Interview with Roderick McKinley, CFA Tokenomics Advisor
Q: Can you start by introducing yourself and telling us about your background in the Web3 space?
As a tokenomics advisor I offer clients support with the strategy, fundraising, financial planning, and economic design of their tokenised enterprises. I took on my first blockchain engagement in July 2020. My clients needed help managing their token sale, and they valued the strong quantitative skills that I had developed over my 10 years working as a financial analyst. My client’s fundraise and listing were a success, and I was soon contacted by other founders.
Initially these engagements were narrowly focused on token sales as well, but eventually I was being asked to design token economies and create matching whitepaper writeups too.
With my support, in the period up to 2022, 17 of my clients successfully raised over $100m. The biggest surprise for me on this journey was to discover just how rich and profound the possibilities around blockchain technology are.
I was a keen economics student in my university days and had even weighed up pursuing an academic career in the field. And now, suddenly, thanks to this new work, all that economic theory I had learnt has taken on a completely new lease of life. This really sparked something for me.
It’s this amazing mix of intellectually engaging issues and problem-solving, together with a deep appreciation of this technology’s potential that have kept me committed to the sector during the downturn and its ensuing controversies, even though this was only a recent career pivot!
Q: What is your company’s mission, and how do you aim to contribute to the growth of the Web3 community?
My mission is guided by three goals:
1. Creating sustainable web3 economies
2. Sharing knowledge and best practice
3. Making the world better with blockchain
Let’s look at how I am presently working on each of these.
When it comes to creating sustainable economic designs, we have to recognise that tokenomics and economic engineering is a new and emerging field. Every project that takes this effort on does has to assume some unavoidable innovation-related risks.
Professionals can do this ethically on a “best effort basis”, by leveraging the best industry tools and knowledge available at that time that are appropriate to the task.
For me personally, I have decided to take advantage of the market downturn to strengthen that “best effort” that I can deliver my clients, by doing my own extensive survey and research into best methods and practices in my area.
Doing this free from the constraints of specific project deliverables allows me to pursue that in a much more deliberated, flexible, and open-ended manner.
For example, I am presently studying to earn the Financial Risk Manager (FRM) certification issued by the Global Association of Risk Professionals (GARP). This accreditation is focused on financial risk management practice in traditional finance, but my end goal is to examine how those methods can be adopted and modified for use in economic design and monitoring of blockchain applications.
This naturally links up with the second mission objective – sharing knowledge and best practice. In tandem with my own professional self-development, I am creating online content that I publish on Youtube, LinkedIn, and my personal blog, in order to share my professional experiences and insights with the community.
I have also created a professional-grade online training course on the tokenomics for token sales and listings
And in the meantime, I am proactively engaging with top professionals and leaders in this space, and have begun to contribute to blockchain conference events. I was privileged to interview the ex-UK Prime Minister Boris Johnson about blockchain in Singapore last year, and I was recently invited to give my own talk at EthCC in Paris this year.
All this drives towards the third mission objective – making the world better with blockchain.
I hopeful my knowledge sharing helps advance understanding, and that it will onboard capable professional talent into the space. I’m also hopeful the that better professional methods we are developing can also help us progress towards unleashing the potential of this technology to create applications that deliver more value for end users; offer greater inclusivity; and provide innovative solutions to important economic problems.
Q: Can you give us an overview of the products & services that you provide?
1. Consulting and advisory
I’ve handled a wide range of engagements that reflects the diverse needs that clients have on tokenomics matters.
Sometimes the request is narrow and specific, say creating an economic whitepaper, or to review and provide an opinion of an existing offer or economic design.
Other times it includes a deeper strategic evaluation in order to determine how and whether a business should tokenise in the first place, and how it can differentiate itself from competitors. This all culminates with the design and modelling of an initial token economy proposal that is consistent with the strategy that is chosen.
Of course, I also offer advice and quantitative support on the token sale fundraising process, which is what I’ve dealt with most in my blockchain career.
2. Training, workshops, and education
As mentioned, I create and publish a lot of educational content that I share online for free and have created a self-paced professional training course that allow people to learn in their own time.
I have also been engaged to run workshop sessions live, in person.
These sessions offer clients a great opportunity to have the instruction and delivery tailored to the needs and situation of a specific team or organisation, as well as benefitting from a more dynamic and interactive in-person delivery.
When you eat, sleep, and breathe blockchain 24/7, you can forget how bewildering it can be to people outside the sector! It requires a special talent to be able to distil the technical language and complexity into terms that are accessible to non-expert professionals, something I’m pleased to be able to offer my clients.
The need for research is also being driven by the fact that there are now just so many subdomains that each have their own depth, complexity, and goings on.
While no one can be a deep expert in every area – myself included – the existing expertise I possess gives me a strong head start on finding good data sources on an unfamiliar niche area, and digesting what the information means much more quickly than would be possible for a researcher who is totally new to blockchain.
Q: What sets you apart from other players in the web3 space?
1. Strong training in financial accounting
I developed these skills to create business projections that were able to withstand scrutiny from auditors at Big 4 firms; credit committees at international investment banks; and principals at private equity funds.
This same high standard of care and constructive scepticism allows me to bring rigorous analysis to understanding the real fundamentals of web3 enterprises, without getting distracted by complex smart contract arrangements, or erratic and unreliable public market activity.
2. Good communication skills
As a tokenomics expert, my work intersects with various business concerns. This means that I need to be able to communicate with internal stakeholders across multiple domains (e.g. leadership, legal, development). Furthermore, since my work frequently ties in with fundraising efforts, I also need to be able to understand what communicates effectively with external stakeholders who need to be won over to a project’s value proposition.
I would not presume to be the absolute best communicator, nor the absolute best technical specialist separately, but I know I am able to deliver both to a high standard.
That happens to be a rare combination that is valued by my clients.
It’s a little sad to say, but worth doing so.
There are a lot of people in this sector who will sell you on promises of fast money, with an over-inflated sense of self-competence.
Tokenisation is not an unmitigated benefit. It comes with several trade-offs and the assumption of many risks that many founders are unaware of and are ill-equipped to navigate.
For clients who are just beginning their web3 journey, I will want to check that they understand these risks and trade-offs, and that this is the right choice for them (even if that lands me out of a job). I have had clients tell me first hand that they really appreciate the balanced and sober analysis that I bring to them.
I also own up to not knowing it all.
Tokenomics is a young and experimental field, all my contributions are delivered on a best-effort basis. It is becoming apparent that there are a diversity of tools and methods being used in the space. If I recognise that a client’s problem is best handled by advisors or engineers that have different strengths to mine, I will happily forward them on.
Q: In your own words: How do you see the web3 space evolving in the next few years?
I think we are going to see more flexible privacy and identity-oriented infrastructure begin to settle and bear fruit. This will enable us to accommodate legitimate concerns around these issues, and will enable the migration of more economic activity to be handled on-chain. Together with the new regulations that are clarifying what kinds of blockchain use are acceptable and compliant, I believe this will lead to greater adoption of blockchain by conventional enterprises.
But I expect many of those first mainstream uses will be “boring”! Boring in the sense that they just migrate existing business models and processes on-chain, relying on transactions that use familiar fiat-backed stable instruments, creating value for businesses and end-users through improved economic efficiencies that blockchain handling will achieve.
And actually, I think that at an early stage, being boring is a good thing! It means these early adoptions are likely to be safer, which could help repair the trust deficit that has built up in this sector. The RWA (real world asset) tokenisation trend offers similar benefits in my view. By design, it imposes strict accounting requirements that will help defend token values and build confidence that these instruments can behave like assets we are more familiar with.
In the meantime, as more economic activity takes place on open economic platforms, this creates greater possibilities for further innovation, and increases the lure for others to develop on the platform. I do still hope to see projects that lever the more experimental and exciting features made possible by economic designs that use their own native tokens. But I trust that all the boring applications will put us in a better position to understand how to manage the development and monitoring of these more creative applications, so we can build them better, and care for our end users better.
Q: How do you envision the adoption of innovative technologies by mainstream consumers, and what do you think are the biggest challenges to achieving this?
On the user side the UX will improve massively.
Blockchain interaction is going to become much more seamless, and from a user perspective, blockchain is often going to become an invisible backend thing. Casual users will have the option of never having to think about blockchain, in the same way that many users don’t care what language their apps are coded in, or what chips their phones are using.
As part of this, I expect that wallets are going to become a key identity feature that enables seamless SSO-like authentication online (though I’m sure Google and Facebook will resist that change!)
Mainstream adoption will also increase with the proliferation of “boring” products that do not have a volatile financial component. They will instead centre on new ways of transferring traditional, stable value in ways that are more convenient, or that allow us to celebrate and uphold different specific interests and community values.
In terms of the challenges…
I think regulation and growing interest from conventional players are already in motion to help us make progress.
A lot will depend on us coming to agree on common standards and tools to build around (we can’t have 10,000 different identity standards, for example). That’s a tricky issue to bridge, but there is widespread understanding that this matters, so I expect it will be successfully addressed in due course.
So, ironically, one of the stickiest challenges may come from the blockchain and web3 communities themselves. In them having to learn to be openminded enough to embrace applications that deviate from the extreme libertarian, hyper-self-sufficient, distrustful vision that has motivated and propelled so much blockchain development to date.
Q: Lastly, how can individuals and businesses get involved with your company and contribute to the growth of the web3 community?
Reach me at my youtube and linkedin page linked above. When it comes to knowledge production, it isn’t my main job to be “right”, but to be an active voice that helps drive the conversation forward!