Mosendo, the Final Piece of the Cryptocurrency Payments Puzzle

Asia Blockchain Review
August 21, 2019
Mosendo, the Final Piece of the Cryptocurrency Payments Puzzle

It’s been more than a decade since blockchain caught the attention of technopreneurs, but despite growing momentum in the industry, mainstream adoption of the technology has yet to take root. Enter DeFi — Decentralized Finance. Will DeFi be the long-awaited breakthrough that the blockchain space is looking for? Asia Blockchain Review’s new Monthly Spotlight takes a look at this emerging sector through a series of interviews with leaders in the field.

We kick off the interview series with Clayton Roche, the Head of DeFi with Mosendo and the community manager of DeFi Nation. As an accelerator of the DeFi community, he shared with us the idea of DeFi and its benefits, as well as his engagement with the community.

Asia Blockchain Review: For some of our readers who may not know, What is Decentralized Finance? Why is it so important?

Clayton Roche: Decentralized Finance has been given the name “DeFi” by some of the earlier builders who started to realize it was a movement.  The brief explanation for DeFi is that it dis-intermediates finance, which means to “take the middleman out” of financial relationships. The middleman in this case is banks and governments.  I believe that it is the killer app for crypto.

It is important because these intermediaries each take their fee for their services and create high barriers for access.  The result is that certain financial relationships that would be of a net value to society cannot occur due to them being cost prohibitive, and that billions of people live less happy lives due to the inability to access basic financial services.


ABR: On the Mosendo website, it says, “… after more than 10 years, [cryptocurrencies] are still unusable. For the first time, the tech is available to create a true p2p electronic cash system.” How has Mosendo made cryptocurrencies more available? To whom?

CR: We have identified something that no one else has stumbled upon, which is that the last mile in electronic cash is the user experience.  Cryptocurrency has thus far been surrounded by a moat: steep learning curves and scary risks. It is almost as if cryptocurrency were a castle designed to keep people out!

Mosendo has come up with a way to lower the drawbridge and cover that last mile by making DAI as easy to use as cash.  Easy enough for all of our parents to use.  We enable you to get DAI and change back into local fiat, we make it easy to send between peers anywhere in the world for free, and intuitive to secure your funds.  

In fact, we see Mosendo as the final piece of the cryptocurrency payments puzzle, the other pieces being critical blockchain and financial technology to come onto the field in the last 18 months.  These include layer 2 scalability solutions on layer 1 blockchains, in our case Connext.Network on Ethereum, and the world’s first decentralized stablecoin: DAI by MakerDAO.

Our partnerships with these two technologies allow us to deliver nearly instant and free transactions of a currency that behaves like money as we know it today.  Mosendo’s magic sauce has been to make this cryptocurrency so usable that people don’t need to learn anything new to use it. They can send and receive payments on Mosendo just as they would on Venmo, Alipay, or any other country limited payments solution.

ABR: Tell us more about DeFi Nation and its activities.

CR: DeFi Nation was born out of a desire to make decentralized finance more accessible to people who aren’t as obsessed with it as we are.  We interview founders and publish how-to videos always with the aim of making the content easy to understand. This doesn’t mean we shy away from the technical explanations, but we do try to put them in relatable terms.

There is always a bit of showing off on Telegram about one’s understanding of some obscure crypto topic.  We try to strip that attitude from the DeFi Nation community and instead see it as a way to reach out to the people we really want to serve: those who need financial solutions but don’t want to become financial experts.


ABR: What has been the community sentiment regarding decentralized finance? What are blockchain enthusiasts most worried about? What are they most excited about? 

CR: The blockchain community is definitely abuzz with the topic of DeFi, love it or hate it.  I try to stay out of the Bitcoin vs. Ethereum debate, but as DeFi has taken off on Ethereum, it is difficult to ignore it entirely.  Bitcoin and EOS have a few projects that qualify as DeFi, but they barely register against Ethereum’s $500,000,000 DeFi market.

The worries are typically expressed in terms of potential failures of the system as it grows in size.  MakerDAO’s DAI and the lending protocols are relatively young, so I often hear concerns about their security.  I take some reassurance that DAI maintained its loose peg when the underlying asset Ethereum fell 10x, and that these protocols have so far managed to secure millions of dollars of funds.

The excitement is captured in the “money legos” meme — This idea that each DeFi protocol can be used alongside others, and in ways that are not planned for by the designers of the protocol.  This means the market can plug each piece into the other and build new financial devices, just as legos can be combined.

The wisdom of profit-maximizing markets leads to interesting combinations, such as creating cDAI, which is an interest-bearing token, and then supplying it to a Uniswap liquidity pool to earn additional interest.  This combination was not arranged by any partnership between the two, but arose organically due to the nature of these “money legos.

ABR: What are the barriers to entry or adoption of DeFi?

CR: A question after my own heart!  I will attack this from two sides, from the usability side and the infrastructure side.

On the topic of usability, I would rate a site like Compound Finance or dYdX as highly usable for people who are already Ethereum savvy.  That’s a huge caveat, more on that in a moment. If you have sent and received ERC20 tokens before, and know how to use a web wallet like Metamask, then DeFi lending does not require much of a learning curve.  Also, I frequently use decentralized exchanges such as Radar Relay and Uniswap. For the most part these exchanges are simple enough to use for those of us already down the rabbit hole, and are easier than signing up for a centralized exchange.

But what about the other 99.99% of the world’s population?  Indeed, usability presents a very high barrier to adoption. People often site education, but it is my opinion that using something is the fastest way to understand it, and our brains have a way of understanding something quickly when money is on the line.  If DeFi products were more accessible to laypeople, the understanding would follow.  

Finally, on the infrastructure side, DeFi products need to be connected to real-life finance, which for most people means payments.  Currently, DeFi lending is reserved for people who are already speculating in cryptocurrency, and even most lenders also hold other volatile assets. 

Payments requires two pieces: a strong network of fiat gateways and an immensely usable app.  This is where Mosendo comes in. We recognize that a usable app doesn’t ensure adoption unless we have a way to also cause the adoption of DAI.  I have seen many crypto projects build a beautiful product and effectively “strand” it without any connections to the world as it exists today. This is why we focus on fiat gateway relationships.  People need to be able to change DAI into money as they know it today, until one day they no longer change out of DAI.


ABR: MakerDAO’s USD-pegged stablecoin, DAI, is leading the way in DeFi, and you personally keep money in DAI. As the Head of DeFi at Mosendo, how do you see the financial sphere in the near future? What impact can DeFi and stablecoins have on this sector?

CR: There are a few good examples of the DeFi space reaching its tentacles into the traditional space.  Uma and Synthetix are creating synthetic stocks and derivatives which allow people to participate in the US stock market for people who would otherwise not have any access.  If enough money goes into these synthetic assets it is bound to shift the market.

Another example we’ve seen is various projects trying to allow for ways to take advantage of the high returns on crypto lending.  These services endeavour to allow people to send their money from their bank and earn a healthy 10% return without ever having to interface with cryptocurrency.  They would be able to do it through their bank account interface alone.

You’ll notice my answers are quite conservative on this question.  I suspect the really cool things to come out of the DeFi space will surprise us all and will be the result of these money legos fitting together in a way that no one team anticipated, and it will shake traditional finance. 

ABR: Are there any specific DeFi projects that have caught your attention?

CR: If you’ll forgive me for saying so, I joined Mosendo when they shared their pitch deck with me in Bangkok.  I walked away and I just could not stop thinking about their proposition. It is fair to say it caught my attention!

MakerDAO and DAI are next, as I credit DAI with restoring my faith in cryptocurrency.  I have worked in this space for years but always with some skepticism because of price volatility.  I didn’t think there was a solution until I learned about DAI. I spoke to Mariano Conti about this–He is MakerDAO’s head of smart contracts–during our interview with him for DeFi Nation.  As an Argentinian facing extremely high inflation, Mariano explained his own relief about being paid in DAI instead of either pesos or a volatile asset like Ethereum.

As for lending platforms, most people agree that Compound.Finance is well executed.  I have had such a positive user experience with it, and the way they allow you to take your cDAI and do things with it really enables this “money legos” idea I discussed.  

And finally, I spoke with the guys behind Atomic Loans, which is not live yet but will combine atomic swaps and lending to enable “decentralized protocol for cross-chain debt, allowing almost all crypto assets as collateral.”  This will allow us to use Bitcoin in the way we use ETH today in DeFi. I have heard of a few ways to attack this problem but this one seems the most consistent with the money legos theme. We will also have them on DeFi Nation when they are closer to launch.


ABR: Would you tell us about the upcoming DeFi conference in Macau on September 21st? What do you hope to achieve through the conference?

CR: We hope to bring together thinkers in DeFi and also to help integrate into the Asian space.  We have noticed a lack of Asian teams and cross-cultural conversation on DeFi, yet there is clearly tremendous interest in this topic.  We have speakers flying from around the globe to join us in Macau, and hope to meet local teams who are working in the DeFi space.

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