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DevHub Live 43 - @TemplarProtocol Cypher Lending
Recorded: March 27, 2025 Duration: 0:51:27Space Recording
Short Summary
Templar Protocol is revolutionizing decentralized finance by enabling users to borrow stablecoins against Bitcoin without centralized trust, with a closed beta launch on the horizon and a focus on strategic partnerships to enhance user access.
Full Transcription
Mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, mmm, so Hey, we are back again with another edition of DevHub Live.
I am your host, Joe.
Excited to have everyone back here this week with another great guest that I'm excited to jump into.
A couple quick housekeeping things before we get started here.
I just want to make sure if you've not already subscribed to our newsletter, it comes out every single week,
about the Nier developer community, things that are going on here at Nier,
Nier AI, definitely check that out. That link is down below.
Great place to get started there. Also, too, there's different
hackathons always going on around the ecosystem. We list those in the newsletter.
Definitely check those out.
If you're building here on Nier and you want to get started,
again, we'll stream the links here at the bottom all the way through.
But today's guest, which is what I really want to get to.
So we've had a few different Bitcoin-related DeFi products on here
the past few months,
and they've all had something a little bit different to offer.
And this is definitely another one here too. Templar Protocol
is one that just announced a fundraising,
which is exciting for them as well. But
they are taking a little bit different approach than the ones that we've talked about before.
So we're going to talk about what it means to build, what their product actually is,
kind of going into the piece of, you know, for, I guess, DeFi and what that means to really leverage Bitcoin and how near is enabling that.
I think that's the part that we're going to really dive into a little bit more today. I also want to talk about just kind of the concept of crypto in
general and kind of where they're coming from. This is a really interesting backstory. You may
have seen our guest today, Royal Fool, on the Redacted speaker panel. He did a panel there
during the Redacted conference as well. So we're going to get
into all the different things here. Again, if you have questions or things that come up during the
episode, you're welcome to put it into the comment box of anywhere. You might be streaming this,
whether it's on Twitch, YouTube here, or on X. And we will try to maybe get to some of your
questions if they are reasonable. And before I bring up my guest, just the last thing is no financial advice here.
We are simply just talking about kind of building
and focusing on that.
This is absolutely not financial advice.
And let's get going.
Royal Fuel, thank you so much for joining today.
I'm really actually excited to talk about all different things here,
but maybe just let's start with introducing yourself and what Templar is. All right. Thanks for having me, Joe. Yeah, I'm Royal Fool. I've
been a developer previously and I co-founded Templar Protocol, which allows you to borrow
stable coins against Bitcoin
without trusting centralized institutions.
Nice.
So what exactly for, I guess,
there's a few different products out there,
not just in your code, through the ecosystem.
What is Templar trying to do that separates themselves
Templar trying to do that separates themselves from some of these other Bitcoin-based protocols here?
from some of these other Bitcoin-based protocols here?
So, I'd say that what we're trying to solve is a trust-minimized lending market with Bitcoin.
lending market with Bitcoin. So that enables kind of permissionless lending of multiple stablecoins
on any chain natively against Bitcoin. So we're not doing any entire time. There's no wrapping that happens. And
the stable coins can arrive in your wallet of choice. And we're also implementing it such that
there's no requirement of a MetaMask Phantom Meteor style wallet to be connected.
Ask Phantom Meteor style wallet to be connected.
It follows the simple send receive functionality.
There's some pretty cool near tech that enables us to do that.
But that really opens up the potential user base for our product to on the order of 50 million different accounts. And we could argue users that have those on-chain wallets,
that was contract functionality versus estimate,
it's estimated that there's around 500 million different people holding crypto
in different wallets and exchanges.
So we're enabling those users who don't have like an on-chain wallet
to use our product without that extra friction of onboarding to like an on-chain wallet.
Right, right. A few things I definitely want to get into here around building, but I want
to just take a little higher level view first. And for maybe those in the audience who don't fully understand
and want to learn a little bit more about the Bitcoin side of this, why is Bitcoin the
right asset to build a protocol around like this?
Yeah. I mean, it is by far the largest crypto asset. You know, it's around 60% of the market cap dominance. And people like holding it as a store of value.
it but it's that's that's uh kind of taking the place as the predominant use case of bitcoin uh
an uncensorable decentralized store value that can be permissionlessly uh sent and accessed
anywhere in the world um and that's that's a huge unlock um the unfortunately the problem has arisen
that if you want to access liquidity with that Bitcoin, your options become
rather limited. Ideally, like in a peer-to-peer worlds where everyone can send and accept Bitcoin,
you're able to spend your Bitcoin. But the adoption for Bitcoin as a payment network has been rather limited.
So then you're left with after that,
okay, I want to spend some sort of fiat currency, which is short-term stable.
And then you either need to sell your Bitcoin,
which may incur taxable events that may limit your ability to have any future upside appreciation for the Bitcoin.
And that's not something everyone wants to do.
So then what you need to do is you need to borrow against your Bitcoin. That way you don't need to incur a taxable event and you don't lose out on the upside.
Now, the existing solutions for borrowing your Bitcoin are rather centralized.
You have Coinbase, which is offering borrowing against Bitcoin, but that requires that you custody your Bitcoin with them.
And technically, they also wrap that Bitcoin as well, which is also a taxable event. So
that kind of doubly defeats the purpose of borrowing against your Bitcoin there.
The previous solutions out there were like BlockFi and Celsius as well, and we all saw how that went. There's some newer approaches out there as well, but they all have their different trade-offs. borrow on Aave or on Morpho or Compound. But that also involves custodying your Bitcoin with BitGo.
So the ability to actually borrow against your Bitcoin without trusting a centralized third
party, that hasn't properly been solved yet. And we think that using the MPC network, which shards the private key among a network of
nodes, is a good solution to that.
It's a good first step.
And this solution isn't just something that we thought of. It was actually proposed by Nick Szabo in his 2001 piece,
Trusted Third Parties or Security Holes,
where using that MPC network replaces the centralized third party,
in this case, Coinbase or BitGo.
Yeah, I think if you've been around long enough,
you've certainly seen the
dangers of host you know holding somebody else for for you guys as you're starting to build this
protocol uh and again before we get too technical i just thinking about like the users here and
what your products is trying to get across you have a very clear vision of trying to stay true
to the cypherpunk model
of you own everything,
self-sovereign,
you are going to be
in control of all this.
And also unlocking
at the same time
the ability to leverage
some DeFi off of Bitcoin,
which again, like you said,
is hard to spend.
And sometimes, again,
people don't want to spend it.
If you believe that it's going to continue to rise in value
and appreciate, it goes like that.
How, though, do you start to think about, though,
like competing with some of these centralized places
where they try to tout that the user experience is easier,
whether it is or isn't, but they try to come across like,
oh, you're already using Coinbase. It's already here, here, you can do this. How do you start to get
that message out and get other people to believe in that same vision as well? Yeah, that's a good
question. I don't think it's necessarily that we're trying to compete solely on user experience.
I think there have been enough people that have been hurt
or have had a bad user experience with a centralized exchange,
whether it was a hack in the past
or whether it's just with Coinbase,
who frankly has just ignored their customers
who are retail as of late.
They've been focusing on institutional adoption and their institutional clients, which makes
sense because Coinbase custody is around 10% of the Bitcoin supply in existence today.
That's based off of a River report in November of 2024, I believe.
off of a river report in November of 2024, I believe. So that goes really counter to the
ethos of Bitcoin. I mean, that's where almost 90% of the ETFs are custodied with Coinbase.
That's where Saylor and a lot of corporations custody their Bitcoin. The US government is
buying Bitcoin. They're probably going to be using Coinbase. A lot of the big funds in the US and in the Western world,
they use Coinbase as well. And in the event that there is a contentious hard fork within the
Bitcoin community again, like what happened in 2017, they can kind of like tip the scales
on the outcome of that by saying we only give this one version of Bitcoin to our clients.
And we may choose to sell the other version of Bitcoin, which we don't agree with. And we think that the version that we're giving our clients is the real version of Bitcoin. And that may include changes that hurt the decentralization of the Bitcoin network in the long run.
I think that for the users that really care about the long-term success of Bitcoin and Bitcoin being truly decentralized, incredibly neutral, that they're not going to want to custody their Bitcoin with another centralized institution.
another centralized institution they would have said for a network um and on that point uh we
They would instead prefer a network.
also have plans uh to implement uh like a multi-sig where users can um hold the there
will be three different keys it will be a two or three multi-sig where users hold one key
uh the npc network holds another key, and then another
neutral third party holds the third key.
And that allows users to recover their Bitcoin in the event that the MPC network is no longer
live and it also allows there to be kind of programmatic liquidation in the event that
the user's collateral ratio falls
below the minimum. So in this future iteration, we'd allow users to properly maintain custody of
their Bitcoin. The actual MPC network would still be a pretty decentralized solution as well,
and that would hold another key. And then a neutral third party would hold the third so we have some good plans on the roadmap for ensuring that in the long run
there's proper decentralization of the Bitcoin network and users are still able to
hold their keys custody of their funds. Really Really, that's a really interesting concept.
I want to talk about, so this custody piece here,
how, and again, this, where our audience is a little more technical,
so feel free to go deeper,
but how are you maintaining that custody
and allowing people to borrow against?
So you talk about leveraging the VC network,
but what goes into this aspect right now yeah so with the mpc network uh that essentially takes
a single private key and it shards it uh into multiple different pieces and the idea is that none of the other holders of a shard know what the other shards look like.
So they're unable to reconstruct it without everyone going around and adding their kind of unique shard back to the key.
and with the
MPC network
running in a trusted execution
environment that ensures that
none of the shards get leaked
to any of the other participants
in case there's any malware
that's running on it so yeah
that custody is
split among
the network of nodes that are running the mpc network
um and it is callable from the near smart contract runtime uh via chain signatures so
the smart contract that accepts the bitcoin as collateral um is able to create a deposit address
is able to create a deposit address for which the corresponding private key is held in charted form on the MPC network.
And then when either the user repays their loan and wants to withdraw their stablecoins,
then the contract checks if those conditions are properly met and then calls the MPC network saying, hey, release the funds back to the user.
Or in the event of liquidation, in the event that the collateral ratio falls below the minimum, the smart contract calls the MPC network saying, hey, release these funds to the liquidator.
So, yeah.
Interesting.
So in this setup,
and so you talked about users being able to come in,
not having to have a wall set up.
So what does that onboarding experience have to look like?
Do I just register an account and now I have to...
Where does the Bitcoin come into this process of onboarding?
Yeah.
So on the near side of things, the way that we set it up is that the user who doesn't know this behind the scenes that's using the front end,
they actually have a trial account.
And that trial account that maps to their unique user ID.
And then there's a meta transaction relayer that pays for the transaction fees so that
when the user clicks the button saying, here are the terms of the loan that I agree to,
that actually creates a transaction that gets sent to the contract by the meta transaction
relay. And that says, specifies everything that's necessary for the contract to get the
process started. Here's the amount of Bitcoin to accept as collateral. Here the collateral
ratio, here's the repayment terms, et. Interest rate, all that stuff.
And then here's the stablecoin address to send the funds to.
What network it's on, what stablecoin, etc.
Once the contract receives that, then it sets up the Bitcoin deposit address using chain signatures.
The user scans a QR code or pastes in the address to send the Bitcoin to.
And the user sends that Bitcoin natively on the L1 using their wallet or from their exchange to the deposit address.
When the Bitcoin Lite client confirms the balance of the collateral address and that balance has been received,
address and that that balance has been received uh then uh the the funds for the borrow and the
stable coin are sent to the address that the user specified um that address could be on near that
address could be on ethereum and the future could be on solana l2s etc um and that could be is that
using near intense or just chain signatures that's just the chain
signatures um because on the other side of things the uh the lenders provide um the stable coins uh
to the to the lending market right okay really interesting so i can so this definitely feels
different than other solutions in the sense that like like, I can have, let's say, my cold wallet that I want to maybe send some funds out of and still use this.
I don't have to actually connect anything else.
I don't have to swap anywhere.
I can just say, okay, I feel comfortable sending, you know, let's say you have a cold card, right?
And I can actually send from there something like that.
I can just be off and running and
borrow against that yeah that's correct um i mean this is also compatible with the institutional
wallet flows as well that just have like send and receive functionality um so yeah there's there's There's no connect wallet that is necessary. It is optionally supported.
There are Bitcoin wallets that allow you to connect.
There are obviously Near East Solana wallets that you can connect in order to receive the stable coins,
in order to sign the transaction as opposed to the meta transaction relayer.
But that's,
that's optional in our setup.
So yeah,
you can send it from a ledger,
Trezor,
cold card,
whatever your hardware wallet of choice.
It's compatible with that.
And then the stable coins just could be sent directly to an exchange address
if you'd like.
So you could sell that USDC, USDT, whatever, and get funds within your bank account.
How are you guys managing liquidation in price and things like that?
Is that something that's all fully automated as well?
Is that something that's all fully automated as well?
So just like most DeFi protocols,
we track when loans are eligible for liquidation
based off of collateral ratios,
or the inverse of that is LTV, loan-to-values.
And when a loan is eligible for liquidation by being below the collateral ratio,
then either a liquidator can come in and liquidate that collateral and get a reward for doing that.
get a reward for doing that. Or we could also call the near intense framework.
Now, this is a rather attractive solution to us because that kind of cuts out the middleman of
the liquidator so that the spread on the liquidation, basically the difference between
the value recovered from the collateral being sold and the principal plus fees that the borrower
has incurred, whatever's left over there, that gets split among the lenders and the protocol.
There's no need to pay for the liquidator because the intense framework handles that liquidation
and kind of takes care of any middleman that's there.
Interesting.
So for you guys, and maybe we didn't highlight it really too much at the beginning here,
but you're truly trying to just build a protocol here.
You are not serving as the liquidator or as any of that.
Are you providing the stable? is that like your business model
that you're providing that and collecting interest on that no i mean the product the
the protocol itself uh will earn uh revenue uh from fees that could be from origination fees
which is a small amount that's charged in order to generate the loan.
It could earn a share of the liquidation spread as well. And there are a couple other sources that
the protocol itself could earn revenue from, but we're just building the tools and releasing the
protocol itself. We're creating a market so that liquidators,
lenders, borrowers, et cetera, can meet up and make the magic happen. We are also ensuring
with the protocol design that the actual markets themselves can be permissionlessly deployed.
themselves can be permissionlessly deployed. So we just deploy the code saying, hey, if you want
to set up a Bitcoin and USDT on near with these minimum collateral ratio, this type of interest
rate utilization curve, you can do that, set your own fees, and they can deploy that market and that market's immutable. We are
using a versioning system similar to Uniswap. The actual protocol itself, once it's deployed,
is permissionless and decentralized. It is not something that we have multi-sig or admin keys to, to make changes to once it's deployed.
We can make updates in the future, in future versions,
but those original versions will still be running,
provided that the market participants are still interested.
So getting back to the different parties involved there, yeah.
Once a market is deployed and there's uh interest in in that market then uh like a lender can deposit stable coins
uh and a borrower says okay there are these stable coins available to borrow i'm going to deposit my
my bitcoin and uh borrow those stable coins against that. And then the, in the event that the collateral
falls below the liquidation ratio, a liquidator comes in and says, Hey, I'd, I'd like some of the,
some of that please. And sells the collateral, recovers the stable coins so that the,
the lender gets repaid. The protocol earns a share of that
and the liquidator
gets a share as well.
Like I mentioned, the near
intense framework could also take
care of that as well, provided there's sufficient
liquidity.
Sure, sure.
For you guys, there's a couple
different things I'd love to
dive into a little bit further. As a team building, is the focus right now just purely on setting up the protocol and making sure that this gets to main net with all of these features in there?
Or is there an aspect where you have to start actually onboarding some of these, and I'm just going gonna use the word partners for lack of a better term right now,
that to come in to act as the lender
and act as the liquidator or things like that?
Well, it's both.
We are mainly focused on building the protocol,
but obviously we want it to have users as well.
So that will take the form both of different partnerships to increase the distribution.
Earlier this week, we announced that we'd be working with Raya, which is recently rebranded as like the merger of Ref and Burrow to provide native Bitcoin loans on their platform so that users on their platform can have access to it.
We'd like to work with wallet providers as well, different DeFi apps that would be interested in utilizing it.
There's even been some interest from Bitcoin miners who need to properly like hedge their exposure to Bitcoin.
So being able to just send that native Bitcoin and then get stable coins back.
Then with those stable coins, they're able to like pay for options premiums or able to,
you know, short as a hedge. So it really unlocks a lot of different use cases.
And yeah, obviously we want just regular users as well.
Sure.
This is, yeah, something that we're, you know,
we built to solve problems that we ourselves were facing.
So, yeah.
Yeah, that's, yeah, you're leading right into my next question.
It's kind of like, where did this come from?
Is this something that you personally or your team were facing?
You feel like this was the next and correct iteration for this?
Yeah.
So, I mean, for people that are holding Bitcoin, like I mentioned,
and, you know, you have real world bills to pay, right?
I don't know.
Maybe you want to take a vacation.
Maybe you want to buy a house, cover some medical bills.
There are just all these different things that people have to pay for.
And there are a lot of people that people have to pay for and there are
a lot of people that have been holding Bitcoin for a long time and they don't want to sell it
and they don't trust Coinbase they saw what happened with BlockFi and Celsius and FTX so
you know this this kind of using the MPC network as a solution to the trusted third-party problem really kind of opened our eyes to, hey, this could be an actual solution.
And then we can improve security assumptions.
And using multi-sig as well as the MPC network, we believe that we can provide a really robust and secure solution to this problem
without relying on a Coinbase or without relying on a BitGo.
So, yeah, this is a problem that we faced ourselves,
our friends have faced, who are just maybe more casual crypto users.
They're not in the trenches every day or don't have a MetaMask wallet
to play around with DeFi.
Interesting.
So for this type of setup, and as you guys are putting together this protocol,
you guys are putting together this protocol is it something where you are feeling the need to build
in some of the educational pieces around what the security is here what is the safety like
so for example when a user is about to deposit their bitcoin is it it's something that we feel
like it's imperative of showing not only just what's
happened to be transparent but like why it's being done this way or is that something you
kind of just put off to the side and i'll just raise this as i ask a lot of different builders
in this in crypto is like where is the line of like educating people especially as you bring in
people who maybe are a little bit, uh, not as crypto native.
And then,
you know,
and how much does it become like,
you don't want to be too academic,
but like,
where does that line sit for you guys as you're building this product?
I mean,
what we're thinking about is that,
on the actual product,
when you're using it,
that's not what we want to do as much of the education
it should be like as simple as possible when you go to use it now on other parts of the website
like we'll be building like an faq page uh that's where we can both have things at a high level
that's pretty introductory and we can also dive into the technical weeds as well.
We'll have user guides
just showing how to use it in video format
so that people who might be a bit cautious
about trying out something that's new can see,
okay, here's how I expect it to work.
So yeah, that education piece is definitely important. But, you know,
we don't need to have a clippy with users as they're actually using the product.
Right. Yeah, yeah, I think that's a nice balance. A lot of developers kind of feel very similar.
It is a tough problem, especially as you start to open up your market
towards more mainstream users, that there is a piece where you want to hopefully get across
some of the ideals maybe that you're trying. Like, hey, why does this protocol exist? Like,
this is some things that we believe in. But there's also a balance of providing too much
information and causing, you know, just, you know,
concern simply because they just now don't understand
what you're trying to show them, right?
So, I think that makes sense.
From a builder's standpoint,
you guys are building in public.
Your stuff is open source.
You actually, I've
seen your team members post
logs, like, on Twitter, twitter uh like hey this is what
we've been building you know these are some things that have gotten done why that approach for this
uh yeah uh you mentioned kind of the values and how we communicate that um it've chosen the branding cipher lending for a reason. It's not
just something that we think that will resonate with kind of the OG crypto crowd and Bitcoiners.
It's something that we actually believe in. One of the main themes and narratives in the past two years has been institutionalization of crypto.
That means ETFs, that means onboarding of real-world assets, which essentially are IOUs on-chain to stuff that legally is custodied by some sort of other third party.
And we believe in those cypherpunk principles that gave birth to crypto.
And we think that in order for crypto to survive long term, those principles need to be upheld.
term, those principles need to be upheld. Doing everything open source and being transparent
is one of those tenants of kind of like the cypherpunk principles. We believe that
code should be transparent and that networks rather than centralized institutions,
networks rather than centralized institutions.
Peer-to-peer networks solve a lot of problems with trust.
I mean, that's how crypto came into existence with Bitcoin. It solved the
Byzantine generals problem through proof of work.
That was a huge breakthrough in a trust
model.
And people might get lazy and think,
okay, well, yeah, we can just issue these IOUs on chain,
essentially, because one thing crypto does really well is distribution.
Like you can get global access to finance, right?
So if you issue these complicated Ious that are that are custodied
somewhere else you can do that but that's really against the spirit of what crypto is about um and
we don't believe that that is the best long-term use case um we believe that uh being transparent
about what we're doing while preserving our personal privacy um important. That's why I'm not showing my face
because I care about ultimately the quality of the product
that the user ship, that gets shipped to the users.
And yeah, if you don't, we're not asking you to trust us.
We're showing you, here's what we're doing.
Check out the GitHub.
There'll be audits on the code.
You can run it yourself.
You don't need to use our trusted front end.
If you want to
run the front end yourself to connect to the protocol,
feel free to do so.
If you want to run the protocol
yourself, feel
free to do that and deploy your own
markets.
We don't require that you trust us.
In being transparent that way, we believe that's a very good way to build trust.
Yeah, really interesting. It sounds like taking this approach made sense for you guys too where if you were a singular product like you
if you're going to be the whole suite of the product you run the risk of having at times to
make decisions where maybe you have to sacrifice some of those things in order for particular
experiences but by being a protocol you eliminate any of that push and pull of do I have to sacrifice for user experience or these different issues that might come up when you have the full suite.
You can just say, no, we are simply the protocol that is allowing all of this to happen.
of this to happen. Yeah, that's correct. I mean, there might be some products that are
Yeah, that's correct.
very well integrated together and they look nice and maybe they're easy to use,
but ultimately we believe those are fragile. Even within the, you know, it depends on there being a very very strong leadership that is around for a long time
right that kind of steve jobs approach apple was not known for open source apple is known for
closed source developing projects in secret and making sure that everything fit together perfectly
and apple has basically coasted since steve jobs has died and you know you see they're
becoming more and more blow and the product becoming less and less smooth over time uh since
his passing um so there's an you know there's a really big risk that you run in having a tightly
integrated uh closed source product because it might get you short-term gains,
but in the long run, ultimately, we believe that open source wins.
And that's the case in operating systems,
as you have seen with iOS versus Android,
which is based off of Linux.
You see that in the case just of developers and servers
and their environment of choice.
You know, it was Microsoft that was dominating the server space for a while, but now most people
are running some flavor of Linux. And we believe the same thing is true of monetary networks as the dollar preserved its credible neutrality as a global reserve currency because they didn't shut
people down or at least big people down. And you could say as like somebody holding dollars,
well, the US government isn't going to stop me. And that turned out not to be the case. Even Switzerland as well. The accounts
holding, the accounts for Russian oligarchs when the war in Ukraine broke out were frozen.
Their assets seized. Switzerland as a country, you can't really say that they're credibly neutral anymore.
They've lost that.
So, yeah, we believe in these open monetary networks.
We believe in open source.
We believe in building out in the open.
And that ultimately, closed sourced and centralized networks are fragile.
and centralized networks are fragile, and they will fail.
And they will fail.
Sure, sure.
Sure, sure.
So for you guys going forward here,
this sounds like a couple things that you are, though, dependent on.
And one is the chain signature piece of this from Nier.
Are you creating your own MPC network,
or are you leveraging the one that exists from near-proper chain signatures?
No, we're not leveraging our own MPC network.
We're using NIRs.
We would like if the near-MPC network consisted of maybe multiple different MPC networks going forward so that there's kind of more decentralization.
It's not just like a single network or that there was maybe some sharding
to the NPC network itself.
That would definitely help
with kind of like the trust and scalability
in the long run, in our opinion.
But we also plan on using like the multi-sig solution,
like I mentioned, where the user holds a key,
the NPC network holds a key, and then a credibly neutral third party holds a key as well.
And we think that that will lead to a very good kind of best of all worlds, where you
have a level of decentralization, you have a level of decentralization you have a level of
self-sovereignty and in the event of liquidations those can happen programmatically
so yeah for you guys it sounds like that you are preparing as part of your roadmap and
architecture here that as some of these technologies improve, right? So maybe as the MPC network improves and things like that, you are able to adjust to that
and leverage hopefully improvements from it and things like that.
But even if they are things that maybe you don't love, you're not fully beholden to this
other network.
Is that right?
Yeah. fully beholden to this other network is that right yeah you know we would love if the near npc network
uh it properly scales and it's incredibly neutral uh and decentralized um you know we want it being
a core part of our infrastructure um but we don't want it to be kind of like the you know a single point of failure it's still a network right um so
you know the funds can't be stolen as long as one of the participants holding one of the shards is
honest that's a very nice security assumption of the mpc network yeah um but there are concerns
about like liveness uh of the MPC network.
So in the event that it goes down,
we want the user to be able to regain their funds if they repay their loan.
Nice. Nice. Okay.
You know, I definitely appreciate where this approach is going.
For you guys now, you're on test net.
You're going on to Mainnet soon.
What does this roadmap look like for the next few months?
Yeah.
So we launched Mainnet, launched Testnet pretty soon,
a couple of weeks ago.
We are aiming for a closed beta invite only Mainnet launch by the end of May.
That will enable us to kind of get some usage on mainnet,
ensure that there's sufficient liquidity,
and allow us a bit more time to get support for ETH before we do a public mainnet launch.
For the closed beta, we are targeting Bitcoin as collateral.
We'll support NEP141 tokens, NIR as collateral, but we don't want to step on R's shoes there, as well as stable coins on Near that
can be borrowed. When we do a public mainnet launch, which we're targeting at the end of June,
that will also support Ethereum stable coins as well. On the roadmap, we'd also like to support Bitcoin LSTs. So, you know, there's
billions in TVL that's been deposited into Babylon, which is like a multi-chain staking network that
allows you to earn yield on your Bitcoin. And there are other different tokens that represent the yield
that could be earned on Bitcoin that could be used as collateral. Obviously, we'd like to add
more support for different stable coins. That seems to be a very hot area within crypto.
We anticipate that there will be an explosion of different stable coins and that those will live naturally on a lot of different networks.
So chain signatures definitely helps us out there.
And then we'll also want to post mainnet work more on like different partnerships and integrations to increase the distribution and get the protocol
into the hands of more users.
That's great.
That's great.
Definitely, I mean, the stablecoin push definitely seems to be growing a lot more momentum.
You can just censor just from recent news releases as well as just, I think, in general,
people are trying to integrate that more
and more uh is there any concern with you know like another like luna where the uh stablecoin
dpegs is that something that is built into this protocol yeah that's definitely a possibility for
any individual stablecoin but the way that we've deployed the contract
is that each of the markets that gets deployed is isolated.
So let's say that Luna 2.0 comes out
and there's like a Bitcoin Luna 2.0 market that is deployed.
In the event that Luna 2.0 depegs that won't affect the Bitcoin USDT,
USDC, FRAX, any of the other stable coins that are out there. So each market is isolated
and not subject to like contagion. We went with that instead of the pool-based model.
Yeah, okay, that makes sense.
That makes sense.
In that scenario, would repayment be based on token number
and not dollar value?
In the event of a DPEG?
Yeah.
Yeah, I mean, it would just be in the number of tokens uh like the
yeah uh that were that in order to get the dollar value that would require like modification of the
contract and oracle which kind of breaks the trustless assumptions right that's that's yeah
that's kind of okay that's where i was kind of going with that that. Do you start to have to include now other parties to price that and everything else?
It's just token number with the assumption that everything is...
In the future, we plan on having an insurance fund in the event that...
In addition to the protocol revenue accruing to the actual Templar protocol itself, as well as going to the lenders, there'd also be a little bit set aside for each market to an insurance fund.
And that insurance fund should help cover the event of losses in such an event.
Makes sense. Makes sense.
Awesome. This has been a great discussion.
I'm really excited to see how you guys continue to build.
I really like the ethos.
I'm really glad that you're building in public so people can follow.
And if you are a developer, I really encourage to follow along
because just see what it's like to actually build in public.
I think you guys are doing a really nice job of modeling that behavior,
which I think is something that other developers could certainly gain some insight from.
Royal Fuel, what's the best way to follow along
and keep up to date with everything that's happening with Templar?
Yeah.
Follow the Templar Protocol account on X
if you want to get a little bit more involved in the discussion.
We also have a telegram and a discord group. Those social links are available on our
website, templarfi.org. You can check out kind of like the blog posts there. That's, you know,
what a link to the, to the test net um and yeah awesome awesome uh well
again i really appreciate your time today and uh hopefully after main night you guys can come back
on and a little more how everything's going yeah really appreciate the conversation joe all right
thanks for all take care all right bye-bye uh folks uh Folks, that was a great conversation.
Again, I really always appreciate when builders can come on and just talk about the process as well.
So hopefully everyone's learned something from that there too.
And again, some of the themes that we've hit on here, in case you missed it, again, being able to abstract stuff away,
who missed it. Again, being able to abstract stuff away, one of the strengths here on Nier,
and being able to really ease that onboard process, keep up with the self-custody, all
of the different pieces. So it's really a nice thing to, again, model yourself after
and watch what they're building. So definitely follow along with them on Twitter and their
other socials and things like that
and stay up to date with that.
For us, coming up,
so there is a bonus episode tomorrow
around the Zcash Hackathon.
That is at 5 p.m. UTC.
Definitely check that out.
Next week, we'll be back here in normal time
with another guest talking more about building.
So definitely exciting around that.
And if you haven't already, please follow along on our newsletter.
We have tons of stuff happening always around there.
So please make sure you check that out.
But until then, I'm your host, Joe.
And keep building.
And we will see you next week.
Thanks, everyone.
Bye-bye.
