Building the future of DeFi with PlasmaFinance
Decentralized Finance, or DeFi, has dominated the crypto industry in 2020, as new projects have exploded into the public consciousness. It has highlighted all that is interesting about the space, as each new project has spawned new possibilities for other individuals and teams to run with. As such, DeFi has quickly transformed from being dominated by Maker DAO, to peaking recently at nearly $13 billion locked in DeFi projects. In particular, UniSwap has become a sensation, seeing daily trading volumes in excess of the flagship U.S based centralized exchange Coinbase Pro.
Amidst this euphoria, the wider platform has shown signs of cracking. Due to the inability of Ethereum to cope with the surging demand placed upon it by the rise in transactions and smart contracts, gas fees have risen from an afterthought to significant sums of money, with $50–100 fees commonplace. Scams and money grabs have become even more prevalent, with the more complex technology leaving many inexperienced users and investors susceptible to suffering total losses. And, while huge sums of money have been generated, traditional financial firms and public use of DeFi feels further away in many respects now than institutional investment in cryptoassets in 2017 did.
It is these issues that PlasmaPay seeks to address, as we build the financial services infrastructure for the global digital economy of DeFi and Web 3.0.
Building the future of DeFi
We can visualize the current problems DeFi faces as three interconnected issues:
1. Ease of access
2. Scaling the infrastructure
3. Scaling the market
Ease of access
DeFi can be daunting for a newcomer. From basics, such as setting up MetaMask or wallet of choice, through to signing contracts and using the likes of UniSwap or decentralized lending platforms such as Aave or Compound, it assumes a technical knowledge that many people do not possess. A simple transaction to sell an asset can have multiple confirmations, while more complicated processes such as farming or staking can be many more. Whilst recognizing how important they have been, many of the wallets used remain unfriendly to users.
It is not just design that is an issue. Although things have certainly improved, the fiat on/off ramp remains hard to access for many — particularly to buy DeFi assets, which are rarely listed on the most common exchanges people use to buy into the system such as Coinbase and Kraken. Even Binance, which is quicker to list many DeFi projects, still only has a small fraction available for trading.
We want to make all DeFi assets available to all by making the process cheaper, easier, and faster. We currently support Visa and Mastercard payments in over 165 countries for over 100,000 users supporting 16 popular cryptoassets, but the next iteration of our Crypto Checkout product will make it possible to directly purchase any DeFi token. Adding to this, our future Plasma Card will provide users with a card that enables them to spend their cryptoassets worldwide.
We also want to make it easier to manage your cryptoassets. This is where our DeFi Dashboard comes in. This platform provides the functionality of the wallets used currently with a portfolio focused interface. It also builds in new features, such as being able to facilitate farming and staking, as well as allowing for borrowing and lending through the dashboard itself.
Scaling the infrastructure
As previously mentioned, Ethereum has struggled to cope with the surge of demand brought about by the increasingly complex and intensive nature of DeFi smart contracts. This has seen transaction times soar, with fees rising accordingly. Fees of $50 or more, which have become a regular occurrence, are not sustainable. Even far smaller fees disproportionally impact those who have fewer assets to begin with. Paying $5 to transact $1 million may not be a big issue, but the same fee for a $50 transaction is a significant amount and far in excess of the legacy CeFi world that DeFi is trying to improve upon.
Ultimately Plasma aims to be more than just a set of user-facing products but is also an infrastructure upon which developers can build DeFi focused products and applications. It will provide the speed and security required to host financial tools, while simultaneously allowing developers access to Plasma features such as fiat on and off-ramps, payment processing systems, and tokenized assets ranging from crypto assets to more traditional instruments such as stocks and commodities.
Scaling the market
We want to make DeFi big. Really big. Despite the recent explosion of growth, DeFi still pales into insignificance when compared to the traditional financial markets, in which trillions are moved every day. The global foreign-exchange market alone is responsible for $6.6 trillion of trading daily.
Plasma will:
- Reduce costs and time of traditional businesses for payment processing
- Make it easy to onboard clients who currently use CeFi for banking, lending and other facilities
- Support traditional assets such as fiat-backed stable coins, tokenized commodities, stocks and shares
- Allow for real-time cross border payments and currency exchange on-chain
We want to bring businesses who currently use CeFi, because it is the sole option, into DeFi. By doing so we believe we can make the ecosystem better for everyone, due to the network effect. The more money that flows into DeFi, the more companies will allocate resources to it. The more resources allocated, the more likely we are to build the products that can bring more people into space. And with all of that development, the more money will flow into it, causing a cycle of improvement and expansion.
Close to launch
While DeFi has exploded in popularity in 2020, we have been building for far longer. We began development in early 2018, convinced that DeFi was the next important step for crypto.
Our iOS and Android wallet launched in early 2019, while we secured important partnerships with the payment processing duo of Visa and Mastercard as well as opening corporate accounts with five major cryptocurrency exchanges including Binance, Kraken and Bittrex to allow users to purchase crypto with their fiat. This year we’ve been focusing on launching our Mainet, as well as creating the building blocks for developers to use.
But it is our next steps that are the most exciting, and what we are now focusing our full attention on. This includes the Token Swap Event in Q4 for PPAY, the token that will be the utility, reward, governance and staking function of Plasma Pay DAPP.
PPAY is currently finalizing what looks set to be an oversubscribed investment round with a limited number of strategic investors, which we are very grateful for. Following this will be a subsequent public listing.
