Business development: How adoption changes the structure of cryptocurrencies

Business development: How adoption changes the structure of cryptocurrencies – Mail Bonus

Encryption-oriented companies have come a long way from the beginning in terms of company structure, employee motivation, decision-making systems, compliance and other aspects of operations. Although in early 2010 a start-up company was founded by a small group of cryptocurrency enthusiasts, the space has since grown to become the home of large institutional companies.

However, cryptocurrencies do business and business is an alien anarchy. The rapid growth of the cryptocurrency industry in 2010 transformed small, independent companies into giant conglomerates with thousands of employees and offices around the world. Investment funds and institutional investors own shares in them, many have active boards and there are dozens of departments and divisions in the company structure. But does all this bureaucracy destroy the very philosophy of cryptocurrency?

Like all other companies, most cryptocurrencies started when their founders came up with the idea of ​​starting a business. The difference, however, is that cryptography is not only a new form of finance but also has an ideological basis that combines the spirit of devolution, freedom and anonymity. In the last decade, cryptocurrencies have challenged traditional fiat currencies and rejected many of the financial world’s rules, which have caused confusion in the measured life of the international investment industry.

Right from the start

Huobi’s cryptocurrency exchange was founded by two founders, Du Jun and Leon Li, in September 2013. By November 2013, Huobi had already reached a $ 1 billion Bitcoin (BTC) trading volume (about $ 6 billion at the time) and began receiving funding from well-known investors. During Huobi’s first year of operation, the number of employees increased to over 100, and the stock exchange now has more than 2,000 employees in the corporate structure. It has changed rapidly since the launch of cryptocurrency into a large company with a multi-billion dollar turnover. Institutional investors such as the Chinese venture capital fund Zhen Fund and Sequoia Capital bought shares in Huobi in 2013 and 2014, respectively.

1inch Network, another stock exchange, was founded on the ETHNewYork hack in May 2019 by Sergej Kunz and Anton Bukov, engineers with many years of software development experience. Today, 1inch is a network of over 100 participants spread all over the world. From what can be collected, the company does not have an office and employees can work anywhere in the world. Nevertheless, it has a corporate structure, as well as funding from Binance Labs, which it received in August 2020.

Company colors

In 2014, a book by Frederic Laloux Inventing an organization again was published. It was the result of a three-year study of 12 companies (including Patagonia, Zappos and Sounds True) that promoted unconventional governance and principles. In the book, Laloux identifies five types of companies, which he classifies according to their governance: red, orange, yellow, green and blue. According to the author, teal companies represent the highest level of organization. They are characterized by a lack of hierarchy, maximum transparency and a great deal of freedom for employees to make decisions and express their opinions.

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Unfortunately, Laloux did not research financial institutions, much less financial start-ups, so there is no information in his book about the colors of cryptocurrency companies. Nevertheless, the CEO of Huobi and the founder of 1inch told Cointelegraph that they consider their company to be blue-green.

Jeff Mei, director of international policy at Huobi Global, describes Laloux’s theory of institutional development, telling the Cointelegraph that teal represented the final stage, characterized by “complex distributed systems of distributed power, often structured as distributed, autonomous teams or networks.” . ” At this stage, “magical pyramid hierarchies give way to floating natural hierarchies, where power is transferred to the people with the most experience, passion or interest.”

Source: Readingraphics

Mei said the description “is in line with Huobi’s core beliefs as well as the underlying values ​​of the blockchain itself.”

1inch co-founder Bukov told the Cointelegraph that he believes his company’s efforts to create a “blue institution” are not only successful but also sustainable in the long run. While corporate hierarchy may work for some companies, it is not very suitable for diversified financial projects. In fact, the less hierarchical the project structure, the better. ”He added:

“But consistency between different teams is important to ensure that they are on the same page. Following rules is perfectly normal for DeFi projects and freedom should not mean breaking the law at all. Freedom and devolution remain the core values ​​of a 1-inch network, no matter how large the project. Our teams enjoy a lot of independence and if, for example, a team does not consider an idea promising and worth following, it will be discussed until a consensus is reached. “

Freedom or follow-up?

The ideology of blockchain and cryptocurrencies – described in decentralization, freedom and anonymity – has recently been tested and even questioned by some cryptocurrency companies.

Mei said that “thanks to numerous government regulations around the world, as well as security breaches and even currency crashes, we have come to the conclusion by 2022 that a cryptocurrency as an asset needs some kind of regulation to serve as an anchor and bottom line for protection.”

He added that “Disregard for compliance and regulation is necessary for cryptocurrency to be widely accepted as an asset class, but the nature of blockchain technology should always allow for a certain degree of autonomy and devolution. These two opposing ideologies must be parallel to some extent. “

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According to Mei, stock exchanges such as Huobi operate on a spectrum where devolution and compliance are already parallel: “Transparency and accountability must remain in certain aspects of traditional corporate governance, but we can learn from the spirit of unified contribution and collaboration. A system with a more secure, more efficient distribution of work and information is useful in both the blockchain world and the corporate structure.

Teal or red future

The cryptocurrency industry has developed rapidly in recent years and this will only continue. Many companies operating in the cryptocurrency market declare their commitment to the values ​​that characterize “blue” institutions. Of course, as the number of cryptocurrency companies increases and they become institutionalized investment companies, corporate governance will also change. Striving for openness, self-control and solidarity could face difficult regulatory requirements, competitive pressures and other external challenges.

Will cryptocurrency companies be able to believe in the original values ​​of the industry, or will they be forced to become more centralized and “red”? Time will tell. For now, however, representatives of Huobi and 1inch are optimistic. Interesting fact: With the recent renewal of the Huobi brand, its official colors were given a new blue-green and green color. One can only hope that going forward, the company will be able to keep these colors as part of their management practices, not just its logo.