How Zerion simplifies DeFi onboarding
Today, we are talking with Zerion’s co-founder Evgeny about a series of iterations that lead to the creation of the first DeFi interface
Hello! What’s your background, and what are you working on?
Hey! My name is Evgeny, and I’m the co-founder and CEO of Zerion, an all-in-one DeFi interface that lets you actively track and manage your DeFi portfolio. With Zerion, users can invest, lend, borrow, swap, and do just about everything DeFi-related while retaining full custody of their funds.
Personally, I’ve been into programming and finance for as long as I can remember. I first heard about Bitcoin in 2013, and when I read the Ethereum whitepaper in 2014, I understood the magnitude of what was possible for trustless, decentralized systems. I quickly learned how to write basic smart contracts for Solidity. I also started going to every blockchain meetup and hackathon in Moscow with Alex Bashlykov, now CTO of Zerion. After we won our first hackathon, we just didn’t stop building 🙂
What’s Zerion’s backstory?
Zerion was born out of a series of iterations. The original company name – no judgement – was EtherionLab. This was back in 2015, and our team dabbled in just about everything from building Blackjack on Solidity to creating tokenized funds and Ethereum wallets. As the crypto and ICO market rapidly expanded, we evolved and started offering smart contract development (not many people know this: Nexo token smart contracts were written by us 😅). In 2016, we rebranded under the name “Zerion”.
It’s worth bearing in mind that Zerion became what it currently is only in 2019. The vision to become the non-custodial “bank” of decentralized finance emerged after working for over four years in the space and realizing there were some serious technical and design challenges barring adoption.
2018 was a challenging year for us because of the bear market that followed the wild exuberance of the ICO craze. Between 2016 and 2018, we had worked with some very successful ICO projects, including Waves (raised $15m) and Po.et (raised $10m). But after helping all these projects build their smart contracts and reach new investors through the Zerion portal, we realized there was still no automatic solution for easily tracking all ERC-20 tokens. We wanted to provide our clients with a non-custodial tool where they wouldn’t have to manually input their assets. Combined with the growing interest in decentralized finance, we saw a huge opportunity.
Zerion’s pivot was also driven by personal experience. Our team took a good look at the crypto space and concluded that most cryptocurrencies were either useless or not ready for adoption. Using centralized exchanges started to feel a lot like traditional finance. It was sometimes impossible to open an account with certain exchanges under our nationality. If it wasn’t KYC red tape, it was the fragmentation of available services. Things were messy and unnecessarily complicated. DeFi promised to solve a lot of these issues, but we were yet to see any use-case for fully managing one’s finances at the smart-contract level. So, we decided to build one ourselves.
What went into building Zerion?
Fortunately, Zerion has always had a great technical team and were able to scrape together just enough from our prior work to kickstart the project. We began with building a basic ERC20 token portfolio tracker in May 2018. But once we learned about DeFi, it became clear to us that it is possible to allow people to transact directly from the interface! We intuitively felt that this is the right track, and we released a beta version of a “trustless bank” in January 2019. Our first iteration supported basic portfolio tracking and trading on Uniswap. Maker was our second integration, followed by Compound V2. In April 2019, we won the YCombinator hackathon. In less than 24 hours, the founders of Zerion built an app called Defy that would allow people to earn interest on their dollars in Compound. We completely abstracted blockchain away as the app allowed deposits from bank accounts through debit cards, ACH, or wire transfers. This is the exact same concept that we now see on apps like Dharma, Linen, and ZeFi. In addition to winning the YC Hackathon, we also won a UX award at DevCon5.
When it comes to security, Zerion is non-custodial. We don’t have smart contracts on the mainnet yet but are in the process of writing our own smart contracts, which will be externally audited before they go live.
The main difficulty we experienced in onboarding new users was the huge gap between people who understand and use DeFi and those who are completely new to the space. We’re hoping we can change that with our simple, easy interface.
During our fundraising journey, we met with a lot of teams in the DeFi space, and we are extremely grateful to the community for making Zerion possible! Special shoutouts to the teams at Fortmatic, Tokensets, Dharma, 0x, and Uniswap – thank you!
What’s your business model?
Zerion provides people with the instruments to navigate DeFi. Our target users are a niche yet rapidly growing group of people who want to manage money radically differently. Zerion users recognize the potential for decentralized solutions in a very broken, centralized financial system. They’re looking for an easy way to use sophisticated tools without giving up control over their funds or data.
Knowing who we serve has been integral in how we’ve expanded as a business. Zerion is currently free to use, and we are figuring out the most fair way to monetize. The thing about DeFi is that no one can be fooled into thinking they don’t have an alternative. If users feel they’re being overcharged, they can always directly use the protocols themselves. Our goal is not to become rent-seeking. When we do start monetizing our business model, we’re committed to upholding complete transparency and only charging for the value we add.
What’s your position on the regulatory landscape today?
I believe that regulation is beneficial. It brings more clarity to the space and helps the ecosystem to grow. However, regulation should be adjusted to the reality of any new market, such as DeFi. Zerion is non-custodial, which means we never hold users’ money, and we plan to stay this way. This puts less funds at risk of loss, which is why regulation towards such services is not as strict as with centralized exchanges. This strategy has allowed us to operate globally from day one.
What are your goals for the future?
Recently, we have been getting more and more traction. Thanks to the valuable feedback we get from our users, it’s becoming much easier to navigate the landscape of features we need to roll out. DeFi is rapidly evolving. As this happens, we have three main goals in mind:
Provide precise portfolio tracking. As of now, it’s impossible to track your complete DeFi portfolio. We want Zerion to be the place people trust to evaluate the performance of all their DeFi investments. This includes profit/loss, breakdown by the position, tax fees, and cross-protocol comparison for APYs, protocol, and network fees.
Make Zerion the simplest place to invest in DeFi. From a user perspective, investing in DeFi is often fragmented and overly complicated. We want to create a secure interface that makes it easy for people to invest in all DeFi products.
Fuel the growth of a decentralized, open financial system. The DeFi ecosystem is based on a principle of shared value. The most valuable products in the space are open-source, which is why we bet on communities built around joint effort. Aligned with this ethos, we recently launched the DeFi SDK – a system of smart contracts that makes it easier for developers to integrate with every DeFi product.
What are your future thoughts for the DeFi market?
I believe that decentralized finance will coexist with traditional finance for quite some time, but DeFi is going to grow extremely fast. Globally falling interest rates will fuel the growth in these crypto networks and protocols, which will cause an inflow of capital. Abundance of liquidity in DeFi should increase overall adoption of the ecosystem.
But the opposite is not the case: going from crypto assets back to fiat money will not make much sense anymore. Hedging can easily be achieved using stablecoins, spending is already possible, and investing in synthetic assets within crypto networks is much easier than in traditional finance. That will have a dramatic impact on the accessibility of financial products.