Crypto Tanking, Cake DeFi Banking: US$73M paid out in Q1 2022 rewards

May 9, 2022

Dear Customers, Partners, and the rest of the Community!

2022 started for us with a bang – literally. In order to get the team aligned with our aggressive goals, we had invited every team member that had passed probation to a kick-off week in Munich at the beginning of January. Just as we were on our way there, the German regulator BaFin made a public announcement that they would be investigating whether we needed a German banking license or not. We immediately reached out to our German law firm, to understand what was going on and are now in touch with BaFin, but also with other authorities on applying for a European crypto license.

On top of all that, the bearish sentiment for crypto continued all the way through Q1 2022, with Bitcoin hitting a low of roughly US$32,000 by the end of January. This dragged pretty much all other cryptocurrencies and therefore also most of the investors’ sentiment down with it. Only the DeFiChain price managed to withstand the downward spiral and kept trending close to an all-time high. The decision to list DFI in 2020 and focus our products and services around “DeFi on Bitcoin” has really paid off for our customers, and therefore also for us as a company. Nevertheless, with the Borrow product development completed in Q1 and rolled out  at the beginning of Q2, we have now finished the integration of this exciting blockchain and from Q2 onwards, we will focus on other cash flow opportunities, which we call “Multichain”.

Growth wise, we hit an all-time high growth in terms of customers, deposits and payouts. Due to our rigorous business model of recurring revenue, we managed to pay out US$73M in customer rewards, and stayed cash flow positive as a company despite all the blitzscaling and growth, while the rest of the ecosystem seems to be bleeding.

Despite hitting our major outcomes, I would like to reflect critically, looking into some of our struggles and shortcomings in Q1 2022, while providing suggestions on how to improve going forward. The team leads were tasked to go a bit deeper into their own departments, and you can read their thoughts in the various chapters of the Executive Summary. Here, I would like to look at them from a higher level.


  • Our company is extremely healthy financially despite the wavering crypto market and our Finance Team lead by Ping Lai has done an amazing job preparing us for our audit and due diligence processes.
  • US$73M were paid as rewards to our customers in Q1, 2022, which is pretty much as Q4 2021, despite the different crypto sentiment. The number is in line with our target for 2022.
  • Even if our revenue dried up completely  and crypto prices would drop by 80%, and we had to cut down our marketing budget as much as possible, we would still easily have 3-4 years of financial runway.
  • Nevertheless, we always look to add other revenue streams for our customers and thereby for the company:
    - Multichain Activity. This allows us to provide additional income from other protocols, but furthermore, allows us to provide our customers with access into the entire Web3 space
    - Treasury Activity. We have built up a massive fiat and crypto treasure over the past years. Making money from that, however, greatly depends on the market conditions, which I do not expect to improve until late Q3 2022
    - Investing Activity. Due to the market sentiment, Cake DeFi Ventures will take a very cautious approach to startup investing at the moment. Since these are our own funds, we have no time pressure with how fast we deploy these funds into other companies.


Our marketing and comms strategy has greatly improved in Q1, and I am quite confident it will get even better in Q2 of 2022.

  • Leticia, our PR and Comms Lead, together with her team, has done an amazing job with all the new news pieces and completely turned around the Branding, PR and Comms department. The announcement of Cake DeFi Ventures especially had a strong customer growth impact, as well as the promotions around the Bitcoin Learn and Earn.
  • The launch of Cake DeFi Ventures’ US$100M VC arm generated very strong coverage (>150 media articles) in the global crypto media /online news outlets (Coindesk, Cointelegraph, The Block, FXEmpire, Crypto Daily, Crypto Potato, Blockworks, Yahoo Finance, The Street etc) and Singapore-based online tech/investment media outlets (Tech in Asia, Vulcan Post, e27, The Asset, AVCJ, The Asian Banker). We also saw a handful of coverage in  multiple languages/geographies (Arabic, German, Japanese, Mandarin). Visibly lacking was coverage in top tier business titles and local mainstream media as the then news cycle was inevitably dominated by the Ukraine war.
  • We have also started ramping up speaking engagements in Singapore and globally (SXSW, The Economist's Tech for Change Week, TEDxNewton). We will be kicking off our own live in-person events in Singapore, starting with Crypto Market Outlook 2022 on 7 April 2022.
  • In addition, social media influencers covered key content and ran reviews of Cake DeFi, including: Mr. Money TV, Foxy On The Blockchain, Jim Crypto, DAPP Centre, Crypto Kang, Cryptosphere, LiteLiger, Moneydelics, Market Warrior FX, and more.
  • Kavi, our VP of Marketing has helped us tremendously, especially with setting up the FaceIt Partnership, which will drive a lot of Gamers to Cake DeFi, and from here onwards we need even more experts in performance marketing, affiliate marketing and driving app downloads.
  • The implementation of our new KYC solution has increased our KYC conversion to record highs.
  • We will also hire a Social Media & Community Lead, who will help with Influencers and Social Media strategies.
  • We will keep doubling down on our winning strategies, and cut our losing ones. Performance Marketing, Influencer Marketing and Referral Marketing have been our strong winners. We will double down on them.
  • Additionally, we have shifted aggressively to a mobile-first approach , and we will be revamping many landing pages to convert even more of our traffic.


The Product team focused on these 5 priorities in Q1 of 2022:

  1. Cleaning Up the overflow from 2021 and dealing with massive instability challenges due to the strong user growth.
  2. Improving the UX, especially around KYC, by implementing international and local Singaporean KYC measures.
  3. Concluding the DeFiChain integration with adding the final dToken and preparing the launch of Borrow.
  4. Being FATF compliant by implementing additional travel rule withdrawal systems.
  5. Implementing data tools for better reporting.
  • For Q2, 2022, we have a couple major releases. The main one will be to go “Multichain” by implementing other blockchains to expand our existing revenue streams.
  • We definitely had some roadmap delays and spill-overs into Q2. We are especially looking for a VP of Engineering and a VP of UX Design, to help solve these problems. Both have to have have years of experience with fast-moving global web services of the world such as the likes of Netflix, Uber, Facebook, etc. Missing these two roles is probably the cause of major Product pain points and its symptoms are seen in how the app works, how stable our system is and how fast we can roll out new services.
  • Product-centric management has yielded tremendous results over the team organization and product deliverables, while providing clarity to all stakeholders, marketing etc. and, it is important as well for Cake as a whole to be transitioning to an even stronger product-based management vs engineering-focused management.


  • Of the three large teams I see in any company (product, marketing, operations), the Ops team, which includes, finance, legal, compliance, risk and hr, performed the best in Q1. This is in stark contrast to last year, where operations were mostly lagging behind compared to the other teams. For now, it is also the team we are not really needing to expand much.
  • The withdrawal processes and speed have improved dramatically.
  • The same goes for the KYC process, where most identities are being checked within 3 minutes and due to the seamless process, we now manage to get record numbers in the verified stage. In Q2, the team is planning to automate the KYB process as well.
  • With our current VP of Ops Bettina going into maternity leave, we have hired a senior leader from LinkedIn, who will be an excellent addition to the team, and will be starting in May.
  • The Customer Success Team now has a senior lead and has expanded into all timezones, being able to provide 24h customer support, which is absolutely necessary with the tremendous growth this quarter. In Q2, the team will be looking into adding a chatbot into the app to speed up our response time even further.
  • The Business Intelligence team has been established. Despite a rather complex product-first data structure that we have, BI team led by Kapil has managed to identify a BI platform, set up a preliminary dashboard with the goal of fully transitioning all data requests to self-generating and self-service reports on Microstrategy.
  • Security will stay an increased focus point, with additional security layers for team members.
  • We had our new legal lead start in Q1 2022 and also hired our new compliance lead, who will start at the beginning of Q2. Both will be hiring another team member each in Q2, and then these teams are fully stacked and efficient.
  • Additionally, we got our Birthday Research contracts completed for all team members working on open source code.
  • We liaised with our external legal partner in Germany to resolve any issues the German regulator BaFin may have with our products. This also included getting ready for a European Crypto Custody License.
  • We also stayed in touch with the Singaporean regulator MAS for our Payment Services Act (PSA) license.
  • We also did a thorough internal review of all our documents, contracts, etc.
  • I also expect constant legal work to pop up, so there will be regular ad-hoc work for the team.


  • With FaceIt, we closed our first Lifestyle Partnership in Q1 2022. Another one is currently on hold, hopefully to be launched soon.
  • We also announced the launch Cake DeFi Ventures, our VC arm with US$100M earmarked in capital for investments in towards strategic partnerships. We are proud to announce our first investment into an NFT marketing company.


  • Contributing to the R&D of DeFiChain has generated a lot of value to Cake DeFi users and justifies our R&D spending.
  • It will be essential to make it clear to the outside world, what Cake DeFi is, and what our R&D efforts are. Many times people see Cake DeFi synonymous with DeFiChain, which is not correct. This will become clearer with us working on other blockchains from Q2 onward.
  • Ramping up the team and efforts in Birthday Research to contribute as a company into the wider blockchain ecosystem will also help.
  • Moving ahead, Birthday Research will largely focus on two functions that align 100% with Cake’s company goals: open source software contribution and new research-heavy product design and incubation.


  • Our goal was to make 20 hires in Q1 and we managed to have our strongest hiring quarter yet, and hit 28 hires, getting us to 121 confirmed team members.
  • We have now upped our 2022 team size goal to 200 team members, of which most will be for the product and marketing teams, and we offer full health insurance to all.
  • I will put a strong emphasis on our team principles and have started performance reviews from Q1 onward. We will also become way stricter on team members passing probation.
  • Additionally, we have hired a senior HR manager to start in Q2, and will be looking into adding a VP of Talent later this year.
  • We got our office for up to 50 team members in Singapore and since the Singapore government allows for 100% of the workforce to return to work, we will require all local team members to be at the office on Tuesdays and Fridays from July onwards. While I am sure we will receive some pushback from a few team members at the beginning, especially because for almost two years they were only working from home, I strongly believe in having such a mix.
  • Additionally, we are planning on having the next company get-together in Q2 in Dubai.
  • Next, we are planning on doing a full team get-together late Q3 in Singapore, which may be mandatory for people to join.


While it is important to focus on all the things we need to do in the upcoming quarter, it is equally important to remind ourselves that it is always “a car we don’t see coming that kills us”, meaning that we need to make sure we mitigate as many risks as possible. I split risks into three categories: those we are not aware of which are the most dangerous, those that we can influence, and those we cannot influence.

  • Risks that we are not aware of are the riskiest, because it doesn’t matter whether we can influence them or not - we are simply not aware of them. The best way to combat these risks is to hire team members that are smarter and more experienced in their fields of expertise than I am, and I believe we are doing that. Additionally, we have hired two Internal Risk Control Specialists with audit backgrounds, who assist to map out potential risks and further on, mitigations with the teams.
  • Of all the risks we can influence, the five most relevant ones are:
  1. Fund hacks, which we mitigate by using good wallet separation strategy and designs. Ensuring that key custodians are sound, processes are in place and only having a limited group of people to have access to a larger amount of our funds. Our growth into other blockchains may present a renewed risk, as none of the other providers, we have evaluated quite a few major ones, are as securely designed as BitGo’s. We will be mitigating these risks by moving some funds away from the providers and into our cold systems/wallets.
  2. Data hack, which we mitigate by having sound security engineering,  social engineering mitigation, and clear safe processes overall.
  3. Treasury volatility, which we mitigate by investing our treasury with at least 50% in low volatility assets such as fiat and stable coins and the rest only in Bitcoin and Ethereum.
  4. Transaction errors, which we mitigate by using manual processes on top of the automated ones, such as four-eye-principles, before every larger transaction.
  5. Blockchain or Smart Contract bugs, which are technically mitigated by our terms & conditions, but it is something that could potentially affect our reputation if one of the DeFi services that we offer encounter a major bugs causing our customers to lose funds. We also mitigate this by being careful in selecting DeFi protocols and products for launch.
  • Of all the risks we CANNOT influence, the five most relevant ones currently are:
    - Crypto sentiment, which I am NOT expecting to improve in Q2, 2022.
    - Crypto regulation, which has gotten slightly worse over the past quarter.
    - Crypto taxation, which has improved in some jurisdictions such as Germany, who have confirmed that Staking does not increase the holding period to 10 years to be tax-free.
    - Economic uncertainties, which I am NOT expecting to improve in Q2 2022.
    - The COVID pandemic, which has improved in Q1.

Summarizing, I believe that we are doing a great job minimizing our risks while maximizing our opportunities, and our internal risk specialist is doing a fantastic job in getting our risk committee together for this purpose.

As a reminder:

  1. We do what we do because we believe the lack of purchasing power is the root of all evil! We started with Decentralized Finance (DeFi), because with all the inflation and economic uncertainty in the world, crypto is pretty much the only place to get capital gains and good yield with acceptable risks. We will now go on to expand into more asset classes to help even more people to increase their purchase power. This is our WHY or MOTIVE.
  2. We bring financial freedom to anyone! We started by proving people cashflow /  financial rewards on their crypto! We now go on to provide not only consumers, but also businesses, easy and trusted access into the world of DeFi and Web3. This is our HOW or MISSION.
  3. We are building the world’s Web3 plug and play infrastructure! We started with building a safe and compliant 1-stop platform with easy access into the world of Decentralized Finance for consumers. We now go on to build the front- and back-end into DeFi and Web3. This is our WHAT or VISION.

If you are not getting excited looking at this roadmap for this rocket ship, I am not sure what will. If you are already a customer or partner of ours, thank you for your trust. If not, then what are you waiting for? Head over to and get started.

PS.: We are always hiring:


The most transparent way to get cashflow from your cryptocurrencies.

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.