Thibaut Sahaghian: Crypto-First Business Banking (from EthCC 3)

Transcript

[Music] I'm here with Tebow's Aguila I'm a former stratum colleague it's nice to sit down in here in the booth and talk about what you're doing now I mean you've been working on this for a while went to SF for a while to bootstrap the project and now I don't even know where you are if you're back in France or whatever but a lot of people are talking about beauty see in the space it has surfaced as one of the more serious projects around crypto banking and I'd like to talk to you about you know what

what is mootisse but also kind of trends with regard to defy and what you're seeing there so thanks for joining well thanks for having me I guess I'll start with a few words on you know Maltese so we were rebuilding a solution a banking solution to help companies run business with crypto we started the company like back in 2018 late 2018 with this idea of creating you know a gateway to defy two companies so that they can basically love rage financial services in addition to nice fashion which means you know instant access to those loans to all this kind of financial services you would expect from traditional banking yeah you have a bank account you want to be able to exactly and you know

or money or you know invest a six days except that you should be able to do safely from your you know with your crypto so you know you're replicating those those features you have a current account you have a savings account and you know I can talk about define how we do that later but you know again we were replicating this stuff so we started in 2018 and you know we we've come a long way since then we went through which one wine could be data during the summer hence you know this timing wise in in California a lot of things have happened since then and we know back in France and to answer one of your questions ok cool so you're back in Paris no we are have to go get a beer or something

so what does muties look like like you know I'm a company and I have crypto or I you know maybe I did an IC o---- and I'm I'm leveraging that crypto to run my business to pay my employees to to rent you know pay pay for rent this sort of thing what what does muties provide for these right now you know we are building a solution that looks like exactly the same as your modern business accountz business bank account I hope now because my modern business the kind of well you know that's one of the things I keep telling my co-founder you know it's not you know we're not gonna get there only by providing crypto based services right we

need to be 10 times better than actual existing solutions yeah so that was driving for you know offering the best of the two words access to the Sun drives furnaces but at the same time you know just killing away all related frictions and make this thing prettier down exist the oceans there's this is a huge challenge but we're getting there slowly so to answer your questions it's if you think about Neo banks and 26 travel the business cetera we're replicating the same user experience with crypto as an infrastructure layer so it looks like it's a SAS solution really and you can invite your teammates with the emails so that you can you know set up permissions to manage defense collectively so we use the multi signature wallets for those familiar with us okay which multi is a solution are you using so we we initially started

building with the with the 2070 knows a smart contract which is beautiful tool it's robust resilient it's bulletproof it's amazing but we we wanted to get rid of gas fees transaction fees so we had to we had to make them to upgrade them to make them compatible with you know the gas station network to get rid of fees so we we know have our own volition entry wallets that we call and yeah I mean we we have many audits to make sure that they are bill approved to and now we have more than 100 companies using them so okay so you chose to go down the road of building your own smart contract and so maybe it's like the good no system our contract doesn't support the

gas station Network the the old one mm okay I think I think the I mean they were great team and I think they're doing stuff around you know meta transactions and better gas fees with a new one but you know the beauty of the 2017 one is the simplicity of it it's a bust a lot of ico you know companies you know stalled IC o---- firms on those wallets so we felt like it was better to go with the old one that is for now and just you know slightly amended to support ESA it's it's it's one what line of code yeah nothing else right we've in terms of security we felt that there was more that was the way to go okay and but the the overhead and sort of also the risk of now maintaining your

own smart contract like that that that trade-off was was a good one for you and rather than just using a solution an existing solution it's a simple line of code so which means we you know each time there's an upgrade and ignacio's we ignore this 2017 one we upgrade it as well so basically doing this and well I'd like to say that beyond this you know very code approach if you will we actually have insurance as well so we're partnering with Nexus Metro so that we can provide it's kind of you know security additional security so the funds are also insured yeah I mean the smart contracts are technically insured

right if there is any anything you know happening to the smart contract then you get covered by the mutual Nexus mobile phones and get your friends back cool so what kind of companies are using Moody's can you talk about some of them yeah I mean you know we've been companies here at ETSU see for example we have we have a request network we have I exact we have a connector in the u.s. we have a we have about 100 companies today mostly crypto companies crypto what we call Krypton crypto native companies yeah companies building with crypto companies you know just trying to do some duck footing basically yeah and what what are the one of the types of features that crypto native companies look for in

their in their to a bank that you've discovered you know don't exists in you know your regular banking infrastructure what are the new paradigms that are emerging in this you know we're actually quite surprised because people get super conservative when it comes to their company's money so we tried all these kind of exotic stuff like automated traded straight trading strategies with token set so that companies can could actually gonna grow the even holdings well it did not take off really no because you feel like you know at the end of the day you need somebody I mean you're very conservative on your money because that's technically your runaway you needed to keep building so so people people tend to to stick to very

traditional features and you know if we if we sum it up we're providing the basic features of Bank we're just adding you know instant the howdy call that we instant access for example if you want to put some money in your savings account or if you want to you know invest your money to get some additional years to optimize your Treasury well you would need at least two or three weeks if you have enough funds with your you know asset managers or you know bank advisors with multis you can actually do that in one transaction so it's pretty powerful too much to Treasury in extending run away mm-hmm and again you know same thing with a lot of features that we're building the payroll is a huge use case for us companies love the address book they can save details and just you know send every month crypto to

two companies one of the cool things to conclude them we could add is a new integration with Sevilla here so we could basically with it's a sable sadly it's like it's money me streaming smart contracts so basically you lock funds in a smart contract and then you stream them every minute or day or you know week whatever we replace this component sorry what would they use those for payroll so basically yeah yeah that's my role so you know I'm hero unless streaming payroll oh that's so cool it is cool it is cool so that's that's actually one of the hue very exotic new services enable my crypto that that our users really love one of the first ones

ayat sorry is anybody doing that well not yet because in certain domains ok the park but that's that's something we are into building it and companies want to use this like they want to try them yeah I mean you know I would love to know like once once you've launched this like if the employees that choose to have streamed payroll or stream salary yeah cuz I mean that that just totally changes like the it's the entire paradigm of how like people get paid and how people pay for things like you know I mean you get paid to get paid at the at the end of the month and so your rent is like right after and like you're all your bills come within the first 10 days likely it's all that stuff is built around a paradigm and people get paid

once a month and you know if you think about it you know it's like right now this kind of streaming is is a perk just like you know health coverage was at the beginning you had company is selling paying fight right work so attract the best talents you know tomorrow it will be a norm just like health insurance used for committee today streaming money to me will be the same thing and it will be powered you know enabled by our solution that's really that's that's an interesting because I'm psyched like this yeah that's cool and so what are the what are the defy integrations that you've implemented and which ones are getting the most usage do you actually have kind of like user data

are you collecting that kind of stuff we do have some data so we have some figures which why we don't publicize all of them obviously because those are companies those are companies fund so we need to be careful yeah but I'd say that out of the 100 companies we're helping today more than 50% of them just invest funds through compound which is one of the Defiant equations we we built the more conservative one yeah I mean you guys DC NC and die so pretty stable and that's a good way to diversify you your holdings get interests it's super easy to do that and yeah 50 percent company are using it so this is by far you know the most compelling defiant equations we have today another one we have today

which is doing well is khyber so we integrate and attacks actually can do some talkin swaps going pretty well and i'd say that we have many others we you know the beauty of the device by compressibility is that you can actually try different kind of spawn contracts test and very easily and you know add new features or you know get rid of them if they don't work mmm interesting one of the one of the big challenges that we had an epicenter in the early days when epicenter was a cryptid only company like we were a crypto only company in 2014 we just moved away from that we kind of went backwards on that one but

yeah in the early days like all our customers would pay us in crypto and we would pay most of our suppliers also sometimes in crypto or you know we had some on ramps and off ramps to to get into the Fiat but it was it was very like makeshift E and one of the things that was really a challenge was the accounting and I mean that's also one of the reasons not only only reason but one of the reasons why we kind of moved away from crypto is just cuz the accounting was just so complicated and we were only dealing in Bitcoin yeah so what's been your experience on this I like are you are you offering kind of solutions to

help make that easier with in movies or partnering with so companies that might do that two things here one of the big changes you know from the early days is the fact that today can use table coins it's a big deal of companies it means that you can actually benefit from you know instant payment I mean time efficient cost efficient payment without struggling with volatility so if you replace Bitcoin with dye you can keep you know hanging with crypto but you benefit from the same at least in France and most European countries and the US as well by the way you benefit from the same environment accounting environment at treatment as for foreign currencies mmm USD for example so solve the solves the

number one issue which was how do you deal with valuation situation but like some companies might want to hold you know either Bitcoin or just because they're long only for Bitcoin yeah so in that case we will not be able to help them fully okay so we provide transaction history and CSV export and you know we add some data so that you can hand it over to your accountant to your dealers etc okay but when you have a lot of holdings we're partnering with companies like very ledger creep Co et cetera yeah so that you can you know use this data because you're holding us it's with us and you know very easily import them through API but you're providing the data so you're providing the transaction history and like the exchange rate correct we don't

deal with valuation which is like totally different business sorry we don't deal with a you know valuation fluctuation because you need you know that's the thing you need to provide accurate data you know if you talk to your accountant you'll you'll need to explaining why if went to this prize to the other I mean there's a lot of complicated things that we don't want to do really know what you mean I mean you should I mean like you just need the exchange rate at which it sort of entered or what when do you when do you evaluate it when which they which they do use the accounting treatment okay so yeah you use it as do you use it as money or to use it as an as an asset all right you know all those questions are trying to be they are being solved but

really for these I would recommend to use a professional accountant or an accounting software like QuickBooks sure we're building a Korean Seoul Korean account a bank so you know in legacy world you also need a bank account and an accounting solution so really trying to stick to that model okay yeah interesting what are some of the what are some of the trends that you guys are looking at in terms of you know building immunities and like the services that people like this streaming thing is one thing but what other things do you anticipate will come out of immunities in the future well you know we the whole idea of multis is to build

a new kind of banking stack starting with crypto which means you have to build the you know those features with crypto first that's what we're doing now well if she OTT is not going away yet currencies are not going away so it's clear that the bank will have to bridge those two very separate worlds and we're building that Bank which is starting with crypto one of the key things that we hear when we talk to our customers is the need for a way to spend in your local restaurant we are working hard to provide a debit card so that you can spend directly from your diagnosis to Tk let's do exactly plus you get some yards you get some yield and that's pretty cool okay yeah in France we have these

things called meal card so a lot of companies will offer these meal cards to their employees and you basically get like you know you get ten bucks a day and it's it's sort of an advantage advantage in kind anyway okay interesting this is one of the biggest thing we're working hard on and and you know one of the other things I mean it's pretty it's a continuous of yet features we want to provide but we we will provide a ban in fat accounts you know that's that's what we called crypto first banking we're merging those two words we're providing wallets you know business design wallets and access to the centralized financial services but

at same times we're providing fiat features so that you know companies can basically benefit from the very services whatever the underlying infrastructure is hmm I mean this is this kind of stretches outside of the realm of of crypto banking but are you aware of this this instant SEPA feature that the banks are now implementing yeah I mean they've been trying they've been trying to implement it for like 20 years now yeah yeah but it's likely it's likely that we it's it works it works for for for less than 500 euros yeah today in the European that's amazing yeah and and you know that's why that's why we really have this belief that you know shut and traditional

payment system will not disappear fully yeah but for some use cases crypto will be a killer you know cross-border payments everybody's talking about that but that's that's one of the key things crypt is good for if you want to send 100,000 dollars - you know China Japan or whatever the countries well you will not use it oh sure no but we descriptive but within Europe I think like the the instant supper thing so instant SEPA is for our foreign non European listeners so SEPA is the the payment service payment network payment network in Europe that allows you to send money

from any European bank to any European bank using an Iban and instance that allows you to do that you know whereas before it would take maybe a day or two if you're going internationally it's instant I mean I was I it happened to be sort of by accident the other day I transferred money from one of my accounts to the other expecting it to take 24 hours but I got a text message in 20 seconds saying like here's the money I was like what and and that's reading about it and it's actually like a really interesting evolution to the SEPA Network and we if you think about it like okay it doesn't have all of the aspects of crypto but like what is a separate address a separate dress isn't is sorry an Iban and I Ben is in unit of letters so identifier to a bank account

increasingly with things like revolute you can have multiple I bands so you can create an Iban maybe for your savings your your personal account maybe you have like an out and account with you know where you like have a joint with your your partner so I'm like that and but what's interesting is that you know we can we can think about building infrastructure on top of SEPA so someone could build like an IO V or maybe even io v could integrate with with AI bands so that you could also have your I ban in your Iove address and so sort of building all all this kind of interesting stuff that we're doing in crypto because of this instant the ability to have instant payments some of

those things can carry over I think to the traditional finance world and so all the experiments that are happening in defy like the super super far far out experimental stuff some of those things might be transferable into the traditional banking there are obvious synergies there and you know it's it's it's really why we wanted we have this vision of you know making those two worlds into a parable it doesn't make any sense to build like in a silo one and you know replicate things that the others are doing and I think I think we will see services that can only work with crypto we mentioned money streaming you can

undo that with traditional banking system well we can do that with crypto so the whole idea with instant steppin well you would you would need an intermediary to streaming you will be able to send it every two weeks or three weeks but if you want to start programming it it makes things much more complicated so you know as as soon as you get beyond you know mere payment you kind of restrained by the the 30 years or 40 years of you know iTunes banking infrastructure that banks have been building and SIF is a good thing but they needed 30 years to to implement it yeah so innovation goes faster than that so you need you need to be the end in to build this innovative layer of infrastructure to provide new new

services like streaming like you know like instant invoice financing you know if you think about it you can use you know you can tokenize invoices and use them as collateral yeah that's really good to get instant financing so that's something we'd provide but with traditional banking well sip or not you still need two weeks to do that so when you are in desperate need for cash well you're stuck so that's the kind of things in something your services that crypto can help provide on top of additional services that I'm proving slower so you touched on something there which is interesting so you the the organization of invoices is that is that something you guys are working on so we

are factoring absolutely yeah effectuation for furniture so the idea is the ad is to basically get some cash ahead of receiving your receivables yeah so you know you you you work for for for a client and they they have a 60 days payable policy and so you your invoice in 60s they usually wait until the 59th or the 60s day to actually pay you so you're stuck and if you're a small if you're sure small business that's hard actually in a reason number one for small businesses to go bust so so what we have in mind here is that you can basically transform this invoice from a reputable company you can transform it in a token this

token can be used as collateral so you can lock it in a smart contract and provide loan against this collateral without the need of an intermediary so coming you can company is called centrifuge started doing this protocol katene like that we're considering to integrate could be a super powerful solution and you know could really talk to mainstream mainstream companies beyond the sole crypto space cool so what's next for you hiring hiring hiring how many people are you hiring I mean are you by the way well we are just the two of us now yeah we're super pretty small we've been going super fast but now we need some help raised how much

well we don't disclose the the figures yet but we we've raised enough to have a team of ten people and be at ease for 24 months so let's go okay so it's a good a good ways that will help us you know provide us Bank and he had features so we're hiring for that you know between four and five engineers we're using closure script if any of you guys are listening closure script which is a very you know advanced language come talk to us so DDT obviously we're dealing with small contracts we're hiring marketers to help us go mainstream and and yeah product designers to make the solution even prettier cool and you're doing all this here or are you gonna build a

remote company well we all know we are remote friendly company okay I think kind of makes sense when you you know building with distributed technologies right yeah so remote company but the main office is in the one domain of his actually in San Francisco so we're building from here because it's we get access to huge I mean a huge pool of talents so yeah make sense here the FinTech space is always you know a little bit more inventing you up and we in yeah will hiring people remotely as long as they're on Western Europe so yeah I mean time difference makes things hard sometimes so we wanna stick to the same one cool thanks T well thank you so much