Technologist and Exchange Builder Richard Baker’s Deep Dive into Blockchain with Tokenovate

A JLN Podcast Interview of Tokenovate CEO Richard Baker at the ISDA AGM in Chicago

John Lothian News interviewed Richard Baker at the ISDA 37th Annual Meeting in Chicago. JLN spoke to the former CEO of ClearTrade Exchange about his experience creating, running and selling the exchange in this podcast interview. We also talked to him about his new enterprise Tokenovate, which uses blockchain and the ISDA agreements to build smart contracts to digitize and automate trading. 

Baker caught the wave of over the counter trading moving to cleared markets with ClearTrade before selling the exchange to EEX in 2016. 

After that, Baker, who started in the telecom business, started to look at blockchain technology, the original bitcoin blockchain. 

Baker likes deep dives. First it was the deep dive into the Dodd-Frank Act. Then it was a deep dive into blockchain. 

Combining his experience in derivatives markets and blockchain, as well as his time as an engineer and having built a database business, he launched a company called Tokenovate. It is a software platform business. Tokenovate works to create smart contracts to activate the digital life cycle of an ISDA agreement, Baker said. Tokenovate creates templates that execute the whole pre-trade to post-trade lifecycle as digital agreements that now report to the blockchain, Baker said. 

We asked him about the development of Tokenovate. The company is just over one year old and raised some initial money from a family office. Baker said Tokenovate is about 60% through building its platform. They have a lead customer, a London technology firm. Tokenovate now has a minimally viable product and will do their first trade this month in the voluntary carbon credits market. 

Tokenovate currently has a team of 12 people based in the U.K., Baker said. 

JLN asked Baker about how big a market there is for Tokenovate, which Baker said can work with any asset class. ISDA prioritized interest rates and so has Tokenovate, though the carbon credit market is a pressing concern, Baker said.

Baker said there are a lot of data silos across the trading world that are highly inefficient. Blockchain can help replace those silos. Digitization and automation are key to improving this efficiency, he said. 

Baker spoke about this experience building an exchange and the importance of intermediaries in the industry. He said you need to be careful about who you displace. 

We asked him about what he says to unbelievers in blockchain. Baker said he is not a believer in crypto journey, that it has been “highly distortive.” He said he “does not think the planet needs 22,000 currencies, or tokens.” He called cryptos, meme or product building entertaining, but serving very little purpose in developing market confidence and robustness.  He said cryptos have distorted the real use case of the underlying technology. 

To tell the blockchain story he said he starts at the beginning. He equated the development of blockchain to the early development of the internet and the TP/ICP protocol and all the applications that opened up. 

We asked him about what blockchain he found to be successful. He mentioned shipping and gaming. He also said a blockchain needs to be energy efficient and scalable. 

John Lothian Newsletter

Today’s Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

More Crypto Podcasts

The CryptoMarketsWiki Podcast Episode 15: Digitizing the Capital Markets

The CryptoMarketsWiki Podcast Episode 15: Digitizing the Capital Markets

Carlos Domingo is the founder of Securitize, the aptly-named blockchain company that securitizes assets in the form of digital tokens. The company recently signed a deal with an SEC and FINRA-registered broker-dealer and ATS called Distributed Technology Markets, LLC, and seems on track to become an end-to-end digital securities platform that offers both securities issuance and trading through secondary markets. 

The CryptoMarketsWiki Podcast Episode 14: The 80/20 Split

The CryptoMarketsWiki Podcast Episode 14: The 80/20 Split

DrawBridge Lending LLC sees itself as the “bridge” between the cryptocurrency world and the world of institutional trading. In this episode, DrawBridge CEO Jason Urban discusses the finer points of running a business based around lending against cryptocurrency, the state of institutional demand for digital asset products, how to work with regulators, and more.