When DeFi Meets TradeFi: Comdex Co-founder, Abhishek Singh, Discusses Commodities In Crypto

I’m so excited to catch up with Abhishek Singh, Co-founder and CEO of Comdex, a holistic infrastructure layer for DeFi. He is on an ambitious mission to enable seamless deployment of DeFi products and services, and make them more accessible to the masses. Comdex is also aiming to democratize global financing by powering a multichain future for DeFi. 

So today, I’ll be probing Abhishek’s thoughts on the recent crypto crash, features of a robust DeFi infrastructure layer, and more. We will also delve into the integration of blockchain tech and its underlying infrastructure. Moreover, I’ll be picking his brains on how he perceives the blockchain and DeFi market will evolve in the future.  

Q1. To start, I would love to get your thoughts on the broader crypto market. We have seen the cryptocurrency market cap reduced significantly since the beginning of 2022. What do you think of this downturn? 

Oh yeah, the blood in the market is unbelievable. Billions of dollars were wiped out within a couple of days. But while the calamity was real, we need to understand one fact — the reasons for this are multifold. 

First off, the regulatory landscape for crypto has been ridiculed with negative sentiments and a lack of clarity. Hence, all naive and unsure retail traders are pulling their money out of the market, draining what is often called timid money. Similarly, the narrative of a ‘crypto winter’ setting has further pushed small players away from the market. 

Another catalyst that has struck the crypto market is the macroeconomics situation. The spike in inflation, labor shortage, and rising interest rates have adversely impacted the crypto market. People believe that their money is better off in their hands during these uncertain times. But that’s somewhat ironic because DeFi is ultimately about self-custody and ownership. Anyway, that’s another story. 

So, amidst all these, I’m looking up to smart and big money, i.e. institutional investment flowing into the crypto market. They are the ones that will bring stability and provide opportunities to the dynamic innovation prevailing. This inflow of big money makes me genuinely hopeful of this blood being a temporary dip. 

Q2. How is the integration of blockchain and DeFi helping Comdex solve the issues of conventional trade finance?

Brilliant question! There’s lots of friction concerning the traditional financial markets. We can start with bringing the elements of transparency and provenance into the movement of assets and money. Blockchain enables us to achieve seamless peer-to-peer financial transactions, across the globe, at a minimal cost and in quick time. 

Similarly, the conventional markets neglect the involvement of small players. Only individuals or firms with huge credit lines and other resources are able to participate in legacy trade financing. But with DeFi and crypto democratizing the financial markets, more inclusivity can be achieved with investment vehicles designed for small players specifically. 

Another critical issue being solved using blockchain is the tedious documentation. The current banking, insurance, and similar markets are document-intensive and depend heavily on paperwork. But by integrating tech, transactions can be settled with minimal paperwork and seamlessly. 

At Comdex, we are working on tokenization of real-world assets as on-chain NFTs to enable global trade to take place with minimal friction.

Q3. Please delve into the reasons why Comdex was built on the Cosmos SDK? Also, how can the Cosmos ecosystem benefit from Comdex?

Yeah, we are extremely proud to be one of the early adopters of Cosmos. Application-specific blockchains are a great way to provide creative and infrastructural freedom to innovators. They have disrupted the status quo by removing the one-size-fits-all approach. That is a huge breakthrough of flexibility for building blockchain-enabled solutions. 

Also, we chose Cosmos for the degree of sovereignty it provides us. Rather than depending on the underlying blockchain itself, solutions on Cosmos can use our multiple modules to wield supreme operational control. The vision of interoperability is evident in the Cosmos ecosystem, which further aligns with our overarching goal of inclusivity. 

Achieving transparency in global trade finance ultimately means thousands of data points being fed into our platform to be processed in real-time. For this, the Band Protocol on Cosmos provides us with much-needed off-chain data processing capabilities, that too with optimal integrity and privacy. For one, these help our NFTs of real-world assets and transactions to be identifiable and trackable. 

Now, for the second part of your question, dApp builders and creators can easily build their dApps using our plug-and-play modules. Since these are customizable, Cosmos developers can build everything from peer-to-peer marketplace to lending protocols.   

Also, Cosmos, as a whole, is IBC-enabled which promotes interoperability. So, dApps and other DeFi services built on Cosmos shall be open to a broader market which translates into deeper financial liquidity and more accessible assets. 

Q4. What features do you believe are a must-have for a robust DeFi infrastructure layer? 

Great question. And I genuinely see this answer turning into a wishlist for us at Comdex to deliver.

But, yes, for a DeFi infrastructure layer, a basic AMM-enabled DEX is a must and it needs to be reliable, secure, and user friendly. This is a non-negotiable requirement as it facilitates the movement of funds in the ecosystem while also providing rich liquidity for users. AMMs are a must as they bring liquidity provision to the equation which turns into a financial service of its own.  

Moving on, I believe that interoperability or multichain communication needs to be blended into the infrastructure itself. Now, affordable cross-chain swaps and bridges are also a priority for any DeFi layer. For example, in the case of IBC-enabled Cosmos, developers focus on the product and service itself, rather than their compatibility with other blockchain networks.   

Apart from these, having a native stablecoin is essential for any DeFi layer. It needs to be the native currency of that ecosystem while also being IBC-enabled for cross-chain transactions. 

Also, a solid protocol for tokenization of real-world assets and one for lending are sort of must-haves. Also, a secure native crypto wallet with TradFi integration is growing into a fundamental need. These are certain features that, I believe, are basic prerequisites for any robust DeFi infrastructure layer..  

Q5. Lastly, please share your thoughts on the future of the blockchain and DeFi. Which particular aspects of this market are you keeping an eye on? 

Thanks to promising innovations, DeFi and other blockchain-powered industries will undoubtedly be the eye-grabbers in the near future. 

As I mentioned earlier, I’m excited about the steady influx of smart money into these industries. Not only will they fund ideas and solutions, but also encourage retail investors to park their money in DeFi. And this will create a positive feedback loop enabling decentralized financial markets to mature sooner than later. 

Personally, I am sincerely interested in building an interoperable future. Being a part of the Cosmos ecosystem, we are hands-on in this journey at Comdex. 

Plus, there are so many more solutions being built to bridge and connect different blockchains. The era of siloed blockchains will cease to exist in the near future. So, the emergence of seamless on/off ramps is something that excites me immensely. I think they will play an integral role in bridging users from TradFi to DeFi. 

As we are building an interconnected future with different blockchains, we should also be focussing on the coexistence of DeFi and TradFi services together. That’s critical for sustainable growth in my opinion; that’s where the future lies.