The founders of lending protocol Nuo are launching a “neo-bank” to attract more retail users.
Varun Deshpande, Ratnesh Ray and Siddharth Verma – who launched the Nuo protocol in 2018 – are now launching a new digital banking platform called Juno.
Juno will be built on top of ethereum, rely on the Nuo protocol and is expected to launch in either February or March of 2020, Deshpande told CoinDesk.
The startup’s flagship product will allow users to hold the dollar-pegged USDC stablecoin and earn a 5.5 percent annual interest rate. Juno wallets will have no fees and a Venmo-style peer-to-peer payment option, Deshpande added.
“What Juno will be able to add is a very simple user experience which is required for retail adoption,” Deshpande said, adding:
“If there’s anything that can take DeFi [decentralized finance] or crypto mainstream, it would be an interest rate.”
It’s not the first time a DeFi platform has created a savings product, however.
In August, lending startup Dharma announced it would relaunch its services with stablecoin accounts that offer returns based on the Compound lending protocol. Dharma’s site currently advertises an interest rate of 7.7 percent. Two other lenders, Celsius and Nexo, offer returns on USDC deposits of 8.2 percent and 8 percent, respectively.
Earlier this month, crypto unicorn Coinbase announced that users of the exchange would earn an annual percentage yield of 1.25 percent on USDC holdings.
Juno plans to launch initially in the U.S., Europe, Singapore and Japan. The platform plans to partner with online money transmitters in each of these geographies for on-ramp capabilities, Deshpande said. Partnerships with local banks in each market could one day lead to debit cards and free cross-border payments, he added.
Juno is also announcing that it raised $3 million in venture capital in a round jointly led by Polychain Capital and Sequoia Capital’s Surge program.
The round included participation from Dragonfly Capital, ConsenSys Labs, Astarc Ventures, Singapore Angel Network and several angel investors, including Balaji Srinivasan, the ex-chief technology officer of Coinbase and former general partner at Andreessen Horowitz (a16z).
Prior to this round, Nuo received investments of $500,000 from ConsenSys Labs and $250,000 from payments firm PayU.
Deshpande explained that the platform will be able to offer its 5.5 percent yield from the interest it makes from short-term, crypto-collateralized loans – as well as loans for margin trading that it makes through Nuo.
Nuo currently has $25 million in deposits and $20 million in loans disbursed. Deshpande says Juno’s deposits will be insured by a price volatility insurance fund that Nuo is building and smart-contract insurance.
Varun Deshpande image via Nuo