From theblock by James Hunt

Former Revolut employees Joao Alves and Guilherme Gomes have raised $2.3 million in pre-seed funding, led by Consensys founder Joe Lubin’s Ethereal Ventures to build Bleap — a “bank account on the blockchain.”

Maven11, Alliance DAO, Robot Ventures and Credibly Neutral also participated in the round alongside angel investors, including key executives from Revolut, Phantom, OKX, EigenLayer and Consensys. The capital raised brings the company to a $10 million post-money valuation, Alves told The Block.

The funding will be used to help develop the self-custodial payments app, which enables customers to spend stablecoins in the real world via a linked Mastercard debit card, promising no conversion or exchange fees and up to 2% cashback on purchases.

The former Revolut employees believe blockchain technology is the foundation for the future of finance, with the concept for Bleap first beginning to take shape in July 2023. “We wanted an app that combines blockchain’s power with the best of banking,” Alves, who previously led Revolut's card program, said. “A banking app that would be radically better than anything else available today.”

"Blockchain technology lets us build experiences that traditional finance rails simply can't," fellow Bleap co-founder Gomes, who led multiple product teams at Revolut, added.

The neobank also supports multi-currency accounts with savings rates of five times that of traditional banks, the team claimed, enabled by stablecoins and decentralized finance, and also allows users to transfer funds globally, instantly and without fees.

How Bleap works

Built on the Ethereum Layer 2 network Arbitrum, Bleap enables fast, gasless transactions and replaces traditional seed phrases with cloud storage and social logins, leveraging PortalHQ's Multi-Party Computation technology. MPC is a cryptographic technology that can improve existing multi-sig techniques, effectively allowing wallet keys to be split between the user and PortalHQ.

When a user signs a transaction, their device uses their key share while the app fetches a backup share from PortalHQ, Alves said. To securely back up the user’s share, the app generates and encrypts it with a password derived using AES and SHA256, stores it on Bleap’s server, and emails the password to the user while saving it in their cloud. This eliminates the need for a seed phrase, as only the user has access to the password, keeping the seed encrypted and secure, he claimed. If the user loses their phone, they can recover their account by authenticating with 2FA and decrypting their share using the backed-up password, though they can export their full key at any time for offline storage.

After users create a Bleap account, a smart wallet powered by account abstraction (ERC-4337) is deployed, delivering a secure and user-friendly experience akin to web2 for managing web3 assets, the team explained. Users can add stablecoins from external wallets or purchase them with fiat via Bleap’s fee-free crypto on and off-ramping service.

Bleap’s smart wallet supports the USDC, USDT, USDA and EURA stablecoins. It is only deployed on Arbitrum, with no plans to deploy on other networks at present, Alves confirmed. 

However, Bleap’s on and off-ramp and bridging services currently support Arbitrum, Ethereum, Polygon, BNB, Solana and Bitcoin, he said. This also enables users to buy various cryptocurrencies on the supported networks and receive them directly into their own external non-custodial wallet, according to its website.

The biggest challenge the team faced was working out how to connect a public blockchain to a centralized system like Mastercard in a fast and cost-efficient way while maintaining self-custody, Alves said, explaining that there were some hurdles on the regulatory front.

“For the card part, we are partnering with providers that are used to working with crypto, but since we are doing something new, some things take more time than usually they would have in the fintech world,” he said. “But overall, I feel there is a lot of will from everyone in payments to make crypto payments work.”

Explaining the flow, Alves gave the example of a customer making a $5 payment at Starbucks. Bleap receives the request from Mastercard and verifies that the user’s wallet holds an equivalent amount, such as 5 USDC. Once confirmed, Bleap approves the transaction and simultaneously recreates it onchain, charging the user’s wallet in stablecoins. After receiving the stablecoins, Bleap converts them to the fiat equivalent and settles with Mastercard.

This process works because, when the card is created, the user authorizes Bleap’s card signer to deduct funds from their wallet — a permission they can revoke at any time by canceling the card or set custom limits for. Unlike other crypto cards, Bleap doesn’t require converting crypto to fiat first — saving in conversion and exchange fees and making spending seamless, he said.

The cashback on offer comes from a combination of multiple incentives Bleap receives from its partners, including interchange fees from merchants and subscription plans. All blockchain transaction fees inside the Bleap wallet are covered by its infrastructure. 

Bleap uses DeFi protocols to offer savings rates in USD and EUR-denominated stablecoins, Alves explained. Users can interact with Bleap-integrated DeFi products directly in the wallet with a single click. Alves emphasized that Bleap never has ownership of users’ funds, it just aims to simplify the user experience. At present, Bleap is using Angle Protocol, which offers rates of 13.2% APY and 5.3% APY on USD and EUR stablecoins, respectively, with plans to introduce more options over time.

Crypto’s ‘killer use case’

Stablecoins have undoubtedly found product market fit, with a circulating supply approaching $200 billion and generating more than $5.1 trillion worth of global transactions in the first half of this year alone, according to analysts at crypto asset manager Bitwise. That’s comparable to Visa’s $6.5 trillion over the same period, with a further $3.1 trillion generated by stablecoin transactions in the third quarter.

“We always say that crypto is on the brink of finding its killer use case. Well, here it is,” Bitwise’s Juan Leon and Ari Bookman wrote in an October report.

Bleap is incorporated in the UK and registered as a Virtual Asset Service Provider (VASP) in Poland to serve EU customers, Alves explained, with MiCA regulations helping Europe to become a key hub for stablecoin adoption.

“MiCA regulation helps a lot,” Alves said. “What was happening with the regulation in Europe, where each country was individually regulating crypto, was effectively breaking the single market mechanism we are supposed to have. I think that was the worst outcome. MiCA fixes this and brings regulation back to EU level where a company in any country in the EU can serve the EU as a whole. From that perspective, it's a great thing.” 

He acknowledged that from an operational perspective, the regulations increase the barriers to entry, which for startups can be hard to overcome. “However, having a license simplifies a lot of things as well, like opening a business account to serve customers — it's super easy to do for Europe with a license, but for other currencies like USD and GBP is quite cumbersome without a license,” he added.

Bleap is currently in beta with a select group of European users. A full public launch is planned for Q1 2025, introducing crypto payments across Europe. Bleap is also looking to expand into Latin America next year, Alves said.

Additionally, Bleap plans to launch its own token in 2026, though Alves could not share any further details at present.

Revolut alumni have a history of going on to build crypto projects. In April, former Head of Crypto Ops at Revolut, Ruslan Fakhrutdinov, launched X10, a hybrid crypto exchange utilizing the StarkEx Layer 2 engine, with $6.5 million in funding. In 2023, more former Revolut employees launched a new crypto wallet called Zeal, while others raised funds for a web3 energy startup and crypto investment app in 2022.