GMGM how's everyone doing?
GMGM how's everyone doing?
GMGM how's everyone doing?
GMGM how's everyone doing?
Hello hello let's wait for Jordy to also accept the Speaker role
It goes well. It's an exciting day.
All right. I think we can just get started.
So just a quick round of intros, and before then, I'm just going to welcome everyone to this space.
Thank you, Mirana, for hosting this.
I will be asking most of the questions here, but we'll keep this pretty informal and exploratory.
Thank you also, Community, for all sorts of questions.
We'll get to as many of those as we can.
We received quite a few, so probably won't get to everything, but we will try.
So, yeah, let's just start with some round of intros. Guy, would you like to start?
Hey, sure. So, I'm Guy, founder of Athena.
Before starting out with Athena, I was working in TradFi at an investment fund looking at financial services mainly.
Been around the space since 2019.
I was first interested in DeFi, investing into it on the side of my day job before starting with Athena.
What we're doing for anyone that's not aware of us, we have taken the vision and was inspired by a piece that Arthur Hayes put together
basically a year ago to today, where he outlined his vision for a synthetic dollar or a crypto-native dollar
where you're essentially taking crypto assets and then using that as collateral to take out a short or a hedge on the other side
where those two things come together and they net off to create a synthetic dollar.
We had a couple of tweaks to his core idea, which was centered around Bitcoin initially.
We thought that to take deep was a more interesting asset to start with here.
And, yeah, we came out with our main net about two weeks ago now.
Had some reasonable growth since then and have been working with both the Marana team who were seed investors
and one of our strongest supporters since the initial seed round.
And then the Mantle team have been extremely helpful to us across multiple fronts in the last few months.
And we're gearing up to start doing our L2 expansion as early as next week.
And so I think it's pretty cool timing now to jump on and talk about those plans.
Awesome, Guy. Yeah, thank you. Thanks for being here.
Jordy, do you want to introduce yourself real quick?
Sounds good. I'm Jordy. I'm the founder of Selene Capital.
And I'm also the chief alchemist at Mantle.
Been working with Athena for some time to see their vision grow and grow.
And it's been so impressive, like how much has grown.
So I'm happy to chat about it today.
Real quick, both Guy and Jordy, what are your PFPs? I'm very curious.
Oh, quite different. Mine, you know, this old Leonidas guy, if you're not following him,
he's like the best cartoonist of crypto Twitter.
He does these like custom PFPs, so he made me a dragon.
Yeah, mine looks pretty demonic actually looking at now on the screen.
But it's like a milady derivative collection called Schizo posters.
Yeah, no more backstory than that.
Awesome, awesome. Thank you. I was very curious.
From Marana's side, I think Mavis is there. Do you want to introduce yourself real quick?
Sure. Thank you. I'm Mavis. I'm a partner at Marana Ventures.
We are an independent investment fund.
And since inception in 2021, we have deployed over $500 million across more than 150 portfolio companies,
including Ithina, Sierra on a seed extent, and also Scurril Siege,
Eigenlears USA, et cetera, and also 27 funds, including both very established funds,
such as Dragonfly, Pantera, and then emerging fund managers, such as Photos, Bankless.
Yeah, at Marana, we are not just investors.
We are definitely partners to the next generation of funders to provide our expertise
and also the dynamic support of both the vibe and the mental ecosystem
to help to turn their groundbreaking ideas into reality.
And I think Ithina is the best example of it. So happy to be here to discuss the vibe. Thank you.
Amazing. Yeah, thank you. Thank you all. I can say from our end,
we were also looking at the Arthur Hayes blog post back in the day
and just kind of trying to figure out how to include some of that thinking
into Mantle and its design and ecosystem.
So really quite exciting guy that you guys are working on this.
And definitely want to learn more about what the difference is between Arthur's designs.
I know the original model was on Bitcoin.
I think his concepts were all based on Bitcoin.
And you guys clearly took a different route, so we can delve into that a little bit later.
But yeah, let's maybe just do a bit of a TLDR and dive into what Ithina actually is.
You've done quite a few AMAs so far, so I'm sure you feel like saying the same thing over and over again.
But I think it does bring a lot of value to just kind of go back to the basics.
So what is Ithina and USDE?
Yeah, sure. So as I mentioned in the beginning, you can just think of Ithina as taking some input asset.
So that can be Staked ETH, it can be ETH, it can be Bitcoin, it can be Solana, it can be anything really,
where you have a deep doer to market that's sitting behind the asset.
That comes into our system and it's sent through to off-exchange custodial solutions
where they're held and then automatically hedged on the other side on centralized exchanges using the perpetual contract.
So we do have plans and a vision to expand that to decentralized exchanges in the future.
But I think one of the key pieces to understand here is that in order to get a product like this to actually scale into the bid-ins,
DEXs on-chain are just not mature enough at the moment to be able to absorb that level of flows.
So centralized liquidity or open interest is roughly 30 times the size of all DEXs combined.
And so we took the decision that we thought users would appreciate the ability to scale and deeper liquidity
over some of the benefits that you'd have executing this fully on-chain.
So yeah, at a very basic level, all that's happening when you come to our app, if you haven't been there yet,
is you're essentially just swapping other stablecoins into our synthetic dollar.
You then have an ability if you want to stake and when you stake in the staking contract,
you're capturing yield from two different sources. So you've got the yield that's inherent within a staked ETH collateral now.
And that obviously varies between assets like Lido staked ETH, somewhere between three and a half to four percent.
And then obviously you also got Meth from Mantle, which is north of seven percent in the last few months.
And the other source of yield is from the futures market where typically you get paid to be short.
And the way that you can just think about this in very simple terms is that crypto is like a very long biased market
where people generally think it's going up through time. And in order to express that view, they often use leverage by perpetual contracts.
And so you can just think of a funding rate as basically the cost of leverage to be long within the system.
And so as the market gets more bullish, as we've seen in the last few months with expectations around ETFs and those type of things,
you've seen the funding rates get to pretty extreme crazy levels.
So since we came out that yield and what I'm describing here is just literally the yield that has come through as a real yield.
This can obviously vary through time. It can go to zero. It can go below zero.
We're just describing what we're seeing on the screen at the moment.
It was roughly in the high 20s and in the first couple of weeks. Last week was in the low 30s.
And then we're about to distribute the yield payment today where it averaged out at 67% for the last week.
And that's like a real yield on the instrument.
So we think it's pretty interesting because you're typically what you're saying on chain in terms of the sources of yield for dollar-denominated instruments.
It's all really one yield source, which is RWAs. We obviously don't have an issue with that.
I think that they're super useful products to have an ability to capture like a treasury return on chain.
And the risk profile looks very different to what we're doing.
But we do think that there are some users who have a higher risk preference and would like to find other ways to get higher returns on dollars.
And this is basically the way of bringing together what is basically the only two forms of scalable crypto native yield into a single dollar instrument.
And yeah, that's that's what we've called the Internet Bond, which is basically putting together state teeth with the basis that's present within futures markets.
Thank you. Thank you for that. So out of curiosity, I think the Arthur original blog post, it did call this design stablecoin, yield-bearing stablecoin or something along those lines.
But you're specifically calling this synthetic, a synthetic dollar.
Why the why they change in in description or definition with this is.
Yeah, I think it's something that we put a lot of thought into as well, which is I think after some of the disasters that we saw last cycle with stuff like Tarolina, we as an industry need to think more deeply around how we're actually marketing different products to users.
It's fine if something has a different risk profile. And I think that that's actually what's interesting about crypto is it allows you to express a choice where no one's telling me you can can't do something.
You're allowed to be an adult and actually just decide does the risk in return make sense for yourself.
And but as part of that, you also just need to make sure that the marketing of products is done in a responsible way so that users who who are sophisticated actually understand what the underlying risks of the product look like.
So I just want to be very clear to everyone that's listening. The risks on this product are fundamentally different to holding a third stablecoin like USDC and USDT.
But that is also literally the point. What we're trying to do is actually provide something that is uncorrelated and has a very different risk exposure to USDC.
Because I think one of the pieces that we identified at the beginning of twenty three, if you remember, when SVP went down, USDC traded down to 90 cents over that weekend.
And all of the other on-chain stablecoins, whether it was a DAI or a FRAX, they all traded down in lockstep on that exact same path on that weekend.
And what that was, was essentially the market looking through and actually identifying the risk profile of all of these stable like assets.
It's exactly the same because all of the collateral is just sitting within the US banking system.
And so we think that it is important for crypto to actually just find its own stable unit of account, which is like our own form of money, which doesn't have collateral sitting within the bank within the banking system.
And so in order to do that, you've really transferred collateral from banks into crypto native exchanges and custodians.
That's not to say it's better or worse. It's just different. And we just wanted to make very clear to users that the risk did look different.
And we just encourage everyone to really read through the documents that we provided, because I do think the documentation around the risks is one of the more transparent ones that you found within the space.
And before you use any of the Athena products, I would really encourage you just to read that.
And we're obviously there to answer any questions in the Discord if you have them.
Thank you. So let's go a little bit into kind of the differences, talking about what exactly is a novel about your solution.
We know there's been a few other kind of these synthetic dollars, I think, USD on Solana a while ago, some other stuff on Ethereum also.
So we'd love to hear about what exactly is different about Athena this time around.
And also maybe we can touch on all of the entire stablecoin design space now, right?
Whether it's the more centralized ones like USDC, USCT, decentralized, like DAI, maybe even talking about the differences between USD and some other algorithmic stables.
And you guys would love to compare and contrast all of those.
Yeah, sure. I think it's been really interesting actually to see the design space for stablecoins actually open up, which I think is great because, as I said earlier,
I think it's a fantastic thing that people are able to express different risk preferences on the stables that they hold.
So I think everyone's familiar with USDC and USCT. That's like pretty obvious what they provide to the system.
But I think the one interesting piece to call out there is that typically they're not paying a yield.
So USCT internalizes all that return to themselves. USDC pays some like on Coinbase, but like for average users who are using USCT within DeFi, you don't get a return there.
So I think one interesting dynamic that's emerged in the last 12 months was as rates went from zero to five, there are a few projects that popped up that allowed you to capture some of that treasury return in a yield-bearing stable on-chain.
I do think that's like interesting and it is a fundamentally useful product for people who are living outside of like the center of finance within the US.
And if you're on the fringes and have an ability to access dollars with a yield, that is actually a fundamentally very important financial asset for most people who are living in emerging markets.
I think there are some question marks around just how the regulatory environment and treatment might actually evolve for that type of asset because it's obviously a pretty sensitive financial asset to have a treasury being distributed through DeFi in permissionless markets.
So I think different teams have taken different approaches in terms of how they are approaching KYC and your ability to actually throw that asset into AMMs.
But I do think it's a pretty interesting design space for people to be working on. But I do have question marks, I think, in a bull market where you have seen with RWAs, which I find quite surprising, is that even as stablecoin supply basically bottomed out in October 23 at the back end of last year,
we've added about $20 billion of stablecoin since. But actually RWAs lost 25% market share, which is a pretty crazy stat, I think, like relative to the narrative that you've seen around RWAs.
And I think what was actually happening there was that crypto native yields, whether it's like capturing the basis like Athena is doing or other forms of crypto native yields, they started to exceed risk free rates for the first time.
And we actually saw like RWA market share decline pretty significantly while the market has been expanding.
So I do think that they have that comeback in the bear market. But during a bull market, it's quite difficult to justify, I think, having your capital only returning 5% when yields so much higher through the rest of crypto, whether it's DeFi or CFI.
And then I guess just like touching Athena, I think the one key difference that looks different between ourselves and another on-chain stablecoins is typically the most popular model has been something like a CDP that you see with MakerDAO.
I think it's an incredible project in business. And I think it's one of the most impressive cash flow machines in the whole space, MakerDAO.
But the one piece around that is that it's obviously just slightly less capital efficient because you need to put up $150 to $200 of collateral versus every $100 of stablecoin that you're producing on the other side.
And so with the Delta neutral design, you really only need $1 that's going in to create another dollar of USD on the other side.
And then obviously, there's a structural yield difference here where anything on-chain that isn't touching centralized perpetual markets just loses out on the ability to capture that yield source.
So where you're sitting on-chain, you really only have like two forms of yield that you can capture, which is staked ETH returns, which you can put on a CDP and capture part of that like 3.5%.
Or it's RWAs at five. And so your ability to actually produce super normal returns on the dollar instrument is pretty constrained when you're sitting on-chain.
And so I think one interesting development that you might see in the next few months is actually Athena's ability to actually plug in the infrastructure that we provided connecting DeFi to CFI and actually plug it into some of these other on-chain stablecoin projects where they can actually use Athena as a source of yield.
So you can sort of think about it as like vampire attacking the yield from CFI into their own unit economics.
So I think that that's going to be one interesting place where Athena doesn't really see we don't see ourselves as competition to these other assets.
It's a very different type of product offering. We actually see ourselves being just useful info for these other projects to plug into and use as a piece of diversification or as an alternative yield tool so they can get otherwise.
Thank you. And obviously there's been a lot of excitement. A lot of people are talking about Athena. You guys have been growing in a massive scale in the past few weeks.
Where do you think this excitement is coming from? Like what's the reception been? And maybe Jordy can also touch on this a little bit from kind of what you're seeing from your side.
Sorry, was that to me or to Guy? Either one. Go for it.
I've been hogging the microphone. You can jump in if you want to.
Yeah, I mean, you know, like the demand for leverage is so high during a bull market and that can last for a week long time as we saw in 2021.
And, you know, for investors that are not just all aping, you know, have your meme coin bag or do whatever, you know, you're doing on the one side.
But if you're also, you know, wanting like your savings to generate yield, it's just this insane opportunity.
I mean, compared to being in a bank and like dealing with like the four, three, four, five percents there, you're just providing a service for the community out there who wants to leverage long.
And you're saying, okay, like, here you go, like go for it. And you're getting paid, you know, ridiculously well and stably.
So, you know, the excitement is around everybody has a part of their portfolio that's in stables, right? And so rather than managing the process themselves and trying to get into basis trades, you know, you create a product that is a very simple UX where you can just generate yield.
And then you have all the nice Web3 stuff like, you know, the guys that have done a cool job with the shards and, you know, it's another, I guess, version of points, but, you know, it makes it sound a bit less lame at this point.
You know, the word points makes me a little bit nauseous. I love that they changed it.
Totally different. I don't know what you're talking about.
I mean, on our side, we had miles, right? We distributed 25 million MNT as miles. So we're also not jumping on the points bandwagon.
Yeah, interesting. So from your side guy, like, how has this reception been so far? Like, what gets people excited?
And also, like, maybe at the end, we can touch a little bit on the kind of risks and how, you know, what your responses have been to a lot of the a lot of the fun that we have been hearing from the community.
Yeah, I think we were actually quite surprised, I think, by the attention it grabbed.
We'd been around for a while, actually, before we came out a couple of weeks ago, and no one seemed to care that much about what we're doing in a negative sense.
And I was slightly taken aback, I think, by some of the negative reception, I think, from people who hadn't even really like spent 10 minutes to actually understand why this is different to some examples that we've seen with with Luna and stuff.
Having said that, I think it's actually quite positive that the space is being more skeptical about new products that are coming out with what are like headline, you know, pretty eye catching like yields.
And I think it's actually like we as a team sort of embrace that. And that's why I've been jumping on spaces like this.
We did our own Q&A to just address some of the concerns that people raised on the first week, which we've recorded and people can listen to on our Twitter.
So, like, we're definitely open to discussing these risks. And just speaking, like, my personal approach to these things is if people do you think that there is like fundamental issues or fragility within the system.
I have like no pride in adjusting things or actually just talking about them now, rather than creating a bigger problem, like, further down the road.
So we're definitely open to that feedback. But we're just asked that people actually spend a bit of time to understand how this works, because people have been doing cash and carries for 10 years in crypto.
This is not that new as a concept. It's actually how, like, a lot of the more prominent characters from like previous cycles and guys have gone on to build big businesses within crypto found their way into the space, which was actually just looking at how out of whack and unlevered
cash and carry was relative to the risk that you're actually taking on. So Arthur's actually written about this like previously, which is like his first entrance into the space was doing this at two to three hundred percent back in 2013.
This is like before Bitmax was even founded. And, you know, we speak about like the institutions coming and like these things shouldn't exist.
These options exist like this level of retention exists. We've been speaking about that for like five years.
But here we are when last week funding was like between 60 to 100 percent.
So I think we just looked at that and thought like we've been speaking about it for a while, but no one's actually come in and put together the infrastructure, which actually closes that down to a return.
That makes sense. And I have encouraged some people to just think about Athena.
I think there's one element of it, which is the synthetic dollar, which we think is fundamentally important for the space and is a useful product.
But you can also just think about Athena as a really like an interest rate arbitrage vehicle between DeFi, CFI and TradFi, where it doesn't make sense that you can go on to make a Dow and borrow dollars at like six and a half percent and then get paid 60 to 100 percent last week on CFI.
And all Athena can be thought of like is just providing connective tissue between borrow rates and different elements of the market, which aren't really connected at the moment and bringing those more in line.
And really, USD is just the balancing item, which allows those interest rates to converge.
So, yeah, that's like going back to the original question.
I think it's obviously nice when people take an interest in what you spent time building and focused on for the last few months in a year.
But we were, I think, quite surprised by some of the negative reaction.
But like looking back in retrospect, I think it is actually sensible that we as a space do question things with a bit more skepticism when they come out because we didn't do enough of that last cycle.
Yeah, 100 percent cannot agree more.
I think the two most common sources of FUD that I see is the kind of funding rates turning negative eventually, very likely, and also potentially the underlying asset depegging.
So could you could you just touch on those two to kind of concerns from the community?
Yeah, I think on the funding rates, it's actually one of the key reasons we included stake details as an asset within Athena because it obviously provides you just another margin of safety now for if you do get negative funding that's there as a first line of defense.
I would encourage people to just look at the data that we provided, like back to 22 because I think it's quite useful to just contextualize like how bad did funding get when the entire space was going to zero.
And, you know, every 10 figure balance sheet in the space was like blowing up or going to jail. You could actually just look back and say, how bad did funding get?
And I think it was interesting to see that even like during 22, you didn't really even average negative funding then it was still slightly positive above zero.
And you didn't really even have quarters like entire quarters where where funding was more negative than the yields that you're generating on stake.
Having said that, like if Athena does get to a much larger size, you can only rely on historical data to some extent, because Athena is going to play some role in actually influencing those rates going forward.
So on top of that, we've added an insurance fund, which at the moment has been capitalized with actually the funds that we've raised as a team from the private rounds.
And again, we didn't have to do this. This is like money that usually a team would raise and actually just pay their own salaries.
We're putting this behind the product because we believe in it.
And we actually just want to give users confidence that we're putting our own capital that we've raised behind it.
And then in addition to that, there's also yield that's been captured as part of the yield that's generated on the entire Athena portfolio.
Some of that is also going to capitalize this fund as well.
The final comment I just have around the funding is what I've just described that like fine, you can you can like accept that or you can you can look back and say like the historical data means nothing.
We don't know how the future can look. I would just try and like frame the thinking rather than don't be scared about things going negative because it's a self correcting mechanism.
When the funding rate goes negative, that's actually just the market expressing that Athena or USD is too large relative to the size of the market.
And that short interest needs to be lifted from the market.
And when the when the break goes before it even gets negative, to be honest, when it goes down to like sub 10, when it gets to five or to zero, users are naturally going to go, all right, I don't want to hold USD.
I want to go into an RWA or I want to go into USDT or whatever it is.
And in the process, as I'm actually stepping out of Athena, we need to close the shorts to be able to redeem the collateral back to users.
And in the process of doing so, that obviously allows funding to mean about down above zero, where it's a self correcting mechanism and can just find like a new equilibrium.
So it is really actually quite cool to the design that Athena is just responding to market interest rates.
And if those interest rates are pushed too low, it just means that the supply of Athena's USD needs to shrink to allow that to turn positive again.
So I'm a big believer that like you shouldn't step in front of these market forces.
And so long as we're not artificially changing those rates, like you saw with Anker, I think it's a self correcting mechanism where if we need to shrink, then we shrink.
And that's kind of the whole point.
And in terms of the insurance fund that you mentioned, like how large does that have to be in order for you guys to kind of manage any potential negative funding rates for a moment?
Yeah, we did our own analysis around this and then Chaos Labs did a separate piece.
So it's roughly between two to three percent of the outstanding supply we think is a sensible amount to have in that.
So basically growing the insurance fund as you guys are growing in TVL?
Yeah, we should be. So that can obviously come from two sources. One is just capturing like the yield from that's actually being produced.
And so when you're producing what was like 67 percent last week, there's obviously some scope for you to be able to add to that fund for a rainy day.
And then also, you know, when we're more decentralized and I've actually put like proper governance structures around Athena in a few months, there's also an ability to obviously sell tokens that are sitting within the treasury for like hard dollars to investors.
That's something that Lido did, for example, in twenty one or twenty two where you just sell part of your your treasury into dollars.
I think that that's like an interesting way as well to just help really capitalize it up front where you don't realize much on the ongoing yields.
Gotcha. Gotcha. And sorry if I miss this, but but in terms of the potential, of course, it's very unlikely.
But if there's some deep pegging events happening with the underlying asset, like what is the what is the kind of risk mechanism here for Athena?
Yeah, I think Jordy said that method is never going to be pegging. If it did, he was going to step in there. So I don't want the risk actually is that.
No, I think jokes aside, like the the whole the way I think about this is actually very similar to a normal stablecoin where bonds that are backing a stablecoin have different durations.
So some of them are like less than 90 days, some of them are longer than that. And that duration risk is actually very similar to the way you can think about an RST where sometimes that price can actually deviate from from ETH.
And it only becomes an issue when everyone wants their money out at the exact same time. And there's a difference in the price of the LST versus the hedge, which is denominated in ETH.
And so if everyone withdraws at the same time and there is a difference, then there is going to be lost to the principle of that position.
The one thing I would just point out here is that I don't think this product would have worked in twenty two before we had Chappella in place.
Now you have an ability to obviously redeem LSTs for underlying ETH. And that obviously means that the price difference between LSTs and ETH will struggle to ever get below levels that I think we saw when three hours blew up in twenty two.
So that's not to say it won't happen and we won't see like small deviations around the price. But I'd be extremely surprised if we saw anything anywhere near as deep as what we saw then just because it's a fundamentally different structure now where you can actually get your hands on the underlying ETH rather than like an unknown duration like we saw when three hours went down.
But I think the final comment here is that there is like no free lunch in finance. So if you're going to be getting yield from LSTs, you are assuming some risk of duration.
And it's really cool to the product construct that we put together, which is there are LSTs in here and you need to understand that that risk exists and that's where the yield is coming from.
So if you want to come and use Athena and you want to capture that yield, you're assuming some of those risks around the duration on the LSTs.
And if you're not comfortable with that, then do not use the product because that is really where the yield is coming from is because of that risk that you're assuming.
Well said, thank you, Guy. So let's go. This next question is a little bit more maybe for Mavis and Jordy, but Athena has been selected as kind of this showcase app for Mantle.
You know, we have a pretty significant strategic alliance together. So I'd love to hear from Jordy's side.
You know, what are the synergies here? Like how is Mantle and maybe even Murana supporting Athena's roadmap moving forward? What are the plans?
Yeah, you know, we have increasingly been more and more thinking of Iskina as a strategic core partner.
The reality is that when you're competing against other L2s, you want to have really good yield on your chain for people to have both on the each side and on the stable side.
You know, I think we've achieved that with meth. It's by far the best product out there. I can't imagine holding my Ethan, not meth.
And on the stable side, you know, we've been kind of at the forefront of trying to get users good yield.
You know, we have USDY. For example, we're the first ones to have USDY. So Treasury yield.
I think at this point, there is a lot of fragmentation between USDC, USDT, USDY, you know, maybe other options.
What we've started moving towards just to kind of give a glimpse internally is we want to sort of like how Athena is diversifying.
Like I said, you know, their stablecoin and two, like you will have different Treasuries backing, for example.
We would love to just consolidate all the liquidity into one stablecoin that will be used as a core stablecoin on Mantle.
And behind that stablecoin, you know, we want to have a strong yield.
And right now, the yield that, you know, is on DeFi, is on Athena, is much higher than, you know, even Treasury yield.
So, you know, we would try to look to combine different assets in a really good risk sort of risk return way that gives a really good yield and also provides, you know, the safety and liquidity overall.
So we're looking at, you know, as kind of a core part of that.
Not sure if you want to touch on this, but how would this differ, for example, from, let's say, USDB and BLAST's kind of native yield-bearing stablecoin design, if you can share a little bit?
Yeah, I mean, everything that we do, we kind of take the hard road.
I would say BLAST has taken the easy road and everything, you know, whether it's just, you know, put it into multisig and it's fine.
You know, they drop it into Lido.
We've obviously, you know, built from the core up an actual LSP instead of putting it into Lido.
You know, and then on the stablecoin side, I think, you know, they've basically kind of just thrown it into DAI, like SDI.
You know, at this point, you know, we've been working on designing a way that creates a mechanism that allows people to mint and redeem different stablecoins into a unified stablecoin
that will actually, like, have a lot of rewards.
So we'll give the full details on that once it's ready to publicize, but it's quite different.
All right, all right. Some alpha here.
Mavis, anything from your side and Mirana's side?
Like, how are you thinking of this kind of Ithina roadmap and relationship?
What gets you excited about Ithina?
I'm sure I think Mirana has always acted as a venture partner for Bybit and Mentos,
which means that we are the technology partner for Bybit Strategic Gifts and the operator of the Mental Ecofount.
Thus, we have a very close relationship with Bybit and also Mentos.
So since last May, I've been working very closely with Guy on the integration with Bybit side
and also hope that Mentos side can provide enough TDL to support Guy from zero to one as well.
I think the most crucial piece of Ithina is the off-change custody solution,
because Ithina definitely wants to minimize the counterpart risk while to have the, you know, 24-7 audibility and also transparency.
I think as all of us know, like Firebox Copper have been working on this piece for a really long time,
and especially since post-FTX or their institution, especially large institution clients,
they want to have this tri-party custody solutions. However, it hasn't been really induced.
So with Bybit integration, I worked really closely with Guy with Bybit's institutional sales team
and also financial product team to ensure that, you know, this piece can be actually put into the use.
And luckily, during the private beta time of Ithina, Bybit became the first centralized exchange
and to provide all the central exchange liquidity.
As all of you know, like more than 90% of Ethereum open interest is Binance, Bybit and Okac.
So I think from our side, Bybit is very proud to be, you know, the day-long central exchange partner of Ithina.
And then going forward, we were continuing to support Ithina with more collateral support on that side.
And then from the mental side, I think Jordi can elaborate on this more,
but then I believe that we have the largest TVL provider out there as well.
We have a chunky, you know, size-to-size position. That's all I'll say.
I think the one thing I can, since it's public, I can mention is,
and this is one of the kind of unfair advantages the mental ecosystem has, right?
We have obviously the strategic relationship and partnership in alliance with Bybit.
We have a treasury that's hitting all-time high today. It's at about $4.2 billion.
And if you go to mantle.xyz, you scroll down, you see the kind of what the treasury is, you know, consist of.
If you've seen DeFi Llama page before, it's been incorrect.
It doesn't index all of our wallets. But yeah, it's at $4.2 billion.
And you can see that $100 million so far has been in USDE with Ithina, of course.
So yeah, from like Jordi, as you said, like building from the ground up,
thinking about these kind of mechanism designs from first principles.
I know we, and especially you Jordi, you've been talking about native yield from maybe a year ago,
much before any other L2 network where we're kind of using the word even.
Yeah, all of this ecosystem advantage anywhere from Bybit to the shared treasury size that no other L2 has.
It's a very exciting time here in the mental ecosystem and all the partnerships that we're working on.
Let's go maybe into some of the community questions next.
So the first question here was, Ithina is launching on various different L1s and L2s.
What are the differences between those launches versus mantle launches?
Yeah, so if you could talk about a little bit working with mantle versus other chains, that'd be great.
Yeah, sure. So I think mantle is going to be the first way we're actually up and live before any of the other L2s.
So there's been a few different announcements, which I think are a bit more passive in terms of the involvement that Ithina is going to have there.
So there are other chains that are doing similar things to blast where there's just, you can think of Ithina as like neutral infrastructure that's sitting within the bridge
or just in the background to provide native US dollar denominated yield.
So that's obviously just a bit more passive. But I think what we at Ithina like, we're most interested by and I think drawn to mantle by, yes, I think the capital support is obviously huge and immense to get up zero in the beginning.
I think that it made like a ton of sense across different areas, whether it's us actually bringing liquidity, open interest and trading fees to buy bid.
But then also finding like another use case for meth as like collateral that's sitting within USD.
There were just like a bunch of different touch points that I think made sense across various pieces of the ecosystem.
But I think the piece for me that stuck out the most was actually I do get the sense that a lot of different L2s are just trying to run as fast as they possibly can at the moment.
And I think just capture what they can out of out of the bull market. It's obviously clearly here at the moment.
But I think what we observed from the outside in was that mantle, I think actually had a lot of these ideas before they became popular with some of your projects that have come out, whether it was like focusing on yield or focusing on DeFi.
And actually, you guys have been doing these things for months in a more controlled and I think thoughtful way than some of the other participants who came to market in a loud and quicker way.
And I think just from the perspective of someone who's developing an app, you want to always feel that I mean, there's always risk sitting around the application that you're building itself.
But you always want to feel that actually the base layer that you're building on is safe and secure and actually with people who are being responsible at the base layer, because if something goes wrong there, that's ultimately going to completely crush any plans that you had at the application level.
So I think that the mantle team and across the various touch points that we've had strike a really good balance of being commercial and trying to move quick on new and innovative ideas.
But then actually being quite thoughtful and careful around the way that they approach it where I think you want to be in an ecosystem where there are curated applications that you can actually compose with and integrate with.
And I think that the mantle team has done an incredible job of actually finding extremely high quality DeFi apps, which are new, like net new, not just actually like talking over old apps from from either one, but actually new teams have come and chosen to build here.
And I think that's obviously just great, because that's what's actually interesting about DeFi is your ability to interact with these different apps.
And if you feel like you're coming to a ghost town without different apps doing different interesting things, it's not that exciting.
So I think that's the piece that stuck out for us, which is actually the thoughtfulness around building DeFi infrastructure in an innovative but like controlled and secure way.
And then I think their ability to actually draw in application developers who are coming with new and interesting products just makes it sort of better for everyone who's joining after that.
Well said, thank you. Thank you, Guy. The other question, which is perhaps related to this, is when can users expect to use USD or USD and DeFi protocols?
Yeah, so on Ether one, it's basically as soon as next week. So on some lending platforms like Morpho, you should be able to do some interesting stuff in terms of looping SUSD and USD next week.
We've had government's proposals in with Aave and we're doing something interesting with Spark as well, which we can reveal some more details on next week.
So on the money market side, there'll be some interesting use cases that I think start to pop up next week.
I think with Mantle, the analog there is probably within it capital, where I think the hooks idea that they're doing around money market liquidity is actually super interesting and like SUSD there is just a very clear use case that makes a lot of sense.
The other places are within AMM. So what's quite interesting now is you have an ability to actually power up to yield bearing assets within an AMM.
So you can put together what we've done in Ether one is you have SDI with SUSD paired up within an AMM.
And so there you're capturing like two different and uncorrelated sources of yield in a single position where you've got the treasury returns from SDI.
And then the crypto native returns from SUSD.
So you can sort of think about that like is that an all weather rates portfolio that's that's pushed together in an AMM that's capturing yields on both sides, but then also the trading fees.
So I think we're looking at something similar with Jordy and the Ondo team on Mantle, which I think is going to be quite exciting in terms of how you just get more capital efficient with providing liquidity on chain.
And then the last one is actually just thinking out perp DEX is where you're trading usually with an instrument that has no yield.
So on most of the perp DEX and SEX is if you're putting down dollars, whether it's USDT or something else, you're not capturing any yield while you're doing that.
What we think is quite interesting is actually using USD is perp margin collateral where you can actually have an embedded yield while you're trading.
So that's been something that's been quite impressive.
I think with meth, for example, you can actually take that onto by bed and use that to margin your trading positions.
And I think actually one of the biggest use cases for SUSD is actually going to be trading firms or individuals who actually put a lot of value on that capital efficiency.
And if you have an ability to generate 10, 20, 30 percent returns on the instrument that you're actually trading, that's like a very meaningful thing for some of these large trading funds.
So if you're holding a hundred million dollar position, giving up 20 million dollars of interest is actually a pretty big deal.
And so, yeah, I think using that as collateral through DeFi makes a lot of sense.
I think, yeah, the basic answer here, I think, is that stable like assets are plugged in everywhere.
It's like 90 percent of trading volumes are in dollars, 70 percent of the transactions on chain or dollars.
And so really dollars touch everything that we're doing.
And we think that having a dollar with the highest return is probably the killer app of DeFi.
And so any app that is building any kind of financial structure will have some way that using or building infrastructure around SUSD makes sense in some contexts.
Thank you. And next up here, so our community members are wondering about your shard campaign, as Jordi was mentioning before.
But I think you've mentioned that the campaign will last until you hit one billion TVL.
Well, you're pretty close to hitting one billion TVL. I think you're at 830 million somewhere there.
So what are your plans for shards after you hit that key milestone?
Yeah, we're going to be releasing a public announcement around this as we get closer.
So it's not going to be as like as we hit a billion. I think just before that, we will be releasing just a bit of an update in terms of how we're planning things going forward.
We did mention in the original blog post that it was going to be the sooner of three months or a billion dollars when we stop adding new epochs to the campaign.
So as we get up to that billion dollar mark, we'll just put out the last blog post, which outlines like the final epoch.
And in any case, whether we get to a billion or not, we are going to take the decision, even if we don't reach a billion, that we're going to be ending the shard campaign in the first week of April, regardless.
So, yeah, that's as much as is public right now. We'll share more as we get closer to that milestone.
One billion dollars. Definitely going to get there. Come on. Don't say like what if I'm pretty sure that the momentum is going to continue. We're getting to one billion dollars.
You need some of that seraphim conviction guy.
OK, well, one of the one of the questions was about blockchain trilemma.
I think I think the community member probably means stablecoin trilemma was perhaps more more fitting.
So I think the if I if I remember correctly, the stablecoin trilemma as being a censorship resistant, scalable and stable.
Yeah, if you can touch on those things, kind of how you see your Athena solves each.
Yeah, I think the stablecoin trilemma like as it's presented is actually a pretty real one.
Like there isn't actually a way to address all of them. It's more about how if you want to more narrowly define how you actually want to attain qualities of each of those three pieces.
So I think from our perspective, you can always think about Athena is basically sitting in the middle of all extremes.
So it's not perfectly decentralized like liquidity. There's centralized touch points like custodians or sexes.
But equally, it's not sitting within the US banking system outside of the crypto ecosystem.
And so it's not the same as Tether and USDC. So we think that there's like an interesting middle ground there on the decentralization piece where, yes, it's not perfectly decentralized.
But it's actually crypto native, which is actually quite important for some people who don't want to have reliance on the system that's outside of our own equally with the scalability.
You can think of like normal feedback stablecoins as effectively infinitely scalable where they can get as large as there is demand to have them.
Athena is absolutely not infinitely scalable. So we're still constrained by the size of derivative markets within crypto, which are pretty big, though.
So right now, majors on BTC and ETH are just over 35 billion of OI.
And I think a rough thing to think about like how big can Athena get relative to that market size is roughly in the order of like 30 percent of post money open interest.
And what I mean by post money is like once we add our own OI, are we 30 percent of that number afterwards?
So I think if the market didn't grow at all from where it is right now, there's about 10 billion of capacity that I think Athena could fill across both BTC and ETH.
But I would also just look back on my cycle and just point out that through the bull cycle, the open interest actually grows at a quicker rate than market caps, i.e., when market caps are going up 1x, the derivative market is actually growing at 1.3 to 1.5x.
And so even if you think that ETH, wherever it is now in sort of like the low to mid 3000s, even if you think that that's going to be twice of where it is now, we actually think the derivative market is going to be growing more than that going forward.
So yeah, that capacity obviously expands pretty dramatically through time.
So I think summarizing all those pieces, we're not perfectly decentralized, we're not perfectly scalable.
The stability point, I think you can just look at the coin gecko charts that are out there now.
It's been trading within a band of like 15 basis points around a dollar pretty consistently.
So it's held peg better than any of the on-chain CDPs in the last few months, which have been at like 99 cents for months now.
And yeah, I think that that's the only comment on the stability piece right now.
Thanks. And then last question actually here on my list, and then maybe Jordi, and maybe if you have some other ones, you can ask.
So community is very interested in what kind of collateral assets.
I think you had plans for BTC, but is there anything else that you're considering for ETH in a collateral?
Yeah, I think Solano is definitely possible now.
So when we were first putting the product together, it was kind of when it was at the bottom of the FTX situation at the back end of 22,
and the derivative market around Solano just didn't really make sense as like a size first to think about.
What is quite interesting about Solano is obviously the proof of stake yield is higher,
which if you're holding sole and you're just net long sole, it's kind of just left pocket, right pocket stuff between people who are staking or not.
So you can make that number five, ten or whatever. It's not actually like real value. It's just sort of like a reallocation of value.
But what's interesting is if you're delta hedging the collateral, that becomes like a real yield because you're actually hedging out the yield of the staked sole returns.
So Solano staking is actually higher than ETH, and then actually the funding rates are significantly higher on Solano, which had been pretty consistently above 100% from even Q4 last year.
And now Solano open interest is north of a billion and a half dollars.
So I think that that is actually quite interesting now, where we as a team just need to focus our engineering efforts on big markets that actually make sense for us,
where we could add mid nine figures of supply before we even think of adding it.
And I think that Sol has basically crossed that mark now, where the economics look interesting enough and the market size is large enough.
So yeah, for us, it's just a matter of sequencing between starting with ETH and then deciding which of those two other assets make the most sense going forward.
All right, guys, well, thank you.
Jordi, Mavis, do you have any any other questions for Guay, guys, or anything you want to talk about or point out?
You know, just just so happens that I'm going to be hosting guy on Steadylabs in a couple hours.
So I'm going to leave the next spicy stuff for there.
Sorry, guys. Join us there.
Yeah, if you're not following Steadylabs, please, yeah, just go on YouTube and subscribe.
It's I've been a I've been a follower for quite a few months.
It's one of my favorite podcasts.
Mavis, anything from your side?
Actually, I would like to actually share his final journey with many of the developers who's listening to this.
I think many of the people out there in the industry would claim that they have thought about this idea a long time ago, but none of them actually executed.
And I think Guy definitely is such a, you know, driven and focused founder who actually got all these and tried to change to be his, you know, go to market partner from day one.
So I think he is so well deserved to share his fun journey and inspire more developers who is building incredible groundbreaking products.
Yeah, I think from my perspective and just like echoing the comments at the beginning of the chat, like, whether it was like the support that we got from Arana or from Mantle.
It has like really been above and beyond all the support that we got from from investors that we've had throughout this journey.
I think whether it was some of the pieces that we touched on just getting us in front of the right people actually outside of the organization as well.
And then within Bybit and making sure that those conversations could actually progress so that by that was actually like the first exchange partner for us when we launched.
Obviously, all of the things that we sort of discussed around Mantle support, both from an liquidity perspective and actually like strategy and go to market has been immense for us.
So yeah, I think my perspective and the whole thing is I couldn't really recommend being part of this ecosystem and these investors like more than I have already.
I think it's been an amazing journey for us and we're excited to continue going into this year.
Yeah, massive massive credit also to the Mantle DeFi team. I see DeFi Maestro listening here. Go follow him. He's an absolute giga chance.
So you'll find some alpha there. But all right. I think from our side, this is this is it. Thank you.
Thank you, everyone, for listening in. Thank you, Guy, for for teaching us about Athena and all the things surrounding Athena.
Thanks, Jordy. Thanks, Mavis, and see you around.