Aaron Tilton discusses SmartFi’s trading, staking and lending

0:01i'm ashton addison from block west capital for investmentpitch media and the cryptocoin show and today on blockchain interviews we have aaron tilton the ceo of smartphi aaron welcome to the show and thank you so much for taking the time to come on today yeah thanks for having me ashley appreciate it you're very welcome i'd love to dive into the intricacies of

0:20defy uh but first let's start with a little bit on your background how you got involved in the space and what led you to starting smartphone so uh my background a little bit is uh i'm a former state legislator and uh our our business is not new it's actually uh almost 15 years old and we previously uh developed nuclear power plant sites and owned an oil and gas pipeline

0:47business so we were in the energy infrastructure business uh how we kind of got to where we are in crypto is uh about 2017 the very beginning of 2017 we started getting all these crazy calls from cryptocurrency miners uh wanting to know if we had uh you know the large-scale power and that's where our introduction was we thought what are you guys doing

1:09with all this electricity right yeah and uh so we we started uh working on projects with them to locate their power at different places the market cratered as everybody knows uh at the beginning of 2018 and so a lot of the projects that we were working with they they all of a sudden they said gosh our crypto's worth you know one tenth of what it was before so we're gonna have

1:31to put our project on hold so we said well why don't we loan you the money will you give us your crypto we'll lend you the money and that's how it started smart yeah and i'm guessing those companies that stuck to it in the bear market now realize that they it's a good thing they did um a lot of those guys made a killing you know because they were they were

1:53mining it you know their cost was maybe uh 2800 and because we were lending the money to keep them going uh you know they started selling off at the end of last year and first part of this year so they made an ax on that on that mining amazing and maybe you can touch a little bit on an overview of smartphi some of the solutions uh that you've now integrated into that

2:18uh and bringing that into the d5 world yeah so as we made our our loans and you know up to that time we had done about a you know a little over a billion in in loans and transactions and so mostly what we were doing it was high net worth uh large wells and high no individuals who either acquired their crypto through the early days of buying it some of it mining it

2:42and uh so our our client base was smaller but it was very high net worth so we took all of the learnings that we had from servicing those customers and we have our own trade desk around liquidity with different hedge funds and capital partners and everybody that we deal with and now we've built an automated uh open lending platform so that you can go

3:04to the platform get a loan post your cryptocurrency we give the coin interest accounts or smart interest is what it's called uh we also have our own exchange now so we broaden the platform to really make all of our uh knowledge and experience in the crypto space available to the average person and that was really our goal is to make the average user

3:28uh put them on par with a large scale you know high net worth individual definitely yeah and going from giving out large loans to now making it more accessible to everybody when you started developing the solutions to have this accessible to everybody what were the problems that you pinpointed uh within the d5 industry was it just that more access to capital and being

3:53able to do what you do to a larger audience well yes i mean those are kind of the average kind of problems that we were looking at but the biggest one that really underpins what makes us different is that um our project has really kind of built our technology over the last four years that we've we've innovated our technology from the problems that we saw

4:20the primary one was this a mining company was coming to us looking for safety when you mine cryptocurrency the crypto comes to you already fully entrenched in risk right it's highly volatile um you know just all the issues that are related to cryptocurrency so what they were looking for for us was actually safety and so we provided them uh not an exactly correlated hedge

4:48but a hedge nonetheless they still had risk because of margin call and some other things like that so what we did is said look what if you could mine a currency that when it came to you it was already fully hedged or if you had a cryptocurrency that you could buy that had an index to a fundamental that gave you a hedge so that you had a basis that would never change

5:14and it gave you a free option so when you buy it you have the optionality to keep it and watch what the market does and if it runs up you get to generate the p l and realize that p l realize those profits uh but if it didn't do what you thought it should you could always get back the original purchase price that you paid for it that's what we've done at smartify that's what makes us

5:39different is that our our platform and our funding for the platform we've changed or we're giving a new option which is when you buy the smartphone token uh and it's dollar denominated so you buy let's say a costume of five dollars any time after a year 10 years whatever it was you could come back to us and put the token to us and we we'll give you your

6:06five dollars back and the reason we're able to do that is because we use a loanable funds model like a private bank would or similar to a private bank so we've already we don't use the money that we get in our token sale and it's this token sale is actually it's not your typical token sale we don't try to sell our tokens at once actually what we do is just try to fund

6:30the loan demand that we have so the lower the price than the token is in the beginning funds the loans and it's an index so as the tranches move up so does the price of the token because our loan portfolio is growing so it creates a natural hedge with exact correlation so that's you know very different from what other people do yeah that is very different uh it's a

6:54nice incorporation of you know the your previous business and having those loans and then also having the hedge that is necessary in crypto with the volatility so that's really interesting aaron and um it effectively if you buy the token it's like better than owning a bank yeah and in terms of early adopters and getting more people

7:20that you know they're not minors they're not large institutions regular users involved into the platform um is the purchasing the smartphone tokens and getting involved uh to be able to use those products um is that the incentive of getting in early or how are you incentivizing users to start utilizing these services well so the primary reason around that

7:44is that if you buy the token earlier it's cheaper right i mean it's like everything else it has an index but it also i don't i don't want to discourage people from that part of it like if i didn't buy into the very beginning i'm not going to give a capital appreciation because it's indexed no matter when you buy it as long as we're making more loans

8:03you're going to get these great returns right you're going to again i have to be careful about what i say because we're not guaranteeing anything yeah but the opportunity is always there because of the index you know a lot of people are lament that they didn't buy bitcoin at a dollar or whatever it is right and so i wonder if it's really a good time to buy bitcoin or ethereum and

8:24and the really the the basis behind that is that those cryptocurrencies while they serve a utility for a payment system they don't have a structure like a loanable funds model that can provide an index so in our process no matter when you buy it it's a good time to buy it right because but so the motivation for that is that earlier is better as everybody knows

8:47um but there are a couple of things we have our own stablecoin and it's mineable uh and and some of the utility around that we were probably limited on time but what i would like to basically say is that because of again the loanable funds model to create the hedge we have no transaction fees for our stablecoin ever right and that's because the miners that record the transactions

9:13on our blockchain actually get paid a portion of the interest that we charge on the loans so their incentives are aligned with hours and they're aligned with the users where the users never want a transaction fee you know that's one of the worst things about cryptocurrencies is they use some of the worst features that they adopted from the current banking

9:33systems like a fee everybody hates to have a fee and be a nickel denied it's like a tax you know they tax you for using your own property so that was one of the other things that we solved with our process is having a minor stable coin that has no fees that's really interesting and you mentioned there that it's sort of running on smartphi's protocol um is that

9:55fully interoperable or uh with some of the major d5 platforms and and moving from the stable coin to smart phi and the other cryptocurrencies that are on the platform um or is it more of an isolated system currently we you have two ways to interact with it one is on our c5 platform but we'll uh in about 30 days we're launching our decks so the dex is fully interoperable right

10:17so it's a non-custodial wallet with its own decentralized exchange that supports basically 99 of all cryptocurrencies so you can start to swap it out there so on that platform fully interoperable you can trade smart5 for bitcoin for ethereum for whatever you want to do uh so you can download the decks uh we actually have a technology partner in the komodo community where we forked

10:40some of their technology and then we incorporated a lot of our algorithms and our innovations around our block uh block reward that convert that so it doesn't have any transaction fees so a lot of that will be interoperable through our own decks and we found that that was an easier way to get the interoperability instead of trying to get it listed everywhere else

10:59we just give everybody a their own wallet where they can then swap it out very interesting aaron and based on your experience so far in d5 maybe you can give a glimpse into how you see the industry evolving and smartphone evolving with it over the next year to two years well a great question and i think you have no you can look no further than the current

11:26infrastructure bill that's being proposed in congress it looks like it's going to pass and you can see what the attention and the success of the commercial success of cryptocurrencies is starting to engender the attention of regulators and policy makers so separate from technology right we could have a long discussion about all the wonderful lisbon things we're going

11:50to do with technology but none of those mean anything unless society as a whole and the quote-unquote sheriffs that they impose upon us understand the benefits of what we produce so kind of the way that we look at things from smart vice per perspective and future proofing what we're doing uh is that every innovation that we

12:18design must have its core uh design structure in the acceptance of society with its use so for example like our uh stable coin no transaction fees right it's hard if you're a policy maker it's hard to find fault with that or um using our coin that resists bear market volatility

12:45and it's structured with a 100 buy back guarantee so if you're a regulator or you're uh you know legislator how do you tell everybody this is such a danger or such you know there's risk or all these other things well when there's 100 buy-back guarantee there's no need to legislate against it or regulate it right and that's what we see is that you know

13:08unless your uh blockchain or your project begins with these core benefits in mind and build the technology to suit the benefits you're going to be obsolete very quickly not through technology but through regulation so that's that's the way we look at our adoption of future proofing is we make sure that what we build meets the needs the broader needs of general

13:34users who may not be very experienced and not know how to navigate the current risks well we got to take those risks out and make it more usable definitely and i think that's a great approach aaron so i'm really excited for the decks that you mentioned um that sounds like a great addition to the platform can you talk about if that is one of them and all of the other sort of main

14:00developments that you and your team are looking to deliver out from from now to the end of 2021 yeah definitely that that's one of the major uh deployments that we will make it's been in beta for quite some time and in fact it's it's already had testing on it for several years with the komodo community and we forked it made some changes to it that we felt were necessary for our

14:22purposes added our coins we had to build our blockchain so a lot of that work has been done for a long time we went through our security testing and the audits and all these other things and so that will give it the broader adoption into the market uh that they can download the wallet and now they have a non-custodial wallet that they can swap virtually every coin you know in the

14:44crypto sphere for usd uh rsf usd or smtf which is the speculative coin and then we have the stable coin so that'll definitely be about in fact if you just watch our our twitter channels and other things you'll start to see that we made our press announcement about this minable stablecoin uh i guess that was uh three weeks ago uh and now kind of our going forward

15:10approach for the next six months toward the end of the year is that we're gonna we're gonna combine some of our c5 functionality which is our lending platform with our d5 platform and they're they're the core technology to those two are very different because they have different aspects of interoperability and uh one our stable corn actually makes our c5 platform work more efficiently

15:41even though it's on a blockchain and our d5 platform provides some advantages to our c5 platform through the uh speculative coin but the speculative coin is only issued on the c5 platform so it's kind of the melding of both of these technologies to make a unified structure and then later next year we'll make everything available on a web app so the c5 platform

16:07currently is a web app the d5 platform is a local program that you would download to your desktop or your iphone or android and so the combination of those two things later next year will be the next evolution so you can get it all in one location one has kyc aml requirements which is our c5 platform the other one does not because it's defy and it uses a real peer-to-peer network

16:34to do the swaps and it doesn't have uh the the fiat integration so we're not required to do the aml structure in the kyc but if you need fiat integration and you quickly want to trade go from the decks to the c5 platform the two will be interoperable and so you can kyc on one platform but not the other and one will check for your c your kyc compliance

17:00and they get you to fiat currency on the decks and then you can withdraw it on the c5 platform so it's that integration is going to be critical for a more seamless experience with less risk definitely that sounds great and it's the best of both worlds yep great aaron so for the viewers that are looking to follow along uh with those updates and to start

17:23utilizing smartphone right now before that rolls out as well what's the best way for them to get involved into the platform in the community well probably the first thing to do is just go to smartphy.com and you can hit all the links to the social media uh platforms that we're involved in on twitter and everything else and telegram and uh discord you know just go to those channels um

17:45and you can look at all of our blog posts you can look at all the press releases and sign up for the portal uh and that's where you would get the latest news and frankly what is happening with the token so we do have a tokenomics page that will be available next week that'll basically show you what's happening with this the token sale now watch what happens with the coin sounds great

18:11aaron thank you so much for taking the time all the best with smartphone moving forward i will leave those links in the description box below as well and let's follow up in the near future okay thanks ashton you