August 26, 2022
Photo: Jakub Porzycki/NurPhoto via Getty Images
Hello, and welcome to Protocol Fintech. This Friday: Affirm’s stress test, Coinbase goes to the polls and the top brand NFTs.
Coinbase doesn’t want its employees to talk politics at work. But it’s hoping its customers will go to the polls. “We don’t regularly talk about politics here at Coinbase, but we’ve always said that we will engage in the political process at moments when it relates to our mission of increasing economic freedom in the world,” chief policy officer Faryar Shirzad wrote in a blog post about its new voter-education initiative. More crypto-friendly candidates are running in 2022, and Coinbase and other companies are hoping to expand the size — and maybe tilt the tenor — of the Congressional Blockchain Caucus. That may be an uphill battle, since some crypto-friendly candidates like the Association for Digital Asset Markets’ Michelle Bond haven’t made it past the primary contests.— Owen Thomas (email | twitter)
Affirm spooked Wall Street with a downbeat outlook, which confirmed what many already suspected: More consumers are hurting. CEO Max Levchin said the “buy now, pay later” company is seeing “early signs of consumer stress.” It’s likely to continue and could even get worse.
It’s a major test for Affirm — and for the emerging payment method. While Levchin still argues that “buy now, pay later” is a better financing option for consumers, especially during a crisis, his team is paying close attention to “signs of significantly more stress.”
“We are going to be cautious,” Levchin said on Affirm’s earnings call. The company reported a downbeat revenue outlook that sent its shares tanking late Thursday.
Is “buy now, pay later” good for stressed-out consumers? The short-term payment plans, critics have warned, could lead to an unhealthy rise in consumer debt.
Despite the fuzzy path forward, Levchin is still a firm believer in “buy now, pay later,” a payment system his company helped pioneer before it even had that catchy moniker. Hard times are creating more challenges, but this may be the best opportunity to shine.— Benjamin Pimentel (email | twitter)
Why on-demand talent could be exactly what companies need right now: If you thought the rise of remote work, independent contractors and contingent workers rose sharply during the pandemic, just wait until the next few months when you see a higher uptick in the on-demand talent economy.
FTX has absorbed the venture capital operations of Alameda Research. The change was in the works at the two firms, which are both founded by Sam Bankman-Fried, before co-CEO Sam Trabucco announced he was stepping down Wednesday.
There are now more Visa tokens than cards, the company says. The company's chief product officer told Reuters that Visa has issued more than 4 billion tokens for digital payments, like Apple Pay.
Real estate startup Reali is shutting down. The company — which offered a "buy before you sell" product — said the combination of a difficult real estate market and slow capital-raising environment brought the decision. The firm raised $100 million roughly a year ago.
CBOE has a long list of partners for its crypto business. The options exchange is working on crypto products with a list of financial firms that includes market makers DRW, Jane Street and Virtu Financial.NFTs are increasingly the target of scammers. More than 4,600 NFTs were stolen in July, according to a report from Elliptic — the most of any month since the firm began tracking the data in 2017.
With few conventional payments options for cannabis businesses, Bespoke Financial’s backers think the returns on a “buy now, pay later” service for the sector are going to be high. Get it? It’s a marijuana joke. Anyway, Casa Verde Capital’s Karan Wadhera, who has backed Bespoke, isn’t worried about the competition: "We're not seeing Affirm or Klarna, and definitely not Apple come into our space anytime soon."Former SEC chair Jay Clayton wishes Washington and crypto would just get along: “Each group fears that yielding to the other would cost billions in either losses to innocent victims or missed opportunities for investors. In this environment, consensus is elusive.”
The NFT market, which exploded in 2021, now has an estimated value of roughly $19 billion even after the frenzy fizzled. While the NFT world initially featured offbeat digital art collections like CryptoPunks and the Bored Ape Yacht Club, major corporations have also embraced the trend as a way to enhance their brands while raking in meaningful revenue. Here are the top five consumer brands cashing in on the NFT craze, with Nike in a commanding lead.
Why on-demand talent could be exactly what companies need right now: The biggest benefit of leveraging on-demand talent is often tapping into the talent and skills that businesses can’t find elsewhere. Upwork’s recent report highlights that 53% of on-demand talent provide skills that are in short supply for many companies, including IT, marketing, computer programming and business consulting.
Thanks for reading — see you Monday!