A New Way of Distributing Financial Products – Interview with Gregor Arn from Verso Finance
In April last year, Verso Finance conducted its IDO via the TrustSwap launchpad, the leading crypto launchpad with guaranteed allocation (pending KYC requirements) and no ‘gas-wars’. The company was the first one to enter the TrustSwap Incubator Program and also the first-ever lDO conducted on the Avalanche blockchain.
Verso is a decentralized marketplace for the regulated financial service industry. It provides financial service providers with access to previously inaccessible consumers allowing them to access insurance, loans, and yield products directly from their preferred FIAT wallet, their bank account, or via Metamask. Top-tier investors including Ava Labs, Gate.io, AU21 Capital, DFG, JRR, and NGC back this project.
Six months after the successful IDO, we decided to have a quick chat with Gregor Arn, a founding partner and visionary behind Verso. Below is a transcript of our conversation.
Can you explain what Verso does in the simplest terms possible?
Verso provides financial service providers like insurance companies with a new distribution channel to reach more consumers around the world. We build new pipes with distributed ledger technology to deliver financial products to new consumers at the lowest cost.
Or, to put it simply, we are all about connecting on-demand microfinance with consumers in emerging markets; DeFi with non-crypto users, all in a trustless and compliant manner. A bridge between DeFi and TradFi at its finest.
How was the idea of Verso born?
Verso Finance was conceptualized because of my passion for inclusive financial services.
I launched the first social payments app in the Philippines in 2015 but struggled to scale the product due to the lack of small-value cross-border payment rails. The challenge led us down an exciting path around microfinance, a tremendous opportunity for which many infrastructures are still missing.
Long story short: we formed a team and started to build Wallet Engine – a bank-like financial institution providing in-app wallets for cross-border apps. Wallet Engine combines financial services and technology under one roof so that apps can seamlessly bring financial elements into their user journeys. Wallet Engine has access to apps with millions of users around the world, which the team is now using as a starting point to build Verso.
With the launch of Avalanche mainnet in Sep 2020, we saw a real opportunity to focus on microfinance and finally solve the distribution challenges for financial service providers.
In a nutshell, Verso introduces a paradigm shift in how financial products are distributed. It allows financial service providers to focus on their product, Verso takes care of distribution at scale. Our commitment is reflected in our brand identity.
The name ‘Verso’ is derived from Latin in versō foliō (“on the turned leaf, on the turned page”), the ablative case of the Latin verses (“turned, changed”) from the perfect passive participle of vertō (“turn”). Compare rēctus (“right”).
What is the utility behind Verso’s token?
The Verso token ($VSO) is an ERC-20 standard-based utility token, created on the Avalanche chain. The token grants users access to the Verso financial platform and its services. The token is essential for product creation, to become a product or compliance validator, to trigger conversions in wallets, and to participate in governance. In addition, there will be ecosystem vaults where anyone can stake VSO and participate in the economic upside in a sustainable manner.
Why should investors be excited about Verso?
As with any startup, great things don’t happen overnight. People may have many reasons to buy a specific token. While traders generally ride on short-term waves, we have a long-term horizon, and we are company builders executing on a vision. The value of Verso will become glaringly apparent once we showcase the possibilities with the marketplace set to launch in Q1 2022.
What are the challenges this industry is currently facing? How is Verso solving them?
Financial service providers have been facing a number of challenges related to the distribution of their products:
– Cost of user acquisition is greater than product margin
– Overhead associated with the complex settlement process
– Different integration standards across partners
– Microfinance is a massive opportunity but largely inaccessible due to overall unit economics
– The complexity of the landscape (regulation, data protection standards, DeFi, etc.)
Verso is a distribution platform with directly connected wallets and banks. Products are distributed to the right audience around the world, based on criteria set by the financial service provider. The Verso smart contracts take care of the conversion step (e.g. when a consumer purchases travel protection) and the settlement. In the case of insurances, the contracts handle claim disbursements and in the case of loans, the contracts handle repayments. The trustless environment removes the need for the parties involved to sign commercial agreements and integrate with each other’s systems.
Where do you see the DeFi industry going next?
First off, I believe that traditional finance and decentralized finance will move closer together, and innovation will eventually entail both parties.
The speed for this convergence is dependent on many factors; one of them is regulation, another is consumer protection.
So, we will see a lot of innovation on the actual product side over the next 24 months (which hasn’t been possible for many years due to technological limitations or cost-prohibitive distribution networks).
However, the best products do not improve an inclusive financial economy if people who need them cannot access them.
Here is where we, as Verso, come in. We focus on the distribution challenge. We are helping those building innovative products to quickly and conveniently reach their target customers. Furthermore, we are the bridge builders so that people can access financial products through their preferred wallet or banking partner in a convenient, secure, and low-risk environment.
What were some of the most rewarding parts of this journey for you?
The general sense of making something meaningful and industry-transforming is the biggest reward for our team. The overall mission of Verso is way beyond the traditional “make a lot of money” situation, but is instead for making people’s life easier, more financially accessible, and convenient. In addition, we want to play a role in bringing more users into the DeFi world and I think we have some really good tools in our hands to do that.
Another significant part of the journey is the community of investors, partners, and competitors. This ecosystem keeps us on our toes while striving for achievements and growth.
It is no easy journey, but we find it incredibly satisfying and fun. Isn’t this what crypto is all about?
What comes next on Verso’s product roadmap for the next three to six months?
We have launched our financial product marketplace and we’re very excited about this. We’re kicking the platform off with two travel protection products: Flex Flights and Flex Stays.
Our initial focus is on opening up distribution channels for microfinance (from DeFi and TradFi) to FIAT wallets. There are over 3,000 regulated e-wallets worldwide; many of them are the primary tool to store digital value for billions of people in emerging markets.
What lies ahead is to open up distribution channels to non-custodial wallets too. (we already started working on this and partnered up with Dash and their merchant network).
The year 2022 will be about expanding the network, marketplace, and wallet reach while signing up companies from TradFi and DeFi.
We will also roll out several functions where the community can actively participate in the Verso ecosystem. Roles like product validators provide exciting passive income opportunities from real-world products.
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To stay updated about Verso, follow their announcements via their Twitter and Telegram channels.
