Dezy has been built for the people, by the people from day one. We are a cai fan brand, and this means we keep the best interests of our customers at heart in each of our decisions.
In case you missed it, here’s our July AMA!
Hey @everyone thanks for joining us for our first ever #AMA. We’re looking forward to answering your questions and providing you with clarity on how Dezy works to bring you safe and stable yield.
We have grouped previously submitted questions into themes so that we can address them more holistically. If you have any questions arising during the AMA please hold off until the end of our session. Our team will be sticking around to answer all questions and generally hang out.
Let’s kick off!
We understandably received a lot of questions regarding our regulatory status in Singapore and as this is a very important question, we thought it would be best to start here.
Why don’t we have a licence? When do we plan to get one? How are we building legitimacy in parallel?
DeZy is not licensed by the Monetary Authority of Singapore as our services currently fall outside of the scope of the Payment Services Act (”PS Act”).
DeZy has always taken a pro regulatory stance in that we believe the fundamental desire of regulators is to protect end consumers. This is absolutely a worldview worth pursuing and we completely support sensible regulations that aspire towards that. We have engaged Singapore based legal teams from day 1 of our journey to understand how we can build DeZy while staying on the right side of the rules and at the moment
We continue to aspire towards more regulatory clarity though both with respect to our existing services as well as future ones that we may introduce and so we continue to self regulate, engage with relevant legal teams and seek appropriate guidance. We're super thrilled to have our General Counsel & Compliance Officer join us recently who will be immensely helpful in our efforts to remain a positive market contributor.
Our core focus is transparency and communication towards customers. We feel that trust has to be built regardless of whether an entity is licensed or not and I think that is a reasonable statement to make considering recent reports of licensed entities engaging in behaviour they did not communicate to customers and which could be described as egregious behaviour in any case. We aspire for regulatory clarity but with or without it, we aspire to be clear and transparent with our customers.
Whether people are exposed to crypto or traditional financial markets, we’ve all come to accept that we are in a “bear market”. Tough times and a lot of you are wondering whether that is going to impact what we are doing here at Dezy.
Some examples of those questions are:
- Considering evolving market conditions, is DeZy still safe / reliable moving forward?
- What would you do if crypto winter continues to go on for a year and major token values tank? What would that mean for your investments? Can you give a concrete eg?
- How does a long term crypto winter /bear market affect Dezy?
- What are your thoughts on the recent crypto contagion, as well as the current outlook on the crypto market overall? How would it affect DeZy?
DeZy has never engaged in trading, leverage or other similar yielding strategies. Per the information on our website, 1:1 backed stablecoins are used to generate 1:1 backed stablecoin yield. Period. We do not expose users to Bitcoin, Ethereum, leveraged positions, nor things like stETH or associated strategies. While there is no such thing as a risk free product, we have always prioritised simplicity and risk mitigation.
While continued downward pressure in core crypto pricing would be unfortunate for market participants, the price of Bitcoin, Ethereum and others have no reflection with regards to 1:1 backed stablecoins. There are various factors that contribute to the stability of stablecoins and the nuance of that sector is one of several reasons that we only work with 1:1 backed stablecoins such as the ones issued by Circle (USDC) and StraitsX / Xfers (XSGD).
At DeZy, our focus has been and will remain on offering stable products built on top of 1:1 backed stablecoins free of the fluctuations seen in other areas of the crypto space.
Finally, we are grateful to our investors for being in a well funded position and we have always planned to be here for the long term. We're hard at work and have no plans to stop.
We strongly believe in being as transparent with clients as possible and broadly aspiring to be a CeFi held to the transparency standards of DeFi. There is a long road ahead to achieving that but we have started taking some steps in that direction.
On the topic of stablecoins we recently released https://dezy.sg/stablecoins but we received some further questions around the stablecoins we use and how they work.
- In the event of USDC/XSGD collapse or the unfortunate liquidation of your company, wil depositors get their money back? TOS mentions a maximum liability of SGD1000, thus the maximum compensation in the worst case scenario is SGD1000?
Dezy does not engage in any leveraged or trading positions. That means that every dollar deposited into the platform is there. There is no asset adjustment between what is deposited and what is maintained. For example some reports have recently emerged of platforms engaged in strategies whereby they would take customer stablecoins and convert those into Bitcoin, Ethereum or other such assets which obviously puts asset matching at risk when there is a dramatic adjustment to the value of those assets.
In the case of Dezy, customer funds are deposited in SGD, converted to 1:1 backed stablecoins and maintained according to that asset structure. In short, this means there is no unwinding of positions that needs to take place and thus customers will have access to their funds when and if they want them.
This is a fundamental difference with regards to what customers are exposed to via Dezy versus other platforms.
An additional question on stablecoins - What is the plan if any of the stablecoins depegged?
We have explored various types of insurance but ultimately settled on a great partnership with InsurAce which you can read about at https://dezy.sg/insurance/. We may explore a similar diversification strategy with our insurance as we do with our sources of yield by introducing further coverage with teams like Nexus Mutual and others but that has not yet been done and will be announced if / when it occurs. For now we're very happy with the Smart Contract Vulnerabilities and Custodial Risk we have with our partners at InsurAce.
In terms of XSGD and USDC, these are 1:1 backed stablecoins and fundamentally different on a structural level than things like algorithmic stablecoins which came to light via the UST debacle and arguably even different on a regulatory level than things like over collateralised assets such as DAI. Dezy has only used 1:1 backed stablecoins and will continue to do so for the stability they offer and the regulatory stability they offer via issuers such as Circle (USDC) and StraitsX / Xfers (XSGD).
While we would be open to exploring depeg risk on these assets, there isn't really existing coverage for that in the case of USDC and XSGD. While anything is possible, the market has broadly determined the potential for that to be limited. You can read more about the different kind of stablecoins in the market at https://dezy.sg/blog/algorithmic-vs-11-backed-vs-collateralised-stablecoins/.
Next question! Now we're going to talk about yield stability. With various platforms announcing a reduction in yield and with leverage exiting the market, people are understandably curious as to how sustainable Dezy yield is. Let’s unpack!
- How does Dezy maintain so high yield when competitors are decreasing? Will yield drop when AUM increases?
We do not currently have plans to reduce yield.
Our goal has never been to be the highest yielding product in the market but to be a risk mitigated way for users to either passively expose themselves to a combination of DeFi primitives or for non-crypto participants to start learning about the industry and technology.
You are correct to note that others have been reducing their yield and while that may be needed across the industry, at least for now I think its more so a reflection of the higher risk strategies some teams were previously engaged in.
The reduction in yield elsewhere has to be viewed in the context of how that yield was generated. We offer a familiar fintech experience denominated in fiat. We also do not engage in leverage, trading nor in any kind of exposure to fluctuating crypto assets. As we have all clearly learned recently, if you ramp up the risk, you can ramp up the yield. We aim to stay simple and stable.
We are looking at expanding our underlying sources of yield without sacrificing our preference for low risk strategies. We hope to make announcements around that as things develop and should we ever be in a situation where yield has to be reduced, we will announce that well in advance.
Happy to see we received a wide range of questions. I wouldn’t call these “rapid fire” but we’re now going to touch on a variety of different items.
- What is the actual interest rate - why is the interest rate reflected as 5.5% instead of the publicized 5.65%? Will DeZy get MAS certification / approval in time to come? Why the maximum $30K deposit and $20K guarantee?
DeZy offers a base rate of 5.5% APR which can amount to 5.65% APY through daily compounding interest. We provide some details within our FAQ regarding the differences between APR and APY.
Currently speaking you are correct that there is a S$30,000 total deposit limit on customer accounts and a S$20,000 transaction limit.
While the latter will remain in place, total deposit limits are imminently being increased via our Learn & Earn program: https://dezy.sg/blog/dezy-learn-launches/
Through the quizzes available in that program, customers can earn rewards for correct answers as well as unlock higher deposit limits. To be clear, these are only deposit limits. Customers can earn rewards beyond those values.
How does dezy actually invest? Can we follow the funds through the blockchain transactions? Are you converting SGD to USD before any / every investment?
With regards to how funds are deployed via DeZy, funds are redistributed into a variety of crypto native sources of yield. You can find more details about our sources of yield at https://dezy.sg/diversification
In terms of on-chain data, we are working on introducing some integrations and features that will provide deeper insight into our underlying strategies and yield partners. Our objective is to build a simple and familiar fintech experience but one which can be held to the transparency expectations of DeFi and while we are not there yet, we are working towards that.
Our recent Diversification page on the website is a step in that direction but we are looking at more on-chain data that can be shared. We have ongoing discussions internally with respect to sharing on-chain wallet data and while we are not against doing so, we are still building with the aim of keeping on-chain / crypto / DeFi simple and accessible so we will get there but it's an iterative process. Finally, we convert XSGD into USDC and vice versa periodically but not on a per transaction level.
What is the key expansion plan for DeZy in the next 1 year?
Apart from exploring different geographic opportunities, our core focus has been and remains solidifying our underlying risk mitigation strategy as well as introducing new products to help customers further benefit from DeFi.
We have a reasonably extensive roadmap at the moment that covers different yielding products, different yielding structures and also a variety of different ideas we have with respect to how customers can bring their savings back into the real world.
Yield has always been the initial building block for us but it has also always been the first piece of a much larger puzzle we have in mind.
How big is Dezy team? Any plans for future expansion beyond Singapore ?
We are currently a team of 10 with 6 of us being based out of Singapore. We certainly have plans to grow both in headcount and in terms of geography. Singapore will always be our home and core market but there are a lot of opportunities elsewhere which we hope to eventually explore.
Given the recent crypto turmoil, can you share with us Dezy's roadmap (and anything that has changed)?
Nothing has changed with respect to our roadmap. We are still hiring, we are still looking at expanding both geographically and with regards to product line as well. In fact we would go so far as to say that we feel quite validated with respect to our risk mitigation strategy and so we see no reason to deviate from that based on recent and current market events.
We are doubling down on information sharing, learning modules and things of that sort while continuing to explore different ways to bring the benefits of DeFi to consumers in an accessible and risk mitigated manner.
Can you give us an update of the total AUM of Dezy?
We list some information around that on our website. More than S$3.75M have been deposited into the platform with more than S$200K earned by customers and S$4.5K donated to various charities via our Dezy Cares initiatives.
What products does DeZy invest in?
Funds deployed via DeZy are redistributed into a variety of crypto native sources of yield. You can find more details about our sources of yield at https://dezy.sg/diversification/.
How many investors do you have so far?
Not sure if you are referring to the number of users on the platform or our equity investors.
In terms of the former, we have a few thousand people on our platform.
In terms of the latter, we’re super happy to have a broad list of investors including Leo Capital, Iterative, HashKey, HH Investments, DeFiance Capital and some great angels such as some of the executives from Xfers, Funding Societies and Tranglo.
It's remarkable how Dezy is able to get more funding - from hashkey, especially in the crypto environment that we are in. Just wondering if you can share what the funding goes into, and how Dezy is going to achieve sustainable growth to account to the key funders?
We’re definitely thrilled to receive continued support from investors amidst the macro environment and crypto environment that we’re all navigating at the moment. A lot of teams are not so fortunate and so we’re taking on this support with a great sense of responsibility.
We have a healthy runway after the multiple rounds of funding we have raised and so this additional capital goes into further securing that runway, hiring plans and accelerating some of our product development plans.
As for further growth, we are looking forward to continuing to solidify our underlying yield strategies in a sustainable way and introduce complementary products alongside for users to further benefit from a simplified DeFi and simplified fintech environment.
Thats it for the pre submitted questions!
Let's open up the channel for anyone who wants to ask new questions or follow up on any of the above comments.
@Harald open it up please!
Should now be open. We're here to answer anything you got for us @everyone
Do you guys have any plans to open up deposits with fiat currencies other than SGD? Or maybe even other cryptocurrencies?
If we move into other markets then we would cater for their domestic fiat currencies.
We do not have immediate plans to accept crypto or to enable withdrawal of crypto. We want to keep things simplified in terms of fiat denomination and there are also regulatory considerations when directly dealing with crypto in / out flows.
Do you mind to share how does Dezy make money and to grow in the future?
or our current product our profit is generated by the spread between what we pay to customers and what we can earn on top. Within that spread we are also handling things like the insurance premium, FX rates, etc so as to keep things simple and straight forward for all of you.
Although our profit comes from the spread, we are still mindful of risk mitigation as our core thesis and not simply looking to generate the highest spread possible.
As we look to introduce different products, our revenue model may adjust across those products but the above is accurate with respect to our core yield feature.
Will you allow minting xsgd instead so that we can bypass the 30k limit?
I think you're referring to the recently introduced "mint" feature via the StraitsX platform? Thats something specific to them and not something we support via Dezy.
We are however imminently enabling people to increase their deposit limits via our Learn & Earn functions. Through the quizzes that will be announced in the next week or so, users will be able to earn rewards for answering quizzes and also unlocking higher deposit limits.
We touched on this briefly above but no worries if it got overlooked. Just for context you can find it here ->
From the feature requests:
any implementation of spending card? e.g., credit/debit, crypto/cash back, tiered/point rewards)
Just replied to that in feature-requests. 100% on our radar. No ETA yet but we're looking at it
Ah, if I were to do the learn programs now, will I get the rewards once they are rolled out?
Oh and re:the future of DeZy, would you guys be offering other defi made easy stuff like an index fund for defi like Defi Pulse Index? But made simpler of course
You can go through the learning modules now at your convenience. Once the quizzes are released in the next week or so we will announce that to customers.
You will earn the rewards and unlock deposit limits once the quizzes are successfully completed.
Honestly one of the things lacking in my portfolio haha
Oh and, send and receive money to other DeZy users, is that also possible? Not sure, with the regulations
In our view there are a lot of areas where DeFi and finance in general can be simplified.
Although at times it forces us to go slower than we would like to, we are mindful of regulatory considerations and building products in as safe a way as possible. So, the short answer is yes, 100% we are looking at those kind of opportunities and we hope to share more details with all of you as we progress down that path.
Unfortunately we dont have ETA around them yet as there are a lot of considerations we have to take into account in order to do these things safely.
Not to hammer on current market conditions but I think we all see its relatively easy to push things out to market and while we have never promised a risk free solution, we at least want to push things out to market that we can stand behind.
Similar commentary as the response above on this one.
Yield was always just the first building block for us. There is so much more to do in terms of simplification in our view. Long road of work ahead!
At Dezy we are committed to bringing transparency into how your money makes money.
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