(L-R) Finblox Co-Founders Peter Hoang (CEO) and Dmitriy Paunin (CTO)
High inflation and low bank deposit rates have triggered a massive spike in worldwide crypto adoption, which reached over 880 per cent in 2021 alone. Emerging markets such as Vietnam, India, the Philippines, and Brazil ranked among the highest on the global crypto adoption index last year.
Yet, only a tiny fraction of the population in these markets has had exposure to cryptocurrencies.
Peter Hoang and Dmitriy Paunin sensed an opportunity there and started the crypto savings platform Finblox. The duo, who have years of experience dealing with crypto-assets in the past, also attracted an oversubscribed US$3.9 million seed financing for their four-month-old venture.
The capital came from strategic investors, including Dragonfly Capital, Sequoia Capital India, Three Arrows Capital, Saison Capital, MSA Capital, Coinfund, Venturra Discovery, Kyros Ventures, First Check Ventures, and Ratio Ventures. Coins. ph’s Founder Ron Hose, Xfers Founder Tianwei Liu, and other unnamed angel investors also co-invested.
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Hong Kong-headquartered Finblox will use the funds for product development, as well as to accelerate its regulatory compliance processes, marketing and user education initiatives.
The beginning
“Dmitriy and I are very passionate about democratising wealth-building and have been fascinated with crypto-asset class, especially decentralised finance (DeFi),” CEO Hoang told e27. “I previously co-founded Gotrade, a zero-commission stock investment app, and Dmitriy was formerly CTO at Coins.ph. During our previous roles, we noted the onboarding experience into the DeFi is inconvenient, insecure, expensive and unsuitable for beginner investors. There was a big gap to be filled bridging users from Web2 base into Web3, and we decided to build Finblox to address that.”
In a nutshell, Finblox provides a “secure on-ramp” into stablecoins and popular crypto-assets such as Axie Infinity and Polygon. The platform allows users to earn a yield on their assets passively, with no limits on minimum balances or withdrawal periods. The services are available in over 100 countries.
Hoang claims Finblox offers one of the highest interest rates available in the digital asset space. Users can earn a 15 per cent annual percentage yield on USD Coin, a stablecoin pegged to the US dollar. It also offers up to 90 per cent yield on other major cryptocurrencies such as Bitcoin, Ethereum, Solana, Avalanche and Axie Infinity.
The returns are enabled through Finblox’s partnership with established crypto institutional borrowers and trusted DeFi protocols.
How the platform works
Users register, complete their identity verification and set up two-factor authentication within two minutes. They can then buy or deposit digital assets such as Bitcoin, Ethereum and Polygon and start earning interest rewards the following day. The rewards are paid out daily, and users can withdraw the funds anytime without any lockups.
The company is working with regulated financial institutions to enable a smooth on-ramp from fiat into crypto via different payment methods
The assets available on Finblox are carefully vetted before being listed, claims Hoang. The user assets are insured by Fireblocks, an SOC 2 Type II-certified digital assets custodian with bank-grade security. In addition, the system is protected by the crypto-insurance platform Coincover.
As for monetisation, Finblox takes a small cut on the interests it earns by lending out the coins to its trusted institutional partners and a cut on the amount paid out to the users. The startup plans to introduce paid premium features on the platform in the future, such as commission-free swapping between the coins.
About 90 per cent of its registered users are from emerging economies, mainly Southeast Asia. Hoang declined to share the number of customers or the number of transactions it facilitates. “We’d prefer to announce the figures in the next round announcement (pre-Series A or Series A).”
“Southeast Asia has grown to be one of the most active markets over the past year, yet product infrastructure is still lacking to support the rapidly growing demand. We believe what Peter and Dmitriy are building at Finblox will make a meaningful contribution to Southeast Asia’s crypto ecosystem,” said Mia Deng, Partner at Dragonfly Capital.
On a global level, Finblox competes with crypto lending platforms Celsius Network (US) and Nexo (which claims to be managing assets for over 3.5 million users across 200 jurisdictions).
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Despite the growing adoption of cryptocurrencies, many governments are yet to make crypto transactions legal. In Hoang’s view, more clarity on regulation is essential to enable wider adoption of crypto as an asset class. “We are actively looking to acquire licenses globally in the established jurisdictions where possible. We believe that crypto will become a number one asset class globally in the foreseeable future and regulation would bring a lot to the table in terms of taking it to the mainstream.”
Finblox also sees a significant opportunity to tap into the metaverse projects popular in the emerging markets, where users are getting onboarded into crypto for the first time through play-to-earn games. “We can empower them by offering yield on the crypto assets that they earn by playing NFT games like Axie Infinity,” Hoang said.
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