WonderFi CEO on the importance of decentralized finance

Ben Samaroo, CEO of WonderFi, joins Yahoo Finance to discuss the importance of decentralized finance and simplifying user interaction within the emerging area of decentralized finance.

Video Transcript

- Our next guest believes the next big investment opportunity is within the decentralized finance space. A somewhat controversial concept defined as it is called is a blockchain based form of finance that does not rely on banks or brokerages to offer traditional financial products.

Ben Samaroo is CEO of Wonderfi. That's a platform created just this past January to help investors learn and profit from DeFi. Ben, thanks so much for being with us. I know this is still a new concept. First off, just explain for our viewers what decentralized finance is.

BEN SAMAROO: Sure, Alexis. So Decentralized Finance, or DeFi as it's often called it's a new financial system. So it presents a faster, cheaper, and easier way to do finance. I think it's really easy to get caught in the technical jargon when you talk about cryptocurrency and DeFi, especially.

So probably the best way to explain this would be to focus on the value that DeFi has to offer. So a couple of examples. One, you can borrow money instantly without having to be on board or approved by a bank, and two, you can earn interest in the range of, say, three to 7% on your assets instead of close to 0% that you might earn on cash in your bank account.

So DeFi really enables you to lend, borrow, earn interest, trade assets, all through smart contracts that in a lot of ways are more efficient than traditional financial products.

- OK. So then talk to us specifically about WonderFi. I guess WonderFi then as it is a type of defined system, if you will. And what are some of the benefits of going with your platform?

BEN SAMAROO: Yeah. Sure. So our mission with WonderFi is to bring decentralized finance to the masses. The problem with the fee right now is it's very fragmented, and it's very complicated. It's like any early technology.

There's a very steep learning curve, and it's not fully built out or developed yet. And so that creates a lot of obstacles for anyone that wants to get involved with DeFi. So our mission and our platform really allows users to access all the best parts of DeFI so simple that someone with no crypto experience can use it, by assets, or an interest, track your performance without any of the complexity.

So I like to use the Netscape Navigator example. When Netscape Navigator was released, it gave consumers an easy access point for the internet, which at the time was not usable for your average consumer.

And so we're at a similar stage with DeFi right now, where you have existing tools that are built for crypto traders or experts, people with a lot of experience. And there really is yet to be a platform that provides a dead simple user interface.

And from our perspective, education really starts with that-- with that great user interface. And you really don't want to overwhelm the user with a lot of information up front. So simplicity really is key. And that's at the core of WonderFi.

- Getting the [INAUDIBLE] situation, you know, I know it's being used mostly by-- by crypto traders right now and experts. Does wonder if I have a business if crypto is not adopted as legal tender? What are some of the other growth opportunities for a company like yours?

BEN SAMAROO: Sure. So I think crypto being adopted as legal tender. In some jurisdictions, it definitely is supportive of the big piece within crypto is Bitcoin. And that's been around for a very long time. And that's created the opportunity for regulators, and incumbents, and the investment community to become accustomed to Bitcoin, and really to understand that what it is, is a store of value.

And so what DeFi brings to the table is beyond a store of value. It's really these smart contracts that allow for more complex financial transactions. And that's really at the heart of what DeFi is.

So when we look at the traditional financial system and issues that it presents, whether it's in North America or in more developing markets, it's really around censorship, high transaction fees. And if you look at the system as a whole, we're really using legacy infrastructure that's many decades old.

And globally, you have over 2 billion people in the world that are unbanked for various reasons. So DeFi sets out to solve these problems and really make finance accessible and open to everyone.

And part of our thesis with WonderFi is that the informed consumer is going to want to own and control their own assets directly rather than through a centralized entity. And so our core focus really is around enabling and empowering individuals to do that. So it's-- it's really a big social movement behind this.

- And I think you hit it in terms of trying to service the under banked, which is an area that I think traditional finance has-- has largely overlooked. Talk to me a little bit about why there's so much controversy surrounding DeFi right now. And why is there such resistance from the traditional financial system?

I think I know the answer to that because you guys are giving them a little competition. But why do you think it's hitting it's coming up against. So much resistance?

BEN SAMAROO: Yeah. So I think with any new technology like this, they're-- they're often is this type of resistance. And so we've seen that with things within the fintech crypto space, with Bitcoin going back to 2008, 2009. And really up until today, it's still not quite at the level of kind of acceptance that, that we anticipate going forward.

So I think the-- the resistance is there. And its regulators its traditional financial institutions. But I think what it comes down to is with any technology that provides a simpler, faster, and easier way to achieve whatever your objective is, and in this case, it's-- its finance, there-- there really is-- it's-- in our view it's a foregone conclusion that there will need to be at first, it'll be sort of a level of collaboration between traditional financial institutions.

And then companies in the space like us. And you're starting to see that a lot with institutional adoption of-- of-- of crypto Bitcoin, in particular, and really a lot of people playing in the DeFi space that are incredibly active. So I think the-- the resistance is quite common to see when you have a sort of game changing technology that really calls into question. Some of these sort of structure and approach of the incumbent system,

- If you had to pick one, what would you say is the biggest barrier currently preventing widespread adoption of DeFi?

BEN SAMAROO: I would say the biggest barrier really is accessibility. So I touched on this a little bit. But I can't emphasize it enough.

It is extremely complex and-- and fragmented the space. So there's-- there's a ton of great technology there, and a lot of very talented people building in the space. But all of the tools are really targeting again these crypto experts and traders.

So as more advanced technology comes out in DeFi, these platforms are building more and more functionality to serve your power user. And so there's really nothing that's out there for sort of an entry level consumer, which in our view is really, really essential to actually achieve the objectives of DeFi, which are democratizing finance.

Because right now, you basically have to have a crypto expert or an engineer to really see the benefits of what DeFi has to offer.

- All right. We're going to leave it there. Ben Samaroo, CEO of WonderFi. Good to see you. Thanks for coming on.