Matrixport’s Head of Public Relations Ross Gan
DeFi, or decentralised finance, is the future of banking and gaining mainstream adoption.
DeFi enables users to make deposits, earn interest, lend, and borrow. But what makes DeFi unique is that it is much faster and no paperwork/third party required. All thanks to blockchain.
Singapore-headquartered Matrixport is a DeFi company offering crypto investment products. It provides a suite of cryptocurrency financial services, including institutional custody, trading, lending, fixed income, spot OTC, structured products and asset management to institutional and retail clients.
Its mission? To make crypto easy for everyone.
“Our name Matrixport reflects its vision to make crypto easy for everyone. ‘Matrix’ represents a future empowered by digital assets, and ‘port’ means a gateway where you can get more from your crypto,” Ross Gan, Head of Public Relations at Matrixport, told e27.
The fintech venture was established in 2019 by Bitmain’s billionaire founder Wu Jihan.
Also Read: What is the next big step in DeFi?
Matrixport provides a gateway to invest directly into DeFi within several taps on its app “with full transparency” on yields. It provides one-stop crypto financial services to meet the emerging needs of generating long-term wealth in digital assets. The services include Cactus Custody, spot OTC, fixed income, structured products, lending, and asset management.
Institutions, corporates and high net worth segments in Asia represent a majority of Matrixport’s customers.
Thus far, Matrixport has raised US$129 million in multiple funding rounds. It included a US$100 million Series C round from DST Global, C Ventures and K3 Ventures, among others, in 2021, making it a unicorn. Its other backers include Qiming Venture Partners, IDG Capital and Dragonfly Capital.
The company holds licenses in Hong Kong and Switzerland, besides Singapore.
According to Gan, the number of investors using its app increased 427 per cent in 2021 over the previous year. “In 2021, NFTs witnessed tremendous growth in volume, reach, and new users and their applications. NFTs have grown across industries, such as art and collectibles, games, entertainment and fashion, with use cases for community engagement, content monetisation and social interaction.”
He believes that with the rise of Web3 virtual content consumption, another wave of crypto adoption will be via gaming and NFTs besides crypto financial services.
“The rapid development and ambitious roadmaps published by NFT brands, games and metaverse have exposed bottlenecks in the current NFT technology stack. We’ve kept a close eye on the space as the need for a financial layer of NFTs becomes increasingly apparent to support the accelerated growth of the NFT industry,” he explained.
Matrixport has also set up a venture arm to forge strategic collaborations with early-stage Web3 innovators, helping them build, grow and scale. An example of this is its strategic investments into players in the NFT space, such as BendDAO, Stakes and Polemos.
In Gan’s opinion, blockchain technologies and digital assets will eventually disrupt and enhance nearly every industry and sector of modern society. Matrixport believes in its potential to complement and improve the existing global financial services infrastructure through innovations, such as DeFi.
“As adoption widens, we believe user needs will transition primarily from trading and mature into asset management. Matrixport’s mission is to provide one-stop digital asset financial services to meet this emerging desire to generate long term wealth.”
The future of cryptocurrency
The valuation of digital assets is on the rise, and according to Gan, there are two fundamental countervailing factors driving this.
The first is the global adoption of digital assets. This adds liquidity to the overall market capitalisation of digital assets. Demand for exposure to them will continue to grow, supported by the development of new use cases, such as DeFi, with continued VC investments.
These innovations will impact a larger footprint of stakeholders by enhancing efficiencies, lowering costs and filling market gaps not well served by the existing financial services infrastructure.
The second is the overall macro-economic sentiment and outlook. The current inflationary environment and the expected rise of central bank interest rates, particularly the US Federal Reserve, will dampen valuations across all asset classes, including digital assets.
The future of finance
The nature of blockchain technology is that it empowers localised interest groups, regardless of scale, with tools to build and financialise their own assets and currency within their communities, including NFTs and governance tokens. This has catalysed a new wave of fintech innovation that will see Bitcoin’s dominance continue to wane as more tokens are introduced, where those with strong use cases and robust utility will become popular and widely used.
Also Read: The unrealised importance of DeFi in fixed-income securities investments
While there are liquidity benefits of having a “global cryptocurrency”, its associated natural monopolistic tendencies will mean it will be less relevant in the immediate future.
He also spoke about the central bank digital currencies (CBDCs). In his opinion, CBDCs could significantly reduce the layers of intermediaries involved in domestic and international remittance. There are several projects in the region at various stages of research and development to study how CBDCs could be applied to their financial systems.
“A major motivation for many national banks in launching CBDCs includes building a more efficient and inclusive payment system. These cost savings could consequently be passed on to businesses and individuals. Once CBDCs are widely launched, there is a possibility that they will be competing with privately issued stable coins, as these digital currencies would bear digital identity features and compliance with the issuing authority,” he said.
“Overall, we can expect a diminishing role of stable coins, as their use case would be reduced if the CBDCs can be used across regulated and unregulated spaces,” he concluded.
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