Cake DeFi’s revenue hits $631m in 2021, but income to reduce in 2022, CEO says

When crypto boomed in 2021, Singapore-based crypto investment platform Cake DeFi saw a massive spike in growth.

Its revenue reached US$631 million, and it saw operating income of US$203 million – an increase of over 2,000% from the previous year, according to Cake Pte. Ltd.’s unaudited financial statement.

Its operating expenses for the year were only US$16.6 million.

And although crypto prices have crashed this year, Cake DeFi CEO Julian Hosp is expecting the company to end the year still in the black, although he says it won’t see growth like it did in 2021.

“Since crypto prices have fallen dramatically in 2022, our top and bottom line have gone down compared to 2021,” Hosp tells Tech in Asia. Operating income in the first two quarters of this year was positive, but Q3 has “turned slightly negative.”

Cake DeFi’s net income in 2021 stood at US$134 million, a 400% jump from the previous year. The company, which was founded in 2019, is a subsidiary of Cake.

“We are forecasting a similar slight cashflow negative in Q4, unless crypto prices jump up,” Hosp says. “We should be ending the year with a slight plus, though.”

Crypto prices are unlikely to recover soon, with market sentiment still negative following the collapse of crypto exchange FTX.

Record inflows

While Hosp was unwilling to share Cake DeFi’s current figures, he says the company has seen “record inflows over the past week” due to the ongoing concerns over centralized exchanges following the bankruptcy of FTX.

Cake DeFi’s transparency, he says, is a reason for the increased inflows. The firm considers itself a “CeDeFi” platform, which means it’s somewhere between being fully centralized and fully decentralized.

“We only direct customer funds the way our customers instruct us to,” he says. “We do not leverage or misuse their funds, and everything can be tracked and traced by our customers.”

While falling crypto prices did affect the company’s reserves, the platform’s main sources of revenue were not affected in 2021.

Cake DeFi only earns fees on the transactions it makes on its clients behalf, and in 2021, when crypto was in a bull market, the yields from staking sometimes touched 300%, Hosp says. That resulted in large profits for both Cake DeFi’s customers and the company’s own treasury.

The firm managed US$891 million in customer funds in 2021. While the company does not offer a breakdown on how much was used in staking or for liquidity mining, its financial report does itemize the net revenue (revenue after deducting cost of revenue) gained from staking and liquidity mining.

Staking fees in 2021

Cash flow-positive despite impairments