FinTech Chat (FTC) is a series of educational & informative interviews with world professionals in the FinTech / Crypto / Blockchain communities. We aim to provide content that is digestible in multiple mediums such as video, audio (podcast), and written (blog) form!
FTC Episode 9
In this episode, Blockchain Wayne interviews Chris Roper, Head of Communications of MyConstant, a crypto lending company. We will discover the importance of lending in crypto investment. Our guest also shares some thoughts about the future of DeFi in particular as well as crypto lending in general. Remember to watch the show until the end, because we will have some surprising Christmas gifts from MyConstant!
Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos and grammatical errors may be present.
Intro: Interviews on crypto blockchain with your host, Blockchain Wayne on FTC
BLOCKCHAIN WAYNE: Hey welcome everyone, and thanks for watching. Today we are joined by the Head of communications with MyConstant, Chris Roper. Chris, thanks, first of all thanks for joining us today to talk a little bit about your crypto journey and what your company is doing in… in the cryptocurrency space.
CHRIS ROPER: Yeah, thanks for inviting me. It’s great to be here.
BLOCKCHAIN WAYNE: All right, awesome, so first and foremost, Chris, let’s start with your personal journey, I always like to get a little bit of insight into kind of your background, man. What have you done in the past and what led you to what you’re doing today?
CHRIS ROPER: Sure no problem, so about I was… I was a commercial underwriter for 10 years way… way back, that was my first job at university. And so I was used to kind of looking at risk and… and doing pricing and analysis and things like that. And then I had a bit of a career change and got into freelance copywriting, so I then joined a energy company in the UK which is it was a startup when I first joined. It’s now grown into a kind of billion dollar unicorn. I was their in-house copywriter for a while, so I was specializing in kind of explaining complex topics to… to our customers and prospects and around that time. So you’re talking about 2015 2016. I was starting to think about cryptocurrency because I was seeing a lot… I’ve seen it occasionally in the news and I was… I was reading more about it and after about a year and a half, I opted this energy, I left and began freelancing full-time again. And I just happened to apply for a job for a company called altcoin.io, which was the decentralized exchange. So they did some pretty cool stuff with atomic swaps. I think they were one of the first to do a Bitcoin Ethereum atomic swap. And so I was again doing communications for them, writing blogs explainers and things like that. And that’s when I started getting into crypto and actually buying it myself. I’m not a massive trader, but I do own some Bitcoin. I’ve been paid in Bitcoin and I did buy some XRP at a very bad time. I got in like when it was like three dollars or something as it’s now about 60 cents I believe so. I’ve made some… you know, good trades bad trades. It’s all part of the journey, but I’ve always really been fascinated by cryptocurrency because and not just cryptocurrency but the… the blockchain technology behind it as well. It’s… it’s really fascinating so it has so many different use cases. And I’m really like quite excited at this period in time because it seems like the industry is starting to mature a bit. You’ve got PayPal doing bitcoin and other cryptos and Square as well is getting involved, so it’s an exciting time. But most recently back in, so after freelancing for a while, altcoin.io actually got bought by another company called BnkToTheFuture, so they just it was like a technological acquisition, so they just bought the technology and put it into their product. And after that I joined MyConstant, so MyConstant was originally a stablecoin project so we were trying to make you know international transfers frictionless borderless really low cost. We were looking into that for… for payments and for personal transfers. And over time we started thinking about… well it’s great that we can do all this with stablecoins, but how can we actually create value for people. And so we started looking into a crypto back lending. We made the switch about four months after launching the business. And we’re now… that’s our our primary business, now is we’re not a stablecoin anymore but we’re a crypto back door, as I like to say a collateral backed p2p lending company. Because we sort of had a look at the market. We had to look at p2p lending. And we could see that there was a real issue with it. It was a great idea and… you know, with blockchain… you know, it became even… even more feasible to do it without having to worry about kind of third parties or unnecessary risk. And there’s a real use case for the borrower side of p2p lending and that you had all these millions of people around the world holding crypto. And… you know, sometimes life gets in the way of your investment strategy and sometimes you need a bit of extra cash, so there was definitely a use case on the borrower side and on the investor side. Well I mean, that was… that was the easiest use case because we all know that banks pay very very little on your deposits, but if you could invest in p2p lending that’s backed by cryptocurrency collateral, you could get… you know, interest rates up to kind of 20 times that of a CD. So yeah, that’s… that’s kind of my journey from way… way back after leaving university up until… up until now.
BLOCKCHAIN WAYNE: Awesome man, yeah, I think a lot of us… you know, have made good and bad decision when it comes to cryptocurrency investing, and you’re probably like most of us. You know, you may have heard about it in the past and kind of dismissed it, but it just… it keeps coming around, you’re like oh that thing’s still going and yeah… you know, one comment you made that… that spot on is the market is maturing. I think about where we were in 2015 2016 2017 and where we are now, not just in terms of the big dog like PayPal, but you know, I kind of dug in and traveled around a lot in 2018 when the market was really crashing just… (CHRIS ROPER: Yeah) it was that’s where the infrastructure was going in… that’s where the work was being put in to solidify it. Everybody’s looking at market prices, but that I think that’s really 2018 2019 was a time for the market to mature and shake out some of the… some of the bad… bad actors (CHRIS ROPER: Yeah) Or… you know, they just really didn’t have the right intentions. And it’s… it’s… you know, it’s definitely paying off now. Going into like with MyConstant, so crypto back lending, you get a great example because one I didn’t even think about… you know, I’ve actually talked to someone recently that life happened with Covid, they ran a service based business out of malls which pretty much went flat. And he pretty much liquidated most of his crypto holdings… you know, so having that avenue to where… you know, he could have easily used that as collateral for… for a loan, that’s… that’s a good service, I think, to… to have. What kind of customers are you… are you seeing the most right now when it comes to people coming to MyConstant whether it’s to lend or to… you know, whether they’re lending to the platform or they’re borrowing? What types of clients are you seeing over there?
CHRIS ROPER: So on the borrower side, it started off where our main customers because this was kind of back just before the crypto winter came in, and they were mainly using us as a kind of leverage mechanism. So they would borrow against a cryptocurrency to finance the purchase of another crypto cryptocurrency or a trade. And when they profited on that trade, they would repay the loan and keep the… the difference, so we… that was actually we… we thought that would be a small use case. That’s one of the smaller use cases of the platform, but actually it was one of the primary ones for… for quite a long time. But as time went on, people start… and people start just using us for just the kind of purposes as you said, you know… you… they’re bit short of cash, or maybe they… something happens to their car, or they just like unexpected expenses because the interest rate, our interest rate at the moment is… is very very low. It’s… it’s only six percent, and a lot of people don’t want to sell their crypto because then they lose the uplift in value, or they have to buy in again a higher price. So what we do for forwards is we… we kind of give them a way to unlock the value of the crypto without having to sell, that’s and that’s very appealing for… for traders and… and just generally cryptocurrency holders, because I think a lot of people apart from like the day traders and… and the pros are holding onto things like bitcoin, because it’s becoming more of a kind of store of value a bit like gold, for example, and as that’s become more popular, as that’s become a more popular use case for bitcoin, we are seeing more people borrow for those life expenses. And on the investor side, really we… we have a real mix, we… we have cryptocurrency holders, stablecoin holders who want to instead of just leaving their stablecoins… you know, and a wallet sitting idle, they can invest those stablecoins in loans. And we have two products, so we have like a fixed term product and anytime withdrawal product. So our anytime withdrawal product is you… you lend your stablecoins or your fiat usd, and then we lend it to third-party lending pools that gain interest, and then we pay you the interest. It’s four percent APY and that’s compounded and paid every second. So it’s in real time, you can actually watch your balance tick up second by second, which… which is pretty cool. And then the other product, our fixed term product, we have three… three terms: 30 days, 60 days, and 90 days. And you can invest in these for up to seven percent APR. So what we found is a lot of people out, so we have some cryptocurrency holders investing with us and borrowing with us doing both. We have some who are fiat holders and… and they want to get a better return on their money. Maybe they’ve kept their savings in a bank account for a long time and only getting like… I don’t know a fraction of a percent, so they’re trying to get a little bit more back. We’re actually seeing a lot more people now because of the pandemic seem to be… there seems to be a kind of a turning point, I think, in terms of people becoming investors. A lot of people we speak to, they… they’re very interested in what we do but they’ve never invested before, so we have to… part of our… our mission is to educate customers, and to not just on cryptocurrency and blockchain and… you know, the assets that are backing these… these loans, but also just generally about investing…you know, how the importance of diversification… you know, your risk tolerance, things like that. So yeah, we do have some professional investors who use us as a diversification mechanism, but we also do have a lot of people coming in who haven’t invested before. They start off with the four percent APY anytime withdrawal product because they like that idea. They can put money in and then take it out without you know having to… to sell it on a secondary market. And once people have become familiar with that four percent APY product, we call it Flex, and so once people are familiar with Flex, then they normally go on to invest in a fixed term loan. So they might try 30 days, they might try 60 days, or 90 days depending on… you know, how quickly they might need their money back. Our… one of our key messages is that we… we’re not trying to… we’re not telling people to put all their savings in, because… you know, all investment involves risk, but what we’re doing is we’re getting people on with small amounts. And then as they become more familiar with the platform and become a more experienced investor, we then sort of gently encourage them to go down into fixed term investments, because they offer the better returns. And we’ve even seen some investors who are just investing for the 30 days, but doing it every 30 days, so they’re kind of… although it’s a… an APR rate, they’re kind of compounding every month, so they’ll… they’ll put their money in for 30 days, and then it’s… we… we actually have a feature where you can enable auto reinvest, so you can reinvest your principal or your interest or both. And it will be on the same terms say for another 30 days. And yeah people… people do that, they like that because 30 days is it’s a good… it’s… it’s not too long to wait to get your money back. And the interest rate you get six percent for… for 30 days, if you want the full seven percent, you have to invest for 90 days, sorry yeah.
BLOCKCHAIN WAYNE: Nice, so yeah, I mean I guess it makes sense with… with your business model that initially you were seeing a lot of people borrowing for trading, because that’s kind of where the market was. But yeah, I mean we’re seeing that there’s… there’s… there’s still people trading, but there’s a lot more people coming in as investors for long-term holdings, so that definitely makes sense when it comes to that now. Obviously the buzzword of earlier in 2020 the late has been DeFi, right? Everybody’s talking about decentralized finance, and you know, there’s some… some pros and cons to DeFi. How do your products differ from what people would get from going on to say Uniswap and getting into some… you know, DeFi protocols?
CHRIS ROPER: Right okay, well, we used to consider ourselves a decentralized finance project. This was back in… back in the day and I suppose it depends on… on how you define decentralized finance that… you know, you’ll have some people are really strict about it, like… you know, you can’t have any human involvement at all and then… you know, other people think it’s a little bit looser defined I mean, in a sense p2p lending, because… you know, it’s not a bank giving you a loan or are you investing in a bank product or an investment product. It isn’t in some ways decentralized, it’s… it’s kind of peer-to-peer. But if we assume the… the strict definition, then I would say that while DeFi is a great idea, I think it’s in a… in a stage at the moment where it’s… it’s… it’s very difficult to understand. A lot of people don’t quite get it, I think there’s a very steep learning curve to… to get involved and I don’t think it’s necessarily easy to do. I think the risks are sometimes a bit obscure just because I don’t think anybody really understands the… the full extent of the risks of these protocols, because it’s… it’s you… you really need to be fairly technical, I think, to understand and… you know, audit smart contracts and things like that. So I believe that what and just to go back to… to MyConstant, I… as I said we used to think of ourselves as… as decentralized finance, but, and we tried to do everything automated through smart contracts, but what we found very quickly was that, it was actually it took longer to… you know, get people’s deposits in, to get people’s withdrawals processed. So we actually… and we wanted to keep our… our levels of security high, so we actually decided to go for a slightly more centralized model. Now we don’t actually handle customer funds ourselves. We have a third party custodian called Prime Trust who handles all of that on our behalf, so we’re… we’re… we are a non-custodial platform in that sense, but we do a lot of the some of the approvals, for example large deposits, large withdrawals do… are still done by ours. It’s… it’s not all automated, autonomous and… and decentralized in that sense. So I’m excited by it because… you know, I love technology so whenever I read about these protocols, I get excited. I think wow, that would be really cool, but I think that part of the industry is not maturing as quickly as… you know, cryptocurrencies as a store of value and for… you know I don’t think the… the general public is… is ready for them just yet.
BLOCKCHAIN WAYNE: Yeah yeah, absolutely, I mean that’s kind of what I figured and kind of the answer I was… I kind of expected. Because DeFi, I tell people it’s still… it’s still the wild… wild west. You think having a truly decentralized protocol where there’s… you know, no… no real centralized point of control is good, but right now like we’ve seen so far, in the DeFi space projects that have been exploited with flaws or are our issues in the smart contract where funds have been lost, there’s exploits that are either not known about… you know, until… until someone finds them and exploits them or it could be maliciously from the beginning by a dishonest dev team. So there’s still a ways to go in the DeFi space. I’m like you, it’s very intriguing I… I’ve tested out a little bit of yield farming, but I’m not one of those men I see the stories every day, where people put… you know, 20-30-50000 into a DeFi protocol, and then they do what’s called a rugpull, where they find an exploit in the smart contract and… you know, full funds and sometimes… you know, the… the exploit wasn’t in the smart contract, that was in the… the oracle service that… that pulled the data used to feed this market. So yeah there’s a long way to go there, but I’m like you. It excites me to see what’s next, I’m not going to throw a bunch of money. I like to be on the sidelines to see… see what happens with that. So Prime Trust you mentioned, I’m familiar with them. Really wherever you’re gonna send your crypto, if you’re not gonna hold it, if you’re gonna earn interest on it like with your… it’s all about trust, right, and that’s… that’s kind of the name of the game whether you’re trusting an entity. I’m sure Prime Trust has… has insurance backing their holdings, right? I’m pretty sure.
CHRIS ROPER: Yes yeah, they do, yeah.
BLOCKCHAIN WAYNE: So there’s always… there’s got to be some level of trust within there, so it sounds like what you’re doing at MyConstant is that it’s a good blend, because… you know, you know, and your… your definition of DeFi earlier that… that’s kind of spot on, what I tell people true. I mean you can almost classify anything in the cryptocurrency space some form of decentralized finance, but then there’s also a specific category that… you know, that’s emerging from this where… you know, it’s got to meet certain criteria to be called that. And I… you’re right, I think the mainstream is ready for that yet… you know, and anybody that says differently… you know, and just throwing money in there, it’s really just a form of gambling. If you’re going in with more than you… you can lose, you can… you can make some good money, you can also lose it just as easily.
CHRIS ROPER: Yeah absolutely, and these… these protocols and the smart contracts themselves, they’re only as good as the code they’re written in, so you know, you… you won’t… you like to think that it’s… it’s completely decentralized, but somebody wrote that code, so you know that’s your little point failure there, but yeah it’s… it’s an exciting time to be in the blockchain space for sure. And it’s… it’s great for us to see more of how to… like I suppose crypto newbies people who’ve never even… they don’t know what it is, they don’t understand how it works. So we’re kind of in a… we’ve given ourselves a big job, because we’re trying to explain why our p2p lending product is better than traditional p2p lending product. Because for a long time p2p lending had a collateral problem in the sense that either there wasn’t any collateral backing the loans or the collateral that was backing the loans where it was a liquid, so it couldn’t be sold very easily… you know, like property for example. And with that a lot of… you know, investors lost quite a bit of money. We haven’t lost any… no investors on MyConstant have lost a cent since we launched. And we believe that’s because cryptocurrencies make great collateral. I mean we have had a few defaults, so we have sold collateral to repay investors, but no investors have lost a cent. We think that’s testament to the… the robust kind of lending model that we have in place. And why cryptocurrency makes such good collateral, and one of the questions we get asked a lot is… you know, why would somebody want to borrow against the cryptocurrency, you know? Why don’t they just sell it to get there… you know, if they need money, they just sell their crypto, it’s a liquid asset, right? So we… we then have to kind of explain. Well, yes, it’s… it’s a bit like a currency, and that, yes… you know, you can… you can get money out of it. However, most people view it as an investment… you know, it’s like a long-term thing. You stay in it for a few years, and with the hope that the… the cryptocurrency will… will go up in value, so and once people understand that, they’re they’re usually pretty comfortable. But yeah sometimes, it’s… it’s tough… you know, trying to explain these topics to people who’ve… you know, either never invested, never heard of cryptocurrency or perhaps even have… you know, never used an online investment platform.
BLOCKCHAIN WAYNE: Yeah yeah, I mean education is crucial, I’m sure you guys are seeing that with… at MyConstant. That’s kind of what most… most of the partnerships I have with companies within the cryptocurrency space is really creating educational content. Because there’s… there’s a gap that needs to be bridged, and that… that’s really what it’s going to take to get there’s people understanding it. Because I’ve also seen inside of that where people don’t learn more about it, and just jump in blindly. And that’s where they can get hurt into bad projects, scam projects and things… things like that so…
CHRIS ROPER: Yeah, absolutely, and there’s so… so many of them out there, these dodgy projects. And we have like… so whenever we hire new customer service staff in the… in the US, a lot of them come, they don’t have a great knowledge of cryptocurrency. And we… we are in a good position in the sense that there’s lots of good quality youtube tutorials on… on crypto. There’s courses that you can do free ones. There’s loads and loads of blog content, video content, so there’s… there’s lots of educational materials out there. But it is a blockchain itself. It’s a very complex topic. And so it does, you do need to spend a little bit of time to familiarize yourself with it. And it’s various applications. Yeah, so it’s… I think it’s a full-time job education in the crypto or blockchain sector.
BLOCKCHAIN WAYNE: Yeah, absolutely, absolutely. What… what are you guys seeing as far as as you know collateral that may be put up? Do you accept are there certain limit to a certain number of different cryptocurrencies or is it a broad spectrum?
CHRIS ROPER: Well, we… we try and… and on board the… the best projects we can, so I think we have around 70 different cryptocurrencies that you can borrow against and when we first began, you could only borrow against one cryptocurrency. But we’ve introduced multi… multi-collateral loans, so you can actually borrow more by leveraging your entire portfolio. This is particularly useful for people who perhaps have been margin trading on… on exchanges which normally is very expensive. But they can actually use us instead to do similar kind of trades. We actually have when you… when you borrow now and you can use your USD loan to buy new cryptocurrency. So you can either withdraw your loan as USD or you can withdraw as a… as a cryptocurrency if you’re a borrower. So we do all the… the kind of pricing research for you, so we… we go to multiple exchanges to find the best price, and then we buy it, we deliver it to your… your MyConstant account. And then you’ve got your… your new cryptocurrency which you can then trade or whatever so, yes we have a lot of cryptocurrencies that you can borrow against. You can isolate your loan just to one or you can use your… your entire portfolio and you can repay in the cryptocurrency that you… that you’re borrowing against, too. So if you’re borrowing against bitcoin, you can repay with bitcoin. And one of our risk mitigation measures because when we started this crypto backed p2p learning product, one of the things we… we were a little bit worried about and… and wanted to make to manage was this idea of a kind of a massive liquidation event. So if for example, we over exposed ourselves to a particular cryptocurrency. And so we’ve got all these loans backed by let’s… let’s say it’s bitcoin, and then bitcoin suddenly has this massive price drop. We start triggering loans liquidation, and then that liquidation itself is only going to lower the price of bitcoin more so you end up with this kind of cascading snowball effect where we’re actually our… our business could… you know, lower the the price of bitcoin. So our… our risk management factors, we… we don’t overexpose, we cap our exposure to any one particular cryptocurrency. We also only onboard cryptocurrencies which we believe have legs, which we believe will last as we take a look at the… the project itself, the white paper, we look at the team and if we ever if… if it looks dodgy, we just don’t touch it… you know, so we do have an onboarding process before we add a cryptocurrency to the platform.
BLOCKCHAIN WAYNE: Nice nice, do you see any of that expanding? I’ve heard a lot lately focus being put on tokenizing assets collateral whether it’s I talked, I interviewed someone a while back talking about tokenizing different types of metals? Do you see any of that coming into the… the lending and borrowing space within… within MyConstant or in that… that sector?
CHRIS ROPER: Yeah I think definitely in the future, I think at the moment we… we’ve… I can’t tell you for certain off the top of my head if we support any security tokens. I think they… because it’s still quite an immature market. I’m not sure what the market cap is we have certain minimum market cap before we can add it but yeah I think security tokens is the future of the industry. I think this is an absolutely fantastic idea where you kind of fractionalize traditional assets capital markets, and then… you know, you make them more accessible because if you look at something like fine art or property… you know, you have these big big assets like hotels or… you know, marinas and… and things like that. And suddenly… you know, if you… you fractionalize these assets, you actually issue them on the blockchain… you know, you have like I don’t know a million… a million tokens, each one representing a piece of that asset on the blockchain. Suddenly it’s like everybody can get involved… you know, you, everybody could get a little share of some cool new hotel or… you know, a piece of a monet or something like that. So that’s I think that’s really cool and that’s… that’s really exciting. And I think that is where the industry is… is kind of moving towards. And you know it’s a multi-trillion dollar opportunity as well… you know, for the companies that are in there (BLOCKCHAIN WAYNE: Yeah) doing this now.
BLOCKCHAIN WAYNE: Yeah it’s exciting to see it happen, Chris, man… you know. As we wrap up, tell everybody how can they connect with MyConstant… you know, both the website and social media channels.
CHRIS ROPER: Yeah so we’re… so the website is at www.myconstant.com, that’s MyConstant m-y-c-o-n-s-t-a-n-t. And we’re also on Facebook, so you just search for us on Facebook. We’re on Twitter. I think we’re on Instagram as well. And we’re… we’re actually running a promotion. And I don’t know if you might be telling your… your listeners about it.
BLOCKCHAIN WAYNE: Yeah sure sure.
CHRIS ROPER: If you’re… if you’re… you… if you’re a US citizen and you join now, then we will actually give you a 2000 dollar free trial at 4 percent APY, so you get that, 2000 dollars for 30 days. And during that 30 days, you can watch your money grow by 4% and then at the end of the 30 days, we take back the 2000, but you keep the interest. So it’s… it’s… it’s a promotion designed just to let people familiarize themselves with the platform. Read our blogs, get to know how everything works and also wearing a little bit of free interest, which they can then you put towards their… their first deposit or first investment.
BLOCKCHAIN WAYNE: Nice I’ll be sure to check that out myself. All right, yeah, Chris… you know, hey, thanks for joining us for this interview, learned a lot informative, man, definitely get to learn more about MyConstant and… and the role it plays within crypto. I think a lot of people hear about just the overview of what a company does, and… and just having you on or having… you know to be able to explain the different aspects of it’s really going to be great to help break down barriers that may stop people from jumping into something… something like this that could benefit them. Definitely appreciate the time and…
CHRIS ROPER: Thanks for having me on. Yeah I mean I guess whenever we’re talking about investment, I think it’s always useful to remind people… you know, that just to… to use caution, diversify. If you do, come to MyConstant… you know, start small, get to know how everything works, and… and take it from there.
BLOCKCHAIN WAYNE: Awesome, yeah, great tips, Chris. All right, thanks again and thanks everyone for watching and we will see you next week.
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About Blockchain Wayne (Host)
Wayne has been managing, teaching, and coaching high performing teams for over 20 years. He has a passion for helping and teaching people and a passion for cryptocurrency and blockchain projects. He has created various coaching programs and partnerships with select education platforms and cryptocurrency program tools.
You can learn more on his website: https://www.blockchainwayne.com/