CrunchDAO uses collective intelligence for trading signals

0:01I'm Ashton Addison from Block West capital for investment pitch media and today on the Crypto Coin Show we have Arnold Castillo CEO and founder of crunch down Arnold welcome to the show and thank you for taking the time thanks Ashton for having me you're very welcome let's dive into the world of Dao's alternative you know hedge fund mechanisms and growing Finance in web

0:283 and I'm really excited for you know the shifts that are happening in the industry and I feel like Dao specifically although I feel that they're early on they will revolutionize you know internet organizations and organizations as a whole one day but right now I feel like we're still in the inceptions and sort of weeding out the details but there's a lot that's

0:47happening in the industry I would love to kick off our conversation by just hearing a little bit from you on your experience so far in blockchain and what led you to starting crunch down yes so basically I've been looking into blockchain from the early 20 and 10 was was a Bitcoin I was in the in the tech industry and so I had a lot of friends talking to me

1:13about Bitcoin or ethereum when they when it came up but I didn't use it too much in the beginning but basically what happened me to what made me go to Crunch down was the idea of you know crunching numbers so basically this is the what the crunch part of the crunch dial and using a community to be able to Crunch a lot of numbers because in

1:37finance today you have a huge amount of data and basically a crunch Tower is today is a team of research data scientists leveraging the power of collective intelligence and both and also web 3 to produce the Next Generation Financial insight and so what we have the good thing about the Dow is the way to organize the world and to incentivize everybody to participate in

2:02the in the community and basically what we do is we produce a data set every weekend and data sent it from around the world we have two thousand data scientists and from 50 countries who can participate by taking the data set and making the predictions and then the Dow is organizing The Ensemble of these predictions to have this Market signal the other part which is important why we

2:29are worth three is because we have a token that we call the crunch since we are crunching data we call it the Crunch and this crunch is allowing us to share and that's one of the big benefit of this organization is that we are sharing whenever we sell the signal to an asset manager an Institutional Investor they pay fees that we transform into

2:52Crunch and the currency is given to the community as part of the contribution of the work they've done so the higher the prediction the better the prediction they give the more tokens they receive as a share of the performance of the Dow fascinating and how long have you and your team been working on this and where is it at right now in terms of

3:14Growth and fleshing out all the details so we started more or less a year and a half ago we started with a very simple hackathon that we did with the French school I.T School Code 42 and so since then we've started to do this weekend weekly tournaments and we grew the community to 2000 data scientists

3:40and so we're trading the signal already and we have a very good performance we are we are basically doing if we compare to the average industry startup we're doing a 3X the performance of the industry well that's great and looking at this from I don't know maybe a philosophical aspect why do you think that there's a need for these alternative hedge fund models in

4:05society and you know how exactly is it improving upon what we have already okay so that there's two way to see your question here I think first of all the idea of using machine learning in finance is not new and a lot of quantitative funds are using machine learning but there is a big A Plus in using a crowdsource crutches and also and to use you know

4:35the wisdom of the crowds and this is very important machine learning because when you have hundreds of data scientists bringing a predictions to you when you do The Ensemble of these predictions you end up you know eliminating outliers eliminating the noise and you're having a much better predictions much more accurate so that's one important thing is that we

4:58believe that using crowdsource that is much better for the result that we want to have in finance and the other part of it is that if you look at the traditional hedge fund they're recruiting the best and the best phds from the best schools in the world whether it's all have other MIT or in Europe it would be Imperial College for example and basically they're hiring

5:21people who could have worked and find Nobel Prize and find a fantastic breakthrough for mankind in physics or chemistry or whatever and obviously because they are paying very high very high salary a lot of people who are doing research in these schools are really tempted to go to this industry and work for the finance industry we believe in our in our system we prefer that the

5:46data scientists work in the field he can for example we have in our team I just give you one example one person who is working on you know the brain and looking at the brain imagery and doing machine learning on that but he's doing this on the during the week and on the weekend he can take the data set and apply what he learned in his job and use it for us so it's only

6:09you know something that he is using his skills and bringing the skills to the Tower and not only can do that but once he has set up his model in a he can put it in an instance on an AWS with what you call a Docker and then it can run every weekend just grab the data create the predictions and send it back to the Dao so that the diagram can assemble this work and what is good is

6:33then you have work of thousands of data scientists from different Industries who don't need to know anything about Finance but they can bring their skills to it down okay and with the Dow itself obviously the philosophy around having a decentralized organization with you know more transparency and open collaboration it I think has a lot of value in it but

7:03I'm curious on your take on the actual mechanisms in web 3 and in blockchain that are sort of you know actually being utilized of the web 3 technology to make this happen versus just sort of having that kind of structure in an organization where do you see the technology at right now and is the actual web3 technology that your team is using

7:25actually functional yes so it's totally functional just because as you say we all the decision take through votes the decision being taken by your votes and the vote is on chain and anybody who is a member of the community is

7:53basically a token holder the token orders are the data scientists who receive tokens as they work so they really have stake in the game and for us the token which is the crunch which is organizing is Dao is also a payment mechanism for us you know what when we do a tournament and at the end of the tournament we need to send a fee to let's say 1000 data scientists it's

8:19very simple in crypto you just make a smart contract you just actually we have a smart contract for that for that it's like just like airdrop but it's just in one project to 1000 data Sciences so I think it's great not only for the payment makers in like a real world mechanism also a way to incentivize the data scientists and the contribution they bring to the

8:41Dow and also the transparency as you see is as you said is very important because you can actually see you know what decision are proposed because anybody can propose something and we're actually right right now we're actually working on a staking mechanism and we are actually making a vote there are a few people from the community who propose different way to manage the

9:01stacking and so the vote is going to happen this weekend and then we will decide to act upon the result of the vote okay that's great to know and with the trials and tribulations that your team has gone through so far in you know growing out this kind of Dao where do you see the industry as a whole you know in other hedge fund models potentially looking at what crunched out

9:25was doing and saying hey you know we should consider implementing some or all of what they're doing it's it's interesting because as part of the token token holders that we have because we have a lot of people from the hedge fund industry who have who actually invested in the token in the crunch so they are very interesting in what we do and I think

9:47they believe there is value here not only you know using machine learning using you know the wisdom of the crowds as I said before and also I mean we'll talk a little bit maybe after but we are trying to share the research that we do as much as possible because we believe that as we share we can have more people bringing their skills and this is not only on the

10:11machine learning part of it but just you know even on the portfolio optimization part because one big part of asset management is how do you manage to you know to create support for you and this is called the portual optimization so we are planning also to share what we do and the research we do and anybody can actually it's like open science anybody can bring value to

10:32this part and people will also have tokens thanks to their contributions that's great to hear and from what I understand you and maybe some of your team are are in Europe but Dows are supposed to be you know a global movement what do you see as you know the geography of sort of where crunched out is and where it's expanding and does geography matter

10:59So it's very interesting because you know in traditional businesses it could take you know several years before you go out of your country and start to be International in our case I think within six months we had data scientists from 50 countries wow and so and we had to deal with people you know basically at the very beginning before we went to crypto we

11:23had to pay people in Russia before Ukraine in India or in Africa it was quite challenging it's actually a mess I'm telling you it was with crypto it's much easier so now in terms of Regulation and where you be I mean there's a there's an issue into you know how what's the best place to organize from illegal point of view adult and you have you have a lot of

11:49efforts that are being done with some countries I think there are some some options in the US we basically where we started out of France the business and we moving the Dow as a non-profit organization in Switzerland because we believe it's it's a it's a great place it's very transparent I think it's we don't think they're going to move they're

12:11going to stay in the right direction you know the ethereum foundation is there also so we will organize as as soon as early 2023 the Dao the Swiss nonprofit organization and basically the members of the organization are the token holders very cool looking forward to seeing that grow and I'm curious if you've seen an effect or a hesitation from you

12:37know people that aren't really crypto native they hear about Dows and it can get complex if you're not already familiar with Bitcoin and ethereum and just in the mainstream and The Regulators you know still having hesitation about making those assets whether into traditional Financial products or you know giving access to everybody around the world and in those

12:59countries you know full access to these assets do you see a barrier where you talk about all the great things that like crunch Dao is doing and how Dows work and they think well you know I still don't really understand Bitcoin and like that's Way Beyond what I you know that's like the next level and I still have a hesitation towards just digital assets in general

13:21well you have in our case we see the Dow as as an organization whereas people can work with being freelanced from anywhere anywhere in the world you know so it's a it's different from being an employee in a bank or whatever people are free that can obviously be remote because everybody is remote you know and they earn something which is paid

13:47in token but the token is can be exchanged to usdc or whatever you know so it's really a for us it's like a payment mechanism but and it's it's totally across border you know so it's very it's much easier to pay anybody in Nigeria or whatever you know that it's that you probably have more difficulties to send a wire to somebody over there

14:10so we see it as a as a big opportunity for a lot of businesses you know I was talking to one of my colleague who's saying you know I don't see why Uber is not a Dao because basically all the drivers of uber should be able to just Finance through a dow you know what development they want in the in the platform and they should earn all the benefits actually they wouldn't need any

14:31shareholders you know and there are many peer-to-peer businesses where the dial could be a much better system than the existing mechanism I completely agree and there's a lot of these companies where you know the users and the employees are doing a lot and when it gets to the point where these companies are just software you know the people that created the company they

14:55really have a lot of control that they're not giving up to the people that are making it you know without the drivers in Uber you know the people that wrote the software wouldn't have a lot of to do right so I feel like this Dao context really will be able to provide value to the people that are in the ecosystem thank you yeah go ahead no it's a great way I think so sharing

15:21make it's the best way to Share value with all the stakeholders not just the shareholders it's the stakeholders whether you bring assets whether you bring your energy your skills your knowledge your time I mean it's great great way to share between stakeholders and do you think moving forward similar to how we're seeing regulation with cryptocurrency

15:49exchanges or stable coins or you know just like kyc and around moving assets do you think that there will be regulations around Dows which may or may not you know like hinder the Innovation and the growth of them so this is a matter of you know what's going to happen next with what's going on today in this industry with the

16:16regulation and so on and so I don't think it's it's a problem for those in the fact that okay if you need today we don't have kyc on our basically if somebody want to participate he can come and participate we excluded some countries because of you know the regulation but we don't do for forsake here we see just to access the platform there's some

16:42countries that cannot access unfortunately but we don't do kyc so somebody can come just create a create standard predictions basically and be rewarded for that now if the regulation changes that anybody who receives a crypto or token or whatever has to go through kyc you will have to follow the rules for sure and what is the best way for

17:11people to learn more about crunch down and potentially get involved in it yeah so the best way is to just go to the website and go to the there's a tournament part where you actually see what you have to do to participate you can have a first download the data set have a first sample you know you can try your first model and you see how it how easy it is and then if you have a

17:35data science skills like machine learning skills and then you can actually just make your first predictions and push it to the to the tournaments every weekend and so you'll see the leaderboard just like you have a Leaderboard on kaggle and you can actually then then start to actually earn some crunch every amounts based on your performance and

17:54your contribution very cool well thank you so much arnott I will leave the description in the description the links for crunch down as well and the socials so that people can check out what your team's been working on and all the best moving into 2023 with everything uncrunched out I will definitely be watching and let's follow up in the near

18:14future okay thank you very much