145: Calling My Spirit | Ernest Cantillon, Brian Elders and DramEx

Across the trading lifecycle and around the world, DramEx will enable you to efficiently manage risk and capture opportunities previously unavailable in the digital whiskey marketplace.

MoneyNeverSleeps is sponsored by PAT Fintech, the training partner that demystifies fintech and digital finance for financial services professionals.

HIGHLIGHTS:

Ernest’s first steps into the whiskey business that led to the DramEx idea:

“After about 10 or 15 years of selling other people's drinks in the bars and restaurants I own in Cork, I had a desire to sell my own. A guy called Tom O'Riordan, who gave me my first job in a bar 20 years ago, decided he wanted to get into the gin and whiskey business, and he asked me to get involved with him. So out of that, Kinsale Spirits was born.”

“We’re probably in year six now – three years of getting it going and three years of good growing trade. That experience educated me in the whole world of whiskey, whiskey trading, and markets or lack thereof.”

“Our desire to create a whiskey brand initially without a distillery led to asking if the introduction of blockchain and DeFi to whiskey, would they help solve some of the problems with the whiskey industry?”

Ernest on the problems to tackle in the whiskey industry:

“In the big whiskey markets like Ireland, Scotland and the US, how whiskey is made is different, but we all face the same challenge – there’s a serious lack of liquidity.”

“You spend a lot of money to build a distillery, and then you have at least a three or four-year wait time while you lay down your product, so your cost of production is sitting there.  If you want older stock [aged whiskey] as most people do, that’s your capital tied up for longer. So, it's a very illiquid business, pun intended, and that's a challenge as it makes the supply chain uncertain and trickier.”

“On the investor side, whiskey is a very steadily appreciating asset, and we know that global investors have a desire for new asset classes.  It felt like marrying off these two bodies in some way - the illiquidity of the whiskey market and the desire for new asset classes - especially if they could be brought together digitally, we could solve a lot of problems.

Brian’s view on the intersection of whiskey, blockchain and digital assets:

“The world of assets and how they arranged, traded and created, is going to be impacted with gusto by blockchain and the related technologies and innovations.”

“I look at whiskey as an asset class, but it's an old business that’s been around for a long time with not much technology in it. The way that the trading and markets work is ripe for some change. So after meeting with Ernest and brainstorming a piece, DramEx came through.”

“We're tackling an alternative asset class here that needs some new technology and some new ideas to bring more liquidity to all the market participants.”

Brian’s explanation of linking whiskey casks to non-fungible tokens (NFTs):

“There are so many ways you can slice and dice whiskey as an asset.  What you end up with is an asset that has a fairly reliable path from when it is created to when it is put in a bottle and sold to somebody.”

“So, you can take a cask – a well-known and well-documented asset because the taxman wants to get paid his revenue – and you can apply an NFT to that. You can also create a marketplace where those NFTs can be relied upon as representing those casks, based upon the construct you’ve put together. From there, you can take the first steps towards creating a market.”

Ernest’s role in putting the whiskey-NFT link into action to gauge the market interest:

“With Kinsale Spirits, we tokenized a cask and we sold it on the OpenSea NFT marketplace earlier this year.  It was the first cask auctioned in that way, and it caught some interest from the right people.  There was some good bidding on it, and it sold for $100,000, which was a nice payday for us.”

Ernest on why the timing is right to bring DramEx to market:

“The industry is open to innovation – disruption is too strong of a word because disruption can happen when you're not open to it and you get dragged along, and I don't think that's the case here. It helps that Irish whiskey is growing at a phenomenal rate, particularly in markets like China and in Africa, so it’s an industry on the move.”

“When something is growing at a fast pace and evolving, there are a lot of new players, lots of new investors, so it's a good time to bring the DramEx vision to it.”

LINKS:

Episode title inspired by ‘Calling My Spirit’ by Kodak Black

Get in touch with Ernest Cantillon and DramEx to learn more and follow DramEx on Twitter

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