Melon AMA Recap with Crypto Society
3 November 2020
Matt — Hi everyone!
We’ll be starting very soon.
Mona are you with us?
Mona El Isa — I’m here! HI everyone :)
Matt CS — Hello!
Super excited to have you here today
Mona El Isa — super excited to be here :)
Welcome to our 5th AMA with Melon Protocol, an open-source protocol that enables anyone to set up and manage a pooled asset vehicle on-chain, at a fraction of the cost of traditional funds. Melon automates the cumbersome back office and intermediary functions required in traditional finance using smart contracts.
Melon is an Ethereum-based protocol for decentralized on-chain asset management. It is a protocol for people or entities to manage their wealth & the wealth of others within a customizable and safe environment. Melon empowers anyone to set up, manage, and invest in customized on-chain investment vehicles.
This event will feature Mona El Isa, formerly the co-founder and CEO of Melonport AG which developed Melon, the on-chain asset management protocol. Mona is a former star-trader at Goldman Sachs, promoted to Vice President by the age of 26, and made the “top 30 under 30” list in Trader Magazine in 2008 and Forbes Magazine in 2011 after profitably trading the 2008 and 2011 crashes.
Melon is a fully decentralized asset management protocol that removes complexity and cost for managers and their investors empowering them to focus purely on the best investment opportunities. Melon allows anyone to set up, manage, and/or invest in a fund of digital assets in a secure, robust, and permission-less manner. It enables asset managers to create their own customizable investment vehicles on Ethereum in a matter of minutes and for just a few bucks, without the need for back-office or financial intermediaries.
The Melon protocol is a set of smart contracts, that each performs a specific functionality of an investment fund: accounting, investment/redemption, assets custody, trading, fee distribution, etc. Once bundled together through a hub contract, the set of smart contracts are able to work together to implement the behaviour of the fund and to enforce the rules of that fund.
These smart contracts set the parameters for the fund, enabling fund managers to make decisions about the investable asset universe, risk management rule-sets, management and performance fees, data feeds, permitted investors and which exchanges to use, etc. This is opposed to being written in a legal fund prospectus and operated and controlled by back-office and financial intermediaries. Investors are thereby assured that the pooled digital assets will be managed and administered exactly as specified in the set-up of the on-chain investment vehicle.
Melon also enables investors to have a direct relationship with the investment fund, which is typically prohibited, in the traditional asset management world.
The whole process of setting up a Melon fund currently costs a few hundred $ (in Ethereum and Melon gas costs). And, once it’s up and running, the funds can be set up and discovered through The Melon Terminal and monitored via the Melon Monitoring Tool. The Monitoring Tool makes it will make it possible to view historical on-chain data easily and eventually extract reports over any historical time period which are typically required for investor and regulatory reporting.
Most excitingly, Melon’s lead developer Avantgarde has been head down during 2020 working on the v2 release, which is expected only weeks from now. Mona will join us to discuss some of the work they’ve been doing, what exciting new DeFi features to expect, and much more!
➡ Melon on the web
➡ Melon Telegram
➡ Melon in Twitter
Welcome Mona El Isa, we’re all very excited to have you here.
Can you tell us a little bit about yourself and your role at Melon Protocol?
Mona El Isa — Sure!
Matt CS — We’re all huge fans here and it’s really great to have you join us.
Mona El Isa — Prior to co-founding Melon, I enjoyed a very intense 14-year career as a trader and investor. I worked on the Goldman trading floor for nearly a decade. There I was performing dual role: a) market-making equities and b) prop trading across multiple asset classes.
After nearly a decade of that I became a long/short equity portfolio manager for a few years. I co-founded Melon in 2016 with the vision to build a decentralized and completely automated and digital asset management platform powering digital assets. Haven’t looked back since :)
Matt CS — It’s really interesting that a traditional asset manager would make their way to digital assets. I feel like you’re being a little humble above, but we won’t fault you for that.
Can you tell us about why you thought Melon needed to be built? When was the aha moment when you realized the world needed Melon?
The Council meets once every two weeks to discuss matters (grants, Tokenomics, admin, technical aspects etc)
Beyond that, we have 3 working groups which meet in between these meetings too and work on bigger issues that need further work/thought
When we finally decide on implementing a change — the vote will take place on Aragon
Matt CS — The future of decentralized organizations is really a monumental saga. Originating in very early human history with a massive resurgence as of recent. Never creases to amaze me. We need structures like this now more than ever.
How does development take place on Melon? Do you have incentives for contributors?
Mona El Isa — Yes -there are a few ways actually!
Anyone can make a “Melon Funding proposal” on github to the Melon Council to build things. Primarily the council is focused on protocol improvements (especially in the early years)
But we also have gitcoin bounties for smaller projects and a fairly generous bug bounty program which I forgot to mention in the security question earlier :)
We have 4–5 teams building cool things on Melon right now and we’re always looking for talented devs to add to the ecosystem
Matt CS — No better way to find contributors than those in the community who truly care about the future of the project. I love the approach.
What is the Melon token used for? Can you describe the Melonomics?
I did “borrow” melonomics from your website. Love the term.
Mona El Isa — that’s a very good question because it’s actually “in flux” right now
Matt CS — Interesting.
Mona El Isa — Back in June, Tom Shagnessy, Ceteris Paribus and Chris Manessis put forward a token enhancement proposal (known as MIP7) which was actually endorsed by the council just a couple of days ago https://medium.com/melonprotocol/update-on-mip7-81f7950be385
In a nutshell it proposes shifting from a once-off fee model to an asset under management fee model to accrue value to the network/token in a more efficient way
We’re really excited about finalizing the details of this and hope to see it implemented early next year
Matt CS — Definitely recommend people having a read through this if you have some time. Exciting stuff happening at Melon.
I am going to skip the question about some of the unique features on melon in terms of portfolio management unless you wanted to add anything as I think the benefits at this point are quite clear. Access, efficiency, transparency and trustlessness.
Something you just don’t find in traditional asset management. Quite the opposite.
I think everyone wants to hear about V2.
Mona El Isa — Yeah, you nailed it.
Matt CS — What are you currently working on and what do you have in the future roadmap?
Mona El Isa — Yeah so right now we are pretty much entirely focused on v2 :) We are so excited for this release for so many reasons but mainly because its going to address a LOT of user friction and probably position us very uniquely in DeFi
Some of the features that are public are:
- Much, much bigger asset universe than what is currently available (we currently have 14 assets but should have multiples of this with v2)
- Exchange aggregator making trading easier/ cheaper
- 1 step fund (instead of 9 transaction) reducing cost and time dramatically
- access to other DeFi integrations (lending, derivatives, pools etc)
- improved UX/UI (first time in our history we’re investing in this)
- much lower gas costs throughout as a result of much leaner infrastructure
those are just a few of the features I’m most excited about but there will be much more too :)
Matt CS — If I had to bet on one protocol truly leading the pack in the future, I would definitely be putting Melon at the top of the list. V1 was fantastic. It sounds like V2 is a perfect iteration and adds a ton of diversification and utility.
Where is the future of digital assets in five years and what impact could Melon have if everything went incredibly well?
Mona El Isa — My fundamental view on this has always been the same. I don’t know how long it will take but im absolutely convinced every “traditional” asset we know of today (and thousands of new ones) will exist in token form. I don’t know if it takes 5 years, 10 or 20 but I know that when it happens — Melon is right there ready to capture “Future” of asset management which is completely automated and runs with minimal intervention and headache
It was exciting to see the FTX announcement this week and I’m sure we’ll se a lot more of that in months/years to come — bringing traditional S&P equities on-chain
In the meantime though, Melon has so many assets that managers can work with but I see it as a multiphase opportunity
Phase I — where we are now (plain vanilla tokens/”primitives”)
Phase 2 — where we go with v2 (options, synthetic products, derivatives, lending, pools, etc)
Phase 3 — traditional assets on chain. (Hard to predict timing of that)
but its happening…
Matt CS — We’re aligned and you have a fantastic head start. Tokenization is clearly the future. I did catch that innovative approach by FTX. It’s about time really.
It all sounds fantastic Mona.
What is the best way for people to learn more about Melon?
Mona El Isa — Well, I always like to say learning by DOING is the best education :)
I’d actually roll up your sleeves and play around with the melon terminal to start (melon.avantgarde.finance)
But for some interesting reading, our medium page has always got some great write ups https://medium.com/melonprotocol
and twitter for smaller snippets https://twitter.com/home
and the team is very approachable — you can always find us on telegram. Just to clear up any confusion from earlier the CORRECT telegram channel is https://t.me/enzymefinance
Matt CS — Mona, we really appreciate you’re carving out some time for us. I’m not kidding when I say everyone in this room is very excited about Melon. I know you are incredibly busy and you can bet we’ll all be using the protocol in the future. It means a lot that you would join us here today to chat. You are an inspiring woman and we all appreciate the mission you are on.
Please everyone, join Melon in Telegram and on their socials and stay tuned for V2
➡️Melon Telegram (Please note that Melon has rebranded since the time that this article was written!)
➡️Melon on the web
➡️Melon in Twitter
Mona El Isa -Thanks for having us Pleasure to be here and hope to see many of you around!
Matt CS — You will. 100 percent. Thank you so much.