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HSE University Graduates: Alexey Bashlykov

Photo courtesy of Alexey Bashlykov

Alexey Bashlykov completed the bachelor’s programme ‘Applied Mathematics and Infomation Science’ in 2018, among students of the first cohort of the HSE Faculty of Computer Science. Alexey is a co-founder and Chief Technical Officer (CTO) of Zerion, a fintech startup, which has recently secured $2m in seed funding. In this interview, Alexey discusses the evolution of Zerion, the benefits of networking, and decentralized finances. 

How did you benefit from your studies at the Faculty of Computer Science?

The most important thing I learned at HSE University is how to network. Knowledge is a matter of perception. What is relevant today might no longer be in use tomorrow, while your contacts will always remain with you. Evgeny Yurtaev was one of the people I met at the Faculty of Computer Science. At first, we took part in haсkathons together and then decided to set up a company of our own.

These days, I often travel abroad. I come across HSE graduates in almost every city I visit. I can meet them and chat over a cup of coffee. However, networking can often be beneficial in a more practical way because you can find someone you need for business via the people you know.

Where are you working?

I’m with Zerion now. There are three of us—the people who founded the company—Evgeny Yurtaev, Vadim Koleoshkin, and myself. Evgeny studied at HSE University with me for two years, Vadim had graduated from the School of Business Informatics three years before we enrolled in HSE University. 

As the company’s CTO, I am responsible for the technical solutions we use to develop new products. At Zerion, we’ve got a brilliant product manager, who does a lot to facilitate our processes, making all of them run much more smoothly. He coordinates the design with the front-end, the back-end, etc. I am the leader of our back-end team, delegating tasks and writing code. In addition, I coordinate the operation of different technical parts of the system. I figure out how to make them all work together effectively. I also decide on how to implement updates.

Evgeny is our CEO. He has spent most of the last year forging relations and communicating with investors. Evgeny is also responsible for solving bureaucratic issues. He works with lawyers, seeking their advice and help for drafting agreements. Obviously, he deals with the company’s global mission too, as he is primarily responsible for the strategic development of the product. Nevertheless, we always discuss the future of Zerion together, all three of us, whenever we need to figure out what we have to do next. 

Vadim is our third co-founder. He is in charge of business development, building relations with other businesses, clients, etc. He is very good at networking and meeting useful people. Vadim always analyzes the market to find out everything about our potential competitors or companies that could become our partners. He writes letters, arranges phone calls and looks for people who might be helpful for us.

How did it all begin?

When we were second-year students, Evgeny Yurtaev and I took part in a hackathon. As far as I remember, it was the first blockchain hackathon in Russia. We won a small prize, but more importantly, we got to know the local community. That community was not very numerous, as most people hardly knew anything about blockchains or bitcoins at the time. We began looking into this area and developing smart contacts. 

While at the hackathon, we also met Alexander Ivanov. He was the person who eventually launched Waves in Russia, a blockchain platform used to issue cryptographic tokens and run crowdfunding campaigns. We were lucky to meet this person before he actually became the founder of the company. That spring, they managed to raise enough funds, while Evgeny and I helped them a little by writing smart contracts. The successful launch of Waves brought us some first recognition. People understood that we were capable of developing smart contracts, and we began receiving similar requests. 

Some time later, a conference took place in Moscow, which was attended by Vitaly Buterin, the founder of the Ethereum platform. Evgeny and I came across Vadim there. We had known Vadim as one of the cofounders of Jufy, a web studio where I, a first-year student, was working as an Android developer, while Evgeny was dealing with iOS. After the conference, we had a chat, and realised that we were all keen on Ethereum, that there was a huge demand in this field, and that we could set up a company of our own rather than just being employed as simple hired workers. That’s how Zerion started. 
 

Photo courtesy of Alexey Bashlykov

How has Zerion been developing?

As a matter of fact, the Zerion which we started by the end of our second year at university and the Zerion which we are running now are two entirely different companies. We are doing what we have always done, I mean blockchain, cryptocurrencies, and, in particular, Ethereum, and our core team is still the same, but everything has changed dramatically many times as far as the business itself is concerned. 

We began by dealing with smart contracts, and then we went on to deliver turnkey projects. The hype around ICO and crowdfundings via cryptocurrencies helped us launch our own platform, and in 2016-2017 we became quite a profitable business. We continued growing. At some point, we employed over twenty people. Thanks to the staggering growth in the value of cryptocurrency, we could afford to hire more people. We didn’t even need any external investments as we wrote the code ourselves. Once we had our first profit, we began hiring people to expand our business.

That’s how it was going a couple of years ago until all that bubble burst in winter 2017-2018. The currencies plummeted, the market collapsed. We had very little money left to finance our work, and our services were no longer needed. We realized we would have to come up with a new business model. The market was full of tokenized assets at the time, and it was absolutely impossible to track them, except through centralized stock exchanges and some isolated websites for each separate token. We thought it would be a good idea to create a single application for portfolio tracking. You just need to download the application to have all your assets in one place. In other words, we wanted to create a platform for all the tokenized assets that had appeared in the previous two years.

It took us about six months to develop the product. In autumn, Evgeny and I went to Prague to visit the annual conference of the Ethereum Community, Devcon 4, which takes place in a different city every time. That’s where we heard about decentralized finances (DeFi), which interested us very much. This business sector was undeveloped at the time, and even the word itself had only just been coined. Before DeFi, the use of cryptocurrencies had been limited to tokens and speculations. Once DeFi arrived on the market, we had a use case that made more sense.

What is Zerion like now?

At first, we thought we would just offer an application people could use to track their tokenized assets. However, when we heard about DeFi, we realized that the application could also be used for asset management. We wanted to create something between a bank and an investment application. Now anybody can come to Zerion, open an account and begin investing into various assets.

We would also like to create something like Robinhood (or Tinkoff investments) for cryptocurrencies. Uber has managed to set up a taxi service, although they have no car fleet of their own. Airbnb provides accommodation but they possess no real estate. As for us, we would like to develop a financial application without having any assets under our management. Blockchains and smart contracts enable the creation of financial products with no direct access to the users’ money. We provide an interface that enables access to these opportunities.

One of our main competitive advantages is that we have no access to our customers’ money. It is extremely difficult to set up a conventional bank or even a simple financial application. The key issue is that you have to meet a whole number of regulatory requirements as soon as you start managing your clients’ money. This puts some significant constraints on your business and requires a lot of licenses that vary from region to region, which means it is virtually impossible to obtain all of them. Conversely, there are not so many regulatory requirements we have to meet, which enables us to operate globally even at the early stage of our start-up. 

What do you like most about your job?

Most of all I like the fact that it is my own business. I am independent and I don’t have to report to anyone. My partners and I can decide what to do, and why we should do this. This is always inspiring. Another thing that appeals to me is my confidence in this business area. Although decentralized finance is a very narrow sector, I believe that in some years’ time it will be able to compete with the current financial system, both in terms of the new investment opportunities and in more traditional areas of savings and loans. Decentralized finance may become a new step of the financial system evolution. If so, we would be among the pioneers taking this step, which is just great.

 

February 19, 2020