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dForce X Velodrome
Recorded: April 18, 2023 Duration: 1:01:41Space Recording
Full Transcription
Hi all, can you hear me?
Hey, yes.
Perfect.
Let's give it a couple of minutes for people to join us.
Sounds great.
Let's give it a couple of minutes for people to join us.
Let's give it a couple of minutes for people to join us.
So I see someone's joining.
The Accelerator X1-2-1 fun, CJ Ming up.
We're going to start in a couple of minutes.
Just hang with us.
All right, Tao, if you agree, let's start with the first question.
One very simple welcome, first of all, to our AMA with DeForce and Velodrome.
And about that, please introduce yourself to the community.
Yeah, thank you very much for having me.
I'm, excuse me, yeah, I'm head of strategy at Velodrome.
And if you guys aren't familiar with Velodrome, it's a protocol that basically combines the dynamics and the design of what the basic curve, let's say, curve, convex, and volume mechanics, you know, with drive and vote mechanics.
And the pools of Uniswap, it combines it into one kind of cohesive decentralized exchange.
We built it on Optimism.
Most people know it as perhaps a Solidly fork or V33 type of decentralized exchange, which are now starting to pop off in different ecosystems.
But Velodrome was basically the first one to get it right after Solidly had crashed, or not crashed, but crashed a little bit last year.
And we continue to build up our presence on Optimism.
We now have over 200 million TVL and have attracted over 5 billion of overall volume this year.
And excuse me, my voice is a little bit off.
I've been a little bit sick, but hopefully it's going to hold up through the conversation.
I'm sorry to hear that, but it's good.
We can hear you well at least.
Okay, interesting.
I mean, on a more personal note, what is your role in Velodrome and how did you get there?
Yeah, so I have a background in finance, economics, and mathematics.
So my role in Velodrome initially was very much focused on the strategy and tokenomics,
designing sort of like the right tokenomics for this kind of protocol.
Learning, so before Velodrome, I was part of the VDAO team.
If anybody was familiar with the Solidly wars in Phantom, VDAO was a protocol that basically enabled this sort of like playing Solidly as a service,
basically like, let's say, you know, basically allowed anybody that wanted to participate to get tokens.
And if you held Weave tokens, then you can basically be part of the team that was strategizing around what was the best way to play the Solidly games,
which included, you know, adding liquidity, locking and voting, et cetera.
And as part of that team, we realized this sort of perhaps gaps that Solidly had.
And we realized there was a better way to redesign the protocol.
So we were actually the first ones to start exiting the Solidly wars.
People were initially not happy with that, but eventually realized that we were right.
And as a team, we came together with Optimism.
We worked with the autism team to deploy Velodrome and to build it out.
And as I mentioned initially, I was part of basically finance, economics, strategy.
Now I'm much more involved also on the business side and also just thinking ahead of what's next and starting already to kind of lay out the groundwork for what are the big next steps that we're going to take.
Awesome. Yeah, I remember the, you know, the worst, the big noise that the Cronje invention created and all the DAOs that were chasing the yield on Solidly.
It was a great time.
And I'm happy to see that then eventually the system, the VE3 system expanded quite a lot at the point of reaching most of the chains, like even on the new chains.
There are always new V33 protocols and Velodrome is absolutely crushing the market on Optimism.
You are the leading DAB.
And I really appreciate DeFi protocol in general that can deliver something that people need and then know how to innovate and improve through time.
And I think you guys at Velodrome have been a game changer for Optimism and that you are able to always reinvent yourself and to have it in the right direction and support the users.
You're welcome.
You're very well deserved.
So let's talk about, you know, as a quick introduction to the community on how DeForce and Velodrome collaborate.
So about DeForce, we are a decentralized stablecoin protocol powered by an integrated DeFi matrix, which is composed by assets, lending, trading, and bridging.
So the first decentralized stablecoin we integrated is USX, which has a permissionless, non-custody, high capital efficiency, and multi-chain liquidity.
So USX is a decentralized stablecoin, whose peg is maintained mainly by the liquidity stability reserve, which enables users to swap USX with a number of stablecoins like USDC, USDT, and DAI at the 1-1 ratio, any time.
And also we have other systems like the protocol direct liquidity provision, which enables us to change the interest rate of USX to sustain the peg.
For example, when the market demand for USX is high and the borrowing interests are pushed up, then we can supply more liquidity to lower the utilization rate and make it less expensive to borrow USX.
So these are many of the mechanics we have to keep the peg.
Another thing is we enable, we allow people to mint USX against a variety of assets with fixed interest rate through the vault.
So each vault may implement different risk parameters based on the specific collateral supported, which is divided by the governance, which in turn is led by the DF token holders.
So DFOS and USX are available on seven blockchains, including, of course, Optimism.
And here on Optimism, Velodrome is our main partner as it hosts the deepest liquidity pool available for USX in its stable pair with USDC.
So there is a USX, USDC stable pool on Velodrome, currently having around 5 million of TBL total value locked and an APM of around 9% last time I checked.
And to maintain this yield, you know, according to the means that your protocol has made available, we are bribing the USDC-USX pool on a weekly basis.
And then we're leveraging the value emissions to award the funds of USDC-USX, as well as DF-USX.
We also, taking part of the, to the, to DOP, can you introduce that to the, to the community?
Can you talk about that a bit?
Can you talk about that a bit?
Can you talk about that a bit?
Absolutely.
And, um, one quick, uh, anecdote about USX is that, um, you know, you, we've talked in, we mentioned some of the forks in different chains of E33 protocols.
One of them is Equilibrate on Kava.
Um, so they're actually kind of friends of, of Velodrome.
They reached out to us early, uh, before they forked and sort of like just extended their, uh, let's say kind of, kind of like their, their kindness and saying, you know, we're going to drop you an NFT because we're going to fork your, your code, which we thought was quite nice.
Um, so we actually kind of stayed in touch with them, um, and, uh, Equilibrate, you know, being on Kava, Kava being kind of tied to the Cosmos ecosystem as well.
It's, it wasn't very easy to, to bridge initially any kind of tokens if you wanted to participate, but USX was actually the token that you could actually do it very early.
And since you guys have now become acquainted and actually really good at, at playing the, the B33 game, uh, I noticed that you very quickly were participating in, in Equilibrate as well.
So it was very easy to bridge USX and they converted in, in, uh, farm, uh, VARA tokens.
That was an Equilibrate token or still is the Equilibrate token.
So that was a nice, uh, surprise when I saw that, um, very convenient.
Yeah.
So we, we try to, you know, catch the liquidity on all the blockchains we expand to.
And most often the, uh, the B33 protocols are the ones that we think are the most reliable and most convenient.
You know, you, you really give the chance to protocols to take care of their own liquidity, to have a power, to have a say on that.
So it's, it's really an awesome mechanism and we, we enjoy also your, your thoughts.
I would say also Equilibrium, of course.
So, yeah, uh, let's, let's, you know, I wanted you to, to talk about the, the Tour DOP a bit, uh, because I think it's a, it's a great initiative you're running.
So why don't you tell us about that?
Yeah, absolutely.
So, so the Tour DOP is a program, uh, that we are, that we designed to basically incentivize protocols to participate in certain way.
Well, protocols and users to participate in certain ways, uh, in using the Velotron mechanics.
Uh, the, the, the big package for users is that we provide a lock bonus every time they lock their Velo.
Um, so when you lock your Velo, you convert it to VE Velo.
You can lock it up to, or to up to four years and you can vote with it.
And when you vote, you get all the bribes and fees that the pool generates.
Uh, right now at the moment, the average, based on the last, uh, EPOC, the average APR for your voting rewards was about 70%, which is pretty nice.
You basically, you get your money, quote unquote, you get your money back, um, in a little bit over a year, but you can still have a locked, uh, asset that you can continue to use and get yield.
Um, but with this lock bonus, uh, users can get, on average, it's been about 30% of the value back on an OP token.
So we basically have, uh, about 35,000 OP available every week.
It is, that is split based on how much VE Velo is locked and, uh, also distributed based on the size of the lock per user.
So that's a nice bonus for anybody that wants to lock Velo.
And for protocols, we match their bribes.
Um, so if they're bribing on, on Velodrome, we'll give it, we'll also deposit some OP on top to attract voters.
And of course, uh, the amount of, uh, bribes that are in a given pool will attract the voters and that will send emissions, Velo emissions.
And with these incentives, these pools, uh, that protocols are bribing tend to get about two to three times as much value in emissions than the value they deposit as a bribe.
Which is, uh, why they can also build up more liquidity, uh, with lower, with a lower budget, uh, say per se.
And, um, and yeah, this is basically a, a, a, a really good way of, uh, engaging protocols by, you know, reminding them or actually, or, or, um, offering them, offering this opportunity to basically get a boost on their incentives.
So it's a double boost. They get a boost because we deposit OP and then another boost because Velo emissions tend to be much higher in value than what they deposit and even what we deposit.
So basically it's a win-win.
Yeah.
And one can think that, you know, having, uh, you know, handling, managing decks could be just, you know, you, okay, you let people swap and that's it.
But in reality, the market is always changing and the market follows the incentives.
So you really have to stay at the same pace as the market and attract the liquidity, attract the project.
So, uh, and you guys are, you know, one of the best at doing that, obviously, um, with all these initiatives that you come out with.
So, and, and I think also the V33 model is what really enables you to, to play a bit on this.
It's not just a plain decks where people just swap, but it's, there's a whole, uh, full world behind that.
Yeah. And, um, we, we see right now this, I mean, it's obviously been a very tough couple of years, uh, in the past two years.
So these incentives have, um, along with the design of the protocol have a lot allowed us to basically stay strong and at least continue to grow and build up and prepare for the actual next bull run whenever it comes.
I think we, now we're starting to get more convinces of hope, but, uh, we would definitely like to see just the type of growth that we really expect for L2s, uh, in terms of number of users, in terms of, uh, TVL coming online, um, and, and just overall interest outside of, you know, the, the current, let's say small group that it feels like of action crypto or DeFi.
Yes.
Yes. So, um, as, as we, as this growth actually starts to materialize, which I think we're very sure will happen, especially in L2s, um, Optimism Arbitrum.
Uh, and now there's been the announcement of base coming up, uh, the, the Coinbase, uh, Optimism adjacent chain.
Uh, so this, I think is going to bring a lot of users, uh, to, to this layer two era.
And that's when I think we're going to see much more, the, the volume play, like the pools that are going to generate the most volume and thereby the most piece are also going to start getting incentives by themselves, just because those fees will go to voters.
And now it's going to be sort of like an evolving, uh, kind of strategy or, or set of incentives for, for voters.
And, and now it's going to be complimented with bribes.
So, so I think we're basically building up for that moment.
We're also planning on, um, preparing the, the overall decks to be more efficient.
We're going to build out, um, capital, I mean, concentrate liquidity pools, which are, are more capital efficient as well in the use of their liquidity and, and able to compete with, with other basically top Texas out there, like Uniswap.
And, um, and we're also going to implement adjustable fee levels for pools as well.
So that, um, based on the volume, based on volatility overall, protocols can actually decide whether they want to, uh, you know, use a bit of a higher fee level.
If they see that there's a lot of volatility and that higher fee level can attract more voters or lower fee level, if the volatility is low and they prefer just to kind of keep the current volume that they, they, they being able to attract.
So that's all going to be like adding layers of strength to the, to the V33 flywheel.
Um, and basically again, getting ready for, for the real, uh, growth that, that we're very confident will come, uh, at some point.
Yeah.
Like the Bitcoin halving is in less than a year from now.
So there's that.
And as well, you know, the, the whole DeFi, uh, landscape is really evolving day by day.
You, you did an amazing partnership with Coinbase, which will eventually help on board, uh, new people.
And you gotta be ready for all these newcomers.
They, you know, they usually start either with Bitcoin or either with highly speculative.
Coins that I've heard from a friend.
And, but in the end, I think most of them stay, they stick around and they use DeFi because, you know, it's difficult to ignore DeFi once you understand what is it about.
Exactly.
I, I totally agree.
And I, I agree with that as well.
I think Coinbase, uh, deciding to, uh, launch their own layer two chain is incredibly bullish because of course they will have an interest in, um, kind of directing their large user base.
And perhaps even their large amount of funds that they have, uh, attracted from users into more of the DeFi protocols, um, or perhaps integrating to their app opportunities for users to use the, the yields available on chain, uh, on, you know, by providing liquidity as an example.
Yeah.
And, you know, about adoption, um, fundamental thing, one of the things that is driving adoption, I think is stable coins.
Uh, so let's talk a bit about that.
So, uh, some people are still skeptical about stable coins, but I think that 2023 is teaching us is showing us that stable coins can actually be more reliable than many solutions.
So traditional finance, uh, or the, the, you know, the dollar, like, uh, for example, about the payments, uh, payments are still expensive and slow.
Like in Europe, if you send, uh, transfer wire money on a Thursday, there are chances that the, the, the other person is going to receive it on the next Wednesday or maybe Tuesday, if you're lucky.
So that they, it's still absolutely insane.
That's slow.
And, you know, and this also can be compared with the developing countries.
Uh, and one example that I like to bring up when talk about payments is remittances.
Uh, which is the money sent from one country to another by, for example, workers who emigrated abroad and they want to sustain their families at home economically.
So remittances are very practical and expensive.
Uh, while payments involving crypto stable coins like USX don't require KYC.
They don't require minimum amounts and they happen in a permissionless and efficient way.
Uh, you know, this is one of the reasons why El Salvador has actually adopted Bitcoin because they have a, an economy in a great path, uh, relying on the remittances.
So money that people bring in from, you know, from, maybe they immigrated to the U S and they work there, they bring money back to the family.
And that system was completely inefficient.
So they trying to solve that also by adopting Bitcoin as a, as a standard, but you know, there's a whole new crypto universe that allows you to do that in several different ways.
And something curious is that a study by Uniswap labs and circle estimates that the stable coin could reduce remittances costs by as much as 80% saving, uh, individuals 30 billion per year.
And, you know, these are most often people who are in need.
And I think crypto really provides them, uh, the right solution to, to move money instantaneously, uh, anywhere in the globe.
Uh, another point is custody.
So we live in a system of fractional reserve about the banks.
Uh, which is inherently vulnerable to bank runs, uh, in the last few months, we have seen how highly rated American and Swiss banks can collapse in a matter of weeks and sink with users deposits.
So, you know, this is not just a story that we tell each other in the crypto world that we said that the traditional, uh, finance is not efficient.
No, we've actually have been seeing this in the last months, like huge banks have collapsed.
And then there had to be bailouts to, to save, uh, investors deposits.
Uh, with crypto instead, users don't have to rely on third parties, uh, to hold their stable coins since they own their own keys, hopefully.
And another important point is transparency.
So crypto stable coins, uh, decentralized ones in particular, like USX.
They maintain the peg with the dollar, not because you trust, uh, defaults.
You don't have to trust defaults, but because you can check everything that is going on, on chain.
Uh, users don't have to trust our metrics, but they can verify that every mechanism, uh, you know, the, the, the swap one-to-one with the other stable coins, et cetera.
They can check the liquidity, they can do all of this on each blockchain that we operate.
And while on the other hand, it will be very difficult to predict that, you know, those banks were going to collapse because people don't have the means to audit the bank.
While you can kind of easily do that, uh, with a, with a smart contract on, on a public blockchain.
Uh, another point, which is often ignored, but it's actually very important is that, uh, crypto stable coins have yield advantages.
Like they, they offer yield while banks, uh, they don't offer any yield.
They take all the profit of their activity.
Uh, the DeFi landscape is rich with opportunities.
And, you know, in these years of inflation, I think it's very important to try to counter that.
And, uh, you know, I wanted to, um, ask you now, uh, what, what is your opinion on, on stable coins and decentralized stable coins in particular?
Do you think they're needed?
Do you think they're here to stay or not?
Yeah, I mean, absolutely.
I couldn't agree more with, with the points that you made.
Um, you know, first of all, we, we have to think when we think about DeFi adoption, we have to remember that for most people, money is actually quite important.
Even at the, at its basic level, even like just, you know, opening a savings account, the bank account, most people have no idea really how to, uh, invest their money.
Um, and we have this financial system where it's really a lot about trust, right?
Like you just are going to give the money to a bank and hope for the best and hope that the bank is going to make the, that the executives at the bank are going to make the right decision with the money.
Um, and what you're actually only doing is you're, you're lending them, right?
Even if you have a, uh, checking account or a savings account, what you're doing is you're lending money to the bank.
The bank then goes and does whatever they want to do with it.
They can, uh, lend it over to, you know, 10 times a higher level to other, uh, interested parties.
And, and you hope that their lending services are going to be good enough so that when you want to withdraw your money, it's going to be available.
But if it's not, then, you know, you can get a run on the bank as we've seen this year.
So, you know, for most people, they, they do want to have the simplicity of what a bank can offer.
Um, but also of course the opportunities to grow their, their, their money.
So stable coins provide basically the, the most, the easiest, the, perhaps the, the, the most basic translation from the, call it the real world money to, to digital money.
Um, so I, I think absolutely we should continue developing the stable coin infrastructure, uh, because it will be, it will make it very easy for people to use or easier for people to use and understand, uh, the, the digital asset environment.
And it's also very convenient, of course, in, in times of, times of, um, uncertainty to be able to have stable coins.
Or just, if you want to just park a little bit of, of, of cash on, in crypto, you can always use a stable coin that you can understand that you can know the tech behind it.
And I, I agree with you having the transparency and having the ability to actually read how the design of a stable coin is.
And like the, the code that backs it, um, is, is phenomenal, right?
You can actually, you don't need to trust the protocol.
You just need to be able to understand it.
Uh, and then with that, you can make a, a, an important decision on which stable coin to use.
Um, and I think over time, the best design stable coins, of course, are going to win out as we've been seeing this year.
Um, and, and yeah, again, I think a lot of people say that the U S dollar perhaps is starting to lose its power, but you know, for the foreseeable future, at least it's going to continue to be the,
the, the top currency in the world.
And even if it's not, even if it's other currencies start to rise in prominence, then those having stable coins for those currencies will also be important.
So it's at the end of the day, it's, it's basically creating the, the technological infrastructure to prepare for that, to allow for different types of currencies or, or mirrors of real world assets to be exchanged on chain, uh, in a seamless, uh, cost effective and basically globalized manner.
So that we can allow the system to be used, uh, uh, for everyone.
Um, and yeah, I think, you know, once you get involved in DeFi, it's very easy to forget how much of a learning curve it can be.
Um, even for people that have, uh, you know, a background in finance or a background in economics, you know, even because it's a new system.
So you sort of have to really learn the mechanics of how it works.
Um, so for most people, it's completely intimidating to be able to participate in DeFi.
And I think as we continue to make it easier for, for users to be able to use, again, the DeFi ecosystem and get some yield on their, on their tokens, on their assets, then in an easy way, in an easy, um, sort of trustworthy way, the better it will be overall for the ecosystem, because we can get that level of adoption from people that don't want to take the big risks that perhaps that we'd like to talk about, like DGENs.
You know, there's going to be people that just want to park a little bit of, of money and just get some, generate some yield in a coin that they understand that is, uh, perhaps tied to the U S dollar.
And that just grows over time and allows them to not have to worry or have to babysit their position too much.
Yeah.
So I, I think, you know, the DeFi landscape cannot be ignored for long.
So people don't even know that when they deposit money in the bank, that that money is kind of not theirs anymore.
And the bank is doing business with this money.
And I think, uh, if you know what you're doing, then diversifying using, uh, decentralized stable coins, uh, yielding with them.
I think that's, that's really a win-win rather than, you know, relying with all your life savings to your local government and its inflation rates, as well as your local bank and whatever, uh, their manager is doing with your money.
So I think, you know, if you know what you're doing, that for sure, it's a, it's a win-win.
Key point.
I think of course we will have to have at least some clarity, regulatory clarity so that the off-ramp, the on-ramp and off-ramp can be easier for crypto so that it can be much easier to, for people to just go ahead and, you know, deposit their funds.
Uh, and then use them in, uh, also we can, we can create apps that are, uh, more approachable for people also, uh, to use DeFi and to be able to access, call it the web three world.
Um, but with a web two interface, I think that also is going to start to help.
And that's why also can be, I'm so bullish on, on a players like Coinbase to start getting more involved in the decentralized infrastructure so that they also can learn from that.
And translate it, uh, or at least make it more approachable for their users.
Absolutely.
Yeah.
And I don't know if you heard, but Coinbase is thinking about moving away from the US.
So maybe, I don't know.
It's just the news of today.
I didn't read it through, but there's also there, uh, you know, they, they always been close to talking about regulations and maybe they will find their way through to reach the highest number of people.
Uh, but now coming back to, you know, V33 protocols.
Uh, so, you know, the force is, uh, built to reach the highest number of DeFi users.
And to achieve this goal, we are always looking to expand our DeFi suit and stable core in USX to new blockchains.
And, you know, as we expand, we also want to provide the most seamless service to new users, meaning that we want to provide them with the deepest liquidity for USX basically everywhere.
And to do so, we always search for the DEX is available on each blockchain and V33, as I said, it's a system that has been very useful for us as it relied to, uh, as it enabled us to rely on partners such as Velodrome to build sustainable ecosystem and incentivize liquidity in the long term, which, you know, liquidity is a very key factor in DeFi.
And, you know, you lived in your, this expansion yourself.
You said you worked for BDAO on Phantom.
So surely you are one of the, probably the most expert people on the topic.
So, uh, where do you think the V33 protocols are headed?
Where do you think you're going?
How do you think the next steps of V33 is going to be?
Yeah, it's a good question.
And I agree.
So when we think about this a lot too, um, so I think at least a chain until we see a better design, I think V33 is going to be the design of, of a decentralized exchange that will continue to dominate at least each chain that is created.
So there's going to be at least one big winner.
I mean, well, I guess we saw an Arbitrum Camelo, which was, uh, their own design as well.
I'm more bullish on V33, but let's see how that plays out.
Um, but I think we're going to see at least one, one of these types of protocols win out in, in each of the chains.
Um, V33 is not an easy technology to, to dominate per se.
It's, it's a very complex smart contract architecture.
Um, as, as we discussed, solidly had a lot of bugs in our V1 version of Velodrome fixed most, but still have some smaller gaps that we're actually going to fix with the V2 launch.
Uh, V2 protocol launch that we're going to, it's coming up actually in the next, basically this month, where we basically redesigned the architecture from scratch to make sure that it's now exactly how we would like to have it.
Um, so we're going to see a lot of V23 protocols pop up in different chains.
Um, some are going to get it right.
A lot of things are still going to get it wrong and that they're still going to have some bugs or, or they're going to have issues with the complexity.
I mean, just to, to give you an idea at the moment, uh, Velodrome has, I think over 20,000 VNFTs that have been minted.
So with those 20,000 VNFTs, um, you have to check on chain, um, whether, first of all, the combination of VNFTs with users, um, which we've had over 10,000 users.
Uh, then you have to check the combination of VNFTs with gauges, uh, which are approaching about a hundred gauges that are receiving rewards.
And then check within those gauges, which ones have tokens for rewards.
So basically to, to pull up whether a user has any voting rewards in terms of bribes and fees, you have to check the combination of, uh, over 20,000 VNFTs, a hundred gauges, uh, for fees and a hundred gauges for, um, bribes.
And then I think we have over, um, also like a hundred white listed tokens.
So you have to check the combination of those, which the number gets pretty astronomical very quickly.
And you have to do it very, very, in a very fast manner so that it loads quickly.
Um, while you're actually also serving the other parts of the, of the decks, like swapping and whatnot.
Um, so it's a, I think it's one of the, perhaps the, or the most complex protocol that is out there.
So for a lot of teams, it's not going to be a CC to, to manage.
Um, and in fact, you probably will see when a protocol launches as a V33 protocol, it's going to be buggy initially.
Um, so they're going to have, most teams are going to have to continue to adjust.
Um, but if they get it right and, um, they can continue to evolve the tech, implement the features that, that I mentioned earlier, like concentrated liquidity on top, et cetera.
Um, I think those decks are really going to dominate, uh, their chains.
Now, when we think long-term, um, we believe that at least for the layer twos, there's going to be continued, continued, um, um, kind of progress in interoperability between layer twos.
Which means that it's going to be easier for users to be able to use pools in different chains for trading and still get their assets on their, on the chain that they're on.
So, um, you know, and if you're an optimism and you want to trade and get Grail token, the Kamala token, you're going to be able to do it more easily at some point.
Um, or, you know, whatever else, right.
If you want to tap into a big pool of USX, for example, if you want to tap into the optimism pool in USX, but you're on base as an example, and perhaps, you know, the pool hasn't been as developed there yet.
It's going to be easier to do so, uh, because I think aggregators are, well, first of all, the technology for cross chain messaging on layer twos is going to improve.
Um, and aggregators are going to evolve to provide services for trading across chains.
Um, you know, just like now we have one inch, um, DeFi Llama, Matcha, et cetera, uh, providing aggregation at the chain level.
Eventually they're going to provide aggregation across layer two chains as well, because it's just going to be that it's going to be much easier to do so.
So again, you can, it might be better for eventually for protocols to just build one huge liquidity pool in one of the layer twos, because anyway, it's going to be tapped from aggregators, uh, to perform swaps across the layer two chains.
That's a little bit further away, but in that world where it's easier to transact across layer two chains, because again, they have shared the shared security of Ethereum.
So, uh, it does make it a bit more tangible, uh, in terms of being able to develop the technology to do so.
Then, um, uh, by then the, the, the real strategy will be who is going to be the decks that can really attract the most liquidity for certain assets.
Even if it's in a single chain, because anyways, that liquidity can be used across the layer two chains.
Uh, so, but in the current phase, so I think phase one is the V33, uh, slash, you know, uh, kind of comprehensive decks are going to, decks are going to continue to dominate their respective chains.
And eventually could even dominate, uh, volume across layer two chains.
Yeah.
Like there's, there's a lot to do, but I think we're on the, on the right path.
Uh, there, there's some, you know, some features to be added, some aggregators among multiple blockchains also defaults and enable swaps, uh, from different blockchains as well, but only with our native tokens.
And, you know, about going multi-chain, it seems like the majority of the builders today are dedicating their efforts in the layers, uh, layer twos of Ethereum, such as optimism,
and, uh, and, uh, new, new ones that are coming.
So which advantages do you think that building something on top of Ethereum rather than from scratch brings?
Like, you know, you, I don't know if you're an optimism maxi, but you know, you're really building something there.
I think Ethereum has a global vision, something that goes, uh, beyond what we usually can think of when we, when you stick to its token and speculation.
So, uh, how does it feel, how do you feel building on top of Ethereum and what, which advantages do you have by doing that?
Yeah.
Um, so I'm, I'm definitely a layer two maxi or an Ethereum, uh, which now is becoming kind of like the layer two evolution, actually.
Um, and well, the, the, the main advantage of building on, on the Ethereum, uh, infrastructure is that you, you, you get the security of Ethereum, uh, with the advantages of having, you know, the scalability of a layer two, which is, you know, you, you get lower fees.
Eventually you're also going to get faster transactions, faster throughput.
Um, and for the next wave of users, I think it's going to be much more attractive to start using a layer two, right?
You can all perhaps remember when we first got into DeFi and how crazy it is to transact on Ethereum, especially when the, when, when the demand is high and you have to pay, you know, 50 or a hundred dollars per transaction, which is just insane for, for the majority of the planet.
Um, so layer two is where you can actually do it perhaps for a few cents.
Um, I mean, they can also get a little bit more expensive when, when the demand is high, but, uh, the, the scalability is going to continue to improve.
Um, so again, you get the security of Ethereum with better scalability.
Um, I, and then now over time you get the, the narrative of course, that then what, you know, that layer twos are the base for growth.
And I agree with that, which I think is going to attract a lot of interesting protocols that we want to develop as well.
Um, I think a lot of the main net protocols will also want to, uh, participate in the, the growth of layer twos and will continue to deploy on layer twos.
Um, whether it be arbitral optimism, I actually am, I'm happy that any of the layer twos grow because the, the obvious conclusions when you see a layer to growing is that the.
The, they're all going to grow, uh, in line, right.
Um, it doesn't always play out some layer twos perhaps don't take off, but once you get a significant level of growth, then they grow together.
So, um, again, I think layer twos will be the place to be, uh, for the next wave of users.
And that's basically what the future we're preparing for.
Yeah, absolutely.
I agree with the fact that new comers cannot go on Ethereum layer one.
And, you know, we cannot expect them to pay a hundred bucks to approve a spot contract and then another 50 bucks to, uh, to make a swap.
So I think that's, that's really something that we should focus on.
And, you know, as soon as we, we got the first alternative blockchains, uh, with some defy on like one or two years ago, then we had this huge influx of, of, of people coming actually more than two years ago.
Uh, so, you know, uh, looking at the future, looking at the next cycle, uh, surely all these layer two are going to be fundamental for people to still, uh, understanding that they are operating on, uh, Ethereum somehow, but with the cheaper fees.
So I think that's a really strong narrative that will, uh, convince most of the new comers and, you know, about this topic, let's start the AMA session.
Uh, I pick the question, uh, ask on Twitter guys, uh, for whoever's following, if you have questions, you have the button here to comment directly on the thread of the Twitter space.
You can ask anything and we will go through your questions in the next 10, 15 minutes.
So, um, question was asked, was asked by the accelerator, uh, who asked, uh, how do you see the new competition from ZK rollups?
So, you know, huge topic now, uh, what's your view on it?
Uh, so I'm actually also quite bullish on, on ZK rollups.
Uh, I think there are, I mean, the technology is very complex.
Um, I've, I've tried to invest the time and effort to, to understand it, but it's, uh, obviously you, you get to a certain level where, um, you know, each of us can get to the third level of understanding.
But what, what I can see is that it's going to be technology that will be, will be able to use beyond, um, kind of like a literature chain and be able to use, uh, uh, in a lot of different types of, um, financial transactions.
Um, and even in, in, in systems such as, uh, voting, uh, you know, for public government, et cetera.
So we're just digital identity, I think it, well, you know, it's, it's, it's, again, it's, it's really cool to see this coming out of crypto crypto being the one that, uh, kind of pioneers the technology.
Like, like CK proves, um, the, in terms of the implementation for layer two, what is neat about the CK implementations is that you can batch the transactions, um, at a much bigger rate.
Um, so the more users you get, the cheaper the, the transactions get, which is, uh, pretty cool.
At the moment, it's actually sort of expensive.
If you, if you use certain apps, I don't know if you, if you have played with some of the apps that are out there on CK sync, for example, some of the transactions can actually be quite expensive up to $50.
But it, the funny thing it's, it said it's because it has just a few users, but as the user grow, you, I mean, as users scroll then, um, and they, uh, submit more transactions and the cost per transaction is going to come down, um, which is neat.
And I think, as I mentioned earlier, I don't, I don't see layer twos as being in competition with each other.
I mean, in the short term, it, it could feel like it, right.
Because the protocol can choose to deploy on one or the other, or a user could choose to move funds to one or the other, but in the medium term, it's all going to be about where, uh, you know, about attracting users, right?
Any of the chains can attract users, uh, or capital on that chain.
And then it's just going to be very easy and seamless to move it from one to the other.
So even, you know, I'd be happy to see CK sync succeed and attract a bunch of capital and a bunch of users.
Um, which then will also be looking over to optimism and perhaps use velodrome or, you know, or in the future where cross chain transactions becomes much easier and much, they can become faster than any user on CK sync could tap on a pool on velodrome on optimism if they wanted to.
So again, I'm very bullish on the growth of layer twos, regardless of the chain.
Um, and in, in, in, in that case, I'm very bullish on the growth of crypto overall.
Even if there's a, an alt L one that pops up and I think they're going to continue to pop up like Solana did in the last run and attract a ton of users with their own design.
I think that's fine.
Uh, as long as it can be maintained, right.
Or as long as there's something fundamental that can keep the users around.
Um, but I think it's all about continuing to make crypto more approachable for the, the, the people that have not used it yet, which is a vast majority of the world, rather than, you know, trying to outcompete.
Outcompete the smaller group of users that we have currently, uh, in chain, on chain.
Yeah.
Uh, you know, I also see the, the potential in the ZK technologies, but I don't see the strict competition between the, the layer twos.
I think we're, we're still in a stage where we need to compete, of course, but in a healthy way, because we still have a lot to grow.
Uh, we, we, we are far from, uh, being done in DeFi.
We have still have billions of people to reach, uh, you know, about you, you mentioned, uh, about this in, in our call, you said that the, the B33 protocols are quite complex, uh, very complex.
So we, another question that was asked is, uh, how do you, uh, can you tell us about the solutions that you offer to prevent, you know, hackers stealing the farm, explore, or ugly stuff like that?
Yeah, absolutely.
So, um, you can, you can imagine a B33 protocol as having a few different layers.
The basic layer is the liquidity pools.
Um, so those are, have been battle tested and proven because they are actually, um, they were the original Uniswap design.
Um, so, you know, they, they've been audited a million times.
We also did an audit for our own, for our own V1, and now we're going through a very comprehensive audit for our V2.
So liquidity pools are where the majority of the funds are contained.
And again, those are probably the safe, one of the safest designs that you can see out there in DeFi.
So those are going to be, are, are, again, have been battle tested, have been audited in a long time.
So those are probably the safest design we have for liquidity pools.
Then on top, you have the gauges.
Those contain the, the rewards, you know, they capture the fees, they capture the bribes.
Um, those gauges, um, have also been audited.
Those are a little bit of an innovation of, of Solidly in terms of the design.
I mean, it took some of the, um, basic blocks from different protocols, but those will be, would be, would be the kind of key innovation on, on Solidly ports or V3 ports.
Those contain a smaller amount of rewards or a smaller amount of funds.
And, um, again, they're going through a, we're going through a very, very comprehensive audit to make sure that, uh, they are totally safe.
But the risk is anyways, much, much lower because again, these gauges basically just contain the, the, uh, rewards.
So they contain them only through the week where when people haven't claimed them yet, most weeks people claim the rewards and the balance drops a lot.
Then, you know, maybe increases throughout the week and then drops a lot.
So they fluctuate in terms of the funds, but it's not a large amount.
Um, and again, we're working with, we're currently working with Spearbit, which is perhaps the top or one of the top auditing groups out there, um, to make sure that, um, they're top notch and that we're going to have a, for, for V2 that we're going to launch, we're also going to have a bug bounty.
You know, we're going to go through all the steps of security to make sure that everything is, is very well and very comprehensive and very well designed.
And beyond that, the, the, the rest of the protocol, uh, doesn't contain funds, so nothing else can be, uh, tapped there.
Yeah.
I think with experience, the community is being more and more, you know, uh, and putting a lot of attention at security, of course, rightfully.
And, you know, we, we, we, we try extensively products and we audit them a lot before actually deploying them.
And, uh, it's a really, uh, important thing to do.
I think for, for, for any protocol, for any protocols that is here to stay for any protocols that consider itself serious.
And I'm, I'm glad you, you could give such a, you know, uh, in, you know, such a complete explanation.
It means that you really know what, what you guys are doing and, you know, and you can see this in, in your protocol, in, in the seriousness of your protocol.
Uh, someone was asking us, uh, when will the V2 or Velodrome be released?
Sorry, if you could repeat that.
Just one.
Yes.
We're actually in the, in the final step.
So, um, ideally by the end of April, uh, if not early May, but in the next two or three weeks, um, we just need to make sure everything is, is perfectly aligned, but very, very close to, to release.
Yeah.
Yeah.
Yeah.
You know, some, sometimes just things come on your way and you cannot define a, uh, a date, but you know, uh, but in the end you will get, um, I'm sure.
Yeah.
We will, we will announce for sure.
We will, we'll make an announcement, an announcement.
All right.
Another question, uh, a bit of topic, uh, by someone who's listening right now is what is your advice to someone who would like to start working in crypto one day?
So for example, what is your personal experience?
If you can share some of that, what did you do before, uh, working into crypto and is it something you, you will suggest to do?
Um, yeah, um, I mean, I, I, I, I really enjoy working in, in crypto, to be honest.
I think, um, what is really nice about the teams that you get to work with is that, I mean, if you, if you find the right team is that, um, each person is really just focused on getting stuff done.
Well, it's like working on a startup where you just have to be very, uh, very practical and just focus on, on continuing to build and continue to add value to, uh, whatever project that you're working on.
So I, I really enjoy that, uh, in my experience.
So the way that I got into crypto was through a DAO that, um, was called the information token.
Uh, this was led by a guy, uh, that was, uh, would go on Twitter as a name, uh, under the name of Galagool.
He actually ended up committing a few, um, sort of like, uh, scammy transactions, um, and, and actually got, uh, you know, exited crypto Twitter for, for a while.
But thanks to him, to be honest, he created this DAO where you could get in by buying his NFT early on that NFT was sort of cheap.
So I did that and it was a really, um, comprehensive group of people that joined the DAO.
Some people had a lot of experience in crypto, others a bit less, but just like, uh, getting involved in that server, I started learning about, you know, different opportunities and we launched VDAO as a group through that server.
Um, so that's where the sort of journey began.
And I, I got more involved with VDAO, uh, just because I was trying to add my skills.
I think the, the best way you can get involved in crypto is by first just, you know, providing a, you know, adding your, basically trying to volunteer, uh, with your skills and trying to add value to a project without expecting much in return.
Um, and then as you get more involved and, you know, you start getting to know the group better, then that's when you can perhaps, uh, discuss whether you want to be compensated and whatnot.
But the first step, and we've seen it also in Velodrome, a lot of people, while we were building it out and designing it kind of, uh, reached out, they wanted to get involved where they reached out through friends.
I think that's also a good idea if, if you know anybody else within crypto and they're working on a project, just get in touch with them and just try to, uh, provide value to, to their projects, especially if the project is in its early stages.
They're, they're going to be more open to onboard, um, kind of new contributors.
And, uh, if, if, if, if you're lucky, then the project does well and you can go with it.
Otherwise you can just leverage the network that you're starting to build with these projects to get involved in others that are also, uh, perhaps in their early stages.
But I think that would be my personal recommendation, just kind of get involved in projects that are in early stages, because again, they're going to be more open to, to onboard contributors, more mature projects.
They're probably already going to have their team sort of complete.
Um, of course, if you have the skills, um, if you know how to code, if you know, um, anything related, I mean, I think something that is, uh, under, uh, appreciated is, is, um, work related to just development of a, of a front end, right.
Or, uh, of course, if, you know, smart contract development, then that can be very valuable in crypto, but just, uh, you know, front end work as well.
Um, and, or willingness to learn from it.
We have, for example, at Velodrome, somebody that is, has a background in data science and just started to learn solidly.
I mean, uh, solidity and just getting more involved in smart contract work.
And now he's one of our, uh, devs basically.
He's one of the, uh, he's part of the dev team, but initially he was doing analytics for us, but he just kept telling us that he was learning smart contracts and started getting involved in the conversations.
And now it's part of the dev team, which is really cool to see just that level of growth and involvement.
Um, so yeah, that would be my recommendation.
Yeah.
Yeah.
And I think the, the crypto space is really meritocratic.
Like it doesn't matter how world are you.
It doesn't matter if you started at, uh, Harvard or not, but if you can do things, if you can prove that you're an experience in what you're doing, then you're going to be, uh, you're going to find your place in crypto.
And, you know, you gave the perfect example of it, uh, with this guy, you, you hired in your dev team.
Exactly.
Yeah, exactly.
All right.
Now, please continue.
No, I was going to say just, that's it.
Right.
Um, if you can, if you can prove that you're willing to do the work first and then you're gonna, you're learning and you're adding value.
I think any team will be happy to have you because, yeah, there's not that many people that, uh, come with that kind of mindset and are willing to just kind of contribute early on and continue to learn.
But yeah, I agree.
It's, it's, it's, it's, it's, it's, it's, it's, it's very, very meritocratic.
Yeah.
Uh, all right.
All right.
Uh, the time is almost up.
Uh, uh, uh, I think that was the last question that our community had to ask you.
you know we've been through a lot
we talk about what is
Validrum, it's quite a complex
protocol but it's very
useful for projects to bootstrap
their liquidity and I think users
can enjoy using
it as well of course
and we went through you know our
collaboration, our USX, what is
USX and how is it integrated
on Validrum, we talk a bit about
stablecoins in general, why they
are important
for people you know
we have seen a rising
adoption in
countries like Turkey, Lebanon
Argentina and you know
you never know what is the next country
and you know I think eventually that's going to
spread like an avalanche and
everyone one day will know about
decentralized stablecoins and DeFi
we went through
V33 you know you talk
about the future of it and layer
2's, I hope
I asked you all the questions
all the most relevant questions
that my community wanted to know
I see some excitement for the
V2 of Validrum
and I you know
I'm one of the ones
who are really looking
forward to it
thank you so much for being
here today
we will stay in touch
you know if you want to say
bye to the community
that would be great
yeah absolutely
thank you for having me
it's been really great to work with DeForce
you are awesome partners
very easy to work with
and you also
I think have
very much
the right fundamentals in place
I'm excited to see the growth
that you're
having across chains
so I look forward to continuing
to work together
and again thank you for
having me on Spaces
absolutely
you know
same about Validrum
you really are innovators
in the space
and you know
we can you know
hopefully have this call
another time soon
and you know
and continue working together
week by week
through
the blocks
and all the systems
that you have created
all right
thank you Tao
being here
thank you everyone
for attending the call
I'll see you next time
thank you so much
talk soon
cheers
