Podcasts, talks and insights

The future of the traditional financial system has been in the limelight for the past couple of years. The discussions about the 1% owning 99% of the Earth's resources and wealth come more and more to the surface. In this podcast, Karim Sabba, co-founder of Woorton was joined by

Alex Mashinsky, a successful serial entrepreneur, CEO of Celsius Network, inventor of Voice over IP (VoIP) and founder of two unicorn companies
Alex Mashinsky presenting Celsius Network at the Paris Blockchain Week (2019)

The discussion revolved around how blockchain can offer unprecedented opportunities to create a financial ecosystem that would benefit its depositors.

Some of the key takeaways include

  1. Creating an alternative financial ecosystem
  2. Celsius' business model to benefit its depositors
  3. Celsius vs. other P2P lending platforms
  4. Obstacles to the adoption of blockchain in the financial industry
  5. Digital currencies and stable coins

Creating an alternative financial ecosystem

In the contemporary financial system currency is not backed by gold. On the contrary, digital assets are up to 100% assets backed by the assets behind the smart contracts. Today banks will not disclose information on their activities with the money deposited by its customers. New DeFi network offers complete transparency and can be audited by anyone. DeFi offers to return the trust of people back to the financial industry.

Celsius' business model to benefit its depositors

The appearance of digital currencies allows its customers to earn a return. Celsius is not a neutral marketplace. 90% of Celsius’ business model is designed to earn interest for its depositors. 10% of Celsius’ business is to issue loans. They give depositors 80% of what they make. This means that Celsius’ customers can earn 8 times more than what a regular bank offers.

Celsius vs. other P2P lending platforms

Celsius started with the mission to bring 100 million people into crypto. Celsius invented the business of paying interest to its customers. No exchange in the world ever paid interest. Other P2P lending platforms charge 18-24% on a loan. Celsius never charges its customers any fees. Celsius is twice as big as other lending P2P platforms put together.

Obstacles to the adoption of blockchain in the financial industry

99.9% of all the assets in the world are owned by the banks. The competition is between the traditional financial institutions and the DeFi actors. There is a need to create a service that will bring people to decentralization. Blockchain is 11 years old but there are only 50 million users. There are no killer apps and killer DApps at the moment that will stimulate massive adoption of blockchain.

Digital currencies and stable coins

Stablecoins have an ability to bring millions of users into the blockchain. At the same time, stablecoins are not the independent decentralized blockchain based coins like Bitcoin or Ethereum. Stablecoins are pegged to fiat currencies. A fiat currency means that there is no gold in the bank to back this banknote. If there is another financial crisis, stablecoins will blow up. This will hurt the credibility of the entire blockchain industry.

The DeFi Podcast is produced and hosted by Woorton, a leading European digital asset market maker.

If you want to submit comments, suggest guests for the show or find out how Woorton can help you enhance the liquidity of your assets, please send an email to contact@woorton.com

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