Jack Kelleher joins us to discuss the Buddy DAO – the 1st Guarantor Based DeFi Lending Platform.
Jack brings 35+ years of executive management, operational and entrepreneurial experience.
Jack serves as CEO of BuddyDAO, a fully transparent, on-chain, DeFi non-collateralized lending protocol bringing borrowers, guarantors and lenders together quickly and efficiently on one platform.
COO of OREV Secured Networks. OREV is an integrated suite of security components delivering visibility into data across networks, clouds, endpoints and applications while applying analytics and automation to provide breach resilience and compliance solutions.
Previously, Jack operated as CEO of Dynamic Coin Exchange, a front-end transactional gateway app, providing for a digital acceptance and remittance platform with real time exchange mechanism.
Concurrently, partner of Dynamic Coin Holding, a blockchain based Digital Asset technology company, focusing on stable coins and the build out of the infrastructure and ecosystem for the industry.
Jack formerly served as Senior Advisor to the CEO of Bloomberg Trading Solutions Groups. He was a member of the executive committee and had been responsible for driving vision and execution internally as well as guiding business and strategic planning. In addition, he had been responsible for managing key strategic, organic and inorganic initiatives across the enterprise as well as the integration of acquisitions into the organization.
Previously, he was Practice Manager for the Education, Financial Services and Government vertical markets at Active Data Exchange, a content centric technology firm. His Key engagements included the State of Pennsylvania, Philadelphia School District, Temple University, PECO Energy, Penn Mutual Life Insurance, Morgan Stanley, Morgan Stanley Investment Management and Bloomberg.
Jack began his career in Equity Trading, working at Hambrecht & Quist as well as First Boston/Credit Suisse.
Jack attended Villanova University, graduating in 1981 from the School of Commerce and Finance.
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The following transcript was created using artificial intelligence. There will be some grammatical errors below.
00:01:17:10 – 00:01:39:26
Richard Carthon: Hello everyone. Welcome to another episode of cryptocurrency or host here Richard Carthon
. And today I have a very special guest all the way out in Las Vegas working on a really cool project. With full disclosure, I am with through Acacia, a working with Buddy Dao, which is working to be the first guarantor based DEFI lending platform. Jack Kelleher How are you doing today?
00:01:41:09 – 00:01:45:01
Jack Kelleher: Richard, thanks for having me this morning. Looking forward to our conversation.
00:01:46:06 – 00:01:59:22
Richard Carthon: Yeah. I’m excited to break this down a little bit more. When I first learned about this project, I was like, This sounds really, really cool, and I see all the different use cases for it. But before we dive into all of that, first of all to learn a little bit more about you, he was some background on yourself.
00:02:00:15 – 00:02:01:10
Jack Kelleher: A boy, a background
00:02:02:28 – 00:02:13:12
Jack Kelleher: I bring, I think, 35 years of business and executive management at an operational and entrepreneurial background. What does that mean?
00:02:15:01 – 00:02:46:08
Jack Kelleher: Number one, it means old. And number two, it means I’ve seen it all. Yeah. And what I mean by I’ve seen it all. I’ve seen three or four different cycles in my career of expansions and contractions and booms and busts. I started my career back in the early eighties in San Francisco at an investment bank out there that bought a lot of nasty companies, public hamburger banquets. And a lot of the companies that we brought public back then were the Apples and the Microsofts and the Intels of the world.
00:02:46:23 – 00:02:55:00
Jack Kelleher: They’re all common names now, but at the time they were all. Cutting edge, bleeding edge. And you learn from a site like that.
00:02:57:23 – 00:03:26:05
Jack Kelleher: You have expansion, you have contraction. You have winners. You have losers. And then fast forward it came the dot com under. I’ve seen that also. And what came of the dot com era? A lot of the stuff that I’m in place today. But there were winners. There were losers. You know, fast forward to. No part of my career. I spent I Bloomberg in New York. We had
00:03:27:24 – 00:03:38:12
Jack Kelleher: we had five operating units coming up through our management team. We all had all the algorithms, the smaller routers, all of the matching engines, all the
00:03:40:15 – 00:03:45:27
Jack Kelleher: for all the asset classes, all the trading technology by the asset classes, I mean.
00:03:47:23 – 00:03:55:10
Jack Kelleher: Equities, U.S. equities, global equities, fixed income options, futures. All the platforms
00:03:56:28 – 00:04:08:06
Jack Kelleher: that I learned is that crypto was just another asset class. And this is going back, you know, six, seven years ago. It’s just another other asset class with a different underlying technology.
00:04:10:05 – 00:04:41:04
Jack Kelleher: And because, you know, it’s kind of boring as people look at the crypto space now, technology being the blockchain, it looked at almost mutually, exclusively. If you have crypto, you have the coins, you have the asset, it’s in the tradable assets, but then you have the underlying technology, which is the blockchain. And for a long time, blockchain was this. This is just the way that I looked at it at the beginning. It was a solution looking for a problem.
00:04:42:09 – 00:05:12:17
Jack Kelleher: And you know, as it started to find the prop and there were real applications and huge investments started to go into it from both the bases in the banks. It became, you know, it started to build out. Where we are now is the next generation of that. We’re going through the web3, we’re going through the Defi, which is a real life application of the technology of of the ability to do everything. And it’s really an exciting spot.
00:05:12:19 – 00:05:20:08
Jack Kelleher: And that’s what kind of brings us to that. Hopefully that gives you a little bit of a background of where I am. I guess I’ve seen it all.
00:05:21:18 – 00:05:55:15
Richard Carthon: Yeah. And it’s really helpful to really see like how that journey has evolved over time and how you’re able to take all of those real life experiences and tie them and bring them into what’s happening in current day. And this is a really unique opportunity in the crypto blockchain space as it is still nascent, it’s starting to mature and you see the unique opportunities. So with the experience that you had, you know, work in original finance with Bloomberg and everything else, seeing how this is now translating over on to a blockchain and crypto, it kind of led to where you’ve come today with with Buddy Down.
00:05:55:17 – 00:06:03:01
Richard Carthon: So explain what is Buddy Dao and what ultimately did you identify as a challenge that Buddy is now going in solving?
00:06:05:07 – 00:06:32:25
Jack Kelleher: Well, first of all, we move in the web through and the. You know, if you want to give me a baseball analogy, we’re still in. First thing about any game, maybe even the top of the four, or we’re barely scratched the surface. But when buddy down against one of the other things I learned from. Being in traditional finance and having a background on there, but into the crypto space. Is that again my opinion? I firmly believe that.
00:06:34:19 – 00:06:50:18
Jack Kelleher: All of the disciplines that have been proven out and developed and used in traditional finance over the years. It is going to be directly transposed into DEFI in the future and there is nothing more fundamental in the traditional finance world.
00:06:52:04 – 00:07:00:21
Jack Kelleher: Then somebody who’s going to, you know, give a sign, a loan for somebody. So if you think about what Bible is, it’s a book.
00:07:03:03 – 00:07:38:24
Jack Kelleher: It’s a defi, it’s a non collateralized lending protocol and it brings borrowers and guarantors and lenders together quickly and very efficiently on one platform or on the protocol. It’s fully transparent and everything is on chain. We think of it as relationship based underwrite again. Nothing more fundamental then than, you know, loans, you know, going through somebody who’s buying the loans. So you in in the traditional finance world, it would be called a co-signer.
00:07:39:06 – 00:07:41:16
Jack Kelleher: In the defi world, we call it guarantor.
00:07:43:04 – 00:07:49:24
Jack Kelleher: Here are bunnies, and we just call it a bunny. You bring a bunny to the table. And it’s pretty simple if you think about.
00:07:51:12 – 00:07:54:20
Jack Kelleher: If you think about how the system works.
00:07:56:10 – 00:07:58:27
Jack Kelleher: How the workflow would work if a borrower.
00:08:00:18 – 00:08:31:25
Jack Kelleher: You have a lender. You have a guarantor. And it would be sitting. The prototypical borrower doesn’t have any girl. Very common if you think about what the addressable market is globally for people who are unbanked or underserved. Enormous. Enormous. Think about Southeast Asia. Think about Malaysia. Think about the Philippines. Think about South America. Think about Africa. It’s an enormous market. But the borrower.
00:08:33:12 – 00:08:36:29
Jack Kelleher: The borrowed money doesn’t have any collateral or wish to borrow crypto in this case.
00:08:39:04 – 00:08:42:28
Jack Kelleher: We have a lender. The borrower goes to a guarantor.
00:08:44:26 – 00:08:46:07
Jack Kelleher: Or is somebody who is going.
00:08:49:14 – 00:09:27:01
Jack Kelleher: The Borrowers is leveraging off chain relationship for an on chain lending usage. It helps to predict the borrowers credit. Where credit worthiness goes with the borrower goes to the guarantor. The guarantor will. Into the protocol will fledge crypto assets and get back to the protocol. The stable line of credit. They will then share that line of credit with the borrower. What are the benefits to mitigate the risk? You know, the person you’re borrowing from or who is backing it is cosigning a loan.
00:09:27:27 – 00:10:01:06
Jack Kelleher: And at the same time, as we begin to build out the protocol, we do internal credit profiling. We don’t pull somewhat based credits in the past because that’s that’s not the way that we want it to work, but because all we care about is the social credit score within bleed out. We keep it on chain data and we continuously analyze each borrower. The goal is at some point it’s for that borrower to be self-sufficient, have high enough social score to be able to go in without having to have a guarantor to go with it.
00:10:02:25 – 00:10:07:21
Jack Kelleher: The benefits of the guarantor and the lender gain the guarantee for.
00:10:10:28 – 00:10:23:05
Jack Kelleher: The guarantor pledges their crypto assets. They get back a stable line of credit. They share the stable line of credit. The borrower gets back stablecoins the lender.
00:10:25:17 – 00:11:03:08
Jack Kelleher: Will will get a no token and we’ll put into the protocol a stable USD in this particular case and the benefit to the lender. It’s a stable return. There’s a low risk structure that goes with it backed by the guarantor, and they get a 3 to 5% return on a bond on their money, fairly low risk, and they get a mighty reward that goes with it. When we have a more binding module that becomes enabled in it, which is on our roadmap and to the benefit for the the guarantor.
00:11:04:12 – 00:11:23:25
Jack Kelleher: Is there anything you quoted before? Cooper said, because there are two us in all of it. There’s a mining reward that goes with it. There’s other there are other players that have come into this space, you know, who are doing collateralized loans and they all have enormous
00:11:25:11 – 00:11:46:29
Jack Kelleher: market sizes. Goldfinch Maple Seller True Far Goldfinch goes after the institutional borrowers as is to five with if teller who goes after individual borrowers. Hour before it hit me. Our differentiating feature is clearly that we bring the guarantor to the table. We bring that co-signer to the table.
00:11:49:20 – 00:12:01:25
Jack Kelleher: Even if you think that there’s not going to be. Of course there is. Of course there is. The typical default rate in the lending and lending platform is 3 to 5%.
00:12:03:16 – 00:12:38:11
Jack Kelleher: We think that. We mitigate that risk because the counterparty in this particular case is the guarantor. You bring a friend to the table. It’s not like you’re you’re just taking a loan from something. You’re bringing a friend to the table. They already have a pretty good idea what your credit worthiness is before you even before you even do that. So we think that we mitigate the counterparty risk very well. And then, you know, as we build out the protocol and we do that, so your credit score that it’s mitigates the risk in the case that we do have of the actor, that we’re not
00:12:40:16 – 00:13:13:19
Jack Kelleher: the default on a loan, we’re going to drop a bad token from the order right into the from the guarantor right into the borrower. I guess it would be a soul bound token based on this. So bound up with a solid token standard, it would be displayed in open his wallet and it’s visible for everybody to see. So we think it’s as fundamental as can be. You know, the protocol says a little as we build it out, but it’s as basic as can be written.
00:13:14:29 – 00:13:45:06
Richard Carthon: Yeah. Thanks for breaking all that down. I’ll try to, like, bring it all back. So for all those who are listening, you didn’t get to see Jack’s, like, visual with what he did on screen, but I’ll try to, like, describe it to you. So the way that you can kind of visualize it is basically at the top of the triangle. Think of your Linda left the triangle. You have the guarantee here to the right of the triangle, you have the lender. And so you put all of these are the borrower. So you put all these together in the middle and that is the protocol which makes up body Dow.
00:13:45:12 – 00:14:15:25
Richard Carthon: And so what’s unique to Dow compared to some of these others, you bring your buddy with, you bring your guarantee your is going to help co-sign this loan, which I understand how that works. When I was first getting my first line of credit, I had to have my father help me with getting my first line of credit. So being able to have someone that can come and validate and say like, Hey, I’m good for this particular loan and knowing that they’re, you know, going to have a path to making money with that, having your lender make money as well.
00:14:15:27 – 00:14:46:09
Richard Carthon: And for your person who’s doing the borrowing in the first place and now allows them a path to be able to participate in overall for the money Dow protocol to mitigate the risk, as you were saying. So it kind of completes the triangle. It’s it’s a way that can mitigate a lot of the challenges that we’ve seen that other product protocols have done with over lending and not having enough reserves to really solidify the. The value that is within each of these protocols.
00:14:46:11 – 00:15:12:06
Richard Carthon: Obviously there’s. Celsius is an example. You’re starting to see this happen at a couple of other institutions. And it looks like that you all have been very thoughtful in how you go and approach these different things. Now for. Everyone that’s coming in. Like one of the first things that might come up when they think about this is, okay, well, if I have to bring a guarantor with me, what if I don’t specifically no one. Is there an open market where I could potentially find a guarantor that will work with me?
00:15:13:09 – 00:15:31:15
Richard Carthon: Well in converting to yeah, we want to be able to develop an app that will have a menu of, of, you know, guarantors, menu of link that go with it that you can go. So we can see your profile is in the guaran scored in the garage working the plate and I’ll get back to you a lot.
00:15:33:21 – 00:16:13:08
Richard Carthon: Got it. Okay, that’s cool. And then the other part of it too, with the the Soul Bound Token, I think it’s a unique approach to for those who don’t know what it’s all about. And token is imagine basically being given an NFT that can’t be removed. So it basically is following that wallet address to identify like, hey, there’s some sketchy stuff that’s been happening here. Watch out for this particular address. So with putting these kind of things in place, like how are you, how are people starting to receive the concept of the security and the unique approach of Buddy Dao compared to, like you said, some of those other investment vehicles that are out there with.
00:16:13:15 – 00:16:32:17
Richard Carthon: There’s a lot of obvious. Use cases and benefits to these defi lending protocols. We also have seen the extreme other side of when it goes very wrong. So how are you helping to build confidence into people coming back into design and being able to do this kind of on collateralized lending?
00:16:34:13 – 00:17:02:02
Jack Kelleher: Yeah. Yeah. Mean the most important part of that eventually is is you’re not going to eliminate the risk, the fact that you can make everybody comfortable, that you’re mitigating the risk as much as possible with the sole balance and you’re bringing up, you know, this relationship type of, of, of banking, you know, creating the credit score that goes with it. And we think all of that mitigates risk with the point where everybody feels pretty comfortable with it.
00:17:03:22 – 00:17:34:14
Richard Carthon: Awesome. Let’s talk about that a little bit more. So the thing that’s unique. There hasn’t really been a credit line or a way to like building a DEFI lending type of credit score. Right. The way that you’re able to see like who are potential. Good borrower or people that you would want to give these you would lend to and people who would potentially default to not have any type of indication of how that would play out.
00:17:34:24 – 00:17:42:24
Richard Carthon: But it was helping to create that. How do you how useful do you think that type of tool will be and how do you think it potentially can be replicated into the future?
00:17:43:17 – 00:18:01:17
Jack Kelleher: Oh, it is hugely useful. Again, you know, the whole idea is to be able to get a borrower to a point where they don’t need the guarantor that goes with it, that they can go in because they’ve already built a credit score from the self or a social credit for, let’s call it that. They’ve already built their own.
00:18:03:20 – 00:18:26:12
Jack Kelleher: Their credit went into, they will go into the protocol. And the protocol recognized that it would be a blow that a lender will step up to the plate and make the loan into them. That’s the whole idea behind it is that it’s the old days of every body who can get these loans in, you know, normally to have access to it.
00:18:27:21 – 00:18:58:08
Richard Carthon: And by providing this access, it brings more people to the table and gives them a way to participate in a lot of different opportunities that are out in this crypto space. So someone’s listening to this right now. They’re like, okay, look, I’ve been looking for a defi protocol that I think can allow me access to funds that I typically wouldn’t have access to. I know someone who’s willing to vouch for me to help me get. Me up and running on my feet. What are the first steps look like for me? Come on, buddy.
00:18:58:10 – 00:19:01:24
Richard Carthon: Now, in using this particular protocol.
00:19:03:22 – 00:19:16:13
Jack Kelleher: You know, by opening the protocol, you know, basically, for lack of a better term, sign up or pledge their assets, you know, bring the body to the table. You know, validate. Verify.
00:19:18:22 – 00:19:21:27
Jack Kelleher: And the loan is good as can be.
00:19:23:24 – 00:19:28:03
Richard Carthon: Got it. Well, that’s really exciting for those who are looking to get more.
00:19:28:09 – 00:19:30:11
Richard Carthon: I guess, again, this is.
00:19:32:03 – 00:19:41:12
Jack Kelleher: The IP make it as simple as possible in the protocol and the platform is is is suitable as the whole idea is fundamental.
00:19:42:24 – 00:20:11:10
Richard Carthon: Right. And keeping it simple helps for mass adoption, helps for people to come on and immediately start to use it. So for all of those who are listening in, it sounds really interesting. Go check out a buddy dal. That’s Buddy y de o that i o. And once you’re on there, you’re able to sign up. See, the process to get this going seems really interesting, but what are other ways that people can go and learn more about all the things that Buddy Dale has going on?
00:20:13:28 – 00:20:21:26
Jack Kelleher: Go to our website, please. Outdoors IO go to our telegram group. We have 100,000 people in our telegram group.
00:20:24:04 – 00:20:24:21
Jack Kelleher: Excellent.
00:20:24:23 – 00:20:26:16
Jack Kelleher: So we’re constantly in that.
00:20:31:14 – 00:20:39:20
Richard Carthon: Yeah. After you. So. So you have the website telegram. You’re constantly sending updates and making sure that people are up to date and participating.
00:20:41:16 – 00:20:43:11
Jack Kelleher: Correct. As well as our Twitter account.
00:20:45:08 – 00:21:26:09
Richard Carthon: Excellent. Well, Jack, appreciate all the information. Always like to wrap up with a fun few questions. The first being, you know, you have years of experience through all of bull and bear cycles, innovations happening and people having to adjust to change. With 2022 being a big year for change in a lot of different ways, whether no matter what industry you’re kind of in, we’re starting to see a lot of change occur in a lot of different ways. If you could go in part one or two pieces of wisdom to yourself back when you were just stepping into the world and having to experience all of these things, what is what is some wisdom you would impart to yourself?
00:21:29:28 – 00:22:02:24
Jack Kelleher: Well, first of all, you have to be flexible. You have to have aging, you know, as you become an entrepreneur or as you get into any business, when you have an idea, you have conviction. You know, with that idea, you’ll make decisions, make them urban decisions. If you’re going to build a product and move something for test something in the marketplace, I have this this theory. If you’ve ever seen the movie Field of Dreams. You know, the underlying you know, the underlying theme is if you build it, they will come.
00:22:03:11 – 00:22:33:18
Jack Kelleher: But you know what? You have the greatest idea in the world. If somebody else doesn’t, you believe that it’s a great idea. They’re not going to buy it. You can have the greatest state in the world. Somebody might agree with you, but customers may not pay for it. So, you know, go into the marketplace, you know, make sure that there’s a market for what you’re trying to do and then surround yourself with people and people, people who are smarter than yourself. And trust them. Put a plan together, a solid plan. Put it together and play.
00:22:33:20 – 00:22:50:26
Jack Kelleher: As always, it is the first day that your role will play into. Then it becomes a tactical plan and then you have to be smart enough to recognize what’s going on in the real world is if be nimble and make changes in the plan and then execute, execute, execute it.
00:22:53:01 – 00:23:15:29
Richard Carthon: Awesome. I think that’s a really good gem. Really, really, really good. Everyone go back the set a couple of times. It’s a great reminder that you have to be flexible. You have to be able to pivot. You got to have just and surround yourself with people who can constantly be both challenging you, but also be pointing you in the right direction and helping you to find that North Star to help you move forward to that conviction.
00:23:17:20 – 00:23:21:08
Jack Kelleher: And you have to you have to listen to what the market is telling you.
00:23:22:28 – 00:23:37:06
Richard Carthon: Definitely keep your ears open and don’t get so laser focused that you lose sight of what everyone around you is trying to inform you on. So, Jack, I appreciate all the information. What is the final thought that you want to leave with everyone here today?
00:23:39:25 – 00:24:16:03
Jack Kelleher: The final thought is it was given the by world. I think I said it before for we’re in the first inning of a nine inning game. I think that’s been proven out and used in traditional finance. It’s going to be transposed into defi November three. It’s going to be there that there’s going to be loser in the first market. There will be expansion. It’s just, you know, we have to believe that it’s a norm in this market. We’ve done our due diligence on everything, and we just look forward to doing what I do best, and that’s just executing this thing.
00:24:17:13 – 00:24:32:06
Richard Carthon: No doubt, and looking forward to seeing where it all goes and you executing on that plan and being a part of the Buddy Dale journey. So again, Jack, thank you so much for spending the time. Thank you for sharing all the information and of course, for everyone listening. Stay cryptocurrency.
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