January 7, 2022
Photo: Dylan Calluy/Unsplash
Hello and welcome to Protocol | Fintech! This Friday: NFTs are decentralized until they’re not, Brian Armstrong gets an LA crashpad, and Robinhood makes a key hire.
In the crypto world, everything is decentralized, right? Well, maybe. That model is being tested as investment floods the market and mass advertising campaigns lure in curious consumers who are more interested in the financial buzz than blockchain pieties.
OpenSea is the new flashpoint of this debate. After raising $300 million in new funding, the NFT marketplace is now worth $13.3 billion. Its backers include Andreessen Horowitz and the Coatue hedge fund.
Decentralization is great until it’s not. To go mainstream, NFTs and other crypto products will need more ways to fight fraud and theft.
Web3 may be decentralized in theory, but not in practice. OpenSea can say it’s just a mere “blockchain explorer,” but its valuation suggests otherwise.
Businesses will find themselves choosing between crypto’s ideals and practical user demands. And there are no easy answers.
The challenge for many crypto-native companies may be fear of a backlash from hardcore users — including their own employees. Change like this will take time. That could leave an opening for companies that care less about philosophy and more about customers.
59 million Americans work outside the traditional employer benefit system - and more and more are moving away from that model as the gig economy grows. People, during the pandemic, are taking a step back and thinking about the traditional job setting and asking: ‘Is this what I want to do?’
The state of small-business fintech. Protocol and Morning Consult took an in-depth look at how small businesses are adapting to new tools for managing their finances.
“It’s probably gotten way too deep at this point. But it’s what we signed up for.” —Ridley Plummer, project lead of the Australian Open’s plan to offer NFTs corresponding to tiny portions of the tournament court’s surface.
“That battle’s not going away. The SEC’s not going to run from this. The CFTC is not going to yield.” —Former CFTC Chairman J. Christopher Giancarlo on the debate over which agency should take the lead in regulating crypto.
“DAOs aren’t suppose [sic] to be ‘run by someone,’ right?” —Binance CEO Changpeng Zhao, responding to a Twitter query on who runs the friendliest DAO.
What fintech trend are you most excited about?
We’re seeing the impact crypto can have on financial markets and increasing adoption among consumers, but the possibilities crypto presents for powering prosperity for small businesses are potentially even more exciting, yet still very nascent. Crypto can ease the very real cash-flow challenges that often lead to SMB failure. Providing accessibility to the crypto ecosystem opens up many exciting opportunities including smart contracts that enable an SMB to finance an open invoice through DeFi or instant and low-cost money-movement options for SMBs.
What fintech trend is most troubling for you?
Despite all the innovation in fintech, adoption among small businesses continues to lag. A prime example of this is in the space of B2B payments, which has the potential to completely be disrupted by fintech solutions. For context, 81% of B2B transactions are still checks. This means that small businesses are still struggling with age-old challenges of waiting weeks to get paid and spending hours — in some cases, up to 40 hours a month — logging information in spreadsheets or even on paper. It can take a long time for small business owners to adopt new technology. While we certainly have seen an accelerated shift to digital solutions through the pandemic, a very large share of small businesses continue to stick with old patterns.
What's been your biggest professional blunder, and how did it help you?
In my view, the biggest professional blunders take place by being in a job that you are not deeply motivated by. I constantly reflect on what’s important to me and where I get energy and that informs my view on when I’m ready for the next role and what criteria I look for in a role. I also always invest a lot in making sure I feel great about the people I’m working with. That creates significant safe space when something goes wrong — whether it’s an unexpected product issue or not hitting targets in a given year. I have had my fair share of moments when things go wrong — but they end up being areas we move on from really quickly, because I’m working in environments that celebrate courageous bets and failing fast.
PollenPay is set to launch in the U.K. The fintech startup will offer a new “buy now, pay later” service.
Brian Armstrong bought a Los Angeles home for $133 million. The Coinbase CEO reportedly acquired the Bel-Air estate from Japanese entrepreneur Hideki Tomita.
INX acquired Tokensoft Transfer Agent. The crypto exchange operator bought a subsidiary which facilitates securities transactions with issuers. Financial terms were not disclosed.
Mozilla paused its cryptocurrency plans. After Jamie Zawinski, a co-founder of the open-source web browser project, blasted Mozilla for partnering with “planet-incinerating Ponzi grifters,” Mozilla said it would stop accepting crypto while it reviewed how doing so fit with its climate goals.
Rostin Behnam was sworn in as the new CFTC chairman. Behnam, who joined the CFTC as a commissioner in 2017, had served as acting chairman since January 2021. The CFTC is poised to play a critical role in emerging crypto regulation.
Steve Quirk is Robinhood’s first chief brokerage officer. Quirk is joining the company from TD Ameritrade. He will oversee Robinhood’s broker-dealers, Robinhood Financial and Robinhood Securities.
Joe Kassim was named to First Capital Bank’s board. Kassim had joined the South Carolina bank in 2019 as president and chief operating officer.
Ian Rand was named Monument CEO. The former CEO of Barclays Business Banking will replace the digital bank’s co-founder, Mintoo Bhandari.
Petal raised $140 million. The consumer credit finance company’s series D round was led by Tarsadia Investments.
Cion Digital raised $12 million. The enterprise blockchain software company’s seed round was led by Green Visor Capital and 645 Ventures.
Rupifi raised $25 million. The India-based “buy now, pay later” startup’s financing round was led by Tiger Global and Bessemer Venture Partners.
A shift in the way health insurance and benefits are handled has helped free workers from unfavorable working conditions and unlocked opportunity for the millions of gig workers entering the labor market. In October 2020, Mastercard and Stride Health partnered to bring portable benefits to gig and independent workers.
$15.8 trillion: That’s the total crypto transaction volume in 2021, up 567% from 2020, according to Chainalysis.
Thanks for reading — see you Tuesday!