Hi Dan Schatt, welcome to our series “Behind the Startup” tell us about your journey from the payments industry to decentralized finance (DeFi)?

In my experience of working in the payments industry, I came to understand that decentralized finance could really change the future of financial verifications. As blockchain processes started to become more familiar and widely accepted, a light bulb went off. Decentralized finance can help to eliminate friction. We started to look toward using some of that natural on-chain verification capability to replace outdated processes, and eventually, CRED was born.

Please tell us about your story behind the Cred, how did you start, and what is your vision?

Cred really came out of a desire to free us from some of the inefficiencies in traditional banking, and to re-imagine what it’s like to use digital currencies. We like to say that we are helping people to bank on fairness because there’s that idea that the open hand flourishes, while the closed hand diminishes. So when you open up markets, when you create key

efficiencies, you drive business in a way that’s sustainable. We also wanted to introduce next-gen services and API functionality to parts of the

cryptocurrency world. The idea of defi is getting fleshed out with initiatives

like this that build on innovating banking verifications. We already had

Paypal. Stripe, etc. … we wanted to go beyond that.

Covid19 pandemic is causing considerable losses to traditional businesses, and federal interest rates are on a continuous decline. Do you see a rise of DeFi products and adoption in such a scenario?

I think you have to separate those two. First, yes, the coronavirus pandemic is disrupting business in a big way. One of the biggest

use cases of blockchain and decentralized finance in that context is developing contactless solutions. To the extent that you can build in verifications and eliminate pen and paper processes, or people sharing the same touch screen or digital kiosk, you’re helping to not have people get sick.

The interest rate thing is a specific problem, where the Federal

Reserve is trying to keep the economy afloat by cutting interest rates to near zero. This creates all kinds of unintended bad incentives, just like other aspects of the traditional banking system that reward greed, set up roadblocks for the average investor, and funnel wealth into more isolated crevasses of the economy.

As we can see with Cred, you can offer asset holders new ways of

earning more interest by building participation in decentralized finance

operations. So there’s a definite role there.

I guess you could say in both of these cases, defi solves at least

one core problem!

The blockchain industry is facing a lot of regulatory hurdles in many jurisdictions, and Cred has an excellent track record of meeting such regulatory requirements. What challenges does the company face while dealing with regulators, and do you see their outlook and behavior change in the future?

Thanks! I like to think that we’ve been fairly successful in that regard… A lot of the challenges that companies deal with involves showing in great detail how we solve the questions that regulators put to us.We also have to solve problems that regulators see in very vague and ambiguous ways; in other words, they’re not even really fully confident in their own assessments, to begin with. That creates a high degree of chaos, and then you have regulators targeting firms for all sorts of 'sins of omission,’ and that gets people even more nervous.

I think in terms of changing outlooks, things are going to really

improve as regulators get their own houses in order. As they go about

clarifying and making their own policies and outlooks concrete, then you can build company compliance on that solid foundation. That may not be where we’re at yet, but I think we’re getting there. To the extent that regulators like the SEC can develop a clear roadmap and a consistent response to proposals, then we in the private sector can work with that and accommodate it, and you start to get the synergy that happens when a sector is fully mature.

In so many senses, we’re in uncharted waters right now, but we’re figuring it out together.

How does Cred work? Further, how does a user earn by using Cred solutions?

The essential way that asset holders earn with Cred is by putting their assets into active use on the Cred platform. Because it’s decentralized

finance, you take away a lot of the dross and inaccuracies around financial reporting, and you have clear benefit models, which involve those flat rates of interest that we talk about on the site. If you can get 10% interest in today’s market, that’s amazing, and you do that by putting your assets in a very different and unique digital context.

In a few ways, it’s very simple. Cred works by users putting their assets into the platform and getting flat rates of interest, as well as a lot of functionality, on blockchains and beyond.

We talk about our pledge-hold-earn model, which is very instructive, and you can find out more about this on the website. Essentially, it’s a major on-ramp for all sorts of crypto assets, in order to help asset holders to participate more fully in the broader global economy around digital assets.

In terms of how a person earns, they earn by pledging and holding their assets. How we generate the earning potential is by lending crypto to miners and other parties.

How many digital assets do you support right now, and which of them as the most usage and adoption? Our readers would love to hear some hardcore statistics and insights from you.

So, we have 29 digital assets supported right now, and counting. That last part – “and counting” – is important, so to get an up-to-date list, you want to talk to our people about practical options. We support Bitcoin (BTC) and Ripple (XRP) and a number of other major coins, as well as some altcoins and other more obscure kinds of assets.

As far as statistics, I don’t have them offhand, but you can see that crypto is a multibillion-dollar industry, and how Cred is ultimately important in helping to build that. Basically, I think the best statistic that speaks to our residents in today’s financial world is our 10% flat interest rate on both sides of the equation.

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