Dr. Chiente Hsu is the CEO and co-founder of ALEX, a Bitcoin DeFi platform. ^[1]

Education

Dr. Hsu earned her MS in Computer Science and Business Management from the Technische Universitat Wien and later achieved her Ph.D. in Econometrics and Quantitative Economics from the University of Vienna. ^[1]

Career

Dr. Hsu held various roles at Credit Suisse, including Global Head of Alpha Strategies, where she oversaw significant asset growth under management and provided strategic guidance on risk management and platform evaluation for the Fixed Income Management Committee. She later worked as a Managing Partner at QCAM, specializing in foreign exchange, where she developed innovative currency overlay products. ^[1]

She served as a professor at the University of Vienna and Duke University, researching Financial Econometrics and publishing extensively in academic journals. Additionally, she authored the book Rule-Based Investing, which offers a framework for earning consistent returns through rule-based strategies. ^[1]

Dr. Hsu was Managing Director and Global Head of Quantitative Investment Strategy Research at Morgan Stanley, where she developed content-driven quantitative products. She also led cross-asset initiatives during her tenure, contributing to Morgan Stanley's recognition as a leader in Quantitative Investment Strategy and content creation. ^[1]

ALEX

In April 2021, she was on a phone call with her friend and co-founder, Rachel Yu, discussing crypto and DeFi. ^[2]

“I was on the phone with my co-founder Rachel discussing crypto, the growth of DeFi and how although technologically sophisticated, from a financial engineering perspective there was much to be desired in the space. Fundamentals such as a yield curve and fixed-term fixed-yield lend/borrow were missing, and no one was offering solutions to smooth out the wild volatility that scares many away from crypto.”

They noticed significant gaps in financial engineering within the crypto space, such as the absence of fundamentals like a yield curve and fixed-term fixed-yield lend/borrow options. Recognizing the potential for improvement, they envisioned a future where decentralized finance (DeFi) would surpass traditional finance in accessibility and inclusivity. ^[2]

“It was then we decided that rather than be passive spectators, we would be builders and ensure DeFi would grow up to be better than traditional finance where we had spent our careers. Our vision of the finance of the future would be one of inclusion; permissionless, decentralized and accessible to everyone. We would create an “Automated Liquidity Exchange” or ALEX.”

In 2021, they co-founded ALEX alongside Chan Ahn, the CTO of ALEX. Initially, they explored different blockchain options, including Ethereum and newer chains. However, after consulting with Muneeb Ali, co-founder of Stacks, they concluded that tapping into the vast capital locked in Bitcoin presented the best opportunity for DeFi. ^[2]

“In the beginning there were three people: myself, Rachel and Chan, the current CTO of ALEX. We considered Ethereum and relatively newer chains. But after speaking with Muneeb Ali, Co-founder of Blockstacks, it was clear to us the biggest opportunity in DeFi was to unleash the potential of almost $1T of Bitcoin capital.”

They recognized that for DeFi to achieve widespread adoption, security, and transparency were paramount. Stacks, a blockchain connected to Bitcoin through shared consensus, emerged as an ideal solution due to its settlement of transactions visible in the Bitcoin state and its utilization of Clarity, a "decidable language" that ensures transparency by broadcasting code directly to the blockchain. ^[2]

Interviews

Building ALEX

In a 2021 interview with Stacker Chats, Dr. Hsu discussed the origins of ALEX and how to build a better DeFi ecosystem for the future. Starting with her background, she talked about working on Wall Street during the 2008 financial crisis: ^[3]

“As soon as I joined, a series of financial crises happened. It started with LTCM, the hedge fund that overleveraged. They basically got very, very cheap leveraging from all the banks, but none of the banks knew about each other's leverage exposure, and it triggered a financial crisis…Then you have all the series of crises happening on the financial market, spilling over to Main Street as well. It made us think about what really went wrong. Ultimately, there are a few reasons why all these financial crises happen.”

She then discussed how Stacks enabled them to develop ALEX and why they chose to focus on Bitcoin: ^[3]

“They made us think, "What can we do to make this financial world more transparent and efficient, in the sense of a Pareto optimal, like all the economies like to say?" And really, we didn't have the chance until, I would say, Stacks developed or developed, is a stack 2, that enable us to write smart contract unstacked, uh, build DeFi on Bitcoin.”

“Bitcoin is the most beautiful monetary base that I think humankind has developed, so that's number one. It's a very, very beautiful base where we can build a financial system. But in order to build a financial system, we need to create a lot of things. We need to create bonds, CDS, and we need to create derivatives. Now, to create those things, we need smart contracts, right?...We were very lucky that at the beginning of the year, Stack 2.0 rolled out. And we were lucky that we got invited to join the accelerator program. So this is really the baby step of our vision, in the sense that we want to build a whole decentralized, truly permissionless, a trustless financial services on Bitcoin via Stacks. And I know it sounds like a lot of words, maybe a lot of jargon, but it's very simple, right? We want to have a place where people can launch their token.”

When asked more about why the co-founders chose to build on Stacks, she responded: ^[3]

“Rachel and I are very institutionally trained, so the first thing we look for is the safest option. We might not be the flashiest founders out there; we might sound a little bit boring, but that's because we aim to create a platform where people can confidently invest their money. Money management should be boring; it shouldn't be flashy like a video game, etc. So we search for the safest protocols, and without a doubt, Bitcoin is number one. If you look at other chains, you have those side chains, and there are two chains that, for us, are the most secure places. That's number one from a very technical point of view why we want to build Bitcoin via Stacks. Additionally, I believe in Muneeb's vision.”

She also explained how ALEX is more like an index fund and what that meant for future investors: ^[3]

“An index fund may not be as thrilling as hearing about a hedge fund making a 90 percent return this year, but the industry is safe. That's why I say ALEX is like an index fund of the Stacks ecosystem. Firstly, we're the first platform where our cohort can come to launch the topics we want our cohort to be successful; if they succeed, ALEX will succeed. Secondly, once our cohort launches a token, they need a reliable platform where their tokens can be exchanged—that's where ALEX comes in.”

“So, we want to create this kind of an ecosystem for Stacks, a native token, let's put it this way. That's why I say that the success of ALEX is highly dependent on the success of the whole ecosystem. I guess that we grow together and, you know, in this deep, I would say crypto world, we really build on the giants as well. So, you know, nothing that can get us a Nobel Prize, right? But we very much depend on, you know, whoever is ahead of us.”