What is Voluto? | The founders explain
What is Voluto?
We had the pleasure of speaking with the founders of Voluto to discuss what the product his, why they're building it and what their plans are. Erikas Mališauskas answered some questions to help explain Voluto.
Who are you and what do you do?
Voluto is a pan-European, high-interest savings account powered by DeFi. For regular users, Voluto is like any other fintech app. We remove all of the “crypto complexities” involved with exchanging euros for USDC / DAI and supplying them to Compound to earn interest. We’ve made the whole process extremely easy and user-friendly. All that you need to do is to download the app, register for an account, and make a deposit in EUR. The moment your deposit is processed, you start earning interest right away, and you can check your balance in real time and make withdrawals whenever you like. We strive to ensure that all regular Fintech users in Europe have the opportunity to earn a much higher yield on their savings than traditional banks can offer without needing to be skilled in crypto or DeFi protocols.
A number of things encouraged us to develop the concept:
1. The personal experience of a negative interest rate on a bank account in Switzerland. No one wants to pay a bank to keep their money.
2. The fact that the current macroeconomic environment and the traditional banking system seem to be creating a situation in which negative interest rates are here to stay (the current European Central Bank interest rate is -0.5%).
3. The enormous savings account market in Europe and worldwide that continues to benefit institutions at the expense of consumers.
Now, with the help of cutting-edge technology, a much better product for the savings market can be created. We are convinced that the DeFi ecosystem will revolutionize the financial system, and we want to be at the forefront of this transformation.
What surprised you while building Voluto?
We just launched Voluto on February 5th, and the initial traction has been even better than expected in terms of both user growth and the positive early feedback. Then came the coronavirus and market shake-up, which caused the USDC lending rate to drop precipitously (from 3-4% to 0.4%). We expected our users to empty their accounts given the uncertain times, the panic in the financial sector, much lower interest rates, and the fact that our product was still new. That’s not what happened, however, to our very pleasant surprise. This outcome indicates that the product we’re building is something people value and already have come to trust, so that even the current 0.5% interest rate is enough for users in the midst of a macroeconomic environment characterized by negative or near-zero rates.
How is the blockchain and DeFi industry doing in Lithuania?
The ecosystem has been evolving nicely here. Lithuania has been home to an enormous number of successful ICOs, and this success has naturally drawn top developers and product people into the ecosystem. Now these individuals are working for crypto companies, learning the technology and how to build crypto products. When, in the near future, they start leaving these firms and experimenting with the knowledge that they have acquired, we can expect to see some more interesting products coming out of Lithuania. Moreover, the country is one of the core hubs for Fintech, a place where innovation flourishes and developers learn from each other.
Where do you see yourselves in 6 months? How about 6 years? What’s your vision?
We have set some goals to achieve in the coming 6 months. The first is to improve confidence in our product-market fit as measured by user growth and retention. Second, to have solved and cleared all the regulatory requirements. Lastly, we will raise an angel round to support further product development and growth.
Within 6 years, we expect to be the number one pan-European saving account as we harness the power of a new crypto financial layer.
What do you need in order to grow to the next level?
First of all, we need clarity with regard to all of the regulatory requirements associated with DeFi. We are in it for the long run, so we want to be sure to follow and comply with the existing EU financial and crypto regulations. In the past few months, we have made significant progress on this front.
Needless to say, capital is necessary in order to expand, so, as mentioned, we’ll be raising a small angel round to spur our growth.
Whom do you see as your competition?
Voluto has two kinds of competitors. On the one hand, there are traditional banks and Fintech firms that offer savings accounts. Even though the rates that these accounts earn range from a meager 0.01% to 0.2%, they are still the most trusted way for members of the general public to keep their money. On the other hand, there are other savings account and wallet providers powered by DeFi seeking to attract average Europeans.
Can you tell us more about the Voluto team?
Voluto was founded in December 2019 by Erikas, Lukas, and Laurynas. As a group, we have previously founded and sold companies in crypto and other contexts. We have been named amongForbesmagazine’s “30 under 30,” and our projects have attracted nearly $80 million in investments.
Currently, Voluto is run by a team of six skilled and passionate developers, designers, and marketers. Each of us has specific responsibilities, and we make big decisions collectively.
You can learn more about the team and our roles on our website.
Are you looking for collaborators?
Not at this moment, since we are focused on achieving the challenging, but exciting internal milestones that we have set for ourselves.
What are your thoughts on the current state of DeFi? What do you think DeFi needs to progress?
We think that DeFi is in an emergent state, with some firms gaining real traction within a short period of time after launching. With crypto providing the basis of software and finance, the whole ecosystem can grow extremely quickly in a network-like manner and become more valuable with each new user and product. When finance is inherently „software“, it becomes much easier to build, launch, and grow financial products.
At the same time, the fact that DeFi is still in an emergent state and dealing with money means that a lot of risks are involved. Since we are building a new financial layer on the cloud, we need to be very careful. So, to begin with, as we work to move DeFi to the next stage, we need more security, more stress tests, and more safety mechanisms in general to make sure that the next $10 billion invested in DeFi does not disappear on account of some “unexpected” bug. Second, as suggested earlier, we need greater regulatory clarity and more extensive oversight. Extreme cases, such as total self-sovereign financial systems without any KYC or AML, simply will not work