Why does this matter? Because the way money moves today is still too complex. Multiple intermediaries, disparate ledgers, and back-office processes add friction and cost. While stablecoins offer a strong foundation, they largely exist in a separate world from where most money lives - creating a gap that limits adoption and keeps two systems apart.

Some companies have tried to close this gap by building layered technology stacks that try to weave traditional systems and crypto systems together, and move flows behind the scenes. This approach has helped boost adoption, but it comes with assumptions and trade-offs. The best solution is full interoperability, where the two systems work together directly.

That’s what Cross River delivers with stablecoin payments. We’ve integrated stablecoin rails directly into our core banking system, making them interoperable with other rails. Imagine receiving ACH and converting it into stablecoins within the same account or accepting stablecoin funding and pushing it to a card in real time. This is how we make money practical, secure, and scalable.

Stablecoins do not replace existing rails; they extend them. Banking ledgers are highly reliable within their networks, but they were designed for batch-based processes and messaging standards that work well in closed environments. Stablecoins introduce a complementary layer built on deterministic, open-source protocols (like ERC-20), enabling 24/7 settlement finality and global interoperability. They function as the “HTTP of finance” - a universal transport layer that connects previously siloed systems, allowing us to extend our liquidity and services into a global, always-on environment.

I spoke about this recently with Simon Taylor on his Fintech Brainfood Tokenized podcast. We explored how stablecoins act as a “rail above rails,” creating a unified global payment layer that accelerates transparency. In practice, this enables interoperability, allowing value to move across both banking networks and blockchains.

As a result, stablecoins are emerging as a first-class payment rail alongside RTP® and FedNow®, delivering programmability and global reach that traditional systems weren’t designed to provide.

Link to the original post on Cross River’s website.

1. Growth benchmarks: what’s good growth?

Best-in-class companies grow ~150% annually, average companies grow ~65%, and those in the $1-3M ARR range achieve a 192% yearly growth.

Time to revenue is another benchmark:

• Top-tier SaaS businesses hit $1M ARR in just 9 months.

• The median startup takes almost 3 years to reach the same milestone.

• Achieving $10M ARR takes the best performers under 3 years, while the median company requires over 5 years.

Actionable tip: Rapid iteration and relentless focus on product-market fit are a strong predictor of your future revenue growth.

2. New Business vs. Expansion: where is growth coming from?

As SaaS businesses mature, their growth dynamics shift. Early-stage startups rely heavily on acquiring new customers, but mid-sized companies ($5-30M ARR) see up to 36% of revenue come from expansion through upselling and cross-selling.

The breakdown of growth drivers:

• New business contributed 61% of revenue growth in 2020 but has since dropped to 53%.

• Expansion now plays a larger role, particularly for B2B companies with higher average revenue per account (ARPA).

Actionable Tip: Build a product roadmap that supports expansion opportunities. Empower your sales and customer success teams to identify upsell and cross-sell opportunities.

3. Retention and Reactivation: the hidden drivers of growth

Retention is the backbone of sustainable SaaS growth. Companies with net retention rates above 100% grow 54% annually, compared to just 12% for those with lower retention.

Top quartile companies reactivate ~25% of lost customers. Reactivating churned users is cost-effective—they already know your product and require less convincing.

Actionable tip: invest in retention-focused strategies early. Leverage data to identify churn risks, and run targeted reactivation campaigns for former customers.

4. Billing frequency: how it changes as you scale

Billing frequency evolves as SaaS businesses grow:

• Early-stage companies (<$300K ARR) see 28% of revenue from annual plans.

• Mature companies ($15-30M ARR) derive 41% of their ARR from annual plans.

For B2C SaaS businesses, annual plans are especially popular. They help lock in customers for longer periods and optimize cash flow, particularly in industries with high churn rates.

Actionable tip: offer flexible monthly plans for smaller customers and incentivize larger accounts to commit to annual contracts. Use pricing and billing cycles as levers to appeal to different customer segments and business goals.

5. Reacting to seasonality and churn

SaaS businesses experience mild seasonality, with Q1 being the strongest quarter and Q4 the weakest. March typically sees the highest growth, while July and December lag due to holidays. Additionally, early-stage B2C companies may face high churn as viral customer acquisition leads to short-term signups. Obviously, seasonality is typical of each business/segment, so take this with a grain of salt.

Actionable tip: align your sales and marketing strategies with seasonal patterns.

Conclusion

SaaS growth is shaped by a range of factors, from the speed at which companies hit revenue milestones to the balance between new customer acquisition and expansion revenue. Reactivation, in addition to retention, emerges as critical driver of sustainable growth, while billing frequency evolves as businesses scale. Seasonality and churn patterns add further nuance to the growth journey, underscoring the importance of timing and strategy. Together, these five metrics offer a comprehensive view of how SaaS businesses navigate the path to $30M ARR (and beyond).

• 📉 Checks are becoming infrequent: The decline in check usage is accelerating, driven by digital alternatives that offer greater convenience and lower costs.

• 💳 Cards are king: Debit and credit card payments continue to rise, fueled by consumer preference and expanding merchant acceptance.

• 🔄 ACH transfers boom: ACH payments are thriving, thanks to their flexibility and adoption in payroll, vendor payments, and subscriptions.

• ⚡ Instant payments are here: FedNow and other real-time payment solutions are reshaping expectations for immediate, 24/7 transaction capabilities.

A Nov-2024 report from the Federal Reserve aggregates and analyzes noncash payment volumes in 2021 and 2022. Here's the summary.

📉 What’s declining: the fall of checks

For decades, checks were a staple of the American payments system, but their usage has been steadily shrinking. In 2015, Americans wrote 18.1 billion checks; by 2021, that number plummeted to 11.2 billion.

What’s driving this decline?

1. The Rise of digital banking: Why pull out a checkbook when you can pay bills through your bank’s app? Mobile and online banking have fundamentally changed consumer behavior, making checks seem archaic.

2. Business efficiency: Companies are moving away from checks due to processing costs and the risk of fraud. ACH transfers, wire payments, and digital wallets offer faster, cheaper, and more secure options.

3. Security concerns: Checks are vulnerable to theft and fraud, while digital payments come with encryption and better fraud detection systems.

The bottom line: Checks are becoming a relic of the past as consumers and businesses embrace digital-first solutions that are faster, safer, and more cost-effective.

💳 What’s growing: The dominance of card payments

If checks are fading, cards are taking the spotlight. Credit and debit card transactions hit 157 billion in 2021, up from just over 100 billion in 2015.

What’s driving this growth?

1. Consumer preference for convenience: Cards offer unparalleled ease of use, whether online or in-store. Tap-to-pay, contactless payments, and digital wallets have made transactions faster and more seamless.

2. Merchant expansion: Even small businesses have embraced card payments, helped by the rise of point-of-sale solutions like Square and Shopify.

3. Rewards and incentives: Cashback, points, and travel rewards continue to make credit cards an attractive option for consumers seeking value from their purchases.

Why it matters: The steady rise in card payments signals an ongoing shift towards frictionless, customer-centric payment experiences. This trend is likely to continue as contactless payments and digital wallets become even more prevalent.

🔄 What’s growing: ACH transfers

ACH (Automated Clearing House) payments have quietly become a backbone of the U.S. financial system, with both credit and debit transfers growing year over year. In 2021, ACH credit transfers reached nearly 16 billion transactions.

What’s driving this growth?

1. Business adoption: ACH is the go-to choice for payroll, vendor payments, and other large disbursements. It’s efficient, reliable, and cost-effective.

2. Recurring payments: Consumers are using ACH for recurring bills—think mortgage payments, utilities, and subscriptions—because it offers a hassle-free, automated experience.

3. Same-day ACH expansion: The introduction of same-day ACH has added speed and flexibility, making it a viable option for time-sensitive transactions.

The Takeaway: ACH transfers are booming because they meet the needs of both businesses and consumers for low-cost, reliable, and increasingly faster payments.

⚡ What’s growing: the arrival of instant payments

The U.S. has been slower than some countries to adopt real-time payments, but that’s changing fast. The launch of the FedNow Service in July 2023 marked a turning point, enabling instant, round-the-clock payment processing.

Key drivers behind instant payments:

1. The demand for speed: In today’s digital economy, consumers and businesses expect immediate access to funds. Waiting days for a payment to clear is no longer acceptable.

2. Private sector innovation: The rise of platforms like Zelle and Venmo has pushed the industry towards real-time solutions. FedNow is the Federal Reserve’s response, ensuring a nationwide infrastructure for instant payments.

3. New use cases: Instant payments unlock opportunities for real-time bill payments, peer-to-peer transfers, and enhanced cash flow for businesses. Imagine paying a utility bill just before it’s due and having it settle instantly.

Looking ahead: Instant payments are not just a trend; they are the future of money movement in the U.S., opening doors for new financial products and services that cater to the demand for immediacy.

1. The panic of 1907: chaos in a decentralized system

Historical Context:
At the turn of the 20th century, the United States had no central banking authority. Instead, the financial system was fragmented, with thousands of independent banks operating with limited coordination. The U.S. monetary supply was constrained by the gold standard, and banks often faced liquidity shortages, leading to frequent financial panics. The Panic of 1907 was triggered by a speculative bubble in the stock market, followed by the collapse of the Knickerbocker Trust Company. The ensuing bank runs spread rapidly, as there was no central institution to inject liquidity or reassure the public.

Aftermath and Implications for Money:
In the wake of the panic, confidence in the banking system was shattered. The lack of a centralized lender of last resort made it clear that the U.S. needed a mechanism to provide emergency liquidity. This crisis set the stage for monetary reform, highlighting the need for a centralized authority to stabilize the money supply. The aftermath of the Panic of 1907 led directly to the establishment of the National Monetary Commission, which began exploring the idea of a central bank. The lessons from this event informed the design of the Federal Reserve, whose primary role would be to prevent such liquidity crises and maintain the stability of the monetary system.

2. The Aldrich plan: vision without execution

Historical Context:
Senator Nelson Aldrich’s National Monetary Commission studied European central banking systems and proposed a similar model for the U.S. The Aldrich Plan aimed to create a centralized institution that could manage the money supply and serve as a clearinghouse for banks. However, the plan was seen as favoring big banks and Wall Street interests, sparking widespread distrust. Small banks, rural farmers, and populists feared the concentration of financial power in a single, private institution, perceiving it as a threat to their economic autonomy.

Aftermath and Implications for Money:
Despite its failure, the Aldrich Plan laid the intellectual groundwork for the Federal Reserve Act. It introduced the idea of a central institution with the power to issue a uniform currency and manage reserves, concepts that would become core to the Federal Reserve's design. The rejection of the Aldrich Plan also demonstrated the need for a compromise that balanced public and private interests, shaping the hybrid structure of the Fed. This structure aimed to stabilize the money supply while maintaining public trust, setting a precedent for the future evolution of U.S. monetary policy.

3. The creation of the Federal Reserve (1913): A new monetary order

Historical Context:
By 1913, the U.S. economy was rapidly industrializing, and the limitations of the existing banking system became increasingly apparent. The inelasticity of the money supply—tied rigidly to gold reserves—caused frequent financial panics and hampered economic growth. The Federal Reserve Act was a compromise between competing interests: it aimed to provide a centralized control mechanism while allowing for regional input through a system of Federal Reserve Banks.

Aftermath and Implications for Money:
The creation of the Federal Reserve fundamentally transformed the U.S. monetary system. For the first time, the Fed had the authority to issue a new form of currency—Federal Reserve Notes—which became the dominant medium of exchange. This flexible currency allowed the Fed to adjust the money supply in response to economic conditions, providing a tool to combat inflation and deflation. The establishment of the Fed marked a shift away from the gold standard’s rigid constraints, enabling a more dynamic monetary policy that could support the needs of a growing, complex economy.

4. World War I: Expanding Federal Reserve powers

Historical Context:
The outbreak of World War I tested the Federal Reserve’s capacity to manage the economy under extraordinary circumstances. The U.S. faced immense demand for capital to support the war effort, requiring unprecedented coordination of financial resources. The Fed played a crucial role in stabilizing interest rates and facilitating the issuance of Liberty Bonds, which were used to finance the war.

Aftermath and Implications for Money:
The war effort expanded the Fed’s role in the economy significantly. By managing interest rates and coordinating bond sales, the Federal Reserve began exercising more direct control over the money supply. This period marked the Fed’s transition from a passive institution focused on liquidity provision to an active player in economic management. The increased use of Federal Reserve Notes and the flexibility in adjusting the money supply paved the way for a more centralized approach to monetary policy, which would become critical during the economic challenges of the 20th century.

5. The Banking reforms of the Great Depression: rebuilding trust in money

Historical Context:
The Great Depression of the 1930s exposed severe weaknesses in the U.S. banking system and the Federal Reserve’s ability to stabilize the economy. Bank failures were rampant, and the public’s trust in financial institutions evaporated. The collapse of thousands of banks led to a severe contraction in the money supply, exacerbating the economic downturn.

Aftermath and Implications for Money:
In response, the government implemented sweeping reforms, including the Glass-Steagall Act and the creation of the Federal Deposit Insurance Corporation (FDIC). These reforms aimed to separate commercial and investment banking activities and provide federal insurance for bank deposits, restoring public confidence. For the Federal Reserve, the reforms increased its authority, allowing it to regulate reserve requirements and manage the money supply more effectively. The changes also shifted the focus of monetary policy towards managing economic stability and preventing bank runs, marking the beginning of modern central banking as we know it.

Conclusion: The Federal Reserve’s enduring legacy

Through these defining moments, America’s Bank illustrates the dramatic evolution of American banking and the central role of the Federal Reserve in shaping monetary policy. From the chaos of the early 1900s to the structured interventions of the modern era, the Fed’s creation and subsequent actions fundamentally altered the trajectory of the U.S. financial system. The move from a decentralized, rigidly constrained monetary system to a centralized, flexible policy framework allowed the U.S. to better respond to economic shocks, maintain financial stability, and foster long-term growth.

For anyone interested in understanding the transformation of American banking, America's Bank by Roger Lowenstein provides not just a historical account but a deeper insight into the pivotal decisions that continue to influence our financial systems today.

Onchain banking represents a radical departure from traditional financial institutions, not merely as a novel technology layer but as a redefinition of core banking principles. Where legacy banks rely on centralized databases, proprietary control, and a fragmented global infrastructure, onchain banks leverage blockchain as a foundational ledger, offering transparency, programmability, and seamless interoperability. This transformation touches every aspect of banking, from user experience to backend architecture. Let’s break down the building blocks of the onchain bank and how they upend the status quo.

1. User experience: seamless, global, and instant

The user journey begins with simplicity and scalability in mind. Traditional banks often silo accounts based on local jurisdictions, requiring multiple logins, currency conversions, and tedious onboarding processes.

• Streamlined onboarding: Users can sign up once, undergo a single KYC process, and gain instant access to local bank accounts across multiple countries. Fiat deposits are auto-converted into stablecoins, eliminating friction.

• Multi-Currency flexibility: Instead of cumbersome forex and corresponding banking accounts, users can easily create multi-currency wallets, holding local stablecoins pegged to different fiat currencies.

• Onchain ledger: The bank account itself, along with its transaction history, is fully onchain. This not only ensures transparency but also allows for programmable financial logic embedded directly into the account.

The result: A global, borderless financial experience that adapts to the user’s needs without the constraints of legacy banking systems.

2. Payments: frictionless transactions

Payment systems in traditional banking are plagued by high fees, lengthy settlement times, and reliance on intermediaries. Onchain banks streamline the entire process using stablecoins and smart contracts.

• Stablecoin-powered cards: Users receive debit or credit cards linked directly to their stablecoin accounts, offering rewards and cashback without the need for manual currency conversion.

• Instant payments: Transactions are processed in real-time, with stablecoins auto-converted to fiat as needed. The payment experience remains seamless whether the user is spending locally or internationally.

• Cross-border efficiency: Cross-border payments leverage stablecoins, achieving near-instant settlement at interbank rates, available 24/7/365. This bypasses the traditional SWIFT network and reduces costs.

The impact: By integrating stablecoins into everyday spending, onchain banks deliver faster, cheaper, and more transparent transactions, redefining the user’s payment experience.

3. Invest: Integrated DeFi

Traditional banks compartmentalize saving and investment products, creating barriers for users looking to optimize their assets. Onchain banks, by contrast, offer composable financial services that integrate seamlessly.

• Yield-Bearing savings accounts: User deposits are automatically allocated into tokenized money market funds (MMFs) or other high-yield DeFi products, providing superior returns and/or lower execution costs compared to traditional savings accounts.

• Unified investment platform: Users can directly link their bank accounts to decentralized exchanges and access a wide range of assets—crypto, stocks, ETFs, and bonds—without leaving the banking interface.

• Automated strategies: Intelligent automation features allow users to set up rules, such as converting excess salary into investments or rounding up purchases for savings contributions.

The advantage: Onchain banks eliminate the complexity of managing multiple accounts, providing a unified platform where users can effortlessly save and invest, tapping into global markets and DeFi yields. While US FinTech users may already benefit from some of these features inside certain apps, these functionalities are not widespread and often obtained by stacking different services on top of each other. Imagine if this was natively built and accessed on-chain: no complex agreements, no counterparty risks, no complex settlement and reconciliation operation.

4. Embedded KYC

Traditional KYC processes are inefficient and repetitive. Each financial institution conducts its own verification, creating redundancy and significant user friction. This persists because it serves as a defensive moat—banks benefit from controlling KYC, as verified customers are less likely to switch providers: instead of locking users behind repeated verifications, the KYC data can be embedded within a digital identity token that travels with the user’s assets. After a one-time KYC process, users can access the financial system, without the need of repeating the process.

• New Incentive structure: While this model dissolves traditional KYC moats, it introduces a novel market-driven incentive. The financial institution that performs the initial KYC can receive rewards each time the verified identity token is used by other participants. This encourages thorough and high-quality KYC, benefiting the entire network and reducing friction.

• Trustless verification: Onchain KYC tokens are verifiable without manual cross-checks. Any institution can independently confirm the authenticity of the token onchain, streamlining compliance, reducing latency, and shifting the KYC model from siloed verification to a single, portable identity solution that works across the entire financial ecosystem.

• Selective disclosure: The digital identity token allows for context-specific information sharing. Users can reveal only what is necessary—such as confirming age without disclosing their full date of birth—granting greater control.

The Result: A streamlined, privacy-first approach to KYC that reduces compliance costs, enhances user experience, and creates a more fluid, interconnected financial environment. All while rewarding who ‘does the job’.

5. Banking Core

Unlike traditional core banking systems, which rely on siloed databases and sometimes outdated technology stacks, onchain banks are built on a decentralized ledger, providing a unified, programmable backend.

• Blockchain as Core Ledger: The transaction history is stored directly onchain, ensuring immutability, transparency, and real-time access.

• Multi-approval wallets: Bank accounts are implemented as multi-approval wallets, offering both custodial and non-custodial options for users, balancing security and flexibility.

• Abstracted chains & fiat rails: Cross-chain functionality and fiat on/off ramps are integrated seamlessly, abstracting away the complexity for users. Partnerships with global banking networks enable smooth fiat interoperability.

The edge: A resilient, transparent infrastructure that reduces operational overhead and enhances the scalability of financial products, allowing for rapid innovation. Use fiat or tokens, seamlessly, based on what is best for that use case.

Bridging vision and reality

The potential for onchain banking and decentralized identity is immense, but several critical barriers remain, largely driven by misaligned incentives, regulatory constraints, and integration challenges:

• Incentive Misalignment: The current financial system’s reliance on centralized control gives incumbents strong incentives to preserve the status quo, as banks benefit from exclusive user data access, high transaction fees, and the loyalty driven by proprietary services. In contrast, onchain banking leverages decentralized infrastructure, breaking down barriers between financial services and threatening established revenue streams like cross-border fees and asset custody—leading to resistance from traditional players. Smaller fintechs face additional challenges due to their limited scale, struggling against the bundled offerings and network effects of large incumbents. With no immediate financial rewards or a clear business case for onchain integration, widespread adoption remains elusive, requiring a fundamental shift in value creation towards shared, network-wide efficiencies.

• Regulatory Barriers: The regulatory landscape is misaligned with the architecture of onchain financial systems. For instance, Bank Secrecy Act (BSA) regulations require centralized monitoring and reporting of transactions, clashing with the decentralized, peer-to-peer nature of onchain transfers. GDPR and other data protection regulations emphasize user consent and data minimization, complicating the implementation of a model where identity and transaction data flow across multiple platforms. These legal frameworks were designed for a centralized system and don’t yet account for the dynamic, borderless nature of onchain banking. Adapting regulations to support decentralized identity and financial services would require a paradigm shift in how compliance is enforced—something that is unlikely to happen in the near term, given the slow pace of legislative change.

• Integration Gaps: Despite progress in blockchain interoperability and fiat on/off ramp solutions, the integration between onchain and traditional finance remains inadequate. User experience suffers from the fragmentation of services, with inconsistent interfaces and complicated processes for converting assets between fiat and crypto. The difference in risk management practices is a significant barrier. Traditional financial systems rely on centralized oversight, batch processing, and delayed settlement, which are fundamentally at odds with the real-time, transparent nature of onchain transactions. To achieve seamless integration, the industry must develop standardized compliance protocols, improve UX design, and establish reliable interoperability frameworks that can bridge the gap between legacy banking and decentralized finance.

Conclusion: The path forward for onchain banks

The promise of onchain banking is clear: a unified, decentralized financial ecosystem that offers superior transparency, efficiency, and user control. However, realizing this vision requires overcoming significant regulatory and integration challenges. The current financial system’s incentives, entrenched compliance frameworks, and fragmented infrastructure stand in the way of mainstream adoption. For now, hybrid models that integrate select onchain components may provide the most credible path to market, demonstrating the advantages while navigating regulatory uncertainties.

Despite these hurdles, the momentum is building. As user demand for transparency and control grows, and as fintech innovators continue to push the boundaries, onchain banking is set to redefine the financial industry. It’s no longer a question of if, but when the paradigm will shift, unlocking a new era of banking that truly reflects the decentralized, interconnected world we live in.

What is Fiat Currency?

Fiat currency refers to government-issued money that has value because the government says so, and people trust it. Think of dollars, euros, yen, and pounds. Unlike gold or cryptocurrencies, fiat money has no intrinsic value—it’s valuable simply because we agree to use it as a medium of exchange.

How Do Fiat Payments Work?

When you buy something with fiat currency, whether it’s a cup of coffee or an online subscription, your payment goes through a series of steps:

1. The Payment Request: You swipe your card, tap your phone, or click ‘Pay’ online. This action starts the payment process.

2. Authorization: The payment information (your card or account details) is sent to the payment processor, like Visa, MasterCard, or PayPal. The processor checks with your bank to see if you have enough funds.

3. Approval or Decline: Your bank checks your balance. If there are enough funds, the payment is approved. If not, it’s declined.

4. Settlement: Once approved, the funds don’t move right away. Instead, there’s a process called settlement where banks exchange information, and the merchant’s account is credited with the payment. This usually happens within 1-2 business days.

Common Types of Fiat Payments

• Cash Payments: The oldest form of fiat payments. You hand over physical bills or coins to pay for goods and services.

• Card Payments: This includes credit, debit, and prepaid cards. When you use a card, your bank temporarily covers the cost until the settlement is complete.

• Bank Transfers: Also known as wire transfers or ACH payments, these are direct transfers from one bank account to another. They are commonly used for big transactions like rent or salaries.

• Digital Wallets: Apps like Apple Pay, Google Pay, and Venmo store your fiat money digitally. You can pay with a tap of your phone, but the underlying transaction still involves your bank.

Why Do People Use Fiat Payments?

• Stability: Fiat currencies are backed by governments, so they tend to be stable (as long as the economy is healthy).

• Convenience: Everyone accepts fiat money. You can easily use it for almost any transaction, from groceries to online shopping.

• Trust: People trust fiat currency because of regulations and legal protections.

The Downsides of Fiat Payments

• Inflation: Governments can print more fiat money, which can reduce its value over time (inflation).

• Fees: Using credit cards or international transfers often comes with transaction fees.

• Dependence on Banks: Fiat payments rely on banks and financial institutions. If the system goes down, your ability to pay might be affected.

Conclusion

Fiat payments are the backbone of our current financial system. They offer convenience and stability but come with some trade-offs, like inflation risk and bank fees. Understanding how they work helps us appreciate both the advantages and the potential limitations of using government-issued money.

There’s very little doubt that the crypto revolution is amongst the most exciting forms of innovation our generation will witness and we can now agree that it’s moving much faster than people predicted just two years ago (perhaps the absence of crypto conferences in ’20 and ’21 shifted the focus on #buidling).

Many people reached out to me asking to pick my brain to evaluate whether jumping to crypto is the right move for them. Even though I expect to refresh the argument often in the months ahead, I want to share an exercise that will help you answer the question “Shall I work in crypto?“. It boils down to five questions:

What user do you want to serve?

While the vision is what fuels the energy to move forward, the ability to execute generally requires different levers. From the cloud to the financial system, crypto companies have been reinventing the primitives and the infrastructure of large traditional industries; pushed by the need to validate their products, they targeted early adopters and often motivated them with financial incentives to offset the risks and the friction.

As of now, crypto adopters can probably be described with these categories:

• Active and professional crypto traders → who want to maximize their returns by performing sophisticated trades

• Passive and unsophisticated crypto traders → who want to put their crypto to work without moving their money around

• Fintech users → who want to buy and sell bitcoin and ethereum inside the apps they use

• Blockchain Layer 1 companies → who want to attract usage, create more wallets, outsource some platform work to fill some gaps in their infrastructure, etc.

• Blockchain Protocols and Dapps → who want to build distribution, attract users, and validate their incentive model

• Blockchain infrastructure companies → who want to sell standardized products to solve clients’ recurring needs

• Financial service companies → who want to increase their performance by upgrading their infrastructure

• Enterprises → who want to solve problems specific to the vertical they operate in

• Enterprises’ innovation centers → who want to explore new use cases and increase the perception of the company by running internal research projects

Each segment comes with a different set of challenges and influences the activities you will be working on on a daily basis; you want to make sure you are not only comfortable with but also positively challenged (someone would say ‘passionate’) about dealing with.

What challenges do you want to solve on any given day?

Blockchain is fascinating because it requires an understanding of technology, markets, incentives, game theory, legal frameworks, and product-market fit at the same time. You will have to have a point of view, understand and anticipate trends, solve problems that no one else has ever solved before. You will have to be comfortable making decisions without history and data, you will have to justify your ideas with stakeholders who may have different views and reads of the same situation. You will have to keep your team focused while the industry evolves but you will have to have the courage to kill what won’t work based on new information. You need to be ready to sustain an unexpected crypto winter.

You will have to solve very different challenges: one day you discuss what development framework you want to support, then jump on a call with legal teams to understand the European data regulation, then go back to unblock an engineer stuck on a data format of a transaction, and so on. Working in blockchain means being exposed to a variety of aspects that define what you learn and how you grow. My advice is to spend a lot of time thinking about this question.

What’s your contribution to the industry?

Blockchain evolves every day because the people who are in it push it forward; something is impossible until someone does it and becomes the new norm. But it is still very small relative to other sectors and operators know each other and talk to each other to figure out what’s next, which projects to support, what’s the next natural step for a certain topic. You become the point of reference for something inside and outside your company and you need to know 1) what you want to spend your energy on, 2) what you want to be known for, and 3) what you can do better than peers.

What’s your timing?

The Blockchain narrative comes from Venture Capitalists, Enterprises, and the Media.

Venture Capitalists have a 10-year vision, have the ability to wait a bit longer if they are wrong on timing, and are in a position to place different bets and profit only from the ones that work. As an operator, you don’t have this luxury: you have one bet which needs to work out in a reasonable timeline and your chances to place multiple/competing bets are really limited.

Enterprises make money with their core businesses and can afford to dedicate 1% to big innovations, especially when the market rewards exposure to it. If you use “enterprise adoption” as a metric, you’d better understand which enterprise, which adoption, from whom, why, at which cost, and how close to production the proof of concept is.

It feels superfluous to talk about the Media.

In short, it’s very hard to use someone else’s narrative to justify your own decisions. In the end, what you learned, the people you worked with, and the things you did day after day are the real value of your experience, which brings you to the previous questions.

What metrics do you want to own?

This is my favorite question. I purposely left it at the end because you will use it to validate the conclusion you got to by answering the previous questions. If you like the metrics you will own, bingo! If you don’t, you may want to reconsider your reasoning or even your intention to work in crypto. It goes without saying…you need to like the metric per se AND the realistic results you can obtain in the time frame. you established for yourself.

People get into crypto from very different angles and for many different reasons but your personal metrics for success matter, hence, the alignment between reality and your expectations will determine your own success. In an industry that evolves every day, in a World dominated by so much noise and so many opportunities, approaching crypto without knowing what to consider success is almost certainly a mistake you will regret. On the other hand, doing your homework will open you the doors to an experience you will tell your kids about.

Thanks to Justine Humenansky for the feedback. If you want to chat more, please reach out.

A responsible data economy is based on two elements: confidentiality is one. Properly aligned incentives among final users are equally fundamental.

This post seeks to outline more on the future of programmable data and money and how the network can be used to enable users to earn a data market yield.

Breaking the data paradox with an incentive-based model

Fresh data has become a valuable tool for many companies — it can inform critical product decisions, improve personalization, enable user growth, and create better analytics. Alternatively, users don’t derive the maximum value from their data, in part because they aren’t offered easy, clear, and transparent ways to do so. The two sides of the negotiation, users and companies, differently price the data, leaving a gap in the equation.

This gap is the result of misaligned incentives: companies design products that collect data, while marketplaces and aggregators distribute it to third parties. The user — the data producer and owner — is left outside the value-capture cycle. This is problematic because this cycle influences the decisions that companies take at different stages of their growth. In the earlier phases, they are incentivized to attract their ecosystem of users/developers/etc. through cooperation. The tradeoff between value extraction and cooperation progressively skews toward value extraction when the company grows. Decentralization, crypto, and smart contracts can break this dynamic.

To truly develop a new model, we need to go beyond protocol-layer incentive schemes. If crypto networks’ ultimate revolution is to encourage coordination and compensate network participants, information exchange is obviously the lifeblood of this cooperation. Hence, incentivizing users to engage in (fairly compensated) data exchange, in addition to incentivizing protocol use, seems like an obvious component to achieve the vision of a decentralized and cooperative web (How many times did you hear…”why do we need a decentralized Facebook?”).

Programmability and Privacy

Blockchain creates protocol level incentives. Smart contracts create computers that can make commitments, introducing strong guarantees that code will continue to operate as designed without relying on humans or organizations. The Oasis Network also provides data encapsulation, that allows users to establish selective and consent-based computation on their information, and data privacy, which allows users to maintain ownership and confidentiality of the data even when the right to compute is granted to a 3rd-party.

Once data is encapsulated and controlled by users, programmatic access can be managed via smart contracts: each time an application needs to access users’ data, the smart contract enforces the specified policies and the blockchain records the transaction. Keeping the data private implies that data buyers can’t re-use the information multiple times after the initial acquisition. Each request triggers the execution of the smart contract, resulting in a programmatic, per-consumption, model.

Programmatically attaching money to the flow of data creates the possibility to establish a direct and repeated relationship between the data producer/owner and the data consumer/buyer, making it possible for companies to ‘continuously’ cooperate with users.

Data Market Yield

The above model changes the data collection practice. Instead of finding creative ways to collect data and then hide the policy behind long T&Cs, applications can create incentive-based models that encourage data-based cooperation between users and applications. Users remain the owners of the capsules that contain their data and give temporary access to computation models that are allowed to perform specific tasks only. Data requestors lock an asset that serves as a payment for the corresponding usage of the data and the transaction is settled, automatically, without any negotiation to be done or legal contract to be established. The resulting consumption-based model allows data to generate a yield: ‘control your data, invest it, and earn a payout’.

How it works today

How it works on a privacy-preserving platform such as Oasis Network

Where we go from here

At Oasis Labs, we built APIs to abstract the complexity of blockchain. We partnered with some of the main players in DeFi to integrate their protocols and services on the Oasis Network. We are supporting and incentivizing companies and developers that align to the vision; Through our Dev Accelerator program and the Parcel SDK developed by Oasis Labs, the Oasis Foundation is focused on encouraging developers to start incorporating privacy as an incentive for the final user.

Controlling the data and earning a yield should be considered normal. Creating the capability is the first step. Raising awareness and showcasing the incentives is the following one. My next posts will be dedicated to discuss more about the partners we onboarded and why we decided to work with them. As always, blockchain is a collective effort and I would love to hear from you if you have feedback or suggestions.

Thanks to Dawn Song, Bennet Yee, Anne Fauvre, Justine Humenansky, James Hinck for reading this in draft form.

Plaid in numbers:

💵 investments to date: $353.3M

💰 revenues: $150–250M

🤓 valuation prior to acquisition: $2.65B

🥳 acquired for: $5.3B (2x the previous valuation)

🤝 provides connection for 80% of the largest US FinTech apps

👨‍👨‍👦‍👦 200M accounts linked (115% CAGR since 2015)

👩‍💻 2,600 developers

#1: Plaid is facing risks (that Visa can solve)

A crucial component of Plaid’s business is the ability to get access to users’ bank accounts and scrape the data on behalf of 3rd-party apps. Thanks to this capability, users are offered an enhanced experience that materializes in transparency, easiness, financial advice, etc.

Two problems arise: 1) banks are complaining about the poor security of this practice and 2) users lose control of their data without realizing it.

Visa can leverage more solid relationships with bank partners, which can lead to the development of a safer authentication system / data acquisition system than what Plaid has built so far.

#2: Data

Despite some limitations, payment networks such as Visa and Mastercard are huge data aggregators as they store data of millions of transactions per day. The biggest limitation is that they only see (parts of) the transactions that happen within their network. Plaid acquisition would potentially enable Visa to see the rest of the picture in which Plaid is currently used by all those apps that reduce the need of Visa such as Venmo or Square Cash, as well as non-Visa transactions of a bank account.

Despite this is very tempting, Visa will have to be really careful because Plaid’s clients won’t be keen to let Visa see/use their data, hence creating the case for switching to Plaid’s competitors.

#3: Expansion

In the US, Plaid’s penetration in key FinTech verticals is between 2 and 7%. This represents a win-win situation for Visa: on one hand, Visa’s relationships will help Plaid sign more clients; on the other hand, Visa will expand its product offering and its addressable market.

Visa will also push Plaid’s expansion outside the US: in fact, there are ~15x more fintech users in International markets than in the US…and Plaid’s penetration in these markets is really low.

#4: Payments

But the most interesting use case is the potential development of online payments. Visa is a middle-man, and its value lies on the ability of creating a standard for merchants and buyers to exchange digital money. While the card is a very practical tool in the offline world, especially with the advent of faster technologies such as contactless, it’s generally a strong friction point in the online commerce. That’s why companies such as PayPal, Venmo, Amazon, Visa itself are trying to simplify the process pre-saving the card and letting users pay through a simple authentication. A PISP (Payment Initiation Service Providers) is a 3rd party which enables a payment to be authenticated and paid directly out of a persons or businesses bank account rather than a debit or credit card. A company like Plaid strongly simplifies this process as it helps the user pay through her bank simply with username and password — an easier process than PayPal as there would be no need to create another account on top of the one the user already has with her main bank. The rise of a ‘Pay with your bank account’ system would allow merchants to save on credit card fees without creating any friction for the user, while also reducing the risks of credit card frauds. Plaid’s acquisition would give Visa enough visibility of the new trends, allowing the company to anticipate competitors’ moves while protecting the business model.

So, what are these customer expectations? What do customers really want? Here are 7 things that customers want.

1. To be respected — Don’t treat me like a fool. Don’t act like I’m stupid. Don’t discount what I have to say. I want to be treated with respect.

2. Fair price for a quality product — When it comes right down to it, doesn’t it make plain sense that customers should receive a quality product or service for a fair price? Of course it does. But why does this become so difficult at times. I paid good money for your product and it’s not performing the way you advertised it.

3. Fairness — I also want to be treated fairly. That doesn’t mean I’ll always get what I want. Sometimes what I want is not possible, feasible or reasonable.

4. Empathy — When I need help in purchasing an item or when I call a company because of a problem with their product, I want them to show a little empathy, or understanding. I want them to put themselves in my situation so they can understand my situation — walk in my shoes.

5. Information — I can’t make an intelligent decision unless I have the facts and information in order to do so.

6. Someone to understand my needs — This is a close kin to empathy. It’s a step further, though, since it means that I want someone to own my problem. If I ask a sales person for help, I don’t want to be dumped on someone else.

7. Someone I can trust — When you say you’ll get back to me, you’d better get back to me. When you say you’ll handle my request, it better be handled. When you say your product will do something, it better do it. Otherwise, I will lose trust in you. When you start building trust with your customers, then you are also building respect.

At Procter&Gamble, I learned something really useful to conduct productive meetings, avoid micromanagement, and win as a team: the 3B’s framework.

My team decided that every weekly report-manager or skip level meeting, at every level of the organization, had to be structured in 3 points:

What’s Big:
does it really make any difference to focus on small things that are not going to make any difference? Even more important, are they worth the time of 2 (or more) people? Focus on something impactful, something big!

What’s Broken:
is there any problem, something that should be fixed? Let’s discuss it with someone above you; you will (most likely) be able to repair faster.

What’s Breakthrough:
how could we do something completely new, that can really improve our competitive positioning in the market?

I advise to use this scheme in both business and personal life; is pretty simple and makes you save a lot of time and effort; rarely we read about something we can action tomorrow.