Crypto For The Masses
2022 will be the year crypto goes mainstream in India and gains a significant adoption - from the dApps being built, from venture dollars in the ecosystem, and most importantly from the population getting exposure to the asset class. Currently the biggest hindrance to adoption is two-fold: education about the asset class as well as infrastructural barriers. If you’ve tried any of the major Indian exchanges (CoinDCX, CoinSwitch, WazirX, ...) you’ll know their bridge to the fiat system (transfer fiat to buy crypto or vice-versa) is very fragile and one direction is broken almost every day.
The key to scaling to 100M crypto users in India will be reliable and easy-to-use onramps. If we can make buying crypto as easy as sending a UPI transaction in India, crypto will take off. The other important factor here are: a) educating users about the risks involved with the asset class; and b) introducing ways for them to get exposure to crypto with a lower risk threshold. This can be done by only letting users invest a small amount of their portfolio into crypto or by letting users buy or invest in assets that aren’t as volatile i.e stablecoins1.
Following up from the Crypto roundup from the last post, I wanted to do a deeper dive on another company I’m very bullish on in the Indian ecosystem (Disclaimer: I’m a tiny investor as well).
The company is called Flint, and I think they will be one of the first companies in India to really push crypto adoption to a higher level. The company was started by Anshu & Akshit, both from BITS Pilani where they met and later working together at CRED (Anshu was also the PM behind CRED’s new popular offering- Mint). They’ve been exploring the ecosystem since the crypto winter of 2017/2018 and finally decided to build Flint to offer a great consumer experience for people new to the asset given that the ecosystem has both matured and is becoming scalable for mass usage. The company’s current core offering provides users up to 13% annual interest on their invested capital.
The way Flint’s first product will work is quite simple:
Users go through a KYC process on their devices like other investing applications
Users deposit INR through a UPI transaction (or via other payment methods) that gets converted to stablecoins (USDT) and custodied by Flint
Flint then lends these stablecoins to borrowers and users earn a 13% interest on their deposited USD
I think it’s important to point out here that Flint is making a core UX decision to custody its users stablecoins to begin with. There will be critics who say that this goes against the ethos of “your money your keys” in crypto, but on the flip side the current experience of non-custodial wallets is not very user friendly for folks new to crypto. For my friends who I’ve onboarded to crypto, I have spent 30 - 60 minutes explaining them each step of the process and this is not very scalable until we have better and safe education resources. Even in the United States, applications like Robinhood and Cash App are popular products where a lot of Americans first got introduced to Bitcoin or cryptocurrencies. In Q1 2021, there were 9.5M users on Robinhood who traded cryptocurrencies and 1M users bought Bitcoin in January 2021 on Cash App, which shows the importance of platforms that make it easier for users to participate and invest in cryptocurrencies but custody the asset themselves in the short-term. I would imagine as the Flint platform grows and it teaches its users about the ecosystem, it would let its users move their funds to non-custodial wallets i.e MetaMask or Rainbow (or even build their own wallet, who knows?)
I don’t want to give too much away about what Flint will build in the future, but one of the next steps would be to give users the ability to invest in assets with a higher return potential but higher risk associated with it, a couple possible investment products could be: Coin Baskets (a curated basket of different cryptocurrencies that users can invest in) and Decentralized Finance products that the company’s research arm would recommend to users. Once Flint gains a level of adoption, the number of products it can build and offer to users will expand based on a user’s experience, risk-tolerance and even interest (Flint NFT Marketplace wen?). The product is currently still in its early access phase, but Flint has offered to give 10 Keeping Up With India users access to the product, so sign up for a chance to try out the product before everyone else:
For USDT, partnering with an exchange or P2P? How are they enabling initial liquidity, if P2P?
Thanks for this insightful content!