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Happy Sunday. Block by Block is a series whereby we highlight conversations with founders and operators. The idea is to ask thoughtful questions for projects that want to achieve more media exposure.

Onboarding new crypto users is not easy. Try explaining to your friends how you’re currently participating in multiple L2 and restaking protocols to farm EigenLayer points. Read the last sentence again.

• User-friendly applications that are built with a product-first mindset are much needed in the space. Usually, these types of crypto products are centralized.

• Sock has a different approach. It’s self-custodial and enables you to participate in the onchain ecosystem. It provides an easy way for users to send, invest, and earn with their crypto while maintaining complete control over their assets.

To learn more about Sock and the products that they offer, check out my conversation with Bryan Levine, co-founder and CEO of Sock.

-Marco

P.S. Don’t be like this 👇

Disclosures

1. Today’s issue is sponsored by Sock.

2. None of this is investment advice.

3. Founders of Launchy hold no exposure in Sock.

Bryan Levine of Sock

Bryan Levine is the co-founder and CEO of Sock, a mobile finance app that helps the unbanked build wealth in the world of digital currencies. Sock provides an instant, trustworthy, and low-cost way to send money, invest, and earn with digital currencies anywhere in the world while maintaining complete control and ownership of your assets, data, and connections.

Bryan is a seasoned Product Manager with more than 15 years of experience. Bryan worked in Zynga, and MyFitnessPal as a Product Manager. He served as the Director of Product Management at Nerdwallet, and as the Head of Product Management at Hipcamp before co-founding Sock. 

Currently, Bryant also serves as a Product Advisor at Adventr, a platform that enables the creation of interactive video experiences.

Here’s my conversation with Bryan Levine.

Quick takeaways:

• Bryan’s journey into the crypto space was catalyzed by Ethereum's emergence, which showcased the potential of blockchain to redefine traditional banking through smart contracts.

• Sock was founded to create a safer, more accessible crypto space post-2020 speculation

• Sock distinguishes itself from traditional wallets and exchanges by offering a streamlined self-custodial experience.

• Sock's roadmap includes initiatives to enhance user experience across investing, remittance, earning, and spending pillars.

• Sock empowers users worldwide with self-custody, bridging the gap between traditional finance and digital currencies.

What was the defining moment that drew you into the world of crypto?

The emergence of Ethereum marked a pivotal moment in Bryan's journey in the crypto space, revealing the possibilities of an extensible ecosystem capable of redefining traditional banking with smart contracts. This realization prompted Bryan and Chris Titterton, his co-founder, to reconsider the role of intermediaries in finance. They recognized the inherent inefficiency and redundancy of middlemen in a system ripe for innovation through blockchain technology.

Amidst the 2020 crypto craze, a time characterized by the explosive popularity of meme coins and NFTs. Bryan and Chris, his co-founder, found themselves reflecting on the speculative frenzy and its potential dangers. Their discussions, rooted in a desire to make the crypto space safer and more accessible, highlighted the challenges within DeFi and the broader financial ecosystem.

This confluence of experiences and observations led Bryan and Chris to founding Sock, aiming to leverage EVM-compatible chains to transform traditional finance. Their vision was fueled by a commitment to innovation, coupled with a cautious approach to the volatility and risks observed during the speculative waves of 2020. This journey into crypto was not just about embracing a new technology but about seeking to address and mitigate the pitfalls of speculative investment, aiming to create a more stable, secure, and accessible financial future.

What is Sock?

Sock is a pioneering mobile finance application designed by Bryan and his team to empower individuals in navigating the evolving landscape of digital currency. At its core, Sock aims to simplify the process of building wealth through digital currencies by offering instant, reliable, and cost-effective solutions for sending money, investing, and earning globally. A cornerstone of Sock's philosophy is its commitment to self-custody, ensuring users maintain complete control over their assets, data, and connections.

Recognizing the global shift from traditional cash to digital currencies as the primary means of value storage and payment, Sock is positioned as a crucial tool in this transition. With the majority of the world's GDP exploring central bank digital currencies (CBDCs) and a notable decline in cash transactions—less than 20% in the U.S. and similar trends in Europe—Sock's relevance is underscored. The app is designed to be intuitive, enabling users to effortlessly integrate it into their financial ecosystem, potentially replacing conventional financial products, apps, and custodial exchanges.

Bryan's vision for Sock is driven by the belief in the democratization of financial services, where digital currencies play a pivotal role. The app's name, inspired by the traditional method of socking away money, reflects a deep respect for the autonomy of self-custody, mirroring the essence of cash in a digital age. Through Sock, Bryan aspires to offer a service that is not only accessible and easy to use for everyone but also secures users' financial sovereignty as the world transitions towards digital currencies.

How does Sock differentiate itself from traditional wallets and centralized exchanges like Coinbase, especially for someone new to the crypto space?

Bryan highlights two key aspects that distinguish Sock from traditional wallets and centralized exchanges like Coinbase, particularly for those new to the crypto space. Firstly, Sock offers a streamlined self-custodial experience that simplifies the complexities involved with managing multiple blockchain networks and private keys. This approach is grounded in first principles, aiming to deliver a user-friendly interface that feels familiar to newcomers, reducing the hurdles often associated with crypto investment.

While acknowledging Coinbase's strengths and contributions to the crypto ecosystem, Bryan believes that Sock excels in providing a superior self-custodial service. This makes it an ideal platform for individuals who prioritize full control over their digital assets.

Secondly, Bryan envisions Sock playing a broader role beyond serving crypto enthusiasts and DeFi experts. Sock aims to be accessible to everyone, including the underbanked—a demographic that values the autonomy and security of cash transactions. By offering a suite of services that includes sending money, spending, investing, and saving, Sock intends to replicate the simplicity and security of traditional cash in a digital format. This approach positions Sock as a versatile digital currency platform that caters to the everyday financial needs of users worldwide, making it an attractive entry point for those looking to navigate the world of digital currencies.

How does Sock simplify the user onboarding process, especially regarding seed phrases and other complexities?

Sock utilizes account abstraction to simplify the user onboarding experience significantly. This innovative approach allows Sock to offer users the ability to delegate finely-grained permissions to the app, enabling functionalities such as automated orders, account rebalancing, and automated transfers, similar to those found in traditional finance (TradFi) but within the crypto space.

The focus is on simplicity from the moment a user signs up, emphasizing that there's no immediate need to back up keys or worry about them until there is actual value in the wallet. This approach demystifies the initial steps for new users, removing the barriers typically associated with entering the crypto world.

Once a user funds their wallet, Sock then prompts them to secure their account. Utilizing the phone's local secure storage, Sock backs up the user's keys and offers additional backup options via Google Drive and iCloud with encrypted files, ensuring that the information remains inaccessible to others but available to the user.

Bryan stresses the importance of user accessibility to their keys through the app settings, while also working to eliminate the intimidation factor often associated with managing seed phrases and private keys. This strategy aims to make the transition into crypto seamless, secure, and user-friendly, catering especially to those unfamiliar with the intricacies of digital currency management.

How does Sock process transactions—through its own order book or by routing through DEXes and aggregators like 1inch?

Sock currently sources all its liquidity from Uniswap v3. In about two weeks, Sock plans to introduce a yield product that will primarily utilize Aave among other yield providers. This decision reflects a commitment to ease of use and security, contrasting with the broader industry's emphasis on composability, which, while offering extensive connectivity, often comes with heightened risks such as security vulnerabilities and potential for asset drains.

Sock's strategy diverges from the norm by focusing on a curated selection of services and providers deemed reliable and "blue chip." For liquidity, the choice of Uniswap is justified by its dominant market share, ensuring users access to substantial liquidity pools. Similarly, for yield generation, Aave is selected for its reputation and stability, avoiding offerings with excessively high and risky yields.

Looking ahead, Bryan indicates that Sock will continue to expand its offerings with a cautious approach, prioritizing products and services that are vetted for their trustworthiness and value to the user. This curated ecosystem strategy aims to simplify the user experience, making entry into the crypto space less daunting without compromising on the potential benefits of decentralized finance.

How does Sock offer no transaction fees, except for Bitcoin? Is it because transactions are cheaper on Arbitrum?

Utilizing account abstraction, Sock sponsors gas fees for its users, thereby covering the cost of transactions. This approach is part of Sock's commitment to enhancing user experience. Traditional wallets often require users to hold the native token of a blockchain to conduct transactions, which can be a significant barrier to entry.

By absorbing these costs, Sock eliminates this hurdle, offering a more seamless experience. This decision reflects a broader strategy to prioritize user convenience and accessibility, making digital currency transactions as straightforward as possible.

Does Sock curate its offerings to ensure a user-friendly experience by excluding meme coins?

Sock meticulously curates its offerings to enhance the user experience. This curation is guided by token data providers such as CoinGecko and CoinMarketCap.

Beyond just filtering out meme coins, Sock is also exploring deeper curation based on user investment trends, focusing on assets like Bitcoin and other top cryptocurrencies that align with a more stable and mature investment outlook.

To further this aim, Sock has developed a proprietary evaluation framework, the Sock Score, to assess investments based on risk. This scoring system evaluates tokens on stability, economy, and maturity—where stability measures market volatility, the economy looks at the current versus planned supply, and maturity is akin to market capitalization. Tokens rated poorly (D or F) are considered for removal, aligning Sock's offerings with the preferences of more cautious investors or those new to digital currencies.

This approach underpins Sock's commitment to providing a safe, user-friendly platform tailored for casual investors making their foray into digital currency, distinguishing it from platforms catering to DeFi enthusiasts or crypto maxis.

How many blockchains does Sock currently support?

Currently, Sock supports Bitcoin and Arbitrum.

The team has intentionally limited the number of supported chains to maintain simplicity for users. Although Sock has the technical capability to support any EVM-compatible chain, earlier versions of the app included Ethereum, Arbitrum, Optimism, and Polygon, but these were streamlined to focus on user experience. Moving forward, there may be plans to expand the range of supported blockchains, with a focus on abstracting away the complexity for users.

This approach aligns with how Bitcoin integration is handled in Sock, ensuring a seamless experience without the need for network switching or managing different contacts within the app.

Can you share more about Sock's road map, including any upcoming features, curation strategies, and marketing strategies?

Bryan shares that Sock's roadmap is rich with initiatives aimed at enhancing the platform's offerings. The immediate next step is the launch of a simple yield product, enabling users to earn attractive returns on stablecoins, ETH, and other assets, with rates around 8 to 10% on USD stablecoins due to current market dynamics.

Expanding further, Sock plans to integrate additional yield providers such as GMX, alongside the implementation of the proprietary Sock Score.

• This feature will assist users in understanding the risk-reward ratio of their investments, highlighting options like earning 25-30% on USD stablecoins with GMX, albeit with higher risk, thereby guiding users in making informed decisions.

Looking ahead, Bryan envisions Sock's development across four critical pillars: investing, remittance, earning, and spending. With a solid foundation in investing, the focus will shift towards remittance by enhancing user experience in sending and receiving funds, leveraging blockchain's capabilities to facilitate easy transactions and attract new users.

The earning pillar will see expansion through a broader array of yield opportunities, introducing users to diverse ways to grow their digital assets. For spending, Sock aims to introduce versatile options like prepaid debit or credit cards, tailored to users' geographical locations, thereby bridging the gap between digital currency and everyday transactions.

In conjunction with the launch of the yield product, Bryan announces that Sock will introduce a referral program, designed to reward users with credits on the Sock platform for engaging in transactions. Although Sock imposes a nominal fee for swaps and yield-generating activities, participants in the referral program can offset these costs using the credits they accumulate. 

What's your user acquisition strategy?

Bryan outlines Sock's user acquisition strategy, emphasizing a grassroots approach centered around word-of-mouth. The strategy leverages partnerships with early crypto investing and financial literacy communities, fostering a foundational user base deeply engaged with the platform's mission. Sock's approach is multi-faceted, comprising three main pathways:

• Community and Ambassador Initiatives: Targeting specific communities and countries, despite the platform's broader availability, to cultivate a dedicated user base through ambassadors and community engagement.

• Incentivized Referral Program: Offering tangible benefits, such as credits, to users who refer new members. This not only encourages platform growth but also provides immediate value to new users.

• Remittance Flow with Escrow Feature: Enhancing the platform's network effect by allowing users to send money that must be claimed through Sock, thereby requiring new users to sign up.

This strategy is deliberately designed to appeal to a demographic that values trust and personal recommendations over impersonal marketing tactics. Unlike strategies targeting DeFi enthusiasts who might be swayed by direct community outreach, Sock aims to grow through organic referrals, where users share their positive experiences with friends and family, thereby expanding the platform's reach in a more authentic and sustainable manner.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.