want that. So making sure that your assets are safe, secure in your custody and accessible to you at all points with your own consent is, I think, a large general challenge, a large user interface challenge. Yeah, I think that’s, that is true.
So now I’m going to zoom out a little bit and talk a little about Mubrix, but beyond Mubrix, you know, you were a part of YC, right? In 2019, if I’m not wrong. How did that experience kind of shape your platform’s trajectory? And what advice would you give for other startups who are perhaps, you know, considering an accelerator program? Or, you know, perhaps taking that route? I think the experience at Y Combinator was really useful, from the perspective that A, it helped us get access to these really smart people in a network of really smart people very early. B, I think the more important reason why YC mattered to us was that it gave us a global stamp of approval that they are not thieves.
And I think that was very important. We’re talking about 2018, where everyone was being scanned in crypto left, right and center, right? Yeah. And at that point in time, it was really hard for you to get someone to trust you at a global level for building a crypto company.
And the biggest concerns that users would have was that are you genuine? Or are you just going to scam me and take my money and run away? And that’s where I think YC helped the most. You know, just to give you a small example, the first 1000 users of Mudrex, we literally acquired by DMing people on telegram groups and discord groups. Literally, that’s what we did.
The first 1000 users, we were just, we were just lurking on various telegram channels and discord groups, when users would say that they had some XYZ problem over there. And if Mudrex at that point in time was solving their problem, we would send them a message, we would ask them to try out Mudrex. And at that point in time, before YC, maybe 1 in 50 would end up trying Mudrex.
After YC, that number changed to 1 in 5, right? Simply because earlier we would say we were Mudrex, we are ABC XYZ. And the only thing we changed was that we are Mudrex, we are a Y combinator back platform going ABC XYZ. So I think that’s where it helped really.
And because we were international, it helped really. Whether you choose to go to an accelerator or not depends on many, many things, including what is your problem? What is the product? What is what is that? What is the user base that you’re looking for? Where do you where are you targeting and so on and so forth. And I think it should be based on all of those choices, rather than just because it’s a brand name, because at the end of the day, there is a cost to it as well, right? That cost is inequity.
I think for us, it was a great experience. And I encourage people to do it. But the only caveat that I had is just think about it once as to what do you want from it? And if you’re able and if you’re able to get from it, then definitely do it.
Yeah, I think that’s good advice for fellow builders. You know, this is such a great conversation. I think I completely lost track of time.
But I do have like two or three more questions that I do want to like fit in. I do think that you know, your advice because for fellow builders will be very valuable. So you know, this this particular space comes with its own set of failures.
I think you know, when you’re going out and building as an entrepreneur, that does happen. But how did you can you perhaps talk a little about failure and how that kind of shapes your experience in building your vision? And how do other fellow builders take heart when you know, Facebook fails? Yeah, so the reality is that at Mudrex over the last seven years, we would have tried hundreds of things. And we might have probably failed at 98% of those things.
And the important thing is that that every failure might be a failure from the perspective of KPI or getting to some user number, and so on and so forth. The really important thing was that every failure was a learning moment. And each of that failure was a moment that gave us some insight, either about us or about our product or about the user or about the problem that we were looking to solve.
And that helped shape decision making for the next attempt at solving that. Right. So I think this journey is actually just a stream of failures.
And most of the times you will be failing. And you should not be afraid of failing. In fact, you should be trying to fail as fast as you can.
Because either because and the reason I say as fast as you can, because there are only two things that can happen. Either you will fail or you will succeed. If you’re succeeding, it’s great, you move fast enough.
And if you fail, you fail fast enough. Now you can go back and put in that second attempt and that third attempt and that fourth attempt. It becomes like a stepping stone, right? And I think I think that’s the mentality that at least we have been, we have with failure, that it’s important to fail.
If you’re not failing enough, you’re not risking enough. And you’re not trying hard enough. And what’s the world that will happen? It will not work.
But the but if it was, it’ll work really well. And even if it doesn’t work, it’ll tell you two more things that will help you understand what you need to do next to make it work. So that’s, that’s basically in a nutshell, that learning from failure, you should be trying a lot and you should be trying to feel a lot as well.
Yeah, I think, you know, failure should not deter you. I think it should just tell you how to perhaps do it better, you know, in the future. And now, because like, actually, to be honest, to be successful, there are only two paths to success, right? Either you increase the number of attempts, or you increase your success rate at attempt.
That’s it. That’s really it. There is nothing else.
You either try, try, try. And every time you are trying, you try and be better than the last time. Yeah, I think that is, yeah, that is good advice.
I think it was, yeah, just have thick skin and keep like a go, you know, alter your approach perhaps by learning from your failures. But ultimately, you don’t have to keep trying to get it right. Yeah.
Either, either you get it right, or you understand some real truth about the market, which then changes your goalposts and then changes what you’re trying to solve. Yeah, that’s the real intent, right? Every attempt is an experiment to try and learn. Something fundamentally true about the market, the world, the problem that you’re trying to solve.
Okay, so now to my penultimate question. Right now, or I think all the time, the markets are volatile. And if there are new traders or even old traders, who are perhaps a little scared or by this rollercoaster journey, what would be your advice to them? And what is your perspective on the market volatility in general? Yeah, so I’ve been in crypto for the last seven years, I’ve seen everything.
So when Bitcoin moves 2% in a day, it might be large for a lot of people, for me, it’s just another day. And that’s what happens to you, you get kind of desensitized to a very large degree. Yeah, when you stay for long enough, you don’t care.
Because you know that it’s all a part of a large cycle, you know, it’s all going to correct. And you, at least for me, I also inherently know that I am in it for the 20 year journey, not the two day journey. Right.
So for people who are, so the original, I think, point that I mentioned that if you’re getting into crypto new, start small, start with Bitcoin, do an SIP. The reason why I suggest that is so that you get used to the volatility, so that you understand what all of this is all about. And as a result, you are able to make more confident choices.
The most common thing that people do wrong, it used to be that people came to crypto thinking it’s a lottery, that they would, you know, double their money in like a week or so, right. The game that you used to play, that was a thought process in which most people used to come into crypto. And this used to be true.
At Mudrex, we have these yearly surveys that we do of our users. And in that survey, we used to ask people, or we still ask people, that why are you into crypto? How are you thinking of it? And two years ago, close to 55-60% of people would say that they are in crypto for the short term, they want to make quick money and go. Last year, when we did this survey, more than 65% people said that they are in it for the longer run.
In fact, a lot of people said that they want to make crypto part of their retirement portfolio. So you see how it’s changed. And the reason why it’s changed is because in crypto, market cycles are small.
If you’re someone like me, who’s been in crypto for the last seven years, you’ve basically seen three market cycles. And in equities, that’s not the case. In equities, market cycles are much longer, 15-20 years.
And once you go through a market cycle, you really understand what the asset is all about. And because in crypto, the market cycles are so small, in a three to four year period, users are very easily able to understand what crypto is all about, how investing in crypto should be, etc. By the way, we all say that crypto is volatile.
But in reality, if you look at volatility, Bitcoin has over the last three, four years now consistently been less volatile than the stock of Tesla. So it’s becoming better and better, Tarusha. Yeah, that is true.
That’s absolutely true. Now to my last question. I think this is something I ask everybody.
If you had to surmise in one line, your advice for builders as well as users who are getting into the Web3 space or who have been there and you’re there, perhaps, like I mentioned, they get disheartened by the market volatility or the general kind of obstacles that arise, you know, when it comes to builders and building their vision, what would be that single advice that you would like to give builders and users for them to start living on blockchain? Yeah, I think for anyone who’s building, I think my most common advice is that stop overthinking and start doing. A lot of times people have a lot of innovations, a lot of things, a lot of doubts that, okay, if we do this, it will be like this, if we do that, and so on and so forth, without really knowing their consumer, their market, their audience, and you only get to know that once you start doing. And, and that’s why my advice always is stop thinking too much, start doing more, so that you get to know what’s going on, and then make those informed choices and go keep on repeating the cycle again and again and again.
That I think is my advice, like that Nike tagline, just do it. But yeah, the context being, do it so that you learn and really understand what choices you should be making. Yeah, I think that’s a wonderful way to end this particular episode.
Thank you so much, once again, Adil for taking out the time to speak to me today. This has been a really lovely conversation. Any parting words before we wrap up? No, love this conversation as well.
Let’s keep in touch. Absolutely. Thank you so much.