Connect Financial Community Update
Welcome to another Connect Financial update… and what a week it has been.
Fresh off the heels of the UST depegging and Luna collapse, the industry has been further shaken with news from Celsius and 3 Arrows Capital.
Generally, I don’t like to comment on the market or our competitors. The team and I feel that our time is far better spent building and launching an industry leading platform instead of commenting on things outside of our circle of control. Today I feel that it is appropriate to share a few thoughts on recent events in order to give you some insight into our strategies and immediate next steps.
Regardless of what the market does, nothing changes for the team.
If you’ve been in crypto for any length of time, this will not be the first time that you’ve seen this level of volatility in the market. When Bitcoin goes through a huge downward run, it tends to drag the rest of the market down with it.
Markets are complex systems, and anyone purporting to be able to explain what is happening in a blog post or a few tweets should be taken with a grain of salt. In reality, the current crypto market is being driven by a number of factors including economic policy, the recent Luna collapse, tech stock declines and rumors of insolvency from large players in the industry. If history is a guide, we can probably expect depressed conditions for anywhere from a few weeks to a few months, increased FUD across the board and Discord and Twitter ghost towns.
Like everyone else in the industry, we’re watching the situation closely, but nothing changes for the team. We continue to build, secure partnerships and grow the team to prepare for the release of the Connect Financial platform.
For now, we continue to build and prepare for launch!
Rumors concerning our competitors
It’s no secret that Celsius has had a rough few weeks, culminating in the platform pausing withdrawals from the platform this week. Past these few statements of fact, I can’t really comment on Celsius’ current situation, and anything I could say would be totally speculative.
What I would like to remind everyone is that while Celsius is a close competitor of Connect Financial, the business is not the business model.
Both Celsius and Connect Financial (as well as a number of other companies) derive a portion of revenue from asset management. Typically users deposit funds on the platform, and those funds are then “put to work” to generate revenue for the platform. Generally speaking, those revenues are then used to reward customers with yield, develop products, pay operating expenses and of course make a profit.
There are different investment strategies that can be employed across DeFi, CeFi and TradFi. Some examples include:
- Liquidity provision (e.g. ETH pairs on Uniswap V3)
- Depositing into yield vaults (e.g. Yearn)
- Asset: Stablecoin liquidity as a hedge against market drawdowns
- Leveraged liquidity farming
- Institutional / hedge fund lending
- Asset staking (e.g. ETH 2.0)
While the strategies are generally similar, their application is not. Different strategies have higher levels of risk, and all strategies come together to form an overall portfolio. Connect Financial maintains a prudent, conservative approach to our investments with an emphasis on maintaining ample liquidity and balancing risk and rewards.
Our core values include responsibility and sustainability. For example, some of our yield-earning wallets will have lock-up periods. While some platforms advertise no-lock ups as a feature, we think that they are a bug. Lock up periods are required on certain structured products, which allow us to attract better returns with limited risk, and passing this requirement through on the individual product can reduce our risk of cash-flow insolvency.
All assets under management are overseen by the Connect Financial investment board. The investment board is responsible for identifying and enforcing strict investment ideals and balancing returns and risk appetite.
High return, low drawdown — A range of investment strategies are employed to find a sweet spot between returns and drawdown, with a goal of a balanced portfolio with attractive returns and managed volatility.
Managed counterparty risk — The investment board selects counterparties that meet stringent requirements and pass extensive due diligence. Decentralized and centralized counterparties may form all or part of the portfolio at any given time.
Acceptable risk profiles –While some tranches of the portfolio may take advantage of short term high yield that come with raised risk levels, the Investment Board oversees a conservative general approach to investment with a focus on longevity and fiduciary responsibility.
The market is down. Be kind to each other.
It’s easy to just think of $200B as a really big number. It’s important to remember what that really-big-number is made up of. It represents people’s savings and their jobs. In many cases, it also represents relationships and stability. Be kind to one another.
Other updates from the team:
Our UIUX team remains with a primary focus on supporting the platform experience to round out the MVP. Implementation and development on provided UIUX is performing with steadfast progress. Currently, UIUX designs on send functionality — to perform internal and external transfer of assets, add wallet, expanding our staking and membership staking screens and minor UIUX revisions to whitelisted addresses.
Our UIUX design team has been continuing its developments on the Connect mobile application. We have implemented in the UI designs to our UX wireframes for the onboarding user journey and flows. Now, we are steadily implementing our UX wireframe production for the membership, staking and card screens into the mobile experience. The process for this is going quite well. However, we are keeping our primary UIUX design focus on our platform to support MVP launch in an efficient manner. In the coming weeks we will continue the mobile app UX developments to build out our wallet and profile screens.
Our marketing and design departments are busy preparing assets to support our marketing efforts. Our primary focus is establishing our pre-market and full market campaigns; messaging and supporting graphics as we develop our overarching brand visual style. Additionally, we are continuing our thought-leadership articles, have established our CF token illustrations, and near completion of our brand guidelines and media kit.
Our third-party media planning and buying is coordinated, and we’ll be commencing our pre-market launch initiatives and expanding our digital marketing efforts in the coming weeks.
In regard to supporting our card product, our card tiers basic, silver and gold packaging (please reference previous updates for imagery) are now complete and beginning their shipping process to us. Our platinum and black card packaging continues its final stages of development.
As mentioned in our last update we have expanded our social platforms. Thanks to all who have joined us over there. If you haven’t done so, please connect with us at:
Twitter — follow us at: https://twitter.com/connect_fintech
Facebook — Follow us at: https://www.facebook.com/Connect.Financial.Wallets
Articles and recent PR of interest we have recently published can be found below.
Chantel Meeley — New Chief Marketing Officer and Chief Experience Officer
Read Press Release: https://cnfi.me/3yVmRVE
Christo Brown — New Director of Product
Read Press Release: https://cnfi.me/3wLmiMt
How the Fintech Sector with Crypto is Enhancing Access and Flexibility to Credit
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