Phree is a decentralized finance (DeFi) trading platform that offers a dedicated and compliant DeFi ecosystem as a service for financial institutions and regulatory compliant DeFi globally.
The platform is working to bridge the gap between centralized and decentralized finance with permissionless and transparent solutions that accelerate the financial freedom of consumers globally.
What Is Phree?
DeFi has opened the vision of a new financial system that accompanies the blockchain space. It’s an aspirational dream for all blockchain users across the world to be able to operate seamlessly with the legacy financial system.
It’s the first time in history that a financial system is developing without intermediaries at a large scale. The disruptive financial technology aims to disintermediate outdated systems that stifle capital liquidity and access, delivering better value to consumers and solving friction for the underserved, underbanked, and the unbanked.
Moreover, as DeFi is digital, it is available 24/7 from anywhere with an internet connection. It eliminates the need to trade when markets are open or to conduct business during banking hours.
In this way DeFi is more accessible to those who want to trade during off hours or those who live in a time zone where traditional banking hours are inconvenient.
The New Financial System
DeFi can have a substantial impact on how banks function in the future and even can shift the structure of the whole financial system.
However, its explosive growth potential past the tipping point of early crypto adoption and into mainstream finance will be limited if current structural issues such as risk controls, security, systematic fraud, lack of KYC/AML, price manipulation, and scale are not addressed.
Some of the major structure hurdles in compliance and security that are limiting DeFi’s potential can be listed as high leverage liquidity mismatch, price manipulation, and fraud, lack of risk disclosure, non-compliant algorithmic stablecoins, and lack of KYC/ AML policies, or lack of risk controls.
Based on the core principle of ‘decentralized as possible, compliant where necessary’, Phree and its Swiss licensed asset manager phreeFi are working to serve financial institutions by building permissionless and transparent businesses targeting an addressable market of 5 billion people and $200+ trillion in assets.
What Solutions Does Phree Offer?
Unlike competing platforms, Phree looks to find a unique position to add value.
- The platform is to build solutions in a compliant environment. However, the much larger opportunity (possibly 80%) lies within TradFi organizations that are interested in building DeFi solutions that stay within the necessary regulations.
- This is known as “reverse decentralization”, and there are indications this will be a significant trend in the immediate future. Phree has the tools, relationships, and roadmap to directly address this opportunity.
- TradFi is a term encompassing technologies, user preferences, and procedures. In contrast to TradFi, where centralized procedures facilitate compliance and economies of scale.
- DeFi protocols create a decentralized ecosystem that are built, maintained, and governed, with more efficiency.
- While TradFi mostly relies on private databases and Web 2.0 applications and brick-and-mortar branches, DeFi is making financial services available to everyone.
- DeFi users can access simple payment solutions, and public, open, decentralized blockchains also make more complex financial services available to all.
- Unregulated DeFi is currently limited in its adoption. Although DeFi has proven successful in bringing greater efficiencies to modern finance, there are some issues.
- The markets are exposed to cybercrime, scams, and market manipulation. Also market and liquidity risks, such as fraud of USD7.7 billion of digital assets were lost through cybercrime in 2021, an 81% increase from 2020.
- There are no legally recognized, centralized entries that can be held responsible for smart contract problems such as a mistake in the code.
- The system is ripe for shadow banking to flourish, consisting of lenders, brokers and other intermediaries that fall outside the realm of regulated platforms.
- It’s easy to see that the lack of protection will hinder DeFi adoption as most consumers and FIs are not willing to put all their trust in blockchain technology to safeguard their money until such services are brought into the scope of regulations.
Addressing the Problems
Phree’s position is to go on the offensive and lead the market with a compliant and permissioned DeFi ecosystem.
With an experienced team in traditional finance and regulated crypto, supported by leading partners such as Web3 Foundation, Parity Technologies, PwC Switzerland, and Mastercard APAC, the Phree ecosystem integrates the best of DeFi features and CeFi compliance to provide permissionless and transparent business models.
The solutions it offers includes independent KYB, and ongoing compliance; tools to build with speed and scale; utility token and white label regulated stablecoin; Licensed DeFi Asset Manager with institutional product offering; the flexibility to issue interoperable tokens and products; and consumers benefit from greater access and better rates.
In addition, the core of ‘decentralized as possible, compliant where necessary’ also optimizes outcomes for all stakeholders. KYC/AML of partner wallets, monitoring sanctions screening.
There is a regulated Swiss Franc stablecoin for B2B counterparties as well. Capital buffets and chain treasury management were created to help withstand ecosystem shocks. Lastly, data protection and prevention of market manipulation is a part of the solution.
Not only that, but the Phree ecosystem also solves systemic economic imbalances and unlocks significant trapped value for all stakeholders.
$PHRE is the native token of the Phree ecosystem, which involves all on-chain transactions. The token is used to stake and secure delegated Proof-of-Stake. It is also a unit of account for treasury and liquidity reserve.
Users are able to earn block rewards and transaction fees in PHRE. On the other hand, chain partners leverage tokens to build their own tokenomics and liquidity.
Any individual, as a validator or by delegating their PHRE to a validator for a fixed term, can buy and stake PHRE tokens. The individual receives a staking reward for securing the chain at the end of the fixed term.
There is a maximum of 1 billion PHRE tokens to be minted.
The allocation is as follows:
- Public Sale & Community Management – 7%
- Service Providers, Advisors & Directors – 9.5%
- Accredited & Institutional Investors – 19%
- Annual Performance Pool, Staff, Founders – 27%
- Treasury, Liquidity Reserve & Chain Development – 38%
In addition, there’s also PHRF Stablecoin, which is B2B Stablecoin with Phree ecosystem partners. In that, transactions are supported by a regulated B2B stablecoin with auditable high-quality liquid assets (HQLA).
The stablecoin is issued on request from partner FIs & DeFi protocols in exchange for fiat, which is deployed in custody with a high-quality liquid asset such as HQLA, or Gov Bonds.
How Do Transactions Work?
Transactions are issued on request from partners; FIs & DeFis in exchange for fiat. Fiat deployed in custody with short-term low-risk assets like Gov Bond.
Partner FIs/DeFis transact with counterparties for real-time settlement and lower fees; e.g. credit cards, and P2P remittance.
Then, PHRF converts back to local fiat on request via local brokerages. Finally, redemption back to fiat on request with liquidity provided by the custodian.
What Makes Phree Special?
Backed by very talented co-founders, team, and advisors, Phree has successfully partnered with Web3 Foundation/Parity Technologies to develop the platform so far.
Switzerland has long been known as a Global Banking Powerhouse for traditional services in finance, the nation has been a leader from many standpoints.
In the next phase of the financial era, they keep attracting major banking while evolving to a more legitimate global position in DeFi space.
Therefore, by positively engaging with Swiss regulators for licensing, Phree also proves it safer than other financial platforms in the market.
The achievement of MOU with Mastercard Asia for distribution of innovative payment solutions in Phase 2 also would change the infrastructure of retail as well as encourage other companies to jump on the trend.
Phree: The Platform of DeFi’s Future
DeFi is primed to outperform the traditional finance system in the future. However, there are a lot of things to address before this happens.
Phree’s philosophy and approach to finding how to bridge Defi elements toward the regulations that TradFi has found successful for many years. It is also the future of DeFi.