At an age when everyone is struggling to understand their role in life, these brothers put a Blockchain Startup on World Map. Samyak Jain and Sowmay Jain are the two founders of Instadapp. With a shared passion for finance, the two brothers came up with their app at a Bangalore Hackathon in August 2018. It was this day that changed the lives of these brothers and now Instadapp is only seeing growth. Let’s read more about how these young brothers went to build this million-dollar startup:
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Early Life and Background
A year after he completed schooling, Sowmay Jain aspired to become a chartered accountant but opted out. His brother Samyak Jain, then a first-year computer science student, also did the same. Both brothers shared an interest in finance. They firmly believed in the potential of the Internet as their tutor and as a medium to leverage one day which became the inspiration for their Blockchain Startup.
In August 2018, the brothers participated in the ETHIndia hackathon in Bengaluru. The hackathon was an Ethereum event for developers to create a product in a couple of days. Ethereum, in simple words, is a blockchain-based software platform with its coin ‘Ether’. Ethereum is described as a platform for “smart contracts” where business rules come encapsulated with the software.
A Spark that Ignited the Blockchain Startup
The ETHIdia hackathon turned out to be a ‘Eureka’ moment for the two brothers. They created their hack called Instadapp (‘Insta’, a prefix in cyberspace that fascinated them and Dapp for ‘decentralised app’) which went to become one of the most advanced Blockchain Startups in the World. They were addressing Decentralised finance (or DeFi, in quick speak) through a blockchain-based finance platform that enables people to lend and borrow funds from others or earn interest in savings-like accounts.
All of this began as a hobby for the young brothers, but eventually, they decided to give it a shot and emerged as winners of the hackathon. By September 2019, the Jain brothers grasped the attention of many in their field by raising an astounding $2.4 million in a funding round from Pantera Capital. The initial rounds of funding were used to bring together a team of talented individuals.
Recently, they are raising a much greater amount, details of which have not been unveiled yet. The latest round of funding is also for expanding the in-house engineering team but directed to facilitate grants to developers building on top of our platform.
Instadapp’s Business Mode
The revenue model of their Blockchain Startup, Instadapp will be to charge fees on financial volumes and lending/borrowing activities taking place using the platform. Right now, everything is free of charge for users. They plan to launch their own tokens/DAO in the coming weeks and decide on the fees.
DAO stands for Decentralised Autonomous Organisation that avoids the requirement for an intermediary (human intervention) by applying the rules of transaction in the software, which is closely governed by computer code and programs put in place.
Growth of Instadapp
According to DeFi Pulse, which tracks and gives details on who is leading in the decentralised finance space, Instadapp is the 7th largest entity in the Decentralised Finance space worldwide, with assets worth $4.5 billion circulated in smart contracts on the blockchain. The blockchain enables users to lend, borrow, deal in cryptocurrencies or earn interest in savings-like accounts with high risk-return.
Regulatory Challenges of the Blockchain Startup
No great innovation has flourished without its fair share of challenges.
- The regulatory landscape for decentralised finance is still not apparent in India on this. Right now, it is challenging to transform rupees into crypto due to the prevailing regulations.
- Banks are blocking accounts associated with crypto. The founders stated that if the government can easily convert rupees to crypto advice versa, a significant hurdle will be crossed.
How will InstaDapp work in the proposed regulated scenario?
With the proposed regulations on cryptocurrency, the founder explained how an app like Instadapp should allow easy swap transactions with fiat currency, converting rupees to crypto & vice-versa. Jain said that Instadapp provides foundational DeFi integration. Other services can be integrated without infrastructure and can provide their own system on top of the platform. For instance, exchanges can give fiat-on-ramp (a platform that lets a person convert fiat money like dollars or other government-issued paper money) and permit their user to use Instadapp for DeFi operations.
What about Taxation in Crypto Investments?
No regulation is without a part in the parcel for the government. The founder believes that crypto must also be taxed as an investment (applicable for capital gain tax) just like all other investment options. It can be charged at the time profits are booked (at the sale). Every individual would be responsible for reporting their cryptocurrency holdings.
The remote working environment, crucial in this pandemic, also seems to work for Instadapp. While, they have incorporated the venture in Delaware, USA, after having initiated in Hyderabad. Today, they have a team of 25 people operating remotely.
Most of the team has been hired over Twitter based on an assessment of ‘their work, talent and not degrees,’ The clientele of Instadapp is mostly high network clients and includes funds, high net worth individuals, and institutes.
This was everything you need to know about the inspiring journey of the Jain brothers and their flourishing Blockchain Startup, Instadapp. To learn more about such interesting stories and news, stay tuned to Leverage Edu!