Bogdan Vujović, author of “Crypto Vodič,” is a lawyer with master’s degrees in international business law and investment banking. He provides legal advice to digital companies, specializing in digital assets, blockchain, FinTech, and personal data protection.
Passionate about blockchain and digital assets, Bogdan focuses on the token economy and DeFi. He aims to integrate law with new technologies, contributing to the digital ecosystem’s growth through legal counsel and education.
As a co-founder and investor in several startups, he regularly speaks at national and international conferences. Additionally, he is a former Serbian Ashihara karate representative and a black belt candidate.
From Shells to Crypto: The Evolution of Money
Your book covers the history of money extensively. Did this historical perspective affect your view on cryptocurrencies in any way?
From the very beginning of mankind, people had the need to create an instrument that could simultaneously be a means of exchange, unit of account, and store of value. Shells, feathers, and precious metals were used as the first money. It did not take long until metal and paper money have been created. From then on, slowly, but surely financial system has outpaced its original purpose and became the world on its own.
It cannot be argued that the current financial system has done a lot of good things, but at the same time, it is a fact that FIAT money failed to fulfill one of its essential roles – to be the store of value. The best example for this would be USD which as a global reserve currency has lost more than 90% of purchasing power since abandoning the gold standard.
Also, the current financial system can be used for imposing sanctions and for the elimination of those with different interests and positions.
This is all against the core principles of crypto which are openness, transparency, and democratization.
Therefore, I believe that crypto as not only a new form of money but more importantly new idea of how we perceive the world is significantly better positioned to be the money of the future than current FIAT money.
In “Crypto Guide,” you explore the evolution of the Internet and blockchain. Do you have any predictions on the next major technological breakthrough?
It is very hard to give any kind of technological predictions because the future is always uncertain. But what seems inevitable is an intersection between blockchain and AI, two of the most interesting technologies. I am personally thrilled to see the synergy between an immutable database and technology that can create everything in the digital world.
In that regard, I see significant potential in enhanced security and privacy, data integrity and transparency, authentication, and identity management as well as decentralized AI marketplaces and tokenization.
The Strength of Polygon as a Leading Ethereum Scaling Solution
You discuss the importance of Polygon as a layer 2 solution. Why do you believe Polygon stands out among other Ethereum scaling solutions?
The main challenge of every blockchain network is blockchain trilemma which means that the network cannot achieve full capacity in all 3 aspects: decentralization, scalability, and security. Only 2 out of 3 can be achieved fully, meaning that one aspect must be sacrificed. That aspect is usually decentralization because at the end of the day majority of users prefer scalability which reflects in faster transactions and smaller fees rather than decentralization.
Given the fact that Ethereum has/had issues with network congestion and high fees, one of the obvious solutions was to build Layer 2 upon the Ethereum blockchain which will utilize the security of Ethereum’s main chain, but at the same time enable much bigger scalability which is the main attribute that users want. Polygon did exactly that. In my opinion, Polygon is currently the best Layer 2 solution due to several reasons:
- It has a market cap of 6 billion $ and the biggest number of active users and projects being built on Polygon (such as the Starbucks loyalty program or Donald Trump NFT collection);
- Polygon has a great ecosystem with MATIC token which is utilized for staking and paying network fees as well as for governing and securing the network;
- Finally, Polygon is perfectly positioned to be the most widely used Layer 2 solution in the real-world-assets tokenization.
You refer to Binance as an ecosystem in your book. How do you think Binance will evolve in the next decade?
In my opinion, Binance is a perfect example of the crypto ecosystem which is not only exchange but much more. With BNB tokens, Binance allows BNB holders to have discounts on all services that Binance offers, thus incentivizing them to use BNB rather than other crypto-assets. At the same time, Binance actively lowers the circulating supply of BNB by using 20% of net profits to buy back and burn BNB, hence fostering long-term growth of BNB price.
If we take a look at the short, but interesting history of Binance, we can see that in the first business year, Binance had a bigger profit than Deutsche Bank. With more than 100 billion $ in assets and more than 1 billion $ in profit, I do not see any risks to Binance from a financial point of view.
The only major risks come from regulatory treatment, since we saw that Binance had to pay 4,3 billion $ in settlement fees, and their founder CZ ended up in jail, being the richest person ever to serve a sentence in US prison.
Regardless of the financial or regulatory situation, I personally see the future of Binance in the integration of decentralized finance platforms as well as in offering new sorts of financial products catering needs of evolving TradFi and DeFi investors.
The book explores DeFi, DAOs, and DEXs. Which decentralized finance innovation do you think is the most exciting, and why?
To me personally, the entire concept of DeFi is fascinating because, for the first time, it is possible to conduct financial transactions from storing and sending value to investing, trading, or raising capital without using intermediaries. Why is this so special? Because the entire financial system is based on the fact that we have intermediaries that are heavily regulated and whose services we must use.
The whole idea of DeFi is to use code instead of humans. And as we all know, contrary to humans, code cannot be changed, corrupted, or affected in any other similar way. As the most exciting innovation in DeFi, I would pick up DAOs because I see DAOs as a new way of organizing human potential in a decentralized manner without centralized authority or any kind of hierarchical structure.
Instead, all members of DAO are eligible to take part in the decision-making process based on certain criteria fostering inclusion and democratization allowing people to realize their personal interests easier jointly than individually.
Your chapter on companies and digital assets includes Nike and Starbucks. How can smaller businesses effectively integrate tokenization into their operations?
Smaller businesses cannot integrate tokenization in the way that has been done by Nike and Starbucks because they do not have that level of brand authority and trust obtained by their customers. But what they can do instead is to try to find creative ways to engage their customers in their business, whether by rewarding them for certain behavior which is beneficial not only for the company but for the entire ecosystem as well.
Or to use tokens as an alternative way of financing where investors can be rewarded with interest or even better with a right to participate in profit or revenue share which could split the risk between the company and investors. Also, since tokenization is not yet widespread, each company that performs tokenization in an effective manner shall be considered innovative and shall have good publicity by effectively being an industry front-runner.
Metaverse Potential: Transforming Traditional Industries
You mention Metaverse and digital assets. What potential do you see for the Metaverse in transforming traditional industries?
I think that in this current situation, it is quite hard to predict how Metaverse, which is still in the nascent phase, will transform traditional industries. I am of the opinion that not all industries should be affected by Metaverse. But those who will be can use Metaverse to provide a unique type of experience to their customers which was not possible before.
Also, a bigger user base not limited by geographical borders will be another huge advantage. The area in which I am personally most interested is the new economy which will be developed in Metaverse on different principles than those we teach in economic faculties.
My guess would be that tokens will play a crucial role in the economy of the Metaverse as well as in the digital economy which birth we are witnessing.
The book’s final chapter covers legal regulation in detail. What are the biggest regulatory challenges you see in the future for digital assets globally?
To me, it seems that this question deserves 2 answers. One for the short run and the other for the long run. In the short run definitely, the most important regulatory challenge globally would be the legal qualification of digital assets.
Namely, the first question that needs to be addressed is whether digital assets can be considered financial instruments or not. For example, in the US there is a famous Howey test and in the EU, there are MiFID 2 and ESMA Guidelines which need to determine if digital assets can be considered financial instruments.
In the long run, the most important question is: are we going to use the currently existing regulatory framework which was tailored for traditional financial institutions, and try to subsume digital assets into that framework? Or we will need to come up with a completely new regulatory framework designed solely for digital assets and adapted to industry needs.
Tokenization Beyond Real Estate: Industry Opportunities
When talking about tokenization and real estate, what unique opportunities do you see for tokenization in other industries?
The answer to that question depends on the particular industry. Also, it is important to mention that not every industry or business is suitable for tokenization. Probably the main criteria for tokenization would be if the company has a B2C business model. In that case, companies should see tokenization as an instrument for being labeled as an innovative company, thus differentiating themselves from the competition.
Also, by issuing tokens, companies can have a new way of financing, irrespective of banks, funds, and other types of financial institutions which are more geared towards the younger, tech-savvy population who already hold crypto.
Since the main idea of crypto and blockchain is decentralization, companies should also have in mind that tokenized business models are not only about issuing tokens but more about sharing the value with the community and engaging token holders by creating proper incentives that will benefit not only token holders but also token issuers as well.
Last, but not least, important tokenization can significantly decrease costs of issuance as well as secondary trading, making the entire process not only more efficient but more transparent as well thanks to blockchain technology.
Your book stresses the reader’s journey through digital assets. What advice would you give to someone just starting their journey into the crypto world?
I would give them advice to be open-minded, and always willing to learn and to try new things. Firstly, start with educating yourself, then test your knowledge by installing wallets and buying digital assets, and try to connect with like-minded peers. In case someone is considering making a career in an innovative industry and being a front-runner, then crypto is definitely a thing to consider. We are still in an early phase, so do not be afraid to enter the industry now.
Bogdan Vujović,
Legal Advisor & Brand Ambassador
Disclaimer
FAQ
Cryptocurrency is a digital form of currency secured by cryptography, not controlled by governments or banks.
Cryptocurrency wallets are digital tools for storing and managing your crypto assets.
Best practices for crypto investment include research, diversification, investing what you can afford to lose, and avoiding hype-driven investments.
