Onboarding the First Billion Users to Everyday DeFi
The massive global challenge that motivates the team at IOV Labs is what we call advanced DeFi — the third phase of crypto adoption. We believe this phase presents a huge opportunity available to all of us, as it compels us to focus on real-world utility.
IOV Labs is:
- Internet of Value Labs
- The creator of the Rootstock Blockchain (RSK)
- The developers of the Rootstock Infrastructure Framework (RIF)
These are the building blocks you need to build on top of RSK — building blocks for Everyday DeFi.
IOV Labs has two roles:
Role 1: Grow the RSK Ecosystem
We have been working from day one to build and expand the RSK Ecosystem, making smart contracts on Bitcoin a reality.
Role 2: Build a Thriving RIF Economy
Our primary focus going forward is the RIF Economy.
Our vision at IOV Labs is:
- A safe and equitable global financial system that enables everyone to participate and prosper.
- Safety, security, stability: Fair, impartial, and without judgment.
- Global financial system: Positively impacting the global system, not just local or regional.
- That vision speaks to everyone: The 99%, the underbanked, emerging markets, and global populations.
- Participate and prosper: Inclusive, accessible, community-oriented, and collectively owned.
Our Work
Growing the RSK Ecosystem
What is RSK?
RSK is a decentralized layer-1 blockchain that uses a novel Bitcoin merged-mining approach to store cryptographic hashes on the Bitcoin blockchain. It features an Ethereum Virtual Machine (EVM) that is highly compatible and interoperable, making it easy to port projects built on Ethereum to RSK and secure them on the Bitcoin blockchain. It is the second-most secure blockchain (after Bitcoin) and the most secure smart contract platform in the world (57% Bitcoin Hashrate as of 9 AM, June 10).
Why RSK?
- Secure: Merged-mining approach is cryptographically superior. It is the most secure blockchain you can build on.
- Native: Bitcoin is native to RSK via a 1:1 peg. No wrapping is needed; it’s a direct 1:1 with RBTC.
- Affordable: 40x-50x cheaper gas fees than Ethereum.
- Faster: 10x faster transaction speeds than Ethereum.
- Scalable: Built to scale — with zkSync layer-2 live on Testnet and going live on Mainnet.
- Compatible: EVM-compatibility makes it easy to start building.
RSK Today
- 1,619 days live since January 2, 2018
- 100% network uptime since launch
- 77,000 monthly transactions (April 2022)
- 3,092 X-Chain Total Value Locked (BTC) on RSK (April 2022)
- 9,959 Native Total Value Locked (BTC) on RSK (April 2022)
We have been live for 1,619 days with 100% uptime since the RSK network launched — a claim not all blockchains can make. We have nearly 10,000 Native Total Value Locked on RSK in Bitcoin. It’s early but growing fast.
RSK: An Ecosystem Building on Bitcoin
An ecosystem of partners building on Bitcoin with RSK includes amazing solutions like Sovryn and Tropykus, uncollateralized lending services for the underbanked like Growr, stablecoins like Money on Chain and XUSD by BabelFish, and incredible non-custodial wallets like Edge. We have good coverage in global exchanges like Binance and KuCoin, simple on/off ramps like Ramp and Settle, and powerful integrations from Fireblocks and Covalent. KYC and AML solutions come from Coinfirm.
Helping Developers
Build with RIF on RSK
What is RIF?
RIF is a service layer of open decentralized protocols that run on RSK. RIF helps developers build scalable DeFi dApps faster and easier. RIF protocols are accessed and paid for using the RIF ERC-20 Token.
RIF enables developers to build fast, secure, and stable dApps, especially DeFi. It is a universal programming layer specifically designed for DeFi on Bitcoin.
A Little Bit About RIF
RIF has been in development for about three years and includes various products that enable the creation of DeFi protocols on Bitcoin.
RIF Today. RIF Tomorrow.
- RIF PAY: Making payments faster, cheaper, and easier.
- RIF WALLET: Bringing DeFi and the RIF Economy to everyday users.
- RIF IDENTITY: Building and managing on-chain identity.
- RIF MARKETPLACE: Matching supply and demand in a sharing economy.
- RIF GOVERN: Enabling community ownership and decision-making.
- RIF I.O.: Feeding protocols with data and information.
- RIF TOOLS: Providing developers with everything else they need.
And there’s more to come…
We are Motivated by a Massive Global Challenge
We believe we are experiencing a global economic polycrisis — a situation where multiple crises combine to create something entirely unique. Rooted in the 2008 financial crisis, this polycrisis has intensified since the Covid-19 pandemic.
This economic polycrisis is creating unprecedented strain on everyone, especially the poor and marginalized in emerging markets, many of whom are underbanked.
A Social and Economic Coordination Challenge
The underbanked face daily challenges:
- Inaccessibility to a safe, stable store of value
- Expensive, complex, or impossible transactions
- Institutions that don’t understand or want their business
- Financial products not designed for them
- Distrust in government and banks
And the Problem is Spreading
More people are falling from the middle class into economically disadvantaged and underbanked categories daily.
Why?
- Price inflation affects everyone.
- A sustained, possibly worsening cost-of-living crisis.
- Declining purchasing power in emerging markets.
- Rising interest rates everywhere.
Crypto Solves This! …Right?
Not exactly. We need to talk about…
The Problem with Advanced DeFi
Advanced DeFi is too advanced for everyone. It’s too advanced for our vision at IOV Labs and doesn’t address the problems of the underbanked.
DeFi today is used by and designed for:
- Financially literate
- Technologically advanced
- Affluent, predominantly Western users
- Seeking outsized returns
- During a unique period in the global economy
Advanced DeFi is not for everyone. For example, the complexity of yield farming strategies on Phantom illustrates the difficulty of accessing returns in advanced DeFi today. It’s not a mass-market service; it’s complex, designed by and for a specific group, and doesn’t provide financial empowerment to the underbanked.
We believe usability is a huge barrier to widespread adoption. The Nielsen Usability Maturity Model indicates the amount of capital and resources spent on usability within any technology category. Advanced DeFi likely sits between a dedicated usability budget — where protocols invest in UX and design — and a developer-centered usability approach.
This means advanced DeFi products are complicated, with a steep learning curve.
A Quote from Ashutosh Sharan, VP of New Product Development and Innovation at Mastercard
“Crypto has to become invisible. I keep saying that, and it sounds like a broken record, but it has to disappear in the background for a user who doesn’t care. Honestly, my mom doesn’t care if it’s [Centralized Finance] or DeFi; it just needs to work.”
Advanced DeFi is not how we onboard the first billion users into crypto. It’s an early iteration of what DeFi can actually do.
Our Vision for the Underbanked Demands More
At IOV Labs, and for any crypto project seeking mass adoption, the focus should be on the underbanked. They demand more from what we are building.
Chainalysis 2021 Geography of Cryptocurrency Report
Emerging markets are driving cryptocurrency adoption. Users in these areas turn to crypto to preserve savings against currency devaluation or to carry out remittances they wouldn’t otherwise be able to.
Crypto Adoption in Emerging Markets
Crypto adoption is concentrated in emerging markets, as shown by the highest onchain value received and peer-to-peer exchange trade volume in countries like Vietnam, India, Pakistan, Ukraine, Kenya, and Nigeria.
This snapshot shows the 20 countries around the world where crypto adoption is highest measured through a ranking of onchain value received and peer-to-peer exchange trade volume.
In Nigeria, particularly, people are using crypto to access a store of value, hedge against inflation, and make non-bank digital payments. In Argentina, for instance, while 29% of the population holds a credit or debit card, crypto adoption has reached 12% in just a few years.
What’s particularly interesting is that Crypto adoption is not driven in terms of usage by western markets these are large emerging markets with significant populations of underbanked who maybe have financial services available to them, they have bank account but don’t quite have the full suite that is available to those in western markets.
In Latin America, particularly, people are using crypto to access a store of value, hedge against inflation, and make non-bank digital payments. In Argentina, for instance, while 29% of the population holds a credit or debit card, crypto adoption has reached 12% in just a few years
Everyday DeFi is…
The 3rd Phase of Cryptocurrency Adoption
We believe Everyday DeFi represents the third phase of cryptocurrency adoption. Understanding adoption curves, Geoffrey Moore identified five phases of technology adoption, split by the infamous chasm. To gain mass adoption, technology must cross this chasm.
Crypto Adoption: Phase 1 — OGs
We have mapped crypto adoption over the last 10 years against the adoption lifecycle. We believe that from 2009 to 2017 was the Innovator Phase, characterized by early cyberpunks, Bitcoin hodlers, and maximalists — people who were fanatical about the opportunities that crypto held but were also extremely tolerant of the enormous challenges involved in accessing and using crypto meaningfully.
Crypto Adoption: Phase 2 — Advanced DeFi
We are currently emerging from the Advanced DeFi phase, which we refer to as the DeFi Boom. This period saw explosive growth in the DeFi market, predominantly in Western markets like North America and Europe. During this phase, many people acquired cryptocurrencies as speculative assets to support specific projects or gain yield amid unusual and uneven economic conditions globally.
Crypto Adoption: Phase 3 — Everyday DeFi
Phase 3 is what we are calling Everyday DeFi. To access the massive market opportunity, projects need to cross the chasm. This phase is dominated by emerging market users who are focused on practical uses of crypto, executing basic retail finance use cases with cryptocurrencies.
Everyday DeFi: The Third Phase of Crypto Adoption
We are entering…
THE ERA OF EVERYDAY DEFI
So How Do We Cross the Chasm?
At IOV Labs, we believe this era is here to stay, and we have a Manifesto for what Everyday DeFi means to us. A new phase of cryptocurrency adoption is beginning, driven by people struggling with weak local currencies, declining purchasing power, and a need to protect their financial interests during extraordinary global turmoil. This phase will be defined by ordinary people using blockchain technology for simple, everyday financial tasks and will primarily take place in markets such as Mumbai, Jakarta, and Buenos Aires. It will not be built by traditional banks but by the long-tail blockchain neobanks of the future. This represents the largest market opportunity cryptocurrencies have ever seen. This new phase is everything we were promised from the beginning of the crypto revolution, and it will be built with RIF on RSK.
Everyday DeFi is Enabled by Coalescing Technology Trends
Everyday DeFi is supported by a series of coalescing technologies that are maturing and going through the hype cycle. We are now on the “slope of enlightenment” in the hype cycle. This model shows how new technology gains prominence, experiences exuberance, and then, as the promises of the technology don’t fully materialize, media attention wanes, leading to a “trough of disillusionment.” It is at this phase that companies start building real solutions. Cryptocurrencies, blockchain wallets, and stablecoins are reaching maturity, allowing us to build truly compelling products.
Everyday DeFi is a Massive Global Market Opportunity
- 4.3 million Advanced DeFi user wallets
- 1.8 billion unbanked and underbanked
- $540 billion remittance flows
These figures illustrate that, despite its early stage, Advanced DeFi is far from tapping into this massive market. Everyday DeFi will emerge where:
- Trust in banks and governments is low
- People are exploited by predatory intermediaries
- Regulation stifles innovative neobanks
- Incumbent banks defend their oligopoly through state capture
Countries like Vietnam, Pakistan, Ukraine, Kenya, Nigeria, Venezuela, Argentina, Colombia, Thailand, China, Brazil, the Philippines, South Africa, Ghana, and Tanzania are at the forefront.
Defining Everyday DeFi
Everyday DeFi represents a mass market opportunity, characterized by underbanked or financially excluded users leveraging decentralized technology to meet basic everyday needs, such as:
- Paying bills
- Saving with returns
- Borrowing at reasonable rates
- Sending money to family
What Makes a Service Everyday DeFi?
- EASY TO USE: Simple UX, intuitive UI from Web 2.0
- ACCESSIBLE: Mobile-first, simple on-ramps and off-ramps, and ideally cash-on-ramps
- FAST ENOUGH: For on-the-spot payments
- CHEAP ENOUGH: Low fees and stable assets to avoid barriers to entry
Services Everyday DeFi Users Need
- SAVE: In USD with safe, low-risk stablecoins that are not algorithmic or unstable
- BORROW: Using uncollateralized, community-supported loans
- SEND: Remittances anywhere cheaper than current remittance options
- PAY: Utility bills and receive salaries in crypto
Principles for Everyday DeFi Builders
- EDUCATE: Share information to help users make informed decisions
- SAFEGUARD: Protect users from high-risk investments and major mistakes
- SIMPLIFY: Streamline the product experience with on-ramps, KYC, addresses, and keys
- ADAPT: Use terminology, language, and interactions that make the experience indistinguishable from Web 2.0
At IOV Labs…
- WE ARE COMMITTED TO EVERYDAY DEFI: Building open-source protocols on RIF that help developers create trusted, lasting Everyday DeFi services.
- PARTNERING: With innovative teams serving Everyday DeFi users in emerging markets, building the services they need.
- PROMOTING: Use cases that showcase the real-world value our Everyday DeFi partners create for the underbanked.
- INVESTING: Capital in Everyday DeFi projects to bring important capabilities to the RSK Ecosystem and the RIF Economy.
In summary, we want to make…
EVERYDAY DEFI AN EVERYDAY REALITY
- We believe Everyday DeFi is how to onboard the first billion users into crypto.
- This means the market opportunity for crypto exists today, but we must build for it.
- Everyday DeFi builders should:
- Simplify all aspects of the product experience.
- Educate users on the risks and opportunities.
- Safeguard users from predatory actors and major mistakes.
