Mastercard really, really loves crypto ????; Frictionless institutional DeFi lending? ??

???Hey,?Linas here!?Welcome to a????weekly free edition????of my daily newsletter. Each day I focus on 3 stories that are making a difference in the financial technology space. Coupled with things worth watching & most important money movements, it’s the only newsletter you need for all things when Finance meets Tech.

If you’re not a subscriber, here’s what you missed this week:

1. Stripe's “excellent” layoffs and a warning sign for everyone ???[it’s a must-read if you’re in FinTech, e-commerce, and digital biz per se]
2. PayPal claims the top spot in BNPL ???[a deeper dive on their key growth opportunities & one huge risk + 2 bonus reads]
3. Coinbase loses half a billion dollars & half a million customers in 3 months. What signals does it send? ???[a deeper dive with a focus on what many are missing]
4. Amazon shows why the future of FinTech is Embedded ???[how Amazon is unbundling the bank. Again + 4 bonus reads]
5. Big banks are betting big on the Boring Stuff ???[& so should you!]
6. Yet another causality of the struggling NFT market ???[more to come]
7. Alternative asset investing is no longer just for the ultra-rich ???[or how FinTech is disrupting one of the least disrupted Finance verticals]
8. Alipay tests golden goose in Hong Kong ?????[you’d steal this ASAP!]
9. Bakkt + Apex, or more crypto consolidation ??

and more! Don't miss out and join the community here????

Last week (7-11 November) was another super interesting week in the #Blockchain and #Cryptocurrency space.?We will look at?Mastercard that really, really loves crypto; try to understand what is frictionless institutional DeFi lending, and explore other interesting news and developments.

Without further ado, let us dive into what happened in the Blockchain & #Crypto sector last week. Let’s connect the dots.

Mastercard really, really loves crypto ????

The news ???Payments giant?Mastercard?continues supporting cryptocurrency and blockchain startups as part of its FinTech accelerator, the 萬事達卡 Start Path program.

More on this ???Mastercard has chosen another 7 industry startups for its Start Path program in order to promote the adoption of crypto and blockchain technology.

The new cohort of startups includes the crypto gateway provider?Fasset, Singapore’s crypto payments platform?Digital Treasures Center,?and the Colombian stablecoin-focused firm?Stable. Mastercard previously partnered with?Fasset?in July to jointly work on digital solutions to drive financial inclusion in Indonesia.

The latest Mastercard Start Path program also includes the Web3-focused social payments system provider?Loot Bolt,?privacy startup?Quadrata, the blockchain-based media FinTech project?Take Back the Mic,?and the brand-oriented platform?Uptop.

?? THE TAKEAWAY

It’s mutual????? It’s yet another proof that the payments heavyweight really loves cryptocurrency. As a reminder, last year alone, the credit card giant partnered with firms across the Asia Pacific, including Amber Group and Bitkub to offer crypto-linked payment cards. This April, Mastercard partnered with crypto lender Nexo for a similar offering, though that card was linked to a crypto-backed credit line, allowing investors to spend as much as 90% of the fiat value of their crypto assets. Furthermore, a few weeks, the company introduced a new program with Paxos to enable financial institutions to bring crypto trading capabilities and services to their customers. Having said that, it’s becoming more and more clear that the real winner of the crypto space is emerging… And it could be Mastercard.

Bonus: The real winner of the Crypto Wars is… Mastercard? ??

Frictionless institutional DeFi lending? ??

The news ?? Friktion, a Solana-based portfolio management platform, has?launched?an?under-collateralized crypto lending?product in a bid to lure in institutional clients interested in accessing higher yields.

The USP ??? Friktion Labs 's under-collateralized loan product means that, unlike most existing DeFi lending models, borrowers won't have to put up collateral equal to or greater than the loan amount, as per The Block.

3rd-party underwriting "conductors" carry out borrower due diligence checks and real-time risk monitoring. Then, enhanced lender protection is achieved via a tranched pool system of diversified borrowers. Finally, junior tranches will offer higher annualized yields of?11%?to?17%?in return for covering senior institutional tranches — earning?8%?to?10%— against loan defaults.?Easy peasy.

?? THE TAKEAWAY

Where’s the catch? ???Big DeFi lenders like? Avara ?and? Compound ?presently require borrowing to be over-collateralized, given the considerable risks posed by volatility and market conditions. Friktion?claims?its system lowers the barriers to entry for institutional DeFi credit, opening up DeFi yields via proper protections while enhancing capital efficiency for borrowers. But we all know what happened to Celsius, Voyager, and now Alameda/FTX. Is this time it will really be different? I’m not so sure…

Extra Reads & Quick Bites for Curious Minds??

• Binance to buy a bank? ???Binance founder and CEO Changpeng Zhao expressed his potential interest to?buy banks?as a way of bridging the gap between the worlds of traditional finance and crypto. Zhao did not name any specific targets, and also said he's open to either minority investments or a full acquisition.?It’s not surprising since?banks are becoming crypto companies while crypto companies are becoming banks ???
• More FinTechs layoffs ???Expense management solution provider?Pleo?has laid off 150 employees — 15% of its workforce — as it shifts its target from growth to efficiency.?The 7-year-old company recently experienced “a chapter of hyper-growth” in which it launched in a new country and added 100 employees each month, CEO?Jeppe Rindom?said in a?letter?posted on the company’s website.?Growing headcount ≠ growing productivity. Few understand that.

Money Moves??

• Solana-based DeFi yield platform?Texture?raised?$5M and is now live in private beta testing. Texture aims to launch fully by the end of the year.
• Yassir, the Africa-based super app, offering ride-hailing, food, and grocery delivery and payments, grabbed $150M.
• Web3 gaming infrastructure startup?Xternity?raised?$4.5M in a pre-seed funding round from?NFX,?Jibe Ventures,?and?Flori Ventures.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

?? The Perfect Pitch Deck: How Coinbase Raised Seed Capital and Began Journey Towards $100B Worth Public Company

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

?? Lessons FinTechs can learn from Spotify going into audiobooks ??

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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