DeFi: From Decentralized to Democratized Finance - Stonize Co-founder, Giuseppe Morlino Interview

This article is a condensed summary of the key takeaways from Giuseppe Morlino’s appearance on our latest #Algorandstartups Ask Me Anything series. You can watch/listen to the replay here.

Giuseppe Morlino holds a PhD in Computer Science and is a technology transfer specialist. Prior to founding Stonize, he launched Trustformer, a venture operating digital transformation based on trust and leveraging blockchain disruption. Before that, he was founder and CEO of Snapback, a high-tech company in the sectors of Human-Machine Interfaces and Internet of Things.

Can you shed some light on your entrepreneurial journey?

My PhD research focused on artificial life, studying essential properties of living systems. We used neural networks, genetic algorithms and simulations to study primary cognitive phenomena like categorization (e.g. how living creatures differentiate between red and white, good and bad). I then moved into the tech world because I wanted to see the real contribution and impact of my work outside of publications. This is when I founded Snapback, a startup focusing on multimodal human-machine interfaces.

For example, there are over 1.6 million driving accidents alone every year due to smartphones — more than 300,000 injuries, and 11 horrible teen deaths every single day [1]. This poses very ethical questions around technology and the main motivation behind my entrepreneurial journey: with proper adoption of technology by humans, as in the case of human-machine interfaces, the key is transparency. Very often, people talk about UX and the natural experience, but transparency is a much broader concept. It is about harmonious integration into the environment humans live in.

Snapback was a great learning experience as my first venture: working on compelling value propositions, delivering that to the right stakeholders, the right time to market, creating a team, fundraising, etc.

Why was Stonize founded?

I developed a strong interest in blockchain a couple of years ago, after a series of in-depth discussions on the impact that this technology could have in the next decade together with Alessandro Ranaldi, my old companion of the Roman startup innovation environment and today my partner in Stonize. We recognized there was tremendous value in blockchain, but wanted to cut through the noise and distill its true value (as per Gartner’s hype cycle).

We started off delivering training and strategic consultancy for a year, essentially an opportunity to test several value propositions. We were able to run hands-on experiments in various fields, and narrowed in on FinTech because it was one of the earliest blockchain use-cases with the highest disruption potential. This thesis is supported today by market data, listing finance, retail and ICT among the most promising economic sectors for the application and development of blockchain solutions for SMEs [2].

Figure 1: FinTech is leading the way in expanding blockchain capabilities [2]

The real value for us was to leverage decentralized technology to promote financial inclusion. This is our mission: we should move from DeFi, meaning decentralized finance, to DeFi, meaning democratized finance.

Alessandro, with a strong background in finance, and myself, with a technology background (a FinTech, by definition) decided to incorporate Stonize. Today, Stonize is an independent digital platform for the issuance of asset-backed securities through securitization transactions.

What is securitization?

The broader industry we operate in is private debt, but we focus on securitization. Securitization is a super powerful financial process to raise capital against a portfolio of real economy assets. It’s so powerful because in a nutshell, a securitization transaction makes something illiquid (like a trade receivable or invoice) into something much more liquid (the security).

As a mediation tool, we also wanted to improve accessibility, which is today low (especially for SMEs), and transparency, which was historically very opaque. In fact, it was one of the key factors of the 2008 financial crisis; securitization transactions made on other securitization transactions, made in turn on subprime mortgage loans that eventually defaulted. The people buying the securities didn't have any real visibility into what they were investing in. In order to protect non-professional investors, securitization is today geared mainly towards institutional investors, and the operational complexity of existing solutions doesn’t lend itself towards financial inclusion. As such, accessibility and transparency governs everything we do.

Figure 2: The Stonize platform is a digital backbone for the structured finance market, combining innovative technology with a licensed structure backed by a scalable legal framework and leading service providers.

Why Blockchain? Why Algorand?

We put a lot of work into choosing and designing the right platform. Blockchain can help make securitization transactions more accessible because it reduces the cost of trust, a must-have component to run financial transactions. But this is not a given feature of any blockchain for any use case. In this regard, we think blockchain and Algorand are the best choice for a number of reasons.

  • Blockchain & digital identities: Blockchain, and a DeFi-oriented blockchain like Algorand, is a very important tech enabler in combination with digital identities. We’re currently focused on the European market and are lucky to have the eIDAS compliant digital identity, a regulated framework allowing you to legally operate across all 27 countries. eIDAS allows us to digitize securitization transactions (which were very paper-based until recently), and in combination with blockchain technology, brings transparency, accessibility, and security.

  • Aligned vision: Algorand’s mission is to enable a frictionless, borderless, and inclusive economy. What they are doing at the protocol level, we are doing at the solution level. It's very important to us and forms a sound partnership.

  • Efficiency & decentralization: securitization transactions today can take months, so reducing operational execution from five minutes to 30 seconds is not the biggest concern in our domain. What is important is the indirect reinforcement of decentralisation via efficiency. With Proof of Work-based networks for example, you spend a lot of money running a node by having to move your data centres and mining farms where energy costs are lower. Believe me, even if the intermediaries or large investors aren’t deeply involved in blockchain technology, they do understand evolving geopolitical equilibriums. It’s important to have a truly decentralized network; this was part of the reason we didn't go with Bitcoin or Ethereum.

  • Institutional positioning: Algorand is able to bring financial institutions on board, who should also play a role in enabling financial inclusion.

  • Top-notch & helpful professionals: the team has a very solid background in both technology and finance that not only innovate with the protocol, but are open to work with you. As a startup, you need the best people out there to help you succeed.

  • Accessibility via smart contracts: there are many legal contracts behind securitization transactions. For reference, you can easily spend €100k with a law firm to run a securitization transaction, with basic securitization values averaging above €100m. If you have an automated legal contracts builder pulling data from trusted oracles, and once audited by your legal counsel - you then have an audited, trustable template to work from, saving costs and allowing for smaller transactions.

  • Transparency via standardization and open source: Before notarization, we work on standardisation of what is being notarized. Beyond visibility of what is notarized, you also need to be able to audit it. This is very important at the ecosystem level, converging open source and standardisation to ultimately provide real operational transparency.

What has been your experience with the Algorand team and the Algorand Europe Accelerator pilot program?

I was lucky enough to meet Algorand founder, Silvio Micali, at a conference right here in Rome, where we are based. He’s a great person and can see the energy in his eyes when he’s talking about the infrastructure technology they’re building and how this can bring financial inclusion. We chatted, eventually signed a partnership, worked together on a roadmap in Boston, and have continued to stay in close contact on our development.

We were super lucky to join your pilot program during the pandemic to help facilitate the relationships we need and to understand how to best leverage Algorand’s technology and the Algorand ecosystem. The team connected us with a top-notch network of international industry leaders, potential partners, investors (who we have started talking to), the other startups in the program, and suppliers like AWS credits.

I've been through acceleration programs with my previous ventures, but what’s different about Algorand Europe Accelerator is the long-term relationship and strong connection to Algorand. Algorand is a long-term project. It has been a pleasure to work with your colleagues and your tailor-made assistance, always available to work on specific needs, from reviewing pitches to supporting fundraising activities.

What advice would you give to new founders/startups looking to build on Algorand?

Blockchain is a revolution, it's something that will disrupt the world. But disruption doesn't happen in one day. You have to build a very strong value proposition, and this will need time to be delivered. You should focus on specific elements of your value proposition, working on what's feasible today and considering this as a first step leading to the next one.

Blockchain will be disruptive for your business only if you are able to execute the first steps today, even with all the complexity that there is in development and the broader ecosystem. In other words, focus on what is feasible today while looking ahead to the future.

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[1] Source: LittleThings, The Eight Dangers Of Excessive Smartphone Use, Dec 30, 2015 (

[2] Source: CIVITTA, Blockchain in SMEs Maturity Report 2020 (

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