Maurício Magaldi: The Crypto Metalhead

From the world of finance to the realms of heavy metal and CrossFit, Maurício Magaldi's life is nothing short of a fascinating journey. At 45-years-old, he is the epitome of a man always seeking to challenge himself and continue pushing the envelope.

Born in the vibrant city of Ribeirão Preto, in the north of the São Paulo state in Brazil, Magaldi's upbringing was rooted in a family of medical professionals. But while his family followed the path of science and healthcare, Magaldi had his sights set on a different passion: music. He realized early on that he was the “odd one out.”

"I grew up in a very musical house, but no one played any instruments," he fondly recalls. "I fell in love with drumming by listening to Rush, Metallica, Sepultura, and Dream Theater, and air-drummed for three years until I bought my first drum kit at 17-years-old."

Magaldi's musical passion would eventually lead him to join VersOver, a Brazilian metal band, in 1997. Alongside a couple of his friends, he became the band's lyricist and drummer, embarking on a journey that would span over two decades, three full-length albums, an EP, a live DVD, and numerous tours across Brazil.

But while music remained a constant passion in his life, Magaldi's curiosity and drive also led him to pursue a career in finance. He obtained a Bachelor's degree in Production Engineering from the Federal University of São Carlos, followed by an MBA in Finance from the FIA - Management Institute Foundation. After working for several years in Brazil, he decided to take a leap of faith and move to the UK with his photographer wife and two teenagers in June of 2022.

In the UK, Magaldi found a new challenge in the world of crypto. As the Global Strategy Director for Crypto at 11:FS, a challenger consultancy firm based in London, he helps clients navigate the complexities of the fast-evolving crypto landscape. And if that’s not enough, he also co-hosts the Blockchain Insider podcast, 11:FS’s podcast about crypto, apart from staying connected to his Brazilian roots through his weekly podcast, BlockDrops, which is produced solely in Brazilian Portuguese.

The First Encounter

Magaldi first discovered Satoshi Nakamoto’s Bitcoin whitepaper in 2014 while working at HSBC in Brazil. The paper was shared by a colleague, that he read three times over to fully grasp its significance. The resolution of the 'double spend' problem offered by blockchains such as Bitcoin left a deep impression on him. He realized that the value of music,which was destroyed by Napster and P2P file-sharing back in the 1990s, could have been saved if blockchains had existed at that time.

“The recent emergence of music NFTs is proof of that, and I’ve been collaborating with TuneTraders, a decentralized music protocol, since 2019, so I’m happy to see that come to fruition,” Magaldi states. “Although it wasn’t in the cards for me to buy BTC or work with Bitcoin at the time, I kept reading about it and studying the market, the technology and the applications. Coming from a financial services background, Ethereum made complete sense to me.”

The Promise of Tokenization in the Music Industry

As someone who has worked both in the music industry and in the blockchain space, Magaldi believes that the music industry is in urgent need of a “positive disruption.”

“At every technology breakthrough since the dawn of the industry, artists have been handed the short end of the stick. When music went digital, the value - that wasn’t already great - got completely erased, as it was now possible to simply copy mp3s and move it around the world to listen to any song anyone could rip and make available,” he says, “I’m so bullish that web3 can solve the artists’ challenges created by the internet, that I’ve been personally involved with blockchain in music for over three years now.”

As the music industry continues to evolve, one concept that has gained momentum is the tokenization of music rights. For Magaldi, this creates a direct connection between fans and artists, while minimizing the need for intermediaries.

“This represents new opportunities for up-and-coming artists to build a platform around their art without giving away their future, but also for music fans that can directly participate and benefit from their favorite artists. It also gives established artists more control over their work and proximity to their fan-base. With the (re)emergence of the metaverse, now open and on-chain, music ownership and experience gain a new meaning, and incumbents that fail to realize that will face a harsh reality when every artist becomes a DAO.”

‍Changing the Game

Speaking about some of the most exciting use cases for blockchain technology that he has encountered, Magaldi states that it has to be application of DeFi lending.

“By its very nature, DeFi lending is already syndicated - a pool of money from investors is borrowed by the market, who pay them interests. With the current DeFi platforms it’s hard to know who you’re dealing with, but bringing that to a more controlled, regulated environment while using public protocols has been proven possible.”

Apart from DeFi lending, he also points at digital trade finance and asset tokenization.

“For digital trade there have been various projects around the world with varying degrees of success,and with the upcoming passing of the Electronic Trade Documents Bill in the UK,championed by Lord Holmes of Richmond, I believe we will see a lot of activity in that space, this time with sustainable results," he says. “In asset tokenization we’re seeing many industries, from real estate to carbon credits begin to capitalize on this functionality. The challenge continues to be what is the available liquidity once an asset is tokenized, but as soon as regulations clear the path for stable coins and wCBDCs move out of pilots, I understand we’re going to see wider adoption by traditional institutions. This will enable composability like we haven’t seen before.”

Dispelling Myths

When Magaldi initially broached the subject of blockchain technology with his clients in 2017, he encountered a widespread misconception that conflated all blockchains with Bitcoin. It was not uncommon for corporations to tout ‘blockchain, not Bitcoin’ as their credo, a clear indication of a deficiency in understanding and a tendency towards apprehension. Compounding this problem, the news and headlines failed to clarify the distinctions between blockchains and their practical applications.

“At this stage in the industry I don’t have those conversations anymore, but that doesn’t mean that the headlines have helped. The recent example is the case with FTX, which was an exchange that offered an assortment of crypto products and services, but the alleged crimes they committed were nothing new in the traditional financial services industry. And the reason why they were able to allegedly do so, is exactly because they were NOT using blockchain to perform those actions. The information that helped the market figure out that something was suspicious with FTX was the on-chain information. Without that, they would not have been caught.”

Stating that clients are apprehensive that excessive regulation could stifle the growth and development of the burgeoning cryptocurrency industry, Magaldi is of the opinion that financial regulators should refrain from regulating the technology itself, and instead, focus solely on regulating its use cases.

“The traditional financial services systems that are self-enclosed, siloed and obscure, are not subject to financial regulations, but the products they offer and process, are. This is why I believe that the concept of ‘same risks, same regulatory outcomes’ that is applied in the UK is a winner in allowing for innovation and protection, simultaneously,” he reveals.

The Road Ahead

For the near future, Magaldi is excited by the prospect of blockchain technology in ushering in a transformative era for a multitude of industries, and hence paving the way for new opportunities to unfold.

“I want to be able to look in hindsight and know that I have been doing everything that I can to enable a more efficient, cheaper, equitable, accessible, and sustainable internet of ownership.”

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All photos supplied by: Maurício Magaldi

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