Connect Financial Community Update
Community Update 31 May 2022
Welcome to another community update, and it feels good to be back delivering one of these! Quite a lot has happened since our last update but for this week’s update, we will be discussing the recent Community AMA and role announcements, as well as answering any questions that we weren’t able to answer in the session. We’ll return to our normal update format in two weeks’ time.
Core team introductions
We formally announced two new leaders to the Connect Financial ecosystem. Chantel Meeley as new Chief Marketing Officer and Christo Brown as Director of Product.
Chantel comes to the team with a wide range of creative, marketing and user experience design skills she has obtained over nearly 14 years. She has facilitated many CMO and Head of UIUX design positions for large, fully global businesses within Fintech, gaming, crypto, data providers and risk management solutions offering KYC, KYB, anti-fraud, and regulatory compliance.
Read Chantel’s announcement press release: https://cnfi.me/3yVmRVE
Christo brings 15 years of experience as a customer experience and product leader to the company. He has held several senior roles within a diverse range of startups, focusing on developing products, growth strategies and establishing product-market fit. Recently, Christo led the product expansion of subscription-based support services for the world’s largest mobile device protection provider that serviced millions of customers across APAC.
Read Christo’s announcement press release https://cnfi.me/3wLmiMt
You’ll be hearing more from Christo and Chantel directly as we gear up for launch.
Community AMA
We held our second annual community AMA on May 19, 2022. It was a great success, and we’d like to thank all of you for taking the time out of your busy lives to connect with us and provide your questions. Our leaders really enjoyed engaging with you all.
A special thanks goes out to our fantastic moderators and Orange for helping to MC the event.
Unanswered Questions:
Given the huge slippage on Arb1 and the limited order book in Ascendex, what is the suggested method for new black tier buyers of $250k to buy CNFI? (currently experiences 40%+ slippage). Is this sorted when the new portal allows buying off-chain?
Yes, once we launch we expect that most users will choose to purchase CNFI directly on the client portal. We will continue to have liquidity on Arbitrum and Ethereum for users that prefer to transact CNFI off-portal.
What does the team recruitment plan look like over the next 12 months and what specific positions do you anticipate being of key focus?
The team has grown considerably over the last 6–9 months, and we expect to continue to accelerate recruitment as the platform launches and the user base grows. Growing our team of developers will continue to be a focus, as will expanding our finance and investment teams. Once live, customer support will be a major differentiator for Connect Financial, and we will be investing heavily in building a premier support team.
In terms of ancillary functions, e.g. finance, HR, compliance do you see those becoming something in house or are those something you will continue to outsource (like how Ryan Mueller and compliance is “outsourced”?)
Our overall approach to growing the team is measured, strategic and prudent. Many companies have made the mistake of growing too quickly, and we want to make sure that every new hire is brought on because they can help the company grow — both in terms of user base and in terms of culture. Outsourcing may play a part in some of our team growth, but it’s a little early to say exactly what that could look like.
What do the leadership expect the regulatory environment to look like over the coming years for specifically the collateralized loan sector of DeFi? Nexo make no bones about the taxable status of their cards in their marketing which feels dangerous to say the least, but how else do you convey that benefit without explicitly saying you’re potentially loopholing around every tax rule?
It’s highly likely that regulation in the crypto space will continue to develop, but it’s also highly likely that it will happen slowly. Our compliance team are world leaders in the crypto space, so we’ll be relying on their guidance as the regulatory environment delivers.
As for the second part of the question, there are no tax “loopholes” relating to collateral backed loans, which have been the mainstay of TradFi for decades. Most jurisdictions consider loans tax-exempt and there is nothing nefarious about it. Though any advice or marketing as such would not fall under our plans as we are not licensed tax professionals in any jurisdiction.
Our core value proposition is to give our customers increased convenience and lifestyle benefits surrounded with transacting with their cash and crypto, and that’s where we will continue to market and differentiate the brand.
How did the Connect model handle the risk posed by the UST situation (if testing was run)? Did you guys get any results? Does this issue with UST affect product roll out at all?
It would not have played a major role in the Connect models. The risk profile of UST would have been outside of our tolerances and our exposure, if any, would have been indirect and backed by properly structured failsafes.
UST was not planned to be considered a true stable coin, though it would have been supported, just not guaranteed to be considered as one USD, unlike USDC which is.
Will the cards have a quick freeze option in the event a card is lost? -will there be a mobile option and desktop option?
Yes, the dashboard has an easy way to lock and unlock the card if it is misplaced. We will be launching with the desktop version of the app, and following up with native mobile apps shortly after.
Can we order a backup card to store in the vault?
Yes, you are able to order more cards, though they would be considered a different account at this time. We are looking to allow multiple cards from a single collateral wallet but that won’t be available at launch.
What are the main obstacles to becoming a one billion mc and how will you navigate them?
Projects in the crypto industry are no different than any other business, and have the same challenges. Growth relies on user adoption, revenue and controlling costs. When you take a long enough view, everything else (e.g. regulation and market conditions) becomes noise.
You’ve had no profit for over a year now. How is the company’s liquidity and do you have enough to last if the card isn’t released until q4?
While we are as excited to launch as everyone else is, we won’t rush launch just for the cash. We have a substantial runway and have no immediate concerns about cash flow.
How can you make your credit card available worldwide? Would you not need to meet the regulatory requirements in each jurisdiction?
Connect Financial is not a card issuer (yet), so we rely on our partners to meet many of the global regulatory requirements. We work with a number of partners to ensure that we can offer our customers the best value and most compelling card product available on the market, regardless of where they live (OFAC countries excluded, of course :))
Will your Crypto Earn product be available worldwide (except OFAC)?
There are still many questions around the feasibility of launching “earn” products in certain countries, for example the US. We’re watching this space carefully and are making changes to the product availability and offering as necessary to remain compliant.
When users deposit their crypto into your Crypto Earn product, what do you do with that crypto to earn the yield that you pay?
We will participate in a range of strategies that earn yield, which we then pass on to customers that have deposited their crypto in an eligible wallet. For example, our portfolio may include liquidity provision, defi, loans and so on. It’s a dynamic process and we have established investment guidelines and partners to achieve these. Our risk tolerance is low to moderate so while we aim to be competitive in the market we realize we will not always provide the absolute best returns, but that is offset with avoiding things such as the UST issues that can be costly, damaging to a reputation, and much worse.
Questions from the session
We’d expect there to be substantial online marketing in this day and age, but what offline marketing does CF expect to undertake, and what might that look like? Billboards/Digital Signage/Side of a Bus etc). What locations/geographies does CF expect to have marketing presence in or is it predominantly online?
Our marketing strategy will implement online and offline tactics to support inbound (two-way conversation) and outbound (forced conversation). Predominantly we will focus our marketing efforts online and through inbound campaigns to maximize the use of budget and obtain the best ROI. Our initial online marketing efforts will cross over North America and Europe with a more direct media buy focus with North American based crypto and fintech publications (although they have global traffic). We will ramp up our marketing globally and invest more marketing spending into offline tactics as we continue to grow.
Given the popularity of advertising on F1 for crypto projects, is there any ambition to get involved there or any other sports?
As we continue to grow Connect, our marketing strategy and marketing spend, we will be looking into all marketing opportunities to reach our target audience, including but not limited to the trend of crypto in sporting activities such as the F1, Superbowl, UEFA, etc.
But, I will say that our main focus is on value and benefits.
When it comes to earning interest on the coins, how safe and sustainable are those rates and who are the borrowers? Will CNFI users be able to keep track where the interest comes from?
This one is an interesting one, it goes to the core tenets of our strategies. We use a mix of short term, mid term and long term structured products to generate yield. Sustainability is always fluctuating as the global markets shift. Users are not able to see where all of the interest is generated from but there will be some public announced partnerships/investments.
Will we ever see some form of uncollateralized lending on the CNFI platform that will allow more funds to be borrowed with a good payment history?
Never say never, but it’s not on our roadmap at the moment. Uncollateralized lending opens up regulation and licensing requirements that would significantly change our business model.
We are actively building out additional products and services that offer additional lending options, for example using NFTs as collateral, but these will come later on after launch.
Are there any teaser videos or pics for the current card products? Would love to see any samples you might have!
Absolutely, you can check our medium updates (https://connectfinancial.medium.com/), where we share and showcase platform UIUX developments, card packaging development, etc. Regarding teaser videos, we are currently reviewing and establishing these frameworks.
Will the cards integrate with mobile phones for quick pay- -if so what phone platform?
The short answer is yes… the slightly longer answer is that integrating into Apple Pay / Google Pay requires additional work to be done with our card partners, so this will probably not be available at launch.
You’ve mentioned your credit card will be made available worldwide (except OFAC). Will that be a worldwide release from the start or will it be phased?
At start we will be releasing worldwide. The only phased part will be the velocity of onboarding/issuing cards as we ramp up services
For the roll out of the existing products, what time frame do you have for each of the phases from pre-launch, to launch itself, to post launch campaigns?
We are working with an appropriate marketing ramp-up to support our startup. Our foundational marketing components are active, and we will be lightly advancing these to encompass a few inbound and outbound campaigns approximately six-eight weeks before going to market. Four weeks before launch, we will be expanding our marketing presence through media partnerships. We have a much more comprehensive marketing plan to support our launch with an initial target spend within North America and Europe. Following the launch, we will be continuing to ramp up and expand our marketing on a global scale.
With the recent SEC lawsuit platforms such as Celsius have removed their interest earning service and are working on releasing one that is fully compliant with the SEC regulations. Will CNFI have to go down the same route?
We will always have to adjust our product offerings to our users based on regulatory changes in their jurisdiction. So, tl:dr, unfortunately yes, we will have to make adjustments based on recent clarifications from the SEC.
What’s the teams thoughts with regards to aiming to deliver a near perfect product vs taking more of an iterating and improving approach after launch?
That’s a really good question. Connect Financial is a product-led organization, which means that we use data and user insights and iterate over time to create an awesome customer experience. With that said, there are security, regulatory, licensing and partnership parts to the product that DO need to be perfect for launch. So it’s really a combination of those two approaches.
When will the staking portal be updated so that all fields populate?
We’re spending the bulk of our development efforts in migrating the functionality of the token portal into the client portal at the moment. We haven’t forgotten about the token portal, and we’ll return to addressing some of the functionality issues close to or after launch.
What reporting do you guys expect the company to release to customers in future? Eg earnings reports / audit reports / fortnightly updates etc if any?
We have been in touch with a well known auditing company who produces a daily report users can check that gives a general health check, assets maintained and liabilities owed giving a percent to reflect. Updates in the future will come more spontaneously as we have product releases, partnerships, and client portal updates.
Has there been any work done on the Treasury pieces?
Yes! It’s in active development right now. Our smart contract team is currently focused on the DAO and onchain treasury pieces. Our regular Medium update articles are still the best place to stay up to date with the latest developments.
What is the plan for liquidity for the CNFI token, and is there any ambition to move to a USDC/USDT base? If not, what is the reasoning?
While CNFI will continue to have liquidity in DEXs into the foreseeable, customers will be able to purchase CNFI directly on the Connect Financial client portal for instant settlement off-chain and low fees. We are also open to alternative listings on tier one exchanges and are continuing to test the waters.
We are not currently exploring moving to a sole USD pair, as future listings may require an ETH pairing voiding any movement we make now.
My question is in reference to the Trustswap collaboration and where we stand with that?
We are still open for collaboration with Trustswap but we are focusing on the launch of the core platform prior to formalizing or moving forward with partnerships. It is best for both parties at this point.
Bearing in mind crypto is expected to have one billion users by 2024, what are your targets for customer numbers and what market cap are you aiming for by this time period?
We are focused on attracting the current target market, however, we are constantly expanding our marketing initiatives on a global scale to captivate users to the Connect Financial product offering. As crypto and its adoption continues to exponentially grow we aim to correlate with its growth.
Is CF operational during 9–5 Monday to Friday? What activities do the team partake in together outside of work? (i.e. what’s the work culture like?)
Yes! We’re 9–5. In almost every time zone around the world. We have team members in the US, Latin America, Canada, Oceania, India and the Philippines. Of course many of our core system functions operate 24/7.
Which fiat onramps and offramps will you have available at launch? And what are the plans to expand this?
At launch, we will allow ACH/SEPA/WIRE and a few other bank initiated transfers. We will have a quick follow to allow debit/credit card purchasing but that requires a little more work on the risk side to develop. Expansion plans are being evolved but for now that covers the LARGE majority of users needs. Offramp is the same.
Are there still plans to have us test the product or are they skipping that ?
Yes, we will have a small cohort of community members test the product before the full production launch.
Are we going to see protection for accounts similar to what we see in banks or better? How is CNFI going to prevent fraudsters from gaining access to the account?
Yes, you will see standard protection protocols such as 2FA, account passwords, MFA, IP and Device tracking/authorization. Then within the platform you will have the option to turn on enhanced features such as whitelisting of addresses, IP addresses and locking your account.
Activity that is viewed as out of the norm will require user action to authorize, such as out of country IP logging in.
What is the status of the DAO and when will that piece be released? What is the status of the DAO tokens? Are those portions of the websites/contracts near completion?
I’ll refer back to my earlier reply on this… it’s all part of the same development effort, and is progressing well. Parts of the DAO have evolved, and we’ll be releasing updates in the whitepaper over the coming weeks.
As for the release, we won’t have a target date until the code is fully stable, audited and ready for deployment — watch this space
When Cards?
Wow, I really wasn’t sure if this one was going to get asked or not. It’s obviously a very important question and any answer besides “Releasing today” is going to feel like we’ve fallen short to our community.
The answer is we are working diligently to get to that point. It’s not a great answer but there are a lot of hurdles to overcome that we’ve crossed off the list already. We are definitely on the home stretch with our checklists, technology is near completed and getting tested, integration with our card processor is complete, physical delivery plans are set and those logistics are in place.
It’s been a journey for sure and one we’ve enjoyed taking, we’ve grown and developed a product we are proud of and there is nothing more that we want than to have it in your hands.
What influencers are CF approaching? What deal will they be getting in exchange for their videos? (I suspect most of the existing holders will want to know details such as vesting schedules etc to avoid being dumped on).
We haven’t built our community around pumpanomics and will not change this approach when our cards launch. We’ll work with social, crypto, Fintech and global influencers that best portray our corporate standards to partner in marketing initiatives. We have a solid product and believe in its success without pump. At this time, influencers will likely only be supporting the unboxing event of our cards and associated packaging with compensation matching accordingly, but not utilizing CNFI.
You’ve openly said before that the Team Tokens would be locked for 12 months from when the product launches. Is there any reason that cannot be done before then? If the Team Tokens are currently unlocked that leaves investors exposed to being rugged before launch. Which in the current market conditions increases the risks. The bear market is when alts get crushed. Locking them now would be a good show of faith by the team.
If you really felt at risk of rug from the team, then I don’t believe you’ve followed us or how we handle ourselves when it comes to this topic.
I have stated that the team tokens would be locked for 12 months additionally after product launch and that still holds true. We will do so when the product launches as we’ve stated.
What is on the future roadmap of the CF product suite beyond credit cards and the wallets? Does Connect have any proposed acquisitions / sectors lined up?
Good question, with a two part answer.
Connect Financial is a product ecosystem that sits under the Connect DAO structure.
Looking at Connect Financial specifically, we have a number of features planned for 2022 and beyond including alternative lending options, interest earning wallets, staking wallets and point-of-sale partnerships. A lot of this roadmap is already public and is talked about in the white paper.
Connect DAO on the other hand, has both Equity (new projects) and Venture Capital (investment and incubation) verticals. Obviously the team is focused on executing the Connect Financial product as our first priority, but we have a number of projects sitting under the Equity and VC verticals that will be rolled out in the near-mid future. We can’t talk about the specifics yet, but watch this space — there are some big things coming.
Will you be attending futurist conference in Toronto?
Not at this time. Our focus is remaining on delivery of our platform and product launch.
Will there be a single-use virtual card as an option too?
Yes, we will be offering this post launch.
Now that NEXO have released their competitive product, how does CF plan to gain market share from them, given they’re already better known and presumably will have a larger marketing budget? Has there been any thoughts given to guerrilla marketing methods?
Competition in the space is not a zero-sum game.
Other collateralized loan products in the market legitimizes the space and a stronger market ultimately lifts all boats. With that said, the CF cards are a more premium product and we’ll be leaning heavily into the lifestyle rewards aspect of the program to entice customers.
For example, if you’ve been following along with the recent reduction in rewards for the [insert competitor] cards, cashback and staking rewards are incredibly popular with customers and we feel that we have the best-in-class product.
Are users able to pay off their credit card spend using fiat currencies?
Yes.
Which line items have been checked off since our last Roadmap update a few months back?
Going through individual line items of the roadmap is a little out of scope for this format, but we’ll continue to use the bi-weekly Medium updates as our main place to update on overall project progress.
Is there any chance of quicker smaller weekly updates vs lengthier bi-weekly? Even bullet points on a weekly would be quality!!
Sorry, most likely not as it’s hard to control what a short update is, and micromanaging what we’ve done for a week would be very time consuming.
Marketing
We continue to steadily prepare our pre-launch campaigns alongside our scaled-up marketing initiatives to support full market launch. Additional foundational components to our marketing are also in production including our brand guidelines, media kit, thought-leadership articles, etc. In regard to supporting our card product, our card tiers basic, silver and gold packaging is already in manufacturing (please reference previous updates for imagery) and our premium card packaging for tiers platinum and black, is in its final stages of development prior commencing manufacturing.
We have also expanded our social platforms and please connect / follow us on our new LinkedIn https://www.linkedin.com/company/connect-fintech
Twitter — follow us at: https://twitter.com/connect_fintech
Facebook — Follow us at: https://www.facebook.com/Connect.Financial.Wallets
Articles of interest we have recently published can be found below.
How the Fintech Sector with Crypto is Enhancing Access and Flexibility to Credit
Fintech & Crypto — Innovations for Financial Inclusion.
Fintech & Crypto — Bringing a World of Flexibility, Autonomy and Control. — https://cnfi.me/3LPLN4X
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