Neo · · 33 min

Jackpot Rewards, Stablecoin Cards, and Uncollateralized Lending for the Speculator

With Markuss Jonans, Cero

Key takeaways

  • Cero puts the yield on user deposits and the interchange from card spending into one rewards pool, co-founder Markuss Jonans says.

  • Cero's credit scoring algorithm is accepted by one lender, and three others are in talks to issue uncollateralized credit lines.

  • Markuss Jonans says he is betting that regulators will close the stablecoin card arbitrage within the next six to twelve months, and Cero is pursuing licenses before that happens.

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Summary

The eight-week-old app wants to bank the speculator economy with prize-style rewards instead of cashback, and plans to add uncollateralized credit built on its own score.

Cero, a card app that is about eight weeks old and already has live users and real spend, funds its prizes by putting user deposit yield and card interchange into a single rewards pool. Co-founder Markuss Jonans says the pool is run by a rewards protocol, and that with Cero, "every dollar you spend earns you a chance to win a million dollars."

Upside over cashback

Markuss Jonans describes Cero as "an upside app" rather than a traditional neobank, with the aim to "bank the speculator economy." He says the team talked to more than a 100 crypto-native users in the first week and found that "nobody cares about cashbacks, yields, things like that." What they wanted was the chance of a large win.

“My, let's say past six year history on chain is more indicative of my credit worthiness than like, let's say my six month bank statement would be... it can tell much more about myself and and potentially, like, you know, underwrite underwrite myself, like, with the tighter spreads”
Markuss Jonans

How the pool grows

According to Markuss Jonans, Cero uses Agora USD on the back end to earn yield on user balances. Unused credit balances also sit in a pool earning yield, and that yield goes back into the rewards protocol while the company does just-in-time financing when users spend credit. He says the team plans to keep rewards and credit "lossless," meaning they are tied to fees and yield the app already generates.

Credit from on-chain history

Cero builds a score from spending, balances held, and connected on-chain wallets, exchange accounts and social profiles, and that score unlocks uncollateralized credit lines. Markuss Jonans argues that his "past six year history on chain is more indicative of my credit worthiness than like, let's say my six month bank statement." He expects credit to become the main revenue driver once Cero starts lending on its own liquidity.

Rails and regulation

Cero is built on Privy rails, with Rain and Virex as card issuers, and each wallet is a non-custodial Privy wallet where the user holds the keys. Markuss Jonans says most of the team worked in white-label banking during the first wave of neobanking. That experience is why they are pursuing licenses now, ahead of the crackdown on stablecoin cards he expects within six to twelve months.

Cero is betting on a system where more spending and larger balances make the prize pool bigger, while credit lines from its own score become the source of revenue over time. Whether that holds up depends on the lenders it is talking to and on the licensing work Markuss Jonans says is already underway.

Agora, Agora USD, Monad, and Rain come up most.

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