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DeFi Spotlights: Yield-Bearing Synthetic Dollars, RWAs
Recorded: April 3, 2025 Duration: 1:47:51Space Recording
Short Summary
In a recent Twitter space hosted by Gaiib, industry leaders discussed the launch of the AI-backed synthetic dollar, AID, which has already attracted over 100,000 signups. The conversation highlighted the growing trend of yield-bearing stablecoins, the importance of regulatory clarity for institutional adoption, and the innovative potential of AI compute financing in the DeFi space.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Thank you. No.
Okay.
Cool.
Cool. All right.
Hi, everyone.
Let's give it another minute for all of our speakers to join tonight. Thank you. . Thank you. Hello hello. Can everyone hear me all right? Okay, okay, nice, nice. Okay, GM, GM, hi everyone. Welcome to our Twitter space tonight, hosted by Gaiib.
I'm super thrilled to have a great line of speakers tonight joining us.
Tonight we'll be focused on some of the hardest topics recently around DeFi,
which is obviously your very synthetic dollars, real assets, and also bringing institutions into DeFi, all of that.
It's going to be a very, very exciting night.
And we've got such amazing speakers for tonight.
And before we cook off a bit of introduction, I'm Matilda, I'm the head of strategy at Gaiib, G-A-I-B.
At Gaiib, we're building the first year-barian synthetic dollar that's
backed by AI compute assets. So we'll work with cloud companies and data centers in the
off-chain world that services AI companies, as well as decentralized compute protocols like Aether, for example, and we package their GPUs cash
flow and then bake that into our AID so that for anyone who buys and holds and stakes AID,
you can get direct exposure to AI compute and the yields from it without having to buy
Nvidia stocks.
So we've just recently announced our AID and also our waitlist was open about a week ago.
Already got more than 100,000 signups on our waitlist.
Free deposit votes coming soon. A lot of exciting stuff coming up.
Yeah. So enough about us. Let me give a bit of intro about all of the speakers tonight.
So tonight we've got Jack from Plume Network, super close partner.
Wilbur from Pendo, probably one of the most legendary DeFi Parkers ever.
And Jeremy, actually Jacob from Open Eden.
Yeah, very thrilled to have all of you. and Jeremy, actually Jacob from Open Eden.
Yeah, very thrilled to have all of you.
Maybe everyone here could do a bit of intro about yourself
and what we're building for all of the audiences tonight.
Shall we start with Jack from Plume?
Yeah, sounds good. Can you guys hear me?
Yeah, I can hear you perfectly well.
Awesome, guys. Yeah, I'm Jack. I do ecosystem growth and business development at Plume Network, which is a blockchain purpose
built for RWAs.
Thank you, Jack.
Cool.
Next up, we've got Wilbur from Tendo.
Hi, Wilbert.
Hello? Hello, Wilbert. Can you hear me? Sorry, can you hear me? Yeah.
I can hear you. Yeah.
Yeah, good to be here. I'm Wilbert from Pendle.
I'm part of the ecosystem team at Pendle,
currently adding most of these stablecoin integrations.
Pendle is a protocol that tokenizes yield and also marketplace for yield trading.
We're the largest fixed rates market in DeFi.
Essentially any yield bearing asset in DeFi can be brought to Pendle and we tokenize it
into PT and YT for users to trade yield and principle separately.
Thank you Wilbert.
Um, how about open Eden?
Jacob from open Eden.
Hey guys.
Thanks for having me.
So I'm Jacob.
I'm a growth director at Eden.
At open Eden we are building an end-to-end
RWA tokenization platform.
You know, just to keep things short,
we actually recently launched USTO, which is the world's first regulated
U-Bearing stablecoin fully backed by tokenized treasuries.
So USTO is actually fully regulated, issued under a Bermuda Digital Asset Business License
and structured within a segregated account company structure.
So it's fully bankruptcy remote.
So this is 100% safe and to ensure compliance and investor protection.
So yeah.
Yeah.
Thank you, Jacob. Cool. action. So yeah.
Yeah. Thank you, Jacob.
Cool. I think like a lot of our questions tonight are going to be around Yubarian stablecoins because that's where all of the attention has been
recently, right? There are so many Yubarian stablecoins right now on the
market offering different kinds of yield and with different DeFi integrations as well,
while a lot of them are on Pendo, for example. Yeah, so there's really a lot to unpack here
for all of our audiences in terms of what exactly they are, what are the yield sources,
and what are the risk profiles, all of that. It's going to be a super exciting discussion tonight.
that. It's going to be a super exciting discussion tonight. I think the first question for tonight
is how do yield-bearing syndatic dollars or yield-bearing stablecoins redefine liquidity
and risk in DeFi compared to traditional stablecoins? And also what kind of benefits
or challenges do you see emerging from this paradigm? Shall we start with Jack from Foon first, coming from the chain's perspective?
What's your take?
Yeah, for sure.
I mean, first off, yield-bearing stable coins help to make idle liquidity productive, right?
And also, like, with traditional stable coins, all the value flows back to the issuer.
So, like, with USDC, Circle's picking up all the value
from the treasury notes back in USDC, right?
Like there is value being accrued,
it's just not being accrued to the user.
Whereas yield bearing stable,
yield bearing tables or synthetic dollars
or whatever you wanna call them,
they pass that value back on to the user.
They're also really good for packaging
complex financial products, like structured products,
or you guys are doing like GPU financing
in a way that's really easy for people
to wrap their head around, right?
Like at the end of the carry trade, yeah.
And on risk, every stable coin has some level
of DPEG risk.
During the SDB crisis, even like USDC had a temporary DPEG.
But with yield ring staples, at least you're being compensated for that risk.
So, you know, it makes it a...
It makes it much more worthwhile to hold the coin.
Yeah, thank you so much.
Absolutely agree with that.
I hands the yield back to the holders.
And also it's such a perfect way for packaging all kinds of financial products that generate yield and abstract all of the complexity away from users.
That's exactly how we're approaching this as well.
So yeah, thanks so much for the mention.
What about Wilbur?
Coming from Pendle's perspective or your own perspective, what's your take on this?
Yeah, I think Jack already touched on the basics of yield bearing stablecoins.
But the way I see it,
I think stable coins have sort of evolved over the years, right?
You have stable coin 1.0 or what I call it, you know, stable coin 1.0, referring to
stable coins like USDC and USDT, like Jack was saying, that don't really pass any of
the yield back to the users.
And then you started having stable coin 2.0, which are stablecoins like on USDY.
I think they were one of the first in the space, TBO-back stablecoin that was giving users the TBO rate.
And then you sort of have this new stablecoin 3.0 that we're seeing today.
Guys like UsualMoney, a lot of these other stable coins like open
eden as well usdo that are essentially packaging different yield sources underneath it could be a
mixture of tbo rate it could be a mixture of basis trading strategies as well as perhaps even private
credit right so i think it's interesting because now stablecoins, they're an effective way to essentially use it as a form of treasury management as well.
A lot of users, I think in the perspective of Pendle, especially for Mewa protocols, I think it's a good way to attract liquidity, especially to couple it with a coins program.
with a coins program, right?
I think that's what people think about when they think about Pendle.
I think that's what people think about
when they think about Pendle.
A lot of these protocols, oftentimes,
they try to redistribute the incentives to users
in the form of their native tokens,
as well as the underlying yield,
which I think is something that usual did pretty well
early on days.
So yeah, I think it's really interesting
where we're headed with stablecoins today,
beyond just the basics of settlement and payments.
Yeah, absolutely. That's definitely a great summary.
Describing the evolution from stablecoin 1.0 to 2.0 right now, where the backing has evolved quite a lot.
to a 2.0 right now where the backing has evolved quite a lot and there's also a lot of more
incentives mechanisms around it as well to drive adoption we'll definitely see the industry
following um moving on to jacob from open eden um what do you think yeah i think checking you
and bill would actually come at most points but I can just add, my summary
it's actually that you know eBank stablecoin really turned what was once idle capital into
really active use source and it really unlocks more efficient lending, more attractive LP
positions and even better structured products with the likes of utilizing, maybe even Pando.
And from a risk standpoint, essentially these stable points actually help to make this system
more stable.
So as long as they have clear asset backing, real-time proof of resource, and a predictable
yield, they actually offer a safer foundation for DeFi than opaque or even like
the over collateralized alternatives. And the challenge here that I kind of see is really the
regulatory side. To scale, these products must navigate complex legal frameworks across multiple
jurisdictions. And I think this where where Open Eden's compliance first infrastructure
becomes a true differentiator in the industry.
So institutions right now, I think they're keen on being exposed
to new barons stablecoins unless legal and operational
guardrails are in place, especially after some of the
unfortunate incidents that have
happened along the years within the industry.
Yeah, thank you.
I think that's definitely some great insight here because the majority of yield-barian
stablecoins are still, or yield-barian syndatic dollar, regardless of your color, are still pretty much used by the more definitive crowds compared to FIA-backed stablecoins or those 1.0 stablecoins that
Wilbur has mentioned previously.
Yeah, so for it to get further adoption, potentially get to institutions, there's definitely the
regulation set of things that's going to take probably a bit more time than we thought.
Yeah, but at least right now, I think the adoption is being pretty strong right now
by just average users in crypto, simply because of how easy it is to use and also the underlying
yield.
And speaking of the underlying yield, the next question is going to be about yield sources.
Because being a yield-brain stablecoin is sort of, yield-brain stablecoin is more like a wrapper.
Like what matters is really like what's underneath.
What exactly is the backing asset?
Where does the yield come from?
And how they stay stable.
So next question here. So beyond state, beyond lending, basis trading, DeFi strategies or T-Bell simply, so what are some
of the most interesting or emerging yield sources that you've seen for yield bearing stablecoins?
And how do you evaluate their sustainability and also risk and reward profiles given the
market conditions and also over the long term?
All right, let's start with Jack from Plume again.
What do you think yeah um so i i think guild bearing stables uh are a very very high right
now right um and and they have been for a while because frankly they're a very good idea um and
they've been very successful so far so i i think as a result of that we're going to see people trying
so far. So I think as a result of that, we're going to see people trying a lot of different
things to generate yield for these coins, right? Like I've heard, you know, on the RWA front,
I think especially, I've heard people who are conceptualizing doing stable coins backed by, you know, some kind of like managed futures fine, Ponzi nomics and speculative value
into a new paradigm that makes crypto
something beyond just pure speculation and gambling.
When you think about it so far,
all the yields in crypto are based on speculation and gambling even products that are actually
useful that are that are generating real cash flows like like hyper liquid right like hyper
liquid is a fantastic product um they do something real um but what are they doing
they're powering gambling right um because people are you know people are trading perps on hyper
liquid and even even like uh like staking, right,
is most of the things that you're providing security for
are either speculative assets or people gambling.
So I think we're seeing a really important shift
in the paradigm here
where we're beginning to see yields in crypto
for stable coins and otherwise
that are sourced from things that
are actually real, actually productive, like anything from corporate bonds, commodities,
whatever. And we'll see a lot of experimentation in this. If crypto is really good at one thing it's being the kind of like primordial pool for uh for
financial innovation and we'll try everything and we'll get a lot of things wrong but we'll
get a few things very very very right thank you jack for your insight what about wilbert
what's your take on this?
Yeah, I think Jack brought up some interesting points.
But if I had to come up with some kind of mental model,
the way I would categorize stablecoins is,
there are a few categories here, right?
Firstly, you have synthetic stablecoins
that are getting yield from on-chain DeFi yield sources
I think
Athena
especially
with USD
and SUSD
belongs to this
category
I think
by the way
a lot of credit
has to be given
to Athena
because they were
one of the pioneers
in this synthetic
stablecoin space
without which
I think a lot of
protocols would not
have been inspired
unlock
the potential
that is behind this massive stable point market.
And of course, with Pendle, we have been very close partners with Athena as well.
It's very synergistic in a way, if you understand the relationship between Pendle offering six
rates to Athena, coupling with the points.
So yeah, so that's one category, right? Stablecoins are getting yield sources from on-chain DeFi activities or funding rates,
for example, which is what Athena, Resolve guys are doing.
And the next category is RWA stablecoins.
These are TBO stablecoins pioneered by Ondo USDY.
Of course, I think with Hashnode, they saw a lot of growth as well.
So they're going to uh they they saw a lot
of growth as well um with usual money right usd zero was essentially just wrapping hash note usyc
and then usyc went on to get acquired by by circle it's currently uh something that you can use as
margin as well on darabit so I think it's unlocking a lot of possibilities
with regards to margin options on centralized exchanges
such as Deribit and possibly, you know, like USD on Bybit.
So I think that's really interesting.
And the newest category, which I briefly touched on earlier,
is somewhat of a hybrid, right?
Where you have some sort of a hybrid right where you have
some some sort of base yields that are coming from real world key deals and you have on-chain
yields that are coming from basis trading and the stablecoin issue in this case acts as somewhat of
a portfolio manager to allocate and adjust that portfolio allocation and percentage allocation
depending on market conditions, right?
If the market is doing well, they might allocate more to basis trading.
And if the market isn't doing so good,
you still get a minimum baseline yield of 4% to 5%.
And of course, you know, I think in terms of new developments,
I'm seeing the rise of also tokenized money market funds,
as well as tokenized private
credit funds, which is speaking with this RWA protocol earlier today.
Um, and they're working on something with, uh, Bustonara to bring on board, you know,
big institutions and trust by institutions, um, tokenizing this funds.
Um, and of course I think with guide and, and AI and AID, GPU AI revenue is something that's really interesting.
That started with Aether, and I think GaIP will be the one to hopefully unlock that potential with GPU AI revenue, bringing real yield to the space.
Cool, cool, cool. Thank you. Thank you so much, Wobba, for the shilling over here.
Yeah, I think absolutely agree that with such a growingly diverse yield sources of your
various stablecoins these days, your various stablecoin issuers are kind of like portfolio
manager or fund managers these days.
And we essentially help users manage the fund, allocate the funds to generate yield in different sources, on-chain and off-chain, different when you buy and hone your stablecoins, you're not
sacrificing your liquidity. While you generate yield, you can do a lot of other stuff in the
meantime as well, such as providing liquidity in LP pools, such as lending it out, trading the PTYT
of it. So there's a lot of more DeFi composability that we can add on top of your very stable
coins as opposed to more like a more conventional passive investment with your products.
And I think obviously that takes time, takes integration, takes development, takes liquidity
building, all of that, a lot of resources and efforts uh but definitely a
lot uh innovation as well um compared to before when we in terms of how we package this yield
sources so it's definitely a very interesting time um cool moving on to uh jacob from open eater
what do you think yeah i'll see you guys actually covered most of the points, but if I may, I'd like to share some
insights specific to ATAVI.
We're actually seeing really interesting developments in areas like ATAVI protocols, permission
lending pools, tokenized treasury products like our TVO product and these due sources effectively bring off-chain
yield on-chain and these are backed by access with clear fundamentals so in terms of sustainability
how we see it is that we believe the key is transparency and auditability So what does that mean? Can the protocol prove the use source? Is collateral independently
verified? Are there third party attestations done? And at Openediat our TBO tokens are
actually backed by US Treasuries and issued under regulated fund structure. The fund is also the first tokenized US Treasury fund to have received
a Moody's investment rate rating. And we believe that this is really the kind of credibility
needed, especially in the long run, to support new varying instruments within RWA.
Regarding integrations, we are really bullish on integrations between DeFi and TrecFi, where
on-chain structural products or automated credit strategies can generate sustainable
yield from real economy activity.
So right now USDO is actually live on taxes like Curve, Aerodrome, Strategy Vaults, and
MoFo.
And we're actually happy to share that since you know, since Will is with us today,
that we are launching on Pando next week, which really offers a really good way
for users to trade their yield and allow them to both fix and leverage their yield.
So yeah, this is something that we are really excited, especially coming soon.
Yeah, thank you. Absolutely agree on the transparency part, especially when it comes to especially companies.
Yeah, thank you. Absolutely agree on the transparency part,
especially when it comes to players like us
that are bringing real-world yield into the on-chain world.
There's definitely a lot of work that we're doing
to bring transparency, such as all kinds of audits,
attestations, bringing them to the users
through, like, on our front end, in our documentations.
So absolutely agree on that.
Thanks so much for the great take.
Cool, moving on to the next question,
which is something that we've already tapped on actually,
real assets, as many of you already mentioned,
I think all of the speakers tonight
are working with real assets to a certain degree.
So it's definitely one of the most exciting areas in the next few, in the long terms as
well.
So in terms of real assets, what are some of the biggest hurdles, both operationally and legally, or technically even, for integrating real assets into DeFi ecosystems?
What solutions could unlock greater liquidity and trust?
Let's start with Jack first from Plume.
Definitely the most hyped real asset chain right now.
Thanks. Yeah. I mean, look, so I think in terms of legal challenges, there's a really big one,
right? And it's jurisdictional fragmentation. So each jurisdiction around the globe comes with its
own licensing requirements, custody regulations, disclosure norms, etc. And then on top of that, so does each asset class.
And also these things are changing pretty constantly.
You often now, often for the better, right?
Especially, you know,
as we have a crypto friendly regime in the United States
that kind of sets the standard for the rest of the world.
You also have places like Hong Kong and Singapore
effectively competing for who can be the most crypto friendly
to get the most crypto innovation within their economies because they're economic competitors
within the same region. So I think we're definitely heading into a positive direction,
but there are different laws if you are in Europe or if you're subject to micro regulations,
if you're in Hong Kong, if you're in China,
if you're in the United States, Latim, whatever, right?
So that's a big complexity.
And I think for that, you need a modular compliance framework,
which is what Plume has, right?
So we have kind of like the pick and choose.
You can geofence off certain areas.
Do you need to have KYC for the jurisdictions that you want to be in?
Do you not want to have KYC for the jurisdictions that you want to be in?
Et cetera, et cetera, right?
And so you need a little bit of flexibility and ample compliance for the jurisdictions
that you're operating at the same time.
But this does make it kind of difficult to be in multiple jurisdictions at the same time. But this does make it kind of difficult to be in multiple jurisdictions at the same time.
Especially as, you know,
I think crypto can be a good tool
for regulatory arbitrage,
but you have to be very cautious about that, right?
Because you don't want to be, you know,
you don't want to be non-compliant
in any of the jurisdictions
that you're operating in, especially when you're
working with RWAs. And I think another big challenge is slow adoption and therefore limited
liquidity. And I don't think that that's... So look, TradFi moves very, very slowly. Anyone that
comes from the traditional finance world will tell you that it is entirely different from crypto in that it moves at a snail's pace. Whereas DeFi moves very, very, very fast, right? We like to
move quickly and break things. But RWA is somewhere in between. They kind of have, you know,
traits from both in a number of ways, in terms of like um the the pace at
which people are experimenting on things um you know like early on in crypto we didn't even really
have that many traditional finance people who understood the type of assets that that uh that
they'd be tokenizing or like the types of processes that we would be bringing on chain like private
credit um and it really you know only in um that towards the end of last cycle, did we start
to see some more like traditional finance people come in, which is how you ended up getting,
you know, really sick products like Athena, for example, right? Like those guys,
you know, they were, they were TradFi guys. They understood the carry trade, which is like,
you know, it's a pretty simple product that like, in my opinion, was kind of like an inevitability to happen in crypto at some point.
But yet, like, to build a product like Athena, you have to understand both the carry trade and crypto very well.
So I think we're starting to see more trade-by people come in, which means we're going to get more high-quality crypto products.
The other challenge, though, is that there's a little, as we saw with the Trump coin, right, which sucked all of the
liquidity out of the rest of crypto, there's a very limited amount of liquidity in the
crypto space, right? So, and most of that liquidity is very, very risk on, right? So
it's people looking for, you know, like a hundred X, a 1000X on like meme coins
or like how am I gonna get quick?
It's a lot of, like I said earlier,
it's a lot of gambling, right?
So I think RWAs are a lot more tame.
They're a lot more stable.
And we didn't really see a serious adoption of RWAs
in any way until the last bear market where there was no real on-chain yield.
So most of the on-chain liquidity either was no longer on-chain or it went into tokenized T-bills.
And that was a very good test pilot for RWAs.
And that was a very good test pilot for RWAs.
But the money on chain that is willing to go into something that's only yielding 6% to 8%, or I guess at this point it's even lower because rates are down, right?
That's yielding something as low as T-bills, right?
That's money that's going to be moving very slowly of the rwa adoption curve so maybe
next i'll go into like uh high yield corporate bonds um or you know things that are or like
private credit right and then like uh i think you know like um uh which would be like you know
anything from like invoice financing to like what gaib does with the um uh with uh with like GPU financing, right? And yes, I think that is another challenge
is that we're gonna be moving slowly up the adoption curve.
There's gonna be a lot more assets issued on chain
than there is liquidity to absorb at first.
And the people that succeed right now are going to absolutely
crush it in the future. But it's going to be challenging, right? And it's going to be very,
very, very competitive. But again, I do think that if we do head into, I mean, we're already
starting to see a lot of hype around RWAs because we're in a time period of uncertainty with the economy.
And if we head into a bear market or if we head into recession at some point, that's
when I think RWAs are really going to click and we'll start to see significant mass adoption
of RWAs among crypto users.
Yeah.
And yeah.
Yeah.
Yeah. Yeah. Thank yeah. Yeah, yeah.
Thank you so much, Jack.
A lot of insights over here.
Appreciate it.
I think like,
I mean, all of those are true and great insights.
Right.
I think you're absolutely right that
crypto users are definitely much more risk on than real world investors slash users
always looking for looking to ape into the next 100x 1000x thing um right that's that yeah we've
definitely seen a bit of like subtle changes uh of like looking for more stable yield, and that's why Pendle's PT took off.
Yeah.
Which definitely links to the next speaker,
which is well over from Pendle,
because I think the user behavior has definitely
changed a little bit in the past few years.
You've still got a lot of users looking into the next hot
thing, whereas you've got slightly more risk of whales or even institutions that would
really like to park their money in Pendo's PT, for example, and leverage that by, for example, like, using that as a collateral to take out loans and essentially leverage it.
So yeah, so just coming from Wilbur's perspective, from Pendle's perspective,
what's your take on Outerbiz in general?
And also like what's Pendle's play or like what's pandos uh plan regarding out
of it if there is any yeah i think i'll share this um answer your question in two parts right so the
first part is more um on the current state of our daily market um i think to be honest right a lot
of users currently that are deploying assets into, deploy into stables or yield bearing stables, especially the ones from newer protocols, are probably just trying to farm the incentives and the points, right?
We're not at the stage where we can truly say there's mass adoption.
I think anything apart from Athena's USD stablecoin doesn't really have true adoption and distribution yet at this point.
I think it's going to change in the next few months.
But I think the current state is where a lot of users move their funds
to whichever protocol is giving the most incentives or points.
Because let's be honest, right?
TBL, Stablecoin is not a sexy product, right? So you've got to, as a protocol, you've got to add all this points and stuff. And again, thanks for the shout out on Pendle, I think.
I think that's something that's pretty unique to Pendle in a sense where we turn something
that's qualitative, right?
Like points into something that's quantitative in the form of fixed yields.
And oftentimes the principal token fixed yields for the newer stocks is that we're
going to have a lot of different points. And then we're going to have a lot of different points. qualitative right like points into something that's quantitative in the form of fixed yields
and oftentimes the principal token fixed yields for the newer stablecoin projects tends to be
even higher than whatever is the underlying yield you know let's say the underlying yield is 10%
the fixed rate tends to be you know 15% on panel for example because you know of the demand that's
coming from people that are buying YT because of the points.
And I think in terms of what Pendle is trying to do next,
our core thesis for 2025, apart from launching Boros,
is still very much focused on stablecoins.
We see a lot of demand from the funds and institutions that are deployed on Pendle today
to deploy into stablecoin yield sources and alternatives to Athena.
Yeah, so I think we are going to be pushing out in the next few weeks actually,
a pretty big stablecoin campaign
where we will be featuring the stablecoins
with the top yield sources.
And I think just to add on to that point earlier,
when it comes to RLA and tokenized RLA, not everything has to be a stablecoin.
It's the trend right now because stablecoins are very scalable and effective in terms of gaining TV all in traction and DeFi composability as well.
But I think a word of caution to some projects that are trying to explore, you know, stablecoin bottles for underlying assets, which are not liquid to begin with, can be a very dangerous game to play, right? You're talking about possibly deploying 80% of your underlying collateral that is backing the stablecoins into something like private credit or real estate, that's probably a recipe for disaster.
We've already seen a couple of projects in the last few years that try to do, for example, real estate backed stablecoin.
And there were a couple of DPEGs.
Kudos to Enzin Finance.
I think they're one of the first three projects that did like in hybrid T-bill and private credit stablecoin
that actually gained some level of adoption and some level of stability there.
So yeah, I would love to see more underlying assets or RWA assets that are backing the stablecoins,
but also important to think about the liquidity side of things as well as the associated risk
when you're deploying into the stablecoins.
Yeah, thank you so much, Wilbur, for the great insights.
Yeah, that's something that we definitely think about a lot at Gaib as well.
A lot of times, you've got to choose between yield and liquidity, right,
or potential lockup, and how do you manage that?
And usually there's a cost to liquidity as well.
So there's definitely many.
The good thing is that in crypto, there's many levers you could play with
in terms of like your governance tokens, incentivizations,
all of that that really just like incentivize users to keep them locked,
keep them staked instead of causing any kind of like liquidity crunch just like incentivize users to keep them locked, keep them staked
instead of causing any kind of liquidity crunch or burnt ground. But absolutely agree with you,
that's something that all of us need to think about, especially if we're building assets that
are 100% liquid in terms of the underlying backing. So yeah, thanks so much, thanks so much for the great insights. Last one, we've got Jacob
from Open Eden. Given that, I actually think that we've got such a great mix of speakers
tonight because Open Eden is licensed by the Singapore government. And so you guys definitely
have the absolute authority to talk about RWA as well.
Yeah. What do you think?
Yeah, you know, I really agree with River State. But I guess on our side, we'd like to offer a bit more
insights on the regulation side. So in our view, actually, the biggest hurdle is the regulatory fragmentation. So if you look at it, every jurisdiction has its own view on what tokenized assets are,
you can issue them, how they should be treated legally.
This really creates a kind of friction between issuers and also uncertainty for users.
So operationally, trust is also another challenge.
You know, tokenized RWA often rely on off-chain assets.
So how do you verify custody, collateralization, and asset quality in real time?
So we really address this head-on by building on a regulatory focused framework with licensed
entities we issue through a segregated accounts company, implementing 24-7 on-chain proof of
reserves.
This may all sound a bit boring, but we really feel that this particular aspect is very important
to build trust within the industry.
And to scale RWA liquidity, ultimately we need more standardized issuance framework,
interoperable legal structures, composable interactions, 55 protocols that can really
trust the underlying assets.
Yeah, thank you so much for saying so much, Jacob, for explaining all of these measures
that you guys have in place for building trustworthy and also transparent and compliant RWA as well.
I think that's definitely what we'd love to see from the user's perspective.
You guys are definitely setting great examples in the industry as well.
Cool. I think we've come into an end for the first part of this space.
We'll have to just give another uh minutes for everyone here to uh share a one-liner
a conclusion um anything that we should look forward to in terms of for your building or any
shilling wars um yeah anything let's start with jack from from plume again
yeah uh i mean i would just say you know keep eyes on plume we got a lot of big things
coming soon um you know i think uh yeah a lot of big things coming soon so thank you awesome jack
um how about we'll go from pendle yeah um i think look forward to that stable coin season that's
going to be happening on Pendle soon.
It's probably going to happen towards the end of April, and we're really excited for that.
We're going to be featuring all the top yield-bearing synthetic stablecoins on this space,
and there'll be a lot of options for users.
Yeah, thank you. Thank you so much for that.
How about Jacob from Open Eden?
Yeah, so we have this really safe and regulated USDO
that we launched.
But this is actually coupled with a really exciting points
program that incentivizes different DeFi activities.
It will be incentivizing activity on Pendle as well.
So yeah, if you guys are keen to come and participate
within the USDO ecosystem, yeah, definitely
welcome everyone to do so.
Cool, cool, cool.
Thank you, everyone.
Thank you, Jack, Wilbur, and Jacob
for joining us tonight and sharing all of these insights
alpha to all of the community audiences tonight.
Super helpful, super substantial.
And I think everyone should definitely stay tuned
with Pendle, with Plume, with OpenEdom as well
for their exciting upcoming updates.
And yeah, thank you.
Thank you and have a great day.
Have a great night.
Let's move on. Thank you. Thank you and have a great day, have a great night. Thanks so much.
Thanks guys.
Thanks. Cool.
I think we've got such a great first part of the session,
a lot of substance to digest over here.
Also, we're moving on to the second part of the section where we've got
a lot of very, very insightful and influential speakers as well in the DeFi space or like in
crypto trader in general. And I'm super thrilled to have all of them tonight. So we've got DeFi Dad, Nomadic, DeFi Maximilist, and Patrick, and also Joe.
Cool.
Shall we do a round of introduction first?
Let's start with DeFi Dad.
Hi, how are you?
Hey.
Hey, guys.
Thanks for having me.
Actually, I can cover both Nomadic and me.
The two of us host a podcast called The Edge Podcast, and The Edge Newsletter is where we tend to write out more of our thoughts on, you know, the leading DeFi builders and what are the most interesting and new DeFi applications in development.
And yeah, anyways, we are happy to be here and very excited about Gaib as well.
So yeah, thanks for having us.
Yeah, thank you, thank you.
Cool, yeah.
Any words from Nomadic yourself, or should I move on to Max?
Yeah, hey, everybody.
I'll just make sure my mic's working.
Can you hear me?
Yeah, I can hear you.
Awesome, happy to be here.
Oh, cool, cool, cool. Next up,
we've got DeFi maximalist.
Can you request to speak?
Okay. Well, I think let's wait for him for a little bit.
In the meantime, how about Patrick?
Patrick, would you like to do a bit of intro?
Yeah, happy to be here.
Thank you for the invite.
My name is Patrick.
I host the Dynamo DeFi YouTube channel and newsletter.
I have about 56,000 on YouTube.
And then I'm also the head of growth for DeFi Llama.
And so I focus on a lot of educational and informative content about metrics and fundamentals related to DeFi.
Thank you. Thank you, Patrick. Been a long time for as well.
So moving on to Joe.
Hi, Joe. How are you? And would you like to do a bit of intro?
Hi. Thank you so much for having me
uh hi i'm joe from japan i run a crypto youtube podcast in japanese and um i i work with a lot
of projects in terms of asian expansion and yeah thank you for having me i'm very excited thank
you thank you joe cool hi max uh would you like
to do a bit of intro how are you yeah yeah for sure uh you know thanks for for invitation it's
a pleasure being here you know with uh such such speakers that i've been following for a while
i don't think i've ever had a chance to you know like uh speak personally with uh you know defy that
had a chance to you know like uh speak personally with uh you know defy that uh we traded a few
comments me and uh patrick and i i know i know joe personally so you know it's been it's uh it's great
to to be here with you guys i'm mostly around you know defy although i've started on the lst
slash lrt space and i'm mostly mostly on the liquid fund slash, you know, bootstrapping liquidity
as a kind of like a regular job and not only content.
Thanks for having me.
Thank you all for the introduction.
I think we're to the drop, so let's wait for her to get back.
By the way, did anyone else not get to introduce themselves or did we cover everyone?
I think that was everyone.
I think that was everyone, yeah.
Yeah.
Actually, you know what?
While she's joining, I can just kick us off with, I think I'm pretty familiar with some of the questions here that we were going to start with.
I know one of the first topics was around understanding which projects are doing the
best job of competing for liquidity and mindshare. And so there's a lot to consider there. I know
Nomadic and I, we think as angel investors, I think above all else, but we're power users.
So the two of us were literally just talking this morning about
whether we should loop up a position with stable coins in something like, like fluid,
fluid has a multiplied product, or whether we should do it with Euler. And so anyways, there's
two very different mindsets there. I'm thinking, does anyone else want to kick off with this? I
don't want to talk
too much on this and maybe pass the buck to someone else here, but maybe what's one thing
you look for that is promising in terms of a project that would be able to compete for
mindshare and liquidity? I don't mind taking this one. I think I'll start with a fairly obvious one
and maybe sticking with the synthetic dollar theme. I'll use Athena as an example. So I think
immediately people realized that the Athena team was kind of on a different level. And so for
example, like even in early writings, Guy was calling out that the basis trade would have like an upper bound or an upper limit.
And they probably have to pivot into some other things.
And I think that team has just done so well of, you know, they realized they had to get into T-bill yield.
They realized they made an incredible partnership with Maker, which I think was contentious and hard to do.
And that takes like a level of execution just to pull that off.
They, you know, made this relationship with Aave that was massive for them.
So it's kind of like cliche and obvious, but, you know, just a foundational starting point.
You need a good team because they're going to have to iterate at some point.
They're going to have to try something new. So yeah, I mean, that's always one for me that
you just, you really need that solid foundation of team. I could go into like mechanism design too,
but I'll just like leave it there and see if anybody else wants to jump in.
I'll just add one thing, Nomadic, and then, yeah, I would love to hear what everyone
else is thinking here. I think to sum up what you were saying, we talk a lot about who is the
trailblazer, who is a new sector leader, who's creating something that is actually novel,
because those people, those founders and those protocols tend to command a sort of halo effect. And they
tend to forever be known as like, there's nothing else like Athena, I think right now, even though
you could argue that there's lots of different opportunities out there where you can earn some
sort of programmatic yield, what they did with the basis trade and making it as simple as
one click, and then of course, scaling that to billions, just creates this outrageous sort of
reputation that follows them. Hyperliquid is known now as basically the leading place where you can
trade on chain with perps. And, you know, essentially, it's, I'm going to say it's still one of the
most uncensorable places that you can trade. Obviously, again, there's some caveats to that,
they've got a ways to go in terms of decentralizing. Pendle's another one of those that's top of mind.
Aave, of course, Fluid has been this crazy radical experiment to totally redesign an AMM that is combined with a lending and borrowing market.
So these are really hard problems to solve. And each one of them started out looking like they were off on their own island.
And ultimately, by solving really hard problems, they became sector leaders.
And I think every single one of those has really maintained, again, a reputation that
looks like it's not diminishing with time.
It looks like it's actually going to stick around for many years, which is like several
decades in crypto.
But Patrick, Joe, DeFi
maximalist, what else are you guys thinking?
Yeah, I can move in for a second. So getting back to first principles and some of this stuff,
I can think of a couple of reasons why someone would choose one stable coin over another uh first would be distribution and
uh in that in that respect the crypto native stable coins are are by far have the most work
to do you have usdt and usdc i don't think there's really any crypto native ones that
compete with them and distribution for actually being used for payments
then you've got the stability of it. And I think that historically, like someone
talked about earlier in the previous part of the space, some of the stable coins that tried to use
more exotic backings like private credit or real estate have often struggled to maintain stability,
which is the most important thing.
I mean, I think a lot of things will be tokenized as RWAs, but it's different between tokenizing something as a volatile asset that's marketed as volatile versus marketing it as a stable coin that you can use for payments and savings.
And then it routinely de-pegs by 5%. So in that sense, basically, it's got to be either over collateralized or cash equivalents.
And then you have the yield on it. And then people might be willing to take some more risk if they
can accept that higher yield. However, unfortunately, things that use yield to attract
new deposits, they tend to either, it tends to be mercenary capital that leaves or it tends to uh have a scalability
issue because because either the yield gets diluted eventually or they um you know they
manage to to artificially keep the yield high as we saw with ust and then and then eventually the
whole thing collapses because there's too many stables issued and not enough actual demand and backing for it.
So getting back to that, I mean, I think sort of like Nomadic mentioned,
Athena in terms of crypto native coins has done a really phenomenal job.
And I'm glad to see that they've diversified into T-bill backings as well. I think that USDS formerly die.
Also, given that they've managed to maintain their peg
for basically half a decade at this point,
I feel like they're covered in that respect.
And then if they were able to grow more
and actually start to give some of the
what would I call
fiat backed coins
a run for their money. They'd have to focus on scalability
and distribution.
Yeah, yeah.
Thank you. Hi guys, I'm back on.
Sorry for dropping earlier
because of the internet
also one of the downsides of joining with our meme accounts.
But yeah, thanks so much for sharing all the insights.
Yeah, I won't interrupt here.
Maybe Joe, you were trying to talk about
will be the winners in your mind
with regard to your very synthetic dollars
and stablecoins in general.
Yeah.
Yeah.
I think all the things that DeFi Dad,
Matic and Patrick mentioned,
I totally agree.
And for those areas,
I think we really focused on the stablecoins
that we can, I think think come up at this moment but I think so I just want to try to tackle
this from different angles but now we have a institutional investors coming in and I believe institutions, their yield bearing strategies are, I think, 70 to 60 percent are fixed term.
And in crypto, I think majorities are in variables in terms of the yield.
So now I think from here, we're probably going to see another side of stablecoin collateral so then you know i think we
can create another word different product from from here and also because institutions are coming in
are coming in. We're all focusing on IWA. I kind of see this so weird that people call everything,
you know, those synthetic products as a stablecoin because now from here a lot of
product is going to be backed by so many different products and also from here the
US treasuries and also other corporate bonds and multiple multiple other really big
sorry potentially could be quarter products
could be Quaradao products.
I think these are the really unlocks
that we, I think, really have to focus.
And I don't think there's a clear winner for that route.
Maybe so far, BlackRock, Biddle is the one,
but I'm really looking forward to this,
the vertical from here.
Yeah.
Yeah, I think like, I agree with what everyone said.
I think when like, I think we start speaking about things that matter to us when looking
at protocols and then we jumped into it after the synthetic dollar, I think for the first
first part is definitely I do agree with nomadic when
it comes to team you know i do agree with the solid um you know pran market fit and that's why
i would perhaps name you know of course ave i mean panel of course uh even lido you know in my lst
slash lrt defense and when it comes to this entire dollar of course uh i mean it is but like i pretty
much do agree specifically with what uh you know patrick mentioned as well so definitely i would
name i would name definitely you know these these protocols uh specifically because i mean might
sound kind of like trivial but uh i tend to look at you know how much time these protocols have
been able to stay relevant and adapt through different cycles.
So that's something I also take into consideration when looking at these protocols.
Thank you. Thank you guys for sharing all the great insights. Just joined again on my personal
account. Hopefully there's not going to be any internet issues or delegated account issues.
Yeah, so I think we've talked a lot about
what are some winners, which is some of the great year-bearing cinematic
dollars out there or stable coins out there.
And obviously, another elephant in the room right now
would be the yield sources. Because a lot of times, these days, these yield versus net
dollars are kind of like a wrapper. And what really matters is the underlying backing and
also the yield sources, like where do they come from? How sustainable are they? What
are the risks, all of that? And there's a lot to unpack over here.
So, yeah, just curious about you guys' takes.
What do you think is the underlying, like, how do you view the current yield sources on the market right now?
And how sustainable are they? What do you think the risks are, and basically what kind of yield sources are kind of to your preferences or you
would recommend to communities, to users. Shall we maybe start with DeFi data again?
Yeah, yeah, happy to kick off here. So I think the one question you had there around where are
you had there around where are like the real yields sourced from in DeFi. And I think a few
different places are responsible for DeFi maturing and evolving. And Patrick has been had some just
like awesome tweets with data from DeFi Llama around the growth on chain that has sustained,
despite the fact that the market has, you know, drawn down
like 50, 70, 80%, depending on the token lately. So you've got lots of different opportunities on
chain that are now related to just T-bill yield. I mean, everything goes back ultimately to
bringing that T-bill yield on chain. But then you do have these mega sources of,
call it like a risk-free DeFi yield, like the Aave lending rate for something like USDC.
There was quite a few posts lately from people just commenting on the fact that there are lots of lenders who are lending their money for 2.5,
3% on Aave when they could be earning more elsewhere. And I think that speaks to how the
space has matured and evolved. We all have PTSD from exploits and all sorts of high-risk protocols basically falling apart and disappearing off
the planet. Probably most notably was just the collapse of Terra with UST. I think that really
shook a lot of people. And so many of us are just content to know that they can reliably retrieve
those stable coins and continue to earn a yield like that on Aave.
And then just one other I'll call out, and I should pass this to someone else, is I think that Pendle really has been the unlock this cycle.
Pendle figured out a way to marry hyper-speculative folks in the space who wanted to bet on early protocols through the YT,
the yield token. So that was kind of like this ticket to participate in really early levered
exposure to these new protocols that were emitting points that would eventually translate into
a token reward. And then meanwhile, on the complete opposite side of that
is the principal token, PT token holders.
And those folks are getting a guaranteed, predictable,
like often competitive fixed rate.
So the fact that a protocol was able to figure out
how to permissionlessly and trustlessly coordinate these two different players, the most speculative profiles of users on chain, and then the folks that are just happy to be able to earn a market competitive yield like that's an amazing unlock. And that's why Pendle continues
to command so much liquidity. And I do think that like, that, of course, then drives competition
amongst everyone on chain to be competing with the fact that this protocol is allowing you to earn,
let's say, 5 to 10 to even sometimes 15%, 20% as a fixed predictable rate on stablecoins.
Anyways, okay, I'll pause there. Someone else should talk.
No, no, no, no. Great insights. Thank you so much for sharing.
Yeah, Pendo is definitely one of the best, greatest inventions in DeFi.
And it really helps protocols like us supercharge TVL as well.
Exactly like you said. So yeah, thanks so much for
the insights. How about Nomadic?
What do you think of the yield sources right now?
Yeah, like I agree with everything DeFi Dad was saying there
and I'll take it maybe like a level deeper, like what I look for. So I think what DeFi Dad was keying in on with Pendle is they came to the
table with a new mechanism design. And sure, there's other teams that tried yield trading in
the past, but what a new mechanism design can unlock is new yield opportunities. And I think you can create stronger moats
and more lasting sustainable yields
with strong new novel mechanism designs
because if everybody's copying the same thing,
then the yields are gonna be somewhat the same.
I mean, you have new chains, you have new launches
and everybody can play that incentive game.
But I think yields are typically downstream of mechanism design.
And I'll give maybe two examples here real, real quick.
So Instadap, when they converted to Fluid,
they came up with a novel new mechanism design.
What has that done?
That's allowed them to give good yields and great product market fit and
quality of life for users.
And they've done it. They've attracted a lot of TVL without having to play the incentive game.
So for me, this is like a, again, try not to use this word. There's term too many times, but like a first principles, new development in DeFi. Another one, like always looking for teams like,
you know, Morpho came to market with their optimizer.
And then after being in the space, learning how it worked, came up with this amazingly modular, elegant design.
And we've seen what they have done.
Again, came to the table with a new mechanism design that then leads to new yield sources.
So for me, and Pendle is like a great example of that too. There's many examples
of that. Actually, there's not that many, to be honest, because I think these things are novel
when you see these types of breakthroughs. You can do both. Like it's not, you just have to be
purely focused on mechanism design. Like obviously incentives play into it. A team that I think is
doing really well playing both is Euler. So again, also being innovative and bringing something totally net new to the market, but also using their REUL emissions in a really creative way.
So that's a team playing kind of like the mechanism design and incentive design game really well.
So again, this is kind of like the things that I look for when I'm trying to find yields because I want them to be lasting.
I want them to be sustainable sources.
And, you know, going back to what I said earlier,
this sort of comes from the team.
Because if you identify builders that can build net new things,
I have more faith in those builders being able to iterate going forward too.
I completely agree with you, Nomatic, when it comes to the team, to be honest.
Completely agree with you, Nomatic, when it comes to the team, to be honest.
We spoke about a bunch of different kind of sources,
like commissions, taking, lending, basis trades, LP fees, points farming as well.
I mean, I feel like in the last cycle, in my opinion,
a lot of protocols kind of relied on pure token emissions,
which is somewhat correlated with liquidity the liquidity acts you know short to long term within that protocol when it comes to being
mercenary um touching upon the the topic that nomadic was speaking regards to what he looks
for like what i look for and something that i'm pretty excited to see in the market right now is protocols such as, you know, Reiko and then Turtle, which is pretty much when it comes
to the liquidity, pretty much, you know, allowing kind of like everyone to tap into a bit more
incentivized deals.
And specifically because, you know, for touching a bit more on the liquidity side here uh for a lot of the folks on on this
industry a lot of like you know lps or a lot of like just retail users i don't i don't think a
lot of people understand now you know these prior liquidity deals are actually built and you know
even if even that they exist but i think that's you know it's an awesome kind of idea to bring
those out and you know make everyone uh kind of like able to drop their liquidity into those that's an awesome kind of idea to bring those out and make everyone able to drop their liquidity into those.
That's something that I definitely look out for personally.
Well, in the defense of prior liquidity deals, that's something I do try a lot to do.
I think in consideration specific terms and the specific way they're incentivizing the yield.
But that's usually what I look for and something that i'm excited uh for so uh so yeah that's that's that's kind of my take but uh i think both nomadic and specifically also defy
that you know very good job on explaining you know kind of like the pendle kind of like the
all the other industries is indeed maturing i'm not sure not sure if Joe or Patrick want to take it from you.
Yeah, thank you.
Thank you, Max.
And thank you, Nomadic, for all of the sharing.
I think we're definitely seeing like your sources maturing as well.
And it's definitely some great insights from you moving
on to joe um what's your take on the yield sources in your brand stable coins and also just in general
in defi at the moment yeah um i think i wanted to kind of talk about sustainability side um i think
all the current stable coins or rwa they don't really have a transparency. And I think without that,
institutions cannot come in. I think I talk about a lot from the institutional
side of things, but I think that is really the focus. And also that is going to be the source of
next five, 10 years expansion of firepower. And and so far since we didn't have a choice
and also there was not much of their backings.
But now I think the SEC and all the regulators coming in,
obviously, if we can, we definitely want to know.
And then all the stable coins or unstable coins,
they got de-pack like when the market crashes.
And then those are the, I mean, the ones that are deep packed quite a lot was with uncertainties quite a bit.
So from here, I know we're going to have a lot of stablecoins, real-world asset related tokens,
having business backing those coins with some sort of business,
Gaiba is going to be the one.
And other security tokens, for example, treasuries and other security bonds.
Even those things, we definitely need to know what are the yield source,
not just, you know, this type of business, but more of like, what is it?
You know, like balance sheet or like business plans and so on.
Otherwise, I think institutions is not going to come in.
And obviously for those somewhat complicated products,
the retails are a little bit, I think, hesitant to put the money in.
So to expand this real world asset stablecoin space, we definitely need more transparency.
Without that, we're not going to have success, I think.
Yeah, I have a couple of takes on some of these things that are a little different.
So my issue with most stablecoin farming is in most cases, it's in many cases, at least it's uncapped downside. So you can lose 100% of what you put in if there's either a severe DPEG like we as low as like five or 10%. And now there's some protocols like Aave that I think there's very little chance of something
happening because it's been around for so many years at this point that it's been probably
one of the biggest targets of anything in the world for hacking since there's tens of
billions of dollars on there.
So basically, like for me, I split it into a barbell where I would either want something that I would consider to be almost no chance of losing the money, which would be a battle-tested stablecoin somewhere like Aave or something like a tokenized T-bill yield where it's just going to produce a small but consistent income.
a small but consistent income.
I mean, even their T-billed yield is fixed income,
or if it's a T-billed yield,
because then it's fixed income.
So something like that, that's consistent.
Or I'd want something where I'd have
some sort of uncapped upside,
which in most cases would not be a stable coin
because their price is set to be stable.
It would be something like either
a digital asset earning yield
or in some cases a tokenized asset that actually has upside earning yield.
The one time when I'm actually more interested in riskier stablecoin yields
would be something related to points farming
because then there actually is that potential upside
if the airdrop resulting from the points ends up being more valuable.
Can I just add, I love what you're saying, Patrick.
And I'm just looking at my open tabs here,
and I'm like, my largest stablecoin holding right now,
so this excludes, keep in mind,
I'm probably like a lot of others here where a lot of my portfolio,
even in a bear market, is long because I'm betting
on the growth of crypto over time. And for me, that's mainly been Ether, Bitcoin and tokens like
Sol. So what stable coins I do hold, the majority of them as of right now are earning about 2.8%
in Aave. And that again is because of everything Patrick said. I just,
I know I can get those stable coins back versus I'm also lending to Fluid because that's another
place that I'm almost viewing it as a risk-free yield now. It's just Fluid is a little newer,
but built by the Instadap team. So you got to like give it some time to continue to prove itself and hence size that
position appropriately just in case the you know worst case scenario were to ever play out and then
the um uh the last place which i keep bringing up is um i should be a pendle holder by the way i'm
not a pendle token holder but i talk about pendle a lot um i I also am viewing Pendle as just a place that I can reliably
earn that stable coin yield. And this requires though, that I am very careful about the markets
that we participate in for all the reasons that Patrick called out. I think like looking at
looping yields, which I'm still a big fan of uh like i've probably got honestly i probably only
got like one to five percent of my stable coins in a looping position because of the risks of
something de-pegging or just some unforeseeable you know unfortunate sort of liquidation happening
um it's just not the same as like what we can earn with something like Aave.
And I've got to say the thing I'm most excited for in the coming years is for
some of these newer RWA-backed yield sources that are stable coins to prove themselves so that
that can be yet another place that I can earn what I would
call a near risk-free rate.
Right now, it's just not the case.
I just don't view any of the folks that have these wrappers around T-bill yields as being
totally risk-free.
But again, if you size appropriately, you can earn really competitive yields and plan ahead for the worst
case scenario. And obviously, by the way, that leads back to a synthetic dollar backed by AI
compute with Gaib. I mean, this is one of the reasons we all are talking here is we're really
excited for a novel use case like this to marry the world that is, you know,
the growing demand for AI compute with,
you know,
an on-chain RWA back to yield that can power a stable coin like AID.
So anyways.
Thank you,
DeFi Dad for the mention over here.
And I appreciate all of Patrick,
DeFi Dad, Joe, all of your insights as well just now regarding your sources,
bringing transparency of the underlying backing to the audiences, to the users, to really drive institutional adoption.
to really drive institutional adoption.
And also,
I think like bringing real world yield sources
like AI compute yield sources,
is definitely,
these kind of innovations that we're building
is definitely quite important as well
because sometimes in a crypto native space uh they're owning like
limited categories of yields like the well you can build all kinds of strategies on top of it
and also baking your own token incentives to make it more interesting but still like in the real
world that's where like the vast majority majority of asset classes and yields are.
And so I think bridging the gap between an online and off-chain world, both in terms of asset originations and also in terms of liquidity in terms of users are very important
over the long term for the growth of our industry.
So moving on to the next big question, which is something that we've just
tapped on earlier as well, institutional drivers. I think like institutions still have the
lion's share of capital, of liquidity, regardless if it's in the crypto native world or the
traditional finance world, there are many crypto native world three they are, where the traditional finance world,
there are many crypto native web three liquid funds as well,
operating behind the scenes.
And then there are also a lot of web two institutions coming into the space
right now. So, I mean, a lot of the retail,
a lot of them, like, especially new users,
will only follow if they've seen big institutional money
coming in as well, right?
So what do you think are the factors
that are the most compelling for institutional investors
to enter the DeFi space?
And what do you think could be some regulatory challenges
for risk management frameworks that influence their decisions?
Yeah, I guess we'll start with DeFi data again, following our sequence.
What do you think?
I've got a quick answer for this, and I feel like Joe should weigh in on this
because I thought Joe worked at Morgan Stanley,
so he's probably got the best perspective here to weigh in on this. I think number one is just the reliability of that
DeFi protocol. How long has that thing been live? How long has it been live without an exploit?
And of course, it goes back to even the network. If you look at BlackRock, their Biddle DeFi ecosystem thing, they've got like 1.8 billion or something
like that on chain, according to DeFi Llama. And that is there on Ethereum mainnet because
these are the adults in the room who are, they're not screwing around. You know, they're not looking for, you know,
some 50% looping yield on a new stable coin
on, you know, some newer chain, some newer L2 even.
They're looking for the thing that has been up and running
for 10 years with zero downtime.
And so they're on Ethereum mainnet,
it's premier block space
that they know not only is it not going to go down, but the network is secure and they're going
to be able to reliably retrieve those assets. And everything they're doing feels extremely
defensible because of the credible neutrality of Ethereum. So that's number one above all else to me,
all those sort of factors in one.
But Joe, what are you thinking?
Yeah, thank you for bringing me up.
So I think there's a couple of points.
And one thing is before the Bitcoin ETF or after.
And one thing is before and after the Trump administration rising again.
So I think before the Bitcoin ETF, institutions were interested in,
I think, either only for trading as a hedge fund or cost saving,
as a hedge fund or cost saving because I think 30 to 40 percent of the traditional banking
cost is coming from the human resource. Maybe 40 is a little bit too much but 30 percent I think
definitely like around that and then with the smart contract or the DeFi we can cut so much cost. I think that's one aspect that a lot of institutions are very interested in.
And after the Bitcoin ETF, especially the BlackRock ones, they have a massive inflow
and the business is like huge.
So we now see the upside of crypto or DeFi so they started looking at the
upside after the Bitcoin ETF but still DeFi was skeptical because of the regulation uncertainties
so they only focused on you know potential DeFi outside of the US. So that's why I think Coinbase created another entity
to provide services such as staking
or other services outside of the US
or other institutions are doing similar structure
and not touching the US.
But after the Trump administration rose, now we kind of know or already assume that DeFi is very open in the US or essentially all of the world.
So now the biggest market that they focus is tokenization. For example, like we talked about earlier, the stablecoin market is now in total about 230 million, which is one tenth of NVIDIA.
If we can tokenize NVIDIA 100%, let's say, we have 10 times of the current stablecoin market.
And, you know, this is like really huge.
And we're now saying, oh, stablecoin is like really crazy big market. But, you know, we have U.S. treasuries or Japanese treasuries or European treasuries or corporate bond.
And we have so much of these markets ready to be tokenized.
Not probably 100% because then there's not much liquidity if we tokenize all the things.
because then there's not much liquidity if we tokenize all the things.
But as we have more stable coins ready to absorb those demand,
we can cut the cost but also serve people all over the world for those products.
So I think we have now see a lot of enormous amount of potential in this
market. So I think this is essentially the kind of main phase approach of how institutions
are interested in or what they're looking for at this moment.
Yeah, thank you, Joe. Great take. I think that's definitely some super insightful take
over here, which is leveraging blockchain, leveraging tokenization. It's also for cost
cutting for TrueFi. And yeah, moving on to next up, we've got Nomadic. What do you think will drive institutions into the space?
Yeah, I'm definitely not an expert here,
but I know institutional players look at risk much differently
than probably your average DeFi, DGEN like myself.
So I think a maturation of kind of risk products on chain is going to be beneficial.
One that I'll call out, not invested, but we did a podcast with them is Cork. So they're doing,
I'd say like institutional grade DPEG swap insurance, essentially. So, you know, I guess
in a similar vein as some of the other insurance protocols over the years, but with with a bit of a twist.
So, yeah, I'd encourage you to check them out. It's it's pretty interesting.
So I think that's like a needed kind of bit of tooling.
I think higher yields is needed to like you need a higher risk adjusted rate of return over T-bill yield to just make the risk valid.
And then to Joe's point, I think he's bang on.
I think a big driver of people coming on chain like institutions is cost efficiencies and
headcount and finally cutting out all those middlemen that we've talked about for years
with DeFi.
And then another one that I'll just kind of bring up, like, I don't know if anybody had a chance to look through that Larry Fink BlackRock article.
I did not read every word. I skipped the boring parts, but read all the crypto parts for sure.
in the active versus passive movement back in 2009,
where rolling up ETFs into indexes for passive investors
greatly kind of democratized access to users
and people that could then just,
hey, okay, I want to buy the S&P 500.
And that performed very well for people.
And he kind of called this next wave of,
I think he called it like private credit
and he's going to democratize private credit. And something I see like this, you know, I think ties
in really well with Gaib, like, you're essentially finding a way to get users access to this private
credit sector. And you know, this stuff that Maker's done before, again, Patrick called this out,
previous speakers were talking about Maker delving into this.
But a lot of that was like e-liquid long-term real estate.
If you can get access to shorter term, like three, six month, 12 month, and just kind
of know your terms a little bit more clear, I think that's super interesting.
And obviously, that's something that Guy's bringing to the table.
So yeah, super excited to see how this evolves because Larry Fink's thinking about it and Guy's doing it.
So really cool to see.
Thank you, Nomadic, so much for the mention over here.
And I think your comments on risk is definitely absolutely spot on.
And, yeah, I think when it comes to private credit as well it's it's it's it's such a broad
spectrum and there's so many different kinds of like assets asset types deal types within or like
industries domains within private credit and what we're doing when it comes to gpu financing for ai
compute specifically that's just so different than typical private credit because this could
mean deals that's like six months a year exactly like you said simply because how highly sought
after compute is and is continually going to be and also how short the payback period is
for every dollar that you invest into an nvidiaIA enterprise-grade GPU.
So because of that, that's why there is opportunity over there because there's just so much yield being generated
by lending money to cloud and data centers to fund their GPU
or just like giving money to cloud and data centers to fund their GPU.
There's just so much cash being generated
in financing these AI-driven, AI fueled GPUs at
the moment. But that's all pocketed by the institutional big guys. And what we're really
trying to do is to make sure that we as average users, as average retail investors have access
to that. So yeah, absolutely. Thank you so much for the mention. And moving on to Max,
what do you think
would be some biggest drivers
for institutions coming from
your perspective?
I think we heard
very good texts on what institutions
love, which
also, in my opinion, is low
volatility, high compliance,
steady yields, like nomadic said, they're not as DGEN as here.
I think definitely RWAs could play its part, specifically due to the winning.
A lot of the research being done by BCGg and you know uh standard chartered as well um you know like i do feel like
we already have like 50 billion worth of order otherwise and i think like some creation is to
uh we see like a potentially increase to 500 billion and like when you start looking at the
research doing by these institutional players i mean you also have like rock that alone kick things off by tokenizing one of their funds.
And now kind of like you got everyone
from Franklin Templeton's to Nomura's
launching RWA products.
But like going back to the research,
I remember like Standard Chartered
was kind of like projecting 30 trillion
in tokenizes by 2034,
which is like, in my opinion is insane and vcg
um it was also estimated like i feel like it was like more than 15 trillion by 2030 which is
which is amazing um i mean like there's a lot of like lots more data uh when it comes to rwis
institutional interest but i do definitely uh thank our otherwise as long as they're transparent uh like i believe like joe mentioned um in terms of like
the quad realization and organization aspect i think that should be a good motivation towards
uh institution institutional um you know companies to flow into the space. But yeah, that's just my take. I'm not sure if John or Patrick next
want to touch upon that or Siwa.
Yeah, thank you so much, Max, for your great day.
I think exactly like I said, being transparent
currency is very, very critical.
And also there's definitely a lot more room
to explore here in terms of tokenizing a lot of what we've got in InterFi in order to just like increase the efficiency overall.
Moving on to Patrick.
Patrick, what's your take on institutional adoption at this point?
Yeah, so I'm by no means an expert on this particular part but i would also say it's one way to think about crypto is is that
at its core it's a newer better form of finance and specifically it's a newer form of finance
with better distribution and it has better distribution in a couple ways because first
off you can more easily fractionalize thing which which is what larry think called out in his annual
letter to shareholders this week about how they can fractionalize private credit and private equity and then make those available to a larger set of investors.
And it also has better distribution because it has global distribution.
So I think you're seeing that with T-bills on chain where you have people who maybe previously had difficulty accessing U.S. Treasury bills that can. You also see, I think, an example that gets overlooked is with stable coins in general,
where basically they're increasing the distribution of the U.S. dollar,
where people who live in places where they normally would have difficulty accessing the U.S. dollar
can through stable coins.
So what does that mean for institutions getting into crypto?
Well, one way to look at it is that it's a tool for them to increase distribution of different products. And so one would be to increase distribution of things like
T-bills and dollars to people around the world who otherwise wouldn't have access, which I think is
why you're seeing this rush into stablecoins. And then the other thing would be to increase
distribution of things like private credit and private equity, that they want to sell tokenized versions of that to a larger set
of investors.
And so I think that's going to be something else that you see coming in the near future.
Yeah, thanks, Patrick, so much for the great take on distribution.
Absolutely agree. I think during the early days of fear back stable coins
was such a great time, a gray area at the time,
and a lot of the USDT was actually used by import-export merchants
to do cross-border payments.
And that was a very big, very strong use case,
even though it was in the gray area,
legally speaking. But that definitely gives people access to US dollars in a way that bypasses
some of the regulations. So that's also a distribution in a way. So I think when it comes to institutions,
leveraging blockchain, leveraging DeFi,
and tokenization, the engines in general,
is definitely a great way for distribution for sure.
So yeah, I'm just being aware of time right now.
It's time to wrap up this space tonight.
And super appreciate all of the guest speakers tonight
for coming here and sharing all of your great insights.
I'll just give the floor to everyone who's still here,
who's not dropped yet for a quick one-liner.
Anything that you would like to share in terms of what's exciting for you,
what are you bullish on, or where you're parking your capital at the moment,
what are some best year-generation opportunities,
like anything you would like to share.
So maybe let's start with Defy Dad again.
Yeah, thank you so much again for having us.
Sorry, Nomadic had to drop.
We were headed over to a podcast recording,
but I was just going to mention that there's been a lot of focus on using AI as an intelligence composable Lego piece in the stack.
So this last few years, it's been about AI agents acting on our behalf on chain.
How can we abstract away the complexity of a crypto wallet and just
have an AI agent, you know, do stuff for us? How can we interact with AI agents, you know,
that ultimately have access to DeFi tools? I think like one, you know, huge opportunity that hasn't been unlocked, and again, goes back to Gaib, is the sector that is AI, like the global AI sector is going to grow a lot.
I don't know exactly what's going to, you know, play out as an investment.
I personally just, I have no idea because there's just so much that's possible.
I have no idea because there's just so much that's possible.
But I am extremely confident that AI as a sector is going to grow exponentially.
And one of the picks and shovels plays in that space is being able to somehow bet on AI compute,
being able to cater to folks that are going to be ultimately generating this AI compute.
And so that's the genius to me of what you guys are building with Gaib is you're taking the power of DeFi,
the distribution that Patrick was referring to, that is digital finance,
and then you're making it possible for someone to simply hold a stable
coin that ultimately represents all of the financial dealings that can happen with ultimately
like lending money out to folks who are running GPUs and so forth.
So anyways, it makes sense.
The future is digital finance, and this is sort of marrying all of these different uh opportunities into one so
anyways thank you for having us thank you thank you so much defy dad for for mentioning us and
for sharing all of your great insights tonight i really appreciate it um cool uh next up i'm just
gonna uh follow the order on my on my screen right now. Patrick, any one-liner you would like to share before we conclude?
I just want to thank you for the invite and for hosting this.
This really was a great space.
And I also want to add a reference to GAI.
For people listening, I have no affiliation with them beyond doing this space.
But I think it's really – I think AI compute is going to be one of the most valuable commodities in the coming age. And so being able to have access to that on chain
is a really, really intriguing use case of the technology. And thank you for having us again.
Thank you. Thank you so much for coming here. Joe, any last words you would like to share?
Yeah, thank you so much for having me. This year I'm very excited about, again, institutional
guys coming in, more liquidity, meaning we can have more derivative products. Not just
like futures or options, but more derivative product could be potentially created because
of those fat liquidity.
And also like Eve this year, I'm really, really looking forward to stablecoin real world asset
tokens backed by real business.
You know, pay five is another thing coming from Solana, but these are going to be very, very precious
opportunity for especially retail investors like us.
So yeah, that's what I'm looking forward to.
Yeah.
Thank you, Joe.
Thank you everyone for coming here tonight, sharing all of your alpha, your substance, your insights into DeFi, into institutions, into RWA, all of that.
I think we've definitely learned a lot.
And for all of the audiences that are still staying in this space right now, make sure that you give everyone a follow and stay tuned.
right now, make sure that you give everyone a follow
and stay tuned.
This, all of these are big chats on Twitter,
on YouTube, and sharing a lot of great stuff
very consistently, so there's a lot to learn
for myself and potentially for a lot of, you know,
audiences in the community as well.
And also make sure that you stay tuned with Gaib with what we have coming up next. We have
announced our wait list for our pre-deposit program a week ago
and already got more than 100,000 sign up on the wait list.
In the coming few weeks, we're going to release
our pre-deposit vote. And then after that,
eventually our AI dollar, AID, roughly a month after that
so that everyone can start generating yield coming from AI compute directly with their
dollar without having to buy Nvidia stocks. So yeah, there's a lot of exciting stuff coming up
from Gaib and from all of our partners, from all of the the educators, thought leaders in the space tonight as well.
So hopefully you enjoy it and we'll see you until the next one.
Thank you everyone.
Thank you guys.
thank you
thank you
goodbye
thanks for
for coming here
tonight Thank you.
