This blueprint lays out the main components that we are working on at Verso Finance and we view it as a live plan, subject to modifications and improvement as we develop. We are currently in Phase 2.
Not only will we continue to expand the elements in this blueprint, we will continue to develop our enhanced storyline and community experience touchpoints. We constantly look at developments in DeFi to come up with new opportunities for our project and to maximize the impact we can bring to VSO holders, the Avalanche ecosystem, and financial product providers. We’ve taken note of suggestions and we are learning a lot alongside other Web3 projects.
In the following article we take you through the various sections of our blueprint. Over the coming weeks we will be doing deep dives on several of the subtasks displayed in the plan to help illustrate them to our community.
Embedded finance has grown substantially over the last years and is expected to grow 10-fold within the next 5 years. In addition, Web3 brings a gradual shift towards more decentralization, which requires a complete rethink of how to connect to consumers. While many TradFi companies are still transitioning from broker-based distribution models towards digital ones, the next paradigm shift is already on the horizon with Web3.
Verso provides a single access point to directly connect to consumers TradFi wallets and DeFi users. This speeds up go-to-market strategies and removes complexity and cost for financial service providers.
Our main focus is on microfinance products. It is a largely untapped opportunity in the financial service industry, mostly given the current complexity and cost of integrations.
The first product category we have been focusing on is Protection (insurance, protection from loss, fees, etc.). In this category we have established partnerships with Koala and Igloo.
Each product category contains different product types, such as travel, gadget, cyber, etc. The first products we have on Verso are travel related and we will continue to expand the offerings under that product category. In the future we intend to introduce new categories, such as Yield and Passive Income, Loans and Bill Payments.
Over the past months we have been speaking to multiple partners across industries to identify potential product distribution channels and financial product providers. In addition, we have been chosen to join the open embedded finance observatory in Europe which comprises some of the largest players in the insurtech industry. Member companies are located around the world with the aim to establish collaborations. This facilitates our ability to work on new products and go-to-market strategies with unicorns of the insurance industry.
Distribution channels connect products to consumers and they vary greatly in terms of how consumers are reached, how and what data is exchanged, how payments are made, etc.
Our network build begins with these 3 distribution channels:
- Distribution to TradFi — namely regulated FIAT wallets, banks;
- Distribution to DeFi — connecting to consumers through Web3;
- Distribution to Commerce Platforms — adding relevant products into the checkout process.
Once a product is validated it is available for distribution through all channels. However, individual channels might contain specific sets of filters which may exclude certain products. As an example, Fiat Wallets that partner with Verso Finance will only be able to access products that are cleared for their respective country.
A DeFi distribution channel on the other hand is country-agnostic and will display products which can be sold globally. The channel-specific filters allow product providers to limit access based on various criteria and they allow Verso to deal with both regulated and unregulated products.
We started building integrations for TradFi by leveraging our close partnership with Wallet Engine. Wallet Engine is a TradFi venture that offers cross-border apps with a complete stack and was founded by some of the same people behind Verso. Given it’s positioning in the regulated world, it serves us as a reference point for other wallets when integrating with Verso.
Today, there are over 3,000 regulated wallets in the world, many of them serving people in emerging markets. These people were previously excluded from the financial world and now have built trusted relationships with these digital wallets. Connecting to these wallets will provide access to a massive consumer base which is difficult to reach otherwise.
Sound tokenomics is an important part to ensure the long-term success of Verso, and while there are exciting community roles we are planning to introduce, we are still working through the details on how to best align the overall incentives and tokenomics for the ecosystem.
In addition to community roles, we will be launching a set of vaults which confer certain rights to stakers and offer economic participation and passive income opportunities.
After our IDO, we consistently released sustainable new income opportunities for our community. We started by becoming the first double reward farm on Trader Joe, back when they were still in their early stages. The farm was a great success and quickly accumulated millions of dollars in TVL. It ran at a high triple digit APR for for months giving our community a great return. Simultaneously, we established great relationships with Pangolin, Hurricaneswap, Trustswap, Penguin, AvaLabs, and Lydia Finance.
Our community came to demand we help them to be spared of impermanent loss which led us to provide several options to single-stake VSO. We started off with single stake pools on TrustSwap and upgraded to our current model of having the stake-&-lock farms directly embedded onto our website. Moving forward, we will continue to provide even more value to our investors by launching our ecosystem rewards vault. We aim to democratize revenues from the sale of financial products with these new vaults.
In terms of listings and accessibility, we have applied for several exchange listings and are in active talks with others.
Product Validators are an essential part of the Verso ecosystem. They are the individuals who test products before they are made available to the public via any of the Verso distribution channels.
How do consumers and wallet providers know if a specific product is legit, and will work as announced? After all, there is no “sales person” involved who could answer questions. Clarity and consistency of communication is a key aspect of the experience we are building. Product Validators will play a key role from a consumer protection and UX perspective.
The work to build the validation process will commence in phase 3. We have started to outline the mechanics and economic incentives of this program. The practical and logistical aspects of how to manage the Validator Community still need to be considered, the details of which will be announced in due course.
This is the role of those who will perform certain compliance and regulatory assurance tasks before a product is cleared for distribution. How do we ensure that products are being properly localized and are following the rules? How do we prevent products from being offered to people who should not be eligible? It is intended that these roles will be filled by industry experts, or specialist compliance organizations, and there will be a requirement to stake a significant number of VSO as part of the eligibility criteria.
With the required skill set being so specific, we do not expect these roles to be filled by general community members. Until we launch this program, these roles are being fulfilled by Verso and the various product providers and wallet providers who form part of the Verso network.
We’ve outlined some mechanics of this program. We will build the compliance validator process and launch it in the 4th phase of our blueprint, after following a broadly similar plan to that used for the product validation roles.
How much commission goes into the ecosystem vaults? How much gets awarded to product validators? There is the opportunity for such decisions to be made or changed by interested participants of the community who stake $VSO against their decisions through a governance structure. This topic is one of the furthest ones on our blueprint as the deployment of our other programs will help define our perception and plans for this branch.
We plan on developing the governance process and launching the program in the 4th phase of our blueprint.
Our blueprint only outlines the Verso ecosystem build steps and does not outline measures we are taking to improve our community experience, advertising efforts, social touchpoints, and business development material.