Brendan Playford on decentralized credit at Masa Finance

0:00i'm ashton addison from block west capital for investment pitch media and the crypto coin show and today on blockchain interviews we have brendan playford ceo of massive finance brendan welcome to the show and thank you for taking the time hi ashton great to meet you how are you having a good day thank you very much i'm excited to dive into massive finance

0:19and the d5 solutions you're bringing to bring more financial inclusion into the world something that is well needed um let's kick off the conversation brendan with just an overview of the solutions that your team is driving into finance and then we will dive into those details yeah that's really good question so um yeah master we're building a decentralized credit protocol

0:41and as we call it an embedded lending platform what we mean by that is we're creating a new infrastructure layer that bridges off chain data and on-chain data to d5 says people like individuals or businesses can connect their both traditional accounts if they have them um and their on-chain accounts to create effectively a decentralized credit report

1:06and then connecting that infrastructure layer with d5 lenders providers and other sort of platforms in the space and uh allowing developers or these businesses to launch credit products at scale that match the existing off-chain paradigm that we're used to and we support about 10 000 data sources at the moment across 78 countries uh with integrations with equifax transunion uh

1:33plaid and other bank connectors globally in the us north america europe south america and also in africa um and essentially with that infrastructure we built we can serve around effectively serve 2.9 billion people through partners in those markets wow incredible brendan and yeah credit scores on the blockchain are such an interesting uh concept to refine and to

1:58see how as they mature how it will compare to uh the you know the old off chain system because you know in pure defy it's hard to you have to build up a credit score as you don't really have you know it's possible to start doing it without giving out your personal information and all that kind of details and you mentioned they're just going into like a global market right away

2:21i'm curious if uh you had some initial intention or to serve some initial group of people with this kind of solution yeah i think you know the journey for this starts for me when i kind of moved to the us i was grew up in the uk in what was a very underserved area of the uk an area called norfolk which is um on the periphery of london and generally just doesn't have much access

2:46in that region and i was fortunate mining cryptocurrency allowed me to in early 2013 earn enough wealth to kind of get on my way out of where i grew up but there's a lot of people globally that don't have that opportunity and one of the things to kind of unlocking that journey to wealth is definitely credit being able to leverage wealth or capital beyond what you already have is

3:10really important whether it's to get education whether it's to build a business whether it's to move to another area of higher economic opportunity and what i found when i moved to the u.s my existing financial history from the uk didn't follow me and getting here are sort of back to ground zero and that is not just isolated to immigrants it's also the

3:31same for 3.3 3.3 billion people around the world don't have traditional access to credit and even in the us it's about 45 million our credit invisible so started on this journey four years of understanding with another company of how can we process data just traditional data banks to allow them to score as we call them thin file or credit invisible people these are people that are

3:54otherwise credit worthy that don't have traditional data and fico may not serve well um and as we went through this you sort of realized that by provisioning a data sorry a credit bureau of sorts on chain that was owned by the individual and allowing that individual to connect a range of data sources we could open up open up an ecosystem that would allow

4:16a different type of lender to come in to serve those customers and serve individuals like myself or those people that are underserved in other emerging markets that are otherwise credit worthy and to get to the promised land with allowing on change scoring the time required to build an on-chain score from um on-chain transactions your addressable market is relatively small it's small

4:40and focused on crypto natives those that have high on chain activity and truly doesn't serve the mass market so we really wanted to serve the mass market and create a financial infrastructure that allowed different incentives from non-banks where they wanted to lend to some of these segments like we build on cello for example as well as ethereum and the

5:03mission of cello is to really serve people that are in this side kind of underserved bracket and you can partner with a lot of like-minded funders to bring capital on chain for these individuals so long as you have the infrastructure the ability to build trust in the system very interesting and yeah we've spoken with cello and and i love their initiative in trying to bring that

5:25financial inclusion as well and it's interesting that you mentioned there you know in the uk and in the us as well people often don't think um that the more developed nations there's a lot of people that still don't have proper access to credit and you know you mentioned in the hybrid format where you're bringing that off chain and those and those sort of credit scores

5:45and and uh into the on-chain world and right now there's not a lot of people in the world that have a lot of on-chain uh information data history where they can start getting access to these new kind of uh lending protocols and other access to capital so maybe you can talk a little bit about people that you know they're in a developed nation they are still having

6:09trouble to get credit as you mentioned how do they first get involved and not have to learn the abcs of blockchain to start getting that on-chain history so that they can get access to these new kinds of lending yeah so so our approach was was very user-centric or is used is very user-centric um what i've experienced through my journey was using credit karma specifically in

6:33the us context to sign up and understand where i was on day one and use that understanding to work through steps that were education-based to understand how i could go from like a 550 credit score when i first started or you know essentially a non-existent credit score to maybe like a 700 750 today where i still don't have enough credit age to for example get a mortgage um

6:59but can get car financing got my first car financing just in december personally after six and a half seven years of being here so it takes a long time so our approach has been to take what i experienced with knowing that it's a user-centric journey to allow the individual to bring data that's native to their market into excuse me into our ecosystem so we almost have like a a

7:24credit karma for defy like interface you can think of it that way where when you sign up either through the mobile app or a web application you connect whichever data sources are relevant to your market so in nigeria or kenya for example we use a connection with another company called ping me and that allows us to pull and scrape data from the user's device

7:46um that can be transactional information from local mobile money services it can be bank information where there's bank logins it can also be device behavioral data which actually is a very high predictor for credit uh worthiness um it can often be more accurate than fico for a specific segment and through that journey at the end we're starting to recommend partner

8:10loans on chain partner loans to those users so kind of our wedge into the market is this credit karma like experience where we're putting the user at the center of the journey so as the first experience of this d5 world is one of value and our hypothesis is that the value is understanding more about where you are today and how you can navigate your way

8:35to this end goal um not just getting a loan but that journey as you kind of go through it and when we allow the use to connect those profiles we're creating a almost like a non-transferable nft it's like a multi-token nft that allows us to encrypt off-chain data and link it to this kind of credit report identity um and constantly track that and keep it

9:02updated in real time fascinating and with people that are getting loans on chain whether it's to start a business or to you know get a car loan something like that uh when people go on blockchain they think okay i'm getting a loan in cryptocurrency or in stable coins of some sorts and i don't really know you know first of all i'm i'm new to buying cryptocurrency but then how would i use

9:28that cryptocurrency to buy things with fiat currency you know is that on and off ramp is that an easy process for people that are new to blockchain as well yeah i i mean it's you know i think of all these kind of picks and shovels companies that have been built over the years um you know coming into the space really early on in 2013 i've really seen and experienced the

9:53different bits of infrastructure that have been built one of those is is these on and off ramps and you have a significant number of integrations that you're able to use to provide those on off ramps um certainly in local markets for example the us and also like african markets or even matam there is this class of companies that like the plaid four x y z the plan for

10:18nigeria the plaid for mexico et cetera et cetera and if you're able to marry together someone's bank information um so allowing them to connect their bank account and verify in the way that we do if we sign up for venmo or another like paypal type service you're able to then make a connection to transfer funds from an on sorry an on or off ramp uh into

10:41that user's account and i would say that infrastructure is very very well established it's just a case of joining the dots between infrastructure that's in the c5 space and infrastructure in more of the kind of crypto native space i like dwala does you know pretty good payment linking and sort of payment infrastructure um and there's many other providers including you know platforms

11:04both on ethereum and um in the in the cello ecosystem as well okay good to know and i'd like to get a better snapshot of where exactly massive finance is at right now you know you mentioned at the beginning of being able to serve billions of people um but that does it's a long path to get to that point yeah so you know how long have you been working on this and where exactly

11:28are you at right now yeah so so our mission is to bring the first billion people to d5 and that's a very bold statement um and you've really got to demonstrate hey there's a market but you can onboard these people like you're saying so at the moment we've been building in i would say you know a beta or a beta kind of iterative approach we've had an android app and a web app in

11:55sort of private beta for about six months and we're just going through like pretty big refactoring for scale we've onboarded around 37 000 users at this point across multiple countries um and in addition to that been building out two other additional things a zero knowledge uh validator protocol which is a little bit like a layer i'm not even going to try and call it a

12:19layer one or a layer two it's a uh a base layer that allows for private transactions of private smart contracts so in order for us to link off-chain data on-chain we have to kind of build we've built something similar to chain link but one that obscurates any of the transactional data that's going through it and only reveals it's two parties we've used a forked um

12:42version of a transaction manager and private transaction um kind of enclave and built that out to our inspect we have about 2 000 validators on that network at the moment from our community which is which is really great so we we've been going through this like test iterate and learn process and over the next month we're going live with lenders and actual

13:04products we're launching our own credit builder loan which is kind of a random product but it's for people i used one of these when i first got to the us and it really helped me get a loan and establish credit in a way that was reported back to a bureau so i get future credit it's this weird chicken situation that without credit you can't get credit so providing this credit

13:28builder loan where essentially you're lent a certain amount of money that's actually held in a savings account and as you pay the loan down it matures at the end and you get a payout so you're saving and building credit at the same time so we're launching one of those ourselves where essentially we're saving someone's money in a in d5 they're getting yield on it and at the

13:48same time they're building up credit and after that initial credit build alone has matured they'll then be able to access a larger loan and in addition to that we're positioning partners we have about 10 to 12 partners coming onto the platform they'll be putting a range of crypto mortgages micro loans in certain countries into the app as if it's that credit karma-like

14:10experience and that will be happening over the next sort of four to eight weeks as we've refactored and rebuilt some things for scale after testing with this initial cohort of users very cool and impressive attraction so far just in the beta i'm looking forward to seeing how that plays out you mentioned there part of the next steps is getting more lending i'm curious on the

14:30lending side do you see you know obviously there's a lot of people and demand uh for getting loans but on the providing loan side do you see an influx of capital that will be flowing into massive finance to provide the capital for these people that need loans and what is the incentivization for those people to lend out their capital yeah it's a really great question so it

14:54kind of goes back to a comment i made at the beginning which is today when you're looking at these segments the banks generally don't want to serve them because it's considered i wouldn't even say high risk it's not even considered high risk it's just out of the norm and what i mean by that is they have built businesses lending to a specific segment for x number of years

15:13and breaking that paradigm and pattern is just not what banks do they move slowly and they stick with what they know and they've been making a lot of money from this for a lot of years so we found that there's a specific bucket of capital available for an for a product what i mean by products is a specific loan product so if you look at this credit build alone it's very

15:36very low risk if you're putting a product like this into the market where it's so low risk because essentially the loan is being escrowed you just have everybody wanting to put capital in there if you've got some rate of return that's above a certain threshold so if you're meeting on beating a certain threshold of return uh capital flow but in addition to that you start

15:55finding that you're unlocking areas of capital that are more mission driven or aligned with impact and essentially because you're building a trust layer those individuals are more comfortable provisioning capital so that these are non-bank institutions these are you know we're working we're in early uh conversations with goldfish goldfinch for example and goldfinch is a you know

16:18fantastic platform they provide debt facilities for lenders um and i think they've done well north of 100 million at this point that was probably a few months ago it's probably way exceeds that now um they provide loan facilities things like people like branch for example you do micro loans in kenya so partnering with those people and institutional lenders what i mean by

16:39institutional lenders one of our investors we have some of the um founders or owners or people that started a fund called golden tree asset management it's a it's a 47 billion dollar fund um based out of new york they provide the majority of the retail loan book capital for the us market um they're one of our investors and they are helping us both structure products through the

17:06platform and understand how we tap into liquidity uh based on their desire to also enter the market as well so what we see is a lot of sideline capital today we see a lot of like product specific capital where people have got com comfortable coming from either retail or institutional investors and then we have um this sort of uh old school capital which i don't think

17:31will ever necessarily enter the market or they'll enter the market in five years into very low risk categories and they'll probably miss the boat which is the old banks um so yeah plenty of capital there but they're all looking for infrastructure to make them comfortable in their lending very cool good to hear and for people that are looking to follow along with

17:52you know the updates that you mentioned in in the coming weeks and people that need access to capital and they're looking to either build a an on-chain credit score or just get a loan what is the best way for people to learn more about massive finance yeah so you can dive onto our website uh just massa.finance it's gonna be updated over the next month or

18:13so and to a more sort of uh frilly website but it's pretty simple right now and on there you'll see links to our discord our twitter account and telegram just on telegram for sort of daily conversations you want to become a node operator go and check out github and dive into discord into our validated channel um you'll be able to kind of get up and running there we're also looking

18:34at hiring amazing people we i'm going to do a shameless plug here we want to have somebody that's great at marketing and engineers as well so check out our careers page or just email us at jobs at nasa.finance as well so twitter telegram discord and you can find all those links uh from the website if you go on there awesome and i will leave those links as

18:54well in the description box below thank you so much brandon for coming thank you very much oh really appreciate it all the best with massive finance and let's definitely follow up in the near future cheers ashton thank you so much you