Hey Tribers,

You are undoubtedly watching the chaos unfolding in crypto markets — we are as well. Tribal’s core team is full of long-time crypto enthusiasts and builders, and we share your frustrations about the direction that this industry has gone. The core promise of blockchain was to bring radical transparency and simplicity to people’s financial lives through decentralization. Instead, actors like Terraform, Celsius, 3AC, and FTX opted for opacity and mind-numbing complexity in their products, building houses of cards that ultimately came tumbling down, leaving ordinary people holding the bag.

At Tribal, we are committed to doing things differently. We believe in the power of blockchain to revolutionize financial services, especially in emerging markets. But we believe that crypto products are only worth building if they are simultaneously useful for real people and transparent and accountable. Every step in building the Tribal ecosystem so far has been focused on solving real-world problems:

• As you may know, Tribal launched its partnership with KuCoin (including the listing of the Tribal utility token) in order to pilot Boomerang Rewards, the first token-based rewards program for emerging market businesses. Using KuCoin’s wallet technology, Tribal Credit has already onboarded the first Boomerang Rewards participants, with plans to continue onboarding customers into the Tribal ecosystem in the coming months.
• Additionally, Tribal Credit has a 20 million Stellar USDC credit line from the Stellar Development Foundation, meaning that Tribal’s non-crypto-native enterprises are already accessing credit lines funded by digital assets.

If you’re active in our community, you have already heard about the DeFi Mullet (“fintech in the front, DeFi in the back”), which is integral to our building philosophy. Proposed by Ryan Sean Adams from Bankless, the “DeFi mullet” model suggests that fintechs can build a superior user experience on top of DeFi protocols, similarly to how many fintechs have built smooth UXs on top of crusty legacy payment rails. If successful, a DeFi mullet model bring about a more inclusive financial system, allowing even non-crypto-native individuals to be onboarded.

But in the wake of the CeFi implosion, there are obvious questions about the “DeFi mullet” model: namely, how would a DeFi mullet mitigate the risks of centralization?

Basically, our current thinking on this issue is this: Especially in the early days of building, some centralization might be helpful to optimize UX and unlock real-world use cases. BUT wherever centralization is deemed necessary, it should be accompanied by radical, on-chain transparency and accountability. On the transparency front, centralized actors should be made to prove their good behavior (see e.g., CZ’s suggestion that crypto exchanges do proof-of-reserves). But even more importantly, any centralized actors should be held strictly accountable to decentralized governance processes, ideally through on-chain bonds, subject to slashing or confiscation in the event of abuse. As the Celsius case shows, relying on bankruptcy proceedings to sort things out is not enough: on-chain accountability is the best way to keep people honest.

Last point, we are so grateful for all members of the Tribe, especially during this moment of frustration. Together, we’re leveraging blockchain to create real impact for real people, and that makes this all worthwhile. If you haven’t already, join the conversation in our Telegram and Discord channels. The crypto world needs a new vision for building, and together, we can deliver that.

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DISCLAIMER: The views and opinions expressed herein are those of the speakers and do not necessarily reflect the views or positions of any entities they represent. The information provided in this newsletter does not constitute investment advice, financial advice, trading advice, or any other sort of advice, and you should not treat any of the newsletter’s content as such. Do conduct your due diligence and consult your financial advisor before making any investment decisions.