The Great Unbundling of Finance

Transcript

How's it going? I'm Sam. I'm the founder of Fracks. And uh today we're going to be talking about the unbundling and rebundling of finance in the neoank era. Let's first just get started uh with where things were and where they're going. So for a long time in crypto, everything's kind of been an island as like an isolated financial system and then centralized exchanges essentially acted as the bridge or the onoff ramps, right? And they basically commanded what fiat and money went between these two financial systems.

But now, as everyone's probably seen recently with a lot of Neo Bank products, cards, all of these products releases, those lines are essentially merging, right? There's a lot of products that essentially let you move money back and forth, spend money. Stable coins, especially with the Genius Act, have allowed certain companies to start accepting them directly as payments, using them in treasuries, uh, and actually tokenizing certain financial assets like equities and everything. And one of the most important things we've asked ourselves at Fracks as we've been building our products is which of these things actually need to interact and be composable and which of these things actually have network events because one

of the actual challenges in this era of unbundling is a lot of these products don't actually communicate with each other. Right? So if you think of it right now, what you see in the actual crypto landscape and in the neo bank area is that everyone almost all sounds the same, including the centralized exchanges. They have a card, they say, "Sign up for our card program, uh, trade here, uh, do these things, you'll get this much rewards or cash back." But they all essentially look the same, right? They require you to KYC for each individual product. uh you'll get maybe onoff ramps or some FX and you'll have to KYC for that. Um how many times a lot of you guys have probably done persona

or some sub uh onboarding and then have to do it again and again uh for each feature right and the important thing to essentially highlight from this is that these are all essentially independent siloed products that don't really interact. They don't have network effects. Right? If you think of what a network effect actually means is that every single user of a particular product makes it better for the next user that actually signs up. Right? That's the definition of a network effect. The classic network effect is a is a stable coin, right? Something like Tether. If the first person uses Tether, it's not that useful. No one else does.

But if a million people use it, the one millionth and one user of Tether, immense value, right? There's a million merchants, people and everywhere that actually accept it, trade it. The issue with the current neo banks and all of these products is they don't communicate at all. There's no composable layer there. You have to KYC again. You have to actually use them like separate uh financial apps in a single, you know, brand. And so what we thought is if we're building a neo bank, what are the actual primitives that need to be composable that allow us to build the most powerful tooling that everyone can actually use? And so that's why we built

Braxet as the first runtime NeoA. And so what we call it is that it's essentially a neo bank with an app store. You could think of it like the uh Apple app store where every feature is a composable application rather than a single mobile app using a card. Every single feature that is in Fraxnet that we build or a third party builds actually uses a special runtime that we've developed that has composable op codes such as identity accounts and composability with those different op codes that actually make it a safe environment to create regulated financial applications. And so you've probably heard of cards, you guys

probably have a lot of them. Um you've seen Neoank payments and invoicing savings these are all usually powered by different service providers underneath right bridge um you know Visa and Rain for cards and they all have their own different compliance regime they all have their own different software stack that they're required and so usually a single NEO bank offering currently today before Fraent picks one of them offers it to you UK KYC and then you use that product for us What we've actually developed is a universal identity layer and also a composability layer in the neo bank that actually allows us to create different financial flows for different businesses, retail us use

cases such as trading or payments and cards and allows anyone else to create and extend applications themselves. And so you can kind of think of a neo bank in fracknet as it's all a specific app. Instead of a feature, it's actually an app under the hood. So when we launch our FRA card app, what that means is if you have a Fragend account, you can actually just download it into the platform and then give it permission to use your actual identity and then it'll immediately give you a card. It'll actually give you the FRA card. uh it'll give you the entire use case without you having to do anything if you actually

already have uh fragite account. And so that's what makes it really powerful. You can also import other cards if you like etherfi, if you like the Athena card. Since parts of those cards are onchain and interact with an actual vault, you can actually import them and communicate through the actual fraet runtime with those products uh as well. And so you can kind of see here where each of these op codes, for example, ID, read, verify, test, these are all part of the actual same toolkit across every single practet app. And so this allows anyone else to actually build similar products or even essentially embed uh

fraction login into their own RWA projects, their own uh website or their own financial uh application. And so here's like an example. If you have a fraction account, you essentially get this universal passport. And what that allows you to do is as you actually do more uh downloads of apps and then you onboard to them, this actually saves your data and so you're able to actually log in similar to an uh Apple app, right? If you download an app and it says it wants to access your contacts or your uh camera. You just accept the actual permissions required or you remove permissions and then you uh install the application and then you get that financial product in your platform,

right? in in your phone. Essentially, this you get it in your neo bank. So, let's just kind of go through like a very quick example. This is basically a basic uh fraction dashboard. There's nothing too fancy, right? It's just uh just some features. Each of these features under the hood, they're an application. They use the identity op codes, everything, even though they just look like normal um onoff ramping. And so when you actually go to the app store, so let's say like a card, and then you download it, uh it adds the card in the dashboard, right? It allows you to actually modify your financial workspace in the exact manner that you need. And this is an interesting thing

because we actually ran into this problem working with a lot of uh businesses, not retail audience, but a institutional and business use case that needed their own platform to look a certain way. They needed uh compliance. They needed uh immediate invoicing and chain analysis, wallet checks. And we didn't want to just build a platform from the ground up and only have it for those isolated use cases. We wanted to actually build this within the environment that we're building for web 3 and the users that we already have.

And so that's why the entire platform is very modifiable. It looks completely different for everyone depending on which applications uh that you use. And so you could kind of imagine a little bit. Imagine uh Marina Bay Sands, right? We're we're here. We're at this huge conference. Imagine if MBS wanted to fully accept digital assets, whether it's in their casino, their rooms, their uh conferencing, all of these kind of things. They probably don't care about this card app, right? What they want is they want to be able to actually create different invoices, subclasses, compliance. They want to be able to actually accept the digital assets, maybe hold some stable coins, convert some out, do payins and payouts. They

won't actually have their application look like this, right? They will have a lot of compliance tracks and apps. they will have a lot of uh different kind of invoicing and unique applications that we would build for them or they would actually request or build themselves and so they'll be a user of Fraet just like anyone in the audience or me is a is a user of Fraet but it will look completely different but under the hood it will use the same financial neoank primitives that have been bundled together and so just to rewind and look again at the network effects of a neo bank like this.

The most important thing is because of the structure and the underlying composability of identity transfers and everything in the actual op code runtime environment, we actually get a lot of things for free, right? We actually are able to do builder codes for uh applications and developers because everything inside of the actual platform is an application. So it has an originator. So if you want to develop a Fraxton app, you need a Frastead account, right? And so your organization will see all of the inbound [snorts] and outbound requests of your Fraton app. So then we can actually give you token rewards, we can give you cash back for usage, we can make sure that you can see identity and who's actually using it and everything on on that level. Uh we can also create tooling by construction. So

we didn't actually build this platform just to say everyone else use it. We actually built it for ourselves because of the type of use cases and products that we needed to build for our customers, both businesses and users. And so the main thing is that as we build more NeoBank applications in the FRANET platform, we're able to actually create more cloud skills, AI tooling, things that we use ourselves to make applications better that everyone else can just use, like oneshotting a special feature that you might need into your dashboard.

And that too itself actually makes Cracket by coincidence almost by accident uh the most AI friendly finance platform in web 3 because essentially when all of these primitives are unified they're composable you essentially get this de facto AI harness or vibe coding right you know that the assets on chain are all unified you know that the identity and other neoank composable op codes are the same across all apps all apps can compose and communicate with each other directly. And so it's actually the easiest place to oneshot a uh NeoBank application. You don't need to recreate the onboarding, the KYC, the

persona login. You just embed a signin and then you actually can give a neoank account to your agent. you can actually soon add a muse API or cloud API key and uh they will actually have an account for themselves underneath uh your account. So they can create features, they can move assets to a certain degree and so it's actually by default the most friendly uh AI Asentic Neo Bank just as a as a coincidence. And so we're really excited to launch this internally in stealth and to invite only uh participants. So if you want to build applications with us or if you want to try it out uh you can actually sign up

for fraetet right now at net.fra.com but if you want to build and have access to the actual runtime uh it is currently invite only. So please reach out to us and uh we are rebundling the unbundling of finance. So thank you everyone.