What are the key takeaways from previous blockchain-based FinTech projects?

Before proposing solutions/ recommending any tech advancements, it's crucial to understand and analyze the problem statement. Utilizing diverse root cause analysis techniques, including cost-benefit assessment, is wise for a comprehensive approach. For instance, smart contracts for deal management transactions within the treasury function, a deep dive into existing processes might reveal inefficiencies around communication delays/ manual errors/ breach of authorizations. By employing blockchain, specifically tailored for smart contracts, one can enhance transparency and automate complex deal workflows. This targeted use ensures maximum value and benefits, emphasizing the strategic implementation of blockchain in treasury operations.

Blockchain at its core validates trust through distributed computing. Let's unpack this. Banks have built a reputation over 100s of years and they have generally earned our trust. We put our funds into banks. They hold, store & send our funds on our behalf. Blockchain fundamentally validates this trust cryptographically & can dispenses with that trust. Bitcoin is the best example of blockchain. In the abstract of the whitepaper (a 9-page must-read) it defines bitcoin as "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" The core pain point to solve using blockchain is around removing the need for two trusted parties.

The key question to ask yourself is why should you use blockchain to solve this problem? Blockchains have a number of unique characteristics—including immutability, decentralization, distributed ledger, and consensus— that can be very beneficial in certain circumstances. However, there are enough drawbacks and hurdles (not the least of which is the high cost of implementation) that you should only use blockchain if those attributes are integral to solving the problem you are attempting to solve.

Picking the right blockchain platform is like picking the best tool for the job. You could explore Ethereum, known for its smart contract capabilities, or Stellar, which focuses on fast and low-cost transactions. Understanding the strengths of each helps in building a solid foundation for your FinTech project.

In the web3 ecosystem, collaboration is key. At MC2 Finance, we dedicated our initial 3 months to forge partnerships with the right DEXs and protocols, shaping our product to meet collective needs. This approach wasn't just theoretical; post-launch, it connects us with a user base of 5 million people. The open nature of web3 communities offers a unique landscape ripe for rapid scaling—a lesson crucial for anyone operating in the blockchain space.

Blockchain-based FinTech projects have the potential to transform the financial industry by providing a secure, transparent, and efficient transactional framework. Blockchain, a distributed ledger technology, ensures tamper-proof transaction records, making it ideal for financial applications to prevent fraud and ensure accuracy and traceability. Moreover, blockchain enables automation of manual financial processes, reducing costs and enhancing efficiency. However, challenges such as scalability limitations, evolving regulatory landscapes, and user adoption hurdles need addressing for widespread adoption.