The cautious excitement when you're sitting on a new product that might be the best thing you've done in your career. I think we might have something soon that is going to be a game changer in DeFi

tldr; met with suits that decide the rules for LTV Had a catch-up with ISDA today specifically on the topic of DeFi clearing and Standardised Initial Margin Model (SIMM). ISDA defines how over-the-counter (OTC) trades are executed, margined, valued, and settled, as well as how defaults and close-outs are handled. You might be familiar with ISDA from the movie "the big short" where Charlie & Jamie of Brownfield Fund go to JP Morgan attempting to get an ISDA master agreement to trade long term options, falling $1.47 billion short of the supposed $1.5 billion requirement. 1) "DeFi as Repo" ISDA drew parallels between DeFi and repo markets. They said that BoE are looking at applying ISDA for gilt repo markets and that similar conversations and points were being raised around SIMM. They are receptive to a model whereby DeFi would publish a "SIMM" haircut on lending markets. The comments from the repo desks was that SIMM is often very aggressive and bilateral parties might decide to do lower haircuts. The prosposed suggestion from us is that one would do: Haircut(1 - LTV) = SIMM + Adjustment where Adjustment can be +ve or -ve but at least that way there is transparency that all parties did some homework. 2) Private Credit/Equity Funds/MMFS etc Someone asked me to raise the question about funds being treated the most punitively (equity bucket 11, unknown equity risk). ISDA commented that if you can get look-through sensitivities that's generally acceptable. We pointed out that delta-neutral funds would see zero-charge incorrectly, so probably needs to be taken into account in the "Adjustment". They said where funds are private credit/private equity it may be harder to justify not puting them in Eq bucket 11. Our suggestion was to take proxy indices and benchmarks e.g. MSCI that can be used for sensitivities although acknowledging that this incurs some discretion on the sensitivities and duration when you can't see the underlying book. The tacit agreement was that this is much better than proprietary black-box models, finger-in-the-air or historical returns fitting 3) Overnight equities clearing Someone else asked me to raise the point of overnight tokenised equities and what that would mean for ISDA's SIMM model as we increasingly saw equities trading in tokenised format out of hours. They suggested that this wouldn't change much unless there was a breach. Although you've technically got as much as 10.5 days instead of 10 days of liquidity horizon it's not materially different from exchanges being open/closed on different daycounts whilst they trade on less liquid venues. 4) Self-Regulation There is interest in monitoring how the industry comes together to create frameworks and an appetite to engage and educate ISDA members if we can present a coherent solution in the DeFi community for margining. There have been discussions internally in ISDA around crypto but not yet DeFi per-se as they treat crypto as commodity in the SIMM model. They were interested to learn more about how decentralised contracts differed from CCP models particularly around the risks and sensitivities to an increasingly large retail cohort via PSPs, Exchanges and Neobanks.

A huge amount of work on this from @tydrohq and @inkonchain - thrilled to be a core part of this