Inception of virtual asset service provider
The inception of the Keon Foundation Ltd (Foundation) has been announced. It will serve as the virtual asset service provider for the Keon Finance Ecosystem (Keon) and will provide initial development, governance, and compliance for Keon.
The Bermudian-based Foundation will initially focus on the development of a low transaction cost decentralised exchange, KeonX, and related Keon liquidity farms as well as the launch of KeonFI, which will be a marketplace where investors can discover and subscribe to investment strategies on a non-custodial basis.
“By utilising institutional, low transaction fee blockchains and launching this effort as a non-profit, we will be able to provide investors with the lowest-cost DEX in the market and better attract talented investment managers and developers to grow the Keon ecosystem,” said Kunall Parmar, a Foundation director.
Phase two products include a derivatives DEX (KeonXD), IDO LaunchPad, Farm Auctions and the Keon NFT marketplace, each of which will integrate with the Keon Finance Ecosystem.
Once the software is developed, the Foundation said, it intends to seek a digital assets business license in Bermuda to enable users to access the products and services.
“While there are many DeFi products and decentralised exchanges (DEXs), very few are regulated because following applicable local regulation and adhering to Financial Action Task Force (FATF) recommendations is difficult and costly, therefore requiring scale and sophistication,” explained Lawrence Newhook, a founding director of the Foundation.
“Anyone with decent development skills can spin up a DEX on some blockchain, but the real opportunity in DeFi is with institutional investors.
“Having developed the alternatives programme and traded for a large pension plan, I can tell you that no institutional investor is going to participate on some unregulated DEX operating in the shadows.”
Nicole Biernat, a Foundation director and Goldman Sachs alum, added: “Coming from traditional asset management, we are used to working in regulated environments.
“Bringing DeFi technologies to regulated markets will open the door for institutional adoption and lead to a paradigm shift in asset management. This is the future of investing, and we are at the vanguard of it.”
Natalie Neto, partner at Walkers (Bermuda) Limited, which acts for the Foundation, said: "Bermuda is a natural fit for the Foundation and its ambitions, with the ability to develop the software and seek regulation under the Digital Assets Business Act, 2018 which offers certainty with respect to the specified digital assets business activities that require a license.
“We look forward to working with the Foundation as it launches the protocol and develops its unique VASP solution.”
While initial products and investment strategies will focus on digital assets, Keon is also expected to facilitate non-digitally native assets and strategies in later releases.
Rahul Parmar, Foundation director, said: “We see a tremendous opportunity to utilise the same underlying blockchain and automated market maker technologies of DeFi with traditional assets.
“We can apply KeonFi to non-custodial management of investment strategies consisting of tokenised equities, fixed income or commodities and also create virtual funds of tokenised real-world assets – that’s what’s most exciting to us.”
The Keon Foundation said it is organised as a non-profit Bermuda exempted company limited by guarantee which will develop the software and serve as virtual asset service provider for the Keon Finance Ecosystem.
The team includes talent from blue chip firms across the investment industry, including Goldman Sachs and Point72 Asset Management.
The company was founded in 2022 and is headquartered in Bermuda.
The Foundation does not yet conduct ‘digital asset business activities' as such term is defined under DABA that would require it to be licensed under the legislation.
The Foundation has therefore not yet applied for and is not licensed under DABA.