Recap of AMA with Austin Kimm, Choise.com COO | Jan 27, 2022
Speaker: Austin Kimm — Co Founder and Chief Operating Officer of Crypterium and Choise.com. Experienced results proven financial services CEO. Built companies with a current valuation in excess $500 million.
Where the idea for your project came from?
Ok, easy one to start, thank you. Back in 2017 everything was about ‘how do we actually use and spend Crypto’.
That question has been answered, but probably not in the way people predicted. With a few exceptions (El Salvador and Tesla) most people are not spending Crypto like we expected. People are not going out to the shops and spending Ether. They are converting it to fiat currencies and spending through traditional means such as a visa card. I still believe it will happen, but it is taking a little longer than expected. Perhaps when Facebook finally launches, or one of the other giants introduces the token as a means of payment.
We’ve got what can be done today covered, and much more, and people are generally happy with what we are doing in this space.
The reality is that people are using Crypto as a storage of value and exchange. We attract people through the ‘banking’ features, but the action is in the returns of assets. Like a supermarket entices you in with cheap bread and milk, then you leave with a TV, the same is happening in Crypto. They are enticed by a Visa card but stay for high returns on their assets.
That’s where DeFi comes in. Most people have no real idea of what is means or how it works but they know that you can get some great returns. But it is very complicated, very expensive and very risky!!! 4m Defi users. 100m Cefi users. Must be a reason.
So why would we do it. Because we can fix all those problems. People don’t care whether a bank uses Swift, Sepa, faster payments, so long as their money gets to where it needs to go quickly, safely and cheaply. I believe people don’t care if they are using defi or cefi, they just want it to be easy and safe and deliver an excellent return.
We know how to do that and that where Choise.com comes in. We made Crypto spending easy, we will now make crypto saving just as easy and without inherent risks.
Please tell more about your team and experience of founders.
Back in 2017 Vladimir Gorbunov, Anton Kulikov and myself with a few others came up with Crypterium. We are all still here, all running different functions
Vladimir has taken on the role of CEO, I have the title COO but in reality I am more about strategy, and Anton runs day to day operations. Steven Parker who was CEO is now an Advisor and runs our Advisory group.
What is probably new is the size of the team. We are now 160+ people. 7 alone work in treasury and token management. 20+ in compliance, over 50 in IT.
Many projects were closed in many countries due to failure to use the correct regulations and permits. In order to go global, how does the Choise.com team deal with these issues?
This is by far the hardest issue that any Crypto company will face. We can buy technology, good managers, create new product (or copy them!) but we cannot predict what regulators will do. We take it very seriously and we get registered or licensed wherever we can. But please put this into some perspective. Yes we are global and have a decent sized team, but we are not Microsoft. We have customers in 170 countries. It took us 2 years to be registered in the UK (one of the first to achieve this), regulations in every country change by the day. It is simply impossible to be regulated and directly compliant everywhere.
That is why we work with local partners that have the ability to share their license with their suppliers.
Probably the best example is the issuance of a Visa card. This requires a license from Visa to issue the cards, a local banking license, and lots to technical skills. We can do the bit with Visa, and skills, but getting a banking license is very tough. In the USA it is even tougher as each state has its own requirements.
So when we issue a visa card in the USA, it will be under the license of a regulated USA bank. The alternative is to build up all the necessary resources, capital etc, then go through a 2 year application process, for 50 states and of course another 170+ countries.
Earlier this week a customer had a problem making a payment to a UK card. This is a consequence of new regulations and our partners that have the license for this, put a hold on such payments. His comment was that this is not a very effective way to run a business when we are reliant of third parties. I totally disagree, it is the only way that this can work in reasonable timeframe and capital base.
Sorry for such a long answer, but simply put we work with companies that are local and have all the licenses to deliver the local services.
I use Crypterium and hold some CRPT as well. As I know Choise.com is a platform for DeFi. Is it difficult to launch a DeFi project?
First I want to explain what DeFi means. It is decentralized finance, peer to peer. That means when you are lending or sending your money to another entity, there is nobody taking charge of the process, nobody is responsible to make sure it all goes right. It is managed by a smart contract.
This can lead to lots of problems, different blockchains, hundreds of opportunities, reliance on the contracts, hoping the other side is legit and so on.
So yes it is hard.
But I want to stress we are not building a DeFi service to compete with other DeFi offerings. We are building a simplicity and safety layer above those that are already existing in the market place.
In the same way that you can load a Visa card with one push of a button, we want people to have the chance to use a DeFi offering with one push of a button.
No need to worry about buying the token, moving it to a new chain, we will do all that for you. It also means that we can offer the best projects on the market, we are not stuck with just one, and by offering lots of offerings, we spread risk, so that we can remove the risk for the customer and take that risk on our shoulders.
I think the best way to describe this is as a DeFi aggregator.
So what we are building is a DeFi solution, but it is a DeFi solution that works on top of what is already available, strips out the complexity, risk and much of the cost. So yes it is difficult, but we are going to make it simple for our users.
What is the plan to ensure sufficient liquidity on exchanges to fill market orders, especially as adoption increases and clients begin multiplying year-over-year token?
Liquidity, my favorite subject:)
It is very important to understand that everything, and I do mean everything, that is being raised through the early sale of CHO tokens is for liquidity purposes. Crypterium is a profitable company and we are building the DeFi services even if we did not sell a single token. But when a token hits the market, there must be demand and liquidity.
That is why there are so few tokens being released in the first few months. Everything that we sell to funds will be locked up for 12 months, and even after that they are released slowly. This stops any company simply cashing in on a quick buck.
That means that every token is backed by ‘hard’ currency. If there is $1m worth of tokens on the market, there will be an equivalent $1m of currency to support it. Low supply, solid liquidity and high demand should lead to a very positive outcome.
I also want to stress that the token is not just a governance token, it is an earning and saving token. Demand for the token will come from many directions such as people wanting to earn more return by staking their token — to stake you need to own ! Higher rewards, say better card spending limits and even discounted fees.
People forget that we are not just a retail offering we are also a B2B solution.
Imagine a demand for our token by hundreds of B2B partners (we have over 35 today) where they get better prices for services, or short lead time for solutions because they use our token.
There are several exciting projects our users will know the names of where the ownership of the token bring huge benefits in the platform. It will be exactly the same for us, but we will also apply it to B2B. And all through this period, the token will be backed by ‘hard’ currency.
When will your tokens be listed on the exchange and which exchanges do you plan to list on in the future?
When we first launch there will be one or two DeFi exchanges. These are best when there is a relatively low supply and price can fluctuate greatly by a small exchange — once we are established on a DeX — we will then move to the centralized exchanges that we are already on such as Liquid, Gate.io.
For a project development first of all main priority is having enough fund. Does your team financially capable to run this project? Do you have enough fund for its development. Can you tell us that how your project generate the profit?
As I’ve mentioned earlier, we are a profitable company, and the token sale is creating the liquidity. We don’t have the funds of some of our market competitors, but we are sufficiently funded to see this through. Selling the initial tokens has been a relatively simple process, and we could close the round now, but we are aiming to bring on funds that can offer a lot of value more than just money, for example a new market, or access to great DeFi projects. — so money is not an issue, but of course more would be nice.
Have you being audited ? Have not heard you talk about that security of funds. is what every investor craves for and plans to escape in case of insecurity if funds, scams and rug pulls? How strongly built are your security put in place?
Touch wood🤞 we have never been hacked, and even if we were, almost everything is locked away in vaults with our partner custody providers Fireblocks and BitGo. We also have a team of ethical hackers constantly working away to try to break in.
Could you tell more about CHO tokenomics and utility. I wish you good luck with the project, it is a great idea to mix DeFi and CeFi.
Ok, token economics.
CHO has 4 functions
1. Governance
2. Burning mechanism — Somebody asked this above — it is always good to reduce the supply a little
3. Save — hold the token your reduce the cost — or
4. Your can earn more
Governance is not just about simple voting in the community, but the need for our partners to increase their ranking in the decision making process. B2B partner that owns tokens has more of a say in the things we are working on that one that does not
Save and reduce costs I have covered above. But I want to also cover the point I raised earlier about backing of the token.
When we set up Crypterium, tokenomics was a new subject and most companies did not get it right the first time. Now we have 4 years of data and market examples. Best example of rewards for holding is probably Crypto.com — congratulations to them. But their token is not really backed by anything, just very smart marketing and market making.
When we give a customer the option to earn more via the CHO token, then it will be backed. Let me give an example.
Let’s say that Choise.com can earn 15% in the market through staking. And we give the customer a choice to either earn 15% in our own CHO token, or take 14% in the native token that they invested in.
If they chose to take the CHO token, then they earn 15%, but Choise.com also earned 15%, so even if that customer immediately decides to sell that token, we have the 15% required to cover the liquidity. Of course we hope that a large proportion of customer will keep the Cho token as it will bring them rewards and benefits, so not everybody will convert. But even if they do, there is a solid currently ready to support it. This is a model successfully applied by Celsius. But they are all about CeFi.
For use, the token will follow the best of the best from market experience, underpinned by very careful liquidity management
How did you get the community involved in developing the project? and how do you build a strong community to grow globally?
Community management is now much more than just a Telegram chat.
I think if you have followed CRPT over the years, you have seen the impact a positive comment form a leading fund can have on token price. We have a very detailed, every day plan to make sure that for the foreseeable future, we have something everyday, whether or not this is a youtube influencer, or major paper article
We are not going to let this it the market by chance.
We are also being very careful about the seed and private investors. We are not interested in a company that just has money, they must have connections, something that adds value.
And of course we have a B2B offering. What can be faster than a company coming to us with say 100,000 users, and all of the over night become Choise.com customers
There were several questions about MetaFi. Could you explain this concept briefly.
I wish I could explain it :)
It is such a common phrase now that means so many different things to different people. Facebook are trying to own the term.
But on a simple level, for me it means bringing everything together under one roof for simple access.
We refer to it in connection with web3, CeFi and DeFi. To Microsoft and Facebook it means something else. But what I think is clear, is that it will mean a collaboration, where lots of concepts and idea all come together in one place that everyone can access.
That is why we are building the easy access layer. All the DeFi projects out there will be part of the MetaFi we are providing bridges and links. But if you ask me again in a year, I may give a very different answer:)
Stay tuned to Choise.com announcements as there is so much more to come! The beginning of our new adventure will start with the release of a new CHO token.
Choise.com to-be-released platform will be the ultimate solution for the modern individual, bringing all the possibilities of centralized and decentralized finance — at your fingertips.
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