Plutus, a DeFi start-up that is pioneering the crypto card sector has secured a $5 million funding from a prominent crypto fund, Alphabit. As one of the only working cards within the DeFi niche, the funding could be the catalyst for a huge uptick for the company, something the community is well-aware of given the 104% leap in token value following the announcement.
Current Card Market
Since the 2017 bull run, the crypto card market has become increasingly more saturated, with high-level companies such as Binance and Coinbase releasing their own branded Debit Cards. However, there is little to nothing separating the top 10 crypto cards on the market other than branding – no differentiating factors; no USP’s.
All combine these three aspects - a wallet, exchange, and card. These products blended together allow crypto to be quickly exchanged into a fiat balance that is spendable at everyday retailers.
One noticeable concern that is consistent across the board is the centralised nature of crypto cards. Users must leave their crypto in the company’s custody so that the company can quickly action the conversions from crypto to fiat on behalf of the user. Given the history of Bitcoin and the concept of becoming your own bank with no 3rd party custodians, centralised crypto cards are highly contradictory to the values of self-custody in crypto.
What Is A DeFi Card?
This is where Plutus has separated itself from the pack. As a DeFi Card, Plutus allows you to connect any decentralised wallet of your choice meaning you maintain possession of the private keys and full ownership of the crypto.
The concept was first released in a blog post by its founder, Danial Daychopan in 2015, it also uses a decentralised exchange (DEX) instead of a centralised exchange like competitors meaning the crypto-to-fiat conversion is done without any 3rd party touching your crypto assets. These make it exponentially more secure than competitors and stays a lot closer aligned to the values of crypto.
This is the card for real crypto enthusiasts, and having developed a range of traditional neo-banking features for the accompanying app; Plutus can also open its doors up to the traditional markets and rival the likes of Revolut or Monzo.
In light of their upcoming product release announced by its founder Danial Daychopan, Alphabit increased its earlier stake to contribute towards an all-in-one crypto wallet that includes both Ethereum and Bitcoin which could rival the likes of MetaMask.
What Challenges Does Plutus Face?
Building DeFi products is far more challenging than developing a CeFi product. Plutus was developing the Plutus Card since 2016 and launched the most recent edition in late 2019. During this period, centralised competitors rose through the ranks and garnered much of the market share.
Cryptocom, for example, has acquired over 10 million customers; similarly, Wirex has acquired upwards of 3 million. Plutus, on the other hand, is currently standing at 35,000 customers which is just a fraction of competitors.
However, they have a fully working product and some really strong USP’s that distinguishes them from the rest of the market which shows that the upside potential is there. This is one of the core reasons Alphabit has undergone such a heavy investment in the low-cap token.
"The strategic investment in Pluton comes on the heels of its native token, PLU, almost doubling its market cap in the last three months," said Alphabit CEO, Liam Robertson. "With clear product-market fit, we have tremendous confidence that Plutus will be one of the key competitors in the race to own the retail crypto markets."
With funding allocated to acquisition and a focus on international expansion, it won’t take long to find out if Plutus could be the next player across the finance app and crypto card sector.