Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
DeFi Deep Dive: Presenting the Liquid Staking Hackathon Winners
Recorded: Oct. 11, 2023 Duration: 0:41:06Space Recording
Full Transcription
We all know that DeFi is an essential sector of the SWE ecosystem, and it's been on an absolute
tear these past few months. Since August, just three months after mainnet launch, SWE has been
among the fastest growing chains in terms of TVL, according to DeFi Llama. TVL has been steadily
increasing throughout the summer, and last week on October 1st, we announced that SWE had achieved
a new all-time high for TVL at just north of 36 million. And this morning, just 10 days later,
we shared that SWE broke through 40 million in TVL and is now ranked in the top 15 of all non-EVM
chains. Now, while it's still early, it's safe to say DeFi on SWE is alive and well, which is
something that could not be achieved without the amazing builders in the ecosystem. And speaking
of builders, we're joined today by the protocol winners of the SWE Liquid Staking Hackathon that
concluded last week. My name is Rainier, and along with my colleagues Cynthia and Henry, it's a
pleasure to be moderating today's session. Without further ado, let's dive in. Now, we have some
special ecosystem projects that are joining us today, Aftermath, Haydall, and Volo. And let's
take a minute for some quick introductions. Can you each please tell us a bit about yourself,
your project, and your role at your project, Aftermath? Let's start with you.
Hey, everyone. Thanks for that. I am Kevin. I'm one of the co-founders and the CTO of Aftermath
Finance. At Aftermath, we are really focused on replicating the entire centralized exchange
experience completely on SWE. Now, this encompasses many products, including our LSD AF SWE. We are
also the team behind SIP6. And throughout our time on SWE, we're really focused on providing
ecosystem-wide infrastructure to SWE, like our recently announced dynamic gas feature.
Awesome. Thanks for that. Haydall, you're next.
Sure. Thanks. Very glad to meet you guys. This is Cedric from Haydall. So, I actually used
to be a traditional finance guy. And now we have built a Haydall SD protocol on SWE that, you
know, users can stake their SWE to get Haswe in return. And we have already launched our
product on SWE mainnet. So, whoever was interested in having to test out our product, feel free
to get in, Haydall, and check out our product.
Thanks, Haydall. Volo, what about you?
Hey there. Thanks for that intro and context. So, yeah, this is Vivian here. I'm the product
lead and UX lead for Volo. So, we're also doing, you know, liquid staking protocol, specifically
on SWE. And we're focused mostly around the governance model of liquid staking. We've explored
and researched it being worked on different chains. And we want to focus on that niche,
basically on SWE. So, yeah, we're building like an LSD based on SIP6. And focused on, you
know, building a governance model around the liquid staking.
Right on. Thanks for those intros. Let's go ahead and get into the nitty gritty. Cynthia,
why don't you pitch us a quick intro about yourself and then tell us why liquid staking
is important to a DeFi ecosystem.
Okay. Sounds good. Hey, everyone. This is Cynthia. I'm leading the APAC ecosystem on the
foundation side with a vertical focusing DeFi. I've been like with SWE Foundation for six months
before joining SWE Foundation. I was building a very early project on Solana with a focus
in the name service and DeFi. And then before jumping into crypto industry, I worked on JP Morgan's
trading pool for like three years, pricing, exalted FX and interest rate derivatives.
So, I would say like traditional finance and DeFi have always been my career and personal interest.
And I'm super excited to be here to join the space and chat with our winning LSD projects on the
DeFi future on SWE. And to answer the question why liquid staking is very important to DeFi ecosystem,
I think there are like three reasons. So, the first reason is basically LSD protocol offer a risk
free rate for token holders who seek stable yields. So, this is like very similar to traditional finance.
Like currently the, you know, the U.S. treasury yields have been like really high and basically
these are like risk free rates. And if I'm like a dollar cash holder, I will be like more than happy
to deposit my cash into the treasury bonds to receive a very stable yield. And in the DeFi space,
I would say like the LSD protocols offer the same like risk free rate in the DeFi space for any like
token holders. And then the second reason I think why liquid staking is very important is it helps TVL
growth by leveraging blockchain's composability and interoperability. So, after users stake their
native tokens into liquid staking protocol, they will receive the liquid staking token that represents
the ownership of the state tokens. These liquid staking tokens can be actually used as collateral
onboarding and lending, CDP stablecoin, or deposited into option bots to generate further yields.
So, for instance, as a user, I can deposit into Navi or Scallop. Oh, so I can deposit my native
suite tokens into LSD protocol, receive the liquid staking tokens, and then deposit those liquid staking
tokens into Navi or Scallop and borrow out suite native tokens, and then redeposit this suite token that I
just borrow out into LSD protocols again. And basically, through this whole journey, and through
this like DeFi Lego game, the TVL gets doubled. And this is like very beneficial for the borrowing and
lending protocols as well, because basically, this whole journey helps them enhance the utilization rates
of specific assets on their platform as well. So, in general, I think why LSD protocol is very
important. Basically, it offers a risk-free rate, and secondly, it helps with TVL growth.
Awesome. Thanks, Cynthia. Now over to you, Henry. Can you give us a quick intro,
and then give us a recap of the Sui Liquid Staking Hackathon that recently finished?
Sure. Hi, everyone. So, my name is Henry. I lead the APAC DevRel team here at Sui. I've been
with Sui for about one year. Prior to joining, I was working for a polkadot parachain called Moonbeam.
So, to give a quick recap about the Sui Liquid Staking Hackathon, this hackathon started around mid-August,
and it just finished about a week ago. So, at the beginning of October. So, in total, for this contest,
we had 400 combined registrations between teams and individuals. And then, during the first round,
we shortlisted about six teams for each of the two categories. The first category that we short was
a part of the contest was for the liquid-staking protocols. And then, the second category
was for LSD-Fi and also for liquid-staking tooling.
And then, at the end of September, we had our final round, which was our demo day. And then,
we just announced the six winners and three for each of the categories last week. So, the top three teams
for the first category were also our guests for our AMA today. And they were Aftermath Finance,
Hedo, and Volo. And the top three winners for the second category are Aftermath as well, and also Bucket
Protocol and WisSwap. And also, we had six teams that were in our honorable mentions. And they are
DegenHive, Desic, Interest Protocol, Kana Labs, Legato, and Suisa. And for the winning teams,
the next steps are, if you were in the second category, the LSD-Fi and tooling, the next steps are
going to be pretty similar to our past Sui hackathons. They basically just need to complete KYC,
and they will be able to receive their cash bounty prizes. But for the first category, which are the
liquid-staking protocols, what they have to do next is a bit different. As one of their main prizes
is going to be 25 million in Sui tokens that will be staked on their protocols. So, before the Sui
Foundation can do that, we need to ensure that these liquid-staking platforms are secure,
as there's a fair bit amount of Sui tokens involved here. And so, we want to minimize any chance of any
smart contract bugs or any kind of exploits that could potentially cause the stake to be either lost or
to be stuck on their smart contract. So, we're also covering two rounds of security audits for all
three winning teams, by UtterSec and also by Movebit. And that will start in the coming week or so. And all three
winning teams will be contacted about this. Thanks. Great. Thanks for that thorough breakdown, Henry. Before we jump
into some more nitty-gritty details, I'd first like to hear about how the process went for each of the projects. So,
Aftermath, I would love to hear what inspired you to participate in the hackathon in the first place?
That's a great question. So, I guess, where to begin? So, at Aftermath, we have really, I guess,
always had a strong presence regarding liquid-staking on Sui. I believe it was back in December. So,
you know, we had been here for a couple months. This was right before TestNet Wave 2 and Wave 2 had a large
focus on, you know, the new delegation system behind Sui. And it was around this time where we began
noticing code relevant to Sui staking starting to appear within the Sui's GitHub. Kind of leading up
to this, we had always had an idea that we wanted to build out an LSD on Sui. And it was around this
time where we actually started to begin designing and implementation. So, this kind of started a long
journey of leading us into developing the first version of AF Sui and kind of realizing some of
the drawbacks of the Sui framework, specifically regarding LSDs. And this was the catalyst behind
SIP6. We had positive element there. We spent a lot of time working on SIP6, got that through the
proposal period all the way to the implementation and deployment onto mainnet. And now with SIP6,
it kind of saw a monumental change in the type of LSD protocol that could be built on Sui.
And it was a strong contribution to the design of our LSD and kind of AF Sui version 2.
Now, I can't say there was really one thing that inspired us to participate in the hackathon,
but it was rather just a combination of both our intimate relationship with liquid staking on Sui,
and then our pursuance of just creating a truly decentralized and permissionless liquid staking
derivative. Great. Thanks for that. My next question is, how was the contest process for you?
And Heydall, why don't you take this one? Sure. So, it was pretty intense for me, I see,
because I see there's a lot of very interesting and very great LSD protocols built on Sui that
participate in the liquid staking hackathon. And I see they're all well prepared. And so,
for us, there are two timelines. We complete our smart contract audits by MoveBits on 28th of August,
and launch our product on the mainnet on 6th of September. So, we're trying to get our product
well prepared before the hackathon, like during the hackathon, but before the demo day. And for the
pitching, we keep optimizing our product, getting feedback from our DGN users, and also from other
teams in the ecosystem, and provide their best like DApp experience. And also, we're trying to,
we're making some really unique and interesting features on Heydall. So, we can have a well presented
demo day. Yeah. Gotcha. Thanks. And so, now let's talk about some more stuff with regards specifically
to liquid staking. And Henry, I'm going to go ahead and turn it over to you to continue moderating.
Sure, sure, sure. All right. Thank you. Okay. So, the first question I have is for the three of our liquid
staking projects. In your opinion, what are the important factors in building a successful liquid
staking protocol on SUI? Let's start with the aftermath.
Yeah. So, let's see. I would say just in general, liquid staking derivatives are just a product that
is heavily tied to the underlying design of the network staking mechanism. This means that to truly
build a successful LSD protocol, you really need to just understand and adapt to both the novelties,
and also in some cases, the quirks of the underlying staking framework. So, with SUI,
SUI has presented many new features for their staking design. And I'll add that we have even
begun to see some of SUI's influences start to pop up in the roadmap of other chains, which is exciting.
So, with SUI, most importantly, they enable permissionless delegation. And also, as it stands
today, there is technically no unbonding period. So, with that said, there will eventually be an unbonding
period in SUI's future. So, LSD protocols on SUI should build around these features and should be
able to see these features in your LSD staking and unstaking flows. Now, outside of SUI specifically,
I would also add that LSD protocols should have a focus on the utility or the use cases behind your
token. Making the underlying stake fungible is not really important if there's nowhere to use your token
in the first place.
All right, cool. Thank you. So, like, actually, I have one quick follow-up question. Because you
mentioned that the unbonding period on SUI is either really short or there is no, like, official
unbonding period. How does that affect the design of your platform?
So, I say, technically, there's no unbonding period, although there's an activation period.
So, technically, that's a bonding period. But in terms of the flow, you can also kind of think
of it as an unbonding period. So, with us, that forces us to enforce a one epoch unbonding period.
And going forward, that's going to most likely expand whatever the unbonding period of SUI is going
to be set to. We're going to match that. But with your design, you need to at least,
respect that activation period, whether it's a non-zero bonding period or a non-zero bonding period.
Okay, cool. Thank you. Okay, next, let's go to Heido.
Oh, okay. So, in my perspective, for me, SUI token has the financial value
of replacing other tokens and acting as a collateral and ecosystem. And for us, the LST,
has we kind of let the financial instrument of SUI remain staked. So, it let the LST being used in a
series of DeFi protocols on SUI, such as lending, like Cynthia mentioned earlier, DEXs, CDP, and make the
assets liquid. And I think for the LST, it has two meanings. The first one is to experience incentives
for the liquidity and the project community. And the second is to hold LST, we will provide a DAO
community. So, it means the part of the Heido treasury. And also, they kind of hold the
decision on the incentive release and also some government rights. It would be really exciting for
the ecosystem.
All right. Thank you. And lastly, we'll go to Volo on what are the important factors in building a
successful liquid-staking protocol on SUI? Sure. I think, you know, the LST itself being built down
to protocol level is pretty important. So, I think Kevin did a good job explaining how that's working
within SUI, with SIP6. And then, I guess, carrying that on, you know, an important factor,
I guess it can be put together in a roadmap. So, first, the most important thing is, you know,
security. So, you know, obviously, when a user or institution or anyone else deposits, you know,
SUI and gets an LST on any protocol, security is the most important factor. So, of course, you know,
all three teams, all of us are really focused on having very thorough and timely audits in place.
So, that's the first thing. And then, second thing is, you know, the utility of that protocol
or the LST itself within the protocol. And that would be, you know, making sure that
all the DeFi projects that people are used to using, like lending, borrowing, CDPs, or DEXs,
all utilize the LST in an efficient way. And then third is, you know, of course, using SUI's unique
features. I think one thing that sticks out about SUI that you don't see in other chains that have LSTs
use is that speed and the fact that it's built in the protocol. So, it can be used within all
DeFi applications, but also gaming. There's usually gaming and LSTs are completely segregated
on most chains, but because of SUI's unique design, I think you can have a gamified LST
like program as well. I think a lot of that was showcased in the hackathon. So, for us, it's going to be,
you know, I guess those three factors, making sure it's used within the entire ecosystem.
All right. Thank you. So, the next question is also for all three of our liquid-seeking projects.
And the question is, could you please explain the user journey when they use your protocol
to stake SUI tokens? Let's start with the aftermath.
Yep. Sure. So, I actually use this word a lot during the demo day, if you guys tune into that.
And I believe it is the best word to kind of just describe our user flow. And that word is simplicity.
So, staking for AFSUI is just simple. First, you select the validator, then you enter the minus
SUI to delegate, and finally just click accept. And there you go, you'll also receive your AFSUI.
Unstaking is almost as simple. You just need to select between a delayed unstaking route or an
instant unstaking route. And then you enter the amount of AFSUI to unstake. If you select instantly,
you'll receive your SUI as soon as your transaction completes. If you select the delayed route,
you'll see your SUI appear in your wallet shortly after the epoch advances. In either case, staking or
unstaking, it is only one transaction for the user. So, it really can't get more simple than that.
Okay, cool. Thank you. And let's go to Haydo next.
Sure. For staking, we do provide two modes. For the normal staking, we'll
normal automatic staking. We'll select 10 top most active validators with the highest APY for staking,
and make sure that we distribute equally of the stake amounts of that users throughout the validators.
And for the second mode is the manual mode. So, users would have their own preference on staking their
SUI tokens into some specific validators. And for the unstake, the process is very easy as well.
For the normal unstake, they just enter whatever amount they want to
unstake. And for the 20 hours of first epoch, they will be able to unstake their assets in one epoch.
But for the last four hours, they would have to take some more time to unstake. And for the second mode,
a foreign state would be the instant swap. So, we now already create a liquidity pool on status,
and that provides users to instant swap their HATSuite token back to SUI token instantly.
But there are some fees for that, but it would be really efficient for some users who are really eager to
get their SUI back.
Okay, great. Thank you. And lastly, let's go to Volo for the user journey when someone wants to use
Volo to stake their SUI tokens.
Sure, yes. I think, you know, we want to make the user journey as simple as possible.
So, for us, it's like very similar to most LSD protocols experienced on other chains as well as,
you know, you just stake instantly. And after the user stakes their SUI, they get VSUI in return,
or Volo SUI is the name. And we presented a dashboard on where they can utilize their SUI,
or their VSUI within the SUI ecosystem. So, we presented, you know, a variety of different
deeper applications that support VSUI, as well as something we're working on is something called
Vaults. So, there are customized vaults where you can utilize your VSUI. It's like almost like a
yield optimizer, but it will be given different options. And then in terms of unstaking their VSUI,
they can, yeah, just instantly unstake it. So, for us, it's more just automated. And we want the
journey to be reliant on the governance. So, the governance will evolve over time and get,
you know, more and more decentralized. But we want that transparency with the user that,
you know, it's being, that the VSUI is being delegated in a correct and decentralized way.
So, that way, they don't have to think too much about, you know, how exactly how to stake
their VSUI, which validator it's going in. We want that process to be as simple as possible. Yeah.
Great. Yeah. It's really cool to see all the different teams to come up with their own way to
tackle one of the more central questions, which is how to keep the user experience very
simple and smooth, but while also giving the user enough, like, freedom and choice to choose, like,
which validator that they want to stake with. All right. I think next we'll, I'll turn it over to
Cynthia to moderate the next couple of questions. Yeah. So, going next, I have, like, a couple of
more questions I'm really curious to learn from our winning LSD projects. So, understanding that, like,
Heido has already gone live on Sui. I'm, like, really curious to hear about, like, what's your
TTM strategy and your user acquisition strategy?
Okay. So, I will split into a few perspectives. So, for the very first thing, we're focusing on our
products. So, we're pushing some integration with the existed DeFi protocols and wallets.
So, we've already have integrated to the CDP protocol buckets and they have a set Haswe as a
collateral. So, users will be able to mint the stablecoin buck with Haswe and support the
FlashLong protocol to amplify Haswe's income. And second one, the Lending Protocol, Scallop,
and the Navy. We've, uh, uh, with, uh, uh, let, uh, these two protocols to a step Haswe's collateral and
lands, uh, USDCN as a digital assets on Sui as well. Uh, uh, all of these, uh, integrations are
already live on testnet and they will be ready as long as we push it to the mainnets so apart
from that we also propose the status which is the biggest decks on on suite there is already
liquidity pool of high suite to suite established on mainnet and the status vote function will
probably soon be added to manage the high suite suite position and our plan the LP token will be
used as collateral to be accepted in other DeFi protocols like I mentioned above and become
collateral to mint other assets with the concept of restake so for other
LSD5 protocols such as Wiswap and also desic they're doing some either as the aggregator or
the staking function internally in the wallets we we are also catching up on the on the integration
on testnet and the second thing I would I would say the competency so a good LSD particle cannot
succeed with without a very active and decentralized community so we will
start off to attract community traffic with some marketing campaigns using the social tools such as
zv port 3 galaxy to capture the interest of users and different ecosystems so there will be a traffic from
not just sweet and but other non-evm evm ecosystems to to make their attention on on on liquid staking
protocols on suite also we will that we will issue the header token so header token will provide community
incentives for users of liquidity and other d5 applications and the next thing would be
uh the doubt so there will be a very uh uh very precise uh uh explanation in the uh and the and the
following question of AMA I think yeah so I would just leave a blank here and maybe explain more information later
yeah thanks hey though for your um very detailed explanation so just to summarize you are saying
that um having more use cases for the liquid staking tokens by integrating with different d5 projects
is like super important as part of gtm strategy and on top of that having a very strong a community by
setting up the dow and incentivizing the community with your native platform token also will help drive um
the traction to your platform um and then for uh for uh for our other winners um after mass and volo um
i so so first of all i'd like to know like when you plan to go live and uh secondly what can users
expect in the next couple of weeks uh i think we can start with volo
uh sure i expected uh after me to go first yeah so for us uh we uh again are focused on the audits
process uh and as i mentioned in the beginning so we've completed two audits uh with uh and movebit
uh and as right now we are completing our last audit with ottersec uh so along with that and you
know our cto is very uh focused on uh unit testing even beyond the audits uh so right now we're focused
on security uh so our go live date um as of now is like likely end of the month um or early november
that's what we're looking at and uh in the meantime uh uh your question was what can users expect the
next couple weeks is more just uh just education on how exactly the governance will work how the dow
will be set up and uh and how um you know we plan to do incentive alignment across the entire defy
ecosystem for sui uh so that includes all projects uh that will utilize v sui as well as the community
and invalidators they'll be able to vote on how the sui will be delegated
and after mass do you want to go next yeah sure yeah it sounds like we have an almost identical
timeline as you guys um and i mean this is the question that everyone really has been asking
right uh since the hackathon when are we going to go live um so with as we uh we're also in an audit
with otter sec in the final stages um shout out to otter sec for that they've been doing a great
job um really respect the hard work that they put in for that um and we're just getting everything
prepared on our site for its official mainnet launch but that is kind of the blocker um everything
is looking good from their point of view um and then over the next couple weeks uh what can users
expect with afswe um should be a launch of of as we on mainnet imminent as as we're wrapping up audit
um as well as just a handful of use cases we're preparing i don't want to say too much so i'll
probably just leave it at that yep sounds good we're super excited for you guys to launch and i'm
pretty sure like our users um uh also like very excited about you know seeing volo and aftermath
going live uh next i'll just like pass back the moderating role to rainier awesome thanks cynthia with
that i got a question for you cynthia how do you imagine that these liquid staking protocols that
we just heard all about will contribute to the defy ecosystem growth on sweet yeah this is a great
question um on top of my mind i think there are uh two points so the first one is uh to help with tvl
growth and i think like um during the opening um conversation i already mentioned that like lst
projects can fully leverage the blockchain's um interoperability and composability and by in
by integrating with different d5 projects and expanding the use cases of the liquid staking
tokens uh it can actually uh greatly enhance the general tvl um tvl growth um in the sweet ecosystem
and the second point is since like liquid staking token will be a new type of asset within the sweet
ecosystem and once this total supply of this liquid staking tokens get big enough i'm pretty uh i'm
pretty like looking forward to more innovative solutions um that that will be you know like built
out around this liquid staking tokens um and i'm like also very excited to see like more lsd5 projects
coming out in the next few months um that can you know greatly enhance the capital efficiency of this
liquid staking tokens as well as providing like way more innovative use cases for this liquid staking
tokens in the future awesome thanks cynthia now henry i got a question for you for the builders and the
developers listening in i'm sure they're getting really excited about the hackathon and future hackathons
and developer contests that we have in the pipeline are there any of these events that we will be hosting
or sponsoring in the near future yeah sure there are um so just to really quick we are going to be
sponsoring two uh kind of like regionally focused hackathons this month and the first one that we are
sponsoring is called the unfold hackathon that will help that will be held in bangalore in india from
october 19 19th to october 2021 um so it will be held at the same time as the unfold conference um and the
price pool for that one for the sui track it's going to be 35k um and the the two bounties are fairly broad
but you will get bonus points if you integrate with some of the more specific sui uh features such as
kiosk or zk logins uh if you want to find out more information about this you can type into google unfold
2023 uh and then the dev folio and that the first the first result should be a link on to to the uh to
to the landing page and then the second hackathon we're sponsoring um is going to be the epfl hackathon
uh held in held in held in lozain switzerland at the epfl camp campus and that one will uh it will start it
has already start started the first part uh and then it will go on until october 22nd second um and the
bounty for that one is 20 25 grand uh in swiss francs and if you want to find out more information about
that one you can google epfl suite hackathon thank you awesome thanks henry i can't believe 40 minutes
has already blown by in today's session and you know what with that we are done so whether you're
a developer builder or general community member who wants to get involved reach out so we can help
there are many ways to get in touch and here are just a few you can go to our website sui.io and sign
up for our newsletter the sign up is about halfway down the page you can also join the discord or join
the sui nami writers telegram group and last but not least you can follow us on twitter now keep your
eyes peeled for further updates from the suite foundation as we have many initiatives in the
pipeline to continue supporting the growth of the ecosystem thanks to my colleagues today's guests
and a very special thank you to you the sui community until next time we out
