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Financial Inclusion in the Metaverse: A Discussion with EasyFi Founder, Ankitt Gaur

Today, we discuss the future of money in the metaverse. We have with us Ankitt from EasyFi. His company is building a lending-borrowing protocol that will combine the metaverse and DeFi to create MetaFi. So, without further ado, let’s get this started. 

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Hi Ankitt. We’re excited to learn about EasyFi and talk about the hot new trend of Metaverse Finance. What core ideas do you think ensued the rise of this industry? 

Hey there. I’m Ankitt, the founder and CEO of EasyFi. It’s a Layer-2 lending-borrowing protocol running on Polygon. My vision for EasyFi is that it’ll realize its full potential by integrating the metaverse. 

Land ownership has been significant for many years, ever since humans became settlers. From the very beginning, land had multiple uses: farming, building, renting, etc. But as cities developed, proximity to other valuable plots or properties became a factor affecting land’s value. Moreover, the rise of banking and institutionalized lending enabled land use as a mortgage. 

I believe something similar is going to happen with DeFi and NFTs. The latter is an asset with intrinsic value, while the former can innovate use-cases to make it financially lucrative. And from this synergy, we will witness the emergence of MetaFi.  

You have correlated Defi with the traditional and centralized banking system. How does EasyFi decentralize lending and borrowing? 

EasyFi essentially operates like a typical bank in terms of lending and borrowing. Those with surplus capital deposit funds to earn interest. Others borrow against collateral to meet their financial needs. But instead of vesting authority in a few people, we leverage smart contracts for automation and transparency. 

TrustScore, our proprietary identity layer protocol, determines the creditworthiness of ERC20 addresses based on their on-chain activity while preserving their privacy and anonymity. This enables the lender to monitor and control the monetization of their funds. 

In a nutshell, we support financial inclusion in DeFi with consumer-centric financial products and plan to enable better community involvement in the future with governance modules. 

As a project that primarily operates in the DeFi space, why is Easyfi interested in venturing into the Metaverse? 

We built EasyFi with a focus on offering easily accessible and economical credit facilities for DeFi users. Our mission is to build a smart, efficient, and scalable credit market. So, for us, providing affordable and accessible credit facilities while safeguarding lenders from defaults and NPAs is critical. 

We eventually realized that it’s not wise or efficient to confine our ecosystem to DeFi. Particularly now, when the metaverse is evolving from a mere buzzword to the lifeblood of diverse community-oriented uses. 

By offering credit facilities for metaverse-based assets, we introduce an untapped credit market. This, we believe, can help our platform grow exponentially. High volumes, greater liquidity, and increased supply and demand for credit will be profitable for both lenders and borrowers. 

Both DeFi and the metaverse are scattered across multiple blockchain networks currently. What is your stance on interoperability, and how do you see the multi-chain future unfold? 

Countries worldwide have independent currencies and individual monetary policies, yet the global financial system is intricately tied. Assets worth billions are exchanged daily, which is crucial for maintaining the system’s efficiency. 

Similarly, in DeFi, the value must not remain locked into separate ecosystems. If we achieve maximum capital efficiency, I believe a multi-chain ecosystem is inevitable. 

Today, blockchain networks communicate better as existing cross-chain protocols become more innovative and efficient. EasyFi belongs to this new-age league of blockchain agnostic protocols. It’s compatible with Ethereum. Thus, we already support every major metaverse and NFT project, including Sandbox, Decentraland, and Bored Ape Yacht Club. In other words, we are equipped to provide credit facilities across multiple popular metaverse assets. 

Millennials and Gen-Z are the least significant participants in the global real estate industry. Do you think this will change with the advent of MetaFi? 

Real estate is probably the oldest asset market in existence. I believe the same macroeconomic events that made traditional real estate inaccessible for the newer generations will now make them the leaders in the virtual ‘real’ estate industry. Let me explain how. 

Since the early 1950s, the global money supply has inflated exponentially, pushing the price of real estate to astronomical heights. The early adopters, or boomers, having owned these assets for many years or acquired them through inheritance, have benefited significantly from this trend. But unfortunately for the new generation, real estate is too slow and expensive now. The pandemic and record student debt levels have further fuelled this fire. 

Digital assets and the metaverse open new avenues to fill this gap. Unlike fiat money, the supply and inflation of cryptocurrencies are programmed into their tokenomics and cannot be manipulated by any centralized authority. Furthermore, Gen-Zs are significantly more risk-tolerant than boomers. Such instances have made them dominant crypto adopters. 

I believe these factors will lead to the growth of MetaFi, and the new generation of investors will lead this economy. 

NFTs are infamous for their high volatility and subjectiveness. What are the risks associated with MetaFi? Can such qualities develop any use case? 

The risks associated with NFTs are widely known, and the credit market surely amplifies them. For instance, a speculator who took a loan to arbitrage NFTs could watch its value crash in a moment and lose significant sums of money. Conversely, losing an NFT by defaulting on a loan could incur massive opportunity costs if its value skyrockets. Moreover, there are risks of theft and bugs in unaudited protocols. 

Yet, the volatility of NFT markets can also be an opportunity through the development of NFT derivatives and indices that open up new money-making avenues. We could also see the emergence of NFT debt derivatives, similar to mortgage-backed securities in the traditional market. 

Thank you for the valuable insight you’ve provided today. As a closure for our conversation, please give us your vision of what a typical day in the MetaFi economy will look like years from now when it becomes mainstream. 

MetaFi is right on track to redefine the meaning of assets and real estate. Years from now, a mainstream MetaFi economy will be a web of various markets, ranging from spot to derivatives. Millions of users will exchange value daily, incorporating virtual and tokenized versions of tangible assets. Virtual land would be traded, rented, leased, and built upon to conduct business. 

The investors tagged as Gen-Z today would become the boomers of this futuristic economy and will also be its most profitable beneficiaries. 

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