What is PRELUDE? PRELUDE is a secure, decentralized network that can be used by all institutions entering thefast growing digital custody business.
Prelude is a technological solution which powers a network of trusted participants to secure digital addresses by validating transactions without having to hold private keys.
Prelude has developed an end-to-end technological solution which empowers traditional financial institutions to service digital assets by joining a network of service providers. In Prelude network, digital assets are controlled by the network as a whole but no single node can access the assets.
Using Prelude reduces the sensitivity of the information held by each service provider which allows them to use their current systems without implementing any cold storage or any specific solution in-house. Financial institutions can integrate our technology to their current systems easily with a very short time to market and without having to develop new internal procedures.
"Prelude naturally expends financial services to digital assets without the need for new systems, new processes or getting exposed to new risks.
Traditional custodians can respond to their growing clients’ demand while focusing on what they know: verify clients identity and validate transactions. "
The idea behind Prelude was first developed by Elie Galam, a mathematician (Harvard U), wall street Hedge fund manager (BlueMountain, Two Sigma) and serial fintech entrepreneur (Panorama Capital, Peerform, LGO Markets). Coming from the institutional asset management industry, he realized that having no remedy in case of key being lost would be a no-go for any institutional investor willing to enter the crypto industry.
Prelude technology was further designed by Eitan Galam (Elie’s brother). Eitan is a Harvard educated mathematician and senior wall-street executive (BNP Paribas, Mayan Capital) who had the unique privilege to study finance under Nobel Prize Laureate Prof. Robert C. Merton and fundamental computer sciences with Prof. Jacques Stern, also known as the father of French Cryptography.
Eitan was joined by a team of technologists and wall street veterans to create the first decentralised custodian for decentralised assets.
Prelude is backed by Blockwater Capital a VC investment company known as the most active fund in the blockchain industry in South Korea.
Over the past years, digital assets have become more and more known to the large public. What used to be an investment reserved to a few people has become a new Asset Class. And institutional investors need to get exposure to this new asset class, no matter if they think if it’s going up or down.
“Family offices, hedge funds, other sophisticated investors, are starting to think seriously about this space.
Our clients are thinking about this as an investable asset class.”
But when you are an institutional investor, you need someone to hold your assets on your behalf. That’s the role of custodians. Whatever asset an investor holds, he needs a regulated and trusted entity to insure his assets won’t be lost or stolen.
Those traditional custodians are seeing an increased demand from their clients to service this new asset class of digital assets. Traditional custodians are looking at ways to position themselves on this new business and respond to their clients’ demand.
Holding digital assets is very different from holding traditional assets. Digital assets are controlled by a password known as a private key, and because it’s decentralised - if you lose the private key you lose the control over the assets.
This means that servicing assets creates new risks and challenges for custodians. In order to respond to their clients' demand, institutions need to invest in new systems, risk their reputation and risk a lot of money on new systems with very limited track record. The sensitivity of the information which needs to be held is such that regulation is still unclear on the implications associated with holding digital assets on behalf of clients.
The need for new systems, unknown regulatory framework and unprecedented risks makes the strategic decision to engage in this new business highly complex.
While some major institutions such as Fidelity and ICE are developing their own in-house solutions to enter the market, most of traditional custodians are still monitoring the market without taking any strategic decision.
When using Prelude, traditional custodians secure digital assets on behalf of their clients by validating their transactions. Once a consensus is reached among custodians to validate a transaction, the transaction is signed and can be printed on the native blockchain of the assets.
Institutional investors can benefit from having their assets secured by established financial institutions while custodians can use the exact same processes and systems they use for servicing traditional assets.