An interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
This week we catch up with NEM Group CIO & NEM Ventures MD Dave Hodgson. As a leader in both NEM Group and NEM Ventures, Hodgson engages in group investment management, jurisdictional analysis, partnership building and corporate structure design. In addition to his 15 years experience tech consulting in organizations, government agencies and NGOs, Hodgson was an early adopter and program lead for public cloud projects for multiple large organizations.
NEM, a leading enterprise blockchain ecosystem, has recently made a foray into the DeFi space. NEM Group supports the development of Symbol from NEM, a trusted and secure enterprise blockchain that aims to smooth business friction, by increasing the data flow and innovation to supercharge asset creation, exchange and protection. NEM Group, comprised of the three separate entities NEM Software, NEM Trading and NEM Ventures, seeks to shape the future of blockchain by nurturing a healthy ecosystem and contributing to blockchain technology development.
With its wider mission to strengthen NEM and increase accessibility to the XEM token, NEM is also planning the mainnet launch of Symbol, its next-gen blockchain platform, purpose-built to help businesses cut costs, reduce complexities and streamline innovation. The DeFi narrative has recently shifted from “if” and toward “when,” with blockchain projects across the board looking to the next big opportunity.
NEM’s recent partnerships aim to move XEM holders firmly into the DeFi ecosystem. NEM partnered with Hummingbot to reward traders for providing liquidity for specific token pairs, XEM/ETH and XEM/BTC. Participants earn rewards by placing maker orders in XEM tokens and adding to order book depth. NEM has also recently announced a partnership with Stakehound, a new platform that brings together staking and DeFi with a goal of unlocking greater XEM accessibility. Stakehound aims to bridge NEM and Ethereum to create free circulation of ERC-20 wrapped and staked XEM tokens between both networks. Launched in November, holders can choose to stake XEM through Stakehound and the resulting staked XEM tokens will be tradable or usable in DeFi scenarios, such as for collateralizing a loan, multi-level earning, earning staking rewards, access to credit lines or liquidity provider payment.
I caught up with Hodgson via email to learn more about these updates and his views on what’s happening in DeFi, what led to NEM’s new partnerships, Symbol progressl, taking risks and more. Our interview follows.
EKMH: How has NEM pivoted during the pandemic? Has NEM’s roadmap changed?
Dave Hodgson: NEM has been very fortunate and has not really had to pivot in 2020. Our teams have been 100% remote for some time now, with many of the teams being 100% remote from day 0. This has allowed us to weather the storm with less disruption than some more traditional companies. Our roadmap has always been focused on building and launching Symbol, our next gen blockchain platform, which was purpose-built to help businesses cut costs, reduce complexities, and streamline innovation. This work has continued well throughout the pandemic and we are still on target for launch in late 2020.
EKMH: What led to NEM’s recent partnerships with Hummingbot and Stakehound?
Dave Hodgson: NEM is actively monitoring and exploring DeFi and many other chains. This is part of a wider mission to strengthen NEM and increase accessibility to the XEM, NEM’s native token, and NYM, Symbol’s token, leading up to anticipated the mainnet launch of Symbol. The Stakehound solution allows an innovative crossover between Staking as a Service, Wrapping XEM/XYM in an ERC-20 and payment of yield to holders of the wrapped token. This allows XEM/XYM holders to gain exposure to a mixture of native token price, as well as DeFi usage of the wrapped token and a return on their holdings based on the Proof of Stake (PoS) payments earned by staking. The team knows NEM well and the solution is chain agnostic, making it a perfect accompaniment to our ecosystem.
The Hummingbot team offers a unique solution that allows the creation of liquidity pools within DeFi for digital assets that are not otherwise able to easily access this functionality. This area is growing strongly in many ecosystems and again allows XEM holders to gain exposure to a new forum of finance. Both solutions are innovative in their own right, both also allow XEM and XYM holders to gain exposure to the experimental and fascinating world of DeFi while continuing to hold and benefit from their existing digital assets.
EKMH: Which tech and fintech problems keep you up at night and engaged in your work?
Dave Hodgson: This is a good question and very in tune with the current environment. There are a few key problems to highlight here:
Central Bank Digital Currencies (CBDCs) - The world’s first public chain CBDC, LBCoin, was a pilot that launched on the NEM NIS1 chain. There are rapid moves happening in this space with most national governments and banks are now openly exploring the possibility of CBDCs. The main questions revolve around how to ensure these are all launched in compatible, interoperable and secure ways. There is also always the nagging question of whether they are a positive or neutral step for wider cryptocurrency mass adoption - in my view, exposure to the technology is naturally positive, but centralized control and surveillance is also a key consideration here. It’s a delicate balance.
Securities issuance - NEM has been active in the regulated assets space for several years and Symbol is now integrated with Propine, an issuance and custodial platform in Singapore. This integration enables users to issue, custody, manage and customize security tokens on Symbol. The ‘crypto winter’ put some of the developments in the digital securities industry into hibernation, but it is quickly waking up now. The main areas to consider are cross border differences, opportunities and regulatory challenges. Overall the securities issuance space is moving in the right direction, however quite slowly.
Interoperability - Generally speaking, this applies as much to FinTech as it does to normal tech. The opportunities that distributed ledger technology (DLT) solutions enable are immense, however there is also a risk that with nascent technologies we end up in a situation where data and/or value is siloed. In the future it is likely that there will be multiple large scale and successful platforms - some will fill niches and others will function more as generalist tools. In that scenario it is critical that all these technology projects work together to ensure data so that value can flow across the various ecosystems and projects in order to enable real world use cases.
EKMH: What were your best and worst investments? What did you learn from both?
Dave Hodgson: As NEM Ventures, the VC and investments arm of the NEM ecosystem, is a relatively young investment vehicle, we are too early in our journey to be able to answer either aspect of this question. Our first investments are only 1 - 1.5 years old and have been actively building throughout the ‘crypto winter.’ I believe we’ll be in a better place to answer this question in a few years, when these early stage projects have had a chance to flourish!
EKMH: How have you benefited from failure and/or taking risks?
Dave Hodgson: Whenever I fail, or take a large risk that does or doesn’t pay off, I gain an opportunity for reflection and to understand a little bit more about myself, my risk tolerances and my responses to them. My primary learnings from both failure and success are to keep moving forward in spite of things being difficult. It’s essential to get to a place from which I can ultimately exit, for better or for worse. The worst thing I could do is stand still, even if something is failing and it’s time to exit, I would need to be prepared to take a step to cause that to happen effectively and efficiently. Similarly, when succeeding, it’s important to take advantage of the opportunity and not take success for granted.
EKMH: What about your job do you love? Which part of your job is the least rewarding?
Dave Hodgson: Primarily I love that I don’t view my job as a job - every day there is something new, generally complex, that requires me to think creatively to understand and assimilate the information presented to me in a beneficial way.
In terms of the least rewarding: the amount of time I have had to waste over the years with traditional banking solutions that are frankly incredibly inefficient. Regulations are at times a major barrier - even though we are operating entirely within the law and acting conservatively compared to non-crypto peers, we’re still being eyed with suspicion. I hope that in time this will change as more firm and clearer crypto regulations come into effect across jurisdictions.
EKMH: What people think a CIO does vs what you actually do....
Dave Hodgson: There is a stereotype that C-Suite team members spend lots of time at dinners, events and conferences talking. In reality, I have been sitting in my home office for months on end, on conference calls across time zones, like everyone else during Covid!
EKMH: How has your decision to travel, work and live all over the world shaped you as a leader, in and out of the office?
Dave Hodgson: I have been lucky enough to be able to choose to move around the world multiple times over the past 20 years, covering multiple countries and continents. This helps me to remember that in a world where English speaking/western perceptions are the majority of what we see in the media, they are actually the minority; we need to spend more time listening to people with other backgrounds, languages, genders and economic circumstances in order to better understand how the world works. Plus...I get to try some awesome food along the way, meet some great people who have become lifelong friends and who are often doing similar things.
EKMH: Travel restrictions lifted and direct flights reinstalled, where will you fly for your next vacation? Which books will you bring with you?
Dave Hodgson: Almost certainly Latin America to see visit family we have been unable to see for a long time, and brush up on my Spanish, which I am told is getting rusty. No books - too much to see and do to read books on holiday!
**Follow me @crowdfunderin and @ekmhinnovators
Search below and read more interviews in the EKMH Innovators Interview Archive…Don’t miss an Interview! Be a part of the conversation.