Custody
Neo-banks, despite their modern interfaces and improved customer service, still suffer from a fundamental downside: they hold custody over the funds they manage on behalf of users. This centralised custody necessitates extensive regulations to ensure that user funds are protected, and while many of these rules are reasonable, they stem from the inherent risks associated with centralised control of assets.
Traditional banks and neo-banks are required to follow a myriad of regulations designed to protect user funds. These regulations are essential because users have limited visibility into how their funds are managed. The risk of theft, misappropriation, or mismanagement by the bank necessitates strict oversight and controls. This regulatory burden contributes to the high costs of banking services, often making them inaccessible to low-income individuals around the world.
Crypto offers a revolutionary solution to the custody problem by decentralising it. In the crypto world, custody is handled by the blockchain itself. This means:
Transparency and Trust: The blockchain provides a transparent ledger where all transactions are recorded and can be verified by anyone. This eliminates the need for users to trust a centralised entity with their funds.
Reduced Regulatory Overhead: Because the blockchain handles custody in a decentralised manner, many of the regulations designed to protect users from centralised mismanagement are no longer necessary. This significantly reduces the overhead costs associated with traditional banking.
Global Accessibility: By reducing the need for heavy regulatory compliance and centralised control, decentralised custody makes financial services more accessible to people around the world, particularly those in low-income regions who are often excluded from the traditional banking system.
However, decentralisation alone does not address all user needs. While crypto has achieved decentralised custody, the lack of user-friendly services has hindered widespread adoption. Users still require the ease of use, customer support, and additional services that traditional banks provide.
Glue aims to bridge this gap by combining the best of both worlds:
Decentralised Custody: Ensuring that the security and transparency of user funds are maintained by the blockchain and DeFi protocols.
Comprehensive Services: Offering the same level of customer support, financial advisory, and insurance services that users expect from traditional banks.
By leveraging the decentralised nature of blockchain for custody while providing a suite of user-friendly services, Glue seeks to create a financial ecosystem that is secure, efficient, and accessible to all. This approach not only solves the issues inherent in traditional banking but also addresses the shortcomings of existing crypto solutions, paving the way for broader adoption and a more inclusive financial system.
User Flexibility
Glue offers users the flexibility to select services a la carte, making it more efficient than traditional finance where services are often bundled with custody. If a user is dissatisfied with their current customer support, they can easily switch to a better provider. Should a user decide to opt out of a service entirely, they can do so on chain without the hassle of contacting the provider directly.
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