Fineqia International CEO explains new DeFi exchange-traded product – ICYMI

Fineqia International Inc (CSE:FNQ, OTC:FNQQF) has launched the world’s first exchange-traded product (ETP) that deploys digital assets in yield-bearing decentralized finance (DeFi). 

CEO Bundeep Singh Rangar joined Proactive to discuss the product’s unique value, providing access to DeFi yield through a transparent, regulated security listed on the Vienna Stock Exchange.

Proactive: Hello, you’re watching Proactive. I’m joined by Fineqia International Inc CEO Bundeep Singh Rangar. Bundeep, very good to speak with you. You’ve issued the world’s first exchange-traded product that deploys underlying digital assets in yield-bearing DeFi or decentralized finance. Could you start by explaining in layman’s terms what this is and how it works?

Bundeep Singh Rangar: Fantastic. Absolutely. Thank you for having me. This is an exciting opportunity for a lot of investors interested in not just crypto assets. If you think about crypto assets, there is a danger of just referring to them as any fixed asset. Digital assets, in addition to being like gold or a currency, are also software protocols.

Bitcoin and Ethereum, for example, have applications built on them. Cardano, Polkadot, and Solana are layers of software with code upon which people build decentralized applications (DApps). When you build tools on a software layer, there’s a revenue model. You get paid for validating transactions, remitting funds, or replicating traditional financial activities in a decentralized fashion, referred to as DeFi.

DeFi includes borrowing, lending, providing collateral, or trading. All of these activities generate fees. If your coins participate in these activities on a crypto network, you get rewarded. So far, no one has provided yield from decentralized finance in the ETP industry.

Could you explain how this differs from existing ETFs or ETNs?

Sure. Traditional ETPs like gold ETFs or ETNs involve buying and holding the underlying asset. The value comes from the asset’s potential appreciation. Some European ETPs include staking, which involves validating transactions. The fees from staking are usually capped by the issuer, so subscribers often don’t receive the full benefit.

Our product goes beyond staking. It deploys underlying assets in DeFi activities, generating fees as yield. Noteholders receive 80% of the yield, while we keep 20% as a performance fee. This approach gives DeFi access to people investing in an ETN.

You say this is a milestone in the ETP industry. Do you think you’ll have a first-mover advantage?

Absolutely. It’s taken a long time to get here. The industry is still nascent, and there’s a lot of scrutiny. We’re a listed company, so we must comply with Canadian and European regulations. Our product is listed on the Vienna Stock Exchange and complies with the European passport directive.

No one has broken these regulatory barriers before. As a new entrant in the market, we wanted to do something completely different. If we just did the same as everyone else, we wouldn’t move the industry forward.

You also have a collaboration with FTSE Russell. Can you tell us more about that?

Of course. FTSE Russell, a subsidiary of the London Stock Exchange, provides robust data for stocks, bonds, and now digital assets. They have a division called Digital Asset Research, focusing on crypto assets.

We partnered with them to ensure reliable pricing data. This is critical because crypto is traded 24/7 across multiple exchanges. We’ve branded the product as Fineqia FTSE, starting with Cardano ETN.

Cardano is the underlying asset. Would you consider other crypto assets for similar products?

Yes. We wanted to start with a strong impact, so we chose Cardano. It’s a top-10 cryptocurrency with a market cap of over $35 billion. It’s highly liquid and well-recognized.

With our ETN, investors can access Cardano and DeFi activities without handling wallets or protocols themselves. This is just the beginning; we’ll introduce more innovative products in the future.

Quotes have been lightly edited for clarity and style