The Future Is Now: Barney Mannerings of Vega On How Their Technological Innovation Will Shake Up The Financial System
The only way out is through. You can’t undo the problems created by modern society or technology by going back the way things were, we have to move forward and develop technological and progressive solutions to the challenges we face.
As a part of our series about cutting edge technological breakthroughs, I had the pleasure of interviewing Barney Mannerings, Founder of Vega and a blockchain and finance expert. He designed multiple releases of the London Stock Exchange’s core trading system and matching engine, and worked in capital markets for 15 years prior to starting Vega. He is also Co-Founder of Pik, a SaaS offering for publishers that was funded by Google’s DNI Fund. Barney brings his expertise in financial products, trading systems technology, and blockchain solutions to leading the vision and strategy for Vega.
Thank you so much for doing this with us! Can you tell us a story about what brought you to this specific career path?
I studied Computer Science at university and was very into cryptography and privacy. Ultimately, I decided I didn’t want to be a full time programmer and ended up working in financial services creating systems for banks, stock exchanges, etc.. I was working in finance during the 2008 financial crisis, which exposed a lot of issues. The Bitcoin whitepaper was published shortly thereafter, and I did a small amount of mining to deepen my understanding of how it worked. I also got involved in ethereum early on and recognized the possibilities with this decentralized smart contract network. Realizing the potential of this novel technology and combined with my past exposure to the problems inherent to centralized finance, I embarked on founding Vega, a capital-efficient, decentralized derivatives trading protocol that bridges traditional finance and DeFi. My aim was to create a fair and equitable alternative for people who needed trading services and financial services on a more peer-to-peer basis to break the grip of the large banks and institutions that suck value out of the system.
Can you share the most interesting story that happened to you since you began your career?
Since I started my career, an ongoing narrative has been learning just how much room there is for improvement in finance and business in general.
From a theoretical and academic background, it’s easy to assume, when you look at all the incredibly smart and motivated people working on the problems — in finance and tech, particularly — that things which are well understood are also well implemented and optimised. Nothing could be further from the truth.
Early in my career, I worked on a project that was costing something like £400 million to build an insurance system. Imagine my surprise when I discovered the company doing the work had bought the ancient, COBOL powered system from a dead insurance company, given it some branding and glossy sales materials, and sold it as the latest and greatest.
By the time I came to suggest the whole thing could be done for a 10th of the budget (if that) and found no takers, I was less surprised.
This same experience, of finding unbelievably bad, expensive, and manual solutions was repeated many times across a multitude of organisations and projects, particularly large investment banks and other financial institutions. As I learned, I discovered the causes of this, from perverse incentives (you’re more likely to get paid more in a big organisation for managing more people and convincing your boss what you do is important than for reducing the cost, even if it’s just as important) to risk aversion (no one gets fired for buying Accenture, Oracle or IBM or for making small incremental improvements).
I also discovered that to break out of this cycle takes two things: the right relationships and a lot of trust (and someone to take on the risk). At the moment, the incentives are too great once you reach a certain size, and so the only real solution in many cases comes from startups: disruption and creative destruction. This is what led me to leave that world and start Vega.
Can you tell us about the cutting edge technological breakthroughs that you are working on? How do you think that will help people?
With Vega, we are making market creation and derivatives trading as efficient, scalable, and usable as possible. There are many markets introduced today through centralized gatekeepers that are simply not capital efficient and don’t address the hedging needs of specific regions, professions, or situations. By combining the speed of products that exist in traditional finance with the capital-efficiency and low-fees enabled by removing middlemen through decentralization, we are paving the way to markets that address the needs of traders in a much fuller capacity.
How do you think this might change the world?
Centralized capital markets are set-up to prioritize the interests of the most-monied players over the “little guy,” excluding more businesses and people the further down the wealth chain one goes. These gatekeepers wield extraordinary influence in creating the markets that drive local, regional, and global economies and in determining who gains access to risk hedging and wealth creation opportunities and who does not. High trading fees limit access to a privileged few, and data-sharing practices often go against the interests of traders.
Vega allows anyone to create a market with its decentralized derivatives trading protocol to better meet the risk-hedging needs of traders. By eliminating centralized gatekeepers, Vega allows for instant settlement (< 1 sec), removes conflict of interest from markets, reduces fees, and enables the throughput (up to 10K TPS) necessary for high-volume derivatives trading. Vega deploys its unique fairness protocol Wendy to ensure that orders are processed in a just manner without granting settlement priority to the highest bidder.
Unlike centralized gatekeepers, Vega allows participants to run the markets via decentralized community-operated governance, enabling markets to be created quickly in response to unanticipated events, such as a pandemic or city-wide power loss.
Keeping “Black Mirror” in mind can you see any potential drawbacks about this technology that people should think more deeply about?
There is a version of finance that is much worse than what we have now. What happens, for example, if the crypto world becomes hyper-capitalistic? The few hundred people who got involved in bitcoin early are billionaires, but such a system that rewards early adopters to such an extreme extent is not equitable. The concentration of wealth in the hands of a few is exactly what decentralization is supposed to be attempting to avoid, especially when you consider the possibilities of involved militias and wealth used as a tool of oppression and inequality. The best way to combat this type of dystopia is through open-source information, protocols, and governance, which will develop in line with the needs of their users over time.
Was there a “tipping point” that led you to this breakthrough? Can you tell us that story?
The 2008 Financial Crisis definitely shined a light on the fault lines in the traditional trading space, but I was also at a point in my career where I was ready for a change. I had to decide if I was going to work for someone else or start my own project; I explored a startup funded by Google’s DNI Fund about journalism and advertising before my Vega Co-Founder, Ramsey Khoury and I decided to start the project that became Vega.
What do you need to lead this technology to widespread adoption?
Mass adoption of any novel technology in finance requires good UX or trusted custodians to manage value on behalf of customers, mirroring a CeFi experience. Regulatory acceptance and clarity is also helpful.
What have you been doing to publicize this idea? Have you been using any innovative marketing strategies?
We are approaching our mainnet launch and have many exciting developments in the pipeline beyond that major milestone that we are sharing with our community and the press.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
There are so many people who have supported me along the way, but I owe so much to my Co-Founder Ramsey Khoury. He manages the business strategy and investor relations for Vega, priming it for growth.
How have you used your success to bring goodness to the world?
I hope that by increasing access to markets that are more affordable to use we are doing our part to make wealth creation and hedging more accessible, regardless of a person’s geographic location, banking status, or net-worth.
What are your “5 Things I Wish Someone Told Me Before I Started” and why. (Please share a story or example for each.)
- It’s impossible to overestimate the time and effort involved in fundraising
- Prioritization is important for efficiency
- Sometimes the best path forward is focusing on one big important thing at a time
- Understanding the lay of the land is incredibly valuable when starting a company
- The only way out is through. You can’t undo the problems created by modern society or technology by going back the way things were, we have to move forward and develop technological and progressive solutions to the challenges we face.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I firmly believe that everyone gets richer when everyone is invested in, because that means everyone’s value has increased. We should, as a society, be willing to fund the less fortunate and help people to thrive, recognizing that it’s a net-positive for all of us. Climate change is another global issue that requires humanity and ingenuity to come together to solve. If we invest in people and in green tech, we can help people and save the planet.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“I like deadlines. I like the whooshing noise they make as they go past.” — Douglas Adams
I love this quote, because it’s funny, but also because trying to manage work based on deadlines doesn’t work. In my view, the best way to accomplish goals is to create habits and processes that set you up for success.
Some very well known VCs read this column. If you had 60 seconds to make a pitch to a VC, what would you say? He or she might just see this if we tag them 🙂
Vega is a capital-efficient, decentralized derivatives trading protocol that bridges traditional finance and DeFi. By eliminating centralized gatekeepers, Vega enables high throughput, instant settlement, and low-fee trading. Vega increases access to risk hedging and wealth-creation opportunities by enabling anyone to create a new market, meeting the needs of SMEs and traders around the globe.
How can our readers follow you on social media?
- Website: https://vega.xyz/
- Medium: https://medium.com/vegaprotocol
- Twitter: https://twitter.com/vegaprotocol?s=20
- Discord: https://discord.com/invite/3hQyGgZ
- Community forum: https://community.vega.xyz/
Thank you so much for joining us. This was very inspirational.
The Future Is Now: Barney Mannerings of Vega On How Their Technological Innovation Will Shake Up… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.