Decoding Uncertainty Using Foresight in the Crypto World
We recently had a warm, candid chat with Offline member Sumit Gupta (Founder and CEO, CoinDCX) to learn more about his journey as a founder in an industry that is nascent, volatile, and under constant scrutiny. A strong believer in the power of finance as a tool for personal independence, Sumit has been a leading voice, advocating about how cryptocurrencies and decentralised finance can revolutionise economic systems from the ground up. CoinDCX is a marketplace for Bitcoin, Ethereum, and 500+ other crypto assets.
December 8, 2023
How do you approach uncertainty in an industry that is under constant scrutiny and regulation changes?
First off, proactive self-regulation has been key for us. The industry may lack a regulatory framework, but we choose to act as though we are a regulated institution – just like any other banks, exchanges, or brokers. I fundamentally believe that regulations should come, and they will, so instead of waiting for that day, why not operate as such from day one?
As far as business decisions go, the major pillars are simplicity, safety, and compliance. The industry is complex; we know that not everyone understands it, so simplicity and transparency become critical. Since it’s a new industry, safety is crucial: we work hard to ensure there are no single points of failure, since customer assets are obviously extremely valuable. We also recently got ISO certified – no one asked us to do that, but we proactively asked for our systems to be audited, because we have robust, resilient systems and processes that helped us scale very quickly.
Tell us about the decision to build Okto (DeFi wallet) in a market with not many incumbent players.
(Smiles) We are a proud Indian company, excited to go deeper into the technology side of things and experiment with products like Web3 wallets. Neeraj (co-founder) and I are truly passionate about solving problems of efficiency, trust, and usability. The interaction is complex and adoption is so low that only about 2% of the people who have crypto assets actually end up using wallets, so we thought, how do we increase that to 20%, then 50%, and then 80%?
With Okto, we employed a first principles approach to usability and value, and seeing that we could build something that hadn’t yet been built, gave us the drive to do it. It’s a global market and India itself is huge.
This is how we started the exchange too – in 2018, other exchanges were subpar, low-liquid, and we, as customers, had to navigate platform complexity and high fees. And so we thought, why not solve this problem?
Considering the risk-prone and fluctuating nature of the crypto market, how do you build trust not just in your product but also the asset class it focuses on?
There’s just one answer to that: education – about the technology, its potential use cases, and so on. With various digital channels and DCX Learn, a free learning platform, we create and share a lot of resources to demystify crypto.
Since so much learning happens offline and we are committed to building the ecosystem – we have Unfold, our annual conference which is attended by industry leaders and policymakers, as well as Namaste Web3, our monthly events in various cities. Our hope is that these interactions will create a snowball effect where knowledge generates interest and trust.
What powers you and keeps you going?
Honestly, it’s about deep belief and passion in this space. For Neeraj and me both, the why of it all is very, very strong, and the idea or possibility of giving up just doesn’t occur to us. We see this extend to our team too – the reason CoinDCX has been a market leader consistently is because the team has been working on it relentlessly regardless of market conditions, and we think long-term.
And while there are challenges, there are also triumphs. In 2021, when the Supreme Court quashed the RBI ban on crypto, it was a huge celebration. I also draw a lot of positivity and support from the people on our team, and we’re bound by a common love and passion for Web3 and crypto.
How have you structured corporate governance at CoinDCX? What is the role of your board?
This is a critical piece and honestly, I’m not an expert in this area. I’m learning from my own process and from the mistakes and best practices of others. Building robust risk mitigation and security systems and maintaining transparency have been at the core of our relationship with our board from the very start. Given that our industry is complex and global, I leverage a lot of learnings and knowledge from our investors. With cases like FTX and Binance, the issue was about compliance, AML, KYC, whereas I personally believe that regardless of what’s written or not written explicitly, it’s critical to respect intent.
Tell us about your framework for making investment decisions.
Well, Web3 is close to my heart, so naturally there is a bias there, and being immersed in the space offers opportunities to identify early-stage investments. I follow three simple rules:
- The founder should be mission-oriented: I know it’s commonly said but I deeply believe it because I can relate with my own journey, and know how much purpose matters, especially because it’s a tough space to build in.
- The founder should have long-term vision: Some are chasing instant gratification, setting 1-2-3 year goals, and so after the why, I look for the how – are they going about building with the right vision and values?
- The founder seeks win-win situations: My learning is that such people tend to have a higher probability of winning, and this matters a lot in the early stages, when you have to build a solid team of people around you – investors, first hires and founding team. I’m interested in how the founder relates with these people as it sets the tone for the company in the coming years.
While businesses routinely face evolving challenges, having external conditions stacked against them can beat down the best of founders. Sumit has had consistent wins by leveraging the foresight required to be resilient while building an industry from the ground up, bolstered by a commitment to create a new, inclusive ecosystem -- he truly defines the Offline spirit of “doing winning differently”.
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