“Defis are democratic because barriers are lower”

Key facts:
  • José Trajtenberg said that financial education “is the engine of human well-being”.

  • By the third quarter of 2021, Xcapit will launch its associated credit card wallet.

“The democratic thing about entering DeFi is that the barriers are much lower.” This phrase largely reflects the vision of the team at Xcapit, an Argentine company that offers cryptocurrency investment plans to enter decentralized finance (DeFi) with automated models based on artificial intelligence. José Ignacio Trajtenberg, the CEO of the company originally from the province of Córdoba, spoke with CriptoNoticias and explained the bases that underpin their activities.

First of all, and one of the main missions that this company traces in the medium and long term, is to generate interest and knowledge in the public to approach and encourage themselves to enter the world of finance and cryptoassets. The good news for Xcapit is that the first steps are taken, and firmly.

In mid-June 2021, CriptoNoticias reported on the contribution that the United Nations Children’s Fund (UNICEF) would provide to some select companies to promote access to education and financial services. Xcapit was the chosen firm in Argentina and received a donation of 44 ether (ETH) to concretize “a long-term plan with actions in different senses”, as described by its president.

Thus, through an alliance with strategic partners (including the traditional financial market), the Cordoba company will seek to disseminate, in secondary schools and universities in Latin America, topics such as savings, investments and different types of assets. From the crypto-assets arena, RSK, Binance and Paxful have committed to collaborate in organizing talks on blockchain-based ventures and cryptocurrencies.

In Trajtenberg’s own words, the premise is “to be catalysts of interest in financial education and remove that idea that it is only for some”. To do this, he says, ” we want to generate content that is easy to digest, with content such as pills, for example, in TikTok video format, plays or video games. Long courses will come later, but first you have to generate interest.”

“This should be understood as an engine for human well-being. The person who has the right financial management can maximize the achievement of goals in his or her life.”

– José Trajtenberg, CEO of Xcapit—

Is it risky to invest in DeFi?

One of the main hesitations of the general public has to do with the risk involved in placing the savings in any investment plan on these types of platforms.

“Buying a cryptocurrency has no risk, the risk is volatility. Then, investing or choosing one of the investment products we offer allows you to shorten the risk. There is a stop loss and a take profit level that it is determined by each person, ” says José Trajtenberg in this regard.

Despite the relevance of these benefits, none compares to the ease of income for all types of investors, in his vision: “The democratic thing about entering DeFi is that the barriers are much lower. The capital needed to invest is drastically less than what is needed for the traditional financial world, ” he adds.

However, Trajtenberg is also clear that this type of tools they can be difficult to understand and use for a non-specific audience: “DeFi has many virtues, but usability is not one of them, and this of having it simplified either.” This complexity can be an obstacle even when its premise is to offer ” an easy, friendly and intuitive environment to communicate with the different DeFi protocols and be custodian of your own capital,” he says.

”The capital needed to invest in DeFi is drastically lower than what is needed for the traditional financial world.”

– José Trajtenberg, CEO of Xcapit—

Because of this, the CEO of Xcapit it highlights as an advantage that this ecosystem allows to operate in centralized finance (CeFi), for which they are associated with Binance “for almost two years, due to liquidity, market depth, infrastructure and security issues”. Moreover, Binance’s steady growth is a tailwind that they know how to take advantage of, he admits.

Xcapit’s website reflects the “easy and friendly” environment that its CEO highlights. Source: xcapit

Who invests in cryptocurrencies in Argentina?

Asked about the characteristics of the people who are most interested in the offer of Xcapit, Trajtenberg details: “Our target customer is the millennial who has surpluses and wants to channel them. These are people with empathy for digital and looking for options to diversify or, in some cases, as a first investment option.”

Most Xcapit customers are from Argentina (“70%”); the second market is Mexico, followed by Spain and Brazil, although they also have users throughout Latin America. And how much does the average investor spend? “Between 1,500 and 2,000 dollars of funds managed per client”, although they usually start with lower amounts that then increase, says the director of the startup.

At the moment, Xcapit offers the possibility of link the Binance account so that an artificial intelligence algorithm (a buttons) control investments according to the plan chosen by the client. There are four alternatives: Denali, Olympus, Andes and Himalayas, in order of increasing risk and investment.

However, by the third quarter of 2021 the platform will launch its own wallet, “the gateway for the DeFi market to manage these protocols from there”. They will also add “in the short term a financial planner and manager and a credit card associated with the wallet”.

Regulation of defis: is it feasible?

If there is one factor that can propel public interest in the crypto economy, it is state regulation, whether for better or for worse. Asked about this, Trajtenberg considered that ” it is complex to regulate a decentralized P2P system from a state and from a bounded geography. Based on that limitation, what can happen is uncertain, at least, and even incongruous by definition. Yes you can partially regulate the rise and fall of fiat money, but not DeFi”.

“Regulation is important at one point because it gives confidence to the mass public. However, there is another that can also be demotivated if the activity is made impossible by regulation.”

– José Trajtenberg, CEO of Xcapit—

While admitting that it tends to ” KYC processes [conoce a tu cliente] with which governments seek to ” prevent illicit activities that have cryptocurrencies as a safeguard of value, “the president of Xcapit stated that” the local regulatory logic does not fit with the global system. It’s like trying to fit the square inside the ball: it doesn’t fit.”

In short, it is first to understand and then execute in search of progress, consider. “Before, there should be a strong investment of time to understand what mobilizes this technology and, from there, see if there is a possibility of regulating beyond the fundraising craving and in order to increase trust and security,” Trajtenberg concluded.

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