ProDeFi is a new cryptocurrency project that’s aiming to make the best of both worlds by taking parts from decentralized and centralized financial systems to create a hybrid offering that everyone can appreciate.
We recently sat down with the ProDefi team to learn more about their project, vision and what’s coming next.
Please introduce yourself and provide a short summary of ProDefi
I am James Hong, co-founder of ProDeFi. Before embarking on this project, I founded several offshore marine services companies. At a certain point, the consolidation of the industry led to several M&A which got me thinking about the inefficiencies of various business processes. There were stacks of paperworks to be audited for valuation as well as a lack of transparency especially with regards to developing nations. Wages were paid in cash and there were no proper records. I started off wanting to develop a solution that will fundamentally solve the issues faced by those the unbanked but after researching deeply I realized it was not cost effective for banks to support small account sizes and the large transaction costs erode the already low salaries of the unbanked population. That led to the conceptualization of ProDeFi, an ecosystem designed to kickstart the move towards decentralized financial systemS. We believe that the way forward requires a hybrid solution, one that leverages on the strengths of both decentralized and traditional financial systems. This would allow for new innovations that demonstrate the strengths of each structure with increased transparency and participation through the decentralized aspects, coupled with heightened efficiency and user protection from centralized solutions. Such an approach would also provide increased regulatory certainty by working within the bounds of existing legal frameworks and could be reliant on judicial processes for resolution of disputes.
The concept of providing a hybrid finance service is fascinating. Can you explain more about the benefits that come from the two sides into your one offering?
Currently, peer-to-peer financing systems in blockchain projects serve niche use cases, most often for speculative investment by providing margin to long side traders. This is due to the inherent design of such solutions, requiring loans to be overcollateralized before they are accepted. However, the requirement for overcollateralization is not a design flaw, rather, a compromise in order to achieve full decentralization and remove the risk of default.
With ProDeFi a hybrid financing solution would allow for a decentralized network of lenders to combine funds into a liquidity pool whereas loan approval and issuance will go through a centralized KYC and credit review process. The assets, interest rates and transactions would all be transparent by virtue of its decentralized nature, whilst enabling borrowers to take under-collateralized loans based on a centralized review, with the safety of traditional dispute resolution means to mitigate risks.
This methodology of striking a balance between centralized and decentralized aspects has been a core focus of our product design and can be seen in our other use cases, a crypto-asset fund, custodian service and wallet interface. The proposed fund would be used to manage the holdings of multiple crypto-assets with ProDeFi as a custodian, with the full transparency of blockchain technology allowing ecosystem participants to vote on its structure through their staked tokens.
Where do you see DeFi going and how will ProDefi be a part of it?
I believe that in the long run, a transition from traditional finance to decentralized finance is entirely possible. However, the process of getting there will require significant time and a change in the mindset of the user. One of the major challenges DeFi is facing right now is the barrier to entry, with solutions built on layers of complexity that are accessible only by individuals with a reasonable level of understanding of blockchain technology. In order to move forward with greater adoption of DeFi solutions, products and user experiences would have to provide a degree of familiarity with traditional offerings. This is where I believe ProDeFi truly shines as a bridge between traditional and decentralized finance. By keeping sections of our solutions centralized, we are able to leverage on processes refined over numerous years and enable a seamless transition to partially decentralized solutions, while reducing complexity for mass adoption. This is highlighted in our enterprise custodian service and wallet interfaces that have been designed for less blockchain-savvy users, placing a focus on multiple user tiers and providing varying levels of management. Beginner users will be able to access their assets through a simplified, user/password and 2FA login process, whereas advanced users can opt for greater control and complexity, with settings enabling customized encryption and offline access for cold storage. In each of our solutions, a layer of centralization works to support the overall goal of transitioning to decentralized finance.
Can you briefly explain the importance of your token, PDT?
One key aspect of ProDeFi is the development of an interoperability blockchain focused on DeFi products, the ProDeFi Chain. As the primary value carrier of our network, PDT will be used to facilitate all transactions occurring on or involving the blockchain, whether they be native solutions built on our blockchain directly, or third-party dapps on other protocols routed through us as an interoperability layer. PDT can also be recognized as collateral or value and staked to gain access to our financial solutions, or to take part in block producing and transaction verification. In the later stages of our product development lifecycle, PDT will also be used to facilitate transactions as a medium of exchange for all dapps built by our team, including the hybrid financing service described earlier.
How will you win market share from other DeFi competitors?
Our focus at ProDeFi is inclusivity and ecosystem compatibility and as such, we are looking to onboard and work with other DeFi projects rather than competing with them for the existing market share. One example would be with respect to stablecoins. In the early stages of the project we considered the possibility of building and launching a stablecoin to fuel the network but quickly scrapped the idea as we believed that existing projects such as MakerDAO were better positioned to address those challenges. We decided to integrate those tokens into our ecosystem through the interoperability layer, thereby leveraging their expertise in the relevant fields while providing our users with solutions that they already trust and have access to. In the context of our lending platform, this means that instead of being restricted to a new stablecoin built by ProDeFi, which would potentially be a rehash of other projects, users would be able to select a stablecoin from their preferences whether it be SAI, USDT, GUSD or others.
As for our business development efforts, we are placing a heavier emphasis on the onboarding of untapped markets with a focus on individuals who may have yet be exposed to blockchain technology and the benefits it could bring about. This would be achieved through our business partners who are currently operating in traditional financial markets. These past few months we have been working on pilot projects with our partners and exploring the potential of migrating their operations onto our platform. Companies such as iMillion and Valtuus have been working hand in hand with our development team on our testnet and we foresee that these solutions can be available to the public in the coming year. The successful implementation of these projects will bring about major benefits to ProDeFi and the DeFi ecosystem as a whole, as the mass adoption of ProDeFi would ripple outwards to other DeFi projects we have onboarded in the earlier stages.
What plans do you have for the rest of 2020?
With the groundwork in place, we are focusing heavily on a public sale this year, in hopes of completing our financing round which would enable us to put our full attention on the development and launch of our products. Our alpha stage testnet has just been launched recently, although it is primarily aimed at working with industry partners for the moment. The development team is currently working on the next iteration of the testnet, one that would be of a larger scale and operationally ready for cross-chain compatibility with industry players.
*Disclaimer – ProDefi are our Media Partners and therefore this content is sponsored by them. The fees paid by this project are used to pay for The Daily Chain salaries, dev work, hosting services, travel expenses etc.. that are required to make this company a success and continue to provide the community with great content on a daily basis.