There are two trends that have been marking the course of finance in the world. On the one hand, the rise of fintech; companies that use technology to try to add value to traditional financial services, and on the other all the cryptocurrency ecosystemwhich bring a new business logic to the market.
Nevertheless, these two vanguards work in a disconnected way: Crypto companies, with their decentralized finance verticals, are remote from the fintech world and the fintech world does not have the means to easily offer all the new crypto-based services. To cover this gap, the company 2PI Network proposes, through its technology, that both services are compatible in a simpler way and thus open the game for both in the market.
“Our vision is that the financial sector is going to change, although it is a gradual process where both CeFi (Centralized Finance) and DeFi (Decentralized Finance) worlds coexist, we understand that today the financial system working on top of blockchains is infinitely more efficient than the system traditional financial system where almost all fintechs operate today. But there are many frictions, there are several challenges but that is the main one, how to make it as transparent and simple as possible”, explained Mauricio Velez, founding partner of 2PI Network.
“Today we have created a decentralized asset management protocol that allows any fintech a connection through an API or SDK to be able to enter this world and offer investment rates to its users or to its own treasure. This protocol is built by us and works on what is called money legos, that is, it interoperates between multiple protocols at the same timeVelez commented. “This interaction between different protocols is permissionless, using open source, which allows it to be more secure and auditable, and thus we build the bridge to the DeFi ecosystem and a fintech can, in a simple way, interact with this world without friction and obtain the benefits that they provide. decentralized finance”, he added.
“We see ourselves as the DeFi backend partner for fintechs, allowing them to keep up with the pace of innovation in DeFi models. Fintechs can focus on their strengths like onboarding and UX, while we give them access to frictionless products to incorporate DeFi services”, he explained.
The market that is at stake is not a small thing. In 2021 the use of virtual wallets grew by 340% compared to 2020, according to the latest report on the Use of Electronic Money of the Link Network. According to data from the Global Payments Report, prepared by FIS, Argentina is the country in the region with the highest adoption of payments with digital wallets, with 12.4%, followed by Peru (10%). By 2025, Fintech wallets are expected to represent 23% of the total transactions of a commercial establishment, even more than cash, which would fall to 21.7%. Today, there are more than 30 million uniform virtual keys (CVU) in Argentina, which represents a tenfold growth since 2020. All of which could benefit from adopting services from the DeFi world through the company’s proposal. At the same time, according to a report by the global company TripleA, around 1.3 million Argentines have cryptocurrencies, so there is a considerable distance between them. The company works with partners to offer end-2-end compliant solutions such as Metamask for Institutions (where users must perform KYC and AML for access) and Qredo to have a multisig solution.
From the company, they estimate that its value lies in the fact that “at the company level, innovation in crypto is so exponential that it is very difficult for already structured companies to get developers and support from this world while maintaining the pace of innovation”. For Vélez, it is a market with a model “make or buy”. “It is seen in Mercado Libre in Brazil with Paxos and with Revolut in Europe”, he expressed. “Innovation appears when understanding what is the need of this type of clients. Many see that it is a world that is coming and they will want to have access”, continued the founding member of 2PI Network. “We try to offer a balance between the risk and opportunities of the DeFi world, although products that generate rates of more than 3 digits can be put together, they are not the products that many companies are looking for”, expressed Vélez and went on to explain: “For example, Mercury Bank, which is a bank used by all startups in the US, offers rates of 0.2% per year and offering users rates of the order of the DeFi world, up to double digits, is something they do not necessarily look for everyone”.
The company understands the demand and builds customized products for each client, depending on what type of assets they are looking for, what collateral, etc. “First, we detect which assets our clients are looking for and deploy exclusive strategies for each one, thus respecting compliance issues”, they commented from the company.
“The fintech world is much richer than a digital wallet and the number of solutions are unlimited. For example, you could have a fee embedded in a checkout for an e-commerce and create a vault with a fee so that the merchant automatically receives the money. generate interest and can be removed for use without lockups or friction. The blockchain transforms illiquid assets into liquid assets that operate 24×7Velez said.
The idea has already caught the attention of American, Israeli and Australian funds such as North Island Ventures, Node Capital, 11-11 DG Partners among others, which resulted in a pre-seed round of USD 750,000 and a valuation of USD 5 million.
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