After selling the crypto investing app he developed to MyCrypto, Jai Bhavnani has turned his focus to building applications that will power the future of decentralized finance.
We sat down with Jai to hear more about the vision for his latest venture, Rari Capital, a yield aggregator pursuing a "DeFi Manifest Destiny of sorts."
What was the journey that led you to founding Rari Capital?
Most people are coming to crypto to make money. Whether that’s healthy or sustainable is beyond the point, but that is a fact. Prior to Rari Capital, I built a mobile wallet, Ambo (acquired by MyCrypto), that enabled people to easily speculate on various assets.
One thing I learned was that people were really bad at speculation and ended up losing money frequently. With the advent of DeFi, we understood we could empower people to earn without taking on the price risks of traditional investments. It was this goal we wanted to deliver on: in a world with so many problems, how do we enable the most amount of people to earn the most yield without asset price risk? That’s what drives us.
If you were speaking to someone new to crypto, how would you explain what Rari Capital does?
I think the easiest comparison is to a traditional bank. Clients deposit money into their given bank, and the bank lends it out to other people. These banks earn their customers something like 0.04% return on their USD, with inflation they’re actually losing money!
At Rari Capital, we play a similar role that the bank does in enabling users to lend out their money and earn interest. We do this by allocating our users deposits and trustlessly deploying it to where they will earn the highest return. The entire platform is completely open and controlled by the $RGT token holders, enabling them to upgrade the platform and take it to the next level. They’ve helped drive returns of over 20% annualized to our depositors over the last year.
The yield farming space is heating up (some might say getting a little crowded), how does Rari plan to add value to the space and find its competitive edge?
I think that one revelation we had over the past year is that the yield aggregator is not a product; it is a tool. Going alongside this notion, Rari plans to differentiate by treating it as such and:
1) Use the aggregator to seed our own products (enabling even higher yields via unique strategies)
2) Controlling the entire stack (capital onboarding to capital organization to capital deployment; currently Coinbase to Rari Capital to Compound)
Not only will this help kickstart various projects, but it will enable our yield aggregator to bypass the limitations that many of our (traditionally thought of as) competitors suffer.
Where do you think DeFi is in terms of adoption and maturity right now, and where will we be in a year or two?
I think DeFi is like the internet in the ‘90s. It is still very early in terms of usage, it is promising technology but we’re just rebuilding stuff that is already built. Early in the internet, people copied the things they already had: magazines, pictures, etc. It took decades for us to discover really new applications of the internet: social media, streaming, etc. I think that DeFi is feeling the exact same pains but I am excited for the future where we start experimenting with more truly creative ideas to a much larger audience. Given the speed of DeFi, this will likely come sooner than later. In a year from now, I think and hope we will start to see truly unique and novel products instead of just pointless forks.
How will Rari play a part in this future?
Rari will be the best place to deploy any idle assets, both on and off the chain while working to develop truly novel products everyday.