Ishan Pandey: Hi Brad Yasar, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind EQIFI?
Brad Yasar: The story behind EQIFI is an exciting one. I talked to my friend (now co-founder) Jason Blick about DeFi, and he proposed we do something to get involved. After analyzing the market and the opportunities, we realized that a strong banking partner was direly needed in crypto and DeFi, and EQIBank was uniquely positioned to fill that need. However, at the same time, we realized the urgent need for banking clients to get the access they are looking for with these new higher DeFi yields, and the idea for EQIFI was born.
A bridge to unite the worlds of traditional banking and finance and decentralized finance - A hybrid platform that allows easy access to all your financial needs. I am a technologist who started building early and fell in love with technology and entrepreneurship. I got involved with Bitcoin early, which kicked off an exciting journey with cryptocurrencies. I started an advisory & incubator in 2012, which became solely focused on crypto after a few years, and conceived the idea of EQIFI with Jason summer of 2020. We launched the platform in August 2021 on the anniversary of our white paper and have been growing it since then.
Ishan Pandey: When it comes to the crypto ecosystem as a whole, there’s a lot of regulatory uncertainty, especially when it comes to stablecoins and cryptocurrencies. According to you, should DeFi be regulated?
Brad Yasar: That is a great question and a tough one to answer. We can create systems programmatically that work perfectly fine without extensive third party intervention or oversight. However, it is essential to have a reliable legal framework that supports such innovations and recognizes their legitimacy; otherwise, technology alone does not provide the answer we seek. So we are pro sensible and supportive of regulation for tech innovation to change our lives for the better. So far, the swing has been between heavy-handed regulation and no regulation, and neither of those is optimal for the growth of our industry.
We’d love to see the balance restored where innovators have the legal framework to create and grow. The regulators are educated and well informed about the technologies they are overseeing.
Ishan Pandey: Please tell us a little bit about EQIFI and what are the advantages of it being the first DeFi platform powered by a regulated global bank?
Brad Yasar: EQIFI is a hybrid platform that combines decentralized finance with centralized finance. The DeFi platform and the empowering bank are licensed and regulated, which is a world first. The advantage of being the first DeFi platform powered by a regulated bank is the opportunity to merge the two worlds. Before EQIFi, there was always an apprehension on both sides to integrate, and we want to prove that it is doable and can create a better solution for the end-users.
We can offer banking services and DeFi returns to our user base. It is always exciting to innovate an industry integral to our lives as financial service or banking. When we see our users use our DeFi products next to the bank accounts and cards, they confirm our belief that the two belong together.
Ishan Pandey: International banking policymakers are launching programs to investigate new technologies such as digital currencies and other cutting-edge payment systems. What are your thoughts on the implementation aspect of the same?
Brad Yasar: Implementation will most probably be much slower than the inspection. The legacy systems and institutions are often unable to move as fast as startups that do not burden the legacy system. In some of these situations, rebuilding technology stacks from the ground up is the best and most scalable solution, even if it appeals the least to key stakeholders. Hence, we anticipate a slow adoption and implementation of the technology.
Ishan Pandey: Can you please explain the concept of ‘yield farming’ to our readers?
Brad Yasar: Yield farming is a concept in DeFi, that involves liquidity provision, lending or staking your crypto coins or tokens to get rewards in the form of transaction fees or interest. This is somewhat similar to earning interest from a bank account; you technically lend money to the bank. When it comes to our own product, we generate yield with zero lending, which makes asset safety.
Ishan Pandey: Crypto lending and borrowing have rapidly picked up steam, signalling the dawn of a new financial era. Please explain the concept of crypto-based funding in detail to our readers?
Brad Yasar: Crypto-based funding is the same as traditional lending, except that digital or crypto collateral is much easier to secure and release than conventional collateral. Basically, in a crypto-based funding model, the loan is in cryptocurrencies. It can be programmatically lent out or borrowed, which removes the need to have an intermediary like a loan broker. And because of this, the most exciting innovation in this area is P2P or peer-to-peer interactions. With DeFi, a third party like a bank/broker is not needed to be in the middle of a loan or a transaction, and the returns reflect these savings to the end-users.
Ishan Pandey: The unlawful revenue generated by NFT platforms nearly tripled in the fourth quarter of 2021, with about $1.4 million transmitted to NFT marketplaces by illicit domains. According to you, what is the current situation of crypto’s security across all sectors, especially in the NFT ecosystem?
Brad Yasar: Cryptocurrency transactions are trackable, and to general belief, they are not anonymous most of the time. As such illicit activity conducted using cryptocurrencies and NFTs is an insignificant portion of the overall illegal activity conducted globally using regular fiat currencies. I believe the NFT ecosystem and the crypto industry can and will be more transparent and secure as it matures and grows, but focusing on an insignificant amount of illegal activity that involves crypto and when the bulk of that activity is conducted through traditional systems is unfortunate.
Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions, and equipping readers with better opinions to make informed decisions.