Fulvia Morales Dares to DeFi the Norm
The rockstar 0x PM dives deep into adoption, DeFi, and financial inclusion.
It becomes clear from only a few minutes of talking to Fulvia Morales that she has a deep-seated passion for financial equality and inclusion. Over the years, she has explored this theme working in microfinance, impact investing, Fintech, and, more recently, in blockchain. She previously led the Payments team at Bitso, the largest cryptocurrency exchange in Latin America. Currently, she works as a Product Manager at 0x, an open-source, decentralized exchange protocol powering the DeFi economy. We sat down with Morales to talk about adoption, DeFi, and building inclusion and diversity in blockchain.
Early beginnings
A chemical engineer by training, Fulvia’s first job out of university was as an analyst at Citi working on retail and corporate banking strategy in Mexico and Latin America. “It has always been my personal mission to bring access to financial services to unbanked and underbanked populations. And the more I immersed myself in the financial space, I started to understand this was a problem not exclusive to Mexico, but something that affected many countries around the world as well.”
And so to the surprise of her family and friends, she left her full-time job at Citi to embark on a fellowship with the Vittana Foundation — an NGO that partnered with local microfinance organizations in Central and South America to build student loan programs from the ground up.
Fulvia spent six months in Quito, Ecuador leading market research and product design for microloan products for low-income college students. Yet, she grew increasingly disenchanted with microfinance: “Microfinance is a wonderful tool and has positively impacted financial inclusion, especially of women, but the longer I was in the space, the more I realized it is not the be-all and end-all solution for poverty that many people think. In many cases, high interest rates and other predatory lending practices have instigated a vicious cycle of credit and over-indebtedness for millions of households.”
It was at this time, 2013, that she came across the bitcoin whitepaper. “When I first read the bitcoin whitepaper, I was like ok, cool, but now what? I had to read it like 10 times to finally realize that cryptocurrencies and the underlying technologies were going to change the way we define, interact with and access money. But once I realized the opportunity they bring to disrupt financial services and financial inequality, I could not stop thinking about it.”
On building a decentralized exchange
As a Product Manager at 0x, Fulvia works with teams building on the protocol to provide decentralized products and services for their users. To date, 0x has facilitated the exchange of over $1 billion in assets and enabled more than 30 projects built upon it, according to its website.
“Our mission is to create a tokenized world where all value can flow freely. We believe that 10 years from now we’ll see traditional assets like equities and stocks, as well as new assets like personal time and digital collectibles, being tokenized. As more assets become tokenized, public blockchains give us an opportunity to establish a new financial stack: more efficient, more transparent and more equitable than any other system we know today. Tokenization on public blockchains opens up the possibility to democratize access to markets and financial services in the same way that the internet democratized access to information and at 0x we are building the infrastructure to enable this emerging crypto economy.“
0x utilizes off-chain orders in conjunction with on-chain settlements. While this has some advantages versus other models of decentralized exchange, Fulvia explains it comes with its own set of challenges and tells us about how the team has handled them throughout the years as the technology and the ecosystem mature. “After the first projects started building in our ecosystem, we quickly realized that in order to build a healthy and thriving ecosystem, we needed to offer competitive prices and good liquidity [compared to centralized exchanges and other decentralized exchange protocols].”
0x invested a significant amount of its resources to achieve that until it did. “More recently — as the Ethereum and DeFi ecosystems bloomed — we realized that in addition to prices and liquidity, a good developer experience is essential. The easier we make it for developers to build on the protocol, the better products they can build and that benefits everyone as it can ultimately thrive adoption of decentralized products.”
For this reason, they launched 0x API early this year — a product that enables DeFi teams to build better products and offer better user experiences by making it easy to access liquidity across different decentralized exchange networks through one single integration. “We package the 0x protocol’s liquidity and other on-chain DEX liquidity under an API to make it easier for developers to improve asset pricing and reduce slippage for their users.”
With a few lines of code, developers can now connect to the API, receive a quote with the best prices available across decentralized exchange networks and execute a transaction at its best price. “It reduces the barrier of entry for developers and makes it easier to interact with the 0x protocol in terms of technical maintenance and user experience, including faster response times and reduced gas costs.”
On rising crypto adoption in LatAm
As the former Head of Payments at the Mexican cryptocurrency exchange, Bitso, Morales saw first hand how crypto and blockchain can help close the financial inclusion gap.
Mexico is a predominantly informal, cash-based economy. Large swaths of its population are excluded from the modern payment scheme; 70% of Latin America and the Caribbean’s population or 400 million people do not hold a bank account, as the IMF reported last March. However, internet and mobile phone penetration in the region have shown remarkable growth over the years, making it fertile ground for Fintech operations. There are more than 1,000 Fintech startups in LatAm, with Mexico leading the charge. Collectively, these companies have raised over $1 billion in funding from marquee investors — regional and international alike. Fintech companies in the region primarily serve the unbanked and the underbanked.
It means a changing demographic and environment in which crypto users interact with money. Fulvia shares some of the exciting things happening with regard to bancarization and financial inclusion. “In 2019, Bitso had 3X more accounts than the Mexican stock exchange, and for many of our users, their Bitso account was their first ‘bank’ account. A lot of users were indeed speculating with cryptocurrencies, but many others were also using them for more interesting things. For example, instead of asking their parents to buy their online video games or borrowing their credit cards, users asked their parents to fund their Bitso account so they could buy them themselves on platforms such as Steem. Another use case that I am super excited about and got the chance to build for at Bitso is remittances.”
How has Bitso gotten creative in serving its users? “In Mexico, we have Oxxo — a retail store serving 15,000 locations across Mexico. It is the largest correspondent bank in Mexico. Any Bitso user can come into one of these locations and fund their Bitso account using cash,” she said. “Users are given a unique barcode, the teller scans the barcode and inputs the information, and if the data matches, we approve the transaction. Having a Bitso account means you are committed to the Mexican payment system.”
What are some of her on-the-ground takeaways? “While countries across Latin America face problems with financial inclusion and share similar cultural roots, these countries are actually very different when it comes to crypto adoption and use cases. Some countries like Venezuela and Argentina are using cryptocurrencies as store of value. Other countries like Mexico are using crypto for remittances and online payments. A solution that works in one market may not work in others.”
On building use cases that make sense
“People do not need to understand crypto to use crypto. It is our role — the companies building use cases on top of that technology — to make crypto accessible to everyone. How do we make sure we do not repeat the same pattern and exclude people? Instead, we need to move towards democratizing access in a way that transforms how we fundamentally interact with money.”
Among the many things she is excited about? Leapfrogging the developer experience, DeFi and the growth of crypto-based remittances in Mexico.
“Developer tools are improving quite rapidly. dApp developers now have access to APIs, SDKs and other tools that did not exist a year ago. As the IDEO CoLab puts it in their State of Adoption report released this year, improvements throughout the stack have allowed for “creative bandwidth” that enables developers to build better products faster. This is why we built 0x API and why I am so excited that some of the best teams in DeFi are already using it.”
“Over the last year, we have seen the DeFi ecosystem grow exponentially, with over close to $1 billion in value locked. A lot of interesting things are being built — from money markets, to loans, to synthetic assets — but what excites me the most is the improvements in user experience that some of these products are bringing to the world. We have lately seen a new wave of products — like Zerion, Argent, and Dharma — that make it easy to onboard people who are not crypto-savvy and enable anyone to use and benefit from these technologies. Products like these are what will help us grow the pie in the long term and reach mainstream adoption.”
Blockchain’s potential for the formalization of remittances has also gathered momentum in recent months. Mexico is the third largest remittance-receiving country in the world, with over $30 billion flowing into the country annually and 1.7 million households receiving money from their families abroad.
“The first project I worked on at Bitso was a product to help large remittance companies use crypto as a rail for currency exchange to make remittances to Mexico more efficient and cheaper. We were providing 3–5% cheaper remittances than the traditional market players. Multiply that times 30 billion and that is a lot of money that immigrant families could save.” Indeed, a Xoom study found that digital remittances could save recipients an estimated 15 days over the course of their lives or nearly 100 million hours and $450 million in economic value for the economy.
Bitso recently announced that in 2019 they captured 2% of the total market and they are targeting 20% by the end of this year. “I am rooting for them and looking forward to seeing how this plays out as it represents a huge benefit for Mexican families and a great example of the positive impact of cryptocurrencies.”
On bringing more women into the space
“We need more representation in the space. Otherwise, we risk making the same mistake made by the various industries we seek to disrupt. People in crypto, especially in DeFi, constantly talk about banking the unbanked, but when I look around the room, there is frequently a low number of women (if any) participating in the conversation. I cannot wrap my head around the fact that the people that as an industry we think we are trying to serve are not part of the conversation — this must change.”
This was what led her to start the Instagram account @cryptoladiesclub this past July. “To bring that much-needed diversity, I think we need to start making these industries more relatable,” she says.
Posting memes and visual graphics, the account breaks down basic blockchain concepts and lists introductory resources to get started. “Education is important. In many ways, the space still feels like it only caters to highly technical people, which leaves out the majority of the world’s population. My goal really is not to reach people that are already familiar with blockchain but to bring people that are not.”
As for the engagement she has seen? This reaction says it all. One user writes to Fulvia: “Every time I chance upon an article or podcast about cryptocurrency, I shy away and back off! I think the space you are creating is much needed.”
“In the end, I am in the industry because I believe we can do good things for society. Demystifying the lingo and sifting through the misconceptions is an important first step to witnessing the impact blockchain has for our financial freedom.”
