Q1. Welcome to Unhashed. What’s your crypto and blockchain story and how did you come to work on Request Finance?
Answer: In 2014, I co-founded Moneytis.com (now currencylive.com
) to facilitate international money transfers with crypto
currencies. In 2017, while at YCombinator, we had a eureka moment: we realized that all business payments are triggered by invoices, and the building blocks of today’s payments infrastructure are slow, expensive, and inaccessible for millions of users around the world.
Request Finance was built on the belief that crypto can address some of the serious gaps in our global payments infrastructure. We wanted to build a future where invoices can be denominated and paid in any currency with crypto and fiat, and that’s how Request was born.
At the end of 2017, the Request Foundation raised $30M via a REQ token generation event, to develop an open-source payment request technology, which became the Request protocol. In August 2020 - we launched Request Finance, a platform that allows businesses, freelancers, and DAOs to request and manage their financial operations simply and in a compliant manner.
Today over 1,000 users have made over $150m in payments through Request Finance in just over a year.
Q2. Blockchain technology for payments and invoicing is a huge stride forward from conventional methods. What are the key selling points for this evolution? And why should users and businesses adopt them?
Blockchain technology was born for finance and accounting. The notion that transaction records are immutable, and stored on a global decentralized ledger is laying the foundations for a faster, cheaper, and more transparent financial system. **
But there are more immediate benefits businesses can already enjoy today by using crypto for their financial operations. For one, payments can be cheaper with crypto. More than half of the transactions on Request are made with stablecoins like USDC and DAI. The transaction fees on various blockchains amount to about 1% as opposed to the 2.5-3.5% charged by card processors, or banks for international transfers.**
Getting invoices and bills paid on time is also a priority for small businesses and freelancers. Even before the pandemic, Atradius, one of the world’s largest credit insurers found that businesses in the Asia Pacific had 44.5% of invoices unpaid at their due date, while those in the Americas had 50% of invoices past their due date as of 2018. In contrast, the ratio of unpaid invoices on Request Finance stands at about 36% since it launched in August 2020.
Lastly, decentralized finance (DeFi) options like staking, and margin lending offer tremendous benefits for companies looking for more productive ways to manage the idle cash holdings in their treasury. Rather than earning less than 1% per year, DeFi platforms offer several times greater yields, for very little additional risk or complexity.
Q3. What are the listing criteria for cryptocurrencies to be used as a currency on the Request Finance? Please delve into the security checkpoints placed in order to facilitate secure crypto payments.
We prioritize listings based on the needs of our users. If a specific crypto organization wants to optimize its payments for its ecosystem of contractors and employees in their native token, we will enable them as a payment option.
We do what makes sense in terms of usage of the network. We always have a discussion with the organization itself before we add their token. For example, we recently added many tokens to the Fantom Network so that the entire Fantom ecosystem can freely use Request Finance.
Since supported tokens are added one by one, we make sure not to list tokens with a confusing ticker symbol.
Q4. What is your take on the brewing regulatory and compliance actions being planned for the cryptocurrency market? How is Request gearing up for the same?
Regulatory regimes tend to gravitate towards the two extremes - either to entice with the allure of little to no regulations or be so heavy-handed that it leaves no room for innovation. Both approaches are inimical to the industry’s progress. Lax regulations invite dubious actors to compete with legitimate innovators for the trust of the investing public. Yet, on the other hand, litigious regulators stifle financial innovations which hold tremendous promise for socioeconomic progress.
We think that smart regulation by leading fintech hubs like Singapore will set the stage for other jurisdictions to follow. It is difficult to understate the tremendous speed and foresight with which Singapore’s regulators have managed to balance innovation and regulatory compliance, and it's clear to see how this has paid off. **
Hundreds of leading blockchain companies have flocked to establish a foothold in the tropical island state. It is no coincidence that among those in Singapore include high-profile industry figures like Vitalik Buterin, the founder of Ethereum, Binance’s founder Changpeng Zhao, and Jihan Wu, the co-founder of Chinese crypto mining group Bitmain. The blockchain boom has also bred homegrown stars like Darius Sit, who runs one of the world’s largest crypto derivatives trading firms QCP Capital**
Request Finance helps companies manage their crypto transactions in a compliant manner by ensuring that there is a clear paper trail of invoices to account for those transactions. We think that the growth in smart regulation will enable greater compliance, and that can only be a boon for us, and the industry as a whole.
Q5. Please break down the three types of Request integration for us. What are the tradeoffs a retail user or a freelancer has to make while using a basic Request Portal API?
It’s very simple. Most integrators will want to use the fully delegated API, where we handle all the Request logic and they add their business logic on top of basic REST API calls.
When the transaction data is sensitive such as for payroll purposes, integrators can obfuscate invoice content completely with encryption, using our Request Client library and interacting with our hosted nodes. Finally, users can also run their own node, the most decentralized option where they don’t need to depend on our hosting at all.
Q6. How important will user education turn out to be with respect to crypto transfer and payments as the majority of users are still dependent on custodial wallets and centralized exchanges?
To make payments in Request Finance, you need a decentralized wallet. But to receive payments, you can use centralized wallets. We think both will continue to coexist. As we can support both centralized and decentralized wallets, we don’t see this as being a major challenge to adoption.
Disclaimer: The sole purpose of Unhashed is to unhash (decode) information about projects innovating using blockchain and cryptocurrencies and share it with the community. The writer does not have any vested interest in any of the projects covered herein. Not that this article shares any, but still, taking investment advice from strangers on the internet is not a wise thing to do.