Bringing best practices from TradFi to DeFi: Palash Agarwal, finance leader at OP Labs

Liquifi is showcasing prominent finance leaders in web3. Today's spotlight features Palash Agarwal, who had the opportunity to join OP Labs as a core contributor to the Optimism ecosystem, building up their finance division from scratch.

Palash’s experience in traditional finance, coupled with his excitement and enthusiasm for exploring blockchain technologies, made him the perfect candidate to navigate the Optimism token launch and build out their finance practice. He leveraged his prior experiences, developed from leading firms like Deloitte and BPM, and made it into his own at OP Labs. In his own words:

“Bringing TradFi knowledge into the web3 world is important. Because you can move so fast in this world, people don’t think enough about what we should be doing and why. It’s important to manage your token treasury in a secure and compliant way. It’s easy to spin up new wallets, but there are consequences to doing so, and it can become a mess.” 

‍

Breaking into a career in web3

Palash began in corporate finance, working for industry leaders including Deloitte and BPM. Upon learning about blockchain technology, he was inspired by the scale of decentralized peer-to-peer transactions that were happening in crypto (Ethereum applications and DeFi Summer). Managing, auditing, and moving value at this scale was an opportunity to navigate uncharted waters in finance and accounting. 

‍

Working at the intersection of finance and crypto at OP Labs

In his role, Palash handles both traditional finance and crypto-specific responsibilities. While there are crypto-related aspects of the jobs that are new, many of the frameworks and principles from traditional finance still apply.

Traditional finance responsibilities include:

• Managing payroll, expenses, billing, and vendor management
• Budgeting, forecasting, and financial analysis
• Strategic planning with the executive team, including evaluating R&D opportunities, assessing market trends, and contributing to long-term financial planning.
• Accounting and maintenance of the books including tracking, maintaining sub-ledgers, optimizing recordkeeping (valuations, liabilities, unrecognized gains/losses, tax)

Crypto-specific responsibilities include:

• Managing wallets, setting up processes, and implementing new systems to have a handle on token finances
• Navigating compliance risks with legal counsel and making sure the team stays above board with all applicable laws and regulations

‍

Working in crypto and managing tokens has unique challenges

Palash finds the disruptive nature of tokens and the transparency of the blockchain to be the most enjoyable and exciting aspects of working in web3. The technology changes the way he thinks about business strategy and internal organizational design.

“Records are all on the blockchain and they can be dug up in minutes. Having a transaction hash is nice and easy. I really like being able to look up at any time, what happened and when.”

He cited several pain points of being an operator in web3 including: 

• The rapid evolution of the industry and the difficulty of keeping up with the latest tooling and tracking tools. 
• The need to be constantly diligent because even small mistakes can have significant consequences. 
• Understanding the differences between web2 and web3 finance and the treatment between traditional cash/assets vs. tokens can be challenging (especially because it’s still being defined and constantly changing).
• The challenge of navigating web3 dilemmas, such as the web3 ethos of making transactions cheap for people vs. the traditional web2 model of increasing prices as adoption increases. 
• The need for tooling to evolve to bridge the gap between web2 and web3 and make it easier for people who aren't crypto experts to participate

“Tooling is catered to people in web3 who understand web3. It doesn’t bridge the gap between web2 to web3. It’s hard for people to learn from zero.”

Despite the challenges, Palash is optimistic about the future of token management. He believes that the industry is still in its early stages of development and that there is a lot of room for innovation.

‍

Future of web3 finance

Palash envisions a future where more advanced tools and better practices, like what we've seen in traditional finance and web2, will become available. In this evolving landscape, finance professionals will play a pivotal role in bridging the gap by developing solutions that help web3 companies stay compliant and make the most of both on-chain and off-chain technologies. As decentralized finance matures, he expects web3 finance to have the same kinds of resources and industry standards that traditional finance has."

“Crypto is still very young, and lots of changes are to come. We’ll see traditional banks and payment rails get disrupted. Web3 finance is also too young to make predictions. There are many regulatory changes and lots happening on both sides.”

If you’re interested in learning more, connect with Palash. To learn more about what we are doing with projects like Optimism, reach out to us at bd@liquifi.finance or follow us on X to stay up to date on what we are building.