All right, so everybody ready to get started?
Yeah, I'm ready. Good happy to be here.
All right, well, let's rock and roll. Welcome everybody to our roundtable discussion, regarding the future of cross-chain D5. Today's discussion, again, we're speaking about the future of cross-chain
decentralized finance. We've gathered a panel of experts from some of the leading platforms in the Moombim ecosystem to explore developments and trends in the field. Each of our guests today, they have a unique perspective in the industry and will begin by just giving them
and chance to introduce themselves in the platforms. And the first thing I'd also like to know is who the target audience is for each of the platforms and what sets you apart from others and the DeFi space. And Harrison, I guess, let's start with you guys.
Sure. So we are targeting asset issuers and projects that have stablecoin needs or stablecoin use cases on non-ethereum blockchains. And as a general matter, we're super
We think that pretty much every project has a stablecoin use case, including other stablecoin projects. But the key innovation that we've really introduced thus far is the ability to move a stablecoin
between different blockchains as a native asset. So it's a primitive that we think is significantly better than some of these wrapped stablecoin assets from a user experience, composability, and security perspective.
Awesome. And I want to make sure I'm saying your name correctly. Is it Derove? Yeah, it's true. You got to pretty much on the first go. That never happens. Awesome. Glad I could let I can get it correct. Deroves all here from a quota finance and the same question for you.
I'm sorry, who's the target audience for the platform and what sets you guys apart from others in the DeFi space? Yeah, thank you. I'm joined with my co-founder, Gio as well, who's in this AMA. And Coda is a decentralized
on-chain, order book style marketplace for loans. Our goal for Coda is to build the next generation of infrastructure to underpin fixed income products in DeFi. We're targeting a variety of people, like we are definitely targeting
retail traders and investors because we want to serve our community well, but we're also hoping that Coda demonstrates utility to institutions and financial institutions from Tradify that have traditionally not had an opportunity to participate in crypto and DeFi.
Awesome. And it looks like we have one more person looking to join. Just give me a second and I'll bring them up. If you can Thomas, if you can just request to speak, I'll bring you up to the stage.
I'm actually not seeing you here, so just want to make sure that you're on mobile device.
Okay, try to maybe close the app and reopen the app because I'm not getting any requests.
We'll just jump back to by frost as soon as we can get them on having a little bit of a technical difficulties Twitter spaces. Oh seems to always have this issue. So we'll just move on to the to one of the first topics. So let's talk about governance and specifically in
in a cross-chain world. One of the key trends in DeFi today is to move towards this cross-chain compatibility.
And with so many different blockchains and protocols, it could definitely be challenging to create this seamless user experience. So what does governance look like in a cross chain world? And for example, like the recent Uniswap deployment to buy Nance Mart chain, you know, it's a good
great example of how these ambitions and governance can intersect. What are your thoughts on the challenges and opportunities that can be presented with cross-chain governance? Whoever wants to take this question first can just hop in.
I can have a whack at it if someone else is okay with that. So maybe I can share sort of our responses from the perspective of Coda, which is an L3 protocol. We're just building an app on a network. And for us, we do have multi-chain or cross-chain
ambitions for CODA and some of the questions that we think about are due involved governance, but it really is framed from the perspective of we have this product that allows people to lend and borrow and then we have tokenomics that work in harmony with that product. And the tokenomics part of it is really the doubt.
How do proceeds or profits from the protocol get distributed? What do token holders do with that tokens? How do governance votes happen? And one of the ideas we've been exploring is this idea of like our token on mixing to serve a different set of users from the product itself. Oftentimes,
these rally around the tokenomics first, these days especially. So we are trying to find a way to sort of bridge that gap in a community in terms of engagement to find people aligned both on tokenomics and product, but in a cross-chain world, the question we ask is like how can we reconcile the balance sheet
about Dow across multiple chains. So to give you an example, if we operate markets on Moonbeam and Ethereum, where does the token live? Where does the code I token live? How do the fees that the Dow accrues on Moonbeam and Ethereum, how do they actually get transferred across? Can we do
this in an automated way. How do stakers get their fair share of protocol proceeds? So we think governance does play a key role in this, but can we have fragmented votes across multiple chains? Can we have fragmented stakers across multiple chains? I think the gut feel right now.
and where we're at and where really in the early stages of discovery is it's likely that the token will have to live native on one chain like Moonbeam for example and the proceeds will all have to be repatriated there for stakers and the governance votes will happen there where the execution
of markets may happen on multiple different chains. I hope that provides some insight into the way we're thinking about this and our perspective. I can jump in further, but with questions and not answers because we're thinking a lot about how to bring my other guys. I think in terms of
governance. Really, what is it that you are talking about? And I think it's generally one of two things. It's either some sort of parameter change in connection with the protocol or it's some sort of upgrade or some type of new functionality. And I think that there are sort of
two different use cases. If you're deploying an application on more than one blockchain or more than one software network, it could absolutely be the case that either one of those two items is something that is resonated to a local deployment. However, it could also
the case that you want to upgrade something across multiple deployments on multiple different networks. So in our view, the future of a token and future sort of extrapolate the T2O primitive is that it can will be able to be teleported natively between different networks.
you could actually have a governance token within a particular token framework where you can teleport it as an AVE token between the blockchains in which a project is deployed. But then you kind of have to ask yourself, well, what is the value of that governance token in terms of being teleported? Because right
right now you have certain projects where the issue governance tokens on different networks but they're totally different. I mean it's as if they're entirely two different systems. So I think that the likely outcome here is that what you'll see is that you will have governance tokens issued on different networks but it will be something that's fungible between networks in terms of being able
But where potentially voting could be centralized on one network, but in order to sort of effectuate or to opine on a particular proposal, whether it's a parameter change, or it is potentially an upgrade on one.
or more of the different sort of federated deployments, it could just be a very simple DAP in connection with one of these cross-chain messaging protocols. Something that is quite very low level and is not particularly sophisticated in
terms of what needs to be developed or deployed and it's not something that's time urgent. I would imagine a key thing in connection with either an upgrade or a parameter change. There's probably some amount of time where everybody within the particular project has an ability to apply and to vote on it.
I'll jump in further with this and I'll pose more questions and answers because I think there are a lot of challenges in here. So I think Harrison was talking about a centralized place for actual governance voting.
So there are sort of two types of governance voting. So you've got the off-chain sort, where it's kind of you vote on things like that, you know, still require, you know, there's a yes or no vote, but it's still, there's no
automated actions based on the results of the vote. So those are off-chain governance, right? Where the votes, the results of the vote are actually tied to some governance multisay. And for example, that might be an off-chain.
Automated contract upgrade and that happens automatically at the end of the vote and and and the changes are applied in automated fashion based on the results so that off-chain governance obviously you can centralize that in one place and kind of
carry out the, you know, the will of the token holders across all chains based on the results. But on chain, on chain government, it becomes a bigger challenge yet because, you know, if you're voting for a parameter upgrade somewhere, yes, you can change that on the current.
You know chain where where the token the centralized token is held but how do you kind of propagate that to all the other networks in a similarly automated fashion? I think that's kind of one of the big challenges. So I you know
So from what I can see so far, you know, cross-chain governance really only kind of supports the off-chain governance at the moment. And yeah, I'd like to kind of know how people are approaching it if there are solutions through on-chain governance across multiple networks.
For me, this reminds me of some of the most popular off-chain governance platforms. You have your snapshot.org, you have a poker ID ecosystem. A lot of people are using 4-square.
or these different off-chain platforms. And then, like, regarding like on-chain, like one of my favorite on-chain governance models is definitely the polka dot on-chain governance. And, you know, once these votes pass, you can see
the runtime upgrades automatically are automatically implemented. So I think that's a really good example of these two different types of governance models. And if anybody did anybody else have anything to add to this?
I think the open-gov model is really the gold standard of governance. I think some of the D5 primitives on Ethereum for a particular protocol have done a great job of it, projects like compound and fracks, but I think the next wave of what is being
to accomplish on OpenGov in a way where you have a governance structure that can frankly outlive any of the people using the protocol right now is really something that all projects should really model after. And I know it's one that we take a lot of inspiration from.
Another thing I would like to mention is actually within, if you're familiar with the Chaos Dow, the Chaos Dow has been working really hard on facilitating governance and they're actually creating within Chaos Dow, they're creating a sort of
So, for example, we have our gated channels and then the members can vote on different proposals within OpenGov and then automatically based off of the outcome of these like disk
We have bots that are set up to proxy accounts within, you know, within a pogot ecosystem and then these these votes are automatically just applied. And a lot of additionally like people are delegating
So if you're if you're token holder, you can delegate votes to the chaos down and then then based off of our you know the votes within within chaos down those those votes are applied
So I think that's a really interesting, really interesting model, a way of doing things because it's actually automatically applied. And it's not, you know, there's nothing that's happening manually there. And I definitely like to see other, you know, other projects like implement some sort of like automated, automated,
system like this as well. So, yeah, so another key, actually another key consideration in in cross-chain DeFi is actually like the architecture of these different applications. You know, some of these, so some of these platforms are adopting
a hub and spoke model and others are pursuing this point to point approach. I'd like to hear you guys a comment on this. What are the pros and cons of each of these approaches and what do you see as the future of cross-chain DeFi architecture?
I mean, as with all architectures, there are trade-offs. So there's definitely use cases where hub and spoke make sense or we think of it as point-to-point. Coming from the damn perspective, we come from enterprise software worlds.
very much in terms of the requirements that we know, like regulated financial institutions look for in connection with blockchain type of a DAP. So we personally like point to point, just from a scalability perspective, it also can help
with regards to avoiding points of congestion in connection with an actual cross-chain message. So think of it like you're able to fly direct to your end destination versus taking a layover. And it can be challenging to
to build in resilience to your protocol if you have sort of like a centralized dependency in connection with your architecture. In our view, there is an argument to be made that if you're using a hub and spoke architecture, it
So, eventually introduces some trade-offs in terms of the sophistication of the depth that you're able to deploy on the basis that you're constrained to always having to go to one area or one hub, so to speak.
And that could potentially make it such that the DAP is less composable. But again, it depends on the use case and the project and what they're trying to optimize for. But as a general matter, we favor sort of point to point architectures for scalability and resilience reasons.
Yeah, I'll wait until you know I'm not an expert on Harbin's broken point point cross chain architectures, but maybe from Adapt developers perspective, you know, I view it as like a two things that are really important
One is security and flexibility. The other is, I guess, the resource requirements to actually implement functionality in your smart contracts that works with these protocols.
One of the challenges of crypto in general and building, building DApps in general is there's a lot more complexity than Web2. You know, Web2 is all about centralization. If you want to build a full stack application, you're building a server and a UI, and that's if you control all of your data, you can do a lot more with it.
You can make larger changes a lot more easily and that's some of the benefits of centralization. You know, is, or having a central model is, is control. Like you have this ability to execute quickly and execute well. I think that's where Hub and Spoke probably has, you know,
you know, an advantage in a way is that it's easier to execute on certain things. But it does create like this. I'm reluctant to use the Tom's single point of failure, but there's one, if you put your hacker hat on,
There's a very high incentive to exploit a hub and spoke model over a point to point. And as a DAP developer, you know, it is definitely something that weighs, weighs on my mind. Again, I'll say that I'm not an expert.
on the field and I'm sure there are ways to mitigate a lot of these risks, but it is something that I think about quite often. So looking for something that maintains the decentralization guarantees matter a lot, and I hope that's reflected in the model of whatever solution our industry settles on in the coming years.
Awesome. And so moving on, one of the key challenges and defies is ensuring the stability of these systems. Cross-chain liquidations are a critical component.
component of this stability. And so what I'd like to hear is the thoughts on the best ways to manage these events and maybe some examples on how you guys actually manage this.
Can you actually explain a bit what you mean by cross chain liquidations actually? Oh, the question to explain what I mean by cross chain liquidations.
Yeah. So for example, maybe you have a cross chain application with two deployments on each chain and maybe having collateral on one chain and
And collateral on one chain and assets on another chain. And then how would you facilitate like a liquidation if the token price say on chain B where you have your assets as affecting the collateral on chain A?
Yeah, okay, yeah, that's a pretty sophisticated use case and I think when we talk about cross-chain it depends I guess what the cross-chains are. For us at CODA, speaking, there's this for our project. When we're thinking cross-chain, we're thinking of, let's say, aside from Roondeme, we're thinking
Maybe a theory or an Ethereum L2 something like like arbitrary more optimism whatever From our you know perspective, I don't I think it would be a little bit too complex to have assets on one chain and collateral on another and kind of pass things across through through cross-chain messaging kind of things on top of that You know when you're bringing
bridging across your collateral from one change to the other in order to kind of sell as a liquidator, right? That also takes a certain kind of quite a amount of time depending on what bridging you're using. And you know, that's sort of risk that liquidators generally don't like to take. They generally like to be kind of atomic.
right? So it doesn't really answer your question about cross-chain liquidations, but my personal opinion is that it's, you know, it introduces a lot of risks for liquidators because they don't want to take this sort of cross-chain type of risk. We'd have to wait several minutes before they're able
to crystallize the profits, whereas if you keep your assets in the collateral and the same chain, they can do that on a single atomic transaction. I guess, followed by, we also try to go with this point-to-point model, I suppose, that I have been spoke when it comes to liquidations.
So I think from an architectural perspective, if you're looking at a cross chain liquidation, a liquidation is paramount to the health of a protocol.
right, like it needs to happen. And I think when you look at a lot of the cross-chain messaging protocols out there to design a system where you have asset locked up on one network and you're trying to do a liquidation on a different network and there's some sort of coordination between the two.
There are a lot of things that can go wrong, right? What happens if the message doesn't get delivered and what happens if the message doesn't get delivered on time? What happens if, because of network congestion, the cost of delivering that message exceeds the value of a potential
liquidation, then start throwing in some of the MEV type of activities that happen on some of the actual cross-chain messaging protocols or platforms. So totally agree is very, very complex and I think initially probably a
more simple architecture is something where you have local liquidations. And that's where we see D2O as a native asset on multiple blockchains, being able to help play a role in connection with some of the sort of next wave of lending and borrowing innovation.
Awesome. And so moving on, wrap assets are definitely a popular way to bring assets from one blockchain to another. And but they do also come with their own unique set of challenges. And how do you see the future of this technology evolving?
Yeah, RAP assets definitely presents a solution for the cross-chain liquidation thing. So, let's say for example, having RAPed Ethereum on Moondeme definitely makes it a lot easier to support
that as a collateral because now you can do that automatically on one chain rather than having to face all those problems we were talking about earlier with cross-chain liquidations. Obviously though, like you were mentioning,
rap assets do come with their own issues and I think that there was an incident earlier I think was last year with some nomad it was right the nomad bridge which yeah I mean that's that's
some of the risks that we deal with with rap assets. So I'd love to kind of hear more from Dan Fan and it's also about kind of this is probably where the native token bridging thing plays a huge, huge asset.
RAPD assets clearly introduce a number of risks. There are some of the security considerations, but in connection with building a DAP, they're not very composable. Many of the time when you send a RAPD asset from one network to another, it requires an approval.
on the destination network. So if you're trying to build a multi blockchain workflow, having that type of bottleneck in between can be very challenging. It's also super confusing from a user perspective. There's one token and then
What's the right asset? So I think that what RAPt assets demonstrate is that there is a real hunger and desire to have cross blockchain activity and move liquidity from one network to another.
And I think we're at a point now with some of the tooling that exists is that models for moving liquidity or value from one network to another, it's able to be done in a manner which significantly approves on sort of like the V1 architectures of them.
These are really interesting bullets. I wanted to explore an idea with everyone here. My concern with Rapt assets to build on from what's being stated already is the inherent risk in a Rapt asset.
and the inability for on-chain markets to actually price that risk. So if we think about a traditional bridge and you're taking a token A over from one network to another, the destination network has the wrapped A token and the
Argin network has the native token. If there is an event where the bridge is packed on the native a token is drained on the Argin network, then the wrapped token loses all of its value.
We often see both the wrap asset and the native asset being traded at equivalent prices almost as if they're fungible in value. I think there's definitely utility for them to be fungible. Like we do want really well functioning
chain assets. But we need a way to also understand the risk involved. And I think DeFi markets need to support pricing that risk as well. If that's the solution we end up with, the solution we have now actually.
So I think that's something that's missing and maybe there's something that can be explored further. One thought is like this idea of having the ability to burn and mint tokens on each network. So if you had
a way to convert that native 80 token to some intermediary token that the bridge could then burn on the origin network and then mint on the destination network that would, that would I think help me to get that risk.
That's a great good point, you're right. And I think that's exactly kind of what happened with the Nomad Bridge hack. Let's say, for example, landing board and protocols that rely on chain link for pricing might kind of listen to the
the USDC to USD, Chainlink price or Oracle price, and for the unwrap native USDC to USD Oracle, everything looks perfectly fine. It's at 1.0 all the way, but
like you were mentioning, the RAP asset is a different asset, right? It's not USD/RMU and BIM, it's Nomad USD/C, which like you mentioned, it's on risk in that price. When that deep pegs from 1.0, but if you
you're reading from Chamber and Gung Lee and that's still where he's 1.0. Then you're letting Warren Potty call it, that can lead to certain issues. So I think a right way to approach that from an Oracle perspective is maybe think about having a second price source as a sanity check. For example, having something like
Taking a T-Wap price from a Dex. Let's say a Ueswap T-Wap price and form some one or two standard deviation bands around your chain link price.
using that and if either those crosses, if your chain link price crosses, your on-chain T-Wap bands, then maybe think about putting in some emergency measures like for example,
pausing, letting and boring until these things realign. That might be sort of a sort of protection measure or short term fix to how to price wrap assets from an Oracle perspective.
Yeah, that makes sense. I think from the DAP developer perspective, we can totally mitigate that risk, but while still supporting the RAPDAS sets as they are by doing that.
Yeah, and I mean in our architecture we very much believe not only Minton Bern but also permissionless Minton Bern so when you're moving D2O between different networks that's how it gets teleported but you know the thing about these wrapped assets is you know some of them rely on like a multi-sig
which I know a lot of projects use multi-sigs and there's definitely some really good use cases for them. But if you [inaudible] with RAPT, BTC, I think that that project has been around for about four years. And it was a multi-sig run by around initially 15 industry
players in order to actually do the conversion where the Bitcoin gets locked up on the Bitcoin network and then a wrapped version of it gets issued on Ethereum. And recently, and I think it didn't get as much attention because it happened in connection with some of the market events happening in November.
They had to reset their multi-sig because some of the people on it just like lost their passwords. These are some of the most advanced digital assets users in the world. Some of the projects, you know, people know them by name. And the people managing or the way they was managed, they lost their
passwords. So I think also in connection with how you move value from one network to another, there needs to be some thinking around longevity in terms of how in the future you can kind of reduce the dependence on any one person or any group of people and it can be truly something that's protocol governed.
I also did have to mention, you know, talking about Mint and Burn, Moonbeam has a great solution to this with their XC20 assets. They do have the Burnable assets. So Moonbeam definitely
is working on this and has an applied this sort of solution to the cross-chain assets. So definitely have to mention that. And so the next question, and I really wish we had the BYFrost team here for this
this one because they're definitely the experts in this field but I'm confident that you guys could answer this as well and it's about staking derivatives. So they're definitely an exciting new development and DeFi. It allows users
to earn rewards for their for their stake assets and use them in different DeFi projects. So I would definitely like to hear what you think the future of staking derivatives looks like and what this means for the DeFi ecosystem.
I can definitely talk about what I see as one of the use cases for. I mean, so first just to call out because to give him when we miss out out, I think they were probably the first project that I saw that really understood the importance of having tools and integrations required to build multiple
networked apps and connection with their cross-chain connected contract strategy. So definitely want to put that over. But in terms of like staking derivatives are amazing assets. And I think as a primitive this idea of layering of assets
is super fascinating from the perspective of being able to participate in multiple projects while helping secure a network and have liquidity from them. So the Bifrost product suite is awesome. I use it on a personal
And I just think that that's really the future of how tokenization is going as a general matter. And I know there was some conversation around Oracle providers and the importance of using like more than one price feed. And I think, you know, big shout out to pro
projects like DIA, DIA, that are coming up with innovative ways to develop price speeds for some of these different types of assets which allow you to help secure the network while also maintain and earn the rewards associated with that while also maintaining your liquidity.
Yeah, and chiming in with kind of the use cases for staking derivatives, right? Like, you know, speaking for example, like dot tokens, right? You know, so many people stake their dot tokens or even kind of lock them in
in parenting auctions, right? And they have these assets and they're meant to be returned at some point in the future, but they don't have access to the lot tokens right now, which is why the staking derivatives makes a lot of sense. So from there, let's suppose you kind of
get a state version of dot, what can you do with it? Obviously, the first thing that you can do is you have a liquid version of your token. So if you do want to sell it before the end of your staking period or for the end
of the end of the parachain auction, whatever you can do that. That's great. That's probably the very first use case. But on top of that, I think the most exciting second use case is you can start to use this stuff as collateral. So, pending upon, again, there's this Oracle problem and Oracle solution.
of how do we price the state assets because the state assets, sorry, the state derivative because the state derivative is not exactly the same as the native tokens. So there is going to be some conversion ratio there. But pending on that, it would be great to use your
Staking derivatives as collateral as well too if you want to you know then use that to borrow say a stable coin or other assets and you know do further actions based on that so that's something really exciting and that's something that we're hoping to kind of Support very very soon at Gona
Great, Drew, did you have anything else to add or should I move on to the next one?
No, I think the responses are far have been great. So I don't have much more to add. Thank you.
Awesome. Finally, we're actually going to discuss, and I'm sure a lot of people have comments on this, even from the crowd, centralization and control and defy. There's a delicate balance between centralization and
and a decentralized application, how much control should a D5 protocol have if any? And so definitely like to hear your thoughts on this and maybe some potential solutions or how your team is approaching this.
Yeah, I can weigh in. This is a big question, so I'll have a stab at a slice of it. I think that the tokenomics has a really important part to play here because even though crypto
crypto has achieved a lot so far, we're still pretty early as an industry. There are a lot of new things being built, a lot of ground that still needs to be covered. Part of that is how do we achieve true decentralization? The promise of crypto is
centralization, I think functionally though, we do have a lot of centralized aspects of how DAPS are managed. Earlier, we were talking about multi-save wallets briefly. That is a form of centralization. There are private
keys for teams and treasuries that need to be managed while multi-siguality helps sort of mitigate some of that risk. It's still usually just a handful of people controlling those and it's up to integrity and honesty that those things are done correctly.
So moving towards a permissionless feature is very important. The way we try to think about this in the long term with CODA is through our tokenomics. And the idea is that everyone should be incentivized accordingly and be on the same page.
So if our team is incentivized by tokens, if we, the co-founders are incentivized by tokens, our community is incentivized by tokens, then we all have a shared goal and objective. This is not anything new. I mean, the traditional business world has been doing this with stock grants to their employees and RSC
But it's a very key part because it means that we all have this shared goal of a doubt. And that means how can this down move forward beyond the core team after a certain point of time? Because as a token holder, I want Coda to
be a going concern. I wanted to be a core part of DeFi infrastructure, even beyond the careers of the core team that maybe established Coda. So I think that tokenomics has a very important role to play.
We've borrowed from existing organizations and institutions from the centralized world. And it's helping us achieve this true decentralized vision, which is still a work in progress, in my opinion. But I think we're getting there pretty quickly. That's my two cents.
Harrison, do you want to chime in on this?
So I have to apologize. My Wi-Fi has been really spotty and I think I've interrupted some of the codec guys a couple times. I'll pause for that. But Nick, can you just repeat the question?
Sure. So we're talking about centralization and control and DeFi apps and how much control should a DeFi protocol have and if any. And then maybe some examples on solutions for this and how your project approaches this issue.
For sure, for sure. So I think one of the healthiest design principles that we follow is like what's the one thing that can never go wrong and then designing around that. So like for us the one thing that can never go wrong is that
D20 becomes insolvent. So when we think about designing the protocol, it's around how can you embed resilience into as much of the minting and teleportation as possible. So like we support multiple
cross-chain messaging protocols in the event, one of them fails. We have a DAP called the Guardian running in the background making sure that all of the mints and burns are adding up because if you have a mint on a destination network by definition you need a burn on the origin network.
So we have a doubt that's checking to see that that's taking place. And as it exists, the only centralization that really kind of exists in our protocol is for purposes of like, I would call it, you know, something has
on wrong. So specifically, if you have a mint on a destination network and there wasn't a corresponding burn, what would happen is that the wallet in which the D20 was sent to, in that particular wallet would be
locked and then there would be a multi-sig event essentially which would basically free up the D20 or essentially allow to investigate what's happened. And the reason we win from that is that when we think about what's the issue with a lot of other
stablecoin deephecks that you've seen is it's not actually that the amount of supply isn't backed by the collateral. That actually isn't the problem. The problem is that when that fake supply that's been created has been used to drain liquidity pools. So we introduced an element of centrally
and the organization in connection with a possible circumstance because what I just described can also happen because in our PC provider, like InFera goes down for a little bit and the Guardian is constantly checking to make sure that the burn has taken place.
centralization in the context of what we believe might be some type of emergency type of response in order to protect everybody who happens to be holding D20. But our hope is that that never happens essentially based on the resilience that's been built into the protocol by default.
Definitely, definitely great use checks and balances and making sure that the users are properly asked to properly secure is a great reason to have at least some sort of centralized
So next question is regarding the future of DeFi. You know, we have so many new projects entering the DeFi space. It's important to step back and consider the future of the industry as a whole.
whole. I like to know what your thoughts are on the future of real-world assets and what does it take for a DeFi project to succeed in a long term.
and whoever wants to jump in here first can just happen.
Sure, I'll have to go. So this was something, and I actually spoke quite a bit about when in 2021, when we first started sort of speaking about Coda, we originally wanted to bring our so tradfights being
Two crypto we both met on a trading floor in Singapore a long time ago and we wanted to work on an interest rate swap idea so interest rate swaps are fixed income derivative and traditional finance there's a very very large
volume flops traded on a daily basis and an essential building block for one of the interest rate based products we see as consumers. So we wanted to bring that to crypto but we realized that it would be very difficult to price interest rate swaps and achieve them in a decentralized
text without sort of the foundational building blocks of liquidity that we see in Trad5. So for example a market maker in a bank that's trading swaps will have many pulls of liquidity to draw upon to hedge their risk and make sure they're actually able to make a
very good and competitive price for swaps for their customers, someone who actually wants to use an interest rate swap. And that sort of led us to the conclusion that in DeFi, we have these incredible innovations like AMMs, Leningon borrowing pools that we see with compound and Arbe.
that have sort of shown that it's possible to do something in a decentralized manner using smart contracts. And we view that as the first step to say yes, this is possible. We think the next step is starting to build these layers of liquidity or financial abstractions.
that need to exist for a derivative of products like interest rate swaps to be liquid in crypto. And that's actually what led us to Coda. You know, Coda at its core is a very simple financial product. It's lending and borrowing. You know, but the way we lend and borrow in a
could market matters. So what we came up with was this idea of fixed maturity dates per market. We select a specific asset per market and while the interest rates on the loans are fixed for the tenor of the loan, they freely move. You know, it's a free market. It's an auto book style exchange.
But the theory is that if we're able to build enough liquidity in these markets, then traders and market makers from the Trabbi world can start bringing the existing financial innovations that we have in financial assets that we have in traditional world over to DeFi and crypto.
But still, it remains to be one of the core goals that we have for Coda. That's something I'd love to see happen beyond Coda as well. It's to see additional layers of liquidity crop up across the spectrum of finance that we see in traditional finance.
Thanks, Drew of Harrison. Do you want to chime in on this one?
Yeah, I mean, when we talk about, because we come from the Enterprise Blockchain world, so in many ways,
in terms of blockchain projects. So I think one thing that we always ask ourselves is like does this really need to be on a blockchain? And I think what blockchains are really really good at are the sort of asset issuance and subsequent
life cycle, right around you issue the asset, you're able to custody it, so to speak, by depositing it on a contractor via your wallet, on network, and then you can coordinate different flows, and then the sort of middle and back office that you would have to have in tradfights, all sort of coordinated on network and everyone's balance.
is updated into fourth. What's required as the entry point is the actual asset itself. I think what blockchains are really good at are essentially creating markets or providing infrastructure for asset
that either don't exist in the real world or have it, or lack the infrastructure to have a meaningful market in the real world or traditional world. So, I know NFTs can be somewhat of a polarizing concept, but I'm not an NFT
person, but I think of a lot of NFTs as brands. It's a way to extract value out of something that would otherwise be viewed like an intangible asset on a company's balance sheet. And then with the primitives behind the scenes, like a quota for example, or D2O stable
point, you're really able to maximize the utility of those particular assets. Moving forward, I'm just really excited to see and help support net new assets coming and being issued natively on the blockchain that are either things that can
be unlocked through this new economic infrastructure that isn't really possible in the traditional sense. Or even for things that assets like syndicated loans, the current process for doing syndicated loans, big loans for highly levered companies right now.
in the traditional world. It's really, really inefficient. It would very much benefit from being on on-chain. You know, I don't know how useful it would be for like US stocks, for example, to be issued on-chain on the basis that like DCCC can clear them within a day. So I think that you'll see a migration of assets that would benefit
If they don't have the infrastructure in the real world, they will choose to issue on blockchain and then of course, in connection with all of the native on-chain activity, you'll have assets that have tremendous value associated with utility and governments and different protocols like we've seen today.
Great points. So, but we are coming up on the hour. So before we wrap this up, I just like to give teams an opportunity to add, you know, to add anything additionally like to add. Is there anything? Did you guys want to add anything before we close out?
Yeah, I just wanted to say thank you very much for hosting and it's been great to do this AMA alongside Harrison and sort of hear these great answers. It's definitely one of the more, I think, knowledgeable and technical AMAs that we've been a part of, so we really appreciate that.
We are always welcoming new people to our communities. So if you'd like to be a part of CODA and learn more about what we're doing, follow along. Please do check out our Discord and Twitter. That's where all the action is. Thanks again for having us.
And thank you for having us. Druven Geo is great being able to chat with you. I look forward to seeing if Dam can collaborate.
you as always, the downtown moonbeam for hosting us.
All right. Thank you, everybody, for joining. I hope you enjoyed today's discussion on the future of cross chain DeFi. These guys have provided some valuable insights into this exciting and rapidly evolving industry. And if you're interested,
interested in learning more, make sure you follow our guests on social media, follow them on Twitter, visit their websites and stay up to date on the latest developments. Thank you everybody for joining and I hope to see you on the next one.