Red Pilling Institutions: Raising in the Bear Market and How CeFi implosions grew DeFi

The Defiant


Aya Kantorovich is the co-CEO and co-founder of Fractal, which is an infrastructure provider enabling institutions to clear, settle, and margin digital asset trades on-chain.

In today's podcast, Aya shares her founder journey at Fractal, the impact of the FTX collapse on institutional players, DeFi growth since many CeFi companies imploded, how Fractal is red-pilling institutions, as well as her prediction on how many institutions will be cosseting crypto and having tokens on the balance sheet in 5 to 10 years time and so much more.

But first, Aya tells us about her crypto journey thus far.

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🎙️Listen to the interview

7 Key Takeaways

  1. With FTX collapse in 2020, we saw massive deleveraging. And that led to self-custody being a must, and exchange withdrawals. The effects of that, are in both the companies being built today but also in investor sentiment overall.
  2. DeFi for the first time has this massive push to get real-world assets on-chain. There are over 4 billion dollars worth of real-world asset loans extended and tokenized on-chain across all the protocols in crypto today.
  3. The big issue that DeFi has had is always this cat-and-mouse game of yield. Where's the yield coming from? If it’s the yield normal and non-incentivized, just natural flow versus token incentives or any other incentives that inflate non-real yield.
  4. On-chain risk is now conceptualized, and it can be underwritten. Even smart contract risk, because you can see where assets are held and how they are used. CeFi risk you cannot underwrite, it's this black box model of not knowing whether rehypothecation is happening, not knowing where those assets sit, if they are there and not sent to a backdoor market maker trading it on your behalf.
  5. Counterparty risk, If you don't know how to underwrite it or calculate it, sometimes is much higher than any transaction fee you'll be paying on something transparent like Uniswap. Because in the Uniswap example, you still have the assets. They're sitting in your wallet. In the FTX example, you not only lost the assets. But you also probably paid a fee on top of it, too.
  6. Fractal is an institutional on-chain, collateral management tool that allows for ease of clearing, settling on, and then accepting an extension of credit on top of those positions. A capital-efficient on-chain product that gives you the institutional feel. Able to integrate into the DeFi protocols that have been battle-tested through multiple cycles.
  7. The point is to have a fully decentralized system whereby you have two sides of a marketplace taking ownership for a trade face-to-face without the 15 middlemen that typical institutional products require.


  • 00:00 Introduction
  • 00:44 Background and Crypto Journey
  • 02:30 On-chain risk vs Counter-party risk
  • 17:35 Fractal Founding Story
  • 19:40 Product and Customer Journey
  • 24:00 Liquid Staking Top Players
  • 28:03 Fractal the product or the protocol?
  • 34:26 Red-pilling Institutions
  • 37:22 The Fractal Fundrise
  • 39:22 Advice and Motivation
  • 43:12 How are you defiant?