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Mapping an instant customer base for DeFi

Alex Grebnev explains his plan to mainstream DeFi by adding the infrastructure to a consumer app.

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Alex Grebnev, Maps.me

Alex Grebnev, a former financier turned blockchain entrepreneur, aims to catalyze an app customer base into a DeFi clientele.

The Russia-born, UK-based ex-Goldman and Merrill Lynch investment banker used a private investing vehicle to acquire Maps.me, a mapping app, from Mail.ru. The deal closed in November and the company then raised $50 million to integrate a new fintech infrastructure into its services.

Alameda Research, CMS Group, Genesis Capital, and Jump Trading backed the raise and will serve as liquidity providers to Oxygen, the decentralized-finance prime-brokerage protocol that Grebnev’s team is building for Maps.me.

Overnight fintech

Grebnev told DigFin he was inspired by Telegram’s experiment to raise $1.7 billion in a token offering in an attempt to turn its messaging app into a fintech platform.

“The idea was to make infrastructure accessible to the entire userbase, and turn into a fintech overnight,” he said. “I thought we could do the same.”

In Telegram’s case, the US Securities Exchange Commission halted the scheme and forced it to return the money to investors. Telegram had sought to issue utility tokens called Grams to fund the development of its blockchain, and sold these at a discount. Telegram argued that creation of Grams and their sale were distinct events, but US courts sided with the SEC’s view that these actions should be viewed as a single project – and therefore constituted an unregistered sale of securities. The project has been abandoned.

With Maps.me, the idea is to take an app that people already use for travel-related purposes and embed financial services using DeFi protocols. Maps.me is working with TMF Services, a Swiss corporate services provider that caters to private-equity funds, which will act as trustee and custodian of customer assets.

Grebnev didn’t discuss Telegram’s legal issues, although it seems to DigFin that Maps.me’s legal arrangement may be designed to avoid Telegram’s legal problems.

“We’ve created a way for people to move assets within the system,” Grebnev said. “We’re using the methodologies used for USDC’s stablecoin but without the cryptocurrency.”

DeFi behind the scenes

The intention is to offer customers the ability to transfer value globally, with multicurrency wallets and financial services on top, and a Visa credit card capability for spending.

Grebnev compared the vision for Maps.me with how PayPal works today, noting that PayPal and other fintechs hold customer money in bank accounts and record the transactions. TMF, using the Oxygen DeFi protocol, will merely update the distributed register to transfer value rather than move money through the banking system, while sweeping everything into money-market funds that invest in government securities (which sounds to DigFin like what Facebook-backed Diem will do). Oxygen runs on the Solana blockchain.



And because it’s DeFi, it will pay a yield on stored value by making it available in the form of collateral (in effect, users can make collateralized loans), which PayPal does not, he added. Eventually Maps.me will also offer collateralized borrowing and lending, structured products, and leveraged trading.

But do people with a mapping app want it to turn into a financial services machine?

If you build it, they’re already there

Grebnev says many do. Maps.me has 140 million users, 90 percent of whom reside outside of Russia. About 60 million are active. For several years, users have received cashbacks if they arrange travel through Booking.com. The app’s main map feature is twofold. One, it’s an open-source community development, which Grebnev claims makes it more precise. Second, people use it offline, downloading maps from a wi-fi point or before a trip to save on data roaming costs.

He says the company believes nearly half the users are keen to integrate financial services. DeFi isn’t strictly about finance, either: it can be used for rewards programs – for people using the app to visit a shop, for example, or big users who could earn a claim to Maps.me revenues.

The company does not intend to make a lot of noise about these being based on DeFi protocols; it just wants the services to be easy to use. For similar reasons it operates in fiat currencies, not bitcoin. He believes this is a faster way to mainstream DeFI than to create bespoke protocols for crypto enthusiasts. “This is a seamless way to connect the two worlds,” he said.

And from a revenue point of view, Maps.me can spend its time on building the infrastructure and the user experience, although it will also spend on marketing and customer acquisition. (This also avoids the need to build an ecosystem by selling tokens and risking the ire of securities regulators.)

Grebnev says he hopes to deliver a beta version of the basic fintech aspects this summer, including the Visa card for payments, some banking relationships for products, and crypto market makers for higher-risk investment products. “We want to make it all work together, at scale,” he said.

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Mapping an instant customer base for DeFi