Nov 28, 2021 • 9M

Ep. 39: New beginnings🚀

New crypto job! Metaverse $1T. Davido social token.

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Some say Crypto is a scam. Others swear it's a breakthrough technology. But which is it? Join us, as we explore Crypto in real life (IRL).
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Hey friends,

About a year ago, I started publishing this newsletter as a forcing mechanism to document my learning, clarify my thinking and keep up with crypto news. I decided to share in the event that someone else might find it useful. Thank you for coming on this journey with me. #wagmi! (Crypto babble for “We’re all gonna make it!”)

Well fam, I’ve got some exciting news to share: I did it! I took the plunge. This week will be my first working in crypto full-time.

New beginnings 🚀

I came across a conversation between a McKinsey senior partner and executives at Cross River, a technology-forward bank. I was instantly struck by Gilles Gades’ (CEO) and Adam Goller’s (Head of FinTech banking) energy, innovation, and openness to crypto. So I reached out to the team. This led to a series of inspiring conversations and an offer to join the new crypto team!

Cross River is not your typical bank. It is backed by esteemed investors like KKR, Andreessen Horowitz, Battery Ventures, and Ribbit Capital. It provides banking-as-a-service to FinTechs like Stripe, Coinbase, and Affirm. For example, they power payments when you purchase a Peloton and pay for it in installments. Cross River also banks a number of crypto companies.

Many large and small businesses were hurt in the pandemic. Cross River leveraged technology to become the 4th largest processor of the Payment Protection Program (PPP) loans. In so doing, the 13 year old bank with ~600 employees outdid much larger rivals like Wells Fargo.

Now, the company is building a suite of offerings to enable FinTechs and other companies provide crypto payments, lending, and banking to their customers. Our mission is to onboard the next billion people into crypto by bringing crypto to FinTech. I’m really excited to join this talented and passionate team. And we are still hiring. Let’s go!


Ruminations 🧠

1. Meet people where they are

A couple months ago I conducted a survey and learned that consumers would prefer to access digital assets through their existing financial accounts. I can see the logic, why open up a new account with an untrusted brand if you don’t have to?

FinTechs like PayPal (392M users), CashApp (70M users), and Robinhood (23M users) are scratching that itch. These companies already enable customers to buy, sell and hold a limited set of crypto. But there is a LOT more they could be doing.

Figure 1. Illustration of hypothetical crypto product roadmap for a FinTech

2. What about banks?

Only a handful of banks have enabled their Main Street customers to engage with digital assets. A year ago, Quontic Bank launched a bitcoin rewards checking account. Then a few months ago, Vast Bank became the first in the US to enable customers to buy, sell and hold crypto.

But for the most part, the initial focus of big banks has been enabling institutional clients and high net worth individuals to custody crypto. BNY Mellon, US Bank, JP Morgan, Morgan Stanley, Goldman Sachs and others have made public moves. There are also banks working privately. Bank of America now holds over 160 patents related to blockchain.

3. Why are banks moving gingerly?

Initially, it was lack of understanding. But today, bank executives are putting in the work to explore crypto. The COO of BoA reportedly pivoted from being a crypto denier to a crypto supporter after investing hours watching lectures, testing out products and talking with experts.

Now, I think the speed bumps are primarily regulatory. Banks are held to higher standards than FinTechs. Measures to safeguard consumers sometimes slow down innovation. Plus, regulations are still evolving and banks will need to build new fraud, AML, risk and compliance muscles to handle this new asset class.

Lastly, some banks legacy technology systems are not well suited to meet the increasing demands of modern consumers. Many of these systems would need to be replaced or may require workarounds to integrate crypto solutions.

As the fog rises, there will be a huge opportunity to partner with banks, FinTechs, and other companies to enable crypto payments, lending and banking services. I’m excited to help make this happen.


News🗞

1. Metaverse continues to be all the rage

  • Grayscale published a report stating that the metaverse is a $1 trillion opportunity

  • The red hot housing market extends to the metaverse! This week two records were set! A single plot of land in Axie Infinity sold for 550 ETH ($2.5M). Also an estate of 116 parcels of land in Decentraland sold for 618,000 MANA ($3.2M).

  • I have been dipping my toes into MANA (Decentraland). Still figuring out how best to gain appropriate metaverse exposure. I recently learned about two funds which kinda operate like ETFs for metaverse cryptos: Makara Metaverse and Index Coop Metaverse. Disclaimer: I have not invested in these. Please do your own research. Let me know your thoughts!

2. Hackers using Google Cloud to mine

  • 86% of 50 recently hacked Google Cloud accounts were used for crypto mining

  • Crypto mining requires large amounts of computation power to produce yield, leveraging Google’s massive cloud computing eases that burden

  • But this is wrong! Unethical moves like this taint the industry and feed the false narrative that crypto belongs to shadowy underworld. Stop it, whoever you are!

3. Davido launches a social token

  • Davido is a living Afrobeats legend. His music sets the tone for every occasion. He is by far the most followed African musician on Instagram with over 22 million fans and another 36 million across Facebook and Twitter. I’m one of them. Full disclosure, Davido’s was the last concert I attended pre-pandemic.

  • This week, the 29 year-old launched a social token “Echoke” to give power back to the fans…and cut out the middleman.

  • The tokens will be airdropped for free to fans for a year beginning Nov 28. Holders of the token will get free access to giveaways, NFTs, backstage passes, jobs, festivals, exclusive merchandise, media, and hospitality benefits. I’m looking forward to checking this out! Stay tuned.


That’s all folks! Thanks for hanging with me. Remember, no matter your circumstance, if you are able to read or listen to this then you have a lot to be thankful for. I hope you have a wonderful week.

Best,

Afo