Fintech meets crypto

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Fintech 🤝 crypto #2
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Fintech 🤝 crypto #2

DeFi 2.0 is here, Mastercard joins the crypto game & stablecoins deserve regulations

Paweł Trybulski
Nov 1, 2021
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Fintech 🤝 crypto #2
fintechmeetscrypto.substack.com

Hi 👋

Time flies, right? So many things happened last week! Welcome to the second episode of “Fintech meets crypto” (reading time: 7 mins).

If you want to get new episodes directly into your mailbox, hit the button below:

Alright, let’s go! 🚀


Fintech meets crypto #2 by Paweł Trybulski

Weekly theme - DeFi 2.0 🤔

Last week I wrote a short introduction to DeFi - Decentralized Finance. What it is, what protocols are the most important ones and how it differs from the traditional finance ecosystem.

This week I would like to introduce you to… DeFi 2.0. You probably ask: wait, what? Standard DeFi seems to be still in the dynamic development phase and now you are talking about version 2.0? What the heck?

Over the past few weeks, you may have begun to see the term “DeFi 2.0” appear on crypto twitter.

But what is DeFi 2.0?

How does it differ from the “classic” DeFi?

The simplest explanation would be:

DeFi 2.0 is a general term for the second-generation of DeFI protocols. If we think of Compound and Maker as the original blend DeFi, this next wave of projects is the macchiato. Though there are ingredients that are familiar, there are also some others that are supposed to be totally new.

Some examples of DeFi 2.0 protocols are:

  • OlympusDAO (huge hype here! 🔥)

  • Alchemix

  • Tokemak

  • Rari

It’s not easy to grasp the idea of DeFi 2.0 movement. One good explanation is this one, by Rhys Lindmark:

One frame that I found helpful is that it's GenZ kids (Crypto Class 2018) who grew up on liquidity farming and DAOs, and are now iterating on those mechanisms.

When DeFi 1.0 was being developed, there wasn't much before it. MakerDAO CDPs were an innovative thing. But now they're just the water the GenZ kids swim in. Table stakes.

The basic, old good DeFi 1.0 protocols were created 4-5 years ago. Now a new wave of protocols entered the market and they can be seen as a second iteration.

I strongly encourage you to go and read an amazing piece by Rhys Lindmark:

  • CryptoBoomer Guide to Defi 2.0 👌

if you want to know more about DeFi 2.0 movement, what is going on in the space right now, how it started and what the future might bring.

And if you are more into the youtube content, here is a short video about DeFi 2.0:


Happened last week 👀

1) Mastercard wants to offer crypto services to any bank or merchant 🌎

  • In short:

    • Soon merchants & banks within Mastercard’s payments network will be able to accept crypto and offer crypto rewards.

    • To do so, the payments network is partnering with Bakkt which will be the behind-the-scenes provider of custodial services.

  • My comment: Big news. Seems that Mastercard finally joined the game. VISA has been active in NFT & crypto space for some time now. It was pretty weird seeing Mastercard that inactive compared to its main competitor. More details should be known in the next couple of weeks.

2) Facebook goes big with Metaverse 💥

  • In short: Facebook will invest billions of dollars to build their “metaverse” ecosystem in the next years. Plus they have changed the name to… Meta 🤷‍♂️

  • My comment: Mark really wants to be remembered as “Mark-the-builder”, doesn’t he. And now he wants to build the metaverse. First the announcement of pouring gazillion dollars into the augmented reality projects. Three days later - changing the name to “Meta”. I expect them to fail miserably. And this is why:

Twitter avatar for @kukulabanzeRyan Zurrer @kukulabanze
Microsoft didn't win search, Google didn't win social, and Facebook won't win Metaverse. The scrappy youth movement always wins in tech and Web3 is where the cool kids are. Do the math.

October 29th 2021

117 Retweets667 Likes

3) Crypto body lobbies the US on stablecoin push 🏦

  • In short: The US lobbying group published a letter to the top US officials where they argue that stablecoins should not be regulated as securities or money market funds. Meanwhile, USDC (one of the stablecoins) has done $2 trillion in on-chain transactions:

    Twitter avatar for @glassnodealertsglassnode alerts @glassnodealerts
    📈 Cumulative $USDC Transaction Volume just went above 2,000,000,000,000 USDC. Current value: 2,000,088,180,525 USDC View metric:
    studio.glassnode.com/metrics?a=USDC…
    Image

    October 28th 2021

    8 Retweets56 Likes
  • My comment: I encourage you to go and read this letter. These guys make really solid points. They state that:

    “Stablecoins, a type of digital payments instrument, bridge the gap between the innovations of digital tokens and the functionality of legacy payment systems.”

    and this is true.

    The American payment system is old and archaic. Financial infrastructure is outdated. If they can regulate stablecoins in a proper way, they can win a lot.

4) Klarna & Stripe join forces in the ‘Buy Now, Pay Later” battle 🤝

  • In short: Online payments processor Stripe has entered a strategic partnership with “buy now, pay later” company Klarna, allowing retailers easily to add an option for customers to pay in installments.

  • My comment: The battle to dominate the BNPL market is still ongoing. Almost every week there is news about another merger, partnership, or acquisition in this space. This week brought us huge news. Klarna & Stripe are well-established fintech players. This partnership will help both companies to get a bigger chunk of the BNPL market. Smart move.


Great reads worth your time 📚

1. Why Wallets Excite Me Again (by Richard Burton)
  • Really good article about the state of crypto wallets. How it all started and where are we now. The progress is clearly visible but there is still much to be improved.

2. Invisible Hierarchies (by Dror Poleg)
  • Interesting piece about how DAOs (Decentralized Autonomous Organizations) can be seen as a new type of employment that may disrupt the existing status quo (traditional corporations fighting for talented employees).

3. The case for digital assets (by Eric Peters)

Money is an illusion, perhaps the world’s greatest mass delusion. Out of desire and necessity, we succumb to the hypnosis. Without money, we are lost. And while we cling to its supposed permanence, a quick survey of history tells us money is anything but.

  • A must-read essay for those who still claim that digital assets are worthless.


Gold Tweets 🏅

  1. If you ever wondered what it takes to build a challenger bank from scratch:

    Twitter avatar for @heysamir_Samir @heysamir_
    0/ If you want to build a US challenger bank from scratch, you're not going to be able do it alone (if you want to move fast). To make modern fintech banking happen quickly, here's the 13 most important strategic partnerships you need + common deal unit economics 👇 👇

    October 18th 2021

    58 Retweets419 Likes
  2. Solid thread about main use cases for NFTs:

Twitter avatar for @__mikareyesMika Reyes / mikareyes.com/eth/sol @__mikareyes
Today, I'm observing 8 broad class or use cases of NFTs 👇

October 26th 2021

11 Retweets37 Likes
  1. If you still think that you are late to the party:

Twitter avatar for @NathanCRothNATΞ R◎TH @NathanCRoth
web3 is growing much faster than web2 ever did.
Image

October 25th 2021

25 Retweets125 Likes
  1. And three more great tweets 💯

Twitter avatar for @gaby_goldbergGaby Goldberg @gaby_goldberg
New York isn’t New York because of Wall Street. It’s New York because of Broadway, and Brooklyn, and the music and shows and art and cuisine. Similarly, crypto won’t hit mass market with just DeFi. Crypto needs culture to survive — NFTs, musicians, artists, everyone in between.

October 23rd 2021

99 Retweets1,011 Likes
Twitter avatar for @0xJimJim 🌊✨🦇🔊 (3,3) @0xJim
Facebook is now Meta Twitter is decentralizing itself and adding NFT support Visa is building an L2 Tesla is working on Bitcoin/Doge dev And people still think crypto is only for criminals?

October 28th 2021

677 Retweets3,076 Likes
Twitter avatar for @NathanCRothNATΞ R◎TH @NathanCRoth
If your idea of money is what it was yesterday... You will lose it to the people who know what money will be tomorrow. — Naval

October 27th 2021

31 Retweets139 Likes

That’s all for now 👋

Next episode - next Sunday. Have a great week everyone!

Remember, if you're enjoying this content, please do tell all your fintech and crypto friends to check it out and hit the subscribe button!

Feel free to follow me on twitter (or send me a DM).

Cheers,

/Paweł

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