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Jaemin of Fortmatic on his thoughts about access to yields and DeFi.

Unagii Profile Series: Featuring the best stories about money and yields on people in DeFi, Crypto, Blockchain, and more.

Gabrielle Chia
Gabrielle Chia

Before diving into the world of Web3 and the founding of Formatic, Jaemin Jin was knee-deep with software eating the world at Uber when it disrupted the global taxi industry. It was a phenomenon he soaked in as a software engineer in the beating heart of San Francisco. His journey into the tech bubble may have all started with his love for Apple and a stint at the famous tech giant.

Access to Yields

Jaemin is a die-hard Apple fanboy. After opening his Tax-Free Savings Account (TFSA) in Canada, he bought his first investment in stocks with savings from the account during his first year at the University of Waterloo. With strong convictions in Apple and its vision, it was a no-brainer for Jaemin to purchase and go long on the investment. This kickstarted his investing journey, which led to finding ways to profit from trading Netflix stocks as a short-term opportunity. But with zero experience in trading, his early investments eventually went horribly wrong.

Recalling those unfortunate trades, Jaemin adds that it's hard to say if DeFi (Decentralized Finance) would have changed what he had experienced. Or helped roll back mistakes he made. But one thing that is certain to him is that with DeFi, financing becomes easily more accessible.

When Jaemin was younger, he never took much interest in learning about the value of money until he understood how inflation worked during his senior year of high school. This is why he believes that with DeFi's accessibility, anyone (including himself) would be at a significant advantage to accumulate far more knowledge about finance at a younger age.

"I realized that the yields my money was generating in my savings account were not enough to beat inflation. This got me worried, so I started looking for ways to at least beat inflation."

That realization prompted Jaemin to wish he had early access to learn how to make money work for you and why it was necessary. The reality is that there is not one service in traditional finance that allows young people (under the legal age) to invest their money to earn higher yields. And that's why he emphasizes the importance of 'learning by doing' as a reason to explore DeFi.

Perhaps it's why when Jaemin learned of blockchain through Ethereum in 2017, he foresaw its potential to disrupt some, if not all, parts of industries that exist today. Fired up to get involved in the ecosystem, he decided to develop Fortmatic with Sean Li and Arthur Jen.

Getting in on Yield Farming

While it's challenging to stay up-to-date with all the innovative new things popping up in DeFi, Jaemin tries his best to be relevant. He particularly loves seeing creative abstractions being launched to level the playing field for mainstream users.

A recent example would be yield farming.

But to effectively participate in yield farming, users will need to at least complete a prerequisite, DeFi 101. An education covering concepts like impermanent loss, understanding implications of variable gas costs, and learning the interactions with certain smart contract functions via Etherscan.

Unfortunately, so much of DeFi activity today is pushing up gas prices to unsustainable levels, landing the ecosystem into a vast ocean where only Whales could effectively yield from. "It's cutting out users who previously were able to interact with DeFi with less than say, a hundred dollars. Hopefully, that gets addressed with the adoption of Layer 2 and other scalability solutions".

Despite that, there are so many possibilities for users to start to yield from with protocols like Aave and Compound. While it's one thing to have earlier access to finance primitives, it's the implications of interacting with programmable money that is limitless.

Jaemin's first big aha moment with DeFi was through Set Protocol. He was thrilled to learn that TokenSets is basically a simplified robo-advisor of its own, which can trigger automatic rebalances based on a set of finance strategies. And he could not be more fascinated when they introduced Sets with yield farming strategies. It's now allowing users to easily participate in yield farming by merely buying and holding a Set.

"I was looking to grow my ETH holdings without having to trade on my own, and Set Protocol was the (easy) answer. All I needed to do was buy a set with my preferred strategy and simply Hodl."

At the end of the day, users should Yield Smarter too. To Jaemin, it's about deeply understanding your investment risks and avoiding over-leveraged positions. Especially when it involves various yield farming protocols to generate more yields. After all, with higher yields comes an equivalent or more of risks involved.

Onboarding to DeFi

Everyone is excited to see where the DeFi industry is headed, particularly with such astronomical growth in the past couple of months. While the tech stack has been continuously innovating at lightning speed, the onboarding user experience has not caught up to pace.

Before Fortmatic was founded, the one onboarding solution available for users to interact with Ethereum was MetaMask - a default to many DeFi users today. While Metamask scored in capturing the early crypto community, Jaemin and his Co-Founders felt the entry barrier was still too high for mainstream retail users.

To get started with Metamask, users must understand how and why they needed to safely store a seed phrase. They needed to type in twelve to sixteen-word phrases to set up accounts and learn blockchain-specific facets of key management.

It was all too obvious for the Fortmatic Co-Founders that unnecessary hassles needed to be addressed to open the gateway for mainstream users. With Fortmatic, users worldwide will now have the option to interact with DApps with just their email or phone number. No additional installations are required.

With better onboarding solutions in DeFi, more users - young or old and of any income bracket, can easily get started to better equip themselves financially.

What's next?

Jaemin has seen a considerable increase in user traffic volume coming through Fortmatic alongside DeFi's massive growth. More importantly, most of their new users have been non-technical, which is an excellent validation of Fortmatic as a user-friendly wallet. They're also working on some exciting features and optimizations for Fortmatic in the pipeline.

As for Magic - a recent spin-up of theirs for passwordless logins, more authentication methods such as Social logins, OAuth, WebAuthn, and other enterprise-based authentications are in the works. Since Magic launched in April, they've seen a wide adoption with both Web2 and Web3 developers. This brings them a step closer to their goal of being the bridge between Web2 and Web3 internet. While DeFi is disrupting Web2 finance, Magic aims to take on Web2 Auth.

And Jaemin and his team are beyond excited to be leading the effort.


Gabrielle Chia