KLEOS the home of smart money | Edoardo Ricucci, Giovanni Sanna | ETHWarsaw [4]

So uh it's a real pleasure to be here with you guys um to introduce Cleos our company and uh particularly it's interesting to present you Cleos in the context of this topic of the panel that is financial freedom. So um what is really uh financial freedom? A lot of great thinkers uh historian, economists um talk about that in the 19th century in the 20th century like Freriedman, like Jefferson and um the myth of financial freedom actually was sold by the traditional finance. But in reality, what has been so far is just a myth. And I give you some uh macro data to support what I'm saying.

First, 1% of total population owns 43% of global wealth. 1.4 billion adults around the world are still unbanked. When I say unbanked, I'm meaning with no saving account whatsoever. And so if you narrow our research to a European context, just 60% of European households basically have their total wealth in saving account performing 1.

5% APY. So the myth of financial freedom is immediately blocked here. And honestly um that's why we created Cleos that we were we are going to speak more broadly and more in deep at a later stage. We want to focus now on traditional finance and what the traditional finance of course did for this um for for the myth of financial freedom. What actually happened is that banks and hedge funds were just built to accommodate the 1% of course banks are giving to savers to retail savers 1.

5% APY while inflation in the Euro zone from my ECB data research is around 2.2 2.3%. So the thing is that retail savers are consistently losing money. Retail savers are continuously losing purchasing power and the problem becomes even uh higher and it's a even more problematic view in emerging emerging markets.

Now, so the traditional finance give us the dream of uh safety but without giving us the dream of access. So safety but not access. Then we had DeFi came in DeFi and DeFi was actually a fresh of breath air for everyone allowing us with a wallet access to all different um D5 protocols and so all different investment plans and the um D5 protocols were reaching staggering numbers in 2022 when basically we had deposit in D5 protocols of around $200 billion. But then of course in 2022 Luna happened, FDX happened and so the distrust caused by these two crashes of course bring these numbers below $50 billion in the same year in 2022. So one of the reason of course was the crash of FDX and Luna.

At the same time, retail investors following a Binance research in 2024 are going away from D5 protocols and D5 platforms because of poor UX and also caused by they really don't know what they are investing in in most of the times. 46% is a big number and of course the market and the defi world is trying to go back to what was the uh original aum in 2022. But at the same time when you of course spend a lot of time a lot of years to build trust trust can be broken in one second. And so I have a few past relationship that say that for sure. And um the the thing is that one big pro regarding the defi was the access and the accessibility and so the democratization of the access of these investment plans for everything.

So the traditional finance offer us safety or call it like fake safety but no access and the defy gave us access but no safety. That's why I think and we created CLOS in order to merge the safety of the traditional finance and the access of the DeFi protocols. We can't have a true financial freedom without both of these aspect. And that's why Cleos was created by me and Joe and Crayo. Cleos was created as a platform to this.

Cleos was created as a platform to merge these two elements and to offer to the users a sleek interface, a good UX and finally to democratize access to highly sophisticated, highly institutional grade investment strategies through the connection of crypto funds to our platform. So what we did basically we went to numerous such fund in the crypto space like nine blocks, moonwalker, rockaway, jelly just to name a few and we on boarded them and we gave them the minimum capital entry requirement that was needed in order to create um different investment plans in the app. And we are giving for the first time ever the possibility to the investors to access those plans with no minimal capital entry requirement. So basically the minimum capital entry requirement for all these funds are around 250 to 1 million. And of course all these 99% of retail savers are were cut off of course from these strategies and were stuck with their saving one point with with their saving plan with 1.

5% performances on APY. So with continuously losing money on a early basis how we structure claos uh and how we thought about claos in terms of key pillars that we wanted to tackle. So first simplicity so uh as I said a very userfriendly interface UX and uh frictionless on boarding process. You actually can do the KYC with us, opening an account in less than three minutes. You just need like classic proof of residence like a photo and a passport and a document, an ID document.

But more than this, you will receive for the first time ever the investment plans and plus you will have the chance to spend the profits made with this investment plan through a partnership that we made with Visa. So we are issuing also debit card, Visa debit card. So our idea and the ecosystem that we are building is actually a whole ecosystem where the user can save, can invest and ultimately can spend in the very same day without waiting like longer uh period of time that the hedge fund industry usually uh force them to. Another layer that we use that I think is uh paramount importance for us is the banking infrastructure because this is a product that as I told you wants to be a bridge between the two world the traditional finance and the defy. So we are giving to our customers also the a European Iban, an LT IBA, so a Lithuanian Iban where they can actually deposit where they can actually deposit fiat of course and then inside the app they can convert and ultimately invest in the in the crypto hedge fund investment plans that we are building for them.

We are going to actually create three different plans at first in order to have to satisfy all the risk appetite. We are going to have a smart product that will be up to 6% in APY in order to really fight the inflation that we have in the Euro zone. And then we are going to have two different plan. Let's call it a medium and an alpha plan that are going to satisfy of of course investors with more risk appetite blending strategies with market usual strategies and directional that are provided of course always by this institutional grade um hedge fund in the crypto space. So I think that going back to financial freedom topic, I think that financial freedom is real just when you have just when you gave to millions the possibility of use what once was a privilege and to transform a privilege in a collective right that what we want to do.

Hi. That's what we want to do with all our uh new users and that's why we are launching Cleos. Now I um leave the mic to Joe that is of course my big friend and Cleos co-founder and he will explain you more in detail how this uh user journey works and how the interface works. Thank you so much.

Uh hi everyone. Uh I'll try to be quite fast so we can leave a little bit of space for a Q&A in case uh as Edo just uh uh mentioned we try to start like uh how we can combine the essence of the two words between the uh safety and the access. This is was our starting point and how we create all our infrastructure um with a mission to democratize the access to alternative investment strategies making the institutional great solution available to everyone. Our mission is becoming the uh the smart money where the money works for you at the same time it is surrounded by a full infrastructure for um in our opinion sort of mass adoption. Imagine to have a crypto enabled uh euro hibben which is connected to the crypto world.

Um a wallet where you can obviously store and manage your digital assets. A visa card debit card for your daily expenses and ilenine engine that uh allow you to have access to this asset class. So in a nutshell this this is how the infrastructure is composed as mentioned the crypto enabled euro hiben the wallets visa card and the automatic heal engine. So imagine this this is the starting where we say we need to introduce this safety where um if you if we like to target most of retail that currently have have not uh um you know are not are not familiar with the crypto space wallet or everything but they want to to get access in this we uh we introduced the high band which is uh enable first to deposit transfer or do payments in euro or the future also other fiat currencies is but in this way allow you to seamless convert and swapping internally crypto to fiat wallet is connected to the infrastructure so you can swap internally. Um we started we start the idea to have only USDC just because in the regulatory environment uh we deploy USDC in the investment but we already allow um users to use um other digital assets so you can deposit Ethereum or other so it's not only USDC um with partner Visa since the beginning we present we present the project um in uh last October And we enter in their fintech program and essentially you have a debit card, debit visa card connected.

So you heal in USDC and you can spend everywhere in the world in where Visa essentially is accepted. We designed three type of card. the base which is for most everyday uh expenses with the the premium which include more features and the last one which is a black imal that is is by invitation only and is based on the investment signs and the um this is the real core feature of CLOS the part of infrastructure that gets you access to the uh institutional great strategies is essentially we select u crypto edge funds through due diligence investment committee all the process currently to invest in a crypto edge fund minimum kimon is 100k uh luxembourg 125k so not accessible to retail or to to everyone also for understanding where they are um we bring this and uh we select who they can can be uh the best in class and put on a internal allocation um that is included in our plans. We create three plans. Oh, sorry.

Yeah, this is how works internal process very simple everything in the app. Um you scroll and select uh and uh explore one of the plan based on the u risk parameters um return expectation and everything. you select and invest in USDC. This is for uh regulatory uh purpose and uh once you once you invest in USDC obviously you can then track and manage any time. In term of flow, you can see that uh all the fiat which is covered by our uh bank infrastructure goes into um the conversion before the investment and that's how basically institution grade strategies are uh selected.

So we have access to uh strategies that today retails cannot have access or exposure. I should be very fast. Yeah. uh I'll try to be very fast. Um so in term of earning plan uh we create three that we think that uh it's the um how can say how today high net worth have exposure smart yield because today uh people in Gene in traditional bank just have one 2% in terms of saving um saving accounts.

uh we create a smart field where it's mostly composed by tokenized uh instruments like government for bills and the rest for um crypto edge funds for the rest of the allocation. Then the second one it's a blend between a market neutral and uh uh directional strategies all are provided by only regulated crypto hedge funds. The second one is is essentially giving the um better risk better better return just maintaining the risk risk exposure under control and the third one it's more on the third on the uh opportunity dimension strategy and the market neutral. Um we start um term of financial freedom and uh uh philosophy uh mentioning that we like to build wealth maintaining accumulating time by time not not get rich or free scheme like that. Um also try to um have to everyone accessible through an app the same tools or asset class that currently are only for high netw worth individual and uh obviously we we uh we saw in term of uh position our major trends where there are 11 approximately 11.

5 trillion in European deposits that are making no return. So this is a big opportunity also a growing market for the um wealth and investment app at the same time there's a gap between the savings uh traditional and the hedge fund that definitely perform but no one has access um we're targeting to launch in few weeks uh everything is ready so we start collecting uh joining list and if uh anyone is uh more than welcome to provide feedbacks or uh partner or understanding something more. So we close saying that uh um in term of democratization and positioning our real concept of freedom and financial inclusion is that we want to bring to everyone the power of institutional investing through this kind of strategy and asset class exposure with a freedom to earn and spend every day with a visa and uh uh our uh happen infrastructure. Thank you. I tried to be very quick because uh otherwise there was no no space any questions that

Sure. Uh should I should stay or I can sit? Uh so my question is regarding like trust because it seems that this is a centralized application and how we can make how you can make sure that you will not like scam or

second uh

how how do how does know that you're a scam that they can trust?

Yes.

Yeah. Um um everything is regulated. So uh first of all the uh deposit on the fiat is clearly under an EMI um crypto part is under a regulated custodian and we also partner a bus for the the costly part and the third the investment are not managing via stack but only through regulated ones. So deposit in safety obviously it's uh if something happened to the custodian but you know you are technically covered same thing on the uh cryptocustodian and on the investment side

I see also that a custodian we using extras and as a crypto infrastructure we're using of course also fire blocks so this is the this is the regulatory framework.

Can I have another question? Uh

uh so and what about do you have any internal tool to see the statements because I'm I'm asking because of the taxes so I mean each user should like have such access I think

yes we are partnering with a company that is called NAV consulting and that is providing all the um basically results that showing all the results in the app to the user regarding his investment. Of course, one thing that we didn't say regarding the investments is also that we are limiting to basically zero the minimum capital entry requirement, but we are also limiting the lock up period because usually you have a 12-month lock up period as an industry standard in the crypto edge fund space. But in the hedge fund space in general, I think we are doing the first plan, the smart plan with just a 48 hours liquidity. So you can invest in the plan and after 48 hours you have your cash back on your account. The second plan is going to be a 3 months look up and the third plan the directional alpha is going to be a six months Mont lookup plan but still we are trying to be very user friendly.

We are trying to cut the lookup period down to maximum we can and we we agreed that with the with with the fans. Any more question?

Thank you.

So um I got a couple of questions but I'll start with the first one. What was the decision with my bit uh behind USDC and not EURC since you are providing Euro Ebands?

Yes. At first uh this is more for Joavanni but at first uh we were building this USDC framework because we are official partner with Visa and Visa is building and they they are giving a USDC settlement card for Europe and so based on that assumption we started this process as a USDC native infrastructure but at this stage we are also thinking to open two different uh stable coin

it's also a point of adoption. It's more adopting obviously USDC and the uh crypto edge funds at the moment are accepting more USDC in the US but it's clearly uh something that uh uh we have to include once the adoption become higher in the ERC for sure.

Got it. Are you guys do you have like a beta live already that people can go and sign up and test?

Yeah. Um so essentially uh it's going live within the next few weeks but who uh who likes to have a test flight or something like that? Absolutely. Yes, we can.

Okay.

Iban and um wallet is already active. We are waiting for um basically card going in production, but we are starting with virt virtual card nonetheless. um we are already tokenizing the cards in order for you to of course add it to your wallet and um and the funds are already on boarded. So we are already generating uh profits uh with our money that we had to basically commit uh to the funds. But um the the app is going to be launched I think at the end of the month.

We are going to be to Korean blockchain week. We're going to be to token 2049. Um, so we are doing the fall Asia swing and the app will be live during token 2049 already. So uh it's our idea to launch it just a week before uh 2049.

Nice. So just a quick follow up on the same question as the guy had earlier.

Uh why not go for account abstraction and make it non-custodial because you could facilitate all of what you guys are doing and have a non-custodial part.

It is. It is. So it's non-custodial.

Yeah. Yeah.

Okay. That's that's good.

It is. It is. Yeah.

What's the best way to you know also to get to more where also the uh digital world is going. So yeah.

Yeah. I mean that just creates more trust

of course.

Oh no more questions for me. No, but we we try to you know uh get in this term of safety everything on each element like uh banking uh as you mentioned the wallet no custodial investment so everything that on when there's some risk for the users we are um it's easy to mitigate on and address the the answer

awesome

yeah we really believe that financial freedom as I was telling before is um is really a blend is um is a bridge between safety and access. But uh we so we really focus on these two major points and um the structure is pretty um eclectic. It's u not your ordinary structure because we are coming from a traditional finance background. Cleos capital first was a an hedge fund. We were trying to we were trying to uh already democratize the access to traditional hedge fund strategies because we created an AMC listed in Vienna stock exchange where the minimum capital entry requirement was 10,000 um was 10k unfortunately when we were trying to distribute those product retail investor couldn't access to that product just professional investors and so that's why we realized that in order to have full access you really need to think outside of the wall and create something that basically an infrastructure that wasn't wasn't there before.

And so that that's why we created this.

Thank you so much, guys.