Dear Cake DeFi Community!
Q2 2021 turned out to be a completely different quarter for Cake DeFi, more so than any of the quarters. From a price and market sentiment perspective, it was one of the worst quarters in the history of crypto, with most cryptocurrencies dropping by over 50%, and investor interest even more so.
Nevertheless, Q2 2021 ended up being the best quarter yet for us, hitting all-time highs in revenues, rewards paid out, customer numbers, and profits. Additionally, our extremely conservative treasury management proved to be a strategically sound move, putting us well on track to achieve our 2021 targets. These are the moments we live for, and I am so proud of just how far we’ve come in this journey that only started two years ago — yes, we celebrated our 2nd anniversary on June 7th.
We started the quarter quite unexpectedly, as our two outside investors signalled U-Zyn and I that they would be open to be bought out — if the price was right. If you have ever been involved in intense negotiations, you know just how taxing such an event can be. In the end, the four of us found an option that worked, and allowed U-Zyn and I to become 50/50 partners in a company that is now worth around 300 million USD, and on track to being a unicorn over the next year. I want to thank U-Zyn here for always being 100% aligned to our vision, especially during the many late night phone calls and discussions. Also, my wife Bettina, who kept me sane as we got closer to the finish line and the final details seemed to drag out. Furthermore, our legal council, Ezra, who ensured all the legal work was completed under the time pressure. Being 100% team owned not only aligns our incentives, but ensures a long-term focus on our decision-making.
I am so amazed by how much the entire team was able to achieve in such a short time and how well we dealt with the various obstacles that came before us. I want to reiterate how proud and thankful I am of all of us at Cake DeFi. Whenever we had issues with our platform or something had to be dealt with urgently, the team pulled together doing weekends and/or all-nighters, making sure our customers’ experience was aligned to our team principle of customer obsession. Without each and every one of them and their contributions, our results would have been completely different.
With that being said, let’s shift our focus to the specific amazing results we were able to achieve in the past quarter. So, let’s go, time to show off:
- Our customers’ assets grew by 56% in USD, despite crypto dipping by -50%. When measured in BTC, they grew by 150%. This is absolutely mind-boggling and lays the basis for our revenue.
- We had some great success with performance marketing campaigns, yet, the main source of customers in the past quarter was through our revamped referral program. It was also the reason why we were extremely successful in converting our customers that merely signed up. Close to ⅔ of our new customers with at least 50 USD deposits came via word-of-mouth, highlighting the great experience our customers receive on Cake DeFi.
- In total, we paid close to 2 mil USD in affiliate and sign up bonuses to these customers and their referrers. We will double-down our efforts in the upcoming months, and would be happy to pay as high as 20 mil USD for that.
- Despite May and June having been very slow crypto months, our growth and interaction on social media and our media presence skyrocketed.
- Our revenue in Q2 was close to 100 mil USD and the majority of that, after other costs of sale (partners, blockchain fees, etc.), went to our customers. Our incentives here are 100% aligned: The more our customers make, the more the company makes.
- We have a safe runway of 4 years in USD and stablecoins even if current revenue streams dried up and all cryptos went to zero. The rest of our net equity is working capital and intangible assets.
- The tech-, product- and design-teams worked their butts off, launching a number of valuable products and services, as well as improving efficiencies of existing ones for our customers. One of the key launches was that of the mobile app, which is now available for iOS and Android — currently in Beta version.
- By simplifying access to various services such as liquidity mining, many more not-so-crypto-savvy users were able to get up to 100% per year on their crypto. In the upcoming months, we will see many more of these simplifications and improvements to our UX.
- Our team grew by 12 people in Q2 to 54 team members, with the majority of the add-ons coming from the tech and product side. About half of these members are in Singapore and the other half is remote. We are aggressively looking for more talented people! http://cakedefi.com/jobs
- Our R&D work for DeFiChain comes at a significant cost for Cake. However, Cake has become the main focus point for DFI stakers and liquidity miners, driving user adoption and funds stored at Cake. Considering that we get a percentage of their staking and liquidity mining rewards, this is an important part of our revenue stream, making it a win-win-win for DeFiChain, Cake’s customers and therefore, Cake also.
I may not have listed every single achievement — there have been so many this past quarter — but that does not make them any less important. Once again, I would like to express my gratitude to the entire team that made all this possible with their creativity, hard work and passion, especially during these trying times with the pandemic, lock-downs, crypto crashes, etc.
I want to finish this personal reflection with the things I will especially get involved in over the upcoming quarter, as I believe the following points are especially essential for our success:
- First and foremost, staying cash flow positive. This is what a true business is all about. Since our business — for the most part — has a recurring revenue model, I am confident we will be able to do this, especially with more customers, resulting in more funds with Cake.
- I want to ensure our user growth and make sure we double our user base, and users’ funds measured in BTC. The way to go is a focus on our referral program and the onboarding of key opinion leaders. We will give away a lot of our revenue as additional bonuses to our own users if they help us achieve our goals.
- Team is what any company is about, so I will especially be looking to hire amazing senior and experienced people to constantly raise the level of our team while ensuring our seven team principles are embraced. I am expecting to add around 25 more team members before the end of the year.
- I assume the mobile app will be our main onboarding tool for new users. It will be essential to get it right and easy to use. Cake DeFi will go mobile first.
- There will be several new exciting products and services added to the platform, and I want to focus on the perfect mix of attractive use cases, and usability, while following our compliance guidelines.
- It will be key to improve our internal and external reporting tools. Customers want this and our team members need this. We probably need to hire more people for that team as well.
- Last but not least will be a personal focus on the external audit. It will not only lay the foundations for further bigger plans (for example, maybe, going public), but the transparency will also provide immense trust to our users, and to a certain degree, it is required here in Singapore.
A quick reminder of our goals until the end of 2021:
OKR 1: Be a disruptor of traditional financial systems. We achieve this by offering the six investment categories of cryptocurrencies, securities, precious metals, commodities, currencies and collectibles as digital payment tokens to our users in all FATF regulated countries, who will be able to invest in these individually or in the form of algorithmic funds with the simple click of a button, and without the traditional heavy regulations.
OKR 2: Be a sustainable and cash flow positive company. We achieve this by having 2 billion USD assets on the platform from 1 million users, returning enough net revenue per year to pay for all our costs.
OKR 3: Be a unicorn. We achieve this by being valued with at least a 1 billion USD valuation.
Breaking this down for Q3 2021, I see the following main three goals for Cake DeFi:
OKR 1: Have an offer for non-crypto users. We achieve this by working on our user experience and offering synthetics.
OKR 2: Be a sustainable and cash flow positive company. We achieve this by growing our user base and their funds by at least 100%.
OKR 3: Be on the road to become a unicorn. We achieve this by our team members being Cake DeFi and DFI owners, and by being in the process of our external audit.
I hope you are as excited about the journey ahead. If you are one of our existing customers, I want to express my gratitude! I hope you continue using our service even more and this transparency helps you with this. If you are not yet one of our customers, give it a chance and try it out! Let us amaze you! And, if you are open to working with us, please apply! We are looking for about 25 more team members until the end of the year: http://cakedefi.com/jobs
PS.: If you haven’t done so already, follow us on Twitter (https://twitter.com/cakedefi) for all our updates.
Find the full version of this transparency report with all details on the various company departments here.