KuCoin AMA With unFederalReserve — A Banking SaaS Company Built on Blockchain

Dear KuCoin Users,

Time: August 9, 2021, 13:00-13:57 (UTC)

KuCoin hosted an AMA (Ask-Me-Anything) session with Howard Krieger, co-founder and CEO of unFederalReserve, in the KuCoin Exchange Group.

unFederalReserve is a bank software company making non-bank lender liquidity management easy and intuitive. ReserveLending, its first product, is a live DeFi platform boasting the 12th highest TVL globally. A SaaS company built on blockchain technology. The banking products are designed for smaller U.S. Treasury chartered banks and non-bank lenders in need of greater liquidity without sacrificing security or compliance.

In traditional financial markets, B2B lenders are penalized for cash that not only arrives late but as well if it arrives early. eRSDL’s solution to this is a low-latency platform that allows B2B lenders to borrow and lend short term between themselves, putting their cash to work on moderate interest rates and benefitting from those moderate interest rates when they borrow. The eRSDL Token is a utility or toll to enter a safe harbor for these sophisticated borrowers/lenders. Platform volume provides fees distributed amongst all token holders. Scarcity and buy-pressure are generated as lenders have to aggregate in order to participate in the platform.

Official Website: https://unfederalreserve.com

White Paper:

Follow unFederalReserve on Twitter and Telegram.

Guest:

Howard Krieger — Co-Founder & CEO of unFederalReserve

Before founding unFederalReserve, Howard served as Managing Director at CBIZ Valuation Group and Valuation Director at WithumSmith+Brown. He specialized in the valuation of complex financial instruments, including digital asset loans, interest rate swaps, agency and non-agency mortgage-backed securities (MBS), and collateralized debt obligations (CDOs). He is a former Big-4 Senior Manager responsible for various assignments, including intangible business valuation, intellectual property valuation, financial modeling, valuation of equity participating instruments, and other exotic financial assets/liabilities with almost 20 years of experience. Howard holds a bachelor's degree in business administration from James Madison University and an MBA concentrating in qualitative finance from Rutgers University.

Q: From your perspective, do you envision the top 10 U.S. banks view unFederalReserve as a threat to their current system of banking dominance or a tool to bank more efficiently?

Howard: First off, we operate under 5 key principles: Safety, Courtesy, Inclusion, Efficiency, and Show.

Second, I worked at two top 10 U.S. banks (HSBC and Wells Fargo) for over 10 years as a leader in consumer lending pricing and structuring and consulted for two others over the next 10 during my time as a national technical leader for financial services valuation at KPMG. Banks that large do not actively scan the market for threats at our scale (we are proud of how we’ve grown: https://www.unfederalreserve.com), and their scale poses internal challenges to adopting new technologies. Very broadly, each division at a bank has business development specialists that explore opportunistic partnerships. From their perspective though, acquisitions have to be vetted across the ENTIRE vertical in their channel to make sure they are not stepping on existing departmental leader toes, and across the ENTIRE horizontal of business lines to make sure that no other group is working to solve the problem (e.g. inorganically or organically.) At most, we’d be considered a tool, as their internal tech folks across all divisions focus on innovation that improves existing processes and not replaces them. We are a little too revolutionary to gain the attention (good or bad, lol), my guess, with any bank that holds $100 billion or more in assets.

Safety, first, second, and always.

Q: What is the biggest hurdle to onboarding a bank vs. a U.S. chartered bank?

Howard: No hurdles that we cannot handle, and we can talk about this in more detail (https://discord.gg/Qm2HeUjS) later this morning. First off, the community of $eRSDL holders includes a number of consumer banking and non-bank lending professionals. Establishing and maintaining credibility with the companies for which they work is paramount. There’s a reason Safety is the first of our five principles.

So there are a couple of entities to please. Once we take care of them, then the operation becomes business development focused, not product adoption focused. By the last count, we fall under about 6 + 3 (quasi) U.S. government agencies’ jurisdiction. The banks know that, and they have their own investment criteria. The adoption hurdles, as we see them, are threefold: 1) get our ducks in a row with those regulatory entities (which we largely are), 2) lay the IT rails (which Ryan’s team is all over), and 3) match their treasury product criteria.

This last part would relate to how the platform, an example of which can be seen here: https://lending.unfederalreserve.com, prices risk. The proper B2B DeFi platform will allow for uncollateralized lending and will operate without interrupting or creating new workflows. Keep it clean and easy for them. Safe and secure.

A good friend and partner, Ryan Medlin, is co-founder and CTO of unFederalReserve.

Our team has shared values and a mission to provide safe and secure DeFi to consumers and businesses alike.

Q: Would eRSDL ever consider a referral concept for its banking and non-banking lenders to further secure the early-to-market advantage?

Howard: The $eRSDL community is a great referral network. Our community recognizes we are all in this together. We receive inbound requests from professional service organizations, non-bank lenders, and individuals from complementary businesses (i.e., risk, compliance, underwriting, funding, servicing, etc.) stemming straight from the holding community.

Our “unFed Agents” and our soon-to-be-launched Ambassador program graduates will expectedly bring with them new opportunities. Our advisory team () has over 200+ years in the marketplace and just as many non-bank lenders with whom they break bread. Once up to speed, we may use marriage brokers to help with expanding the platform’s participants. But a lot of success stems from serving customers with Courtesy and Efficiency they deserve and desire.

Q: Can we get an update on any progress with what will be done with the reacquired tokens from client fees?

Howard: Yes, for sure. As previously announced here: unfederalreserve-announces-a-new-reserve-fund-4cc9f8b9e9ec, the reserve pools are increasing as transaction volumes steadily increase. Reserves are transparent and available on the markets page. Please take a look, and you’ll come to the same conclusion.

Check out the bottom half of each token performance page to see how the reserves are building up (markets/USDC). As previously announced, as we develop the utility of the token, we know we need the logic that acts on the existence of $eRSDL in a user’s wallet. The function might be simple at first and independent of other initiatives. Concurrently, all streams are progressing forward. We spend a substantial time each week making sure that all the verticals’ opinions are represented, considered, and factored into the final project.

We are only as strong as our community. Lastly, yes, with the income generated by the reserve factor, we are going to begin model buybacks. These amounts will be steady at first, climbing as more dollars flow through the pipes. The question we want to know after you’ve checked us out is, “How are we doing?”

Q: Are you still on schedule for the projected 40 billion through pipes EOY for $eRSDL?

Howard: Our early estimates are not entirely out of the realm of possibility and have been revised to reflect new information, expanded regulatory gating, and the reality of doing this kind of business in America. As our newly minted Advisor, former Coinbase Chief Compliance Officer, Martine Niejadlik (meet-our-advisor-martine-niejadlik-efdb3319cedf) would attest, there are actual size restrictions on the dollar volumes allowed in this space above which registration and licensing from those 9-ish entities from the first question are required.

So, how do we address it? Well, we are concurrently establishing funds that can handle each up to $150 million dollars (max), and we know getting scalable means installing a broker-dealer. We are working with broker-dealer candidates to see if we can hand the reins of that piece of the puzzle.

The tokenomics support the revised estimates as modeling indicates our multiple product lines are supporting multiple revenue streams. We will receive a higher spread on the smaller initial volumes than intended. The math supports the plan, so now it's a matter of getting everything over the finish line. We meet every objective we set to accomplish, so I am not concerned. It would be great to hear your thoughts on that here: https://discord.gg/Qm2HeUjS

By the way, former Wells Fargo Chief of Staff Nicholas D'Angelo also joined our advisory team around the same time as Martine.

Q: Any perspective on $eRSDL hitting real bankless people worldwide?

Howard: The reality is that being bankless starts at the top. unFederalReserve put out a piece about the concept of natural rights: robinhood-gamestop-and-natural-rights-58d2c5b2771b with specific reference to the January 2021 debacle with U.S. equity markets and the Robinhood application. A natural right is roughly defined as “a principle or body of laws considered as derived from nature, right reason, or religion and as ethically binding in human society.” Natural rights are an entitlement for all personkind.

So understandably, imagining that every human can have at least one wallet in the near future is not out of the question. However, success will be defined by going through the hand-holding process, top-down leadership, community engagement, rewarding, and even making some processes more difficult when appropriate. Check out our 30-second commercial here: https://youtu.be/PXGj_3bu_fc to learn about how we solve the unFederalReserve’s population and imagine that the benefit for these local institutions is that our rails lower the cost of doing business. Competitive pressures should force down prices, and now the unbanked can afford to feed their family and take care of their life's basic needs.

Q: How many separate platforms will there be to service each product aside from P2P? Will there be one big pool for everything?

Howard: ReserveLending, the $eRSDL live #DeFi platform, may be found here: https://lending.unfederalreserve.com. This platform boasts over $52 million in TVL. Our next product, to be launched in the fourth quarter, will be a vault product named ReserveFunding.

You can think of a vault as an investment vehicle. Within a robust regulatory framework provided by our lawyers at: https://www.gouldratner.com and Winthrop & Weinstine, P.A. (https://winthrop.com), the DeFi platform is focused on high-net-worth persons and non-bank lending institutions to get them acclimated to how DeFi can help them manage liquidity. Once a month, we will put a community-selected token on the platform. The tokens we put on will likely have a high growth impression and allow those altcoin holders to use their appreciated value to invest in #RWA real-world assets. ReserveB2B is, specifically, a banking product that allows non-bank lenders to manage liquidity between themselves.

This product takes some specific coding to allow for non-collateral, making sure $eRSDL is in the licensees’ hands but with limited recourse.

So, good lawyers, good products, and an AMAZING community of $eRSDL holders are making it happen.

Q: Any partnerships in the pipeline?

Howard: Yes, but under our NDAs and other legal agreements, we must use discretion until the parties say otherwise. Some vendors providing key components to our platform include Plaid and Circle for fiat-to-crypto onramp rails with walls. We are also exploring KYC (Know Your Customer) support for ReserveFunding using Securitize.io (https://securitize.io) or other vendors. Fireblocks is of particular focus given some of their major wallet integrations.

Of our existing partnerships, our most exciting one is our strategic marketing JV with El Capitan advisors (article here: https://cointelegraph.com/press-releases/el-cap-and-unfed-partner-for-high-speed-b2b-cash-management-solution).

It is from this relationship that we not only identify opportunities to deploy capital for worthwhile projects in tribal lending and other sectors, we can begin to create pools which reflect El Caps investment criteria specifically. The result could be a series of curated onramps from fiat into crypto and then onwards to where directed to best serve the treasury management needs of El Caps multi-billion dollar MRB clients.

Other partnerships are in the works with other members of our industry, where they may be operating out of other jurisdictions. We can use these relationships to help cross-promote and raise awareness.

Lastly, we have also had advanced conversations with other Tier 1 exchanges about ways we can move forward contingent upon each other sharing information (e.g., our corporate formation docs and its SOC1/SOC2, when available).

KuCoin, however, will always be our first love.

$eRSDL holders enjoy our bi-weekly updates. Please mark your calendars and join if possible. This week: https://www.youtube.com/watch?v=1CHRYM74RD0

Q: According to unFederalReserve’s Lite Paper, the 3 key features of the eRSDL token are: The Member Level license fee, Voting rights, and The Rebate. Can you tell us about license fees, access to tiers of services, and governance?

Howard: Thank you for reading the lite paper! Many years in the making and always evolving. Our project dates back to 2018, you know, and really caught wind with DeFi catching on.

We use $eRSDL to track if our licensing fees have been paid and by whom. We have begun using Treasury capital to invest in CeFi entities. In order to design our licensing fee tracking prototype, we will begin using income from ReserveLending and the CeFi investments to purchase $eRSDL out of the market. Our basis for the purchased amount will be a percentage tied to a KPI like reserve amount, total borrowers, etc. More detail will be shared in the coming weeks.

Tiered information access and opening up to greater DAO capabilities will come with our new discussion forum; to be released once we are comfortable, it provides an arena for good discourse and actionable content. $eRSDL’s utility currently comes from the holders’ ability to participate in almost every aspect of the project. Gating mechanisms with sequestered data is something we are considering a desirable feature to add to the platform.

We have also discussed celebrating our unFederalReserve family (https://www.unfederalreserve.com) by offering some token of our appreciation that can only be accessed if $eRSDL is in your wallet and you are connected to ReserveLending. More to come on those exciting achievements and more.

Q: Do you want to conclude the first part of the AMA session before we proceed with the questions from the community?

Howard: Rather than try to reinvent the pieces of the vertical, we are searching for those elements already out there that align with our needs. We are focused on launching good products, see that costs of capital are lowered, and the greater economy (including the bankless) is served. We are a boring software company, but we are excited to have each of you come to join the $eRSDL community.

Thank you for allowing our community to share our experiences and progress with the KuCoin community.

We are all in this together.

Q: All project coins have their main utilities and real-life use cases. So, can you tell us what the main role of your coin in your ecosystem is? Explain its utilities and real-life use cases? And why should I invest in your coin for the long term?

Howard: Our token provides the utility function of allowing the community to contribute to the project's development. We hold votes and informative discussions through a variety of media. The economic function is that our token acts as a tracker that our Host banks Qualified Participants have paid their licensing fees.

Q: What was the most significant milestone your project has? What is the plan for the future?

Howard: Institutional non-bank lenders have been circling us for months. We have already started pointing DeFi towards CeFi with investments in Atipana. More to come very soon as large CeFi's and banks are taking notice. They want to use our rails.

Q: How’s eRSDL development going? Can you describe in detail current development efforts, market expansion plans, expected applications, and when will they become commercially available?

Howard: Check out our roadmap at https://www.unfederalreserve.com. We have left up prior quarters, so you can see how far we've come. Also, check out our Medium page for regular developer updates.

Q: What are the marketing strategies of your project? What will you do so that your project will be visible in the crypto field and people come to explore your project?

Howard: We have about half a dozen multi-language AMAs coming up over the next two months. We are also speaking at a number of high-profile conferences in crypto, banking, and treasury management. We also want our community of $eRSDL to drive momentum through the channels they typically operate. It is all about YOU, the community bringing new eyes to the project. Thank you for the support.

Q: COVID-19 has a bad impact in almost every sector. So, as a crypto project, how did it affect you? How have you and your team done the work in the pandemic?

Howard: Inflation concerns are real. Our project LOWERS costs of capital for non-bank lenders. These savings will get passed down the chain to the retail consumer offsetting higher payroll and cost of goods issues. It won't 100% offset, but we will do our part. The KEY is freeing up the capital locked in the big banks globally.

Q: While you build your project, do you take into account community feedback and demands?

Howard: The community IS the project. Our logo, token listings, etc., we made the straw person concept and understand the regulatory environment. You design most of everything else.

Q: Do you have any plans to attract non-crypto investors to your project? Because it is the success of a project to get more investors who are still not in the crypto world. What are the plans to increase awareness around your project in non-crypto space?

Howard: My network consists of C-suite execs at over 150+ non-bank lenders. We are beginning to actively train them on crypto and make introductions to their Treasury management folks.

Q: How do you plan to spread awareness about your project in different countries where English is not spoken well?

Howard: Our Discord channel has multiple native language channels with their own mods. Our AMAs will be held in English, Chinese and Russian on a staggered basis. The issue of liquidity for non-bank lenders is not bound by geography. It is bound by understanding risk and regulatory considerations.

Q: Without proper marketing and capital infusion, the project dies. How do you convince us you have adequate marketing power and capital to push this project to the top?

Howard: Our coffers are in great shape, and with the support of our advisors and community, we are well-positioned to get to execution. We have revenue already through our channels, which greatly helps.

Q: What problems unFederalReserve are solving that other projects aren't capable of solving?

Howard: We solve liquidity challenges in a HIGHLY regulated environment.

Even AAVE and Maker and other projects which we know and love and support do not have the core competency in the U.S. like we do. We stand alone in our ability to bring safe and responsible DeFi in a manner that institutions will adopt. Plain and simple.

Q: Is there anything else you would like to share or you want us to know?

Howard: We are capturing these questions and will work to address outside the AMA as well, everyone. Thank you for such thoughtful comments.

A reminder for the town hall: https://www.youtube.com/watch?v=1CHRYM74RD0

We also have some votes coming up, so please remember you need $eRSDL to participate. Crucial votes about what to do with the tokens we ascribe to licensees... burn, store, etc. We need your feedback and appreciate your support.

One more thing, if you'd like a hat or shirt or some other way to display your community proudly: https://www.branditpromo.com/stores/unFederalReserve

Have a great day, everyone.

KuCoin and unFederalReserve have prepared a total of 2,000 USDT to give away to AMA participants.

1. Free-ask section: 75 USDT

2. AMA activity: 1,925 USDT

Activity 1 — Quiz: 1,500 USDT

Activity 2 — Price Guess: 300 USDT

Participation Rewards: 125 USDT

. . .

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