What does interoperability look like today? - 2/2
Consumers interested in cryptocurrencies, NFTs, DeFi solutions, and Web3 have historically faced market entry and exit barriers. While cryptocurrencies represent a new set of possibilities, many crypto users still need fiat money to operate in the real world.
Therefore, they are forced to move as currency traders to get in and out of crypto. It consists of constantly moving in and out of different currencies, paying all the transactional costs, logistical, financial, etc. This business use case has historically been mediated by what is known as crypto “on-ramps” that allow the purchase of crypto in dollars, among other services. Off-ramps operate in the other direction.
Today, consumers and businesses are bidding for a blurring of the barriers between the traditional and crypto worlds. Users want to avoid distinguishing between their crypto assets and fiat currency savings. They want to do much more than move their money in and out of crypto through on and off-ramps.
Companies are offering products that combine both worlds. These API-based solutions enable a steady, high-volume flow of transactions between crypto and traditional financial services.
And the role that fintechs play is to tap into this new niche market and offer the best possible experience. At the same time, crypto companies have to focus on improving profitability and security, leaving the user experience in the hands of the fintechs.
Interoperability between blockchains themselves is being sought. The case of layer two scaling solutions, such as Optimism, is more than well known, which were designed to lower transaction fees and further shorten settlement times.
Interoperability means seamless transfers of value between different financial products, protocols, and ecosystems. However, it also requires other elements, such as agility and fluidity, in moving additional critical information parallel to the transaction.
Some financial transactions may require the identity of participants to be carried out for regulatory compliance, or there may be a need to record transaction status in different systems of record.
2Pi is one of the players in this context, uniting fintechs and DeFi protocols through automated smart contracts. This plug-and-play solution allows you to automatically start offering your end-users access to yield on digital assets while you can focus on what you do best. In simple terms, 2Pi can interoperate DeFi capital markets into an infrastructure stack for a fintech.
