In this week's Spotlight series we chat with Lefteris Karapetsas, founder of Rotki, an open source portfolio tracker, accounting and analytics tool that protects your privacy.

Background: how did you get into web3?

I first started working in crypto in Mid 2014 working for the foundation before the Ethereum launch. Contributed to various projects, mostly the Solidity language and the C++ Ethereum client. Then moved on to work with slockit and the DAO. Was involved in the whitehat cleanup afterwards. Subsequently moved to work in L2, the Raiden network and at the same time started rotki as a side-project. The side project became bigger and bigger until I decided to focus on it full time.

Tell us about your project ...What was the inspiration behind Rotki?

Taxes. Plain and simple. The reason I started rotki was to be able to do my taxes in Germany. All other solutions at the time (and unfortunately also today) were centralized web apps that need you to submit all your financial data to them. Sending your most sensitive financial data to a centralized website is against the web3 ethos, against decentralization, against privacy and its outright dangerous.

The need for a real solution is how Rotki was born.

Why does portfolio management matter so much to the ecosystem?

Not just portfolio management, but also accounting matter. The crypto system, especially with DeFi has gotten complicated. Really, really complicated. Multiple exchanges, multiple accounts, multiple l2, multiple blockchains, multiple protocols.

Keeping track of what you have and where and how much profit or loss you have accrued is paramount yet it's really difficult. People have used rotki and thanked us after finding out about airdrops they could claim that they had no idea about.

Having clarity about your holdings and your portfolio performance gives you confidence in how to deal with authorities (tax reporting) and also confidence in planning for the future. No need to worry about whether you approach is profitable or not, or how much you need to keep for taxes. We help you answer those questions.

What are the core alternatives to Rotki?

There is nothing like Rotki out there. No application that is local-first keeping all data in your system and thus protecting your privacy. No application that is doing the same thing we do and is open source, thus providing transparency, auditability and the ability to run the app even if the creators disappear.

All other applications are the same. Centralized, closed source web applications. Putting your data at risk, they can be hacked, leaked or sold to the highest bidder.

They are closed source because they don't believe in openness and collaboration that fosters this space and has made web3 what it is today. Additionally they are closed source since they believe this is their way of capturing value. But once they are gone and their projects run out of money, users won't be able to access them anymore. All the carefully prepared data and reports you have there will be gone in an instant. While with rotki even if we are gone you will always be able to use the last available version of rotki. And perhaps someone else can also come and pick it up and continue work on it.

From portfolio tracking tools: zerion, zapper, debank

From accounting tools: cointracking.io, koinly, accointing, tokentax

There is more ... way too many to count. Especially for accounting. All essentially a copy of the other. Centralized web app tools.

What are your thoughts about the state of the Ethereum ecosystem as it stands in 2021?

It's way too complicated 😵

I remember thinking back in 2017 that there is so many things popping up that it's hard to follow. Now ... oh boy. We have reached escape velocity. There is too much information for any single person to be able to consume.

I am generally excited for the future. I am really into and excited about DeFi and can't wait to see how the different L2s will end up working so that we can finally scale Ethereum outside of its current limitations.

Also looking forward to see how ETH2 will evolve and when the merge will happen.

In short, I'm excited.

How do you really feel about the state of DeFi?

Optimistic. I think it's a revolution in the way finance works. We are really creating a new and improved financial system here. It's amazing to see it unfold.

Naturally there is lots of dangers, in the form of exploits or protocols claiming to be DeFi while in truth they are totally centralized. But in the end this is all part of the process and will be overcome.

What triggered you to become a clr round recipient ?

We are a very active and loved gitcoin grant and Auryn pushed us to also participate in clr. So in short I think it's Auryn the person that triggered us.

Why do you think clr.fund represents such an opportunity in the ETH ecosystem ?

Much like Gitcoin I think it's an amazing way to fund open source projects. True open source software is hard to fund and I think ETH and generally crypto need to find ways to fund and incentivize the building of dapps that follow the ethos of the field and are open source, local and decentralized.

How do you feel about the future of quadratic voting? - What use cases beyond the current ETH ecosystem fundraising do you see QF being super helpful for?

I am really focused on funding open source so personally this is the use case I am most interested in. It's a very hard and as of yet unsolved problem so I think we still have a lot to improve there.

Another use case, but one I have no experience with, would probably be charity as it may be an improvement over registered charity organization which I hear (again — not an expert) waste a lot of their funding in administrative expenses.

If you could change one thing about the space right now, what would it be? aka What keeps you up at night about the Ethereum world?

The hypocrisy. There is a lot of hypocrisy around the crypto ecosystem and especially Ethereum. People larping about decentralization and opensource yet building or investing in closed sourced centralized applications.

If you talk the talk, then you should also walk the walk.

Thanks so much for chatting with us Lefteris 🐦