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🟩 Compound Community Call | Market, Assets, and Incentives Update
Recorded: March 27, 2025 Duration: 0:52:21Space Recording
Short Summary
The recent discussion highlighted the launch of the Compound Growth Program 2025 Renewal, strategic partnerships with Kelp, and innovative marketing strategies aimed at driving growth. With a focus on co-marketing and community engagement, the team is poised to enhance liquidity and expand its influence in the DeFi space, while upcoming initiatives like state comp promise significant fundraising potential.
Full Transcription
GMGM Compound Community. We are going to give a few minutes for people to join the call.
We are expecting the Compound Growth Team and some community members to be joining us on this one.
And it'll be fun. So we'll give a few minutes. I'll send this link out, get a post up, and we'll get going.
GMGM will just be getting started in a few minutes here. Thank you. GM, GM, Spartan, and Jordan.
We're going to give a few more minutes, let everybody else come in.
I'm also going to see if we can get Alpha Growth to join.
Welcome, Kyle. Great. All right. We were able to get Alpha Growth in here.
And let's see if we can get them to co-host
all right All right.
Let's see.
Join this co-host.
All right.
I'm not going to wait anymore.
We can get started here.
I hope everybody's having a GM or had a GM GM on the East Coast.
We have a fun one. We have the Compound Growth Program 2025 Renewal by Alpha Growth, and this is V4.
That is up and out, and it's gotten a lot of support,
which we are extremely grateful for. But today we'll be focusing on mainly
and hopefully Spartan, you can give us some feedback. Jordan, you can give us some insight
and feedback as well. We have a comment already. What's going on here? State comp. Yep.
We have a comment already. What's going on here? State comp, yeah, from before. Exactly. So what we're going to be focusing on are these novel marketing and community engagement strategies and some of the campaigns that have come off of that. Kyle and I have been part of all of these campaigns throughout the year, whether it's me and or Kyle.
campaigns throughout the year, whether it's me and or Kyle. So that'll be great to hear from
both of us, but also the spinoff campaigns. What's been most impactful for us as a team,
as a DAO, and what does the future look like considering a re-election? What would we do
if re-elected considering all of this marketing knowledge. So Kyle and I think that would be
pretty valuable for the community. We can clip this up and also build off of this in the future.
But Kyle, can you hear me? Are you there? How are you feeling? Was your breakfast great?
Yeah. Eggs and collard greens and a tortilla.
Wow. You got me beat. I was just eggs. Eggs, salt, pepper, that's it.
But awesome. Dude, we have a lot of content to go through here.
What I'd love to do is kind of go just riff off with you in terms of fun spaces that you think and you can remember throughout the year.
One in mind that I liked the most was and was interested in.
I couldn't really participate.
It was out of my ballpark that week.
Now I'm up to speed.
But the Kelp interviews, Kyle, could you tell me how that came to be
and what ended up happening there?
Yeah.
Well, the Kelp thing is sort of a long – it was a process of –
I wrote something for Renzo based on an interview that we had with them.
Kelp basically wanted their own interview.
I gave them their own interview, and then we turned that into a
forum post, which was, I think, interesting because that was like one step beyond what
we did with Renzo. And the forum post didn't have a lot of views, but it did have,
it did result in us compound being added to their high gain vault, which we were not previously.
And then, and I was thinking, okay, how do we move it to the next place?
I don't want to just rehash what we've already discussed here.
I got a lot of information.
So basically the forum post is kind of like research to be able to have a lucid conversation
with Sophia from Kelp.
And then we had a space.
And then in that space, we spoke for about 45 minutes.
And it was just basically me and Sophia talking about what Kelp's plans were, what Colonel Dow's plans were,
like some ideas for what their needs were.
like some ideas for what their needs were.
And that conversation led into a handshake agreement at ETH Denver for how Kelp can
work together with Compound to serve Celo,
which is something that we currently were not able to do because of a lack of
liquidity.
But we can do that now with isolated markets and using Kelp to support liquidity needs.
And this process of investigating how is Kelp doing their expansions, you know, Kelp is doing some stuff on move with concrete.
They have a vault there. They're getting some early move tokens because
of it there's 25 million in there like so i'm taking these patterns of kelp's growth processes
and also kelp's need for liquidity for lending protocols and then i'm aligning them with our
growth processes and our need and basically that turns into sort of a public exploratory process,
which turns into a win-win game that we can play with Kelp that benefits our growth mandate for
the next year. And we can replicate that with other companies, like other partners or other chains.
Yeah. I agree. And I think that it also strengthens our relationships with these people.
Yeah.
At the end of the day, these huge protocols, this is a lesson for me.
And it's been a continual lesson through my professional career.
But at the end of the day, it's just people.
So what you've done a great job with, Kyle, to shout this out, is getting to the people level so that you can understand the protocol level.
Because just spending the time with them, there is a learning curve.
And I think a lot of companies and teams, I mean, we meet with a lot of people.
It's a common trait that you get on these calls and people want to pretend like they know everything.
But when you're like, hey, that sounds cool, thanks for telling me about 30% yield, but how does that actually work?
It was literally the question.
And you were able to answer that for a lot of people by asking it and having the courage to ask it.
So that was really cool.
And then also, you know, it gives us the ability to, right,
if you think about two possibilities.
One is a team that doesn't talk to its customers.
And two is a team that talks to its customers.
Who is going to have a better relationship, a better product?
Yeah, I think there's two parts there and it's sort of a difficult line to work on you need to be um able to ask the
difficult questions like because that will give them you'll get respect from them like oh they're
asking me about you know how am I managing risk on these vaults?
Well, let me tell you about our partners that we're working with and why we're choosing to do this.
Like, you know, or, oh, you're making guesses about how our kernel system works.
Like, thanks for being curious. Let's talk more about that and how it works, like how that fits into our roadmap.
Like, so you can ask the questions that you're unsure about. They'll inform
you because they're good questions. And because other people would want to know that that's kind
of like a due diligence thing. And the other part is just sort of respect out of curiosity, like,
oh, you cared enough about us to ask us a bunch of questions, form an interview that you then posted
and shared with the community. You asked specifically how
we could be a better partner to you. And then you spent time having a conversation
to explore what our future looks like and what our needs are. Like that, that gives compound
alpha growth credibility in Kelp's eyes, which um like a respect that we're paying to them for their
successes and as a result you can have conversations that are built on top of that
they're like well how do we solve problems together so we both benefit and that's where
the business development deals come from as far as i've been able to see yeah i mean it's uh and spartan can back us up on this maybe with some reactions
but uh keeping these relationships uh and keeping uh informed really it's like all we have to do is
stay informed is 90 of the the battle the the rest of it is literally going through a form so it's
not us that has to actually make any decisions, which is really relieving.
We're saying, hey, DAO, here are all the options.
And then the DAO is going to be like, okay, we like this option.
Or we can or can't do this option.
We tried this three years ago.
Oh, I didn't know that.
I wasn't here three years ago.
And that's the beauty of having a DAO.
So it works hand in hand with our business structure as well.
And that's just one item.
The next one are these calls.
So going right into it, Kyle,
what we discussed from the first point is writing these like forum deep dive
threads gets us really close to partners.
What we also learned in that experience and also with incentives is that co-marketing and co-incentivization is the key to all top of funnel quality, actionable top of funnel.
What this looks like is, hey, Compound is going live with kelp. Right now,
Grow Uniswap, Alpha Growth's version of this Compound Growth program at one-tenth of the scale
in terms of spend, has, we have, say, six people here, five people here, they have, what would that be, 500 times more than that.
They have like 1,500 times more people.
They have 4,000 people in a space on a live podcast where it's not the Compound
Growth Team just talking amongst themselves. It is the Compound Growth Team, or in this case,
the Uniswap Growth Team, talking to Uniswap delegates. So in our case, what we've learned is that our developer spaces have a great turnout.
We have anywhere from 100 people to 200 people join while we're live,
and then an additional 100 to 500 listeners tune in afterwards who couldn't make it.
Those are a winner.
They're also something that we use to stay in touch as a DAO.
So we love that.
Moving forward, these calls, if we think about it, we have a forum post live now.
I don't know when we'll have a proposal up, and I don't know if I could share it if I did.
up. And I don't know if I could share it if I did. But that being said, the next version of this
will be ideally a live podcast where Kyle and I are interviewing Kelp or Renzo and not only
understanding, hey, what's this high gain vault? What does it do? How does it work?
That's going to be part of it.
But it's also going to be, how did you get a role at Kelp?
Understanding the person behind the initiative.
So that's going to be really exciting for us.
At least the team to be involved with.
Because we get more time with really fun people.
Brian, welcome.
Brian, we're going through our compound growth program posts and all of the initiatives.
And the first two that we've gone through are the forum deep dives and these spaces.
And we're discussing the possibility of moving to a podcast off the learning that right now the Grow Uniswap team,
still Alpha Growth, has 3,500 listeners live on their podcast.
That's so crazy. I know this is like Grow Compound and all of like should be compound specific but like I have to uh I have
to share this right now in the um see if I have to do from a phone okay cool can you hear me okay
I'm like I'm gonna yeah I'm gonna sound fine computer you sound fine okay great all right
cool so I got like about 30 minutes here um it's such an interesting to take on you know what's
what's happening it's it's brands, they have a pool,
but if you know how to tweak the numbers
and get to the different channels,
it's kind of like the same people over and over again.
And so the people that are going to the Uniswap community call,
I want to show this post,
are the same people that are going to the Uniswap community call.
They're not
expanding their market right which are like good it's a good retention and good diehard people but
like what you have to do is you have to like learn how to expand and extend uh in the distribution
channel like because the same eyes coming over and over again you're not you know you're kind of
like speaking to the choir a little bit but does your message resonate with like new audiences and so you know the grow compound groaning i mean the grow uni swap
podcast right now 3 000 some people on we should totally do that um ironically the uh uni swap
foundation community call is going on at the same time and it only has like 120 people
so learning how to expand audiences and you know get the
people from discord and telegram and and all over twitter to come is like it's a skill set and it's
not necessarily a skill set that everybody uh pushes out there and it's something that we can do
um for compound and continue to do for compound uh go with like different distribution mechanisms and protocols that
we partner with. You know, a great example of this is like Merkle and Beefy and like these
channels are great, but they have capacity. And so every single time we're doing a campaign,
we're looking for what are the diminishing returns of capacity per channel.
And it's just a performance marketing mechanism.
I mean, we just got asked by a chain earlier today, like, will you help us distribute our incentives effectively and accordingly?
So I don't know.
Information is getting out.
We're doing what it is.
doing what it is and i think this time around i think we'll the growth program should soar through
And I think this time around, I think the growth program should soar through.
um there's about 50 some projects protocols and assets that we helped over the course of the year
and about 36 of them have posted on the forum on our behalf so it's it's we have to turn we have
to do we're marketing compound we're marketingap. We have to do a better job marketing ourselves to the community.
It's a learning. We're learning.
Yeah, so I think that part of what we've learned in this last year is, hey, we know that people like video.
Our Masari videos did crazy well. I looked at the numbers again last week,
and they've all doubled from when I looked at them like a month, two months ago. Meaning these
videos have this like evergreen effect. And what I was, I think right before you joined,
I was talking about how these podcasts have the ability to go into and it really,
talking about how these podcasts have the ability to go into and it really,
you know, more creative content styles than just a space
that has the ability to go into who are these people, right?
So getting new audiences, not just like a Uniswap or a Compound community.
It's like, okay, who in Kelp doesn't really care about Compound,
but Kelp cares about the founders of kelp and we're sharing
that story with them those are the angles that i'm really excited about also learning from
hope marketing is the key the key here right strong brand name against strong brand name and
then creativity around distribution uh and clipping and all of this activity is gold. So, you know, I think we have a great
setup here where Kyle goes deep with these teams. And now it's up to us to change the structure of
these spaces. Also, the developer spaces should go nowhere. They should stay the same. They should
stay vanilla. I don't think we need to be on a live stream for the developer calls. That's not the audience, right? So it's also understanding who we're serving
for what type of call. And yeah, we also mentioned before you joined, Brian, that the developer
spaces are awesome. They get, you know, now they're getting an average of 400, 500 views
just as a space. So do you know how many competitors are going to our
our our spaces like it's it's pretty wild it's like we talk about insurance and then you know
three months later like um yeah like always come to the table with insurance. Yeah, well, there is the speak it into existence and
also just flat out being married to transparency and saying, hey, we work for a DAO and we're
going to tell you where we're going so you guys can help us get there. And that's all part of it.
But getting back on track here, unless you have items you'd like to focus on, Brian, please stop me and let me know.
But things that we learned along this journey of are they impactful? Are they not impactful?
What I'd like to look at and Kyle go back to are the form writings on things like the collateral
factors, the cross-chain arbitrage strategies. Were things like that impactful for us?
And I guess, did they even tie into our content strategy at all?
Or were they just one-off forum posts to the DAO?
I think that they were important conversations to have and that our goal was to stimulate conversation
with power
players in the DAO. That would be Gauntlet. That would be, I guess Gauntlet is a pretty big one.
And then we came to this sort of conclusion inside of a call that Compound V3's structure
was not sufficient to be able to handle this as it currently exists and a certain number of
things needed to be put in place to make that happen. So the wall that we ran into was the
risk profile for Gauntlet as that informs Compound's brand or something. And so I think that we can look objectively at the
information that's here and that is that Gauntlet has chosen to integrate Morpho
which has a different architecture which has a different capacity for risk
structures and the approaches I think that we can also look at are how is Gauntlet, with the amount of voting power that they have, approaching putting like the Morpho collaboration together?
How are they approaching the staked comp tally integration?
It's pretty aggressive.
It says, here's the idea.
Here's the vote.
What do you guys think?
And so I think that we could benefit from using more of that structure.
And I think that it's probably fair to say that Gauntlet is prioritizing more morpho-related
infrastructure stuff than compound
related infrastructure stuff.
So these are important things that we discovered while we were busy trying to figure out how
to, you know, rebalance utilization across chains, how to increase collateral factors
so we could compete, how to list comp as collateral so that we could
play liquidity building games.
I think that that informed a lot of strategy.
Like the process of approaching those three questions and not really receiving much return
from the DAO in terms of collaborative, like, momentum. I think that tells us something useful.
Yeah.
Brian?
Yeah, there's a couple points here.
What is really, it's really strange, right?
When we presented these ideas at the beginning kyle like the other thing
is is there hasn't been a lot of activity on the dow historically when we came right and so we
didn't have as many delegates when we started talking about like voter escrow liquidity positions
like you know that that was like there then and uh there's a lot more activity now so i think that
like the dow is getting a little bit awakened
uh humpy is back in place they comp is back in play there's a lot more activity there's you know
there's some critical things going on and issues going on that are kind of raising awareness and so
i i think it's going to be different this time around this year coming up. I think we'll get a little bit more engagement. The issue is like everything that we need to push through in terms of like of a voting
kind of scenario, you literally have to go and speak to like eight, nine, 10 delegates and get
them on a call and explain what it is. Here's the pros, here's the cons. So they can make an adjusted and informed
decision. And, you know, most of the time that people that are calling are, you know, asking,
asking for things, asking for capital. And so it's kind of like a strange dichotomy. It's like,
I think that next year, we'll just have to go and do things, right? And then like maybe use some experimental budget to go and execute a couple different things and then say, okay, here's the experiment.
Here's the APR.
We should lean in more, right?
Or here's how many transactions.
Here's how many users.
We should lean in more.
Let's lean in more.
And then do like, you know, 10K experiments, 20K, almost kind of like the grants program does, like do a 20K experiment, do a 10K experiment.
And then, hey, we could really, let's see where this goes.
Like, can we put in $100,000 into this experiment and get, you know, $150,000 back to the Dow?
So I think that's kind of like the way that we have to like think on it versus um kind of asking permission for uh
everything we do it's just i don't think it's gonna work yeah i think there's forms of that
uh like what kyle mentioned uh having super clear initiatives on the forum and taking it from there
whether we get a great response or not uh i think starting at the forums, seeing if there's like doing a heat check.
And then if we get turnout, like there's been for these state comp proposals,
then, hey, you don't just move forward with the Dow, if not move forward by ourselves.
But this is a perfect transition point.
And I'm talking fast just so I can get to this point of state comp.
Brian, would love to hear from you about really starting with the status of, you know, where the discussion is on state comp.
You seem to be very privy to this subject.
Would love to hear that.
And then we can brainstorm what's fun about these ideas.
Look, we have activity.
We have some back and forths. We have people that care.
You know, like whoever gets this, it's going to be like, it's, where do we even begin?
Let's start from the beginning. So let's call it $60 million of reserves that have been generated through the lifetime of compound.
The question is, is what to do with the reserves. Right now the reserves are mostly in AeroVaults by Gauntlet
or they're still sitting in the reserves.
The AeroVaults in Gauntlet are putting the reserves
back into the compound markets, earning more interest.
From 2% to 6% on average, like 2% to 4% on the ETH
and 4% to 6% on the dollars on dollars, you know four to six percent on on the on the dollars on
dollars right so that's where they are the question is is like should we turn the fee switch on and
start giving back to the token holders okay lots of issues here issue number one you're basically
turning the governance token into a security so it's got a regulatory issue. The question is, who's regulating the DAO?
I don't have an answer to that question. And is the DAO entity a US-based entity? Is it a
foreign-based entity? Does it have a foundation? We don't have an answer for that. So it's like,
what's going on? So during the Humpy attack, this was the negotiation where he's like, give me state comp.
And I try to get state comp through.
It was blocked by certain delegates.
And this time, because it's not being pushed by alpha growth, but it's being pushed by three or four different teams, I think it's going to go through this time.
So now it's kind of like, okay,
what's the best design to do the fee switch?
And then how do you get the right mechanisms involved?
And how do you like push it forward?
And thankfully, I don't have to do it this time.
I could just like, I could be the one that's being critical,
not pushing forward the idea, which is awesome.
So these three or four different vendors
are going to push through.
There'll be a bake
off of some sorts or it'll just get hammered through i don't really care either way it's
it's the right thing to do uh and then we'll market it and we'll do business development and
then we have an asset that we can go around and sell to other chains to get like you know yield
bearing tokens and strategy onto other chains throughout the entire ecosystem
so we have something more to sell so i'm excited about it um i put my i put they're not my ideas
they are a collective of like three or four of us on the alpha growth side's ideas we put our ideas
out there if they don't use them all that's okay if they take some of them, great. They do this and do that. We put it out there. We pushed it forward.
We got the ball rolling. Other people are taking the ball.
They're running with it, and they'll go score the touchdown.
So it'll be a nice, cool team community effort.
Who wins is whatever. I'll just try to figure out what's the least hackable
and support what costs the the least what seems the most
sustainable uh what's the least hackable and and we'll sustain the compound community for and and
that's going to be my evaluation process and then i'll probably have to like pick one or two to
support um but i'm thankful that i'm not the one who's launching this thing now. I'm very thankful for that. And so is my general counsel.
Because, you know, we're in uncharted waters. And it's cool. It's cool to see like other people
like hop in and take and I think it should be like a like a legitimate bake off because it's
probably one of the top three things that will happen with compound this year, like state comp sandbox,
probably some like fixed interest rate stuff is probably like the,
the three to four big things that will happen in, you know,
2025 into 2026.
I can't wait. I really can't wait, especially for something like state comp,
adding to our standard offer saying, hey,
here are all these hedge fund, our treasury as a hedge fund-esque opportunities that you can now
have with comp as a yield bearing asset. It makes more collaboration make sense. So just that on the, hey, get more chains and more incentives onto
compounding growth. I can't wait. But I guess the next natural subject would be,
do you want to share a roadmap, Brian? Well, we got you here. I know you got to jump pretty soon.
Do you want to share a roadmap? We were talking on the marketing side.
You're very heavy on the, you know, big vision, DeFi ops, money game side of things.
We'd love to hear your priorities other than, you know, these big picture state comp and such.
I think the block and intact only what we're being asked from different chains is like,
hey, can you guys get some liquidity pools on every chain?
There's a lot of like technical debt or like I want to I don't want to call it financial debt, but it's like token utility debt that hasn't been worked on.
So like just from like a stupid, simple example, it's like, great, we're going to get comp on Ronin and we got comp on Optimism.
But there's no pool to trade comp on Optimism or, like, or mantle. It's like kind of crazy. So you get these incentives and then you
have to bridge it back and wait seven days to bridge it back before you can like accrue the
revenue. So it's, there's like really stupid, simple problems that just, you know, debt that
has to be taken care of. And so I think that's kind of like one of the main
things I'll look at. Just all the way around, like token utility, like the DAO basically asked
us not to get paid for it. But honestly, there's like a really good financial opportunity. So
we'll probably like build some vaults and publicize those things and let people earn
comp on comp rewards just because it's the right
thing to do. We'll probably make a, take a taker fee or whatever on the profit just so that we can
like maintain operations. But like, that's kind of the right thing to do. I want to do that.
Good question. Do you see a Sabler, I think is the name. Do you see a Sabler vault,
the money management vault for our payment streaming? Do you see a sabler vault the money management vault for uh our payment streaming do
you see that as being moved if we can get a comp on comp to be a because in our form post it says
we're long comp are we also looking for comp on comp for ourselves selfishly 100 dude awesome
yeah like like i like we have we have certain clients where they're so big that I don't think that we can affect the token price in a positive direction.
We are a long comp on comp.
I fundamentally believe that our efforts should give comp a multiple in the future.
I shouldn't be talking about price,
but I just, like I fundamentally believe it's,
and that's why we're long comp.
So there's other clients where they might be
in the billions of dollars of market cap
where we have less agency or availability to have impact.
Yeah.
Question.
So we keep... get your hand up what you got kyle what you got no you got your hand up or maybe i'm just seeing oh no i think that was just from before okay cool i have a i have a
question um i see a lot of opportunities for isolated markets to be sent out to the long tail chains,
things that would not like chains that would not have been able to afford the liquidity demands of a full comp V3 deployment. So we should have an offer for them. And my, my attention is that if we solve
this problem using Morpho, every problem that we solve using Morpho is one less solution that's
available for sandbox. And so it's like, you can do both. You could do Morpho stuff now. And I think the question is, how many of these ecosystems can we get incentives for and deploy isolated markets and these niches get filled at the end of the year? And then you have basically January when I think all of these,
it's a proliferation of forks basically to any available location.
So I think it's strategic to get as much incentives and deals done before the end of the year happens. But then it's like,
do we just give that up to Morpho with Gauntlet curation?
Do we get another curator or do we wait and focus on like past due
things that need to happen like say mantle incentives say like unichain etc and then
focus on those long tail when sandbox is live is a strategy question i don't know the answer to
sandboxes live is a strategy question I don't know the answer to it's a great
question I think there's like probably like 100 some assets I'm exaggerating
maybe there's like 70 assets that want to get listing on compound that just
don't have like the right liquidity profile are too risky to do and you know well they'll know that within sandbox don't be
there's gonna be more risk and more controls and i think there's gonna be like it's the right
play it's you have to go smaller you can't have like these big big markets with like 10-day
turnaround time for like risk adjustments you have have to get smaller. You have to get like more programmatic.
You have to get more agile because,
because the risks in certain assets are just adjust at such a high frequency.
I mean like on an hour by hour basis,
a whole entire market can be like completely wiped.
So you have to be able to adjust the speed of the market
on an hour by hour basis. And that's what sandbox is for. When you can do that, you can go more
risk on. And when you can go more risk on, you can offer more assets. So if we can get like a
pretty inexpensive sandbox deployment everywhere, like in, you know, right now to launch on a new
chain, it's something like $250,000 of cost to the
compound DAO. If we can get it down to like 25K to get a sandbox deployment or multiple sandbox
deployments, it's like almost every chain can afford that. So yeah, that's the goal, right?
You know, that's the goal, right?
So then we should do pre-existing obligations, like taking care of Unichain, taking care of Mantle, like, you know, stuff that we haven't been able to focus on.
And that'll give Sandbox some time to launch.
give sandbox some time to launch and then we can take a look at all of the isolated market
opportunities and direct those through to sandbox as opposed to saying let's act now and we'll use
morpho instead it's like such a stupid simple strategy all you have to do is like make smaller
curvature rates in intake rates than you do on morpho and and you just like, like, let's say they're charging 1.5%. You take
the same like programmatic permissions and charge 1.1% and you hit a button and you launch all those
competitive markets. What's going to happen over a long enough time period, people will move to
the markets that charge less and less money. It'll be a raise to the bottom. And the more that you
can programmatically take that over, then effectively you've completely like vampire attack morpho i think that uh sounds
great one point of concern i have is the incentives like say cello say mode say neon say even like
rootstock like these people that we haven't been able to go to,
but have had like conversations that have been interested, like even some money on the table.
We should get that money on the table and we should use it for our interests.
Like, I think that once there's a lot of different small projects that are all in there,
different small projects that are all in there there's less incentives available is that true
there's less incentives available. Is that true?
that's a complicated question i think it's a chain-by-chain basis sometimes the incentive
should deploy there should be like a cost maybe there's like a yearly cost to run um
you know sandbox because you do have like pid controllers and like things that in automation
it's not completely like you need, you still need,
the Oracle's need to get paid in the,
the automation infrastructure and the AI automation infrastructure needs to get
paid. And if those, those two things that at a minimum get paid,
then like those have legitimate costs.
It's like, if there's not enough profit,
it has to be like, if there's not enough profit on a particular market, then the chain would have to pay for the oracles and the PID controller automation at a minimum.
So we have to figure out like, what's the minimum cost per year?
And if there's not enough profit there, then, you know, they have to pay for it or the thing starts to shut down.
And if there's not enough profit there, then, you know, they have to pay for it or the thing starts to shut down.
Yeah.
And then we'll have to, like, do some, like, figure out how to unwind these things, too.
Yeah.
I mean, there's, like, a lot of questions.
I think the rapid growth of, like, Sandbox will be up and to the right.
You don't want to leave a ton of dead bodies, though, around, right?
You don't want to have a ton of dead bodies, though, around, right? You don't want to have, like, dead markets everywhere.
So kind of the unwinding of a market is something that we should talk about with Wolf at some point in time to figure out how to unwind markets as well.
Yeah, I wonder if they would go into bigger markets or move to other platforms like, hey, then it goes into a morpho if we're collaborative
with them yeah that would be very interesting right because like what if like a sandbox market
only has like 10 grand in it right it's not going to run profitably yeah so how long how long do we
sustain that cost because like you said there will be a cost to the dow. It is, I don't know what that is. I mean, we've gotten pretty clear
on what the cost is today
or the last year to run,
you know, normal V3 markets.
So I guess understanding that
is number one.
And then number two is just
doing smart PD.
But if I have the understanding correctly,
it's permissionless.
So anybody can come and create these markets.
And then if their project dies, their project dies.
It's not really on them at that point.
They've walked away.
What could be a defense mechanism for us in that case?
Yeah.
Yeah, I mean, that's why you have enterprise software costs and yearly licenses.
All right, I got to bounce to the next thing.
This was rad.
More markets, more assets, more incentives in 2025.
Looks like things are on a positive nature in more isolated markets for Compound.
Yes.
Thank you, Brian.
I will see you around.
See you around.
Yes, sir.
All right.
Bye.
Bye.
All right, Kyle.
What do we want to discuss next?
I think that we should continue the discussion of isolated markets.
That's what I felt had the most traction.
There are some things I guess we can just kind of set the landscape for.
I would like to make a clip out of this for understanding Compound and where it stands in the isolated markets environment and what it means.
Essentially, Compound uses a mechanism called cross margin.
Cross margin is where your collateral across multiple markets is being used on your position,
on your one account across many positions, right? So with an isolated market, the difference is you have
one account that could have many positions that
do not talk to each other, are not related to each other. And that's how we
see this in terms of the user's perspective.
Making it make sense for lending,
this is where the rules are isolated for lending. All the risk is just in this one spot. It is not protocol wide. If something goes awry or an isolated market, the risk is isolated.
architecture. And what I'm interested to know first, Kyle, is does Sandbox have that architecture
embedded? And then we can go through some of the cool opportunities that that might bring.
Yeah. Sandbox is flexible. It's like a build a market.
So if you...
So if you...
Who's curating?
Who's curating?
I think it's sort of like built to order.
And I think the curation...
So I guess curation meaning like the risks.
I think the risks are done by some kind of PID controller.
I don't know what that means.
But I do know that when you're building them, you can kind of say like,
well, I've got some money and i'm going to deposit for supply
and these are the assets and this is kind of like the risk structure we're looking at
and i don't know i don't know i think that information based on based on dex liquidity
you then will be able to have parameters uh preset just reading contracts uh to say, hey, here's what your supply caps can be.
That then also that contract address also has, you know, like collateral factors.
In the case of isolated markets, I don't see why everybody wouldn't want to have 95, 99% collateral factors
and just, you know, allow people to have that crazy range but I'm assuming on isolated markets you could do that like ah yeah
I think that at some point like I think the wisdom of gauntlet will become
evident at some point if you have If you have crazy collateral factors, like there's probably a reason
why Gauntlet is being conservative like that. And there's definitely cases where people are not
being conservative. And I think there's a difference between allowing your users to
take on a bunch of risk and having the risk of a bad debt in the protocol.
And I don't know what the difference is in terms of where the line is for collateral factors.
Yeah, and I wonder who it falls on, who that bad debt falls on in the case of these isolated markets.
How detached does Compound really want to be in terms of liability, considering it is using its code base?
It would be, yeah, it would be the suppliers would take the pain for that.
So I think.
I like that.
I mean, the lenders would get wiped out.
The lenders on that isolated market is what you're talking about.
Yeah, but the way these are structured
is like kind of like liquidity deals, I think,
that are launched.
So it's like if Threshold wants, you know,
like a isolated market for themselves,
then they are going to be seeding it.
Those are going to turn into reserves for that.
So their capital is on the line.
So. Yeah, no is on the line. So.
Yeah, no, this makes sense. All right.
So we have less liability on these isolated markets.
We have higher collateral factors.
And they're cheaper to run,
but to the degree of how much is what we have to answer so that we can
understand who is best, but to the degree of how much is what we have to answer so that we can understand who is best,
what becomes the cutoff.
But yeah, what's up?
I also want to experiment with Morpho, I think, for at least one,
at least one because there's a market to be had on mode that uses Renzo and ETH,
basically like easy ETH, borrowing ETH, and then looping manually.
And we have a deal set up there where we can get the incentives,
we can get the liquidity, we can get the whales.
But the only trick is, and we also have a Chaos Labs
that can be used as a curator, which I think is pretty cool
because they can just replace Gauntlet in that specific instance.
And I think that deal is just like ready to go,
but we can't,
like there's something interesting about the redemptions for that market
because the redemptions are basically like
the whales will have white listed redemption access
through Renzo's reserves.
I don't know how to turn that into like a program on, um, on like,
like PID controller for, for a sandbox type structure.
Yeah. Do we have, it's really just a, a, um, what is it? White, uh, list module.
Yeah, they have it already. They have it all structured up.
They're waiting for us to just act, and we've been very focused on renewal.
It's not on the compound code base.
It's on the whoever, Renzo or Mode code base.
Yeah, Renzo.
As long as we have a whitelist module on top of however the PID controller works,
module on top of whatever however the pid controller works we then can have whitelisted
whale you know markets yeah well they they have it would be cool to see how they
how their stuff works i think the deal is like we are ready to go just bring us something that will allow us to do this and i i don't know i don't
know what the deal is for how morphos um the compound morpho vaults have been launched
so the gauntlet's sort of like keeping that information and uh so i don't know what the
answer is for that but if it's that morpho uses it and they need a curator and Gauntlet is the curator and we just replace them with Chaos Labs for that specific instance, then the Chaos Labs curation, they're already tight with Renzo.
They've already approved the whitelisting redemptions and then all the pieces are in place.
And then the question is like how much incentives will Mode give us to deploy that market?
I don't know what that answer is either.
I mean, it's opportunity.
I hear these things, and I hear creativity.
I hear we're thinking about how can we make this compound thing extremely dynamic
that's normally not dynamic but super strong as a tech so i'm all
about it i think that we can wrap up uh this call i will say the big focus the big call out is that
these calls are turning into a podcast that is live like a live video podcast with a service provider, an asset, a chain team.
That'd be really cool.
For example, we'd love to have OffChain Labs, the team behind Arbitrum,
as one of our first, I guess, interviewees, podcast guests.
So that is one.
Two is make sure you're on the forums because we have our re-election
up and out. Make sure next week you're at the developer call because those are staying the same.
And then we also just shared a ton of updates on state comp, on isolated markets,
marketing architecture to expect in 2025. But yeah, thank you, everybody.
Kyle, do you have anything to share before we jump?
No, I'm looking forward to the podcast stuff.
I think that'll be pretty awesome.
Awesome.
Well, thank you, guys.
We will see you on the development call on Wednesday next week.
Cheers.
Cheers. Cheers.
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Compound Growth
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