Ken Olling is the founder and CEO of MELD. As he has firsthand experienced the struggle of the masses going through to be directly connected to the world of crypto-based services, he was inspired by the idea of creating a non-centralized international financial system.
MELD is considerate about the mental wealth of their clients. They intend to help people regain control over their financial lives. Ken has created an opportunity for people to use the crypto they already own as collateral and can borrow up to 50% of the value of the collateral. MELD provides crypto-to-fiat services and it has made them different from the other competitors in the market.
Ken, tell us what inspired you to launch MELD?
I come from a middle class background growing up in the 1970s. So saw the raise of corporate America, the multination corporations and outsourcing. I saw what it did to the middle class. I think these factors have made a huge impression on my generation (Gen x). While this is not directly connected to the world of crypto it defiantly sets the stage for the coming of a non-centralized international financial system.
Since 2019 several of my friends have become crypt investors. After the hype and fall of the ICO boom they read the market -correctly- and saw an opportunity pick up these new digital assets like Bitcoin and Ethereum very cheap in preparation for the next bull cycle.
I saw my friends invest throughout the ‘crypto winter’ and then start to see incredible gains in mid 2020 with the DeFi summer. As their portfolios swelled, they would increase their investing to the point where they had no disposable income left, everything went into crypto investments. They saw this as their retirement fund, their way to financial independence.
The inspiration for MELD started when I would have lunch with my friends and even though they sat on seven figure portfolios, I had to pay for lunch as they had no fiat, everything was in crypto. This made we think that where is a major problem waiting to be solved.
When I inquired as to why they said there were no services they qualified (passing KYC) for that would let them collateralize their crypto and get fiat. While there were companies offing it like Blockfi and Celsius they are very America centric and in order to use the service you would need to hand over your crypto keys. This resulted in them simply fighting their belt and waiting for their exit point before they could see any value from their investments.
I started investing in crypto seriously and DeFi specifically in 2020. It was at this point that I saw the future of the technology and believed in how it could completely remake the financial landscape. DeFi or Decentralized Finance has at its core the idea that no one entity has control over the system. You retain ownership of your assets at all time and you rely on Smart contracts on a blockchain as the medium to deliver financial services.
I saw MELD as a way to solve this major need in the space; everyone with a crypto portfolio would like to see some of their value ASAP while staying long in the market. The other benefit is that borrowing against your crypto means you don’t trigger a tax event (capital gains).
How are you offering your service with the loan capabilities of MELD to people who are interested in investing in cryptocurrencies?
The word loan is a bit of a misnomer, while technically it is a loan, it’s not a loan that causes debt. This is called a ‘Lombard loan’. The way it works is that you use the crypto you already own as collateral and are able to borrow up to 50% of the value of the collateral. So, if you have $100k in Bitcoin you can put the Bitcoin into a MELD smart contract and borrow up to $50k in fiat or in another cryptocurrency.
This is a valuable service because you can realize some of the value you are accumulating in Bitcoin as fiat. If you use this type of loan then you can reap the rewards as Bitcoin goes up because once you have paid off the loan, you get your Bitcoin back via the smart contract. You crypto never leaves your ownership, but it is lack until the terms of the smart contract are met.
What is MELD’s role in the current debt market?
At this point we have very limit exposure to the debt market. We think putting people into debt is in general a bad idea. There are many different financial instruments available to us that can be used in creative ways to solve a problem without just going into debt.
This said, in the future we might play some kind of role in the debt market but only if it meets our values.
It is your mission to create opportunities for 97% of the world’s population to regain control of their financial lives. How does the loan process work?
Our mission is to level the playing field for all people and give them access to the same extremely powerful and flexible tools that currently the domain of banks and large financial institutions.
Crypto and specifically DeFi strives to create a financial ecosystem that knows no boundaries, no race, no sex no geographic limits. Today the interest rate person taking out a loan in California is very different from a person taking out a loan in Nigeria. We want these instruments to be exactly the same regardless where or who you are. This is real financial freedom.
Apart from crypto-backed loans, what other services do you offer to your clients?
Lending and borrowing are the core functions of the MELD protocol. When you offer these core services they can be used in many different ways. You can use them to leverage your position, hedge an asset, get some exposure to new assets, earn interest by lending out your assets and providing liquidity to get yield on the asset. Because lending and borrowing are so core, they can be used to do many different activities.
Right now, the only additional services we will be offering is the ability to stake your MELD token and earn yield on them be providing insurance to the MELD protocol.
There must be a difference from what you offer your clients through MELD. How MELD differs from other competitors in the market?
The competitors in our market can be divided into two categories. First, are DeFi crypto-to-crypto lending and borrowing, we differ in that we also offer crypto-to-fiat services. We have to jump through more hoops to offer the fiat side, but it’s worth it because it’s such a needed service.
Second, are centralized (main US based) Crypto-to-fiat lenders, we are different from them in that we don’t require our users to transfer the crypto to us. Our users keep control of their crypto keys which give them a great sense of control and independence. For most of the Centralized services, if you are in a US citizen, then you can’t use the service. In our case, for now, we do not offer MELD services to US citizens. Our US offering will come later.
The Crypto market was never been the same since where it began. Where do you see the crypto market in the future?
I think crypto has an incredibly bright future on many levels. First, the overall market size is tiny compared to transitional finance, this means the growth potential is enormous. The majority of the world’s population have very limited access to financial tools beyond money storage and transfer. Crypto will bring these services to the masses in a way we have never seen before. Finally Crypto will be a hedge against poor fiscal policy because politicians have no control over how much of a crypto is minted or burned, it’s defined by the math in the crypto and nothing else. This results level playing field for all.
As a fast-growing lending solution, what’s next in MELD?
Right now, we are fully focused on delivering on the promises we have made to date. Being able to execute on this would make us the first to do so, I think this is enough for the next year. Beyond 2022 we know we will offer more finical instruments, but what they will be is still a select we are guarding.
What about the MELD Debit Card?
The MELD debit card is an extension of the line of credit service we will be offering. Instead of borrowing the full amount in fiat, you can set a borrowing limit and then only use the amount you need at that time. This way you are only paying interest on fiat you use, not the full amount. To use this fiat, you need a debit card to access the funds.
We think this is another step in the direction of providing better financial instruments to all.
Ken, how is a day in your life?
Since I live in Norway, the weather plays a role in my day. If there’s not too much snow then I get up at about 6AM and take a run to the ocean. This will open end in my first call of the day, typically to my co-founder Hai based in Vietnam. We sync up and discuss anything outstanding in our operations. Then my day is pretty chopped up until about 3PM with back-to-back meetings. After three I usually have one- or two-hour windows to get work done and then the US wakes up and I go onto my next wave of meetings between 5 and 9PM.
I take 30 minutes if I’m lucky for lunch and then have dinner with my family as normal. Then after my kids have gone to bed then I typically will do about one or two hours of research work or reading.
Choose two of your favorite quotes and write them here
“If it works, it’s obsolete” and “Fear is the mind killer, the little death.”
If you had the power to change just one thing in the world, what would it be?
To remove all of the plastic in the ocean.
Ken’s vision is to make more financial instruments through MELD and make them available for everyone. Through MELD, Ken will be able to make it possible for it’s clients to get access to their cryptocurrency with such services as MELD debit cards. Currently, he lives in Norway from where he continues to head up MELD.
To learn more about Ken Olling and MELD, please visit https://www.meld.com