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interview - 13.05.2021

Nomadic Labs’ Hadrien Zerah: Corporate Entities Should Become Bakers At Least to Revel in the Beauty of Tezos

We talked with Hadrien Zerah, the manager for Tezos adoption at Nomadic Labs.

Nomadic Labs has been long involved in developing software for Tezos, including the consensus algorithm Tenderbake, smart contract language Michelson, and the Umami wallet. The company also helps EU-based companies research and deploy blockchain-powered solutions in their business practices.

Hadrien Zerah told about why Ubisoft is interested in Tezos, what corporate bakers actually want, and how the European Commission intends to regulate stablecoins.

Hello Hadrien. First of all, would you mind sharing your background with our readers? How did you find yourself working with cryptocurrencies?

I am an automation engineer. I started to study automation in France and finished my studies in Brazil where I worked for around 8 years in the energy industry as an area sales manager. I used to trade options on the Brazilian marketplace B3 in my free time with a Brazilian friend who told me that I should have a look into blockchain technology. I started studying it and reading a lot of project whitepapers. All of this happened in 2017.

I read the Tezos whitepaper before their fundraising and was seduced by the fact that one of the co-founders, Arthur Breitman, graduated from École Polytechnique, in France. The Tezos governance mechanism also seemed very impressive. I decided to participate in the fundraising in 2017 and have followed Tezos ever since.

In late 2018, I decided to come back to France to prepare a master’s degree in financial mathematics as I was tired of the energy industry and the lack of investment in Latin America. After this formation, I spontaneously applied to Nomadic Labs to help them push the adoption of the Tezos technology in France.

What is the role of Nomadic Labs in the Tezos ecosystem? What projects is your team currently involved in?

At Nomadic Labs I’m an adoption manager, which means that my job is to bring about as much Tezos as possible to the French, Luxembourg and Belgium ecosystems. The strategy we put in place was to rely on an existing ecosystem so that end-users could enjoy Tezos in the first place.

Implementing a new tech in business is a complex and expensive process, which is why there are special companies called integrators who work with that. Nomadic Labs could have become an integrator. Just open a department for development and sales of Tezos-based software and carry on selling the solutions.

But instead, we decided to train and even finance the pre-existing integrators so that they could develop open-source tools reusable by the Tezos community and sell services by proposing Tezos as a blockchain protocol.

Then we applied the same strategy with law firms and consulting firms: instead of having Nomadic Labs trying to sell consulting services on top of Tezos, we trained consulting firms and law firms so that they could do business through Tezos. The same goes for blockchain-as-a-service companies like tokenization/node deployment platforms.

This way, we created an ecosystem we can lean on to attend to the demands of end-users willing to build projects on top of Tezos. This includes various kinds of companies, from power supply operators to banks. This is my day-to-day job.

My team is currently involved in projects with asset managers, insurers, and tokenization platforms plus automotive projects and also NFTs projects.

I believe all companies should use blockchain technology as long as it brings about efficiency. Nomadic Labs has a quite open approach and we tend to help as much as our resources allow us. Of course, since resources are necessarily limited, we have to select companies that could bring new users to Tezos or increase its visibility.

Your cooperation with Ubisoft has made the cryptocurrency-themed headlines recently. What lies beneath their interest in Tezos?

Ubisoft expressed the desire to become a Tezos baker to explore our technology. We, therefore, explained to them the advantages of being a baker and provided technical support to help them set up their validator node.

Like many companies, Ubisoft was looking for a technology with low transaction fees, power-friendly consensus algorithm, and scalability. Tezos fits the bill.

Generally speaking, many in-game items can be valuable, so representing those items as tokens offers new opportunities to gamers.The blockchain technology and gaming industry are made for each other in this sense. Representing the uniqueness of a video game item is where NFTs have a strong role.

Even before Ubisoft, the French insurance company Wakam became a corporate baker. But what does it actually entail? How do large companies interact with the network?

To be a corporate baker means that you are an established company with a business model which is based on something other than baking. What underpins this concept is our wish to ensure better representation of users on the Tezos network. After all, there are corporate users as well as individual ones. So why not have them participate in the consensus algorithm of the blockchain they use? We would love to have universities or startups also come onboard.

Large companies are basically interested in baking because of their interest in having their own transactions in blocks or selling this option to other companies who don’t want to pay fees to bakers from blacklisted countries. Some companies also become bakers to use their rewards for calling a smart contract and therefore to save funds.

But I believe that corporate entities should become bakers at least to revel in the beauty of Tezos, a decentralized self-amending protocol promoting technological innovations without fuss. Plus, as bakers, they can vote to amend the protocol they use for their own benefit.

Finally, they can operate a node which comes in handy if they decide to kickstart a project on Tezos. This is when having access to a reliable node is critical.

Speaking of corporations, Société Générale and Nomadic Labs also supported the release of the stablecoin Lugh (EURL). How do you assess the prospects of this project?

The European Commission is working on a legal framework called MICA (Markets in Crypto-Assets), which aims to regulate stablecoins in Europe. As far as I understand, centralized stable coins such as USDC or USDT will be banned from exchanges in Europe unless those exchanges get a banking license or an e-money license (EMI License).

As for decentralized stablecoins like DAI or KUSD on Tezos, it seems that the MICA will be more tolerant, but nothing is yet sure.

This is why the Lugh project wanted to be compliant from the beginning by being a digital asset as defined by the French law. The EURL is the first digital asset pegged to Euro. But just as important is the fact that it’s fully collateralized by Société Générale, one of the major French banks. On top of that, the project is audited by PwC. As a legal digital Euro, LUGH is very likely to comply with MICA and be accepted across the EU.

Regulators in Europe are quite reluctant when it comes to stablecoins, so the safest way to build a widely-used stablecoin is to ensure compliance with regulations. This is the exact strategy of LUGH.

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