Lorien Gabriel’s Journey into the Blockchain World
With a wealth of experience spanning decades in developing internet infrastructure companies, Lorien Gabriel has been a pioneer in the tech landscape. From internet service providers (ISPs) to cloud security firms, his expertise is vast. In 2018, Gabriel recognized the disruptive potential of proof-of-stake (PoS) networks and co-founded Figment. This strategic move positioned Figment as one of the largest independent staking providers globally, empowering users to stake their tokens without relying on centralized exchanges or custodians.
Today, Figment manages an impressive $15 billion in assets and caters to over 500 institutional clients.
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Expanding Horizons: Figment’s Growth and Plans
In an exclusive interview, Gabriel, a speaker at Consensus Hong Kong, shares insights on Figment’s expansion into Asia, innovative bitcoin staking experiments, and the meticulous approach the company takes when determining which new crypto networks to support.
The Genesis of Figment
Gabriel explains that Figment is the fourth company he has co-founded with his partners over three decades. Their previous ventures revolved around internet infrastructure, and when they began exploring blockchain technology in 2018, staking was still emerging, with Tezos recently launched and Ethereum only discussing its future in PoS. Gabriel and his team saw a natural synergy between their strengths in network security and the promising future of PoS. They initially aimed to establish a fund, but the staking infrastructure company took precedence, leading to the eventual establishment of Figment Capital.
Figment’s Current Footprint
As of now, Figment manages $15 billion in staking assets and serves 500 institutional clients. The company, with a workforce of approximately 130, anticipates growth to 150 employees by the end of the year. Focused on expansion, Figment opened a Singapore office last year and plans to establish a presence in Japan, Hong Kong, and other key Asian markets. While North America remains its core base, Figment recognizes the rapidly increasing demand for staking services in Asia.
Navigating the Complexities of Asian Markets
Asia is not a monolithic market; it comprises diverse economies and regulatory environments. Countries like Japan, Indonesia, and South Korea each present unique business cultures, adoption rates, and regulatory frameworks. Figment’s commitment to compliance means they work exclusively with institutional clients, which requires understanding the varied regulations across Asian nations. Unlike the U.S., where regulations are primarily governed by the SEC and CFTC, each Asian market has specific regulators and policies.
Gabriel notes that many Western companies struggle in Asia due to a lack of understanding of local hiring practices, scaling strategies, or customer behaviors. Having been born in Kuala Lumpur, he has seen North American firms miscalculate market needs. Figment adopted a cautious approach, starting with a small team in Singapore to learn the market dynamics before scaling further.
The Importance of Education
Education plays a critical role in Figment’s strategy, as staking is often misunderstood in many Asian markets. It is sometimes confused with decentralized finance (DeFi) lending. Figment invests time in conferences, client meetings, and media engagements to clarify what staking is and why it is a viable option for institutions over riskier yield-generating alternatives.
Overcoming Scaling Challenges
Scaling Figment has not been without its challenges. The “zero to one” phase—determining whether an idea will succeed, understanding customer needs, and evolving the business model—has proven difficult. Gabriel recalls running several experiments early on, including a remote procedure call (RPC) infrastructure business and a developer knowledge portal. Ultimately, finding a strong product-market fit in staking allowed Figment to consolidate its efforts and focus on a single core offering.
The volatility of the cryptocurrency market poses another significant challenge. Figment’s hybrid business model, combining elements of data centers, funds, and software companies, also deals with fluctuating prices across various digital assets. Gabriel humorously describes his unofficial title as “Chief Stoic,” emphasizing the importance of maintaining a level head regardless of market highs and lows.
Institutional Interest in Staking Grows
Gabriel observes a marked increase in institutional interest in staking, particularly from banks and telecommunications companies. While Figment has had institutional equity investors from Asia for some time, there has been a noticeable uptick in traditional financial institutions actively engaging with staking. Figment often partners with dominant exchanges and custodians in each market rather than working directly with end users. As more banks explore staking, Gabriel expects the adoption rate to mirror the cautious but eventually expansive approach seen in the U.S.
Navigating Token Support Decisions
Figment employs a rigorous evaluation framework for deciding which tokens to support for staking. With a limited capacity to add new tokens each year, the company must be discerning. Currently supporting around 40 networks, Figment added approximately 12 to 13 new tokens last year, each requiring in-depth analysis.
The evaluation process begins with fundamental questions: Is the project legitimate? Does it have a strong thesis and a competent team? This approach resembles a venture capital framework. Subsequently, Figment engages with project foundations and founders, assesses custody support, and evaluates the wider ecosystem. When faced with multiple strong candidates but limited capacity for support, the company must make calculated decisions, sometimes relying on intuition developed through years of experience.
Customer demand also influences token support decisions, especially in Asia. Occasionally, institutional clients may request support for projects that Figment had not previously considered, prompting expedited evaluations. In instances where a project is deemed potentially illegitimate or a scam, Gabriel acknowledges the difficulty of communicating that to clients, but stresses the importance of maintaining high standards.
Staking as a Secure Yield Opportunity
While staking may not offer the highest yields in the cryptocurrency world, it is regarded as one of the safest methods to earn yield with minimal counterparty risk. Figment prioritizes delivering high risk-adjusted staking rewards. Unlike some providers that pursue higher returns by cutting corners, Figment’s institutional clients value security and compliance.
In the crypto landscape, staking can be likened to investing in a 10-year Treasury bond—it offers stability and reliability compared to riskier DeFi strategies. While some investors might pursue higher yields through liquidity pooling or lending, institutions typically favor staking for its inherent security.
Emerging Trends in Staking
Gabriel identifies several exciting trends in the staking space, particularly in Asia. Innovations such as liquid staking and re-staking are gaining traction, with EigenLayer leading the way on a global scale. Bitcoin staking is also a burgeoning interest, with projects like Babylon exploring its potential, although demand remains uncertain. Additionally, new chains with significant Asian influence, such as BeraChain, are rapidly growing their user bases in the region. Figment is actively supporting BTC staking and monitoring new staking models emerging from Asia.
In conclusion, Lorien Gabriel’s journey with Figment showcases the transformative potential of staking within the cryptocurrency landscape. As the company continues to expand and innovate, it exemplifies the importance of understanding local markets, maintaining compliance, and focusing on security in the ever-evolving world of digital assets.
