Solving the DeFi Onboarding Crisis - TOKEN2049 London 2022

it's a pleasure to be here I'm appreciative of your time humbled by your tenants thank you my name is Dennis I'm the CEO of bitcoin.com and if we could there we go bring up the title slide there many of you may be aware bitcoin.com is the Premier online destination for millions of people around the world to buy sell spend trade track stay informed about crypto we've created over 35 million fully self-custody wallets today for users around the world millions of people read bitcoin.com news to stay informed about cryptocurrency and World economic news and one by one you know we are onboarding people uh into the world of crypto as for me personally I I've been CEO for a couple of years at bitcoin.com I've been in this space for a while I've seen some crazy things I see some crazy things that are going on this week perhaps in the past things that are happening right now as events unfold while we're sitting here in this session it's pretty nuts we'll touch on that a little bit as we get into talking about how we're going to solve the defy onboarding crisis that is affecting our community and future users of crypto today so let's take a look first at a couple of numbers if you look at this chart this is the number of unique addresses that either bought or sold the decentralized finance asset anywhere in the world from the last few years and immediately you can take away two things from looking at this chart number one is that there is a huge growth in defy users beginning in defy summer of 2022 or 2020 and the second thing you can take away from this chart is is that user growth basically dropped off to nothing in April of this year now I know all of you probably count yourselves amongst the users represented in this chart you're all very tech savvy crypto native people who are already participating in defy and you may be thinking to yourselves well what is the reason for this I know it's of course the bear Market people are just not interested in investing right now because of the bear market and there may be some truth to that but I like deposit that as something more that while we as defy users today our represented on this chart we are only actually one to two percent of the addressable Market which can is consisting of everybody else in the world and we know the reason that they are not coming on board is because D5 because I don't want High fees eroding uh my earnings well first in order to be able to do this I'm going to need some ethereum a bridgeable asset and then I'm going to bridge it to Avalanche you're going to take ethereum and watch it become wrapped ethereum on the Avalanche Block Chain through some black box process I'm gonna need to swap it into the interest bearing product that I want to deposit let's say it's a stable coin like usdc I also need avex and then I'm going to find a DEX to do that and then finally I'm going to find a D5 product to invest it in and if I want to do if I want to get my money out I'm gonna have to go through all these complicated steps you know more or less in reverse and people like you or I are able to do this because we're crypto native we've been there we've been through the pain of figuring this all out for ourselves we're aware of all these different Technologies and different products and how to do it but the rest of the world is not the rest of the world is not even aware that defy exists everyone in this room of course is but everyone like the 90 of the rest of the world is still asking the question should I buy Bitcoin where should I buy Bitcoin how should I bit why Bitcoin you know it's now the right time to buy Bitcoin they're still thinking about crypto at the most fundamental level there and that's because Bitcoin the original decentralized financial asset is still the largest gateway to defy in the world today 75 percent of the world has heard of Bitcoin at this point that's three times more than the second most widely recognized cryptocurrency by brand recognition Doge and of all the tens of thousands of cryptocurrencies out there available to choose 65 of all crypto users still hold Bitcoin in their portfolio why is that well it's probably because of a couple of reasons maybe some are practical maybe some are ideological but I would I would suggest to you that the vast majority of people want to buy Bitcoin or hold Bitcoin in their portfolio because they're interested in their own personal financial prosperity they want number to go up and that's a good thing that's a really good thing because we're all here to create good for the world to make everybody uh more financially uh prosperous but maybe when they're thinking about you know number go up or financial prosperity is their top priority they're not thinking about what is actually going to happen to that crypto when they purchase it who's going to hold that crypto and they're all too willing to let centralized exchanges hold that Bitcoin or that crypto for them and that's because the pull of centralization is strong even today still three times more people hold crypto in a centralized exchange than do in a self-custody wallet it's very easy to do centralized exchanges have seized on this opportunity to offer interest bearing products similar to D5 that are not defy but yet are very simple and easy to use and this creates a sort of paradox where people are participating with crypto in a system that is completely centralized they're having their decentralized assets managed by Central uh uh exchanges and these exchanges in order to make these attractive apis are centrally managing those customer funds sometimes like their own personal hedge fund and we know what happens when centralized exchanges manage customer funds centrally the outcome is never good four billion dollars lost or locked up when Celsius and Voyager went under earlier today were all sitting on the edge of our seats today wondering what's going to happen with FTX this week it's never a good outcome when centralized exchanges are holding on to user funds and managing them in a way to create these attractive apis but they did get something right they did get right the idea that you have to create a simple easy to use interface for people to be able to participate and that's what we need to do we need to create apps that allow people to participate in defy and interest in apy earning products as easily as they would be able to do in these centralized platforms that's not to say though that when they get to defy that there isn't risks of course there are anyone who participated or saw what was happening from the sidelines to UST and Luna earlier in the collapse of the Terra block system this year or blockchain system this year that was 45 billion dollars wiped out overnight thousands more life savings lost why because of protocol risk this category of risk associated with defy that affects any decentralized financial asset or even entire blockchain buggy code poor design malicious actors bad management or choices hacks these are things that we need to build guard rails around to protect users from we need to protect users from protocol risk because once they get to the world the defy we need to uh once when they get to the world of D5 we need to make it a safe and inviting place for them essentially we need to make it we need to make crypto as it was meant to be we need to make it easy for users to get started uh with crypto in a safe way we need to make it easy for them to back up their keys to the cloud to trade socially to participate fully in a decentralized self-custody manner because there are many steps along this journey from crypto to beginner to crypto native and by instilling a sense or instilling this ethos of self-custody from the outset of this journey makes every step along the way much easier much safer much more secure and better for that user and this journey this journey is one journey of many steps that the journey is the reward I mean even if you build great UI even if you give your users great education these are critical how will you incentivize them to take the next step on their Journey because incentives can play a powerful role in affecting user choice what users decide to do next how they choose to participate at bitcoin.

com we incentivize our users with our rewards and utility token verse to provide monetary incentive for them to get started in crypto to back up their keys to the cloud to transact safely and securely to participate fully versus on sale now it'll be going live on the ethereum blockchain later this year in early December but how will you incentivize your users to make the take the next step on their journey and your product from crypto beginner to crypto native in a way that is self-custodial safe and secure users expect guard rails in the traditional Financial system there are guard rails if you make a mistake your transaction can be reversed the bank can credit your account the bank can protect you through a variety of different ways there are no guard rails in defy you make one mistake in defy you drive right off the cliff so what we need to be thinking of is how do we create guardrails for users to give them the experience that they are familiar with that makes them feel secure in using a D5 product just the same way that they would use a traditional Financial product there will always be room in defy for The Adventurous early adopter to take the the risky steps to invest in in Risky projects and and hopefully get high returns but everybody else means an experience with guard reps imagine what that experience might look like in your products imagine if you will a fully self-custody app where you're able to tap the earn interest button simply browse through a list of protocols until you find the one that matches your specific goals and needs you select the protocol you select the crypto you want to invest you confirm it and you start earning it that is that is that can be and will be the future that's the future that we're building at bitcoin.com it's going to be powered Again by our rewards and utility token verse which is on sale now at kitverse.com and we invite you to join us on this journey as you build your products make the defy safe easy and accessible you know for everybody around the world thank you