“Since the launch of the NFT loan offer in October, X2Y2 has reached a volume of almost 3 million euros”

Launched in January 2022, X2Y2, Ethereum’s second NFT marketplace after OpenSea, caused a lot of ink flow due to a largely anonymous team and their choices, such as making royalties optional. Meeting with its development manager, Derek Caussin.

Derek Caussin, development manager of X2Y2.io. © Jérémy Le Bescont

JDN. You are the only member of X2Y2 whose identity is public. Isn’t it a problem for a market to have an almost completely anonymous team?

Derek Caussin. Perhaps it was a concern at the beginning, but the important thing is to have a physical interlocutor to deal with and it is possible since my involvement. The team is anonymous or pseudonymous, its location in Japan is well known, our general manager TP has a Twitter account (visible hereeditor’s note) and don’t try to hide it. Not really a concern. Users and customers see what the platform is trying to do, which is trying to add liquidity and improve the market. We are not LooksRare (another marketplace born in 2021, ed), who laundered his funds with their token and Tornado.Cash.

Your arrival on the market was realized by an airdrop of tokens aimed at OpenSea users, in order to attract them. Today, OpenSea is still the leader in the NFT markets. How do you think you stand out now?

OpenSea still has the first mover advantage and it needs to be acknowledged to them: the NFT market wouldn’t be what it is today without OpenSea. Now, in terms of differentiation, there are royalties, which we made optional after a very tense debate, as well as a peer-to-peer lending system with mortgage NFT.

This mortgage NFT system has already been seen with BendDAO and caused quite a stir last August with an asset liquidation threat, in this case cash receipts from Bored Ape Yacht Club, Azuki or even CloneX. Don’t you think you’re contributing to a new risk of instability?

Yes and no. Our loan system works very similar to BendDAO but LTV (relationship between financing and value of the asset, ed) it is usually between 50 and 60% maximum, instead of 90%. In the event of a default by the borrower, the lender recovers the asset and since the LTV is modest, this is generally to his advantage. There will always be defaults by the lender, but ultimately the blue chip holders (Iconic and expensive NFTs, ed) have access to money they previously did not have access to. From our point of view, it is rather a tool for adding liquidity. Since launching our offering in October, we have already achieved a volume of 2,300 ether (about 3 million euros as of 11/10/2022, ed).

“X2Y2 will continue to develop financial derivative products”

You mentioned the subject of royalties paid to creators, now optional on X2Y2, as they are followed by other platforms. Solutions are emerging today to force markets to pay royalties to creators. How will you position yourself with respect to this counterattack?

I only ask one thing, is to give back the power to the creators. The creators did not realize their dependence on the markets. The abandonment of royalties was, in a certain sense, the alarm bell for the creators and for them to use the technological tools at their disposal. We only ask that they bind us to the code and that way we can move forward. Personally, more royalties for creators would mean more liquidity in the market, so I’ll always be in favor.

What are the next developments planned for X2Y2?

We will continue to develop financial derivatives and also explore other blockchains because many industries, including games, are expanding on Polygon, for example. Our ambition is to open up to new users who are not necessarily Web3 natives. We have to say things: We could still try to take another 10% of OpenSea’s market share, but that doesn’t represent that many users. The future is not about competing against each other, but about educating the next generation of users on the concept and value of NFT and making it easier for users to access the Web2.

French expatriate in the United States since adolescence, with a degree in finance (American University, Washington DC), Derek Caussin evolved within ABSXChange before joining London, once acquired by Standard & Poor’s. Once a golfer, real estate developer, he joined X2Y2.io in May 2022.

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