Geeth Jay from Cryptoworth on Data Complexities with On-Chain Transactions

[00:00:00] Umar: Welcome to The Accountant Quits, brought to you by the Web3CFO Club, a community by Request Finance. With a curated community of web3 CFOs from companies like Aave, The Sandbox, Binance, Consensys, Ledger, and many more, joining this club will allow you to network and learn best practices on web3 financial operations.

[00:00:24] Umar: On The Accountant Quits podcast, we discuss how blockchain will impact the accounting professions and how accountants should prepare themselves for the future of work.

[00:00:34] Umar: My name is Umar, your host, and even if some might refer to me as the accountant gone rogue, my job is to provide you with the blockchain knowledge that you need that will be relevant for the accounting industry as a whole.

[00:00:47] Umar: Welcome to Episode 43. Even if it’s relatively straightforward to export transactions from block explorers, how do you know for a fact that the data is complete and accurate? Block explorers have not been designed for accounting purposes and turning the complexities of on chain transactions into an enterprise grade data for your accounting is quite a challenge.

[00:01:10] Umar: One crypto accounting solution who is rapidly capturing market share and automating the crypto related back office transactions is Cryptoworth. Cryptoworth provides the operating system to convert the complex blockchain data from wallets, exchanges, and custodians into your accounting software to facilitate your reporting audits and tax filings.

[00:01:33] Umar: Moreover Cryptoworth provides a dedicated DeFi and NFT operations support that tracks and reconciles these transactions, providing the accountants with a clear picture on what to account on revenue and expenses. Cryptoworth supports around a 100 blockchains, 56 exchanges, over 700 DeFi protocols and has already onboarded more than 1200 users on their platform.

[00:02:00] Umar: Their users include web3 industry leaders, including Aave, Axie Infinity, Celo, Moonbeam, Request Finance amongst others.

[00:02:10] Umar: Today I have the pleasure to be speaking with its co-founder and CEO Geeth Jay. In this episode, you will learn the challenges with aggregating data from block explorers, how to ensure data from block explorers is complete and accurate, what does it mean to have in-house nodes and indexing that data yourself? The value proposition of Cryptoworth for crypto bookkeeping, how different web3 projects are running their crypto back office with Cryptoworth and much more.

[00:02:42] Umar: Geeth, welcome to the show and thanks for making the time to be here.

[00:02:47] Geeth: Hello, Umar. Thanks for having me. It’s a pleasure to be here.

[00:02:50] Umar: To start, could you tell us a little bit about your background, how did you become interested with blockchain and the story that eventually led you to co-founding Cryptoworth?

[00:03:02] Geeth: Yeah, it’s in 2012. I, I first heard about Bitcoin in 2012, and then, I was a trader and in 2017, started to become a bigger problem.

[00:03:15] Geeth: This was before, Coinbase didn’t have a single place to track a lot of assets, and I was holding different tokens all over the place. So I wanted to build something that can track, just show me the balances of everything that I held because I was using Coinbase Gatehub, et cetera. So my background is in enterprise software.

[00:03:39] Geeth: I previously worked for large enterprises in the, in the US and the DoD. So I’m naturally prone to building enterprise software. So I built myself, along with, my co-founder, a crypto tracker, for, for my, for myself and, the community.

[00:03:57] Umar: And how did that lead you to eventually founding Cryptoworth?

[00:04:01] Geeth: Yes. So when, when we were building accounting seemed to be, an upcoming problem. I mean, there was the tax problem that was, coming up, it was pretty clear. But it was also pretty clear that it was going to be a bloodbath in that market cuz, everybody was going into it pretty fast. And taxes obviously didn’t intrigue us that much at that time, because it was consumer taxes. We wanted to help the B2B side of the industry.

[00:04:29] Geeth: We were building software, so the back office and then accounting was the biggest pain point. So we, build the software for the accounting back office.

[00:04:37] Umar: Now, the title of the episode today is data complexities with onchain transactions.

[00:04:43] Umar: The audience will be familiar with companies like Cryptio, Bitwave and Consola, who we previously had on this show where we went into, why we need a crypto subledger. When When it comes to crypto bookkeeping, we need first a subledger to categorize all the transactions before exporting those into your main, ledger, your traditional ERP..

[00:05:07] Umar: But for today, like I said, I want to, dive a little bit more into the complexities of aggregating this data from block explorers. So one of the main challenges with aggregating data from block explorers is ensuring the accuracy and consistency of the data. That’s because the volume of data on these block block explorers is enormous.

[00:05:31] Umar: So I would say it’s pretty straightforward to export transactions from such block explorers. But in what instances will retrieving these transactions be incomplete and not accurate?

[00:05:44] Geeth: Yeah, there are multiple instances, that, that this process will not be sufficient, to run your back office reports. Number one is volume.

[00:05:54] Geeth: I think if you have a lot of volume, then pulling the data out of the explorer might not be a viable solution, mainly because some of them don’t have the capability to export large number of lines. If you have a small set of transactions, then I think it is, it makes sense. and if the Explorer is also giving you the fair market values for those assets, then I think it makes it even easier.

[00:06:18] Geeth: But if you’re dealing with large number of transactions, it might, it might be difficult. And the second one is if, if there are balance changes or, or yeah. If there are balance changes that happen that do not show up in transactions, then that’s another instance where the explorer transactions will not be enough, and you’ll need some sort of manual input to reconcile the balances in in your wallet.

[00:06:42] Umar: Now, some blockchains will have different block explorers. For example, even Ethereum has the widely used Etherscan, but also others like Blockchair. Now for people using block explorers, I want to understand what would be the different capabilities and features offered by different block explorers for the same blockchain?

[00:07:04] Geeth: Yeah, I think it’s a good secondary check. I think that’s the primary use case. So if you’re going to trust Etherscan to report the correct balances, balances and the transactions for Ethereum and the tokens and NFTs, we can also double check that with another,secondary blockchain explorer.. The reason for this is I, I think this should be a mandatory practice in the back office because, these data’s coming out of indexes. Indexes are centralized most of the time.

[00:07:30] Geeth: They’re not decentralized data sources, so nothing stops from a bad actor going and modifying those data sources or having some sort of error in, in the data sync. So always having secondary check on, on another explorer is the safe, safe thing to do. And I think it’s one of, it should be, a mandatory check in the back office.

[00:07:47] Umar: Now in the intro I said that even if block explorers are publicly available, they’ve not really been designed to be used for accounting purposes. Could you compare and contrast the complexities of retrieving data from different blockchain block explorers like the likes of Bitcoin Explorer, Etherscan, Near Scan?

[00:08:09] Umar: How are these block explorers different to one another?

[00:08:12] Geeth: Yeah, so for, for Bitcoin explorers, I think the main challenge is if you have an X-pub, Y-pub or a Z-pub, I think some of these explorers don’t support them. That’s one. And then you have a lot of change addresses, that they, especially because it’s in the UTXO model.

[00:08:27] Geeth: So how can you kind of, you know, get an accurate, transaction snapshot for your X-pub, right. Is a problem. But it is, it is good to check a balance of a single address or, or check the balances of a transaction hash. But in order to get some tangible data, I think that is where the limitation is.

[00:08:45] Geeth: And some of the explorers that I mentioned cannot export large numbers of transactions, so that is problematic. And some of them don’t have, a good pagination techniques. It’s like an infinite scroll, so going down that, rabbit hole to find a transaction of five years ago that that’ll be a challenging task as well.

[00:09:03] Geeth: But other than that, again, again, at a scale it becomes a problem, a bigger problem. But if you have 10, 100 transactions, you’re fine. The problem comes when you have a large number of wallets and a large number of transactions. Can you do it manually? Yes, you can. But is it practical? Let’s say you were hypothetically, you are able to kind of export these transactions.

[00:09:25] Geeth: So you have the transaction set, but now you need to kind of sanitize them, right? You need to get the fair market values, you need some sort of explanations of what these events are. So, and get a, get a nice spreadsheet of, of your, of the transactions that will make sense for reporting. So that’s, that’s when you’ll have to do manual work and that’s where, that’s where the inefficiencies will arise.

[00:09:46] Umar: Now speaking of data, sanity checks. Once the data has been pulled from block explorers, how does the accountant ensure that that data is complete and accurate? By that I mean, are there additional data reconciliation exercises that would vouch for the integrity of that data?

[00:10:05] Geeth: Yeah, that’s a great question Umar.

[00:10:07] Geeth: I think the first check, first check you should do is to crosscheck the balance against the computer balance based out of the transactions, right. They should always match. If they’re not matching, then something’s missing somewhere. So the first check is balance versus computed balance.

[00:10:23] Geeth: Once that passes, I think you also need to do a transaction count check. And the reason for that is there’s a lot of ways that you can come to a certain number, right? If you have USDC 1,000 as a balance, and you compute USDC 1,000, you could be missing an entire block of data and then still get to the USDC 1,000 balance.

[00:10:43] Geeth: And that’s when, you should do the transaction count check. So now assuming you’re going to do all this based out of Etherscan, right, then you’re relying on the Etherscan indexes to give you the accurate data. So, like you mentioned earlier, a secondary check from a another indexer that does not rely on Etherscan.

[00:11:04] Geeth: Is a good practice just to double check that, or if two blockchains are reporting the same, set of data.

[00:11:11] Umar: And what are some common transaction deviations that you have seen happening on different chains?

[00:11:19] Geeth: The most common one we’ve seen is in Defi. For example, if you get into a liquidity pool, you put USDC in, let’s say a USDC 100 in, you get a IOU token, let’s say Aave USDC, and by the time you claim you’re claiming more USDC, so you are actually disposing more IOU token the AUSDC.

[00:11:40] Geeth: So that will account for a negative balance. So you did change your AUSDC balance without having a transaction to show for. So that’s like one of the most common examples, the most common scenario that we’ve seen, where a negative balance, comes into play. So in this case, you need additional, software to reconcile this or compute or add that ledger item into the ledger to avoid that negative balance.

[00:12:08] Umar: Next, I’m wanna move on the topic of running your own nodes and indexing that data yourself. So I’ve heard differing opinions when it comes to running your own nodes. So running your own nodes and indexing the data yourself instead of relying on third body providers. Like we mentioned, Etherscan, Blockchair, has several benefits.

[00:12:29] Umar: First on improving the control over the data because you can now index and query the data on specific traits that you want to fetch, but also on its reliability as you’re now minimizing the risk of downtime. Of course this option is attractive for organizations with very large volumes of data as it’s costly to set up and maintain your own nodes.

[00:12:52] Umar: I want to ask you, what’s your opinion of having organizations run their own nodes and indexing the data themselves?

[00:13:00] Geeth: I think the right answer to is, it depends, right? It depends on the company. If you’re big enough then you can run, a full node.I know some of the companies who do this, They ran a full node.

[00:13:10] Geeth: They index the entire node. So they have terabytes of data, that they manage and, they also incur a lot of cloud costs as well. So if you, if you’re able to do this, if you have a team and the expertise to do this, then yes, you have that, peace of mind by having that data under your control. But that this would also mean that you, you’ll need this, need a team dedicated to do this job.

[00:13:34] Geeth: Right? Right. Because if you get this, if you get the indexing wrong, or the node operation wrong, then that means your data is incorrect. So you would likely need a dedicated team. And if you can do that, it’s great. But for smaller companies, I don’t think it’s, it’s practical in my opinion. However, I also think, I mean, at Cryptoworth, we, we all all think that the data infrastructure is equivalent to the cloud infrastructure.

[00:13:59] Geeth: Back in the days, right. At early days, the SaaS companies always like, take Salesforce for example. They had their own, they build their own cloud, but today, companies rarely do that until they hit a certain, you know, scale. I think based on some of the companies that pop up and the companies that get funded in this space, there’s a lot of money going into data indexing.

[00:14:22] Geeth: So eventually this is going to be a common, service that will be available for the industry. So in this case, you might not need to run these indexes in-house. You’ll be probably be able to query using GraphQL the data that you need via multiple providers to do that sanity check that you need to do.

[00:14:42] Umar: Now some organizations use private blockchain, the likes of Hyperledger and Corda for reasons involving the data privacy, customizability, and control around the governance of the blockchain. Is Cryptoworth working with users on such private blockchains and would collecting data from such blockchains present other challenges as compared to public to public blockchains?

[00:15:09] Umar: I’m curious to know what crypto subledger these projects you would be using.

[00:15:14] Geeth: Yeah, absolutely. We, we have some experience in connecting private blockchains and, it’s definitely a possibility when we designed the system. This was totally in our minds when we did it. Our infrastructure is designed to do so.

[00:15:26] Geeth: In terms of challenges, it really depends on the chain. If, if it’s a clone of the EVM, then it’s, it’s very easy. If it’s a completely different different chain, then there’s a implementation time. It’s usually varies from 3 to 5 days. So it can be as long as a month depending on how we implement the chain.

[00:15:47] Geeth: But based on our experience, we’ve integrated many, Hyperledger based chains. And, it wasn’t too difficult. But as, as a service provider, we are totally ready, to connect these chains, for our customers.

[00:15:59] Umar: Perfect. So now it’s time to speak about Cryptoworth. Now as a crypto subledger accounting solution, like I said in the intro, Cryptoworth has been onboarding many blue chip blockchain companies, the likes of Aave, Axie, Axie Infinity, Celo and Request Finance.

[00:16:17] Umar: In light of all that we’ve previously discussed on the complexities of aggregating onchain transactions from block explorers, could you tell us how Cryptoworth is facilitating converting those into an accounting grade data that can be reported now in financials.

[00:16:35] Geeth: Yeah, absolutely. So what we do, we break, this is a complex problem, right?

[00:16:40] Geeth: There’s a lot of automation required. As we broke this problem into three main pieces. One is the data ingestion or the data input. Then it’s about processing the data. And then the final step is data output. That is taking from this crypto ledger into a main ledger if the customer wants to.

[00:16:59] Geeth: So we, we do automations in each step that I mentioned. Data injection has been the biggest one, right? We connect to a lot of blockchains more than 700 DeFi protocols. A lot of exchanges, a lot of, custody providers. We translate all that data into a unified structure, which is the crypto ledger that we maintain in the system.

[00:17:21] Geeth: We help you with that automation. That kind of takes away a lot of hours. And then we auto sanitize this data. We do reconciliation checks. If there are negative balances, we report it to you. We don’t let you basically go to the next step until those reconciliations are done. So that will avoid, that will avoid the missing transactions basically.

[00:17:41] Geeth: So once the data, data is in, step one is done, then it’s about generating reports, cost basis, FIFO, WAC, LIFO, whatever you want. Generating GL reports, et cetera. That’s their second step. that’s the, that’s also a very important step again. But some of the customers, they don’t really do that step, they just export the data directly into SAP.

[00:18:05] Geeth: But for the customers that do run the second step in Cryptoworth we be ensure that this data is correct, There’s no negative cost basis, et cetera. And then the third step is connecting to an ERP solution or, or an accounting system like QuickBooks or NetSuite, or that’s like example of an ERP.

[00:18:23] Geeth: We take that datathat’s processed, and then we output that via an api. So our goal here is to automate the entire data pipeline from the input process to output as fast as possible with the minimum work. But, end of the day, our goal is to improve the month in time by at least 90% if compared to what they would do without a system.

[00:18:46] Umar: Now, could you provide us with a walkthrough to onboard a client with Cryptoworth, whether each project has to be onboarded on a case by case basis. The time that it requires for them to, let’s say, import all their transactions on the Cryptoworth platform.

[00:19:03] Geeth: For sure. Our process is still broken into those three steps. After we do the onboarding.

[00:19:08] Geeth: But let’s say you are coming in, signing up with us. You sign up a contract, you, you wanna, you’re ready to import. The first step that you should do that we ask our customers to do is to, you know, set up a dedicated team. Most of our customers are what we call in the SaaS market, mid-market and up mid-market enterprise.

[00:19:28] Geeth: So most of our customers have a dedicated team, using crypto with at least two members. So the first step is to get the team. We do software training first. And then followed by, we give a checklist. We have a onboarding documentation, obviously, and we ask customers to follow that. In that, that guide, one of the first things is to set up the team and then figure out all your connections.

[00:19:53] Geeth: When I say connections, I mean your, your wallet, your exchanges, your custody providers, everything that you need to track in the system. You connect that to Cryptoworth, and then once that is done, you have to make sure everything’s up to satisfactory. We have all the assets that you want to support, all the Defi protocols that we support.

[00:20:11] Geeth: If not, we go through a phase of implementing these missing integrations until they’re, they’re in the system because data tracking, which is the core step that is very important and we spend a lot of time making sure the data is in, in the ledger properly. Once that passes, then we move them to the next step, which is running a calculation report.

[00:20:34] Geeth: We have a couple of automated checks there as well, and if they’re okay, then we move them into the third step, which is the, ERP connection. I mean, the ERP connection obviously varies, from customer to customer. If it’s QuickBook, it’s pretty automated. If it’s NetSuite and there’s some initial configurations that we all need to do, but that’s not more than 8 to 16 hours.

[00:20:54] Geeth: But after that, it’s completely automated. So once we, we kind of walk through our customers between step one, two, and three, which can take from two weeks to about a month, the customer is fully ready to, do their month ends, going forward.

[00:21:12] Umar: Some of the clients that Cryptoworth works vary in their use cases.

[00:21:17] Umar: For example, Aave is a Defi vorrowing and lending protocol while Axie Infinity is a decentralized video game. How does Cryptoworth help these different projects with their back office setup? And by that, if you could tell us a project that was not using Cryptoworth before, what kind of pain pain points they were having and what happened after they started using Cryptoworth?

[00:21:42] Geeth: Absolutely. So there are two scenarios that we experience. One is they use another system. The system didn’t scale, so they’re looking to upgrade. The other scenarios, they were completely in Excel, and then they want to come into a system and not continue to use Excel. It’s in both the scenarios. It’s pretty similar except for the start dates, because, in another software obviously it’s, it’s a bit different.

[00:22:08] Geeth: Once again, the onboarding process, whether you’re a DeFi protocol or you’re a GameFi project, or you are a, a crypto bank. Whatever you maybe. The onboarding process is pretty standardized. I think the only place where it becomes a little bit different is the integrations that you might need. So for if you’re a Defi protocol, you obviously need a certain set of Defi protocols supported, right?

[00:22:34] Geeth: If you’re a custody provider, you’re like a, like a crypto bank, then. We might need to connect to the backend. The customer would want us to connect to their backend and then some of the internal ERP systems that we do not support. So the, the challenges are mostly around the integrations, The data pipelines, if you will, but not on the process on step two and three that I mentioned, it’s pretty standard.

[00:22:59] Umar: Now, I would say blockchain accounting is still unchartered territory for many CFOs and accountants. For those still using spreadsheets, what’s, what message do you have for them on the time that they could save, opportunity cost of not using, a crypto accounting solution and the kind of automation that they could immediately put in place if they switched to like a solution like Cryptoworth?.

[00:23:24] Geeth: That’s, that’s a great question. So I will maybe answer this question by like running the two scenarios, right? So, if you were to do this in Excel, let’s say you have, 10 Ethereum wallets that you need to track and hundred transaction each. So what, what would you do? Like first thing first, would you go load that transaction, the manual way, right.

[00:23:42] Geeth: You’re going to go to Etherscan. Download the transactions. You’re gonna download Ethereum transactions, then you’re gonna download the ERC20 transactions, then the ERC721, if you have, you’re gonna do that for all the 10 wallets. So 10 into three, you’re gonna have 30 files.

[00:23:55] Geeth: Then you need to bring in the fair market values into that data, right? That’s the second step. So now you’re going to go to CoinMarket Cap, a Coingecko, whatever you like to use, and then get that data into that, csv and then process that, using Excel equations. If you want to, and then upload that to, QuickBooks.

[00:24:16] Geeth: With the software, what you could do is you could just paste the address in the, in our data input form, and then the rest is done for you. Everything from Ethereum to ERC20 to ERC721, 1155. All the transactions get automatically synced to the fair market values are automatically added.

[00:24:35] Geeth: You can choose between FIFO, WAC. Compare and contrast the different algorithms, the outcomes of those different algorithms. This is all automated. So what would take you hours? You could do this in minutes. Our ROI here is that there’s at least a 90% now, like there is a massive time save, right? So connecting, let’s say 10 wallets, it’ll take you, let’s say 5 minutes to do so.

[00:25:01] Geeth: And generate a report, right? It’ll take you five minutes to connect Let’s say another 15 minutes to run that report in Cryptoworth. But how the time to do that manually, that that will take you hours. So there’s a massive, ROI in using a software.

[00:25:18] Umar: Now there are many emerging crypto accounting solution providers, and I would say it’s a, it’s already a very competitive market.

[00:25:26] Umar: How does Cryptoworth differentiate from its competitors? The likes of Cryptio, Bitwave, Tres Finance, Integral, Infinity Force, the list goes on actually,

[00:25:38] Geeth: Yeah. Our target clients that is more the mid-market and up, so mid-market to enterprise. We tailor to customers who have sophisticated use cases are not just tracking hundred transactions, although you could technically use our software, although it might be an overkill, you could just use Etherscan for that if you have a very small number of transactions.

[00:25:58] Geeth: But yeah, the goal here is to minimize the large, complicated, sophisticated use cases. For example, let’s say you have a large number of wallets, large number of transactions you are tracking more than 15 DeFi protocols. You also have NFTs. You are also connecting to NetSuite. Now, you’ll need a certain set of automations in place in order to do your books every month.

[00:26:24] Geeth: So that’s the type of customer we help mostly.

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[00:28:09] Umar: Now, something that I often think of like Cryptoworth and all the other crypto accounting solutions, they’re considered the subledger.

[00:28:17] Umar: So first you have to import them in the subledger and then push them to your traditional ERP accounting software. What would it take for Cryptoworth to also be, to be both the subledger and the main ledger?

[00:28:32] Geeth: Yeah, that’s a great question. Some of our customers don’t even use a main ledger.

[00:28:36] Geeth: They use us as a standard alone system, although that’s not our intention. I think at scale you still need a main ledger software. We don’t have any plans to replace main ledgers. We actually work with main ledger software companies and their teams. But I think if you’re a small operation, it makes sense just to use Cryptoworth.

[00:28:57] Geeth: And by the way, we connect to bank accounts as well. You can connect to JP Morgan, Chase, BMO Harris, TD, et cetera. But I think at scale, once again, you’ll need those ERP systems that have been built for decades that are doing a great job. But when it comes to small use cases, we can definitely use us.

[00:29:13] Umar: Yeah, I can totally understand because I’ve used traditional accounting ERP solutions before, and they would have specific, let’s say modules for Plant, Property and Equipment, Intangible Assets where you would be able to run, let’s say, depreciation and amortization every month.

[00:29:32] Umar: I think crypto accounting solutions do not cater for that yet, so that’s why you would actually need those traditional ERPs.

[00:29:41] Geeth: Yes, you’re right. And I think it does not make sense. Oh, this is what we see for now. We does not make sense to reinvent the wheel. I think there’s a lot of well-built software out there.

[00:29:51] Geeth: And then there’s also the fact that a lot of people are already trained in those solutions. I think the only thing missing in web2 products is the data ingestion, right. And none of them, they do the accounting perfectly well. They just can ingest or take in crypto data, that is like the main problem, right?

[00:30:09] Geeth: Or, understand Defi or understand NFTs. That’s where we come in and kind of help to scale those systems, whether it’s Oracle, SAP, QuickBooks, Xero. So I think the best way here is to feed that data into those systems and process internally if we have to. But ideal cases, if we take the data, we process them and we put them out, into an ERP, so the accounting, the back office can have less products and do their job faster.

[00:30:39] Umar: Now the next topic is pricing. From speaking with different folks in the industry, pricing is often a heated topic when choosing a crypto accounting solution. For web3 projects, I would say the minimum tech stack for their accounting would involve having a custody provider with a multisig wallet, an invoicing solution for the accounts receivable and accounts payable, a crypto subledger and finding a traditional ERP. But I think it’s unfair to compare a traditional accounting software pricing like Xero, QuickBooks, Oracle NetSuite pricing with crypto accounting solutions as they would have hundreds of thousands of users. So how does pricing work with Cryptoworth, and would you have different packages for crypto accounting firms who require, let’s say, multiple licenses for their different clients?

[00:31:33] Geeth: Yeah I completely agree with you in what you said. It is different, it’s, it’s almost like comparing apples and oranges, comparing crypto or subledger solutions to other traditional accounting solutions. Again, if you look at the problem in the way we broke it down earlier. One is data ingestion, data processing, and the output rate.

[00:31:52] Geeth: Step number two and three is being done. And step number one is being done in softwares like QuickBooks at a smaller level. The problem with crypto is that you have a large data volumes, right? Even if you’re a relatively small operation, you still can generate a large number of line items, which can drive storage costs in the cloud.

[00:32:11] Geeth: If you’re a solution that’s indexing data in-house, you’re ensuring that indexes are running correctly and then you are also doing the accounting and also doing the export, then I think that most of the cost, our software, the lowest package starts at $300 a month, and out of that, I would say 90% is for the cloud data part of it.

[00:32:31] Geeth: So if there’s no data to process, I think you can do that for, you can sell a SaaS product for like $10 a month per user. It’s not a problem. This is where the misunderstanding or the miscommunication happens is that every subledger solution is technically a data solution and the cost reflects that.

[00:32:49] Geeth: But over time, I think, again, I’m referring to the old SaaS model where you have the cloud inbuilt and then versus the public cloud, like, AWS. The public cloud helps you to drive costs extremely low. As the indexing services, you know, grow as the industry matures, I think we’ll definitely be able to bring the costs down.

[00:33:12] Geeth: But for now, I think because it’s kind of specialized, the software, the crypto subledger software is a very specialized type of software, just like Geneva for fun admins. It is priced that way because of the amount of cloud workload that we handle in order to provide the service that we provide to the customer.

[00:33:30] Umar: Now, accountants, they like to have a budget or forecast for their expenses. When you say the starting package, I mean it starts at $300, how many transactions would that comprise of, and let’s say in practice, what kind of company would start with that package?

[00:33:50] Geeth: Yeah, at $300 a month, we provide about 50,000 lines transaction data, unlimited number of wallets, and couple of other features along with support as well.

[00:34:00] Geeth: There’s a support element to this as well that is included in the price. There’s a lot of training to do, and apart from just. You know, handing over the software once the customer starts. Price includes all of that. The companies we know, usually they’re well funded companies and some of them actually have a lot of revenue already in the operations.

[00:34:18] Geeth: Those are the type of companies that are looking to optimize rather than build the company, if that makes sense. So if you’re very early, you’re still trying to sell your product to the customer, I don’t think, it maybe might not make sense to, you know, spend $300 or $2,000 a month to set up that the back office.

[00:34:36] Geeth: But if you’re already generating revenue, you already have a team, you already have a dedicated finance ops team, then it would make sense to come and use product that costs $300 and up, if that answers your question Umar.

[00:34:50] Umar: Yes. A good follow up question after that will be to speak about the Cryptoworth Alliance program.

[00:34:55] Umar: Could you tell us what is this program about and how could different companies benefit from this program? Maybe tell us the profile of those companies.

[00:35:05] Geeth: It’s good that you brought up the Alliance Program. So this is a program that we set up to help much smaller companies. One of the biggest friction that we encounter during onboarding is the support.

[00:35:15] Geeth: So we’ve partnered with a lot of accounting firms all over the world in North America, Europe, Asia, South Africa, to kind of onboard smaller clients who cannot afford to pay the $300 a month. With that, we do provide, if you go through our accounting partners, we don’t really do any support. The support is obviously handed over to our partner and the partner will, most of our partners, experts in the software, so they know how to handle it better.

[00:35:45] Geeth: And then we can take some of the, we can help to drive down costs and most of these companies are startups. Still getting set up, they’re still are trying to sell their product over there, or the value that they’re trying to sell. So they’re very early stage companies that I’ve seen in this space.

[00:36:01] Umar: Now, one of the recurring questions on this podcast is when I ask about the challenges for adoption.

[00:36:07] Umar: Now, given the fact that you work, I would say, directly with CFOs or these accounting firms, what would you say are some of the biggest challenges faced by Cryptoworth today in terms of adoption? And that could be anything in terms of communication regulation, of course. So let’s not touch on that or just also education in general.

[00:36:32] Geeth: Yeah, the biggest challenge that we see is to help. So there’s the obvious learning code to the software that the software has been, is grown over time and to, you know, to facilitate all the different use cases. And there’s definitely a learning curve to the software, but that’s, I think, common to a lot of enterprise SaaS products.

[00:36:50] Geeth: But apart from the obvious learning curve problem, the other one is the blockchain learning curve. So there are two learning curves that we face when we onboard customers. One is the blockchain learning curve, the second one is the software learning curves, we are, you know, fighting an uphill battle, two curves at the same time.

[00:37:06] Geeth: So there are a lot of chains and these chains operate differently. We sometimes we train our customers on certain behaviors of the chain and we give explanations on onto why we display certain data the way they’re displayed. And also sometimes another challenge that we, we face is the sheer amount of Defi protocols that come in and customers, they enter into those pools right away.

[00:37:34] Geeth: And then we also fighting to keep up with these chain. So we have, like I said, more than 700 protocols, and a lot of large number of blockchains. We are still fighting a battle to keep up with this. The chains that pop up every day, some of the challenging chains are like Cosmos, Near. EVM chains are totally fine. So if I were to summarize this right, so It’s a growing industry and that’s rapidly growing. It’s a rapidly growing industry keeping, so keeping up with that and then also learning the blockchains and the protocols and also learning the software. So those are the three common challenges. And there’s one more actually change manage from Excel And to a, to a software that’s, that’s a, that’s another challenge. I would say today the biggest computer is Excel than any of the other software that I mention. So we, we have some tough time convincing some of the customers that they shouldn’t be using Excel in their back office.

[00:38:27] Umar: So that’s still the biggest challenge, like to convince people that, Hey, you guys don’t have to use Excel anymore.

[00:38:33] Geeth: Yeah, that, that is our biggest, like, it’s getting better it’s certainly getting better, I think. I think this is where the competition is useful, right? It’s good to have competition because at this moment in the market, it’s important to advertise the problem rather than the solution, right? We need to that, you know, as industry as a whole, what we try to do is we need to, we try to communicate that, that it should be using this type of software, it should be doing this, you should be doing that.

[00:38:58] Geeth: So, yeah, I would say our, our biggest competitor is Excel at this point.

[00:39:03] Umar: And would you advise accountants to specialize? I mean, it is still very early, but perhaps specializing on specific chains would be better instead of trying to understand everything and trying to be good at everything.

[00:39:18] Geeth: Yeah, I agree with you a hundred percent.

[00:39:20] Geeth: I think it’s a very important to understand Bitcoin and if you understand Bitcoin, you understand the UTXO model easy, right? Then there’s EVM. Even the clones are almost a carbon copy, right? You take Ethereum, Polygon, you take Avalanche. They’re, they’re very similar. And if you understand Ethereum, then you’re likely to understand the other chains.

[00:39:38] Geeth: Then there’s other chains like, Solana. So, I think Bitcoin followed by Ethereum, followed by, Solana would be, I think the most useful, for now. But, that being said there’s, there’s more chains coming up like Near, Cosmos, but understanding the most common ones will probably help you understand the other ones that will come later.

[00:39:59] Umar: Now, speaking of the roadmap for Cryptoworth, could you share some of the upcoming features and milestones you guys have for 2023?

[00:40:09] Geeth: Yeah, I’m happy to share some of the tasks in our pipeline. Again, at a high level, the data. Our goal is to double down on the data, to make sure the data is correct and make, to make sure we can automate the data ingestion as much as possible.

[00:40:23] Geeth: Because if we nail the step one, which is getting the data in, I think that is 90% of the problem. In our opinion, biggest challenge is to get the data into the, into a single, into a unified structure. Once that is done, step number two and three of processing and output of the data is, is a piece of cake comparatively to the step one.

[00:40:42] Geeth: So yeah, the rest of the, the three quarters or so we have in 2023, we, we are doubling down on data ingestion.

[00:40:50] Umar: Now there’s a question that I forgot to ask you, which is regarding the dedicated DeFi and NFT support that you guys provide. Could you tell us a little bit more about this and how now this helps accountant to track the revenue and expenses coming from these Defi protocols and different NFTs that they have.

[00:41:13] Geeth: Absolutely. We have two different modules for Defi and NFTs. So for Defi, I think apart from the obvious chain level transaction tracking, right, and we also compute to the PnLs, et cetera. So the main use case here is to give our customer a dashboard, if you will, of all their Defi positions. For example, Uniswap v3, Aave v3, Aave v2, SushiSwap, et cetera.

[00:41:40] Geeth: So our goal here is to then they come into our platform, you know, on a Monday morning to give them the up to date PnLs and the numbers. And then second step, obviously is to kind of process or improve the readability in the ledger. If there’s a USDC transaction that’s going into a pool, then we work really hard on trying to help customers understand where it’s going, why being deposited there, and et cetera.

[00:42:09] Geeth: So it’s a lot of data sanitization, adding information along with, showing a nice dashboard of all the protocols that, that the customers have to give them an accurate snapshot. And also we have historical Defi tracking capabilities. We have, different automations, different features available in the platform to, for you to kind of go back in time and check your history. And then snapshot the data as well. That’s on Defi side.

[00:42:35] Geeth: On the NFT side, we track every single, obviously all the lines again of that’s generated out of 721 and 1155. So we support EVMs and Solana and NFTs and most of the other chains as well. And then we also merged the data that’s coming out of the chain with Opensea ,Rarible, and add more information to what that NFT might be.

[00:42:58] Geeth: And one of the recent chains that we integrated with , I think it’s, really NFT driven, and we work really hard on getting as much data as possible for those NFTs in the IM exchange.

[00:43:09] Umar: Geeth, I’m looking at the time, I’m really enjoying this conversation with you, but I’ve to be respectful for your time. So as let’s say, closing thoughts for this episode today, has there been anything that we didn’t touch on during our conversation today that you would like to share with the listeners?

[00:43:28] Geeth: I think you’ve touched on pretty much everything. From Cryptoworth I think what we can tell the industry is that I think we should rethink the problem. We should empty the cup, if you will, if you know what I mean, and rethink how we should build the back office and to, to streamline the back office. Given that we have, we will have more on chain activity going into the next 5 to 10 years.

[00:43:52] Geeth: So maybe it’s time to kind of get rid of some of the traditional software and then bring in, new techniques to optimize or the on chain world.

[00:44:03] Umar: Perfect. There’s a last question, which I usually ask to my guests, which is, do you have a quote, like a favorite quote or a maxim that you live by?

[00:44:13] Geeth: Yes. I live by this phrase give more than you take.

[00:44:18] Umar: Nice. It’s very simple, but it’s, everyone will be able to relate to that. Geeth, I really enjoyed preparing this podcast today, the data complexity for onchain transactions, it’s a recurring topic on this podcast, but for today I wanted to provide the listeners with, let’s say, a deeper understanding on this topic.

[00:44:39] Umar: So thanks a lot for coming today. And before we go, if people want to reach out to you or learn more about the company or reach out directly to you on social media, how should they do?

[00:44:52] Geeth: Yeah, you can visit our website cryptoworth.io and we can definitely call, there’s a link to you book a call, a calendar link and then if you wanna contact me personally, you can go to our company information page and there’s a link to my LinkedIn.

[00:45:04] Geeth: I don’t use a lot of other social media. But I’m active on LinkedIn. Yeah, we can definitely catch up there.

[00:45:09] Umar: Perfect. I will include that in the show notes of the podcast. Geeth, thanks a lot again for coming today and we’ll speak very soon.

[00:45:17] Geeth: Thank you Umar. Thanks for inviting me and it was a pleasure to be here.

[00:45:21] Umar: I would like to thank everyone for listening to this episode. You’ll find all the links of the episodes, show notes and transcripts on the website of The Accountant Quits at theaccountantquits.com. Please note that this content is for general information purposes only and is not a substitute for consultation with professional advisors.

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