Going Ape: Siam Commercial Bank ventures into DeFi

Thailand’s Siam Commercial Bank is backing a startup, Ape Board, that has designed a dashboard to allow investors in decentralized finance (DeFi) enjoy an aggregated view of their portfolio.

“In the future we want to integrate traditional finance and DeFi,” said Mukaya Tai Panich, chief investment officer at SCB 10X, the bank’s corporate venture arm. “Right now, we see the same needs in DeFi as in ‘TradFi’.”

Ape Board was co-founded by Mike Phulsuksombati as a project while he worked as a developer at SCB 10X. Previously he was part of the product development team at SCB’s retail banking business.

At SCB 10X, the team was encouraged to use various DeFi protocols, to familiarize themselves with blockchain-based finance. That experience was interesting, but also troublesome, with clunky user interfaces and a lack of communication among decentralized apps and or chains.

“There’s no way to view your entire portfolio, especially if you want to operate cross-chain,” Phulsuksombati told DigFin. A user with assets in apps ranging from lending to investing to rewards can’t keep track of it all; Phulsuksombati found himself spending a lot of time each day on Excel spreadsheets to monitor his activities.

Going Ape

Ape Board is a simple portfolio tracker, but by aggregating one’s holdings, a user can operate in a more sophisticated manner. “This lets people apply the kind of trade and risk-management tools you find in TradFi,” he said. It makes it easier for users to trade derivatives and other tools to mitigate risk and manage liquidity.

The startup’s name winks at a common meme in the cryptoverse: the nonchalant, even disaffected ape that doesn’t worry too much and just invests aggressively. “The ape is relaxed,” Phulsuksombati said.

(A series of digital cartoon ape images such as the one above recently went, well, bananas in the NFT world, with one selling for $70 million. But DigFin digresses…)

Ape Board is designed to support blockchain interoperability, rather than tie itself to a particular one. It currently supports 79 DeFi protocols on five blockchains: Ethereum, Binance Smart Chain (BSC), Polygon, Solana, and Terra (in which SCB 10X is also an investor––see below).

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However, Phulsuksombati says Ape Board is more targeted at relatively newer blockchains such as BSC and Solana. This differentiates it from other portfolio-aggregators out there, such as Zeroin, Zapper, and DBank.

Zeroin is the oldest of the portfolio trackers for DeFi, with initial funding back in 2016 and a product live in 2019. From January to July 2021, it processed more than $600 million in transaction volumes for over 200,000 users, according to an article on Medium by Stakingbits (which has more detail on these trackers).

Zapper launched in 2020 and is similar, although it is a desktop-only service. Zeroin and Zapper are focused on Ethereum-run apps. Ethereum is the most popular blockchain for DeFi developers, and it has the most activity and users – but its proof-of-work consensus mechanism is slow and expensive.

In contrast, Ape Board launched as a multi-chain offering from the start, with the goal of capturing users keen to use the new, faster breed of chains. In this it is similar to another competitor, DeBank, launched by a Chinese team. A fifth player, FarmFolio, has launched only covering BSC and Polygon users, and excluding Ethereum altogether. More trackers are on the development board.

Ape Board went live in April. It has now over 20,000 users in Thailand, and is beginning to attract users in Argentina and Brazil. Phulsuksombati declined to specify volumes transacted. Like most (but not all) of its competitors, Ape is a free service, but will begin to charge fees for value-added services as it rolls these out, such as helping users consolidate multiple cryptocurrency transactions (essentially a netting service) and yield-farming products that offer compounding interest.

Banks and DeFi

What’s most interesting about Ape is, of course, that it was created out of a commercial bank.

Nor is this SCB’s first foray into DeFi. Its 10X arm has also backed Alpha, a leveraged credit app, and Anchor Protocol, built on the Terra blockchain to provide fixed interest rate products. 

“Stable interest rates are the biggest part of TradFi capital markets,” said Panich. “This is the equivalent to what SCB does.”

SCB 10X has a $50 million fund dedicated to DeFi. She says SCB 10X is investing along two themes.

First is DeFi projects that mirror what a commercial bank does in the traditional world. “We want to learn how they do it and see if it’s something we can integrate,” she said.

Second is infrastructure that make DeFi work better. One project is a cross-chain messaging service so users can exchange information or tokens across them. She likens today’s DeFi world to the Internet in the early 1990s when it was nothing but a series of intranets run by companies, universities, and governments. The advent of the World Wide Web enabled “the Internet”, the rest is history, etc.

Her team is also about to invest in a protocol to audit smart contracts on an ongoing basis, so that security holes or other bugs that developers missed can be identified in the ongoing use of dApps.

Ape Board is part of this attempt to bring some interoperability to DeFi. Panich says by supporting new blockchains, Ape is giving app developers extra support. “We can become an enabler,” she said.

She adds that DeFi can use the backing of traditional banks. DeFi developers are innovating ways to cut out intermediaries from a swathe of financial actions, such as lending, payments, and investing, with smart contracts replacing banks.

“But TradFi is good at customer interfaces,” she said, noting that in the world of blockchain, with its immutable records, there is no call center, no place to complain or seek help. And the user experience on DeFi apps is cumbersome and convoluted – which makes it unable to scale to a mass market.

“Banks can focus on the front end and use DeFi software layers to automate everything else,” Panich said. “If banks can partner with DeFi, we have a good future.”