Meet Pillow – a crypto management app promising users upto 17.8 pc returns on their investments

Although Arindam Roy, Rajath KM and Kartik Mishra were actively interested in Decentralised Finance (DeFi), they saw a large gap in the adoption of DeFi products and services.

Arindam and Rajath were with identity software firm HyperVerge, while Kartik was with Dunzo, and as techies, understanding the fundamental, transformative power of blockchain and DeFi was not difficult.

But they also realised DeFi would never reach mass adoption if it remained complicated and clunky for regular users.

“Making DeFi usage as simple as using UPI, for example, would make adoption of Web3 more mainstream. Instead of users going through multiple hoops - from an exchange to a custodial wallet to bridging to the right chains and finding the right investments - what if we could build a simple, singular platform to help users generate the best returns on their crypto?” says Arindam in an interview with The Decrypting Story.

Diving into the problem statement and solution, the trio built and launched Pillow - a DeFi investment platform - in 2021. Originally a side hustle, Pillow is now a full-time gig for the founders.

How Pillow works

On the Pillow app, users can invest and get returns on their crypto (BTC, ETH, and stablecoins like USDC and USDT) in a simple manner.

In fact, Pillow claims users can earn up to 17.8 percent returns on their stablecoins and up to 7.05 percent returns on BTC and ETH.

The startup claims its research team scouts 500+ protocols across 10 different chains to find the safest way to invest user funds and generate these returns.

Pillow is currently building infrastructure and liquidity across blockchains such as Ethereum, Polygon, Fantom, Terra, Solana, and others to ensure efficient movements of funds and investments.

It has so far raised $3 million from investors such as Elevation Capital, Sandeep Nailwal and Jaynti “JD” Kanani, (Polygon), Prabhakar Reddy (FalconX), Aniket Jindal (Biconomy), Scott Lewis (DeFi Pulse), Farid Ahsan (Sharechat), and Mukund Jha (CTO, Dunzo).

Pillow is in invite-only access currently with a few thousand active users across 11 countries and managing a few million dollars of investment. We actually call our users our product managers, as they are essentially writing an entire roadmap for us. Users, investment team, tech team, and engagement and education team are the four pillars of our company,” explains Arindam.

Investment thesis and business model

The decision to start with BTC, ETH and stablecoin investments stems from the founders’ belief in encouraging healthy investing in what is otherwise a highly volatile market.

“We encourage people to stay invested long-term, and we encourage people to chase returns that are sustainable, good quality, have downside protection, etc. This means Pillow will only deal with assets which have proven value,” Arindam adds.

Pillow’s current revenue model is based on keeping the returns generated over and above the returns made accessible to users.

The project keeps a small percentage of the spread generated, and a small percentage also goes into Pillow’s yield reserves, while the vast majority of the returns are passed on to the user.

Although BlockFi, Nexo and Celsius offer yield solutions not too dissimilar from Pillow’s, the similarities do not carry over to the rest of Pillow’s roadmap, the founders believe.

“A DeFi product of this nuance currently doesn't exist in emerging markets. There is currently no other DeFi product for the average retail user of this nuance which allows seamless investments into diversified protocols across chains for creating returns on your digital assets,” claims Arindam.

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Democratising access to Web3

The founders believe that while there has been an explosion of awareness and adoption of crypto, less than 3 percent of wallets have made an on-chain transaction or used a Web3 service.

The team believes solving the accessibility problem will bring the next 100 million users onto the Web3 economy, thereby democratising wealth creation for consumers and accelerating innovation in the ecosystem.

As Pillow now strives to become a go-to yield maximisation platform for crypto users, it faces a challenge familiar to most other projects in this disruptive sector.

“Rapidly hiring high-quality engineers in this market is one of the challenges we have faced so far. While we have built a great team, the pace of hiring always lags behind the demand for engineers,” says Arindam.

Despite this, the founders take a macro and long-term view towards democratising crypto investing, and are optimistic about the future of Web3.

“There will always be barriers, but we want to shape our unique path and our own avenue towards making Web3 accessible. We will add more asset classes and make them accessible to millions of users,” he says.