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Kain Warwick, the Australian behind decentralized perps protocol Synthetix and now “UX layer” Infinex, says the clock is now ticking for crypto to grow fast enough to reach the point where no one could ever try to shut it down again.
Speaking to Magazine at Near’s Redacted conference in Bangkok, Warwick says the crypto industry — specifically his latest venture, Infinex — has four years to break into the mainstream.
“If we can get mass adoption in the next four years, which I think is achievable, and bring everyone onchain, and we have hundreds of millions or even billions of users, the job’s done — you can’t shut it down.”
Infinex founder Kain Warwick at Near’s Redacted conference in Bangkok (Andrew Fenton)
Infinex is Warwick’s bid at solving the risks that come with centralized platforms — seen in the multibillion-dollar implosions of FTX, BlockFi, Celsius and Voyager Digital — without sacrificing the “normie”-friendly features many of these platforms once offered.
In short, Infinex is positioning itself as a CEX killer, a platform that seeks to offer the user-friendliness of centralized exchanges with the transparency and user control of decentralized finance. Given that Infinex operates from a single office in Sydney, it’s not actually uncensorable, although that shouldn’t be a big problem.
“At the moment, the platform is non-custodial, so even if someone goes and nukes the Infinex platform, censors it, DDoS’s it, or takes down AWS, you can still go to the chain and get your assets back.”
To Warwick, the end goal of Infinex, or of any robust crypto platform, is to scale to a level where the level of demand can practically outweigh any legitimate attempt to “nuke it.”
“It’s the Uber model, right? Make it so useful that you can’t shut it down.”
Infinex scaling up, betting on passkeys to replace seed phrases
As of right now, the Infinex platform is still very much in its infancy. While users can perform a limited number of swaps, bridge assets and play crypto-themed minigames, they still can’t trade assets like they would on a major centralized exchange such as Coinbase or Binance.
Infinex’s minigame “Bullrun” allows players to speculate on markets without actually trading. (Infinex)
But that’s coming soon. Warwick says Infinex will look to list the top 500 crypto assets by market cap in early 2025 when it releases an updated version of its platform. It just announced a partnership with Near Protocol to use its chain abstraction technology to make decentralized crosschain swaps as easy as pressing a button.
One of the core features Warwick hopes will bring retail users onchain is the use of passkeys, which he believes should replace the antiquated security model of seed phrases across the industry.
The world’s largest tech companies, including Google and Apple, already utilize passkeys. You sign up with your usual email, which is associated with your biometric data in a secure enclave on your device. This means you can log in securely to a crypto account without needing to go through the painful process of setting up a crypto wallet.
A week prior to our interview, a user of Infinex lost 80 Patron NFTs — which cost around $400,000 — after being drained by a Trojan virus. Warwick says that while Infinex now runs entirely on passkeys, he blames himself for not integrating an NFT market into the platform, forcing the user to withdraw out into the wild.
Warwick shares the story of how a user was drained for 80 Patron NFTs (Kain Warwick)
“So, this user pulled their NFTs out of their Infinex account to go and put them on OpenSea or Blur, and while they were sitting in their hot wallet, they got drained because there’s a Trojan on their device and they’ve put their seed phrase in.”
Concerns over passkeys
Warwick says that when he first launched Infinex, he didn’t want to rely completely on passkeys, as they were still a novel security method, so he opted to include an “onchain security element” as well.
“If we’d just leaned into passkeys a little bit more aggressively, they wouldn’t have lost those assets, right? We would be able to onboard all of those assets and not worry about the risk of the onchain component.”
Speaking of NFTs, Infinex’s Patron sale shook up the venture capital landscape in September, raising over $67 million through the new fundraising model — although Warwick said he would’ve preferred that amount be closer to $100 million.
Instead of offering any kind of return at all, the platform’s “Patron NFTs” were marketed solely as a way of allowing investors to support the growth of Infinex.
Unlike most crypto fundraising, no special deals or discounts were offered to venture capital firms, early supporters or insiders, with all investors purchasing Patron NFTs at the same tiered prices.
Infinex raised over $67 million from its Patron NFT sales. (Infinex)
However Warwick admits that offering the locked Patron with a three year unlock period at 25% of the cost of the unlocked and liquid Patron was a big pricing mistake.
“We expected that the regular community members and even a lot of the KOLs would be like, well, I want optionality and I want liquid Patrons. But it didn’t play out that way.”
“Very, very few people chose liquid. It was 2% or something like that. It was such a big discount, and this was one of the challenges.”
Warwick says it would have been better to try and figure out the pricing on the open market, but that was too difficult.
“It’s an NFT. It doesn’t do anything. You know, there’s three tiers, there’s discounts. If we had then said on top of that, and I can’t tell you what the price is, it would have just been too hard.”
“The reality is we got it wrong, and so recently, the [Infinex] treasury just did a distribution to the people who bought liquid Patrons of an extra locked Patron to bring their purchase price down.”
Despite getting the pricing wrong, and not raising quite as much money as hoped, it does seem as if the Patron sale was a clever way to get around securities laws, as an NFT with zero promises attached can hardly be said to be a security, even if holders are later “rewarded” for their patronage with some tokens at some point.
Warwick says the idea wasn’t simply a move to skirt securities laws — it was his way of taking a stand against avowedly anti-crypto politicians and regulatory agencies who were doing everything they could to crack down on digital assets over the last few years.
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“I think securities laws are very important for securities because securities are centralized corporations that deliver some value, and they’re opaque, and if you don’t regulate them, then people can get wrecked.”
“But it wasn’t even about regulatory bodies and governments saying ‘everything’s a security’ — it’s that they were saying whatever they needed to say to try to kill crypto.”
“At the point where I realized this was outright warfare, it’s like, ‘I’m sorry. I’m not going to sit there and let you shoot at me all day. I’m going to shoot back.’”
“So, I looked at this and said, ‘What can we do to optimize for the outcome of getting more people to use Infinex?’ The answer was: Get more people aligned with the project. It’s as simple as that.”
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Tom Mitchelhill
Tom Mitchelhill is a reporter covering crypto and fintech for Cointelegraph’s Asia-Pacific newsdesk. He was formerly the lead reporter at startup Web3 outlet The Chainsaw. Tom majored in philosophy, economics and international relations at the University of Wollongong.
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