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Earning Steady Yield in Unsteady Markets
Recorded: Aug. 27, 2025 Duration: 0:55:00Space Recording
Full Transcription
Thank you. I I'm out. Thank you. Cause everybody else knows what they're taking tonight
But I just wanna play it right
We couldn't have that tonight so far I've been walking the line of my own
I've been walking the line of my own.
Lift me up to the stars, we are coming home.
I only had a chance that we're out of time.
We're sold in the cold physical design.
Set me free, set me out on the run.
Lift me up to the sun, to the sun
You're burning down, you're burning down
It's the way that you fake it, I know it's the way
But I just wanna to play you right
We're gonna get there tonight
I just want to take you down.
We're going to bring you down. We're going to bring you down. I just wanna make you live
We're gonna get this tonight
I just wanna take you down gmgm everybody welcome back to another banger show with bearer chain foundation accelerating applications and rewarding
users through proof of liquidity backed by bh digital assets and today we're talking about
earning steady yields in unsteady markets and we've got some great guest speakers to dive into
this conversation with we've got smoky the bearer with me in the co-host spot, Chief Smokey Officer at Bearer
Chain, Mascot at Builder Bear, all the cool projects and more.
I'm reading the bio, please don't come for me, people.
Smokey, how is it going?
Are you excited for the show today?
Yeah, man.
It's always a pleasure to talk to the Bearer Boer guys, and I think we'll have some cool
stuff to go over in terms of some of the initiatives that they're going to be launching and they'll hopefully
be applicable to a wide range of folks absolutely and I can see Barabaro in the crowd if you guys
want to hop up on stage I know we've got cobble here as a speaker but if you want the main account
up it just means any listener can just see the square tile and go straight to you guys
absolutely up to you though I know sometimes people on multiple devices and stuff so just
want to throw that out there before we dive in and welcome to the stage cobble as well
from bearer borrow i draw flywheels that i hope will take off keeper of nect token at bearer
borrow bearer borrow instant liquidity infinite opportunities And we've also got Gearbox, I believe, hopping up on the show.
Gearbox Protocol Lending Reimagined.
I think they're going to hop up soon.
Yep, all good. Nice to be here.
Nice to be talking to the entire Belchion community.
Oh, awesome. Okay, so I think X might be bugging then.
I can only see a couple of speakers on stage but
it looks like um that might be an x bug and actually we've got all the speakers on stage
some people are just shown as a listener to me fun times fun times we'll get through it it's fine
it's you know it's spaces i don't think elon is necessarily giving it the most attention in the
world right now so we'll we'll keep this one cooking but look guys
for the speakers up on stage if you've not been on a show with myself smoky or bear a chain before
gonna quickly run down how we try and do these shows and then we'll just dive straight into the
conversation and basically we're just going for organic conversation today which means you guys
get the mic when you want it look you're the industry expert you're building in this industry
that's what we're here to do we're just here to get some of that knowledge for our audience today.
How we do that, though, is I do need a little helping hand from you.
This isn't a video show, so I can't tell when you guys want to come off mute without a little help.
So there is a heart plus function, bottom right-hand corner of your screen,
and there is a hand raise function that I'm demoing right now.
Basically, if you would like the mic, just get the hand in the air,
and we'll get the mic straight over to you. Really, it's that simple. If X continues
to bug, I might just start throwing the mic around organically as well because there's only a couple
of us speaking today. So it'll be pretty easy for me to manage. But sometimes when X bugs, I can't
actually see the hand raises. So if you do want to come in and I seem to be ignoring you, just know
that isn't the case. X is just not showing me that you want to speak. So just either come off mute or yeah, I'll just throw the mic around a little bit more randomly slash, you know, we'll just keep going in circles on the conversation title today where are we going with this one how can can you do it
can you earn steady yield in an unsteady market or is that you know a bit of a fallacy in itself
i think it all depends on where you're looking for that yield right um the old has to come from
somewhere in some cases it's missions in other cases it's fees on borrowing and lending and
trading and everything in between um so i think that the Bearbor and Gearbox guys respectively
can probably give some great context on this.
But I think they've both built interesting
and in some cases intertwined solutions for enabling that.
Let's do it then.
And let's get the mic over to Cobble to begin with
to talk a little bit about this and what you guys are doing.
And then we'll do the same thing with Muggles as well
from the Gearbox team.
Gearbox is lending, reimagined, building a permissionless credit layer for everyone to enjoy but first
let's get over to gobble um yeah i think you can definitely earn steady yields in unsaid markets
and i think depending on what you're doing uh sometimes the volatility creates additional yield and even more yields in choppy time.
So I think there's like, as Smokey said,
there's like probably it's like swap fees,
interest on lending or lending fees,
and maybe like not many other things that actually generate yield.
And everything else is purely like a derivative of
that. So 100% you can earn fees or yield in unsteady markets. And I think the most simple
version of that is probably just supplying into some form of money market or LPing into LP.
And then over the last kind of, I guess, couple of years of DeFi, we've seen that shifting.
And I think what's currently the meta is basically set and forget vaults,
where we let smart contracts make either predetermined decisions for folks
or protocols like ELE that cleverly move around.
So yeah, that's kind of the direction of where yields are heading i guess i
can um dive into that a little bit later but um for sure i'd say especially for like if you're
earning yield on on uh swaps and something we're looking to do down the line specifically as well
um the more volatile the market the more yield you can get really interesting stuff and look i think
there's this term as well right that we're hearing
more and more in the industry which is like real yield risk i don't know what we call the other
version of that yield um but like this idea of you know yield coming from these places that
actually you know you can make sense of that you can track that you can use the blockchain to
tangibly grasp okay this is where the yield's coming from the
other version of that coin which we've heard on a bunch of spaces and a bunch of content around this
before is if you don't know where the yield is coming from it might be coming from you so we'll
dive into all of that during the show listeners thank you so much for tuning in as we do jump
into this and do not be afraid to get the likes and retweets of the show out bear a chain and trying to put more educational content for you guys to take advantage of so if you do like that
sort of content and you want to show support a like and a retweet is a really easy free way to
do that and muggles i'll get the mic over to you before we dive any further where do you sit on
this idea of earning steady yield in an unste? I think that's entirely possible.
You just have to be really cognizant
about the risk curve that you're on.
And the risk curve largely goes through two things.
One is the asset that you're on
because timing crypto is kind of like dog years
where a month is not a month.
It's like seven or eight months
given the volatility there is.
So just make sure the asset that you hold is something that you
actually want to hold for the time period that you want to learn for whether
it's majors or stables depends completely on you and the second thing is
the kind of you know protocol or source of yield you interact with now if you're
going for something that is largely emissions-based,
that is not going to last too long, right?
We have seen emissions largely end up going to zero over a time period.
But like you said, places with real yield,
where users actually want to pay you money for the assets that you have supplied
or just because of the kind of uh yield they're able to generate uh
either through the mechanism uh like pol uh where how you know stake beta actually generates its
source or uh how staked ethereum generates its source you're largely going to be fine uh but you
again have to be uh managing your expectations in terms of the kind of yield you can earn if you want
a steady yield because everything is risk adjusted right at the end of the day.
So you can't be expecting to earn 30% steady yield over a period of time without expecting
too much risk.
So if you're somebody who wants to be on the lower end of the curve, just expect that you
won't be earning double-digit yields on your assets
or you have higher probability of stomaching uh volatility yeah look again great insights
to start off the show and yeah obviously makes a lot of logical sense to to anyone with any sort
of financial literacy yeah if you want yields that you can't find anywhere else on the planet,
likelihood is that volatility comes with extra risk. That higher upside, when we talk about
volatility, I think sometimes we consider only the downside, but there is a lot of upside to it as
well if you can take advantage of it. But of course, yeah, there's going to be more risks to
that. Otherwise, if everyone could just steadily get a 50% return instead of a 5% return, they would be doing it. So yeah, great, great start. I guess, again,
for our audience to start us off on the show, and then we'll get into the individual projects,
Bearer Borrow and Gearbox that our speakers are talking on behalf of today. I guess the broader
question is, what are some straightforward ways
people can start earning interest on their crypto especially without you know dealing with like the
complex side of the trading having to have that nuance and understanding of the market you're
trading in and how does that lending fit into that you know what are the most straightforward
ways people can start earning interest bearer borrow do you want to come in first on that one yeah i'm happy to kick that one off i think it's
like super simple lp liquidity so providing um liquidity into a pool for folks to trade off of
and benefit from swap fees or depending on how the dex works some form of token emissions uh and then
secondly there's like uh lending So this is probably the most common
considering impermanent loss is quite unpredictable in LPing. So simply providing assets into money
market for folks to borrow. That is probably kind of like the second version. And then
there's a bunch of cool things like, for example, with Bariborrow, we have something called the
liquid stability pool
which enables you to profit from interest rates
from the protocol as well as liquidation
so it's kind of like this weird place that positions
you for yield in black swan events so if there's a crazy market
downfall and loads of liquidations this actually
allows you to position yourself to profit
from like times of extreme volatility again.
I'd say those are super simple, classic ways to earn yield.
And I guess also the carry trade has probably become something super common.
So like Athena, Resolve, they've all built around carry trading funding rates on different purpose taxes.
So those are the super simple ways and then defy is i guess just um supercharging every single part of that and many different protocols to either
loop up or leverage up and i guess that's when muggles and those guys come in now great great
insights again muggles what's your take on this any anything that's been missed out anything that
gearbox is specifically focused on uh no i completely uh agree with uh to be honest uh but yeah one
thing that i want to say is this uh if you just want to go on yield go to gearbox uh but no that's
not it uh i think like cobble said right cobble laid out all of the risk assets there are so i
think the least risky thing that you can do in order to own yield is just stake your assets you
can stake your beta you can stake your eth and you can earn that uh three percent to eight percent range pretty
easily that's i think the safest thing to you do if you're not an advanced you know d5 person if
you want to go a little further down the risk curve that's where we see lending protocols come
in i'll say just make sure that you understand all of the risks uh what you
want from a lending protocol is for it to be the least complex thing there is how you want to earn
yield on a lending protocol is without any impermanent loss without any lockups without
any fee you don't want any of that uh you just want to be paid from the borrowers you just want to be paid from the borrowers. You just want them to pay you for borrowing the assets that you have.
And once you go beyond that, you have amazing options with DeFi today, right?
You have fixed yields with Pendle.
You have crazy great yields by helping on various taxes today,
especially something like Kodiak, which, you know,
PeraBorrow and us have been working
on at the moment and we'll talk about more talk more about that uh soon uh but yeah you can just
keep going down the risk curve after a point and i'll say if you aren't advanced you should not
perhaps venture to that side yeah yeah obviously like with that additional risk means you have to
understand where that risk is coming from and generally need to be more active as well. Like, I think this is, you know, something I think about a lot is like, how much time do you have to give to where your funds are? Like, if you don't have that time, and you're, you know, in a general job, and you're just looking to get that general interest, then yeah, that's, that's where you just stick to the basics. Smokey, hand came up there i think i'll throw the mic over to you yeah yeah for sure man um i was gonna say i think some of the things
that that muggles uh sort of overlapped with which is that on one hand i think that there's a lot of
very simple like single-sided staking type opportunities um i'd be uh you know i'd be
remiss if i did not happily shill uh polv2 staking with Barra now, just because it's something that is pretty easy to do for most folks.
As in, if you have Barra, you just go to, you know, the hub and then you go to stake and you can put your Barra over there.
And it's consistently earning pretty meaningful yields as it is a relatively new product.
But we'll also be benefiting from a number of centralized exchange integrations over the next few weeks, including actually one or two which are live right now, but we haven't put out full
comms on. So that'll come out quite shortly. I think other things that are very easy to think
about when it comes to just steady yield profiles do end up being some of the other things that were
mentioned in terms of single side supplying on stable coins. There's a bunch of great loops that currently exist within Dolomite. Um, there's a bunch of great stuff that
you can do by staking Nekt with Baraboro. Um, so I think that there's like very solid opportunities
there. Uh, it is just a matter of understanding the risks that you take on in each case, right?
So in the case of, of staking Barabara, yeah, like, you know, you're, you're staking a volatile,
uh, altcoin that has experienced swings massively up and massively down. So I think it's like, you know, you're staking a volatile altcoin that has experienced swings massively up
and massively down. So I think it's like, okay, well, do you want to take on that risk? And I'd
perhaps argue that if you are looking at holding an asset like Barra, you're almost doing yourself
a disservice by not using it productively within DeFi somewhere, just given the opportunity that's
sitting there, right? And other people who I think are weak-willed will
dealt a neutral farm and will basically take an asset and go long and stake and then go short on
the other side with a PERP and attempt to capture the spread between those rates. However, other
times that can actually backfire and they can end up paying more for the short than they earn by the
quote-unquote long or the staking yield right um so that's
another way of playing the game um and then i think that uh the biggest thing is just understanding
what you're signing up for and working backwards from there yeah and for those who are newer to
the bearer chain ecosystem polv2 that will be proof of liquidity sort of the the fundamentals
that you guys are set up for right and we can find a ton more information by
going through the main account going through the website that's linked on that square tile
and also go back and listen to one of our earlier shows we did an introduction to bear a chain a
couple weeks ago so if you guys want to you prefer to listen to get your content and then that is
also available to you um look we've got obviously two two major projects that you can take advantage of some
of the things that Smokey's just referenced. And yeah, that's why we've brought them here today.
So at this point going forward, we're going to ask a couple of broader questions to keep you guys
engaged and understanding the terminology, but we're also going to go deeper into the individual
projects on stage and let you know how they work and how you can take advantage of what
they're building a cobble i'll throw this one over to you first and let's talk a little bit
about bearer borrow and with your focus on a simple lending tools on bearer chain can you
walk us through like a beginner friendly version or example of how someone might earn consistent
yields right now uh yeah for sure as mike mentioned the most simple is probably just SW Bearer.
If you're looking to do something really simple,
I think my risk senses are a bit cooked
considering I deal with a leverage slider every day of my life.
Even I guess this is still pretty risk-on, but from a
simplicity perspective, it's extremely simple.
So we have the debt cap's just been reached, but we have a super simple one-click deposit stable coin vault,
which we essentially abstract absolutely everything away from you.
And all you need to do is deposit stables.
We then LP that into the BEX LP, deposit that into Infred, which earns like 20% yield and then we loop that 23 times
To get you around about a hundred and something percent AP on your staples, which is crazy
The caps have been reached on that. So it's not open right now
However, you know, that'll be increased. So that's one thing and then the second thing I wanted to touch on like
I guess why I some gearbox in the first place
Hopefully we literally finishing up the testing like as we speak the guys are busy thing I wanted to touch on, like, I guess why us and Gearbox in the first place, hopefully we're literally
finishing up the testing as we speak. The guys
are busy. So hopefully later this week,
if not next week,
the Gearbox instance
will go live on BearChain, which was
curated by us.
And a fun strategy
there would be something like
supplying
you know, SW Bearer into Gearbox and borrowing Bearer and looping up on that.
So, you know, that helps lock up more stake Bearer and also allows you to loop up like max loop on the SW Bearer yield without having kind of like directional risk,
which you would if you did that on bear borrow, for example.
So that's kind of like something else
that would probably pop up next week.
Now, that makes a ton of sense.
Can you tell me a little bit about that risk mitigation
through looping, right?
Because 20X looping, that sounds like a lot.
So tell me how that works.
Yeah, I guess there's like, there's leverage in looping.
And this is where we saw, and myuggles feel free to jump in on this because we've had a couple
of chats around this point but um initially when we launched and went out like we built
bear borrow and for leverage it's really cool but spot leverage just hasn't taken off as much as
we i think we thought it would have um so when we do a 23x loop, that's because the assets are correlated, right?
So it's two stable coins used to borrow another stable coin,
and the volatility on those assets is relatively low,
especially the more volatile asset is the one that you borrow.
So that means you're inherently kind of short that asset.
So that's why you can do these crazy loops.
However, the problem on bear borrowers
is you can only borrow stables,
which exposes you to price risk.
So what's cool is if you're a long bearer
and you want to take SW bearer
and you want to maximize your exposure
and 3x leverage, for sure,
you can do that spot with the cheapest rates out there.
It costs like 5% to borrow, right?
But for people who are a little bit more risk-off,
borrowing correlated assets,
so let's say you supply a WBTC and ETH pool and borrow ETH,
you essentially short ETH,
and then you're only exposed to the WBTC volatility,
something like that.
So trying to borrow assets that are semi-correlated
allows for kind of looping.
And this is where I'll hand over to Muggles
because that's their expertise.
And essentially what the partnership we've done
is curating on Gearbox, so the instance of Gearbox on Baruchain.
We've set up a bunch of different pools, Kodiak,
LPs, and lots of fun things that people will be able to loop up many,
many times.
Dude, no, that makes a ton of sense.
Thank you for the extra clarity there.
And yeah, Muggles, do you want to come in on that one?
Yeah, absolutely.
So I'll introduce Gearbox a bit, right?
So like Cobble said,
so Gearbox is effectively the credit layer of DeFi. It's essentially a lending protocol, I'll introduce Gaybox a bit, right? So, like Gobble said,
so Gaybox is effectively the credit layer of DeFi.
It's essentially a lending protocol,
but it doesn't just let you borrow to a certain amount against your assets.
It actually gives you a leveraged credit wallet.
So you can go ahead and use this wallet
across DeFi protocols and turn anything leveraged.
Now, imagine just your Metamask having
10 extra funds, right? You put in one Bera and you can borrow nine more, and then you can stake
all 10 of them to multiply your yield. That's effectively what Gavebox is. Now when we're
coming to Bera chain, what's special about that is, one, what we're deploying is Gavebox permissionless.
Gavebox permissionless enables anyone to set up institutional-grade bespoke lending markets.
So you can decide entirely how you want to operate it.
You have the risk parameters.
You decide which assets are allowed,
which assets can be borrowed.
And that's exactly what Peraboro is doing, right?
And the second part, the cool part,
which is why I really love this integration,
is how Peraboro has approached it
in terms of not just doing, you know,
another simple leverage-taking thing,
but they have gone ahead and put in a lot of effort
in terms of Kodiak risk designing,
where they have found the exact pools
where they believe leverage can be of benefit.
And what that's going to do
is increase the liquidity in these pools
and effectively bring a lot more stability
to a lot of these assets. And at the same time, the people who leverage these pools,
they will be able to earn much more in terms of trading fee and other incentives that come their
way. So it's a win-win situation. On the other hand, we're going to have our regular lenders
who provide the liquidity for these for us.
And without doing anything, without any impermanent loss, without any lockups or any fee, they'll be able to earn passive yield.
So they can literally just supply, earn their yield and leave whenever they want to.
So that's a great part about the entire thing that, you know, we're trying to curate on Beragene. Now, I think that... If I can just jump in there,
they'll also be able to supply those passive assets
into Infrared or stake them on the BGT hub
to earn POL emissions on top of that.
So we'll be routing a portion of,
or a large portion of our fees that we charge
back through POL to make it even more juicy.
So on both ends, we're going to be putting the turbo on.
And yeah, you're just doing this all for the end user, right?
So essentially, all of this,
they just stake with either BearerBorrow or Gearbox.
Is that correct?
Yeah, it's all on Gearbox.
It'll be on the Gearbox UI.
And then on our UI, we'll just have places,
like I'm trying to abstract everything
so that it goes directly into infrared and things like that.
We'll build that down the line.
But currently, everything will just be on Gearbox,
just passively supply or loop everything there.
We've wrapped everything into vaults on the back end.
So it should be relatively simple.
Awesome, awesome stuff.
And look, we're 30 minutes in
i feel like we got so much insight and context already really love doing this sort of show i
hope you know like people who are trying to just learn a little bit more this is a great way to do
it even if you're at work and stuff just be able to put the airpods in and you know kick back
um so massive shout out to cobble and muggles here for their time today and smoky and bear
chain for putting this one together i get to just sit here and ask the questions um let's let's keep going with it
bearer borrow for a second so i think there is another thing that you guys are doing right now
and yeah excuse me if this is sort of repetitive for what we've gone into for context but i think
sometimes that works for the audience and for myself you know just to understand it a little
deeper so try tying
into bearer chains recent proof of liquidity updates like the v2 model that we've hinted at
and that smoky spoke about earlier for native staking yields how are you adapting to help
users air more reliably and cobble that one was for you i think um well i'll first shout out to
smoking them the changes to like a protocol level weren't actually that much except for the cutting for you? I think, well, I'll first shout out to Smoke and Em. The changes
to a protocol level weren't actually that
much except for the cutting board.
I guess for a few hours, people freaked out
because of some UI,
like a UI thing. But other than that, it's not
really been many changes from a protocol level
if I'm being honest.
POL still works as it did
originally.
Except now, I guess, the goal is that there's some kind of more value
tied back to bearer, which long term should help out
with kind of keeping the premium in the BGT that we earn, right?
But however, that being said, it didn't really change much for us,
but how we've been using it since the beginning is essentially
any asset that's deposited into Barabara as collateral is automatically deposited into proof liquidity.
So example is an LP position with, let's say, WBTC and Honey from Kodiak.
and honey from Kodiak.
We deposit that into Infrared.
We deposit that into Infred.
We automatically claim all the IBGT,
and then we auto-compound that back into your underlying position.
Now, what's cool is these vaults that we use,
our ERC-4626 vaults, which meant that when Gearbox came over,
we could reuse these same vaults in their kind of protocol
with the way that they set up extremely flexibly as well.
So that meant that, as Muggle said,
it's not like just the simple vanilla deployment of Gearbox.
It's actually super, like the ultimate version of a PLO-enabled asset
that's getting looped, allowing you to get the maximum amount of yield
that you would have been able to get on this asset,
regardless of whether you're in the money market,
but now also being able to use it as collateral to then loop up and increase exposure to these assets.
So, yeah, I'd say that.
And then, obviously, the simple version of this is SWPay,
which is the new asset that was introduced,
which is the new asset that was introduced, which is like your stake lock pair.
which is like your stake lock pair.
That will obviously be one of, I think,
the key collateral assets for folks to be able to loop up on.
But what I think, yeah, so that's it.
No, it makes tons of sense.
And look, really, really great to just get this
from the horse's mouth, so to speak,
Carble and Muggles, again, thank you so much for hopping up um and giving you giving us this context um let's let's zoom a bit
further out again so we heard a little bit about bearer borrow we've heard about gearbox and
especially you know how these new tools are going to help end users just get the most from that
proof of liquidity layer but we're also i sure, with how you guys are building and how
clearly you're at the forefront of a lot of this stuff and being able to take advantage of it,
I'd love to look at these general trends a little bit deeper as well. And Smokey,
maybe you could come in and offer your experience on bearer chain side here.
And so specific question when we're looking at general trends is like, how are these incentives, like reward programs, making lending like a go to for steady income in these tougher markets?
You know, the title today is earning steady yields in unsteady markets.
Smokey, what's your take on this?
Like how are incentives, especially like reward programs, et cetera, helping lending go for like, honestly, like a steady income, you know?
Yeah, yeah, man. I think it is very asset dependent, to be fair. But I think like many
other systems in crypto, it is somewhat reflexive by baseline, right? Which is to say that,
you know, when you are able to have a whole bunch of X or Y asset, you know, supplied to a market,
right, it means that it's, in most cases, also a little bit cheaper to borrow, of course, until
the utilization becomes crazy, so on and so forth, right?
And I do think that one of the best ways to actually end up having something that feels
like a steadily usable, you know, asset or a steady stream of potential, you know, real
income from that, you know, from that spread, if you will, and or from those rates on borrowers
and lenders being applied in an effectively risk tolerance to market is by actually having relatively deep liquidity on it,
and or making sure that you're building around a very productive asset that people actually want
to borrow a ton, and or to supply a ton. But primarily, if there isn't an interest in borrowing
the asset, it can sometimes be more difficult to find interest in supplying the asset.
So there has to be demand to utilize the asset in the first place.
And I think that if you find the right coincidence of wants there, then you end up in quite a nice place. to be able to give the guys as much time as possible to explain is sort of where the intersection of what the Barabar guys
and the Gearbox guys makes a lot of sense
and sort of how it's uniquely unlocked on Barachain,
especially with POL helping to accelerate some of those underlying yields.
Because I think that the most interesting things are often ones
where each of the teams individually could have perhaps pulled it off in a janky manner,
or each of the teams individually maybe could not have fully pulled it off,
but by rather, you know, letting them come together in the right environment,
you get that one plus one equals three, right?
So I'd love to, you know, give the guys a shot at almost explaining a little bit more
about like the direct correlation or collaboration between the two and and you know how it ends up as greater
than the sum of its parts that's that's a great great insight and yeah let's do exactly that
maybe switch it up and go to muggles first on this one do you want to talk to us about that
collaboration and yeah how the idea and obviously the actual actions of collaborating is giving you this opportunity to provide more to the users.
Yep, absolutely.
How we'll talk about this is actually divide the users into two segments, right?
While there are users who want that passive side, the yogi side,
where they do not want the additional risk, they just want simple yield,
there are users who are also looking for uh outsized returns who just want to beat the market
because they understand it really well to be very honest and uh by combined so one uh the work
in terms of you know deciding what exactly can be leveraged or what exactly can be leveraged, or what exactly can be lent has been done by Berah Borough.
So, Gaybox serves effectively
as the infrastructure layer over here.
Berah Borough utilizes our lending stack
and deploys all of the lending markets
on Gaybox permissionless,
which enables them to not do any of the coding work,
but still access a battle-tested lending protocol
on Berah Chain.
In terms of users, what happens here is the passive lenders,
like we talked about the incentives,
the passive lenders receive some incentives for lending their assets,
which helps them maximize their yields without taking on additional risks.
But at the same time, what happens is because of the leverage side they see constant utility which is
where these which is where these yields turn really real so once borrowers have borrowed these assets
whether it's pera or honey or neck they can go ahead and leverage it up by 10x and supply it to
kodiak lending pools or sw pera and multiply their yields as much as they want to.
So this constant utility of the assets that are being supplied create a very sticky system.
So if your lender who has put in assets to earn passive yields,
while you might have gotten there because of the incentives,
over time what you see is that you're earning 7% 8% without doing much or you know without
managing a position constantly and without having the risk of being logged into something
so you're pretty happy saying that you know I'm able to earn 7% to 8% and as a borrower you are
now able to utilize those funds so that's where the additional utility gets unlocked from a user
perspective. Look really interesting stuff here.
Kabul, tell me about your side.
Would this have been possible without Gearbox?
And how important was it to do this on BearerChain?
I think not in our current protocol stack.
As my CTO would say, everything is possible.
But the Gearbox tech is really second to none.
And the guys have put together, I think, pioneered, I'd say, looping,
I guess, alongside maybe.
Or the OG looping protocol, for sure.
So it was really cool to collab on this.
As Muggle said, we chose kind of the assets that we think people would want
to loop, and then also assets that folks would want to earn yield on on the supply side.
So it mainly consists of like IPGT, SWB, other two common ones.
But then something that we don't see on other money markets, which currently only Gearbox allows for LP positions that people are able to leave a drop on.
So this is where it gets quite exciting because of PRL.
The yield on the major LPs, for example, WBTC Honey has been sitting at like 30% for a couple months now.
and this is really, really like GC yield.
And this is really, really like GC yield.
So allowing folks to loop up on this
essentially allows people to get far more yield
than what they were
and also play around with kind of the assets that you have.
So I wish I could share some numbers
because we're actually wrapping it all up
but before we launch we'll have a quite detailed kind of back-tested model
of all the crazy loops you can do.
But essentially, supplying or borrowing and looping up on an LP,
but your borrowed asset is one of the volatile assets in that LP,
allows you to hedge out your exposure to the one asset,
but still get all of the yields.
So as kind of Smokey said, being on the fence earlier, but in this sense, still looping
up on these PRL enabled assets.
So every time you loop up on something, this is going into infrared, you're earning all
of the points and all the goodness that you could have earned whilst then getting max yield.
So that's the one side on the looping side.
And then on the supply side, again, as I mentioned, that's also going back into infrared.
We then, as a curator, we have a portion of the interest rates that we earn, which we
then funnel back through to PL to actually make for a higher supply rate than what you would have earned just on the flat asset.
So even if we did something really simple,
a classic loop that is very popular on Gearbox on mainnet,
which is just STETH, ETH,
if we did that on Barotrain, because of POL,
it will still be more profitable for the folks supplying their ETH.
Oh, Michael's hopping.
Supplying their ETH, which creates a lower borrow rate
and creates kind of the more feasible opportunity
for people to loop.
So that's why we're quite excited on our end.
Michael's hopping.
Yeah, apologies.
Actually, I wanted to add in something regarding POL itself.
So one thing that I'm seeing on ETH and other networks right now
is that lending protocols
effectively have to compete against the staking, which is what secures the network to begin with,
because it's the same asset, right? Lending protocols want ETH and also at the same time,
staking wants ETH. So it's a constant tussle between the two. If you supply staked ETH,
the yields for borrowers gets completely diluted.
So they are not too interested in borrowing staked ETH itself.
What happens with POL is effectively your liquidity serves also as security for the network,
which means you can grow DeFi protocols and the network security both together.
And that's creating crazy good feedback loops
in terms of even, you know, the LP positions
where we have tried a leverage LPing
earlier back in 2022 and 2023.
But what we saw was it can be negative for gearbox users
if, you know, everybody else removes their liquidity
as incentives go away.
But because of the structure
of Verachain, the liquidity already present in the pools is good enough to provide additional security
for KBOX users. So you don't want KBOX users to be the only people inside a pool.
And POL kind of promotes chain security by providing that additional liquidity
to the pools itself. I think that's a great thing to have and directly removes the competition we are seeing between
protocols and the native staking on other chains.
Again, guys, look, really love that we've been able to do this on the show and really
interesting to hear how this
collaboration came together. And honestly, you just don't see that too often, especially not
traditionally, but even in web free, I think that level of collaboration and the value that you've
been able to get out of it is really, really interesting. I'm sure the listeners will agree.
Smokey, how exciting is this for Baruchain? Like seeing, you know, real projects with real
fundamentals sort of collaborating to get even more from the chain and provide even more value back to the users?
Yeah, I think it's awesome, man. I think that a lot of it comes down to figuring out unique things that can exist here that have an opportunity to compound in value over existing opportunities.
compound in value over over existing opportunities.
And also finding out things and identifying these combinations of
applications that can, again, be synergistic,
but can also help bring in people from other ecosystems and say, Hey,
there's a group I already recognize like Barabarrow and, or sorry,
like Gearbox and they're teaming up with a native team like Barabarrow.
And maybe there's something interesting here that I didn't know was,
was going to be around before. And I think that's like quite healthy.
And I think it also means that, you know, the Gearbox guys get to experiment with a pretty new mechanism
and hopefully deliver a bunch of value for their users. And I think that overall, it just sort of
lends to a bit of a virtuous cycle of projects working together and working to expand their
capabilities beyond what it could have been in a solo a solo context and I expect we'll see a lot more evolution especially in terms of the on-chain
credit yield or on-chain credit world as a whole over the next little while I've definitely started
to see some interesting stuff that even ties you know some effectively you know DeFi protocols
to to people's effectively like real life credit scores as well, which I think is also quite fascinating.
And I'd be very interested to see how, you know,
stuff like that might eventually add up with the stack that's already
existing, you know, with Gearbox and Bear Bar, among others.
So overall, it's great to see.
I think it grows the pie and that's really what matters.
And I also think that what I, you know,
where I have even more respect is where there are teams that are coming
over that are not
artificially incentivized in some weird way, if you will. I think it used to be very common,
and I think we still do see sometimes nowadays, it'll be like, okay, you got to give a big grant
to X or Y big name in order to show up over here, right think that, um, there's a big difference between that and okay, you know, I'm, I'm going to deploy here because it makes sense for the protocol. Right. So I think that is, that's also exciting to see from our perspective.
incentive side of course isn't as bullish as people just being like oh we can offer something
a product or an advantage here that we can't offer anywhere else that's got to be bullish
for everything that's going on here and look we're nearly at close of play like we're 45 minutes in
it's been a great great show i want to thank all of our listeners who've tuned in as well
likes retweets all that good stuff if you are enjoying this sort of content it just honestly
just gives us a heads up like this is like how you like to consume this sort of content so we'll
produce more of it for you guys so if you do like it do show that support do make sure you're already
following bearer chain but also the other speakers on stage and and yeah let's let's look at the
future a little bit more and maybe go over to cobble again and then we'll hear from muggles
on this question cobble what what's on the horizon for you guys?
You know, we've talked a lot about, you know,
just a ton of advantages you guys are building up for,
but what's on the horizon for your platform
in terms of like updates, milestones,
anything that you can share with us that you haven't already?
I think the biggest one that I haven't shared,
but Smoky knows we've been working on for months and months now,
is leverage
liquidity. So one of the biggest bottlenecks we've had as a stablecoin is how do you bootstrap your
organic liquidity with your stablecoin? Because LP is a super scared of impermanent loss. So we've
been working quite a while on hedging out that impermanent loss through our CDP mechanism.
It's pretty close to being done, I say this whole time,
but backtesting everything, so getting really close.
We've been working with another project really closely
to help us get that done.
And that's really cool because what that allows,
there will be vaults created over Barabar,
and that allows people to provide single-sided assets.
Those assets will then be used as collateral to provide liquidity into Kodiak.
So those will be necked, paired with those single-sided assets.
Those assets are then used as collateral to hedge out the impermanent loss.
What's really cool is all these vaults are tokenized.
So they're simple EOC4626, which means they can be used in Gearbox and looped up on Gearbox.
And that's where this starts getting really, really exciting. So allowing for kind of LPs to passively
participate in providing liquidity on assets that previously wasn't possible. And this will also
involve us potentially launching some other synthetic assets which gets kind of fun
but yeah that's what I'm the most excited on
is what we've been spending all our time on since we've really launched
it's coming close and it's also
very good timing
with the gearbox deployment going live
because it means that we can
go live with a bang I guess
and have
other integrations on money markets so
yeah that's i'd say what's on the horizon for us and definitely the most exciting thing um i've
been working on for a while awesome and look congratulations to all the work and everything
that's going on behind the scenes there to make all that come true um muggles over to you any
anything else from gearbox's side that you'd like to keep us updated with? Anything on the horizon, any updates, milestones that you'd like to share? Absolutely. So you know how Peribor was talking
about the other ones curating everything on Gearbox. So that's actually part of Gearbox
permissionless. Around February of this year, we decided to actually go into beta mode and start
testing for Gearbox permissionless.
What Kbox permissionless is pretty simple.
Kbox has been live since 2021.
We had battle tested protocol, but everything was initially decided by the DAO.
So if you wanted to add an asset, if you wanted to add another source of debt, it had to be
decided by the DAO.
This year we are going with the free market model. We have enabled anyone to come on board and set up their own lending markets however
they would want to and you can do that across EVMs and that's effectively what we're doing right now.
We started with Lido and since we launched in March, we have added about $300 million in TVL,
We have added about $300 million in TVL,
4X our entire TVL already, and we're still in beta.
I think right after the beta-borrow launch,
we'll be exiting beta and going with the complete launch
of Kbox Permissionless.
At that point, the DAO won't be managing any of the pools
and it will all be done by individual projects,
institutions, curators, and if anybody wants to set up
a lending market, it's really as easy as setting up a uniswap pool to be honest so that's the goal
again really really appreciate your time today my girls and really excited to see how you guys
keep cooking up and of course cobble and smokey for putting this all together and we're really
close to the end here so i think, just zooming out for the audience,
I'd love to get a final take from the both of you,
a little bit more of general advice for our audience.
So what's one piece of advice from each of you
on balancing risk and reward
to maintain steady crypto earnings?
And we'll go muggles first and then cobble on this one.
Yeah, I'll keep it very
simple if you're new to defy or you do not uh understand the asset that you're entering don't
go for it uh if you understand the asset and you're new to defy just simply lend it uh don't
think too much about it stake it or lend it don't try and go in to you know advanced defa strategies
yet but if you are if you know what
you're doing go towards the leverage side and that's where you have the edge right i think what
vera borrow is doing uh you'll have insane opportunities available just make sure you know
what you're doing that's the most important thing and as far as leverage goes never go with max
leverage that's the one thing uh you do not have to slide that bar to the right to the extreme right stay
in the middle uh never go max leverage that's the best thing you can do in d5 great advice just
personally like i wish i heard that a couple years ago sometimes i went a bit too djn
yeah yeah it is to be fair sometimes you have to learn the hard way as well and i guess
yeah that's that's my side of this is guys if you have learned the hard way you're not the only one
don't don't feel too bad but hopefully we can pass that lesson on so some others don't have to
cobble over to you yes part of the battle scars um i think something simple like definitely
everything margot said is is the absolute key. Something simple that I think people often miss,
and I have spent many hours in Discord tickets with folks,
is reading what happens when you leverage.
So oftentimes you're leveraging between two assets.
These assets might consist of an LP,
and there's fees entering and exiting this.
And even if the fee is as small as 10 bps,
if you're looping 15x,
now you're sitting at 150 bps. So before you do that max leverage, or if you even do half of the
leverage, check kind of what the assets are, how deep the liquidity is, what your effect is on the
assets. Most protocols do add warnings, but we love to just click past things. And as many warnings
as you can add, as much you can show on the UI, people still just do that.
So I'll always say like,
have a look,
try and understand what it is
that you are looping
before you do loop.
And if you're well aware
of what you're doing,
then go for it and have fun.
But that's something I think
people overlook many times
is like the entry cost into position
and how long it would take you
to earn that back.
So yeah,
that's I'd say one little key piece great show like your context on both platforms you've got some general advice
for the audience and yeah we heard a little bit about bearer chain as well so massive shout out
to cobble bearer borrow muggles and of course to gearbox they're speaking on behalf of today
and massive shout out to Smokey and the team
for putting this sort of show together.
And do make sure you're following the accounts, people.
If you're excited or interested
and want to learn a little bit more,
go check these guys out.
Smokey, before we close out,
we've asked for updates and milestones
from our two guest speakers today.
I'd be remiss if I didn't ask the same from you.
Any updates, any milestones,
anything at all you'd like to share
with our audience around Bearer Chain before we close out nothing too crazy man i think that the the biggest
things that we're making slow and steady progress on the the pol staking integrations with centralized
exchanges and i think most of the big players in the space are planning on supporting so we're just
figuring out timelines now and actually some light upgrades to that just to make it even better from a user experience point of view.
For example, the ability to cancel a withdrawal or an unstaking event.
Stuff like that that can just, I think, improve quality of life a little bit.
So let's say someone changes their mind and doesn't want to, you know, take out their tokens.
And then coordinating that alongside the technical timelines with these exchange partners who, as I'm sure you guys can imagine, often have quite a number of things to juggle on their plates, but also have a pretty decent appetite over here.
And then beyond that, I think we're just gearing up for what should be a pretty exciting few weeks going into the conference season across Korea and Singapore.
So we'll be sharing more about some of the events we'll be doing over there and we'll hopefully have some fun news to announce over there as well um apart from that heads down doing the thing
um a couple new hires joining the bear team which we'll be announcing shortly
and uh i think that from from that point we just kind of keep on trucking so that's all i got
awesome dude well look thank you again so much for putting this together
big shout out to all our speakers and look to the listeners as well.
You guys are why we're doing this show.
So thank you for all the support.
I hope you guys enjoyed it and we'll catch you on the next one. Thank you.
