We’ve been involved in the fintech space for over a decade, from developing core identity and payments infrastructure at the dawn of mobile payments, to enabling AI-driven lending to small businesses, and even launching one of the largest Canadian crypto exchanges and wallets. Our focus has been on driving innovative change in the financial space, but largely on top of the legacy financial infrastructure. It’s been a slow process.
We’re now living in 2022, but many of the core financial mechanisms we depend on weren’t created in this century, let alone the last one. The majority of the TradFi (traditional finance) space operates on decades-old infrastructure and is riddled with middlemen taking outsized and sometimes arbitrary fees. This lack of innovation doesn’t just hurt the retailers and small businesses that rely on financial infrastructure, it hits us all in our pocketbooks when we pay for goods and services, finance large purchases or invest.
Granted, the finance space doesn’t make it easy to drive change. It’s laden with large, slow moving companies navigating complex legal frameworks, with billions to lose if they make the wrong move. While they’ve done a reasonable job at aggregating several financial experiences, it comes with massive costs. Additionally, these kinds of organizations simply don’t attract the kind of entrepreneurial and creative talent that drives real change. If you’re an engineer, and you’re thinking about doing something innovative, is the first idea to apply to a bank? Never.
However, the last decade has seen the rate of innovation around money dramatically increase, and it’s tied to the development of blockchain and cryptocurrency. Reading the original Bitcoin whitepaper was like reading about the future, and we’re thrilled to see how this technology is changing the dynamic in a positive way. Since the inception of Bitcoin, and even more specifically Ethereum and smart contracts, there has been a constant funnel of top engineering talent entering the space, driving significant progress and bringing a new excitement to ‘working in finance’.
Consequently, blockchain and cryptocurrency have delivered monumental changes that will rewire the banking industry: money has become software, and contractual instructions have been codified into smart contracts. The DeFi (decentralized finance) space has exploded to offer products and services that have outpaced TradFi in many ways. Nevertheless, it’s still fairly difficult for most people to enter the space, and an uphill battle for organizations who’d like to offer ways for their customers to participate in crypto. This shouldn’t be the case.
Our thesis is built on the fundamental belief that cryptocurrency, and decentralized finance specifically, will radically change how we interact with money. Money as software, driven by smart contracts, will usher in the era of ownership through digital wallets and the cryptocurrencies and tokenized assets they’ll hold. This set of concepts will leave no business or industry untouched, in the same way the Internet and smartphones have completely disrupted, and in many cases replaced, core activities in life.
But, the barrier to entry is enormous, with limited developer and customer experiences being two large hurdles preventing DeFi from being adopted by the masses. To drive the kind of progress we are thinking, accessing crypto and DeFi needs to be as simple as calling a few API’s, or integrating a UI widget. It can’t be bound up in massive complexities, or building an outrageously priced engineering team, or being worried about scams and rug-pulls.
No, the future of finance must be enabled through a thoughtful approach to developer tooling, simplified access, security and compliance. It must embrace regulation, partner with existing (trusted) financial institutions and provide exposure to the best DeFi products in a safe and secure way. This is where the spark for Cybrid came from. We’ve set out on a mission to help businesses accelerate the world’s transition to the DeFi economy.
The DeFi economy, sometimes referred to as web3, is about reimagining how finance works, returning control and ownership to the people. It’s about disrupting middlemen, who sit in the flow of every transaction or exchange, but provide comparably little value. It’s about providing access to more advanced financial services which are normally reserved for the ultra-wealthy or those with access to large pools of capital. And it’s about enabling users to directly interact with financial service providers, giving individuals more control, more choice, more opportunities, all at a lower cost.
Through mechanisms like self-custody, decentralized financial services, and the ability to be rewarded for participating in the operation of the financial network, ownership is given back to the individual or small business owner. This lowers the cost to the individual, and allows them to participate more fully in financial opportunities. And it tips the favor away from traditional banks, who are used to leveraging people’s money to drive their own profits, while charging customers for that right.
Our mission to help businesses accelerate the transition to the DeFi economy is focused on driving this change, on enabling people to save, invest, transfer and pay using crypto and defi services, saving them both time and money, and reaping the financial rewards in a more equitable way. We believe this is the future of finance, and this is why we started Cybrid.
If you’re a challenger bank, neo bank or fintech, and are looking to accelerate your innovation in the crypto and DeFi space, we’d love to chat.
The Cybrid Founders