How much are 140 million users worth? 

After a $50 million direct investment in travel app earlier in the year, Alameda Research has announced today a $40 million investment in decentralized finance protocol Oxygen, a Solana-based lending platform that will plug into the app. 

Similar to lending protocols such as Aave and Compound, “Oxygen will first offer borrow-lending services via pools, in which users will deposit their assets and leverage Serum’s on-chain infrastructure to lend according to their desired terms. Users can also simultaneously lend to generate yield while borrowing against their portfolios,” reads the announcement.

While the specifics are hard to come by on official channels, Oxygen also boasts a host of planned features including cross-chain integrations with Ethereum-native protocols like Aave and Yearn, options writing, and fully decentralized governance. The protocol is currently in the Alpha stage with the largest debt pool listed at $1,000.

Alameda Research was joined in the round by investment firms MultiCoin Capital, Genesis Capital and CMS Holdings. 

“Oxygen will be the most sophisticated and elegant risk management tool in DeFi – with a strong team, growing liquid ecosystem and large potential user base we believe this is the next step in mass adoption,” said Alameda Research CEO Sam Bankman-Fried of the acquisition.

Users, users, users

The $40 million investment comes after a $50 million investment in Alameda Research announced in January. Combined with the $20 million Oxygen CEO Alex Grebnev reportedly paid to acquire Maps, the team has now invested into the app at a rate of over $.78 cents for each of Maps’ reported 140 million users. 

While many in the crypto community found the initial investment puzzling — it remains unclear if users of a travel app want or need DeFi functionality — Grebnev believes the user numbers are key to unlocking long-term value:

“Currently, DeFi space has at most circa 1 million users. How much would the Oxygen/Maps ecosystem be worth if’s 140 million registered users started leveraging the protocol / platform?”

Part of the user-focused strategy might be a result of Grebnev’s previous efforts with Oxygen. In 2018, he launched a peer-to-peer lending service with the same name, but demand and product-market fit failed to materialize. He lists a number of potential reasons:

“First, it was a business model that didn’t scale – non-custodial peer to peer borrowing / lending of individual assets with no matching engine. Second, the market went down 80% from the time when we started working till 6 months later when we were ready to launch. Third, institutional demand which everybody was expecting – didn’t come through. We decided to pause the project.”

Embedded (de)finance

With and a new version of Oxygen looking to replicate prime brokerage services, Grebnev is hoping for a different outcome. He says that internal research indicates that 47% of current users “want financial services.” He points to similar user-jacking efforts that are common among tradfi companies. 

“Embedded finance is a big theme. Take QuickBooks introducing bank accounts. Or Apple offering credit cards. Companies leverage their userbases to offer relevant financial services,” he said.

What’s more, in the context of tradfi user-acquisition, the aggregate $110 million Alameda Research and Grebnev have invested into the travel app may actually be a bargain:

“These transactions enabled us to build an ecosystem that integrates DeFi tools with a user base of more than 100 million registered users. It took PayPal 20 years and billions of USD to get to 300m users. It took Revolut 5 years and hundreds of millions to get to 12 million registered users.”

Oxygen’s OXY governance token is currently available to select presale participants. The token will have an IEO on March 11th, following which it will be available on FTX, BitMax, and Serum DEX, per Grebnev.