Vugar Usi Zade - Bitget- Innovate. Secure. Scale: Bitget’s Path to the Next Billion Users

Okay, Var. So, uh, before you start,

you good?

Yes, it is.

All right. So, um, I want to say thank you very much because as you guys know, Spit this year, it's one of the main sponsors of Napoli. Thanks to them, we could make this happen. Uh, on Sunday, we have an amazing trip with the boat on Capri with party. But this kind of sponsorships allows Napoli to continue to do this every year in order to give blockchain technologies and make events in in the southern Italy and uh also in Europe.

So thank you again Vugar. Um Vugar will going to he's going to talk about um BitGet growth strategy. So this is quite interesting because uh obviously BitGet is doing so well in Europe. So we are happy to hear how they manage to do this. Um and how do you keep a decentralized leadership security first design and bold execution are shaping the crypto adoption.

Vugar will unpack that uh what it takes to build trust scale infrastructure and on board the next billion users to the web three. Var the stage is yours.

Thank you. Thanks again for everyone uh for being here. It's a great pleasure. It's a beautiful venue. I think it's the most beautiful venue of a crypto event I ever been and it's truly impressive and I know how it is tempting when you have a sea and drinks and all this in front of you coming to listen to a speech and therefore I will try to make it as fun as interesting as possible.

And one thing I will definitely not do is to tell you what pitket is. I believe you guys already know how we work or how you have to trade but instead I want to take you to in a journey where uh I'm sure for the people who been in crypto more than two three years uh narrative was always that uh web 3 is so cool people will jump from web two to web three banks will uh you know all go bankrupt and we become the next banks three four years fast forward we went to this kind of events again we were talking no people didn't come from web two to web three. It is us our time to go to web two people and everyone start talking how we are bridging uh web two and today I want to actually uh think to the crypto as a part of the big financial system and how macroeconomic situation and financial uh uncertaintities are impacting our life. Of course, I'm sure yesterday you already checked the charts. Ethereum is getting around 3,500.

uh bitcoin is all-time high and question is is it a blow on the top or we are still having an alt season while all these questions I will try to find an answer uh during this presentation if it ever works any idea how it works I guess it works First, it's a very important chart. Uh because I come from an economic background. Uh this is the first time we see that uh bitcoin is doing something much different. We call it decoupling from the traditional markets. And why it is very important because the all the time logic was that money comes to traditional markets then people go towards the riskier assets which is Bitcoin and if they make more money they take the profits out and then it spills over to the al tokens and it goes till the end and it is kind of a full cycle of the economic growth and when then we all go to bare market.

We talk about when the bull season comes next and it goes on and on and on. While all the time we were pitching Bitcoin is a great asset to invest because this is the way you can literally by doing nothing genius beat S&P 500 beat the London's real estate market earn more money while for commoners like us who are trying to earn more money to trying to leverage uh this chart actually shows something very different for institution and large uh players who come to the industry because uh when you run trillion dollar fund or you are a private equity firm. Uh your need is not about to make I don't know 10 15% return on investment. Your goal is to hedge against basically until today if Bitcoin was something that would uh spill over from the traditional markets. Today Bitcoin is an hedging opportunity for financial institutions which makes this bull cycle much different than any other bull cycles before.

And it also gives us a chance to understand that actually crypto in itself is becoming something much much massive and household name. Uh helping people to kind of a build new products and do something much different because at this point we are fighting or competing for the consumer attention together with the banks. If you look at these charts we see that 59% of the financial institution clients it's you me and everyone else. If you are having a bank or neo bank or crypto exchange that uh gives some sort of a service, if you are not happy, you will be not sticking because of your loyalty, you will be able to change and go and you will not even hesitate about this. Why it is important?

It means if you don't build a good product or if you are not competing enough on a fee side or any other place, people are ready to switch. It's a good news. It means as a crypto industry, we can build a product that people will switch from their bank to us. But also it's a bad news for us. It means people will be switching from us to the banks back especially if or probably your neo bank is offering also crypto assets and commodities and many many others.

While keeping an idea on this uh numbers I want to take you to a very different uh portion. This is about the blockchain adoption. Recently JP Morgan announced that they will be doing uh and offering the Bitcoin custody services and many other things to their clients because uh not because they are you know so innovative and good. Actually JP Morgan was always against the bank uh banks and their traders touching Bitcoin but today because US passed the law because almost all big banks are jumping into this because they want to compete with the crypto exchanges. Eventually what happens banks start offering the same services.

While in crypto we are very fast and very agile. It's a very big problem because uh today BitKit has 120 million user. It's the second largest crypto exchange. First largest crypto exchange is our friends from Binance. They have around 280 million customers.

But thinking about City Bank and JP Morgan uh these banks they don't only bank people and companies. They bank countries they bank nations. Now we are talking scale in a a national level where JP Morgan operates I don't know in 100 countries CCT HSBC in 100 countries now it is like a 100 nations are getting an access immediately and for them offering crypto is just a service while for us it is a whole identity because for a bank if you go open your new bank today you can buy a stock you can invest in gold and silver you can invest in ETFs and you can also by crypto at this point is it kind of a interesting part and alarming part because the idea of Bitcoin and Satoshi's white paper was to cut out the institutions and make it peer-to-peer payment method where we kind of become free we claim our freedom back and financial independence but in a historic turn of events today we are standing in a place where this is actually totally opposite the institutions are coming and institutions are taking the share that they were meant to be cut from. We have kind of now two ways to go. First, we can definitely celebrate that it's great.

It's perfect for adoption. It's perfect for a lot of institutional funds coming in. But also, it is very very bad because if we can't move fast enough and we can't on board people fast enough, then we will be probably becoming a service and one of the services that an standard bank can offer. On the other end, we have an much added advantage because banks uh always are tied to central banks. Central banks which are the officially government uh run organizations they dictate banks what to do and banks are uh always very conservative because they don't want to step on a sliding sand.

While crypto heads we are always here to fight. We want to do better. We want to build something good. But also first time in history, crypto companies start becoming both working with the government because of legislation but working with all the other uh financial providers in order to be agile and in order to be able to offer bank-like services. Three four years ago when uh journalist from Cointelegraph I believe asked me that where I see Bitkate in next three years I told as all other centralized exchanges will become banklight organization.

But today I changed that statement. I'm telling that today banks are becoming crypto exchange- like organizations because they offer so many services. And this is kind of a five things we I believe still crypto companies can do better and faster and cheaper than traditional banks. It is of course speed. Speed is very important because legacy systems are not as fast.

Of course uh it banks no one stops banks from adopting blockchain technology and running all the transactions on chain but until they do that we are having an uh added value and advantage. We are fast and we are instantaneous. We are talking about split-second uh confirmations when the payments come. Definitely fees. Banks run on the fees because when you think of a bank you think of these huge buildings with many offices, men and women like me who wear suits.

They're boring. They come at 9:00 a.m. and they work in that place. And there's a huge running cost behind these large organizations.

While crypto organizations are usually digital first and remote first where our running cost is marginal compared to traditional banks. Therefore, banks need to charge you more. being access uh having 247 access is another great part because when everything is digital uh you have much better advantage than driving and going to a physical office but banks are keeping up here because I'm sure many of you use Revolute or any other neo bank that is keeping up at this point banks are very naturally known for these small hidden fonts here and there in your contract you will not know their terms and conditions when things run on chain it's very hard to Falsify and last but the most important out of it and the building idea of Bitket is problem of unbanked people. While we are in European Union, this must not be an issue that someone thinks of first because in European Union probably you can order a bank card to be delivered at your doorsteps. uh while in many parts of the world in Southeast Asia in the India for example uh Africa mainly even Latin America it's a very hard and expensive process to have a bank account and another funny part is that I remember after many years ago when I returned to UK I wanted to reinstate my bank account and bank asked me for three months uh rent or address uh proof and I couldn't rent an apartment because I didn't have a bank account It became such a like a weird closed circle and many many people across the world face this issue.

Banks are like having a bank account is a very hard process while today at BitKet you can literally do KYC and the next day order virtual card and eventually physical card and start uh using our exchange or our wallet the same way that any other bank product will work. But as I mentioned this is the most important uh issue that uh took us took the idea of a bit because when I was at Davos and I was listening that how many people are unbanked in the world uh almost uh 60% of world's population is unbanked and 70% of them are women. It means at this point we are not only solving bank issue or banking issue we are actually helping more and more people to come and participate in global economy. We are helping I don't know web designer from Cambodia to actually serve a client in US and get paid in crypto and so on. While as I mentioned we started with a great vision to solve world's most biggest financial challenge.

Uh today we stand strong as a number one copy trading platform. We sell serve 120 million users. We move $20 billion every day and from the start of the year we almost moved around trillion dollars which is a huge huge number and we are becoming an organization that is truly helping people to live on chain. Our idea and our goal is to build a platform where you can earn, save, invest and eventually spend on chain without the need to having your traditional bank. And in this journey I want to take you through like a venture building experience and how we were able to build something as huge and what we were planning to do the next.

Just a small uh introduction as a CEO of BitKit. I took over the office two and a half year ago. When I took over the exchange had around 10 11 million users. we were around top 20 and in two and a half years we managed to do 10x growth both in our trading volume and both in our user numbers which is 120 million today and with our vision we believe that in next two and a half three years we are able to do another 10x growth which will help us to finally land on a billion users and I believe if you've been to crypto again more than two three years the billion number is the biggest kind of a benchmark for everyone I I believe uh almost all my colleagues whether they're running an exchange whether they're running a layer one if it is Athereum everyone talks about that billion users and this is our strategy we believe should work together there first and foremost we from since the FGX collapse we try to build a platform that is not only a brilliant as a tool in itself but we also wanted to become much more transparent than your traditional bank. If you ever try to withdraw a huge amount from your bank, I'm sure you had a big problem because first you have to call them in advance that they actually have the cash.

It means whether you have millions in a bank or $20 probably bank doesn't hold that money in a physical form. Second important factor is that in many countries from Australia, I'm not sure about Italy, but from Australia to Middle East, if you try to withdraw anywhere more than $200 of your own money from the ATM, from your uh savings account or debit account, I'm not talking about credit cards, you will be charged 1% commission in order to actually cash out your own money. At an exchange, we are tackling the issue very differently. As I mentioned, because on FDX case and because we want to compete with banks on the transparency, we do proof of reserves. We are one of the most consistently proof of reserves publishing institutions in the world.

Every second month, we publish our proof of reserve through the Merkel tree confirmation showing that all your funds are safe within the exchange. And we pledge to have at least 120% more money. It means if today all 120 million of our users decide to come and take all their money out of the exchange, we have 30% more money left. For my trader friends, it means we always have a better liquidity than anywhere else. But for most of our users, it is the guarantee and safety that if tomorrow something happens, they will be able to take their money out.

But of course, when I talk like this, everyone goes back to by bit hack and comes back with a question. What if you get hacked? What kind of happen? Now we trust that you have the money but someone steals it from you. I'm very proud to say that BitKit never actually faced any serious uh challenge uh in terms of security not because we are a lucky bunch of people because we have uh protocols in place.

We work with the most advanced uh service providers like Samsap who builds an AI to tackle AI fraud and deep fake fraud helping us to remain safe and secure. But we have the industry's second largest uh protection fund consisting of 6,500 bitcoins and some USDT and USDC's in seven publicly available wallets that you can monitor any time which guarantees if something goes wrong we will have almost around a billion dollar if we take the today's Bitcoin rate but we always promise that even if Bitcoin price crashes this fund will remain at least at the $300 million level making sure if something goes wrong we can help our customers And I didn't mention by bit case uh for joke. Uh actually when by bit hack hacken happened, Bitkate was the company that jumped in first and offered 40,000 Ethereum to help them to refund the customers. We lend them out that Ethereums that they returned back overall. Now we have built this secure and transparent system.

Our second goal in our growth journey was to build something truly remarkable and focus on what we are good at. Definitely if you are building a portfolio I will advise you to diversify your portfolio. But in business we think of something which is diverse enough to tackle and balance the risks. But on the other end we are very much laser focused on building something web three. Therefore all our investments are focused on web three than anything else.

And when I talk about web three it comes to different products that we offer in terms of savings, different products that we build to uh serve our customers better. But we also heavily invest in our uh bitget wallet which is our decentralized offering our AI tool. I believe most of you know we just launched a get uh uh AI that will help you with the trading decisions also with get paid that is our gross locomotive in next three years. But besides that, we own a lot of media businesses that amplify web3 ecosystem and we always focus to make sure that we invest to the ventures that bring impact to the web 3. Besides our core business which is an exchange which get actually owns an $und00 million empower X fund that does a lot of investment in infrastructure projects making sure that we support the growth of our industry.

Now we have built an kind of a road map. We are very transparent and secure. It goes an important factor which is a product. Building a competitive product is very important. And if you go today to our exchange, I take a huge pride that we are the only exchange that doesn't offer light and pro version because we believe if you want to become the next challenger for traditional finance, we have to remain as simple and as easy to use as possible.

And this is the way we tackle it by making sure our platform remains easy to use for everyone. Whether you are the firsttime crypto buyer or you are a seasoned uh trader, you have an ability to navigate and get both of best of the both worlds with that. Another key point how we want to compete with the banks and financial institutions is actually what your money does because today uh I was little bit surprised. I was spending my biscuit card and it is US denominated card which means every time I do any transaction I'm actually settled in US dollars but now because we are in Europe I've been paying and buying some gelato and I realized that actually today dollar versus euro is $1.18 cents per one euro dollar lost around 20% value towards the euro it to overall if you take yen and many other big currencies it lost 25% its value meaning your $100 is actually six months ago is actually $75 today and sometimes I say maybe the price hike of a bitcoin is not because bitcoin is expensive now because dollar is cheap because bit one bitcoin is equaling to be one bitcoin but uh the way we compete with the banks is that in even in the best circumstances your bank's uh annual return will be somewhere 3 4% if you go to most riskiest currencies you'll get around 10% while at crypto to industry, we are still able to compete with most exchanges in among ourselves but also traditional institutions when it comes to the return on investment.

Whether you are the firsttime buyer or whether you are the mining or farming these tokens, you'll be making much much more money than in your traditional bank. Another key point I think will be is not only just how you trade is not how to trade but also what you trade with. We are the first exchange actually availing USDTM like margin futures and trading is our definitely bread and butter. But this is not the only thing we take proud of because most of our users use more tools than doing the margin trading or futures trading. But if you want to trade definitely Bitket is one of the places to go because we are number four in terms of our market cap and we offer the best liquidity.

But we have noticed a new trend in last year and a half. Whenever people come to crypto basically they want to dollar cost average Bitcoin especially from the western world like Italy they want to scoop up the top 10 market top 10 market cap tokens because they are less riskier and eventually most of people hold their money in USDTs in case of something happens in the market they want to jump on an opportunity. All these actions uh helped us to build something we call principal guaranteed feature where you are able to invest your digital assets in a principal guaranteed account. Meaning you don't trade at that point and if you put 100 USDT you get 100 USDT back. If you put one bitcoin you get one bitcoin back and if you get 10 bitcoin you get 10 bitcoin back.

But you also get something on top of it. Similar to the staking, you actually get a farming tokens from other projects. This way, you are able to explore new products and new projects and to explore new tokens without risking your initial amount. By introducing this, we were able almost double our user base who use earn products because through the earn they are not uh risking much but they're still uh making the best use of the product. But again as I mentioned not only earning and investing is a core part actually great part of the having a crypto exchange is this beautiful ecosystem where you can live without living onchain life you don't have to go to OTC you don't have to take your money and turn it to government issued paper money instead you can tap and work my favorite product is bit car instead of building our new you know complete independent payment system.

We partner with Visa and Mastercard to issue UAD denominated cards which works as a regular debit card but at this point you don't need to have an account and you can directly spend your money from your crypto account helping you to leave on chain but still use the ease of the industry. But we are of course smart people. We collect all this data and the next slide I will explain what we did something much much bigger based on this data proving our point that most people in crypto they are not here just to trade and earn money but everyone wants to leave the freedom of the crypto and have this independence to be able to spend their money. But also the good part is that when you have a crypto card, it means you are able now to trade and to buy crypto tokens without commission or uh the way that your banks will do usually charge you another 20% on top of it for the service fees. All all this can be cut when you have a crypto card.

But before I take you to an idea of cards and payments, I want to introduce Bitket wallet. Especially for the DJs and people who love being on living decentralized life. It is our bread and butter. Three years ago in the middle of the bare market when our colleagues were cutting their budgets, we were actually doing something crazy at that point. Today it's proved not to be as crazy.

We went and invested $30 million to Bitkeep wallet a new decentralized offering and in next three years we invested heavily in terms of the talent innovation and product to build a bitket wallet. Bitket wallet today is world's most loved crypto wallet. We surpass both metam mask and trust wallet in downloads. We have we serve around 80 million customers. to move around $12 billion and with almost half a million project listed you get an access to trade virtually any token anywhere in the world in in your fingertips.

And when we look at the growth journey actually BitKet wallet's growth journey was much faster and much bigger than Bitkate exchange because Bitkate exchange took a lot of learning process while BitKet wallet was built by people who already knew the industry within the team. When we collected all this data I want to take you back to that journey of the crypto cards through the exchange that you are able to tap and purchase and today you have a bit wallet. actually bitket wallet even though it's a decentralized wallet we do offer a master cards uh in US denomination on bitk wallet too and good part is that because wallet is decentralized it is KYC free and as per the European law because all the transactions below 3,000 they don't have to be declared you are able to use your money and your freedom it's not a financial or tax evasion advice but definitely it is a great way to look how you can regain your independence back in the beginning of my speech I talked to you about how two years ago we only had 11 million users. Today we serve 120 million users and we aim in next two three years to on board a billion user. This is where we land as a strategy.

Now through my presentation I explained you how we had a vision. We built this transparent and secure product. How we are competing with the traditional institution and how we are competing with other exchanges. And last I explained how we introduced life on chain through the payments. We end up in this strategy that I believe will be core for our growth in next three years because finding a next billion people who wants to come and trade in crypto probably near to impossible but one thing is very much possible and it is part of our life.

The same way we wake up in the morning and I don't know brush our teeth, do our exercise, we have a need to eat and drink and almost in every step of these necessary actions in daily life. The most necess necessary out of all is the payments. Almost half of the services we buy and consume are gone through the payments. You want a coffee, you buy it. You want to brush your teeth.

You buy your toothbrush and toothpaste. uh you pay for your water even if you drink the tap one. Eventually anything in the world except breathing and walking kind of an uh tag to the payments and with the data we collected through our crypto cars actually shows clearly that payments is a one place where we can on board next billion users. And if you deep dive and look closely actually every time we tap our card is a trade and is a transaction. The same way that today you go to your coffee shop and buy a coffee, you tap your card, eventually you pay anywhere between 1.

5 to 3% commission or merchant pays it. And it takes merchant 15 to 30 days to actually get that payment back. We decided why not to bring everyone to do these transactions on chain. With Bitget Pay as a merchant, you're able to instantly get paid which solves your cash flow issue. you get because of the commissions are very low especially let's say if someone is paying USD2 on BMBB commission is virtually zero at this point what you do you as a merchant you get rid of that 1.

53% commission eventually you're able to get paid in full amount instantly helping your cash flow issue this is a merchant side of the things that we can definitely solve and on the user side again it is easier and faster because all you have to do is tap and go rather than any other action rather than paying commission fees. If you let's say in parallel if you compare that you use Revolute and you decide to buy crypto on Revolute and sell crypto on Revolute you'll be losing a lot on the margin on the process and if you even decide to move them to your account you'll be still paying commission and while as a user you pay all these commissions at the end when you tap your Revolute card merchant will pay 3% to process your payment and still wait 15 days for that money to come. It is a huge lag and huge gap that we can compete in solving in comparison to traditional bank and traditional institution with instant travels uh instant transfers or altcoins being supported. It means you don't have to eventually go and hold your money in USDT but you can sell them or trade them in a very last second when you tap your card which will become instantaneous. You will be able to do that uh trade or transfer without losing any money and because it is free and it will remain low cost due to the technology.

This is a one important aspect that we can compete in the big or grand uh scheme of the things which makes us in a somewhere between being a card issuer payment processor and steal your bank. For example, today your bank goes a car card issuer to Visa or Master or AMX. Then also you have intermediaries that does this transaction and eventually on a gateway you have your stripes, e- monies uh that process this payment. While everything on chain actually cuts out these three middlemen, now still you have a middleman which is Bit Pay but there's a single middleman rather than having so many middlemen putting commission and trying to earn on top of each other. As a strategy, I believe that uh Bitgget pay or any payment gateway is the only way we can on board next billion user and it is the one key aspect that will help actually on boarded users not need to know how crypto works or how blockchain as a technology works but they will be using the technology because it is easy to use.

The same way when Apple introduced Apple Pay, we all didn't think that we needed a contactless payment on our phone because our bankers already had one. But today, I rarely see someone carrying a physical card around. You just tap your phone and go. It is easier, safer, securer than any other thing. Therefore, as a user, we don't know how bit Apple Pay works and we don't need to know how Bitkate Pay works.

As long as it solves our problem, it should remain viable and better. Not to brag or not to complain. I know that a lot of our competing exchanges they are more focusing on an existing crypto users only. I know that one of the largest exchanges told that they want to do their own uh pump fund kind of an environment. While at pitket our strategy been always different and is always different that we want to solve world's program problems and our strategy is focusing on something long-term rather than focusing on how we can help people make money quick.

I believe the making money quick is a great way but still it is not the only way that crypto should be perceived and as someone who comes from media background that was my old time problem when people usually wanted to invest $100 and buy a Ferrari next morning but usually it doesn't happen. Last key point and advantage as an exchange compared to the bank is that we run our own native tokens. For example, as a bank, you are only able to charge your fees on US dollar if you are European bank in euros, which tags you to the initial issue I mentioned, the devaluation, the inflation and all the other aspects where you are dictated the rules by the central bank, central bank which is government. While as an exchange we are less or more self-run whether we are the centralized organization or we run a decentralized product and with our native token we can eventually be very very independent. We can introduce different burn mechanisms that we currently run every quarter we burn uh the supply until we reach uh 100 million.

We are able to earn different uh interest rates on our products and we can also the good part is that we can expand our treasury by building different mechanisms. Actually in the beginning of this year we had two tokens bit wallet and bit exchange token that we merged together. We bought back and burned almost $5 billion worth of tokens. We introduced new products to take away the sell pressure which eventually helped us to reach our all-time high at $85 which made us uh one of the fastest growing crypto exchanges uh crypto exchange tokens and eventually helped us to become very much profitable. We did 100x since we first launched and almost 96% of BGP holders as a wallets are in profit making us almost close to compete with Bitcoin at this point and at the end of my journey of this speech I wanted to again to recap all these ideas that with the in the market we stand today we are at a threshold understanding whether next edition of ETH or next edition of any big crypto crypto event will be filled with the traditional bankers and finance bros or it will be kept as native as we are and if we are not able to innovate fast and build products fast and competitive enough probably it will be the first option therefore events like ETH is very important and that's the reason as a bit we decided to support this event and many other events like this to bring together the builders and make sure that we build something that stands the test of the time but also stands the pressure of large institutions coming together because let's not forget the whole idea of the Bitcoin and Satosh's white paper was to cut the middleman and if we just keep adding middleman for the sake of institutions coming and because we love all institutional money and we talk about large adoption let's not forget adoption is not only the part where people use the technology but also it is who is benefiting from it and today JP Morgan runs all their uh internal transaction on their private chain Is it actually a true blockchain or is it just a gimmick of being on chain taking advantage of being fast and cheap and still charging your customer $30 $40 per transaction because you can?

Thank you very much and if anyone has questions I'm here.

Thank you very much. was millions.