The flow of digitalisation has reached the finance industry and there is no going back. Along with the normal currencies, digital assets are quickly gaining popularity. EasyFi is a layer-2 lending platform and it specializes in cross-chain lending and borrowing of digital assets. Analytics Insight has engaged in an exclusive interview with Ankit Gaur, founder, and CEO of EasyFi. 

Kindly brief us about EasyFi, its specialization, and the services that it offers.

EasyFi is a layer-2 lending platform and we specialize in cross-chain lending and borrowing of digital assets. Built on the Polygon (MATIC) network, we are a permissionless money market protocol running live on Binance Smart Chain (BSC) and Ethereum.  

We are blockchain agnostic, hence, cross-chain asset settlement is easier on EasyFi. We have simplified staking and liquidity provision for retail users and have provided them with an easy-to-access medium for generating revenue. Our micro-lending and undercollateralized services have helped users to borrow in the crypto market without needing a huge upfront. 

Dual yield farming is another unique service we offer. This helps by increasing liquidity in various markets and builds the pathway for multichain expansion. Potential borrowers' creditworthiness can be determined using our Trust Score. This helps lenders know the risk involved and make better decisions before lending their crypto.   

We also have credit default swaps in place for lenders to insure themselves against the risk of bad debts by transforming their loans into tradable instruments. This diversifies the risk and reduces the potential downside for lenders. MetaFi is one of our new 2022 offerings that can be thought of as a money market for metaverse assets. This enables lending on EasyFi for metaverse assets including NFTs, virtual real estate, land plots, and on-chain gaming among other valuable assets.

With what mission and objectives was the project set up? In short, tell us about your journey since the inception of EasyFi?

Frictionless borrowing of digital assets on layer-2 networks to tackle the shortcomings of legacy systems is the simple aim of EasyFi. We have observed and suffered from the cumbersome and tiring mechanism of borrowing in legacy systems. Crypto was perceived to be the solution for these as it had the potential to democratize financial systems.

However, with congestion issues, the feasibility of crypto-based lending and borrowing went for a toss. This spurred me to build a lending protocol that is permissionless and makes the money market more efficient. Using non-custodial contracts, higher-yield-bearing opportunities could also be explored.

From there, we focussed on building a robust lending platform for all things crypto and DeFi. Another conscious decision we made and have stuck to ever since is that EasyFi will be blockchain-agnostic. We truly believe that the future is multichain and interoperability will be the key. Hence, EasyFi will not be bound by any single blockchain.

To date, we have developed EasyFi on two simple principles: Inclusivity and Convenience.

Everyone needs to be able to access EasyFi and its products and use them without any hassle.

What are some of the challenges faced by the industry today?

Right now, the main challenge faced by crypto and DeFi is the lack of access to quality education. The majority of the Indian population involved in crypto are banking on social media hype and other "sources" to place their bets on. This is a ticking bomb for the entire crypto community.

I believe that an educated crypto community is a must for the market to grow sustainably. For this, educational initiatives and resources are to be developed with a certain degree of relevance and practicality. We cannot approach crypto and DeFi education similar to our more traditional counterparts. More hands-on education is a must.

Also, the crypto industry faces the regulatory hurdle, despite the proposals in Budget 2022. The legality status of crypto, DeFi, and NFTs are still blurry and it poses a headache for all. If not the retail participants, this mocks the confidence of firms and businesses wanting to build in these niches. 

And for every month or year that passes by, we lose the first-mover advantage to countries with a more progressive outlook towards crypto.  

How has the adoption of digital currency in India evolved over the last few years?

Being one of the early adopters of digital currency, I would call it an adventurous ride. From being imposed by a blanket ban a few years ago to being brought under the purview of income tax, the evolution has been a rollercoaster ride. The legal status is all but achieved as the authorities are looking at measures for crypto to coexist with other financial instruments.

Certain events in the recent past have helped Indians realize the importance of true ownership of their money. And for those in the pursuit of ownership, cryptocurrencies were a savior. Riding on the backs of digitalization, crypto adoption took off to unseen heights with the pandemic being one of the biggest stimulants of widespread adoption.

E-commerce and social media, too, deserve special credit for their contribution towards mainstreaming cryptocurrencies. Payment gateways adding crypto to their online payment modes was a masterstroke. Adding on, social media gave immense exposure for the Indian population to crypto, its applications, and money-making avenues.  

Since 2020, the adoption of digital currency has been skyrocketing. The announcement of an RBI-backed digital rupee and tax proposals in the 2022 Budget fuelled the growth. Despite concerns over the 30% capital gains tax, the market remained green during the week and it was a bright sign for the future of the crypto market.  

Kindly mention some of the major challenges that EasyFi has faced till now. 

To date, every challenge we have encountered at EasyFi has only made our resolve stronger to be the best in the business. There have been several challenges and one of the most prominent ones was that of cross-chain liquidity. In a lending and borrowing platform, user experience is paramount. Waiting for minutes or hours, to find a counterparty to trade with is a major turnoff for users.

This is when our market-making feature comes into action. Our robust market-maker replaces trade books with algorithms. And this allows users to lend, borrow, and use EasyFi without any latency. Another issue we faced was that of security. Unlawful actors have been preying on us and we have our best security measures in place. 

Tying up with a reputed cybersecurity firm, establishing company-wide security practices, smart contract-security, have been an ongoing process for us, to secure EasyFi to the T. Likewise, one of the current challenges we are facing is the lack of credible lending markets for NFTs and Metaverse assets. For this, we are working on a novel product and it will go live in 2022.

What role has cryptocurrency played in the innovations of new technologies?

For me, globalization, though introduced in the early 1990s, is only being actively pursued for the last few years. One of the reasons is cryptocurrencies which have let businesses remove the geographical and bureaucratic barriers in place for Indian companies to interact with overseas entities. 

Forex restrictions, collateral issues, governmental compliance, and many other barriers to globalization are resolved by the use of cryptocurrencies. Rather than looking at it as an escape route, look at crypto as the true champion of globalization. Reducing entry barriers and setting a global standard for businesses is possible with crypto.

The adoption of blockchain technology was brought to the forefront, thanks to the eye-grabbing nature of crypto. Similarly, the DeFi industry is growing on the backs of the crypto market. Crypto, as a whole, acts as a gateway to technologies like DeFi, NFT, Web3, and now, the Metaverse.

In the future, crypto-centric financial models are a major possibility and they shall open the door for several new-age technologies to disrupt legacy models and be the norm.