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DeFi Uncovered Ep.3 | What’s Next in Mantle’s DeFi Plans 🎯
Recorded: Sept. 28, 2023 Duration: 1:01:39Space Recording
Full Transcription
Okay, I think people are slowly trickling in.
So, good morning, good evening, all.
Thank you for being here for the third installment of DeFi Uncovered by Mental.
So, I'm Derek and with me, we are Admin, aka DeFi Maestro, and we are ecosystem growth and researchers in Mental.
All right, so today for today, we have a few questions that I'll be discussing with Admin, and yeah, hopefully at the end, perhaps we can have an open Q&A if we have some time or we can have an open Q&A if we have some time or if we have been with that later.
So, yeah.
So, I guess, I'll also, like, I'll also, like, I'll also, like, I'll be here for the night, yeah, I'll be here for the night, yeah, I think this is a space that I think this is a space that you guys want to stay for because we'll be talking also a bit about social fight, right, and I think I'll be trying something fun later, right?
I'll be picking Ed's brain on something, forcing him to give all of us some alpha, so I think we'll stay tuned for the later part of this show.
But, okay, let's just do a quick warm-up, right?
Perhaps a quick review, right, of the current state of DeFi right now.
It doesn't have to be on Mental, but, you know, across the whole space, right?
What is happening, you know, in the DeFi space right now?
I think you're one of the better people to answer this, so, yeah, do give us a quick review of that.
Okay, I think there's quite a lot of developments that are going unnoticed in the DeFi scene right now, so maybe I'll just touch on a few, like, I think I'll start from, like, ecosystem levels.
So, in the ecosystem level, I think we are seeing, like, a lot of ecosystems have started to focus on, like, bootstrapping liquidity again.
I think in the past few months, there was a loud period whereby there were a lot of new chains deploying, including Elemental, and a lot of, like,
existing chains were just, like, chugging along, and not too much activities were actually being seen.
But I guess, like, we have seen in the recent times there's a resurgence in terms of chains actually actively pursuing, like, TVL and transactions.
And what I mean by that is, like, just for example, you see that Arbitrum having new incentive programs being deployed.
We see Optimism launching the new wave of, like, the fourth rounds of, like, grants for protocols building Optimism.
And you see Celestia having the airdrop of the TIA tokens to actually start to prepare their ecosystem for launch and bootstrapping their ecosystem and getting some mindshare within the space.
And, of course, we have, like, Mental itself with the Mental Journeys program with, like, 20 million M&T rewards.
So I think this signals from that all the different chains are actually starting to pursue growth again.
We are looking for more activity in our chains.
And due to the, I would say, quite a saturated space in terms of, like, infrastructure, where there's a lot of L1s, L2s being built out, everyone wants to have a sizable piece of this market.
And they want to actually bootstrap the growth and push the boundaries of the overall growth in our ecosystem.
So, yeah, all these incentive programs will be coming, like, within the next one or two months, or some has already begun.
So it only means that users that actually participate in DeFi will actually be the main beneficiaries because we can expect to see, like, padded incentives, padded returns from the LPs.
So, yeah, I would think that the next few months for DeFi will actually be pretty exciting.
And it is really a time that users can actually look for the best deal opportunities and get involved in the DeFi space.
I think outside of this, we also have, like, a large surge of, like, SocialFi folks.
I think Frontech on base has kick-started a new wave of interest in SocialFi.
So we see the different folks of Frontech appearing in all the different chains.
And Frontech is still holding on to the majority of the market share, mainly because they have the first mover advantage.
And also, I think a lot of the OGs inside the crypto space actually is very familiar with Razer, the creator of, like, Frontech.
So, yeah, I think SocialFi folks are trying to differentiate themselves and trying to target the market that Frontech has actually ignited.
And this has both good and bad points, I think.
So, like, we see many low-quality folks that actually aim to bootstrap their apps using paid KOLs and also using, like, their native tokens as a so-called incentive.
But I think it is very unlikely in the near term that any of them will actually displace Frontech for now.
But I think that long-term-wise, we have started to see a few of these competitors for Frontech that is actually building out very good products with very clean UI, UX,
and they're pushing the boundaries by actually expediting their developments and pushing out features that Frontech does not have.
But, yeah, I would say that the first mover advantage is pretty huge because they have a sizable crowd that is actually loyal to them and have vested interest because they have very found the points.
And I think that specifically, like, Frontech that's being deployed on Mental is a pretty decent product.
They have been shipping really fast and it's really smooth.
And I'm not just saying this because, like, I'm part of the ecosystem, right?
I am a user myself and I've used both Frontech and Frontech on Mental.
So, yeah, I think try it out for yourself and keep an open mind and compare the different apps.
And you can see that there's actually a very large difference in quality between some of the apps compared to all the plain folks that are very mercenary in nature.
And probably another point is, like, another aspect I see happening in DeFi now is the, I would say, the rise of RWAs in terms of, like, usage as well as the overall TVL.
I think if you even notice, RWAs at the start of September was at, like, a 1 billion TVL.
And now, at the current state, RWAs is, like, hitting, like, 2 billion plus in terms of TVL across the different chains.
So, I think this is a signal that RWAs is actually here to stay.
And there is going to be increased interest in RWAs once, like, more of these protocols actually address the regulatory concerns that comes along with being associated with traditional assets.
And RWAs have been, like, quietly picking up steam.
But I think at the background for builders, we see that a lot of protocols are actually looking into RWAs, looking into integrations, and trying to find ways to actually increase the composability of RWA assets and RWA tokens inside the DeFi scene.
And I think this particular segment is very appealing for a lot of the DeFi protocols because, firstly, that this is yield that is, I would say, sustainable.
And it greatly increases the efficiency of which the assets that you hold can actually generate yield for yourself.
So, maybe one last aspect that I see that is happening right now for DeFi is the potential rise of, like, decentralized stables.
I think since the collapse of Terra, right, I think decentralized stablecoins has been something, like, somewhat of a taboo in the DeFi scene.
A lot of people refuse us to, like, touch decentralized stables because, like, they're scared that you'll collapse, it's not going to be sustainable.
So, I think this new wave of decentralized stablecoins actually focuses heavily on being sustainable and not offering, like, crazy yields like what USTPOC did for Terra.
So, they are doing, like, different kinds of, I would say, designs to ensure that, firstly, these decentralized stablecoins are sustainable and they are also resistant to censorship across the different ecosystems.
So, just for example, when I say this, it's like, I think, just looking at Libra V2, Libra is one of the, I would say, the more popular decentralized stablecoins now.
So, Libra V2 has been picking up a lot of TVL in the past one to two months and it doesn't look like it's going to stop anytime soon.
And we have, like, other decentralized stablecoins such as ST-euro that has been developed by Anger Protocol also starting to, I would say, gain some popularity.
And we also have, like, new stablecoins that are taught to be decentralized, be censorship resistant that are getting a lot of eyes on it.
So, you have Tapioca DAO with USDO, you have, like, Athena that is being developed and also that actually uses a mechanism of, like, opening, using funding rates from PURPS to actually get sustainable yield for the stablecoins.
So, yeah, I guess all these aspects are much more sustainable compared to what USD was, is more sustainable like a protocol such as iron that collapsed overnight previously in the past.
So, the current state of, like, decentralized stables is having a very different focus.
And, yeah, it's good to see that longevity is the main, and helping to maintain the pack is actually being heavily focused right now.
And I would say that this current state of decentralized stables is much safer compared to the previous one.
But, of course, there are still some sort of underlying contract risks that are involved with using all these decentralized stables.
So, yeah, I think that's an overall summary of, like, what is happening in the current state of DeFi.
Okay, that is definitely not a summary.
That is one of the longest, like, alpha-packed monologues I've heard in a while.
So, I think I will have to summarize that for the users, right?
Because, honestly, that was, if you guys listened to the whole thing, right, I think there's a lot to unpack there.
And if you don't mind, I will actually want to pick your brain on certain things within, you know, whatever you've mentioned.
But just as a quick summary, I think you mentioned how there's a new wave of ecosystems, right, incentivizing the gravity, including mental, right?
And then there's a rise of SocialFi and SocialFi Fox, namely Fentac and Fentac Fox.
And then RWA is, right, picking up steam and also a potential rise of decentralized stables, right?
Yeah, I have questions, you know, to unpack certain things that you said, right?
So, for the first one, we see, as you mentioned, right, you know, a huge rise in L1s, L2s, L3s, right?
Maybe even L3s in the future may have a boomer on their front, right?
But for the next, perhaps, cycle or maybe a year or so, right, just to give you a time frame,
do you think the focus or, you know, where value will flow to, right, will mainly be the app layer or will it be the infralayer?
Yeah, just very curious about your personal thoughts here.
I think value will always start from the app layer.
Like, if you do not have the app layer being heavily utilized, like, the underlying infralayer doesn't really have much use.
Like, you can have the best infra with the fastest blockchain in the world with, like, lowest fees.
But if it's, I would say, like, a dead town, no one's using your chain, then it's basically pointless.
So, I think value always accrues first at the app layer, and then you will trickle down towards the infralayer.
So, you definitely need users to use your chain and market makers to actually help to arbitrage the different fee differences.
And then only then the value will actually come towards, like, infralayers.
And, yeah, that's where I see the value actually accrue.
Okay, I fully agree on that, which is why I think we are seeing a boom in social slash consumer fight, right?
I think there's a reason for that because I think it's about time that, you know, Web3 has a clear app, right?
It's been quite a while, right?
I think this is quite a big shot at that, right?
So, when it comes to social fight, right, flowing from this, I just want to get your thoughts on, okay, because for Fantech or Fantech, right, they essentially at the core are competing with incumbent juggernaut, you know, Web2 players, right?
Like, Instagram, Twitter, OnlyFans even, right?
So, how do you think that, you know, we can really use Web3 elements to gamify, to augment the experience for users, right, so that it goes above and beyond what Web2 providers or service providers can give to the users?
Yeah.
Yeah, I think for Web3 social fight protocols, I would say there's a few aspects that are clearly the advantage that they have for using Web3.
I think first being censorship resistant, I think that for platforms like Twitter, OnlyFans, they're always, I would say, susceptible to being, what do you say, censored by the governments or where they're actually based geographically.
So, censorship resistance is definitely one.
And I think that the fun part about social fight on Web3 that Web2 platforms can't do is that they can actually divert the rewards towards users in terms of, like, tokens, in terms of, like, airdrops, or even, like, doing revenue share.
So, I think these aspects are what, I would say, Web2 platforms will struggle to do because of regulatory concerns for Web2, I would say, platforms.
So, Web3 platforms can actually use these aspects to, I would say, bootstrap their usage and also allow users to actually be part of this, of the growing popularity of the platforms.
And they can be, also enjoy the success of the platforms, I guess.
Got it.
I think, yeah, incentivizing users, bootstrapping users, above and beyond what you just said, right?
I think Web3 elements can also ensure a very targeted focus, you know, way to do that, that I don't think many Web2 providers can do.
Because of dark social, right, something that they cannot track, but we can index for, you know, using our database.
So, fully agree on that.
But, yeah, I think just really quickly, again, right, for RWAs, because this is the third thing that you mentioned, right?
RWAs really, I guess, is a shift towards, you know, us looking for quality sources of yield, right?
But right now, most of these sources of yield, you know, T-bills or bonds or things like that, do you think that, you know, there will be a shift away from these sources of yield in, I don't know, in the next few months or so?
Or will it be mainly just this?
I think for sure, if we are looking at just the next few months, I think T-bills and bonds will be the main sources of, I would say, revenue for RWAs.
I think even just implementing T-bills itself and tokenizing it for usage for stablecoins or for other RWA platforms is already, I would say, in the gray area right now.
Because of how slow the regulations have been to actually give firm guidelines for tokenizing of RWAs.
So, this will take some time and I think it will take much longer than a few months.
So, at the current state, T-bills is the main source of RWA yield and it will take probably longer than a few months before we can see that more complex financial assets being used as RWAs and generating yield.
So, like, I think that previously, like, a lot of platforms tried to implement, like, I'll say, real estate sort of RWAs whereby they generate yield for the users.
But there was just a lack of traction for those kind of platforms, mainly due to a lot of concerns between, like, how these accounts were being audited and how they actually translate to yield for the users themselves and whether these platforms are legit and not.
So, yeah, I think T-bills will be the main focus.
And then once T-bills is done and then there's more clarity in the regulations, then more complex stuff like structured financial instruments or even, like, commodities and, like, real estate will actually follow.
And then this will allow RWAs to be, like, more diversified assets instead of just T-bills.
But it will take time.
But the overall direction for RWAs now is encouraging because it's getting, I would say, a lot of traction and it is encouraging to see that sustainable yield is actually being focused and being pushed towards the DeFi scene.
Got it, got it.
The last thing you mentioned was decentralized tables, right?
So, I just want to pick your brain a bit on, you know, the mechanisms that you feel will differentiate the current crop of decentralized tables, you know, over, you know, projects that have built in the past, like Terra.
What do you see, you know, they are doing differently in terms of mechanism that you find really interesting?
I think it's just basically the mechanisms that are actually sustainable.
I think the current generation of, like, decentralized stables are actually focusing on sustainable yield and not magically, like, propping up the yield using treasury.
So, I think Terra failed because they tried to use the 20% returns from Anchor to actually force adoption, I would say, for the stable coin, which was never sustainable in hindsight.
And you see the current generation, they're actually using stuff, like, for Libra, you're using yield from staking Ethereum.
For Athena, you're using the funding rates of a short pet with an underlying collateral of Ethereum spot holdings to actually give you yield from using the stable coin that they're producing.
Then you've got Engel using, like, LSDs to actually bootstrap the yield.
And you've got Tapioca DAO that is combining, like, the usage of their stable coins with a money market to actually generate yield for users.
So, all this, I would say, there are different mechanisms that are involved, but they are all trying to link it with, I would say, what they perceive to be sustainable yields and not over-promising users and trying to force feed, like, unsustainable yields to it.
There's no, like, algorithmic rebalancing of the stable coins to pack.
I think those are extremely volatile and extremely dangerous for mechanisms that have proven to be, like, very, I would say, unsustainable.
And I think none of the current decentralized tables actually is trying to use that.
And instead, they are focusing on being sustainable and protecting the pack, ensuring that users' underlying funds are not compromised, like, even doing, like, black swans.
So, yeah, I think that's a key differentiator between the current generation of decentralized tables versus, like, the decentralized tables that have failed in the past.
Got it, got it.
I think at this point, it's a perfect time to segue into the next generic question, right?
We have discussed, you know, what has been happening in the space currently, right, within the DeFi space currently.
Where do you see the DeFi space in, let's say, one year's time, right?
Like, do you, yeah, what do you basically see if one year we are here again, you know, what would we be talking about?
I think one year in, like, crypto is, like, an eternity, right?
Like, there's so many things that can happen in one year.
You can have so many black swans.
You can have, like, the kickstart of a bull market.
Everything that's euphoria just kicks in.
So, I would say one year is super long in crypto.
But maybe just generically, I can, like, touch upon what I see that will be developing, like, in the DeFi scene, like, soon, I guess.
So, I think SocialFi will continue to be developed.
And I think, like, more integrations with actual use cases will be actually integrated with SocialFi.
So, instead of just, like, speculation of, like, shares and whatnot, I think SocialFi will have more tangible users.
So, what I see is that SocialFi will be integrated with, like, wallets.
So, integrated with, like, Telegram bots or even, like, those crypto credit cards.
So, I think there will be a time where all this is actually integrated into one single app.
So, you can see it is, like, maybe, like, a WeChat of, like, a Web3 space.
So, more integrations with different elements that are sustainable.
And you can see the web, there will be a closer, I would say, a closer link between Web2, social media, and also Web3 elements.
And there will be more tangible users so that users can keep using the same platform to actually conduct more different use cases and integrations or more interactions with the Web3 space.
And for RWAs, I think RWAs will continue to pick up a lot of steam.
And I would say that it is highly possible that, in the next year, RWAs stablecoin will establish itself as a dominant player inside the stablecoin space.
So, currently, like, USDC, USDT, they are, like, the two dominant players for stablecoins.
But once RWAs stablecoins have come on, they offer, like, better yield.
They give you, like, underlying treasury yield of, like, 4% to 5%.
And I think this, once the big players have perceived this to be safe, to be sustainable, and have clearer regulations regarding, like, the tokenized T-bills,
then the RWAs stablecoins is just generally a better, I would say, a better holding for them compared to USDC and USDT.
And this will give rise to RWAs stablecoins really gaining TVL and traction and then gaining usage across the different ecosystems.
And it's likely that more of them will actually be up there with USDC, USDT, and then be a dominant stable, RWAs stablecoin within the space.
And for RWAs, there will be a heavy focus on, like, sustainable yield, and that is backed by, like, tokenomics and, like, a different, a mixed basket of, like, RWAs.
And I think, lastly, we will be seeing a lot of more high-quality debts and, like, a lot of unsustainable debts being perched.
So, I think, after every cycle, for every time the bull and bear market switches, a lot of unsustainable debts basically just die off.
And those that are high-quality in nature, so you can look at Uniswap, Aave, those are the debts that actually survive the test of time.
And I think this time will be no different.
So, now we are sort of in, like, a bear market, and this duration of the bear market, I think, will cause many of the unsustainable debts to actually die off.
But the good ones will be the ones here to stay, and they will be the so-called blueprints for future protocols to actually build on, continue to develop, and continue to innovate,
and then to further push the boundaries of, like, the futures for, actually, DeFi debts.
And I think at the start of the next bull cycle, we can see that debts with proper planning, resource planning, and have sustainable revenue will be the ones that are left-standing.
So, just for example, you can see that GMX was one of the first few that focused heavily on being sustainable, and then generating, like, real revenue sources.
And then we have, like, the Telegram bots that was generating a lot of revenue for TrueTelegram.
And I think the next wave will be a lot of RWA-focused steps that actually are able to generate, I would say, sustainable yield,
but at a much larger scale that allows them to be very profitable and lucrative in nature.
Got it. Thanks for that.
Yeah, I realize that one year is really a long time in crypto-requs.
I don't think it's even been a year since, you know, the FTX saga, right?
And I think so much has grown, as you said, right, since then, and so much has developed and iterated from there.
It's quite a hard thing to see, though, that, you know, there's so much activity still in this current, I guess, like you said, bear market.
Okay, so I know this podcast is about DeFi, right, but, you know, I think all verticals kind of overlap in some regards, right?
And I would really love to pick your brain on this very quickly, put on the spot here, right?
You know, you discussed what, you know, DeFi would be like in one year's time.
Recently, we saw a rise in social fi, as you talked about just now, Frentech and the likes of that.
Where do you see social fi, social slash consumer fi, right, in one year's time, right?
Do you, so, you know, all those things, you know, we always talk about NFT ticketing apps, right?
Move to earn lifestyle to earn things like that, you know, iterations of Frentech, right?
Where do you see this vertical in one year's time, which is a very long time, like you mentioned?
Yeah, I think I mentioned that I think social fi will be just integrated with more tangible use cases.
So, like, I think wallets and social fi will be closely linked, like there'll be social fi apps with integrated wallets, with on and off ramps for crypto assets that allow users to both, I would say, interact with other users within the web tree space, while also maybe having a tipping system.
You can tip someone who posts, like, something useful for you, you can use, you can use, like, integrations with Telegram bots to actually buy and sell crypto assets through the social fi apps.
And then you can also use your wallet to actually have, like, a virtual card that you can actually use to do payments, maybe integrations with, like, cards such as, like, CRO or other forms of, like, crypto cards.
So, I think social fi will be heavily focused on being consumer-facing and also allowing users to repeatedly use the app while not only focusing on, like, social elements of, like, community developments and, like, chatting,
but rather tangible use cases that will make you actually go back to the app to actually do the, I would say, more usual tasks that's involved by interacting with, like, the DeFi scene and also interacting with, like, use cases that you will want inside your daily lives.
Got it. So, more seamless onboarding, more seamless UI, UX, and also stickiness within the apps.
Okay. Got it.
So, I think now we'll move on to the question that I think many people have been waiting for, right?
We've spoken about the current state of DeFi in generic terms, right?
Now, I would like to ask, right, what is the current state of DeFi on Mentor?
What has been going on?
And, yeah, just a quick review, right, of everything that's been going on within the DeFi space in Mentor.
Okay. Okay, you know, in all honesty, I think, like, the mental DeFi scene has been pretty quiet for the past, like, one month or so.
And I think this is largely because we have been heavily focusing on, like, setting up a very strong foundation for growth in the coming one to two months.
So, why I say that is because we essentially have to pass governance proposals for our treasury to be utilized.
And we wanted, like, everything to be seamless.
And we wanted our push to be, I would say, well thought out and have all the different pieces involved to be ready.
So, we wanted, like, the bridges all to be ready.
And we closed, I would say that our proposal for Stargate is ongoing right now.
And once Stargate is on, then we can see that all the other, I would say, steps coming into play.
So, just for example, we, our proposal to deploy our ecosystem fund has been passed.
And then we have started to deploy our eco fund into various different projects.
So, I think, just this month, we deployed into, like, TsunamiX, which is, like, an AMM-based PURPS platform.
We deployed into Valen, which is, like, a decentralized money market for LSDs and RWAs.
We also put funds into LiquidX, which is, like, an application-layer-focused venture studio that is, like, building out, like, Pixelmon.
And then we also invested in RANGE protocol, which is, like, a liquidity management protocol that has already been deployed on MENTO.
So, this deployment of the eco fund actually kickstarts our, I would say, our involvement in investing in projects that we believe will bring a lot of strong value into our ecosystem.
And also, it helps us to ensure that we are vested in the protocols, the high-quality protocols that are building out in our ecosystem.
And we will continue to bring high-quality protocols into our ecosystem to develop the ecosystem.
And next, we also have the liquidity bootstrap proposal for MENTO treasury.
Of course, you can have as many high-quality debts that you want in the ecosystem, but it means nothing if there's no liquidity, there's no users.
So, once we solve the issue of, like, bridges and reduce the barriers of entries to MENTO, we want users to be able to enter our ecosystem and enter an ecosystem that has deep liquidity for users to actually trade and also participate in the DeFi scene.
So, we have MIP26, which is our liquidity bootstrap proposal that allows us to use our treasury to actually deploy into our ecosystem and, I would say, provide liquidity for protocols within our ecosystem.
So, MIP26 consists of $130 million in stables, $35K in Ethereum, and $120 million in MNT.
So, if you, like, calculate the overall value of how much we're going to bootstrap liquidity in TVL in the ecosystem in the coming period, it's going to be, like, around in excess of, like, $200 million in TVL from us actually supporting our protocols within the MENTO ecosystem.
So, I think this is a strong signal in terms of, like, our involvement and our commitment towards, like, builders within the MENTO ecosystem itself.
We want to be vested inside the interest of, like, the protocols within our ecosystem.
We want to be able to support them, not only through, like, marketing and, like, signaling.
We want to be able to support them in tangible aspects, such as giving them liquidity and, like, supporting them to ensure that they have sufficient liquidity to actually bootstrap their growth and have enough liquidity to be ran efficiently.
So, yeah, I think that sums up the overall state of DeFi and, like, how we have gone about, like, thinking about how to develop our DeFi ecosystem.
Got it.
And I'd like to, you know, jump on a point that you made, right, to elaborate on that, where you said that, you know, we really are focusing on building out our foundation really strong first, right?
And I think I'd like to say, I think that's something really important.
I feel like, you know, we need to always, you know, be flexible about this space, right?
You know, because things move so fast here, right, we tend to form the traps that may end up, you know, causing some mercenary and liminal actions.
But I think what we are doing here at Menthol really is to build out the strong foundation, like what Ed mentioned, right?
When you think about it, ecosystems are really like nation-states, right, with all the multivariate, you know, nuanced components that form a great nation-state, right?
Nation-states are never made in months or even years, right?
Some people take decades to build out a nation-state that, you know, is vibrant and thriving.
And I think that's what we are really trying to do here, right?
We're bringing out a strong foundation so that our nation-state will thrive in the future.
I think for us, sustainability and security are the two most important things, right, that we will never, ever compromise on, you know, before anything else.
Because that is what users will value the most.
So, yeah, I just want to add on to that.
And moving on from here, you know, now that we've reviewed the currency of DeFi on Menthol, what is the future, right, of DeFi on Menthol?
What can we look forward to?
What can users look forward to in the next few months or so on Menthol?
I think the next few months will be pretty exciting, especially because, like, we have set up the foundation for what we want to actually do for the DeFi ecosystem.
So, I think it's taken us quite a bit of time to actually plan out, to ensure that all the proper pieces are in place and to actually time when we want to really push the growth in our ecosystem.
And I think that we see that the current state is ready for us to really, I would say, expedite the growth for our ecosystem.
And we have a few different, I would say, initiatives and products that we have upcoming in the next few months that we are intending to use to actually bootstrap the growth in our ecosystem.
So, just for example, we have, like, Mental Journeys having an update next month that will help to add leaderboards to both protocol and users.
So, protocol and users will have a clearer idea where they stand in the ecosystem and also what will be actually, I would say, the overall standing before we actually release, like, the 20 million M&T in incentives towards the protocols and users.
And we also have, like, external APIs for Mental Journeys being launched so that protocols that want to actually tap on, like, the miles that users have can actually do so.
And then they can actually make Mental Journeys, I would say, a more tangible platform for them to actually base their decisions on and to reward, like, selected users or loyal users in the ecosystem.
And we have the deployment of, like, MIF, which is an RSD product that is built by Mental being deployed to the ecosystem as well in, I would say, coming pretty soon.
Like, it is being deployed pretty soon.
I don't commit on a fixed timeline, but a user should be able to see it being traded around in our ecosystem pretty soon.
And then we have USDY, which consists of the RWA stablecoin from our partnership with Ondo, also being deployed to the Mental ecosystem.
So, RWA stablecoins will be, I would say, strongly pushed across the entire ecosystem for Mental.
So, next, we will have, like, I would say, high-quality dApps that are invested in by our EcoFund that will be starting to actually deploy to our ecosystem.
And there are dApps that we have stringently vetted the team for, ensure that they have really tangible use cases, sustainable, that users can use with ease of mind.
So, this will not be a one-off process.
It will be a stream of, like, properly vetted dApps that we have a vested interest in that will be streaming into our ecosystem for the next few months.
And lastly, we will see the deployments of the niche markets inside the Mental ecosystem.
So, mainly, LSDs, prediction markets, and even more social fire applications and integrations.
So, these niche markets will be being deployed more aggressively in the coming few months.
And the overall composability of the chain itself will be very interesting to actually monitor because a lot of these dApps are already engaged in, like, heavy discussions on, like, composability integrations.
And it will be a pretty fun one or two months that will be hitting, like, the mental ecosystem.
Got it.
So, I know that in the next few months, I think something that will really ramp up, right, will be the mental journey, right?
We'd love to discuss, you know, mental journey's role, right, when it comes to DeFi or mental, you know, how will this integration really, you know, boost, you know, the experience on DeFi or mental?
I think mental journey was always designed to serve two use cases, right?
It was, firstly, to reach the gap between protocols and users and to allow protocols to have, make better judgment on, like, the kinds of users they want to attract and also to actually know who are the power users in the ecosystem.
And the next use case is mainly to allow users to actually have fun while participating in our ecosystem.
So, the whole concept of us actually rewarding the users, in a way, you can view it as, like, a socialfy platform that is spanning across our whole ecosystem that rewards users for participation, for their actions in the mental ecosystem.
And the usual norm for chains is to have, like, retroactive rewards whereby, like, you see, like, arbitragem or optimism, you use their chain, and after a period of time, they do an airdrop that users can claim.
And then, I think that's about it for the users.
And then, after that, the chain actually focuses the rewards on the protocols.
I think for us, we want to do a different approach.
We want to reward both users as well as protocols, like, throughout a sustained period of time.
And so, that's why the Mental Journeys was created so that users can actually continue to receive, like, a steady stream of rewards over time for actually being active inside the ecosystem.
They do not have to rely on that specific protocols and taking a directional bet on protocols just to be rewarded.
And protocols are also incentivized to actually drum up the performance and being, like, and attract users so that they are so rewarded based on a merit-based basis inside the mental ecosystem.
We see this as a way to make the ecosystem fair and also to incite, like, a friendly competition between the protocols so that protocols are actually driven to actually push the boundaries and to excel and to compete against, like, similar depths inside the ecosystem.
So, I think it's important to note that the current state of, like, mental journeys, like, this is only Season Alpha.
So, this means that it's the first season.
This is a season that we're using to test, like, what works, what doesn't work, and to actually refine the whole process.
And after Season Alpha, there will be, like, more seasons of, like, mental journeys, there will be more seasons of, like, rewards coming for users.
And I think each season, it will be refined, and then we'll find ways to actually scale up the rewards, potentially,
and also to ensure that users and protocols that are here for the long term are rewarded for the continued use of mental.
So, and these rewards will help to ensure that lawyer users are rewarded and, like, mercenary capital is just, like, yeah, we are not really targeting all the mercenary capitals that are here just for one-off gain.
Got it.
Yeah.
Very well said on that.
I think that's always been a goal of mental journey, and I think we are slowly starting to see that pick up.
You know, definitely we'll see that pick up next few months with more integrations.
Finally, right, before we go to questions that I already see in the comment section, take your time on this, right, because we have quite a bit of time.
I want to throw you a very fun thought experiment, right?
So, we've been speaking about, you know, the current state of DeFi, we've been speaking about what you see, you know, in the future when it comes to DeFi, SocialFi, things like that.
I want to ask you, right, if you could build anything, right, within the DeFi space right now, if you want to choose SocialFi, you know, go ahead.
You can choose, you know, a hybrid of both, go ahead as well.
But if you could build anything at all, you know, with any feature you want, right, what would you build?
I think this is something that I think about quite often.
So, I think, like, I am a builder by nature.
So, like, I always see, like, what are the gaps?
What is fun?
What will work in the ecosystem?
What are we lacking?
So, like, I think that something that focuses on fun inside the DeFi ecosystem will be pretty interesting to actually build out.
So, this probably won't be the highest generating revenue-led protocol in the ecosystem, but it will probably be something that allows users to have the most fun.
So, I think something along the lines of having, like, a PVP trading market, like, I think that our current space inside crypto has, like, too many LARPs in the space that are always posting about their gains, saying that they're going to earn this amount, or follow me because I can generate so much revenue.
And you can time the dumps really well, you can shorten the market.
So, I think that's having a market that allows users to essentially engage in, like, training competitions that are connected to both Centrast exchanges as well as Dexas.
And having all the positions obscured by using ZK technology is something that will be interesting to have.
So, in this way that users can have, like, trading competitions with peers that they think are LARPing and they want to put the money where their mouth is and actually compete with others in terms of trading.
And you can make this, like, a social file platform whereby users can compete and then you can have a chat box for users that are monitoring the competition to actually comment on.
And they can actually participate by predicting the outcomes of these trading competitions.
And you can even scale it up to make it, like, an ecosystem-wide platform whereby top traders across the many big exchanges can also compete to see who performs best.
It is probably something that is done for fun, but it is something that will get a lot of attention.
You can think of it as, like, a social file that has tangible, I would say, tangible numbers attached to it.
And it is something that I think will make the space a lot more fun.
It will help to remove a lot of the LARPs inside the space whereby they shamelessly boast about how good they are at trading.
But I think it is really rare to see extremely good traders inside the space.
And this platform can actually help to show that who are the actual ones with, like, tangible alpha that can actually make it in this space.
And, yeah, I think if I were to build something, it would probably be something like this.
And it will be something that will be really fun to actually build out and to experiment to see actually what is the adoption like
and who are the actual traders that can actually prove their worth.
Okay, that's really interesting, actually, because I really, you know, agree with what you said, right?
I think for me, okay, I wouldn't say recently, but past few months, I've been a bit burnt out by, you know, scrolling CT, right?
Because like what you said, right, not just LARPs, right, but I think when it comes to shills, right,
there's a fine line between, you know, alpha and really paid shilling without proper duty, right?
And I think that, you know, the ratio, in recent times, perhaps because the bear has been skewed in a certain direction, right?
I think something like that, right, where people are forced to put their money where their mouths are, right,
really will ensure a consolidation of quality that people will know then, right,
who are the people that really have alpha, right, and who really doesn't.
I think this is really, this can be for the greater good as well, right, if you think about it.
It's a, our space is riddled with a lot of noise, right?
It's the last thing that we need, you know, in a space like that.
And if this can get rid of some noise, I think this will be very interesting.
And it's fun to watch as well, right? It's interesting as well.
You know, we'll definitely be interested to see if this thing comes up, you know,
if you decide to build it or something.
But yeah, thanks for sharing your thoughts, you know, so gamely.
And I think we have around 10 minutes left, right?
So let's move on to deal with some of the questions in the comments, right?
I see four main questions here, right?
So I'll just work my way up from here.
I think Katerina asked, right, please tell more about limits of earning mouths in the journey.
Is there some limit and how much is it?
So I can take this one very quickly, right?
So for MJ, we work with Seasonal Cap, right?
It's a 1 million, the Seasonal Cap is 1 million, right?
MJ mouths per user per season.
So yeah, that is that.
If anyone wants to also check out more FAQ stuff on Metal Journey, right?
I'll be posting the link in the comments as well for the FAQ page.
Yeah.
So the next question, I think definitely will be for Ed, right?
Aditya in the comments asked, what are the key criteria to consider when choosing a stablecoin to ensure the security of my investment?
So this is the financial advice, this is NFA, right?
But yeah, just asking about the criteria.
Yeah.
I think it really depends on the overall mechanisms, right?
For stablecoins, you should always choose one that firstly must hold a pack, right?
If it doesn't hold a pack, there's no point holding the stablecoin.
So I think the packing mechanism is extremely important.
And after that, it will also be overall risk tolerance.
So like I said, like decentralized stables, they have yields coming in.
You have RWA stables that is backed by RWA assets.
This, of course, will prove more lucrative than holding USDT and USDC.
But USDT and USDC, it has been shown to survive the test of time.
So it depends on your overall risk appetite, whether you're comfortable enough to enter like this new form of stables
and the code base that they use and how they actually maintain the pack.
I think all these are aspects that you have to review and to see what you're comfortable with.
And if you're not comfortable with like certain aspects of it, then I will say that hold off
and then go and do a deep dive into the mechanisms and make yourself comfortable with knowing how they maintain the pack
and whether they're sustainable and how the whole stablecoin actually works.
After you do that, you can, based on your risk assessment, decide which stablecoin to use.
Okay, thanks.
I hope that answers the question, Aditya.
The second last question will be from Vlad.
So I think this one is answered already by us, you know, throughout the spaces.
But basically, you ask, you know, what are the nearest plans of Menthol, some partnerships,
and also whether, you know, our expectations of the start of Menthol was met.
And I think we really answered this throughout the CUC, but I just want to add here, right,
that I want to reiterate here, right, that once again, nation-states are not born in months or sometimes even years, right?
And for us, we really are trying to build a foundation here, and we think that, you know,
we are confident that we are doing it right, right?
For nation-states to even thrive, right, it needs the foundation to be strong.
And we are building, you know, one of the most complex nation-states ever out there, right?
Same goes for other ecosystems, and it's not an easy task, right?
So it is important to be sustainable and secure first and foremost, right, before we try anything.
But yeah, looking forward to the stuff that, you know, Ed mentioned as well.
The last question we have on the list here is by Al Brian, who is a community manager in Menthol.
Shout out to Al Brian.
Al Brian asked, right, I'm curious how you guys think the Web3 identity stack will enhance
or differentiate Web3 social from Web2 social.
So I have my thoughts on these, and I'll share them.
But Ed, you want to go first, or yeah, have you answered them?
I think you can go ahead with this, because I think you are more interested in the social stack
and identity stack compared to me.
Okay, yeah, I think for this one, you know, we can go on for another hour of spaces, right?
So I'll just keep it short.
I'll just dive right into one main salient point, right, that really differentiates,
I would say, Web3 social from Web2 social.
When it comes to the Web3 identity stack, right, I think the amount of information
that we can get naturally from a database like blockchain, right, is something that Web2
can never compete with, right?
So, you know, people may be surprised at this, right?
But so there's something, you know, in Web2 social that, you know, is, that renders them
unable to do this, right?
So that is something called dark social, right?
So whenever people, you see users, right, they post on Instagram, on Twitter, on Facebook,
or any other social media platforms, right?
I think the Web2 firms, right, the incumbents, they can scrape their data, right?
They can process it.
They can try to create a profile of the user and try to cater to that using their products,
right?
But what they can't do is scrape the data within this channel called dark social.
And dark social is nothing insidious, right?
It really is just the private channels that most users actually partake in, right, when
discussing, you know, certain things they see online with their friends.
So if you think about it, right, we don't post as much about the things we like anymore
out there, right?
We DM our friends.
We send them over WhatsApp.
We send them over Telegram, right?
We send them over Insta DM.
We no longer broadcast these things as openly as, you know, maybe before, or maybe we never
even did that, right?
So dark channels are an aspect that I think Web2 firms, right, even incumbents cannot access.
And that forms a huge part, right, of social media in Web2, right?
So if you don't have access, right, to these channels, as, you know, they shouldn't, right,
it's our privacy rights, right?
If you don't have access to these, right, then can they really create, you know, a really
accurate profile, right, of users, you know, of their products?
Can they really then use this information of their users, right, of their user behavior
and things like that to iterate on their PMF, product market fit, right?
I'm not sure if they can do it to the extent that Web3 can, right?
So I'll discuss the Web3 side of things here when it comes to identity stack, right?
What we can do is we can index, right, index necessarily every on-chain action direction
and behavior of our users, right, on the blockchain in a way that doesn't invade their privacy,
right, because these are all on-chain actions that are open anyway.
But if you can index them and also add in some social attestations, right, which is what
Mental Journey is doing, right, if you can do that, we can then curate a more accurate
profile, right, of Web3 users, right, within all of our products, right?
We don't need to know what users are doing within these dark channels, right?
That is not our right to do, right?
That is your own privacy, right?
But we will know the actions, behaviors, and interactions that these users undertake after
emerging from their dark channel, right?
After, you know, PMing, DMing, we don't need to know all the meat of the messages, right?
What we need to know is what they do after that.
And that's something that I think Web3 does really well, right?
Like I mentioned, indexing of the data, like what Mental Journey is doing.
And that can, you know, lead to so many benefits, right?
Not just for Web3 social, but, you know, across the board of Web3 because you now have user
info that you can use to really iterate for PMF it.
So I think that's one huge advantage that Web3 social has a Web2 in terms of the
IME stack, right?
There are many more, like I said, right?
But this is just, I think, one of the major ones that lead to other smaller subsets of
benefits.
So I hope that answers your questions.
And yeah, I think we are left with five minutes.
I think this is a good time to end this space.
I think there was a lot discussed here.
You know, if anyone would love to discuss any of these, you know, feel free to drop
anything in the comments or even just, you know, chat with me and make an ad, right?
And we, you know, would love to take that at any topic when it comes to SocialFi or DeFi.
Yeah.
So thanks for listening, you know, listening in.
Really enjoyed this space with you, Ed.
Thanks for your responses as well.
Thanks for your candid sharing.
And yeah, look forward to the fourth episode of DeFi Uncovered.
And yeah.
Thanks, guys.
Thanks.
Okay.
Thanks for listening in.
Thanks, guys.
I'm dropping off.
Chows.
See you, guys.
Okay, this is the most awkward part of every spaces.
But yeah.
Thanks, guys.
Have fun.
Take care.
Take care.
