Mounir Benchemled talks about building Crypto Startup, DeFi regulation, and what efforts needed to make blockchain technology mainstream.
Hello! What’s your background, and what are you working on?
My name is Mounir Benchemled, and I’m the founder and CEO of ParaSwap. I’m a tech/ product guy. I’ve started as a software engineer in 2007. Since then, I’ve mostly worked in startups as a developer, product manager, or as a CTO. I got interested in crypto back in 2013 when I’ve realized that Bitcoin is only the beginning of a great financial shift.
As users, we’ve all been confronted with liquidity issues when buying and selling digital assets on decentralized exchanges. I believe that this problem is one of the main reasons why crypto is not mainstream yet. We’ve turned this challenge into our mission, and ParaSwap has been designed with one thing in mind: bring more liquidity into the market.
Also, we didn’t stop there. ParaSwap’s full goal is to bring more liquidity and ensure cheaper and faster transactions for our users. We’d like to think of ourselves as a software company that empowers its users with broader options at a fair cost.
ParaSwap aggregates liquidity from multiple decentralized networks such as Kyber, Uniswap, and Bancor in order to provide the best price and optimal execution, which means computing the prices and splitting orders across exchanges. Our users could end up paying 5 to 10% less than if they would do it themselves (even better in some illiquid assets).
We’re currently focused on the Ethereum blockchain, where most DeFi projects are built. Our ambition is to become the go-to platform when token swaps are needed regardless of the product type. It could be a blockchain-based game, a prediction market, or a payment app that allows its users to pay the best price using any token.
What’s ParaSwap backstory?
While I was at Web Summit 2018 in Lisbon, I had many conversations with Crypto entrepreneurs, and I was impressed by the amount of innovation that was made so far. But I wondered why we’re still not even close to our crypto dream? ☺ Why are people still not using crypto on a daily basis? Obviously, volatility has a big play in it, but at scale, then the main issue seems to be the liquidity. For instance, people in Venezuela can’t rely on DAI, even if it’s “stable”, but if 1 million Venezuelan tried to buy or sell it at the same time, the market price could dramatically move.
I’ve decided to take on this challenge and think of ways to fix the liquidity problem. I’ve started doing some research on projects working on improving this subject. This is how I’ve discovered Uniswap, Kyber, Bancor, 0x… I was happy to see that these startups are innovating the field and are quite successful in doing so. ParaSwap is built on top of those projects in order to make the market even more liquid.
I’ve bootstrapped the project from tech to UX, and now I’m starting to build up a team. A world class Ethereum developer is already joining me. We are looking for talented tech and non-tech people to come on this journey. Our ambition is to take crypto adoption to the next level – the mainstream level.
What went into building the ParaSwap?
We’ve been working on ParaSwap since mid-April 2019. The MVP was released two months later, on June 17th. At the moment, it allows our users to swap Ethereum ERC-20 tokens directly from the liquidity networks such as Uniswap, Bancor, and Kyber. We are currently working on a smart contract that will split orders into multiple exchanges so that we can allow our users to buy at a significantly better price. The results we have so far, show clearly that our software finds the best market prices compared to competing products.
We challenge our technical stack every day, including the architecture and the tooling. However, one thing we never make any trade-offs with is security. We review every single line of code and stress test our app before pushing to production. We’re happy so far with our stack, we use Solidity/Truffle for the smart contracts, Node.js/MongoDB/Redis for the backend and React/Redux for the frontend, all written in TypeScript. We also like to write code on a functional fashion and get most of the type system so that our code is more predictable and secure.
User feedback is a daily habit at ParaSwap. We are always trying to engage in conversations with our users, which allows us to validate or invalidate product hypothesis on both existing and future features.
What’s your business model?
So far, we found many interesting ways for our users and ourselves. The simplest method we’ve found is to take small commissions on each transaction. We’re also exploring other ideas such as a SAAS model, where regular traders can only pay a fixed monthly fee and make fee-less transactions. Moreover, we are working on some options trading features that can add a lot of value to some advanced traders.
We chose not to take fees for the MVP stage so that our users can fully experiment with the product. This allows us to focus more on product usage and talk to our users regularly. As a startup, we’re always seeking creative ideas for business models while keeping in mind that the user must receive excellent service at the fairest price.
What’s your position on the regulatory landscape today?
We pay a lot of attention to regulations as it affects all of us involved in DeFi projects. We think that as a non-custodial dApp, we are on the safe side. This is one of the most significant advantages of ParaSwap – users can use ParaSwap stress-free since there are no counterparty risks. Recently FinCen published new guidance, where it suggests that DEXes won’t be regulated as Money Transmitters as long as they remains the software and don’t provide any services, which is exactly our case.
While the value that DeFi brings to society is becoming more and more prominent, it will take efforts on all sides (private & public) to make this technology mainstream. However, we are noticing a growing receptiveness of government officials and regulators who seem to go towards a more inclusive solution regarding DeFi. These facts make me feel very optimistic about the future.
What are your goals for the future?
We believe that crypto will be a multi-trillion-dollar market within the next 5 – 10 years. Our goal is to contribute to the hyper-growth of this ecosystem by delivering a secure and fast solution, ultimately becoming the go-to swap platform.
We’re aiming to become the reference tool for swapping cryptos across chains Ethereum, Bitcoin, EOS… We intend to disrupt centralized solutions that expose their users to several risks – hacks, thefts, and so many others. The current context requires a no middleman approach, therefore decentralized, to completely avoid these risks. No centralized solution can guarantee full protection against these risks to their users.
What are your future thoughts for the DeFi market?
I can only see a bright future for DeFi. I believe that crypto has attracted the best minds in the world and will continue to do so. In 2019, we’re noticing a significant shift from the 2017th ICO craze and more focus on quality products, great UX, and companies with a real hunger to innovate everyday life. I think that we’ll see exponential growth within the next five years as we’ll onboard new users and as we’ll see more traditional finance institutions embracing DeFi.
Where can we go to learn more?
We are always happy to get feedback from users or future users but also from DeFi peers and other interested parties.
Our MVP is up & running on paraswap.io Give it a try and let us know :) We welcome you to leave your feedback and your questions or to follow us on Twitter @Paraswap. Also, feel free to reach out to me on Twitter @mounibec