Cryptocurrency, digital currency, blockchain, banking, fintech

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The pace of crypto has quickened in India, after the ban was lifted by the Supreme Court in March this year. How has crypto fared in the world in an already weird year where the pandemic has been stressing out economies? What new trends have emerged?

To get answers, The Tech Panda reached out to several experts and entrepreneurs in the crypto space. Thus, we present a ten-part crypto series this month. Keep watching this space to learn more about this burgeoning fintech tool.


Even though the world is a lot more digitized than before cryptocurrency made its first appearance in 2008, the toughest challenge that the space still faces is to be trusted. While financial experts are divided over opinion regarding the usage of decentralized currency, several digital currencies are available for speculation and investment. These include, not just Bitcoin and Ethereum, which are easily the most popular, but thousands more like Ripple, Litecoin, Monero, Dash and Zcash, to name just a few.

What if an organization dealing in cryptocurrencies behaved like a bank? A bank that followed regulations and you could trust?


Read more: Cryptonized: OroPocket Launches India’s First Gold-Backed Token on Tezos


Vauld, (previously Bank of Hodlers) aims to create a banking system that is faster, more secure, and decentralized than traditional banks. The way they want to achieve this is by leveraging permission-less blockchains.

The Tech Panda spoke to Darshan Bathija, CEO and Co-Founder of Vauld about their mission as well as several explainers about the crypto space.

Darshan Bathija

We want to enable a better experience around banking, while keeping the goal of long-term wealth retention on behalf of the user at the center of everything

“We want to enable a better experience around banking, while keeping the goal of long-term wealth retention on behalf of the user at the center of everything. This is why we started off as a lending platform,” he says.

Banking with Crypto

Vauld caters to provide all the banking solutions for crypto, including the core crypto needs of owning, lending, borrowing, trading, and spending. Users can leverage the platform to manage crypto holdings, lend and borrow, buy and sell, and swap with all major cryptocurrencies.

“The reason why we are passionate about banking with cryptocurrencies more than anything else is because we believe that this is the best form of money, it is the most customer centered form of money that has ever existed,” says Bathija.

To make this happen, the Vauld team did a deep dive on what most people use a bank for and identifying the gaps in the crypto space. They realized that retail banking, as we know it, is primarily used for three things: safe storage of money done through a bank account, an easy and instantaneous way to pay for things done through cards, UPI, and wire transfers, and if capital isn’t being used, it´s in some form of a system of credit.

The reason why we are passionate about banking with cryptocurrencies more than anything else is because we believe that this is the best form of money, it is the most customer centered form of money that has ever existed

That meant, on one side, they are generating and earning a yield, while on the other, they´re getting leverage and paying interest on that. This leverage could be either in the form of a loan or a dynamic line of credit, like a credit card.

Crypto, says Bathija, already caters to two of these requirements. A Bitcoin wallet or any cryptocurrency wallet, similar to a bank account or a Paytm wallet, is a form of clustering funds.

Cryptocurrencies, as has been described in Bitcoin’s white paper, is a peer to peer electronic cash system. Users can send and receive cryptocurrencies from one wallet to another, similar to Paytm wallets or UPA handles.

This is what stirred the Vauld team to start building a system of credit.

“We treat your cryptocurrencies as a separate asset class and offer services to ensure technologies based on blockchain are usable as of today, negating the need for nation-wide, as well as government acceptance to disrupt the banking sector,” he explains.

Vauld is building products and services that align with the philosophy of decentralization. They intend to become the bank of the future and the go-to bank in a society that uses cryptocurrency and the underlying blockchain technology as a medium of exchange and a store of value.

The Vauld Wallet

Explaining the theory of their wallet, Bathija says that it is based on the obvious premise that when a user has the option of choosing between one wallet versus another, they´re obviously going to be far more inclined towards choosing one that drives their financial interest.

At the moment, on the platform, our wallet infrastructure works exactly like a wallet that you would have otherwise used on any crypto platform, except that we natively pay out interest every Monday

Thus, Vauld generates financial interest on one side, and on the other side, they generate the yield people are looking to over collateralize and get a line of credit. They´re a simple net interest margin business, which makes a small percentage between the interest that they charge and what they pay out to their users.

“We’re able to over-collateralize and offer the line of credit against these asset classes. That’s pretty much the business,” he says.

As soon as a user deposits funds to their Vauld wallet, it goes to a centralized pool. From this centralized pool, the funds allocated for lending are lent out to borrowers (with a float maintained for withdrawals on the platform). This is what allows them to give interest to their users.


Read more: 73%+ Argentines Prefer Crypto Investments Amid Rising Inflation: Paxful Survey


Vauld claims that their loans to their borrowers are risk free. They are over-collateralized by at least 150%, and are typically repaid in 30 days. The funds allocated for trading are stored with a trusted exchange partner, which currently is Binance, to facilitate trades on their order books.

“At the moment, on the platform, our wallet infrastructure works exactly like a wallet that you would have otherwise used on any crypto platform, except that we natively pay out interest every Monday,” he concludes.

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