The founder of the ecosystem in an interview with topplabs.org – about the complexities of developing a non-custodian service, interaction with regulators and the prospects for the digital asset industry
– Let's start with the main question that worries users of crypto wallets: how is the security of such services ensured?
– All existing crypto wallets can be divided into two types. The first, more common, is the so-called custody wallets – in simple terms, the developers of these applications have direct access to the private keys from their users' cryptocurrencies. These wallets include, for example, all cryptocurrency exchange applications. In this case, if attackers "hack" the platform, it simultaneously means that they gain access to the accounts and accounts of all its clients.
Another type, to which Savl belongs, or rather a private wallet within Savl, is a non-custodial wallet based on the principle of decentralization. Only users have access to cryptocurrencies, we, as developers, do not. Therefore, if there is a loss of access to the wallet and there is no way to remember the backup recovery codes, it will no longer be possible to return the lost funds. This is the flip side of security and decentralization.
Therefore, the main rule of safe storage of cryptocurrency is to keep it in non-custodial wallets, if necessary, transfer some of it to custodians for transactions and vice versa. That is why there are both types of wallets within Savl – a private wallet, which only the user has access to, the most reliable one, as well as a market wallet on our platform for p2p trading.
– The second most popular topic is the legality of using crypto wallets in Russia. In particular, I am concerned about the issue of protecting funds from a legal point of view.
– This year, the law "On digital financial assets" came into force, which outlined the regulations for cryptography in the Russian Federation. In Russia, a ban has been introduced on the use of any cryptocurrencies for the purchase of goods and services. In this regard, the ban is no different from the ban on the use of the dollar or euro as a means of payment – you cannot come to the store and buy $ 100 worth of groceries. It's the same with cryptocurrency.
But at the same time, the law does not prohibit the purchase and sale of cryptocurrency on foreign platforms. In fact, the use of cryptocurrency for the purpose of storing funds or speculative transactions is not limited in any way. Again, the closest analogy is foreign currencies, which you are free to use to save your savings. Therefore, you can use crypto wallets completely legally, there is no violation of the law in this.
As for the prospects, let me remind you that quite recently, within the framework of the Russian Energy Week, President Vladimir Putin spoke positively about the status of cryptocurrencies and allowed their use in the future as a means of payment. Therefore, in my opinion, a categorical ban like the Chinese one should not be expected in Russia.
– What is the main difference between Savl and competitors?
– Our main difference is that within one application we have collected all possible tools in order to quickly and conveniently start working with the cryptocurrency market. First of all, this is safe non-custodial storage within a private wallet, support for all coins and tokens that are relevant in the market, the possibility of direct purchase of coins from a bank card, a built-in p2p platform for both buying and selling for national currencies, and exchanging some cryptocurrencies for other. A news aggregator that allows you to be on the information agenda. An encrypted messenger is also built into the application, within which you can carry out direct OTC transactions. Our main difference is that the application is built on the principle of a social network for people involved in the cryptocurrency market.
– Back to history. How was the Savl wallet created? How did you decide to start this business? What difficulties did you have to face?
– I myself came from traditional finance – before founding Savl, I worked at Swiss Credit Suisse. Of course, I heard something from the media about cryptocurrencies, but I was pretty skeptical about them. Around 2016, my friends, deeply immersed in the IT topic, were able to convince me that cryptocurrencies have potential, I began to gradually get involved in this, and after a while I went into this topic with my head. At the same time, I was faced with a situation where I was forced to install a bunch of different applications for active trading in the cryptocurrency market. There was no easy to use integrated tool. In addition, the reliability of existing wallets has raised questions. All these factors prompted me to think that there is a free niche in this market, and we need to give users a convenient, not very “geeky” tool for working with cryptocurrencies.
The biggest challenge was finding like-minded potential developers. Not everyone at that time believed in cryptocurrency as an industry; there were many dubious characters. One and a half years, admittedly, not the easiest ones, it took me to find people who both wanted and had sufficient qualifications to implement such a project. Currently, we have a friendly team of talented developers and like-minded people based in Novosibirsk, which is responsible for the development of the project.
– Savl is officially registered in the EU. What European regulatory requirements does the company comply with? Have you encountered any problems in this regard?
– Legal work in the cryptocurrency market is not the easiest story from a legal point of view. In order to comply with all legal requirements of regulators, we have registered several legal entities in various jurisdictions.
Savl is headquartered in Switzerland. This legal entity owns all rights to the application. To work with users from the countries of the European Union, we have an Estonian company that has all the necessary licenses to work with cryptocurrency in the EU. We have implemented KYC-AML verification, all our trading participants undergo mandatory verification. In addition, we also have a Russian legal entity within which our developers work. The main problem we face is the uncertainty and lack of coordination of regulators on an international scale, which entails a change in the rules of the game, which we have to constantly adjust to.
– How difficult is it to maintain a crypto custody service? Do you need a large team of developers and other employees, how is the workflow going?
– The development team currently consists of 10 people. The development office is in Novosibirsk, a three-person legal team works in Switzerland, and I shuttle between Moscow and them. In general, all parts of this mechanism have already worked well together, so we do not have any serious managerial problems. I will only note that, in general, all members of our team are crypto enthusiasts – we are making a product that we ourselves want to use. This greatly facilitates the setting of tasks.
– How are you going to develop the application in the future? Should users expect new functionality?
– We are working on the application 24/7, every month we expand and refine the functionality. We are now actively working on expanding the list of supported currencies and direct access to decentralized exchanges. Immediately after that, we will begin work on modifying the interface, social interaction between users.
We will move towards a social network, but with a focus on cryptocurrency. Something close already exists in Russia and the UK for active participants in the stock market, but in the field of cryptocurrencies, we will be the first to launch such functionality. In parallel, we are also working on introducing the staking functionality into the application, in fact, this is an analogue of a bank deposit in a cryptocurrency.
– Speaking about the prospects of the crypto market, do you expect some kind of protracted correction in the near future?
– The cryptocurrency market every year more and more resembles the traditional stock market. After each prolonged growth, a correction should follow – this is normal and natural. In the end, it is this moment that is optimal for increasing positions. We observed exactly this phenomenon in May-June of this year, when the rate of bitcoin and other cryptocurrencies fell by 50% and stayed at low levels for about two months. Now we are on a new round of growth, I suppose that it will continue for some time. Leading cryptocurrencies will update all-time highs, after which a correction will most likely occur, perhaps not as deep as last time. When exactly this will happen, I will not undertake to say for sure, perhaps at the beginning of next year.
The likelihood that the correction will last for several years, as it was in 2017-2019, I estimate as low – this is primarily due to the fact that since then the circle of people who consider cryptocurrencies as a natural way has expanded dramatically, by several orders of magnitude. storage of savings. For "millennials" who are actively entering into inheritance rights in the United States and European countries, cryptocurrencies are no less familiar financial instruments than, for example, gold or bonds, so all large drawdowns in the cryptocurrency market are bought off rather quickly. The main risk here is government regulation, but it seems to me that only China of the significant regulators takes an irreconcilable position here, the US and the EU have already come to terms with the new cryptocurrency reality.
– Decentralized services continue to gain popularity. Is DeFi the future of the cryptocurrency market?
The way it is. At the moment, the community is only taking the first steps in this direction, testing the use of dApps (decentralized applications) in various fields – finance, gaming, intellectual property (NFT) and many others.
– What next topic in the field of cryptocurrencies can be extremely promising?
One of the most promising areas today is staking, which is part of DeFi. In fact, this is an analogue of classic bank deposits, but based on cryptocurrency. You can "place" your cryptocurrency in a special service and receive a regular percentage on it, calculated on the value of the annual rate. This technology is becoming especially attractive due to the fact that traditional banks in the EU are gradually moving towards a negative rate on bank deposits.
Another, much more famous story is NFT. Perhaps at the moment the topic is very media overheated, but after the initial hype subsides, I am sure that digital art will take some market share. This, for example, is evidenced by the interest of the world's largest auction houses in the development of their own NFT trading platforms.