Crypto will not be hit as hard as other startup sectors: Sumit Gupta
Crypto will not be hit as hard as other startup sectors: Sumit Gupta
The co-founder of cryptocurrency exchange CoinDCX on more capital being available to crypto and blockchain companies, plans to open a metaversity, and how central bank digital currencies can aid financial inclusion
Naandika Tripathi started her journey with Forbes India as an intern four years ago, today she’s the special correspondent. She covers startups, tech, climate change, education, cryptocurrency and human interest stories. She holds a postgraduate degree from Indian Institute of Journalism and New Media (IIJNM, Bangalore), with specialisation in multimedia and business journalism. Apart from writing for the magazine, Naandika also handles social media, events and the Blogs section on forbesindia.com. Outside of work, you will find her traveling and exploring new places, volunteering for NGOs, rescuing animals, and mostly spending time around them.
Sumit Gupta, CEO and co-founder, CoinDCX
Image: Nayan Shah for Forbes India
Indian cryptocurrency exchange CoinDCX recently announced a new crypto yield program called ‘Earn’, through which customers can earn interest on their idling crypto assets. At present, the crypto unicorn is offering this feature on 15 cryptocurrencies. The highest interest will be paid out on Tether (USDT) at 13.05 percent per annum, followed by USD Coin (USDC) at 9.5 percent, and Near Protocol (NEAR) and Dai (DAI) at eight percent each.
In a conversation with Forbes India, Sumit Gupta, CEO and co-founder of CoinDCX, talks about the new crypto program, plans to hire new employees and the importance of having Central Bank Digital Currencies (CBDCs). Edited excerpts:
Q. How will CoinDCX’s new crypto yield program ‘Earn’ provide a way for individuals to earn yield on their crypto holdings while continuing to keep exposure to the nascent asset class?
‘Earn’ is a tool for anyone who has already invested into crypto. The investors can use their holdings to get passive income out of their crypto holdings. So while people are not trading, their cryptocurrencies lie idle in their wallet, but with ‘Earn’, they can get additional rewards on top of their idle lying crypto.
Let's say if the user has 1 Ethereum (ETH), and suppose it provides a yield of five percent, so after one year, you will have 1.05 ETH. This works on stake consensus mechanism. For instance, all the tokens on Ethereum blockchain that are working on a proof of stake consensus mechanism provide these yields. Before the launch of ‘Earn’, a lot of Indian users were not able to access it because it was very complicated. To address this problem, we have built a product, which allows people to own that income, and we do the hard work in the background. For now, we've started with roughly 15 tokens, and plan to increase it over time.
We’ve been working on building this product for almost five months now. And given the current market downturn, we felt it's a great time to launch a product like this. Nothing specific about the timing, we just felt that we want to give people an access to this as well, which was always out there, but people were not aware of it.
Q. CoinDCX has been investing heavily in education initiatives like DCXLearn platform. Do you have any plans to open a Metaversity?
Education has always been a core part of our philosophy. And what we fundamentally believe is that the right way to grow a category is to make people aware and educated, and hand-hold them in their crypto journey. Crypto is very complicated to understand and it's not very easily accessible. So DCXLearn is an initiative where we want to educate people and make them aware about what's happening in the world of crypto and Web3, presenting the information in a simple and consumable way. Education is necessary for an industry like ours. We have been working on it for almost two and a half years now. We’re targeting to make the content available in regional languages too. The long-term plan is to allocate more budget to this initiative and come up with creative ways releasing the content. Who knows, in the future we'll even have a Metaversity for crypto education.
Q. Are there any improvements in trading volumes?
Trading volumes are fairly stagnant for the last three weeks. We have seen a little bit of downfall, post the tax announcement, but I think the drop is also because of the global markets slump. If markets are volatile, trading volumes jumps up a bit, but otherwise, it's more or less in the range-bound manner.
Q. Central Bank Digital Currencies (CBDCs) were an important theme of discussion at the World Economic Forum this year. What are your thoughts on it?
We are experiencing a change where the world is getting digital and decentralised, and central bank digital currencies (CBDCs) do exactly that. Countries, including India, China, and the US, are exploring CBDC. It will make the economy more efficient, more transparent and accessible. Now, imagine if someone is sitting in a small village in a country, there is no incentive for banks to open up a physical branch there. And when we talk about financial inclusion, we need to have disruptive technologies like blockchain and have use cases like CBDCs, which will make banking accessible to even the rural community.
Around 1.7 billion people on this planet are still unbanked, and they don't even have access to financial services. Another good thing about CBDC is that it's on blockchain, it's a code. A code does not distinguish between the rich and the poor. Even someone without access to a banking system or without credit history can access all of that in an open and transparent manner with blockchain. CBDC is definitely going to be very exciting.
Q. Will the winter that has descended on startups affect those in the crypto/blockchain space too?
With the US Federal Reserve increasing rates and public markets taking a major hit, investors are going to be a lot more cautious about investing. And that is one of the reasons startups are also conservative on capital. Talking about crypto markets, the hit will not be as much as some of the other startup categories. There's still a lot of capital available to crypto and a lot of capital right now is going to categories or industries that have a higher propensity to grow in the coming years. Recently, [venture capital company] Andreessen Horowitz announced a $4.5 billion fund for backing crypto and blockchain companies. That's a very bullish sign. There is a lot of capital willing to come into this sector.
We are planning to hire 1,000 people by the end of this year. It’s a great time to hire while other companies are on a hiring freeze. We think this is a great opportunity for us to build a good and strong team that can give us innovative products in the future.
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