From PayPal to Ethena Pay: Lito Coen on the Crypto Neobank

0:00Josh Han Welcome back to the content suite in Singapore. Today, we have the go-to market lead at Ethena Pay, Lito. Super excited to be talking to you. Ethena is at a really kind of changing moment, and Ethena Pay is a big product of it. But before we get into that, I would love to learn a little bit more about yourself and how you got into crypto.

0:19Lito Coen Sure. Yeah, I'm Lito. Like I said, GTM lead of Ethena Pay. I got into crypto like nine years ago now. I don't know, like everyone just stumbled on on the ICO craze. Was working at PayPal at the time. Very interested in payments, always have been. And so like crypto just seemed like a natural fit. Have done a bunch of stuff. Have led like GTM for a lot of crypto projects in the space. Was also a founder in crypto. Built like a crypto education platform back in like 2017 to like 2020. Before I then transitioned into like operational world at DeFi projects. But yeah, very passionate about like onboarding people into crypto, which is why I had this like education platform. And so now like leading Ethena Pay go to market was the perfect fit for me because I'm really like onboarding normies to crypto.

1:12Lito Coen At least that's the aim. We're just getting started. But that's what I'm here for.

1:16Josh Han And being able to spend your crypto is really one of the more for consumer use cases of money. Right. Tell me a little bit about what excited you about Ethena Pay and what you guys are currently working on since you've joined.

1:29Lito Coen Yeah. So what excited me about Ethena Pay is really like if you think about it, like short term, right? Like we're going to focus on crypto natives because that's just like the path of resistance. Right. They're the easiest to onboard. They know stablecoins and Ethena. They trust the brand and so on. Long term, like I said, or even medium term, really want to go after like everyone basically, especially like in the developing world. And we can talk more about that later. But basically for crypto natives, I just think it's like a natural fit to use a crypto neobank because I'm a crypto user myself. I've always found it quite like, I don't know, inconvenient to like have these two worlds, right?

2:16Lito Coen Like of like the fiat world and the crypto world that are basically very isolated from one another. And periodically I would have to like off-ramp crypto to fund my everyday life and so on. And it was always like send money to an exchange, like offer and sell the crypto, send it to your bank account. It took a lot of time. And so you only do it very periodically. So you do it for big amounts. So a crypto neobank is like, yeah, much more like logical and seamless because you kind of have your crypto money, your stablecoins sitting in that neobank. And it's just earning, you know, like an interest rate, a reward rate that so you don't have that opportunity cost of, you know, of ramping the money or not.

3:04Lito Coen It's just sitting there earning and then you can like spend with the card when you need to fund like your everyday life transactions.

3:12Josh Han Anywhere that accepts a Visa basically.

3:14Lito Coen Exactly. Any any merchant, there's no compatibility issue. We don't need to educate merchants or something. It just works everywhere where Visa is accepted. And should you need that like dollar liquidity in crypto, it's just a simple withdrawal back to your crypto wallet. Right. Like it's which takes seconds. And because often, you know, people want to be like very quickly in either of the two worlds, either they need to offer them to buy something or they they need to, you know, withdraw to crypto wallet to trade because the market is picking up or something. Right. That that is now a solved problem with crypto neobanks. You can just like, right. Hold it and decide very like in the moment what you want to do with that money.

3:53Josh Han That makes a lot of sense. So really giving the accessibility that you would have money in your bank account, but with your stablecoins or even any type of coin or token. Taking a step back, I'm really interested in this term, neobank, you used it multiple times. You worked at PayPal. How do you describe what a neobank is?

4:12Lito Coen Yeah, yeah. For me, the word neobank really is, you know, if you're trying to do something in finance that requires like a new approach or is utilizing a new technology. So if you remember, like five or six years ago, there was also a wave of neobanks come from the Fintech world, the likes of like Revolut or Wise and so on. They were also neobanks. But now, like they were also, by the way, they were not banks technically speaking, right, because like Revolut didn't have a license back then. Neither did like Wise and so on. They were kind of, you know, using work arounds like E-Money licenses or, you know, renting the banking license of a net like a platform bank.

4:58Lito Coen And so like we use the word like crypto neobank to describe that we're basically doing something that is powered by a new technology that's like, let's say revolutionary. And yeah, like also we're providing banking services to a crypto audience. And whether that's a card or these like virtual bank accounts that allow our users to make bank transfers to anywhere in the world. So yeah, for these reasons, we call it a crypto neobank. I think the term is also kind of accepted by the industry to describe what we and like competitors are doing.

5:37Josh Han And I think that feature set of being able to send money through a bank, wire transfers, actually gigantic. It's something that you would have to work with an exchange and off-ramp, right? Is that current feature set live in Ethena Pay? I know it's only been live for a very short period of time. If you could tell users a little bit more about kind of what is the core feature set that you want available in Ethena Pay?

6:00Lito Coen Yeah, totally. So yeah, we're live as of like a month ago or something. We have around 1000 users that are using the app today and we have around like 12,000 on the wait list. So right now we have actually the problem that we have too much demand versus like what we can handle because something that we realized we kind of already knew it, but we realized that even more once we put the product out there, it's like, it's a different beast than doing a DeFi product. It scales very differently. You have a lot more like ops involved and so we're training our ops engine right now with all these like users coming in, getting up to speed and hopefully onboarding users more quickly in the coming weeks.

6:47Lito Coen The feature set that's available right now is basically very basic, but also very powerful because if you think about it, what users really want from a financial app is like saving, spending and sending, right? Saving, spending and sending and everything else is sort of nice and good to have, especially if you want to become like a super app or something, but like really at the core, people want to earn on their money and they want to be able to spend it and they want to be able to send it to a friend to settle a peer-to-peer transaction, like a dinner that someone paid or something. So you can do that. You can settle via like crypto or fiat in our case. And then the earn piece is obviously our bread and butter, right? That's what the Ethena is known for. We have this digital dollar called USDe.

7:41Lito Coen This produces like a yield engine attached to it. It produces like a reward rate. And so when users have dollars in their Ethena Pay wallet, they automatically get this earn rate. So they get a daily reward paid out into their account. And there's no like need to put this into like an earn vault or any like extra service, just like automatically you deposit and you earn on it. And then the other piece is like the card, which is a virtual card that you add to Apple Pay, like we discussed earlier, you can spend at like any merchant in the world via the Visa network. And you get a cashback on it, which is currently 5% for up to 5%. And then, yeah, I think that's it.

8:32Josh Han The ability to basically send money that earns interest as well is very nice, right? By default. I think that ability to not have to sign contract in order to get the yield is actually gigantic. I've had moments myself where I'm in a vault, but I have money in my account. But because it's not outside of the vault, I can't use it. So I think Ethena having this earn feature by native default Can you tell us a little bit about what's been surprising as a go-to market lead of like things that you didn't expect working with so many countries

9:05Lito Coen I realized, like, a lot of things through this launch, it was super insightful. I think, like I said, like, the difficulty of ops in such a product, which touches a lot of like, regulated banking financials. Yeah, exactly. So like, for example, we have like, we don't do like any banking services ourselves, but we're working with partners and obviously, wherever such a product or services involved, there's KYC needed. So imagine just KYC, right? Like, which in DeFi is not a concept, right? You just connect with your wallet to a website, and you just transfer funds, and it's all smart contracts. There's no human touchpoint, right? But like, the moment you introduce KYC, there's a lot of friction, because, you know, especially if you do KYC in, you know, 50 different countries, right?

10:01Lito Coen Like, the documents that users receive, like the ID documents are different, right? Like, the, for example, for proof of address, you need like a bank statement or utility bill or something like, you know, there's probably 100 utility providers in each country, so multiply that times 50. Right. And like, you know, the KYC needs to recognize those documents and need to make, needs to make sure that they're real, right? Obviously, we're also in the age of like, AI and so on. So, you know, if you need to make sure that this is not like a forged document, so users come to you and they're like, you know, I, you know, uploaded the wrong document or, you know, like, I need to change my email address or, you know, like, and these are all like, you know, I lost my iPhone and whatever it is, right? Like, and it all requires like human intervention. And so, obviously, yeah, something that you need to like, learn and get up to speed.

11:04Lito Coen So, this was pretty interesting. Then, like, I also underestimated how much users care about like, localization. You know, you'd think sort of, especially this, like, internet native generation is super comfortable in English and, you know, putting, doing your product only in English will, will be okay. But, no, like, Brazilians want the app in Portuguese or Brazilian. And, you know, I don't know, like, like someone in the Philippines wants it in their native language and so on. So, it's, yeah, it's a lot of, yeah.

11:46Josh Han I'm curious on that note, you guys are supporting so many different regions, I believe 50 at the moment. What are the ones that are number one or have been surprising big areas of growth for you?

11:56Lito Coen So, from the countries that we currently support, I really like, you know, these areas like Singapore, Hong Kong, UAE, for the reason that they're just like financial hubs. Right. A lot of like.

12:16Josh Han I could imagine big spenders.

12:18Lito Coen Big spenders, exactly. Big, big purchasing power. But also, a lot of like crypto natives and or just like high crypto adoption. So, just the average person in the UAE knows about like crypto and is not like freaked out by it. Right. But then, like I said, also, like, we serve, we can onboard people from most countries in LATAM today. And there's a lot of demand from there, obviously different purchasing power, but very strong demand nevertheless. And just Asia in general is very interesting. Right. I

12:53Josh Han mean, on that note of kind of big spenders, I think there's been some traction on Twitter this week between VIP buses not showing up on time at the airport, concierges, cashback rates. What do you think a crypto audience really needs as like the number one feature or North Star for Ethena Pay did become number one or whoever's going to win in this market?

13:17Lito Coen Good question. Yeah. Yeah. It was funny, this like whole VIP shuttle service, because I saw that, you know, a lot of their power users then complained that, you know, they didn't get right. They didn't get picked up maybe because they didn't have a big Twitter account or something, but they had spent enormous amounts on this app. And so, I thought this was quite like telling because I had just this hunch when I had seen this promotion that like it seems more catered towards like, you know, looking good on socials than, you know, actually being like useful for the majority of your users. Right. Like we just made it like free first Grab ride for everyone, right? Not for VIPs or anyone like really just for everyone.

14:10Lito Coen And our users loved it. We're probably going to extend it for longer because they loved it so much. And also it was like much less friction because you don't need to coordinate. You pick up with anyone, right? You just like exit the airport and you jump in the first Grab. So, I think this is kind of like telling for like the different approaches here. Like we don't want to do stuff just for like the headlines or something. We want to like create real utility for all our users, wherever they are in the world. And honestly, I think really what people care about is like transparency, right? Like we don't hide stuff in our terms of services regarding, for example, custody of users’ funds. or something, right?

14:56Lito Coen Or like cashback limits or like, you know, the, I don't know, the reward rate or something. We really want to, I think this is what I think this is what Ethena is known for. We want to be transparent and trusted and do a very good job at the stuff that we do and that we offer via the app and not start like branching out in a million different things that we do poorly, basically. That doesn't mean we're not going to branch out, but we're going to do that at the right time. Because as I said before, I think the users care the most about these core services, like earning, spending and sending and make these things work really well as the prime focus. Nice. I

15:37Josh Han Taking a step back regarding Ethena, you can see how they're going towards more products. First question on this note is like, how might the success of Ethena Pay help the Ethena ecosystem, or maybe even ENA token holders? Yeah, I mean, the

15:58Lito Coen instrument that people hold within the Ethena Pay app is USDe and that's what enables this reward rate that people get natively and daily. And so obviously, like the more people sign up to Ethena Pay, the more dollars they hold in their Ethena Pay account, the larger our AUM grows and that's kind of like North Star KPI for Ethena as a whole. We also are introducing these tiers, right? There's like a standard tier and then standard, obviously, like free as the name implies and then pro and VIP. And those will require locking some amount of ENA to obtain the tier. And so this is sort of like a demand thing for the token and already is massive demand from like all the people that are using the product and those on the waitlist to actually get onto these tiers. And so we think we'll be seeing some interesting numbers there. Very cool.

17:08Josh Han It'll be a nice physical metal representation of how much ENA you hold.

17:12Lito Coen Exactly, exactly. Totally. Yeah, exactly. And the thing is, like a lot of people, especially people who already hold ENA, so it's kind of like just giving some utility to the asset that they already hold and obviously others will need to buy it. But that's one thing. And then also what I'm really interested in, more long term instead of on top of just like growing AUM and creating a demand thing for ENA, I think being able to distribute other products to users directly, right? Like imagine we launch new products, new assets, right? Like I'm just speculating here, right? Let's say, you know, tokenized currencies of like other countries or gold or whatever, right?

18:01Lito Coen Stocks, whatever the product is, we now can like distribute it to users directly without like doing deals with third parties, right? So that's one thing. And then also selling other services to our user base, whether that's like DeFi products like credit, tokenized stocks or stuff like that, but also off-chain services like, you know, travel booking, eSIMs, commerce, like whatever people really do. Because once you're close to the user's wallet or money, you can really like, it's a very short step away from selling them all kinds of services.

18:43Josh Han Right. And there's so much benefits of just becoming in this Ethena ecosystem, being related to all these other card issuers. So that makes a lot of sense. As we wrap up, I'm curious, there's so many products that Ethena is launching, I think within the last two weeks or even a month, if the Ethena Pay has launched, you guys have stopped doing you know, emissions, I believe on the core protocol, you're gonna start doing more institutional things and I think pairs for things and I think pairs for equity. equity. Do you want to talk on any of that? What excites you the most? Obviously, obviously Ethena Pay, but if you give us a bigger structure update about structure update about Ethena you know, that would be that would be amazing.

19:19Lito Coen amazing. Yeah, totally. So I So I mean, there's so much mean, there's so much So I mean, there's so much happening within the company at any given point since you know, since since I've been there, that it's very hard for me to follow really what's happening outside of just Ethena Pay because I'm so you know, busy with Ethena Pay. But you know, obviously, then I see some of the like launches on Twitter almost like just like everyone else, because I was so out of the loop. But I But I think the most exciting think the most exciting thing, like short term is, you know, entering the equity based trade, right? So the crypto basis trade being this strategy that you know, he's started with and that produced these very interesting numbers in the past few years, but that was limited to only crypto, like essentially lending to people that are long crypto. And now with equity perps becoming very big, and you know, almost flipping crypto and it's only a matter of time until they they actually flip crypto and I'll go by a couple of order of magnitudes. We're gonna like start lending to people who are long stocks. And that's a much bigger market and much more sort of less cyclical.

20:36Lito Coen And so the benefit from me as an GTM leader of Ethena Pay is that we're going to have like, it's going to reflect in the earn rate that users get with an Ethena Pay, which is going to get more people interested in Ethena Pay and going to get us more users. And it's very hard for other neo banks or even other DeFi protocols to replicate the what we've got going right, because there's a massive infrastructure that we've built here that we've built over three years, there's a lot of like bilateral agreements with exchanges and stock issues and so on that no one can reproduce this one to one. So yeah, very defensible.

21:17Josh Han Yeah, it's definitely using this moat and not only helping people within the Ethena ecosystem get more yield, but really anyone who wants to get leverage on stocks now, this is going to be the best venue to trade. That's fantastic. As we wrap up, Lito, I would love for you to be able to talk about any updates on your side, things that we haven't mentioned, feel free to talk to the camera, if there's anything else, or if you want to wrap up by talking about maybe your socials and where people can find updates about Ethena Pay. Yeah,

21:47Lito Coen please. Yeah, I mean, I think we're going to have a couple of nice announcements specific to Ethena Pay in the next two to three weeks maximum. And honestly, it's going to be pretty much every week after that, because there's a lot in the pipeline, whether that's like, you know, enabling the features like, you know, locking in to upgrade your tier and have high cashback limits, or new country support, or, you know, a new DeFi integration that we're building at the moment, which people are going to absolutely love. I think that's the first time, yeah, that we're going to really be building something that no one else

22:27Josh Han has. Very cool. And

22:29Lito Coen yeah, I think best is to just like, follow me on my socials, Lito Coen on Twitter. And I'm tweeting about Ethena Pay daily, so you can miss it if you follow me.

22:42Josh Han Nice. Well, thank you very much for listening and joining. We are now signing off from Singapore. Thank you very much, Lito, for your time. Appreciate you.