Exponential.fi: Revolutionizing DeFi Accessibility for Crypto Investors

Ishan Pandey: Hi Mehdi, I am delighted to welcome you to our "Behind the Startup" series. Can you tell us what inspired you to create Exponential.fi?

Mehdi Lebbar: Thanks for having me, Ishan. The journey began during the 2018 bear market when I started guiding my family and friends into the crypto world. We aimed for a 10% exposure to Bitcoin, Ethereum, and some Altcoins. By DeFi's summer of 2020, our collective portfolio had grown to eight figures.

As passive investors, we wanted to earn yield on our crypto holdings. BlockFi and Celsius were not options for us because of the lack of transparency on where the yield comes from. We like DeFi’s transparency but investing in DeFi was too complex and inaccessible for most. This realization sparked the idea to build a platform that provides crypto holders with easy access to yield opportunities in DeFi. DeFi is a major leap towards productivity for humans, alongside AI and robotics, but it is the only one that allows most people to participate directly. This is why we care so much about making DeFi accessible.

Ishan Pandey: Can you provide more details on how Exponential streamlines DeFi investment for users and expands access to opportunities that were once exclusive to traditional banking institutions?

Mehdi Lebbar: Exponential.fi simplifies the DeFi investment process dramatically. Users can easily choose and invest in opportunities with a few clicks. We've implemented a risk rating system from A to F for each yield opportunity with supporting research, so investors can make informed decisions. We also make moving and holding funds easier without the hassle of navigating through different blockchain networks or managing private keys. Our platform handles trade execution, and keeps client funds safe using advanced technologies and cold storage. Our platform makes DeFi investing as safe and easy as possible.

Ishan Pandey: Security is paramount in the DeFi space, especially considering the significant sums involved. Can you elaborate on the specific security measures implemented by Exponential.fi to safeguard user funds?

Mehdi Lebbar: Our approach to security is comprehensive —we are a safety-first platform. We use multi-party computation technology, which ensures that no single party can access funds without explicit permission and offers both security and fund recovery options. Additionally, we store assets in cold storage with stringent controls. Transactions are initiated, signed, and monitored across different systems. The initiating server only acts upon user requests, guaranteeing that all transactions performed are user-driven. This architecture is unique and ensures that users maintain full control over their funds at all times.

Ishan Pandey: How does Exponential navigate regulatory challenges to ensure compliance and foster long-term success for the platform and its users?

Mehdi Lebbar: As a US-based company registered with FinCEN, Exponential.fi proactively embraces compliance for long-term success. Transparency, trust, and adherence to rules are our guiding principles. While a compliant approach may be more challenging, it aligns with our commitment to make DeFi investing accessible to everyone. We carefully select decentralized contracts for assets that are not classified as securities, guided by a thorough legal framework to ensure we steer clear of securities listings.

Ishan Pandey: Can you discuss any strategies or mechanisms implemented by Exponential.fi to mitigate risks associated with smart contract vulnerabilities and potential exploits in the DeFi ecosystem?

Mehdi Lebbar: At Exponential.fi, we prioritize direct access to DeFi protocols. We do not take a cut from the yield to ensure our incentives remain aligned with our users' best interests. We've curated the top 5% of yield opportunities from extensive research on over 800 investments. I previously launched UberEats in London, and our philosophy was that whatever you ordered on the platform should be amazing and meet your specific needs. We are taking the same approach with Exponential.

Ishan Pandey: How do you ensure that users understand the risks associated with DeFi investments while still encouraging participation in yield-generation opportunities?

Mehdi Lebbar: We've developed an institutional-grade DeFi risk rating system, the most comprehensive of its kind, allowing users to gauge the risk level of each investment. Our platform offers detailed analyses of pools, protocols, assets, and chains, including an evaluation of interdependency risks within the DeFi ecosystem. We educate users through our reports available on our site, and also started a podcast named "Degen Responsibly," where we discuss risk with protocol builders in the public arena. This is very much in line with the DeFi principles of transparency and openness.

Ishan Pandey: Looking towards the future, how do you envision the role of cryptocurrency investing and DeFi in the broader financial ecosystem?

Mehdi Lebbar: Crypto has emerged as a new asset class, gaining recognition alongside stocks, bonds, commodities, and derivatives. Similarly, DeFi represents a new asset class, offering yield on top of crypto exposure. At Exponential.fi, we're laying the groundwork to make DeFi accessible to all and enable investors to discover, assess and invest in these new financial instruments — safely and easily.

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