Sergey Baloyan (Yale Financial Markets Certificate 19), Co-founder of X10 Agency and Consultant on Security Token Offerings
Sergey Baloyan is the Co-founder and Chief Business Development Officer of X10 Agency, a full-service marketing and PR agency through which he’s consulted on more than 30 Initial Coin Offerings (ICOs), Security Token Offerings (STOs), and Initial Exchange Offerings (IEOs). X10 is ranked a Top 3 STO advisory agency, a Top 5 ICO marketing agency, and a Top 5 IEO marketing agency by HackerNoon. Mr. Baloyan also currently works as an STO marketing advisor for ARCNUITY, an advisor to TapJets Inc., co-author of the Blog Chain Youtube channel, founder of the BountyHunters ICO platform, and a Medium contributor of HackerNoon-featured articles on Bitcoin. He received his Yale Financial Markets certification this year.
Tell me about your background in the cryptocurrency and blockchain industry. What attracted you to this space?
I have been in the blockchain space since the beginning of 2017, just before the hype surrounding crypto really blew up and propelled the market to new heights. Nevertheless, I remember small meetups, attended by maybe 20 people, where everybody actively and sincerely believed in the ideas of decentralization. At that time, I realized the immense opportunities that were presented by blockchain technology, 90 percent of which are still not yet realized in my opinion.
That year, I was hired by a rather large telecom blockchain project that was in the early investment stage in order to assist in their fundraising efforts. After successfully completing that first investment campaign, I decided to continue working with interesting blockchain projects, helping them to achieve their goals.
Tell us about what you’re currently working on.
At the moment, I’m the Co-founder and Chief Business Development Officer (CBDO) at X10 Agency– an agency that, by many ratings, is considered to be one of the top 5 blockchain agencies globally. We assist crypto startups in the development of their projects: creating tokenomics and business models, helping with global marketing and public relations, community building and management, and so on. Also, in some cases I’m working as an advisor for some projects.
Most of our clients are STO (Security Token Offering) and IEO (Initial Exchange Offering) projects that are launching fundraising campaigns (publicly and privately), as well as crypto exchanges, wallets, and various other fintech projects that are connected with the blockchain world in one way or another.
What have been some challenges and lessons learned from your experience in this industry?
The industry is developing very fast, so you have to be ready for changes. The main thing that I keep in mind is that any hyper-promising and rapidly-developing industry requires time for the mainstream to adapt and for clear legal regulation to be established.
On the other hand, an important thing concerning the startups themselves is that it is necessary to build a project that addresses real problems and needs in the market, rather than just taking advantage of the popularity of technology. The truly successful projects are those who see a problem that blockchain technology is well-suited to solve (e.g. cutting out expensive 3rd parties where they don’t provide significant value), rather than those who see the popular technology and try to find the problem for it. I have seen both the former and the latter types of projects, and it’s clear from looking at the complete trend that the former types of projects become truly successful more often.
At the same time, I understand that the one who can wait wins in the long-term. Many people came to this industry because they were swept up in the hype, but they left as soon as the hype faded away. But every technology and phenomenon has ups and downs, and one must be able to objectively assess the situation and work hard through the down times if they want to reap the full rewards of the good times. There’s actually a joke inside the industry that anybody involved in this space since 2016-2017 can be considered a veteran at this point. It’s funny, but in new industries this is often the case, as the majority of people lack patience and are rotated through very quickly. Industry leaders are those who can see the prospect, lend support at the right time, and remain focused on their vision even during the storms.
What’s the story behind your Yale course certificate?
Oh, it was a great course. Since I typically work directly with projects that are involved in fintech and specifically blockchain startups, I realized that I had to better understand finance and financial markets. I considered different options for a while, but in the end I chose Yale and I didn’t regret it. I received all the information I needed at that time and even more. Ultimately, it helped me to develop a deeper understanding of this space, which I was then able to share with my clients. Thanks for the course.
We saw JPMorgan recently announce JPMCoin, an internal cryptocurrency. Does this give you hope about the future of cryptocurrencies in established financial institutions or does it defeat the intent of open-source tech in the first place?
It seems to me that any development is good in the big picture. The concept of JPMCoin, as it is presented now, is a private blockchain and the token itself will not be a cryptocurrency or even a stablebcoin, in the sense in which we are used to. This will be a system for making payments between only institutional clients, using blockchain technology. In any case, the continued growth of blockchain applications in the institutional sphere, in my opinion, will have a positive effect on the industry as a whole. This is not a quick process, but it is inevitable, so it’s good to see that some giants from the legacy financial system are no longer ignoring nor denying the reality. Projects like JPMCoin will help the mainstream to understand and embrace new economic and financial realities.
There’s been a lot of controversy over Facebook’s announcement of Libra. How will Facebook’s Libra impact your current work? Does Visa being involved defeat the idea behind getting rid of middlemen in cryptocurrencies?
It should be understood that Libra is not Bitcoin. This is a corporate cryptocurrency, and it should be thought of accordingly. It’s difficult to give any accurate predictions at this point but, as is the case with JPMCoin, it seems to me that these new developments are positive. Many more people will get acquainted with the field of cryptocurrency in general. Projects like Libra from Facebook and Gram from Telegram will introduce huge numbers of users to cryptocurrencies and speed up the inevitable mass adoption of cryptocurrencies. But there are risks. We will see how soon the projects are working in reality and how they will have to fight with regulators for the right to exist. But I am sure that the future will bring many interesting turns, which we will observe and engage.
As for the involvement of companies such as Visa, it’s good that they recognize and understand the trends. Again, Libra in its very essence is not Bitcoin, and it is impossible to compare these two concepts fairly. Nevertheless, when such financial giants as Visa acknowledge the potential of cryptocurrencies, and even participate in developing a new (albeit centralized) solution, this is a good signal for the market as a whole. That being said, I know that real crypto anarchists will likely disagree with me. I am very committed to the idea of decentralization first achieved by Bitcoin… that’s why I started working in this industry. But we need to work with the present day reality and find advantages in it.
Why do you think sensible regulation of cryptocurrencies has become such a difficult task? How can industry players like yourself work with policymakers to streamline the regulation process?
To begin with, I am sure that the regulation issues will be resolved sooner or later. This does not mean it will be easy. In my opinion, the main reason is that regulation does not keep pace with rapidly growing technologies. And that’s fine. The fact that something can become extremely popular very quickly means that sometimes regulators simply won’t know how to manage it right away.
Another thing is that Bitcoin and cryptocurrency at the moment remains quite volatile, which brings countless speculators and fraudsters to the industry. That in turn makes regulators look at the entire market with greater skepticism.
And of course, the issue of taxes, the elimination of financial middlemen, and the challenge to fiat currencies makes governments concerned about their own diminishing power.
Nevertheless, it is already clear that the industry is here to stay. And in any case, regulators will have to pass laws that satisfy all parties sooner or later, else they get left behind. Many countries that understand the future potential are already creating crypto-friendly laws.
Last but not least, it’s important that those of us who work in the industry contribute to the resolution of these regulatory issues by conducting honest business, and supporting the innovative and ethos-driven projects in the industry.
Final thoughts? What do you want students to take away?
First of all, many people confuse Bitcoin and cryptocurrencies with the blockchain as a whole. It’s important to understand that blockchain is simply the technology that enables Bitcoin and most other cryptocurrencies to be decentralized, but there are actually use cases for blockchains that don’t involve cryptocurrencies.
Secondly, Bitcoin is much more than just hype and speculation about future price. Bitcoin has a great idea and concept behind it, and I advise you to read up on it and try to understand it. The time and effort required is well worth it once you have that epiphany and you understand the brilliance of this invention.
Thirdly, the financial system is changing and it is impossible to deny it. And to be at the forefront of these transformations, I would advise you to study cryptocurrencies right now so that you can be prepared to capitalize on the opportunities that will be created as they become more mainstream in the years ahead.
And of course, I would advise everybody to study blockchain technology and to think about its possible applications in various industries, not only with cryptocurrencies. I believe that we are standing on the threshold of a truly significant revolution in our lives, which will occur with the help of blockchain, AI, biotechnologies, cryptocurrency and other technologies. So let’s learn and change this world together.