Mover

2020 exposed a wider interest in alternative banking solutions, which allowed both traditional neobanks and alternative crypto solutions to show the biggest growth so far. At the same time, it also exposed foundational DeFi industry problems.

• DeFi wallet services are mostly uni-protocol and have a lag. DeFi industry never sleeps. Every other day there is something new and experimental, and not all services can pick up with the speed of the market. Wallets do not support all DeFi protocols and focus on the $4B Ethereum market, excluding $12B Tezos, Algorand, EOS, Cosmos, and many other networks.
• User experience is still terrible. Seed phrases to recover wallets, browser extensions to access user funds, and interfaces that are built for experienced crypto users only.
• Consumer-oriented DeFi is still complicated. No visibility over all available investing and staking options. Complicated gas fees structure. Multi-step patterns to access passive income options.
• Non-vetted and non-safe decentralized trading. DEXs generate more than $2.5B in monthly volume with no governance and control over quality and scam projects luring crypto traders.

DeFi neobanks are appointed as the “next neobanks”. How do they look like? What features should they offer? And most important, what values do they bring? A good description comes to a financial service that aggregates all crypto protocols aggregating high-interest rates, providing full and safe access to decentralized trading, and supporting the growing demands of the new digital economy.

But what does it mean in practice? Let's have a closer look at the current landscape. MakerDAO being an early Northern Light to all DeFi community carved the path to a fair and innovative technological product structure. However, it is still tiny comparing to the existing neobank incumbents. Ironically, once neobanks were in the MakerDAO shoes.

So how does the “next neobank” look like? Well, it is still a very open question, but we firmly believe in these two statements:

• Instead of equity in any single company, investors and developers have a stake in the underlying crypto asset of the network.
• Instead of proprietary software, underlying protocol wallet logic is open source and non-custodial, while the application layer is supported by the company.

To outgrow existing services, a mainstream DeFi neobank should adopt and facilitate the staking economy market; support the evolution and growth of decentralized exchanges; also utilize traditional neobanks market growth.

Let's take a close look at the “traditional” neobanks growth. Well, they've shown a steady growth of 18.21% CAGR in the past three years. With a total accumulate value of $35.5B.

At the same time, staking economy has made an astonishing leap with a 198.21% CAGR in the past 3 years, reaching a staggering $17.6B in value.

What makes us wonder is why the staking economy is so disconnected from the DeFi Market? Why did the DeFi industry is showing the biggest growth by far right now? Are we using the right metrics? If so, how big the potential is?. Well, let’s start with saying that DeFi Market cap growth that is represented by TVL (Total Value Locked), which isn't the best metric to measure, to be honest. Never the less, it showed a mind-blowing 1,785.2% CAGR in the past three years, and currently stands at $6.7B mark.

The key aspect is to abstract blockchain complexity so regular users can finally get great financial service with all DeFi benefits. Imporant features include: digital assets aggregation, easy fiat on/off-ramp, best in class decentralized trading experience with the DeFi protocols yild aggregation.

• The support of all staking protocols. It is important to have a bridge that will access to the entire staking economy.
• Trading with 3000+ crypto assets with unique features for decentralized trading like smart price notifications and market positions.
• Automatic highest yield routing and insurance. The service will automatically reroute users' funds to achieve the highest yield available on the market, with in-built insurance, where possible.
• No fees structure. No maintenance, trading, or card fees with the integrated experimental crypto tokenomics.
• Debit card. Both physical and virtual cards, where the virtual card will be available immediately upon account opening.
• Live in-app support. One may argue that DeFi is not suitable for everyone at this point. But DeFi must be available to everyone, and an important part of it should great customer support.

Fintech is an industry with tiny margins. Instead of focusing on a fee-based model, a DeFi neobank approach suggests a “fair revenue” model approach. The service is ought to make money by collecting one-tenth of the interest that is generated by users' deposits. Half of all earnings go into the Yield Treasury, and the other half is used as a service fee.

Yield Treasury consists of native underlying tokens generated as staking rewards from user deposited funds. Platform’s native token can be exchanged and burned for the equivalent of the allocated share of the Yield Treasury to cover the app fees. This is a one-time event. It also means that a platform token is a deflation type of a token, meaning that the Treasury Box’s allocated share will continue to grow over time as users use the service.

Taking into the consideration normalized CAC (Customer Acquisition Costs), LTV (Life-Time Value of a customer), average median user deposit, card maintainance fees, fluctuation of APY (Annual Percentage Yield) on user deposits, a two-year modeled run shows a considerable structural economical fit. Of course, that is to keep in mind that an average APY for the users ranges at 10.4% +-4%.