Hello everybody, hope you had some cozy Christmas time with your family and we wish you all the best in the new year!

Thanks to Jay and The Kusamarian team for the great Attempts At Governance show two weeks ago, it was a pleasure to talk to everybody about our grant proposal. Some questions were raised that I did not have the time to elaborate further on the show, so I will do that now here. Please feel free to join the discussion about these questions and ask new ones, the feedback from the community is the best way for us to deliver the best product we can.

Before I address each comment specifically, I’d like to summarise here a few main points from this post:

• we are building a mainstream payment wallet, not crypto wallet
• our main competitors are Monese, Satispay, Revolut (in the US, think Venmo), not Nova Wallet
• we are bringing mainstream, non-crypto users to Polkadot
• anybody in the EU can use KWIT from day one
• we have existing user base all over the EU, will use it to jumpstart KWIT user base
• we have a very strong brand recognition in Croatia, will use that for market trial
• we will bring an EUR stablecoin to Polkadot

Now onto some of the comments that were made on The Kusamarian.

Comment 1 “we can just send 300k to Nova.”

KWIT and Nova are not doing the same thing. Nova is a Polkadot ecosystem crypto wallet. KWIT is an everyday payment wallet (built on Polkadot).

This distinction is very important because Electrocoin has been trying to push crypto payments in the EU for the last 7 years, and the main obstacle we face is complexity of crypto wallets. We talk to our users, and we talk to merchants, and the feedback that we get is that crypto payments are fun for young and technologically proficient people, but everybody else finds it complex. Transitioning from Revolut (with its simple user interface) to using traditional crypto wallets like Nova (with its relatively complex user interface) is intimidating for the majority of users. What we need is a dead-simple, easy to use everyday payment wallet (like Revolut, Monese, Satispay or Venmo).

Please compare screens of Nova, KWIT and Revolut.

Nova wallet is optimised for crypto-native users who wish to handle multiple assets on multiple chains, who wish to vote, stake, use dapps or send funds over a number of networks. KWIT is optimised for everyday payments, period. KWIT’s interface is much closer to that of Revolut than to that of Nova because KWIT and Revolut fulfill the same function - to allow for seamless payments in their daily lives, regardless of users’ level of technical proficiency. On the other hand, KWIT and Nova fulfill different functions. Users of KWIT want to know how much EUR they have in their wallet, and do not care about the network on which they transact, about token prices, price changes or swaps. Nova wallet has a beautifully designed interface, but for the average payment wallet user it is full of distractions. The feedback we get from non-technical people who try using crypto wallets (like Nova) for everyday payments is: this is a bit complicated, I’d rather just use Revolut or Venmo. If Nova is to be used for everyday payments by everyday users, a lot of its functionality has to be stripped and dumbed down, and this is exactly what we are trying to do with KWIT.

Do a little test. Choose 5 random people (not from your circle of friends, but literally random people in the street), give them a phone with Nova wallet and a phone with Revolut or Venmo and ask them to send you 5 dollars/euros. What you will find is that using Revolut/Venmo for random people is MUCH easier than using Nova.

KWIT is intended to build Revolut on the Polkadot blockchain - sending 300k to Nova will not solve this problem.

In this context, I have to comment on what Leemo said on The Kusamarian: that he has a conflict of interest with KWIT. I feel this is not the case because KWIT is not a competition to Nova. KWIT will never implement 90% of Nova’s features because that would defeat the primary feature of KWIT which is - simplicity of payment.

Nova wallet brings Polkadot crypto natives. KWIT brings to Polkadot normies who have never touched crypto before. The Polkadot ecosystem needs both Nova and KWIT.

Comment 2 “what are the benefit for Polkadot to fund this? Looks like you are super limited and only visible in Croatia…”

The first point I’d like to make is: we are not only visible in Croatia. Half of users of our exchange service are located in Croatia, but the other half is evenly spread throughout the EU. We market our exchange services throughout the EU, and the target market for the KWIT payment wallet is the whole of the EU. From day one, anybody in the EU will be able to use KWIT to do peer-to-peer EUR payments (just as with other EU payment wallets) and anybody in the EU will be able to spend their KWIT funds using a credit card (just as with other EU payment wallets).

It is true that our crypto payment processor and our cash on/off ramps are mostly based in Croatia, but the same is true for Revolut, Monese, Satispay or any other EU payment wallet - all of them have QR code physical payments and cash on/off ramps in just several countries. But that is not the core functionality of those wallets - how many times have you used Revolut/Monese/Satispay’s QR code payment functionality or how many times have you topped up your Revolut/Monese/Satispay account with cash on a physical location? The fact that we have that operational in Croatia right now means we can spread that functionality (QR code payment and cash on/off ramping) throughout the EU quickly, but core functionality of a payment wallet (peer-to-peer payments and credit card payments) are available from day one EU-wide.

Now that we have established that we are not visible only in Croatia, let me also mention the following: compared to the Polkadot community, the Croatian payment market is huge. Nova wallet has 50k downloads on Android. In Croatia, there are currently two payment wallets: KEKSPay (500k downloads on Android) and AirCash (1M downloads on Android). If in the next few years KWIT takes only 15% of market share of the SMALLER of the two Croatian wallets, we’ll have more users than Nova wallet currently has. Even if we targeted only the Croatian market (which we don’t), taking a minimal share in this market will bring more users to Polkadot than Nova brought. (BTW, again: we’re not competing with Nova, we’re doing different things.)

The last point I’d like to make here is that all of the crypto payment wallets that we mention in the “Competition” section of our grant proposal start with zero users and zero visibility. The fact that we are an established company with tens of thousands of existing users on our exchange service means we can incentivise them to try out our new payment wallet and get real life feedback from the get go. The fact that we have 500 merchants with 3500 locations on our payment processing service means that we can start getting feedback from merchants from day one. Therefore, we will be able to acquire users/merchants at much greater pace, and jumpstart the build-measure-learn feedback loop, while our competitors who start with zero user base have to bootstrap from zero.

So, the benefit for Polkadot to fund this is: attracting real-world users, and doing it faster than any other competitor on other blockchains is able to do.

Comment 3 “There is no EUR stablecoin on AssetHub”

And there will be none until there are projects that need one. And KWIT is just that.

First let me be clear: we will build our MVP using USDT which is a sufficient asset on the AssetHub so we can start building and doing transactions right away.

But, we do not plan on pushing KWIT into full production until we have an EUR stablecoin on AssetHub. USD/EUR average daily volatility is 0.36%, so if you have 100 USDT denominated in €, your balance will change every day - anywhere from 10 cents to more than €2 (Nov 5 was a bummer for EUR/USD). We need an EUR stablecoin on AssetHub and building KWIT on Polkadot will be a huge incentive to issue one.

There are currently 6 MiCA compliant EUR stablecoins and another 4 that are in the process of licensing. We, of course, plan on working with Circle to have EURC on AssetHub (we are in contact with them), but should that fail we can work with any of the competitors. Having KWIT funded by the Polkadot ecosystem is a clear incentive for EUR stablecoin issuers to deploy their stablecoin to AssetHub - it is much easier to attract the issuer if a project like KWIT is already building on Polkadot. Once EUR stablecoin is issued, every KWIT user topping up their wallet will mean adding to the stablecoin issuance on Polkadot.

So, having KWIT build our EUR payment wallet on Polkadot will incentivise EUR stablecoin issuer to issue their stablecoin on AssetHub, and we will make sure this happens.

Thank you for your attention, and again, please feel free to ask any questions you might have.