DeFi and Blockchain Projects to Invest In, Crypto VC Shares Bull Case

  • Mukaya (Tai) Panich is the CIO and Chief VC at SCB 10X, the venture arm of Siam Commercial bank. 
  • Panich told Insider why the biggest and oldest bank in Thailand is bullish on decentralized finance.
  • She also shares 6 top crypto investments and what type of DeFi projects the firm is looking to fund.
  • See more stories on Insider’s business page.

Decentralized finance, once the wildest west of the crypto market, has started gaining traction among institutional investors in traditional finance. 

In a sign of the times, Siam Commercial Bank, the biggest and oldest bank in Thailand, specifically launched a venture arm called SCB 10X at the start of last year to invest in digital technologies with a heavy focus on blockchain and DeFi

In a wide-ranging Q&A with Insider via email, Mukaya (Tai) Panich, chief venture and investment officer at SCB 10X, breaks down why the firm is so bullish on DeFi, what type of DeFi projects and blockchain companies it hopes to fund, and her investment thesis for the firm’s six top investments.

The written interview has been edited for length and clarity. 

What is your background and how did you get into crypto? 

I’m Tai Panich, CIO and Chief VC at SCB 10X, the digital technology investment arm of Siam Commercial bank, which is the biggest and oldest bank in Thailand.

I am an engineer by background, graduated from MIT with bachelor and master degrees in electrical engineering and computer science. I was in the engineering field for 5 years, working at a semiconductor startup in Silicon Valley called SiByte, which got acquired by Broadcom for $2 billion. Then I got an MBA from Harvard Business School.

Made a career transition into the investment management industry, first worked in New York and then in Singapore. I  invested in publicly listed technology companies for 14 years. The last five years before joining SCB 10X, I ran a pan-Asia fund for Pictet Asset Management, focusing on technology sector investments. I came to start SCB 10X along with other core management team members at the beginning of 2020 and it has been a lot of fun.  

At the beginning of last year, we looked at different kinds of emerging technologies that could potentially disrupt the bank and the financial industry in general. We were doing work on the blockchain industry and started looking into DeFi. And we were amazed by it. It has everything that traditional finance has today. That is how I got into crypto and have not looked back since then. 

How much in assets under management does SCB 10X oversee?

SCB 10X’s overall fund size is $666 million, which is for venture capital, venture building, and strategic investment. For VC funds specifically, our fund size is now $222 million. The fund also includes a $110 million Blockchain, DeFi, and Digital Assets VC fund dedicated to investing in early and growth-stage startups globally, focusing particularly on promising startups in blockchain infrastructure for DeFi and digital assets.

Why is SCB 10X bullish about decentralized finance?

At the beginning of last year, we looked at different kinds of emerging technologies that could potentially disrupt the bank and the financial industry in general. We were doing work in the blockchain industry and started looking into DeFi. And we were amazed by it. It has everything that traditional finance has today – credit/lending, asset management, insurance, trading, derivatives, prime brokerage, etc.

When we looked at DeFi, we thought that it is possible that one day banks and other financial institutions will be completely disintermediated… So we want to prepare the bank for that day that banks are potentially disintermediated. The best way to do that is to invest in DeFi very actively to learn and prepare the bank, find DeFi partners, integrate DeFi into traditional finance, become a player in this area, and potentially be the disruptor in this area. 

Besides having the mission to prepare the bank for the disruptive future in the financial industry, we also have the goal to increase awareness of blockchain and DeFi in Southeast Asia. This year we will do the DeFi Virtual Summit again and even bigger than last year, doubling the number of prominent speakers and expanding into a two-day event on July 22 and 23. 

What are some of SCB 10X’s top investments? What are their investment merits? 

In the area of blockchain and DeFi, we have invested in Ripple (invested since Digital Ventures years), BlockFi, Sygnum, Alpha Finance Lab, Anchorage, and Anchor Protocol of Terra. Recently, we have invested in four more companies that haven’t been announced yet that I am very excited about — two blockchain startups and two DeFi protocols. They will be announced in the next one to two months. 

As for DeFi specifically, one of our seed stage investments that I am very keen on is Alpha Finance Lab (Alpha). This one is particularly inspiring, as the entire team is from Thailand. What Alpha does is credit and lending with leverage in DeFi. Alpha has seen its Total Value Locked (TVL) or the asset that is circulating in their system, grow from zero to $1 billion in 6 months, making it one of the fastest-growing DeFi projects globally today (the protocol was launched in October 2020).

Another DeFi protocol that we invested in at the seed stage is Anchor Protocol, a stable-rate saving protocol on the Terra chain. Anchor is aiming to disrupt the traditional fixed income market. Just very quickly, as you know one of the main attractions of DeFi today is very high-interest rates, but the drawback is these rates fluctuate a lot. Anchor addresses this by being a high, stable rate-savings protocol by leveraging the staking reward mechanism from Proof of Stake (PoS) blockchains. Anchor is part of the Terra protocol ecosystem. Anchor Protocol launched in March this year, and within 3 months, it has garnered more than $1 billion TVL. This is also another successful protocol.  

We would like to contribute to the development of the ecosystems of the projects that we have invested in, which we do in two ways: (1) running validator node, (2) build a new decentralized app (Dapp) to help advance ecosystem development. Terra or Anchor is also another example of how we work with their ecosystem. Currently, we are running a validator node for the Terra blockchain network. I am particularly proud of this because we are the only leading traditional bank in Asia that has engaged in real involvement with a public DeFi network. Being a node validator means having certain technical skills, capabilities, which we possess in-house.

What type of DeFi projects is SCB 10X looking for?

As for the area that we focus in DeFi, there are two major areas: 

  1. Invest in the projects that parallel traditional finance, so we could learn how to do it in a decentralized way and at the same time, teach the startup about best practices we have developed from the traditional finance world. This is true for the two DeFi projects that we invested in, Alpha Finance Lab and Anchor Protocol. 
  2. Invest in the infrastructure of DeFi. I am excited about further development in the infrastructure and cross-chain communication areas of DeFi. I have always been an active investor in infrastructure, as investing in the picks and shovels is always a good idea. I feel that DeFi app/Dapp has been innovating really fast in the last year, and now the infrastructure for DeFi needs to be upgraded and catch up with all these innovations. I am particularly interested currently in (1) cross-chain communication and interoperability across different blockchains, (2) blockchain network infrastructure’s operational intelligence monitoring, and (3) in run time security monitoring of DeFi protocols to prevent them from attacks and exploits.