Launched in January 2022, X2Y2, the second Ethereum NFT market after OpenSea, caused a lot of ink to flow due to a largely unknown team and its choices, such as making royalties optional. Meet its development manager, Derek Caussin.
JDN. You are the only member of X2Y2 whose identity is public. Isn’t it a problem for a market to have an almost unknown group?
Derek Caussin. It might be a concern at first but the important thing is to have a physical partner to talk to and possible since I got involved. The team is anonymous or pseudonymous, its location is well known in Japan, our general manager TP has a Twitter account (see HEREeditor’s note) and don’t try to hide it. It’s not really a concern. Users and customers see what the platform is trying to do, which is trying to increase liquidity and improve the market. We are not LooksRare (another market born in 2021, editor’s note), who laundered his funds with their token and Tornado.Cash.
Your arrival in the market is done through an airdrop of tokens aimed at OpenSea users, to attract them. Today, OpenSea is still the leader in the NFT markets. How do you plan to stand today?
OpenSea still has the first mover advantage and they should be given credit: the NFT market would not be what it is today without OpenSea. Now, in terms of diversity, there are royalties, which we made optional after a tense debate, as well as a peer-to-peer lending system with NFT mortgages.
This mortgage NFT system was already seen in BendDAO and caused a lot of trouble last August with the threat of liquidating assets, in this case collections from Bored Ape Yacht Club, Azuki or even CloneX. Don’t you think you are contributing to a new risk of instability?
Yes and no. Our loan system works like BendDAO but with LTV (the ratio between financing and asset value, editor’s note) usually between 50 and 60% maximum, rather than 90%. In the event the borrower defaults, the lender can repossess the asset and since the LTV is moderate, this is usually to their advantage. There are always lender defaults but ultimately the blue chip holders (Iconic and expensive NFTs, editor’s note) have access to money they didn’t have access to before. From our point of view, this is a tool for increasing liquidity. Since the launch of our offer in October, we have reached a volume of 2,300 ethers (about 3 million euros as of 10/11/2022, editor’s note).
“X2Y2 will continue to develop financial derivatives products”
You mentioned the topic of royalties paid to creators, now optional in X2Y2, since followed by other platforms. Solutions are now emerging to force markets to pay royalties to creators. How do you position yourself in relation to this counterattack?
I only ask one thing, it is to restore the power to the creators. Creators do not realize their dependence on marketplaces. The abandonment of royalties, in a way, has been an alarm bell for creators and for them to use the technological tools available to their advantage. We just ask them to block us by code and this way, we can continue. Personally, more royalties for creators would mean more liquidity in the market so I’m always in favor of that.
What future developments are planned for X2Y2?
We will continue to develop financial derivatives and we will also explore other blockchains because many industries, including gaming, are expanding Polygon, for example. Our ambition is to open up new users who are not necessarily Web3 natives. We have to say things: we can try again to get another 10% of the OpenSea market share, but that does not represent many users. The future is not about competing with each other, it is about educating the next generation of users on the concept and value of NFT and making it easier for users to access Web2.
French expatriate in the United States since his youth, graduated in finance (American University, Washington DC), Derek Caussin developed within ABSXChange before joining London, when it was acquired by Standard & Poor’s. A one time golfer, real estate trader, he joined X2Y2.io in May 2022.