Dragonfly bet? One article understands the stablecoin payment platform Codex specially designed for enterprises | CryptoSeed

Author: Scof, ChainCatcher

Edited by: TB, ChainCatcher

On April 4, stablecoin company Codex received a seed round of $15.8 million, led by the well-known investment company Dragonfly. Participants also include Coinbase Ventures, Wintermute, Selini Capital and other institutions.

It is worth noting that Codex's official X account only released its first content on the day the financing news was announced (April 4), followed by the announcement of a large-scale financing news of tens of millions of dollars, which undoubtedly added a bit of mystery to it.

From "usable" to "easy": The next step for stablecoins

In recent years, the stablecoin market has expanded rapidly. Global circulation was approximately US$4 billion in 2019, but now it is close to US$235 billion, an increase of nearly 60 times. But it is worth noting that the main users of this market are still mainly individual users and crypto traders, and there are still a few companies that truly apply stablecoins to cross-border businesses.

Codex hopes to change this. Its goal is not to just make the stablecoins “use” only, but to make the stablecoins the default way for enterprises to pay cross-border payments, fund management and collection and payment operations every day, just as natural as today’s bank transfers or SWIFT wire transfers. In order to achieve this goal, Codex chose the most challenging path: from the underlying chain to the API, from the foreign exchange system to the account system, comprehensively reconstruct the stablecoin infrastructure, and truly design around the needs of enterprises.

On the surface, stablecoins already have functions such as transfer, foreign exchange and wallet integration, and seem to be "usable". But for enterprises, the existing user experience is still full of obstacles. Taking small and medium-sized enterprises in Southeast Asia as an example, if you want to use stablecoins to collect USD and pay suppliers, you will not only face poor cross-chain compatibility, uncontrollable fund arrival time, and lack of transparent exchange rate mechanisms, but also often cannot connect to the financial system of the company. Enterprises even need to rely on chat groups and manual operations to complete reconciliation, which is inefficient and extremely risky.

It’s not that companies are not interested in stablecoins, but that the current tool system cannot meet their usage needs at all. Ironically, companies are precisely the type of users who need stablecoins the most urgently. Especially in emerging markets, many companies have to deal with high inflation, depreciation of local currencies and expensive cross-border payment costs. Even if it only improves efficiency a little, such as allowing funds to arrive at the account two days in advance, or reducing the cost of exchange of foreign exchange by several percentage points, it may have a substantial impact on the company's cash flow.

It is in these real pain points that Codex has found its entry point, trying to push stablecoins from “usable” to “good use” and ultimately become part of corporate financial infrastructure.

What problems did Codex solve?

Codex does not do a certain "tool", but a complete set of stablecoin infrastructure. The idea is very simple: turn the four most common things in a company - collecting money, paying money, exchange foreign exchange, and managing accounts - into one interface.

For this purpose, Codex has independently developed a chain designed specifically for stablecoin transactions - Codex Chain. Instead of pursuing the "most open" or "most functional", it optimizes around three things that the company cares most: security, predictability, and processing efficiency. In real business scenarios, stability and reliability are far more important than "innovation".

At the same time, Codex provides a complete set of easy-to-integrate APIs, and engineering teams can use very little code to connect it to existing systems, realize automatic transfer, settlement and reconciliation of stablecoins, lower technical thresholds, and speed up implementation. In terms of specific functions, Codex provides several key capabilities:

• Convert fiat currency into stablecoins (on-ramp), and funds go directly to the wallet
• Transfer stablecoins back to fiat currency (off-ramp), and transfer payments to bank accounts through local partners
• It’s okay without using stablecoins. Direct exchange and payment of fiat currency to fiat currency
• Provide virtual accounts with names, such as local IBAN, account number, etc., so that customers can send you money, just like local bank accounts

These sound like what the bank does. But the difference is that Codex reconstructs all of these based on the stablecoin network - more efficient, faster, and more flexible compliance paths.

Project background and development status

Codex is founded from both the crypto industry and traditional enterprises. CEO Haoonan Li was an early member of the Ethereum ecosystem Optimism, responsible for studying protocol design and governance mechanisms; another co-founder, Victor Yaw, runs several traditional companies in Southeast Asia, and is well aware of the pain points that actual business will encounter in cross-border payments.

In addition, according to the roadmap information on the official website, Codex has currently opened an institutional-level service portal in the Philippines, and will gradually open new regions such as Singapore, the United Kingdom, Dubai, and Hong Kong in the second quarter.

(This article only introduces early projects and is not used as investment advice.)