decrypt.co
In an era where "high yield" savings accounts pay a paltry 0.5% or less, some people who put their money in decentralized finance (DeFi) products have been earning fat returns that can reach double digitals. But the reality is that popular DeFi platforms like Compound and Uniswap require a level of technical knowledge that is outside the average investor's comfort zone.
That's a problem that a new app called Seashell is aiming to solve. Seashell claims it will let investors earn DeFi-style yields of up to 10% while providing an interface that resembles traditional banking or brokerage products.
Seashell came out of stealth on Thursday, announcing it has raised a $6 million seed round from a list of blue-chip backers, including include Mark Cuban, Coinbase Ventures, Robinhood founder Vlad Tenev, former CFTC Chairman Christopher Giancarlo (aka “CryptoDad”) as well as the founders of Solana and Polygon.
In an interview with Decrypt, founder and CEO Daryl Hok billed Seashell as an "inflation resistant" savings tool—a description that is likely to appeal to savers who are facing eye-watering rises in the consumer price index, including a December figure December figure of 7%.
Hok describes Seashell—whose name is inspired by early cultures that used shells as payments—as blockchain-agnostic. "We take the best of yields from across the board and make it easy," he said.
Seashell is not the first crypto startup to offer DeFi-style returns to non-technical investors. BlockFi, founded in 2017, has plastered ads across the country promising returns as high as 9% on Bitcoin and other cryptocurrencies on an easy-to-use platform.
But BlockFi has landed in a world of trouble, with multiple state regulators accusing the company of violating securities laws. Meanwhile, Coinbase announced it would offer a relatively modest 4% return on stablecoins but then backed down in response to pressure from the SEC.
So how will Seashell avoid similar problems? The answer is that, for now, the company will only make its saving products available to accredited investors—a legal term that the SEC defines as anyone who makes $200,000 (or $300,000 with their spouse) or has a joint net worth of $1 million.
According to Hok, Seashell is playing a long game, perfecting its product and staying on the right side of regulators until the legal climate makes it easier to offer crypto products to everyday investors.
Hok adds that, unlike Coinbase and BlockFi, Seashell's initial legal structure is set up to ensure it doesn't trip over securities laws. That setup involves creating funds that pay out interest in the form of dividends.
The long-term plan also includes offering its services to merchants, letting them receive payments from Seashell users. This model has been highly successful for Block (formerly Square), which has created a two-sided business catering to both consumers and investors.
Hok says Seashell will be more appealing to businesses since it does not plan to charge any fees to use its services.
All of this sounds ambitious, especially for a startup in an extremely crowded crypto and payments market.
But Seashell is nonetheless worth watching given its roster of influential investors, as well as its team. In addition to Hok, who served as COO of blockchain security firm CertiK, Seashell's founding team includes veterans of Google, Robinhood, Klarna, Snap and NerdWallet.
Seashell is currently accepting customers for its waitlist and expects to go live in the near future.