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Liquidy 🤝 THORChain: A DAO Market Maker that will bring ~1M of assets to bootstrap liquidity on the AppLayer 🚀
Recorded: June 1, 2025 Duration: 2:11:06Space Recording
Short Summary
The recent discussion centered around the launch of the Ruggiero app layer on ThorChain, highlighting its potential to transform decentralized finance with innovative token offerings and strategic partnerships. Participants emphasized the importance of increasing yields for node operators and the need for ongoing recruitment to enhance network security and growth.
Full Transcription
Thank you. Hey everybody, what's going on?
We're just going to get people on stage.
We're going to get started here.
Just a moment.
Guys, if you would, please share the space.
Let's get some people in here. It's going to be a fun one today.
Hello, just testing the mic.
You sound absolutely marvelous.
Perfect.
Okay. I got some more people come in.
Hey guys.
Hey guys.
Welcome.
Welcome.
Share the space, please. what's going on man how you doing i'm good just getting over my fomo for missing you guys at
vegas yeah dude okay so got a little bit of a story for you bro for those who don't know
um kenton was nice enough to, uh, um,
give me his, uh, ticket for BTC Las Vegas. It's not really a give. I owe him a massive steak
dinner, which I will be honoring and Coke and hookers. There you go. Cook and hookers and steak
all at the same time. Right. Very important. So, um, so I show up at BTC Las Vegas. I did not know that JD Vance was going to be there
the day that I was checking in. Okay. So, so I'm in line and then I'm thinking to my head,
I'm like, wait a minute, maybe, is this really a good idea? Like, cause guys like JD Vance wasn't
in the same room as me. And for those who don't know, that's obviously the vice president. He's
like hundreds of feet away from me. He's not in not the same room but it's like stupidly close and i'm like is it smart to go under the different identity of someone with
my ticket like you know and so i'm walking i'm like i don't know if i should do this but then
i'm like you know what the hell with it i'm gonna do it so i go up kenton i talked i go to the lady
right she looks at me and i'm totally calm, and she says, what's your name?
And I look her square in the eyebrow.
I'm like, my name is Kenton.
Kenton Ralph Toes.
Fucking charisma, buddy.
Gave me that thing, no problem, no problem.
And then I carried on.
So I showed you.
Are you serious?
Is that a true story?
That's damn true, man.
Yeah.
That's awesome.
Sweet.
I love it.
I was nervous.
I'm not going to lie.
Did you talk to him?
No, no.
I didn't talk to JD Vance.
He did a space.
But he was – dude, I mean, there was so much security there when you pull into the Venetian.
It was crazy.
It was crazy.
But that was fun.
I had a great time, man.
So, hey, we've got to meet next time okay
for sure 100%
they do free tickets
I got a free ticket I don't know if anybody else saw that
for the next year
there's some promo
check your emails guys
from the conference I got a free ticket for next year
I don't just limit the time or if that's what
they're going to do that now going forward I don't just limit the time or if that's what or if they're gonna do that now going forward
i don't know um yeah well there you go guys make sure to check your emails maybe you've got some
free tickets okay guys um one last reminder to the share of the space we're gonna get started here
um we're gonna be talking about liquidity today now i'm gonna go through introductions and i'm
because everyone's position on you know from, from their reference is unique. Everyone looks like they're close to me.
I'm just going to go from left to right for introductions on people. So for those who don't
know, in case no one knows me, I'm Patriot Sounds. I'm a moderator. I'm an educator for ThorChain.
I do various spaces and a bunch of different content. And I've been doing this since 2021 now.
And I love every minute of it.
We're going to go to Pragmatic Monkey.
Como se va, mon ami?
Go ahead and introduce yourself.
Se va bien, merci.
Hello, everyone.
So, yeah, I'm Pragmatic Monkey.
I'm now mostly part of the RootGera team,
trying to really get things moving on the app layer.
And that's where I spent most of my time.
But I used to be one of the key contributors to Liquidy before that,
when it was still Montadao.
So I obviously know the guys very well.
I'm still involved there as well.
And there are tremendous synergies between Ruggira and Liquidy.
So I think it makes a ton of sense to have this space today
and get the Torch and community to learn a bit more
about what can be done with the data
tooling we will have on Rogira, and hopefully even
inspire others potentially to launch similar initiatives.
Because it's not a zero sum game.
The more we do that, the more it benefits for the players and the more liquidity we add overall and the more volumes we can facilitate on the RUJI trade order book and the more fees for both RUJI stackers and Torchain.
Perfect. Awesome. We're going to move on now to post TenetBras.
I'm sorry if I say your name correctly. Go ahead and give us an introduction.
Yeah, no, that's perfect. Thanks for having us on. Post Tenant Bras here. Everyone calls me PT. That's easier.
Yeah, I just, so me personally, I've been kind of involved with Kujira, now Rajira, since they relaunched since the Terra days.
uh, Kujira, now Rajira, uh, since they, they relaunched since the Terra days. So
actually, uh, I was a fan of them back in the Terra days. Um, obviously everything imploded
back then and they were, uh, you know, it was sort of like a scattering event. And,
and so Kujira went and launched their own chain and I've been, uh, pretty active with them since
day one, uh, when they launched it, very excited about it about it. Now they're moving over to ThorChain.
So obviously lots of stuff happening.
And essentially, since MantaDAO, which is now LiquidYDAO,
the new rebranding since MantaDAO launched,
I've also been involved with them since day one.
I'm kind of proud to boast that I was the lowest buyer
as far as the price of Manta on Fin. I bought it at five cents on day one when it launched. So I
think that's the lowest price that it ever traded. So yeah, I've been pretty involved with Manta
since day one and Kujira since day one when they launched.
And yeah, really excited to be pushing this forward.
And we can talk about exactly what the rebranded Manta DAO now, Liquidy.
Liquidy Finance is going to be bringing for Rujira and ThorChain.
Excellent. That was great. Thank you.
We're going to keep moving on from my perspective here.
I got the liquidity profile next.
Go ahead and give us an introduction, please.
Yeah.
Hello.
This is Jan Devman.
It's the name I use in the community.
So basically, I'm a community member as well.
And I was a little bit of a late bloomer.
I didn't join the Manta DAO until a few months after the launch. But I've been an active community member
since the inception, essentially, and really drawn to what we are doing and trying to actually run a
profitable financial business online in total transparency. So we're gonna deep dig deeper into that but the short story i mean i've
been basically full-time into crypto since 2019 or so doing mostly anything you can think of in
d5 testing everything and and liquidy dow is really pushing the boundaries so i'm really
excited to be here today and let you know more about that excellent excellent and uh
last but certainly not least my co-host kenton go ahead and give us an introduction my friend
uh so yeah my name is kenton ralph toes i have a fund that uh sole mandate is to invest in rune
and run nodes on door chain and um um so yeah i'm a node operator on
door chain uh if you got any rune you want to bond it reach out to me um and i also rent my name out
for people to use at conferences so uh yeah there you go he certainly does and for those who don't
know i uh also bond with kon and he works with Liquify.
And I met some of those guys, by the way, Kenton.
Excellent team.
Very, very responsive.
Very competent.
I could not be happier being bonded with Kenton.
So he is a very good node operator, guys.
So just to show him a little bit there.
Okay, guys.
So let's get this started.
I'm going to ask the setup question here. And then we're just going to have a free-flowing
conversation. I'm going to extend this to the liquidity profile. So what is liquidity?
What does it do exactly? And why is it significant? The floor is yours.
Yeah, I'll take it from the beginning. So let's start. I don't know how familiar people are with DAO, essentially. I mean, the centralized autonomous organization. We are running a spend something, it is a community vote.
Staked tokens gives you the voting right equivalent to your staked amount.
So it is essentially a truly online business
that we are running together as a community.
So I'm just a community member as anybody else.
There is no people on the payroll or anything.
We are running a really lean business entity.
And what we try to do is doing market making is our primarily source of income.
So we are providing liquidity.
Now it's going into the liquidity is providing liquidity on the
fin order books. So that's what we've been doing. We
started out two years ago
pretty much, a little bit longer. So we've been
running on Kujira for about two years
providing liquidity
as the main source of revenue for the DAO
and this is what we will be bringing to the table now on Rujira as the main source of revenue for the DAO.
And this is what we will be bringing to the table now on RootJira as well.
So we will be having around a million US dollar equivalent of capital that we will be deploying on the FinOrder book to bootstrap them
and try to help the
community as much as possible to on one side earn money for our share or token holders and to be a
good community member and bring the boat or raise the boat for everybody i mean it's going to be
the better liquidity we can have on the order book, the better the user experience is going to be for the users.
So that's the main revenue stream we've had.
And aside from that, we've also had a swap router, which is essentially, since we have an order book, I mean, you have to trade between two or one pair is just two tokens.
to trade between two or one pair is just two tokens so what we have as well is a swap router
that is uh the logic so you can essentially swap in a single transaction from any token a to any
token b and it finds the best path possible so you can jump between five different
in five different Rujira trading pairs to find the best route to go from to token A to token B.
And it's even more advanced than that. You can even split the routes. So you can go up to three
different routes on a single swap. So those two legs are the main things that we operate on and
making revenue on. And we've been profitable since day one,
since we have very few expenses, nobody on the payroll,
all the revenue is trickling in as profit more or less.
If that makes sense.
Yeah, absolutely.
Go ahead, Kenton.
I have a question.
The million dollars, whose money is that? Where does that come from?
That is the DAO owning. So from the birth of the DAO, so to say, the first token was actually airdrop to the Kujira stakers.
And in the early days, there were no money in the treasury.
So it has been building up.
We have been selling tokens.
We have been selling bonds.
We've been using all the tool sets that the Jira will be bringing to the table.
So we've been raising money.
We have been doing token deals with different projects,
something that we did do to raise funds and having liquidity on the books.
And I don't think we will do again because it was not the best venture.
But like that, we have been building up and doing revenue.
I can share numbers with you.
We were really profitable back in the days when things were going good on Kijera.
So you lost a token and sold tokens into the secondary market
and just accumulated money that way?
Yeah, and did treasury or token swap deals.
I mean, with Osmosis, for example, we did equal share,
so we swapped tokens with another, providing that as liquidity.
So they were providing it on osmosis we were providing osmo token liquidity on kujiro so we did those
kind of deals essentially i mean so without having to raise funds so to say we were doing
token swap deals and yeah if i could just uh make revenue if i could just jump in and add here i think so like this
is what i tell people this is the easiest way to really boil it down on on how liquidity dow works
financially um you guys all know the popularity now of these bitcoin treasury companies you know
popularized by like microstrategy and so on so So the core thesis with how those companies work,
you know, and this is on the Tradify side, basically they do capital raises, they buy
blue chip assets, you know, these are Bitcoin treasury companies, so they're buying Bitcoin.
And then they're increasing the NAV, the net asset value that is held on the books of those companies. And that increases their market perceived valuation, right?
It trades above a 1x price to book ratio because there's perceived growth of those companies.
So the stock price trades at a premium.
They do more capital raises.
They buy more Bitcoin and they just keep renting and repeating.
buy more Bitcoin and they just keep rinsing and repeating.
And as long as the underlying asset performs well, and as long as they can continue, you
know, with the growth prospects that the market is valuing them at a premium, they can continue
just rinsing and repeating, doing these raises, buying more Bitcoin and so on.
So Liquidity DAO is kind of like a decentralized spin on that, except for us, instead of just buying and holding, quite frankly,
unproductive Bitcoin, we buy Bitcoin, we buy Ethereum, and then we market make with it. So
we put it to work and we earn trading profits by market making with it, you know, paired to anything, paired to USDC or paired to,
you know, Bitcoin and ETH. So we make sure that there are profitable trading pairs on assets
that the DAO wants to hold long term. And then that basically increases the valuation of the
governance token, which is liquidity. And that allows us to do even more capital raises to buy more blue chip
assets and market make with those and make even more profits and just kind of rinse and repeat
so we've been able to amass you know it's over it's over a million now largely from doing capital
raises and doing bond auctions and things like that but i actually at the height of
auctions and things like that. But actually at the height of Kujira, back when KUJI was trading
at like $5 and there's a ton of activity, I think MantaDAO, which is what LiquididAO used to be,
had well over half of all of the liquidity on FIN. And I think we hit just shy of 10 million total liquidity.
Now, the problem with that is that actually at the time,
just like everyone was sort of thinking how the scythe would proceed,
that alts would not be obliterated.
So we had almost everything paired against the Manta token.
This is sort of similar to how Rune operates. So when everything nosedived, that
sort of reflexively decreased the amount of liquidity that we owned. So we're kind of taking
a new strategy for the launch on ThorChain. We're going to be focused on decoupling the treasury
liquidity that we provide from the liquidity token. So we're going to aim
to, I'm kind of ballparking, we want to keep it less than 10% directly coupled to our treasury
liquidity. But those are kind of the details. The general gist of it, though, is that we do
capital raises. We use the proceeds from those capital raises to buy blue chip assets or any
other suitable investment that we think is going to generate revenue and price appreciation for
the treasury of the Dow. And then that increases the market perceived value. We use that revenue
dynamically. It's completely governed by the token holders.
And so, yeah, at higher and higher valuations,
we can raise more capital and continue increasing the NAV
for the token holders.
Okay, cool.
Just to give some ballpark numbers as well.
I mean, like PT said, I mean, at the height,
when we had the most liquidity on Kudruya, we were actually making around 300,000 US dollars a month on revenue.
So that's just giving a ballpark what's possible.
That was the peak value.
We did between 50 and 80 months on month when the market were a bit more normal.
So, I mean, the market potential is huge in this, just to give some ballpark numbers.
Okay, cool.
So, the money is you're trading on your own behalf.
on your own behalf you guys on behalf of the dow the dow is trying they're profit oriented um
You guys are on behalf of the DAO.
The DAO is trying, they're profit-oriented.
and then the token holders of the dow can contribute uh can participate in that upside
by holding the tokens of liquid of liquidity yeah exactly so i mean and contribute i mean having new
ideas we can we can make new revenue streams we can can do whatever we want. It's a dynamic community where we find online revenue streams
to make the pie grow, essentially.
Got it.
Sometimes when you hear market making,
people might think, like Coinbase, for example,
they're going to do some market making for your token,
but you have to give them 5 know five percent of your token supply for free and then they go and
you know provide liquidity and stuff like that but they're really they're just dumping on you
um yeah exactly and that's not the game we are playing we are we are providing our own
liquidity i mean it's our own treasure we are putting up for us to make profit on it so it's
exactly like pete said i mean we try to be an active player in the field and making revenue
of our treasury instead of just holding it sitting and having sitting idle so we are all for raising
the trading volume we see peak hours i mean we have 10 times the revenue on the peak hours when
trading volume is high so so our goal is to get as much activity as possible on chain because
that's what we make money on now you're saying you're you're market making what's the difference
between market making and arbitrage are you guys doing arbitrage as well? Or no, it's two different things.
Let me clarify on that.
So when we talk about market making,
we talk about unchained market making.
Okay.
So I'm going to take a step back
and describe to you the unique architecture
of RUGITRADE and RUGIPOOTS.
So when you provide liquidity on... architecture of RUJI trades and RUJI pools.
When you provide liquidity on...
So first, what we call market making,
on chain, it just means providing liquidity
with a pair of tokens and generate a yield on that
by allowing other people to trade in the pool where you provide liquidity.
That's the same way it works on Torchain,
except on Torchain, all the pools are paired with Ruin.
On Rujira, the way it works is,
so Indy5 generally, most of the DEX are IMM DEX.
It's one and same thing.
So on Uniswap, there's no differentiation
between the I mm and the next
when you provide liquidity in a pair generally it's a let's say it's a unit v3 pair then you
will have to set a range but effectively everybody is in the same pool on with the same strategy and
price is distributed around a given bonding curve and there is no way to express things differently.
I mean, with V3, you can't beat because you can define your range.
But let's say with a B2 pool, XYK, everybody's on the same XYK bonding curve,
and you have no expressivity.
And that's exactly also how basically your pool on Torchain works.
Basically, your pool on Torchain are XY Basically, your pool on Torchain, our XYK pool with a little twist,
which is like this dynamic liquidity fee,
which makes like the,
instead of having a set fee on trades,
the higher your price impact,
the higher the size of your trade
relative to the liquidity in the pool,
the higher the slippage, the fee you pay.
On Rojira, we have a different architecture. We separated the DE page, the PU page. On the RUJIRAP, we have a different architecture.
We separated the DEX, which we called RUJI Trade,
which is very much just the order book.
It's almost like an instant matching engine
where people can put either limit orders
to add liquidity to the book or execute market orders
that take liquidity from the book and we have
well different type of limit orders we have the fixed price limit order we have the oracle price
limit orders and we have also a third queue that's how it works like a three different queues that
fit into the same order book and this third queue can add just provide quotes based on whatever market making strategy you want.
So the first one we will be launching very shortly now
will be a simple XYK strategy,
so similar to what you have on Torch and Baselayer.
But one of the big plan is that we are going to roll out much more different strategies.
We are going to have a Uniswap V3 style
consolidated liquidity strategy.
We have, of course, the virtualization strategies
that will allow us to replicate the liquidity
that is in the base layer, pull into the app layer.
So it's a different market-making strategy.
We will also want to build some market-making strategies
that use those oracle orders.
So you can have all those different
strategies much more like differentiated risk profiles and how you manage your stock of assets
because at the end making markets that's what you do you provide liquidity for a pair and you have
a stock of token a and token b and it's up to you to manage your stock. When you are in XYK, the way you manage your stock is you always keep the constant product fixed at a K value,
which means you are effectively always target to have 50-50 of each of the assets.
Here, we can have a much more diversified set of views on the market,
and differentiated risk profile, and differentiated return profiles.
And all of this liquidity adds up and is matched into the order book.
And the more different market-making strategies that you have,
the more activity you will be able to see in the order book,
especially when you start to have a strategy that trade once against another.
And the more, in general, you add liquidity,
the more you can facilitate volumes
and the more we can generate fees for RUJI and for Torchay.
So with this distinction in mind, then what does liquidity do?
By being a market maker, it simply
uses the tools provided by RUJIRA.
So it's become an LP in those value strategies.
And for now, it will be just XYK.
But going forward, it will be just XYK, but going forward,
it will be a much broader range.
And liquidity has also acquired Rune, by the way, in the past few months
to also be able to provide liquidity in a base layer pool,
if you wanted to.
So there are a lot of different things we can do.
And also market-making strategies,
they generate a yield, and the yield is the number one contributor
of revenue to the Dow and the second one being the revenue we generate on the swap return.
So that's just an important thing to understand what we mean by market making. It's on-chain
market making and it's using the tools provided by RUJIRA which which is RUJI Pools, which add liquidity to the other RUJI trades.
And you asked about arbitrage.
Arbitrage is a different type of strategy.
MantaDAO, sorry, Liquidity, is not directly involved in doing any arbitrage,
but it will be in two different ways.
So one will be with the virtualization strategies that will allow us to replicate on the app layer
of the liquidity of the base layer pool.
This strategy is effectively an arbitrage strategy.
Everybody will be able to participate.
And of course, Liquidy will be one of the many users
of this strategy, deposing single-sided tokens
into a certain pool,
and then making a market by providing, effectively,
a bridge financing for just one period block time
and taking a little spread versus what you would get
on the base layer, and then having arbitrage
that's in the back end will execute the trade
and rebalance the pool. And there is another way to liquidity is involved
with arbitrage and that's with the swap router.
So the swap router, what Jan was explaining is that
it allows you to take, instead of being limited
by a token A and token B in a given pair,
it allows you to trade any input token
to any output token.
And it does that by looking at all the different pairs in the order book and trying to find
the optimal route, and sometimes splitting this route between different pairs.
And what it means is that effectively, whenever you have a route that gives you a better return
by splitting and going through a different set of pairs
instead of just taking input token to output token
in the given pair.
What it does is it captures arbitrage
that exists inside the order book.
And that's another very good stuff so Liquidy does.
DI is swap router.
It allows anybody to optimize their trade execution
by capturing arbitrage existing in the order.
And just to add a bit, I mean, this all, if you're not familiar with this kind of stuff,
it sounds very complicated and maybe way out of my league.
And that's actually one thing that we would like to do with Liquide as well. We are going to democratize this.
You don't have to know about all this.
You can just invest in Liquide and you will be a really advanced DeFi user passively.
That's why I want to kind of hash out the,
make sure I understand the arbitrage part
because there's a lot of people
in the ThorChain community over the years
who've been asking for some kind of,
you know, arbitrage bot that people can invest in.
And it sounds like Liquidy could be that solution.
No, sorry, it's not Liquidy use the tools.
Liquidy is not planning to build any arbitrage bots on their own like the arbitrage so the first the
arbitrage the biggest arbitrage you you are seeing on the on base layer pools is uh not really
replicable just on the app layer because what people do is they rebalance the base layer pools
versus liquidity exist on centralized exchange uh as a DAO, as a 100% on-chain protocol,
we cannot have trading accounts on centralized exchange
and do those arbitrages.
So that's not something Liquidity can do.
What will be available in terms of,
because there are different arbitrage strategies,
one will be the virtualization strategies,
which Rujirai is going to use to create,
to virtualize the liquidity of the base layer pool and i mean i think we have discussed that in another space
i don't want to dig too much into that but we have documented it and we'll do much more education
when it's live but this strategy is effectively an arbitrage strategy everybody will be able to
deposit in those pools so it will be democratized, not by Liquidy,
but by Ruggira directly.
And Liquidy will be one of the players using the Ruggi pool that offers this
industrialization strategy, which is an arbitrage strategy.
And what Jan was saying is that for people
who don't even want to have to pick the pools
and the strategy, because there will be over time
more and more different strategies you can use to deposit assets on the app layer and generate a
return by providing liquidity on the order book well you can insert that just buy liquidity token
and let a team of very experienced community members take care of the governance mechanism, allocating this capital optimally to generate this week.
So what about, like, you can't do any arbitrage of the other DEXs?
Like, you know, if there's any common tokens trading on Torchain versus any other DEX. Could you do any kind of arbitrage there?
That would be super complex to build as well if it's outside the base area.
Yeah, so I mean the direction of LiquidityDAO isn't really building bots or anything like
that.
Basically you can think of it mostly like an investment holding business.
And obviously, we have this treasury and we deploy the treasury in a way to make revenue on that. So
not really building bots or anything, because that's a very, very competitive, arbitrage is a
very competitive space. And it's very difficult to
do in a decentralized way. So Liquidity.io is not trying to enter the arbitrage space. It's really
just, you can think of it like an investment holding business, and it's a power user of the
tools that will be available in the app layer. So, you know, like Pragmatic Monkey is mentioning,
So, you know, like Pragmatic Monkey is mentioning, using the Regera pools in the app layer to deploy liquidity to the order book.
and all sorts of stuff, just using the full toolkit available as a power user, essentially,
to generate as much revenue as possible using the active treasury of the DAO.
Yes, I am viewing liquidity like an investment holding company.
That's what I was trying to understand is that individual users don't have to set these things up on their own.
They can just buy your token, get exposure to what you guys are doing, you're taking
care of it all.
And everyone else along for the ride, right?
By holding your token.
Exactly.
Exactly.
And along with that as well comes the next leg that we are completely for transparency. I mean, we are
having going to have to rebuild, but we have an analytics tool set, transparency tools, so you
can see exactly the positions, how they are making month by month. So you have, we'll have all this
transparency of the investments as well to build up confidence. I mean, for investors as well. So it's completely transparent
what's happening behind the scenes as well. So look with eDAO. You don't have an actual
legal entity. Do you have a Cayman Foundation or a Switzerland Foundation or anything set
up for it? Or no, it's strictly everything's on chain. Everything's on chain. Yeah.
Oh, wow. Good for you guys. There's even like a vested token team or anything. It really
was just a completely organic community engagement effort. So everything is done fully on chain.
Even the websites that we have is actually pretty much a decentralized effort. It's basically
created and then hosted on akash uh using decentralized hosting
and paid for directly by the dow so so there's there's no you know we're trying to eliminate
all the centralized points of failure and and have uh you know everything be completely on chain
oh that's that's huge guys because um i don't feel i don't know if you guys know or anyone
listening though but like i live in cayman, and the crypto scene here is pretty vibrant.
And Cayman is one of the top jurisdictions for people setting up foundations to launch a crypto project.
And the foundation acts as a legal entity. You don't have bank accounts, centralized exchange accounts, all that kind of stuff.
But nobody owns it, all that kind of stuff. But nobody owns it,
all that kind of stuff. But it's a way to bridge the gap between TradFi and DeFi.
So that's the idea. But in my mind, it's really still just TradFi in the end. The only way to
truly be decentralized is if you have no legal entity anywhere.
So kudos to you guys for not going on that path.
Yeah, but what we try to do
is having the thread five cents
and having financial reporting
and being mature in that sense.
We want to be profitable.
We want to show how profitable we are
because since we are
profitable you can actually do i mean all the p pb measurements how how is the valuation not that
that is the most important thing in crypto that's mostly hype but we will be providing all those
numbers so you can actually see exactly how profitable your investment is and
where it is at the moment basically minute by minute since it's live more or less live reporting
so does so sorry to be kick it beat a dead horse to bring it back to arbitrage the the reason you're
not doing it is because you can't it It's technically not feasible. If it was technically feasible for you to do it,
you might entertain it or look into it.
But as it stands today,
you actually can't really do any true arbitrage.
You got to stick to market making.
I would say...
Not only market making,
but online things that we can do in a decentralized way.
Because like you say, arbitrage,
if you need a sex account,
you need to have a physical entity.
That's a no-go.
Yeah, probably not branching into the sex jurisdiction
because of the centralized points of failure
that would be required for that.
But I will just say broadly, there's no direct limitation
on the scope of what LiquidaO can do or invest in.
We do grants as well. We've done that before. For example, back on Kujira,
Manta DAO at the time financed via grant the developments of a liquid staking token platform.
developments of a liquid staking token platform. So things like that, basically, because again,
there's no Genesis team, there's no core structure with vested token schedules. So really anyone
can come in if they have the technical ability to implement something and can present the idea
to the DAO and say, you know, I want to request a grant to build some revenue
generating product. Here's going to be the ROI on it for the DAO. And, you know, the DAO votes on it.
And if it seems lucrative, that's a direction that we can go in. So there's not really a
limitation on the scope to just being an investment holding business in a decentralized way.
That's really just kind of, that's the core. That's how we build up a moat, right?
Is building up the treasury with the blue chip assets.
But the scope is limited to that.
And that's kind of what we're getting at also
with the whole swap router that works
through the Ruggiero order book.
That's just another additional revenue generating piece that's
separate or decoupled from the treasury itself. But it adds valuation and it allows us to again,
do capital raises at higher valuations and get even more treasury, which generates even more revenue.
So is the treasury, sorry, I was just trying to do some rough numbers in my head.
You said at one point you're making 300 grand a month in good times and like 50 to 80 grand
months in like normal times.
So is that million dollars you're putting onto Ruggiero, is that like all your treasury
or do you have other monies scrolled away somewhere else
um and if if you've made more money than just a million over the years where is that gone have
you like distributed to token holders or anything or yeah individual salaries how does that all that
work that's that's kind of exactly yeah so um so historically actually uh Manta at the time, that was a pure revenue share token.
So the revenue that's collected, it would be paid out to token holders.
Now, it gets a little bit tricky when we talk about revenue, right?
Because, again, at the peak, we had like 10 million in liquidity on Kujira.
But that was basically half of that was paired up with Manta or all of it was paired
up with Manta. So half of it is the DAO's native token. We want to move away from that because
it's very reflexive and it's also kind of intangible, right? Because if you make money
denominated in Manta, you can't really realize profits on that unless you sell it.
In a very similar sense to how Rune behaves.
If you're making all your money in Rune, well, the only way that you actually realize value on that is by selling it for something else.
So I think we're going to tighten up a bit on how we present and how we talk about revenue and calculate these metrics. Because if we're
saying $300,000 month over month revenue, great. But half of that is in the DAO's native token
at the time. And it might be an other intangible, or not intangible, but relatively illiquid assets,
or it might be auto compounded into the
liquidity that we're providing. So it's a little bit, I would say of a gray area, but definitely
something that's an area of focus for the relaunch is on basically optimizing the actual
tangible revenue. We're kind of working on decoupling a lot of the treasury
liquidity that's provided from the DAO's native token liquidity so that the profits can be
immediately realized because they're in liquid assets. They're in USDC and Bitcoin and Ethereum
and Solana when that's supported and so on. So highly liquid blue chip assets that can be
readily shuffled around and deployed into other areas as needed or used for grants of new revenue,
generating new products and so on. So to just circle back to your question, what happens to
all of the revenues that's been generated over time? Some of it is part of that treasury liquidity.
I some of it is part of that treasury liquidity. Obviously, you know, we were market making with Bitcoin, which was Axel our bridge Bitcoin. Axel our bridge wrapped Bitcoin on Kujira.
That's part of that 1 million.
But also the majority of it was just harvested and then distributed to the token holders.
So to bring that to another point, that's something that is an active area of discussion going forward for the relaunch is how to best utilize all of the revenue that the DAO is collecting once it relaunches on Rujira and Thorachain.
Because actually, in my opinion, just giving away all of the revenue, especially when you're kind
of in a high growth sort of startup phase, is not the most efficient way of doing it.
So sort of the vision that I would like to drive, and again, this is all completely under the governance of the stakers of LiquidyDAO.
But the vision that I would like to drive is that basically collecting this tangible blue chip revenue on a monthly basis and then proposing a plan on a monthly basis on how we're actually going to utilize that revenue.
we're actually going to utilize that revenue. Because if the financial metrics largely coming
from the treasury and from the revenue that's being generated by the treasury shows that the
token is undervalued. So I threw out numbers of like, if the price to book ratio is less than a
2x multiple, and if the price to revenue or price to sales ratio is less than a 10x multiple,
then we would consider that sufficiently undervalued. And we could actually use
revenue to buy back the float from the open market. And so that would have the most direct
impact on the valuation of the DAO token using the real fundamental valuation of the whole thing, sort of the way
that you would with a TradFi investment holding company. And that's just one example. So another
example might be depending on where we sort of are in the market cycle, it might make sense to
take that revenue and reinvest it into acquisition of new blue chip digital assets.
For example, maybe when Solana is finally launched on ThorChain, so that functionality is there,
we can start redirecting some, most, or even all of the revenue to acquiring Solana liquidity,
and then we can market make in the sole USDC book in the app layer.
So, you know, I kind of the vision that I want to drive forward is on a month by month basis,
basically ratifying a plan through Dow governance on how we're going to be using the prior month's
revenue. But the sort of the philosophy is always, how do we increase the valuation for all holders? How
do we increase the net asset value of the Dow? How do we increase the revenue streams and
generate a profit for all of the holders of the token? So really with that in mind, thinking of
growth over the long term and building a moat that is sustainable.
Because I think we've seen that there's actually a lot of crypto products have sort of gone from
being purely speculative with very little fundamental backing or utility. And now they're
kind of shifting in the right direction of having some
backing, but a lot of them are very, very linear and focused on just one thing, no matter what.
And that one thing might be distributing all revenue to token holders, or there's other
projects like Hyperliquid. They're just only doing token buybacks at any price. It doesn't matter
what crazy, insane multiple the token valuation is at compared to the
actual revenue that they're generating. They just do one thing and ignore the actual, you know,
valuation metrics that really should be guiding these decisions. So we want to be more of a,
or at least I want to push the vision forward of being more dynamic and using real sort of
TradFi equivalent metrics to
guide these decisions on a month-by-month basis. Yeah, and in addition, I mean, and to be able to
do that in a lean way, we have all these analytics and all these data readily available for any
community members. I mean, all the data is going to be there. So we can be very fast and efficient in the decision making.
We will have the tool sets for it or to be able to do that.
Yeah, and then the playbook is really, I love when Pity uses the comparison with micro strategy,
because at the end, that's really what it is.
Like Liquidey is doing the micro strategy playbook.
Once we are, when you have those metrics,
then whenever your token is undervalued,
you just buy it back on low liquidity, push the price up.
Whenever your token is overvalued,
well, it's time to raise more capital, sell more.
Whenever you raise by selling some of your token, every $1 you raise is going to come
to $1 of treasury assets.
It's done something that is unproductive into $1 of treasury assets that is productive,
so generating revenue.
And then you have this perpetual flywheel that is very powerful. Like assuming we don't invest in tokens that under going to zero.
So that's why we also want to stick to the blue chip mostly.
And you just keep increasing the quantity of assets you have making market over time.
And assuming the yields, the average yield you get is constant,
you just keep increasing your revenue and you get more and more firepower.
With breads and repeats, it's uh throughout the volatility of your own little token
so liquidity obviously has its own token then you guys aren't merging with with ruji your token is
staying separate yeah exactly so we have the manta token that has been living on the kujira blockchain
that is going to be migrated over one for one
for a liquidity token.
And so it hasn't
happened yet?
As soon
as the Kujira
trading pairs go live and we can
provide a book, it is
possible to do it, but there's nothing to do with
the token at the moment.
But we are just around the moment so but we are i mean we are
just around the corner so and we we're having the migration analytics ready so we can see the flow
once it's really starts and will will mantra continue to exist on its own or are you going to actually shut it down? What will happen to MADRA?
No, there's not going to be.
I mean, the way we made money was on the books
and we are moving all the business that we were providing
and we are putting our money on the Rivera networks.
I mean, we will have the migration open for a while
and then eventually we will have the migration open for a while and then eventually
we will just close that door as well to be i mean to have a fixed supply of the token
so anyone in the holding the mantra token they gotta you gotta try and reach out to find a way to
contact everybody it's gonna be it's gonna be for a year it's no hurry, it's no rush to do anything.
But there is an action needed to be taken to migrate over to the new blockchain.
There won't be any decay, importantly.
So it's a different mechanism.
We have the tokens that are merging, so QG, Fusion, LBN, NSTK, and Wink.
Those have like a 12 months decay period
or 11 months decay period.
And you merge, they disappear.
It's a one-way process.
The token on the source chain get burned
and you get a PRRATA claim on RUG.
And then you get a token like a liquidity.
So we have three ecosystem token migrating,
liquidity, the former Manta, but also OTO, from O2, and Nami from Nami protocol.
And this one will be a similar process. It's a one-way bridge. You burn on the origin chain the token.
A new token is minted on Rochira, on Torchain, and then that becomes your new native token.
And for those tokens, there will be no decay, so people can do it whenever they want.
But eventually, everybody who is following what's happening should be migrating because
staying on, like, there won't be any economic activity on Ruchira going forward.
Nobody's going to spend any time there from the team, the project, matching things there.
And eventually, assuming all validators
stop validating the Kujira chain,
it will be completely sunset.
So yeah, everybody should, once the process starts,
everybody should look to migrate the autograps.
I will make sure that this is sufficiently announced.
It's going to be a very, very process to the uh rujira merge um i think it's it's it's it's basically going to be built
into the rujira merge website um so i i think that the the mansa token holders are basically a subset
of the kujiro community so they should be well aware already, but we're going to make sure that we spread the word far and wide
that the Manta token should be migrated over to Rujira.
As soon as all the applications start going live,
we're going to be kicking off
with seeding some liquidity over there
and announcing that the migration of Manta is open.
Okay. So in the last space we had with an aspect of Ruggiero, it was Levana. The question I asked back then was, is this something that integrators or various wallets or interfaces are listening to
this space, is this something that they can plug in or is this system going to be compartmentalized in kind of its own separate thing?
So if there was like interfaces and wallets, is there anything you would want them to know
in this space?
So you mean related to Liquidity, right?
Yeah, yes.
Yeah, absolutely.
So, well, maybe, John, you want to dig into that, the api and how we are what yeah exactly i think
the the big thing for external project is going to be when we will be launching our api where you
can actually utilize and and any project essentially it's going to be an open api where
you can just make a request i want to go from token A to token B and get basically a transaction you submit
to the blockchain to just execute that.
So that's gonna be something potentially,
I mean, where if you want to provide
a simple swap interface or anything,
the API we provide will be useful for them.
And it will be effectively the easiest way for any integrator to tap into the order book liquidity in the most
flexible possible way. So from any token to any token with optimized execution via split routine.
Yeah, split routine.
Okay.
And so if an integrator is listening to this,
listening to the recording or listening to this right now,
who should they contact primarily?
PM or liquidity or post PT?
How they should begin that process?
Yeah, I think, I I mean getting into
if Telegram or just on the
Twitter account I would be
the one I would think
that would be helping
out and guiding and explaining
the process on how to do that
it's not going to be possible
as of today it will be but I mean
we can certainly
initiate discussions and because the flow is there
we we did it on kujira we just have to adapt it and make it available on rogera so we know the
full process so that could be in parallel if someone is interested yeah yeah and so we best
place is probably start because we are now again like just go to the main liquidity dow
start because we are a DAO again,
like just go to the main liquidity DAO,
mention your interest there,
and then we can move into a private group
with integration.
And I think a cool step or so to mention
is the plans about having a referral fee
and possibly an affiliate fee.
Okay, you're releasing the alpha portion.
Okay, no, no, sorry.
Okay, no.
No, no, but that's the thing.
I think we are in an agreement
that within the DAO as well,
that in order to boost the API as well,
I mean, we all benefit.
The more volume we provide,
the better for the full ecosystem, essentially. So I
mean, previously, I mean, we were a win win solution with the
Kodura, where we were taking a fee and we were providing volume.
Now we want to even share that piece with the ones integrating.
So we are going to introduce an affiliate program as well. So it's going
to be a win-win-win protocol instead of just a win-win for the Regera liquidity.
See, guys, this is why you listen to the space because Kenton and myself, we're good at squeezing
the alpha out of these people. So that's why. So guys, please share the space if you haven't
already done it, especially if you're listening to the recording. There's some really good
information here. Kenton, I started talking a while ago. I thought you were
going to say something. Was there something you wanted to add? No, not at all. Please,
you keep going. Carry the conversation for a bit. Well, the thing that I think is important is that
the interfaces, the wallets, especially with all these new Ruchi primitives, they're going to be
in an arms race with each other because they want
to add these new zero to ones, essentially. I mean, the amount of innovation that's happening
right now is truly mind blowing. So this is a friendly little bit of vice for the various
teams out there, because I know a lot of them are really hungry. I would message these guys.
I would get involved and start building the relationships and the
infrastructure right now, ready to go. This is something that's never existed before. I think
you understand that. And particularly if there's a lot of new interfaces out there, if you want to
stand out, I think that's how you do it. I think Kenton's questions have been very comprehensive
and I'm really thankful for him because his knowledge and breadth of these matters is
greater than my own.
So thank you, Kenton.
Is there something else that you guys want to bring up that you don't think has been fleshed out as much or anything else you want to cover?
No, I think we've covered it, but I want to make very clear.
It's a two-sided participation into Liquidity can be either a passive investor just wanting to take advantage of the full set of opportunities.
You can just buy a token, have a power user of the Ruggiero Networks, all available tools to maximize the profit.
Or you can be an active member and really drive the space and innovate.
So, I mean, you have the full tools that you can participate in any way
or at any level you would like personally.
You can just buy the token.
You can be deep down into the weeds in the Telegram chats
and really doing business development
and driving this exciting future we have ahead of us together.
So we have the full spectrum available.
So we welcome anyone interested to join us and chat in the groups.
And we're open and want to have more people involved.
Yeah.
You know, guys, we did the raise the bond campaign for a reason we did that
to give security to rogera network so that they're ready for like a springboard ready to launch
go straight to the moon baby and that's why we did that here we are i think we've accomplished
our goal i think we're up to 115 notes so again another call out to the thor chain audience that's
going to be hearing this um i would bond your rune, not just because to add more security to the network, but we're up to 115 nodes. And I think
we have 100, what, Ken, 121, 122 that are waiting to turn in. So bond your rune while you still can.
That's the new message that I'm starting to say, because there might not be space available.
And if you want to earn yield on your rune,
especially with the shared revenue model,
now's the time to do it.
Go ahead, Kenton.
No, I said, I was actually going to say,
I know pragmatic monkey is probably his favorite subject to talk about
security on third time.
I want to get into it a little bit and talk about it.
I've actually, I actually had some more.
My thoughts have evolved over the last couple weeks about it.
Do you guys want to get into it?
And I don't want to take from liquidity
in what you're doing.
Do you want to talk about the security on ThorChain
and scaling it and scaling AppLayer?
And it does affect liquidity in the end.
You guys want to go down that road?
It's just with us.
I'm sure PT will also have interesting takes here.
Yeah, let's do it.
Well, are you guys, let me, I've actually
been coming around to Autostake's idea
about the cold vaults and hot vaults.
And what a part of what's reshaped my thinking is the whole debate, you know, Boone and
JP had about, you know, the app layer, and if there's an exploit, should door chain nodes
intervene or not, and blah, blah, blah. And I've been thinking about it. And, you know, my stance
on that, and my view is that, well, the app layer is separate from the base layer
and there's no reason we can have hundreds
of different Regiras type thing, right?
But we're just starting with a Jira for now.
And as a node operator on ThorChain,
I'm thinking, it's not scalable to expect me
to be policing all these different apps on AppLayer.
That's what the devs who are creating them, that's what they're for.
And so what's got me thinking, you know, maybe kind of help keep AppLayer and BaseLayer separate is we do have this cold vault idea where there are individuals with who hold keys to the vault,
to the separate vaults that hold secured assets.
And it could be the individual developers for each app.
They're the ones that can have, be trusted with, you know,
some of the keys to the vaults on the secured assets that are being used in their smart contracts.
And then the Thorchain nodes has, you know, one set of keys type thing.
But the ultimate control is by the app layer devs. And so if there's an exploit on one of the smart
contracts, it's actually the app layer devs who can decide,
do we freeze this, do we reverse it, what do we do?
And it takes that onus off of the ThorChain nodes
and kind of nullifies the whole debate
of whether ThorChain nodes should do anything
because they can't, they just have one key.
They're part of the signing process,
but they don't have control.
And this would enable AppLayer to scale unlimited
because now it's the individual devs who really have control of the vaults.
And everyone keeps saying HyperLiquid is a three or four multi-sig.
They've got billions in TVL.
The market's happy with that.
Why can't we do that?
Well, now you can.
And then everyone is buyer beware on each one
of these on the app layer.
It's like, well, the devs are telling you
what the security structure is, security stance on the keys.
And if you want to participate, it's a free market.
Go right ahead.
So I'm coming around to that idea.
I don't know if you guys agree, disagree,
poke any holes in that.
You have your own thoughts.
So there are two things here.
So first, there is a security budget with the auto stack ID.
And I'm absolutely no expert here.
But I think from what I understand from this idea,
I think that's a good way to scale the security budget
to allow us to onboard more secured assets on the app layer, especially
for things like Bitcoin-based stablecoin or money market where you will have effectively
a lot of probably long-term locked collateral in the form of secured assets that don't need to move
around very much. I think that the autostack ID works very well. I'm not sure how this is implemented.
You mentioned like, there's having keys.
I think you need some people who are trusted to hold part
of the key, but they cannot move all the funds around.
So that's, I don't have a strong opinion there.
Like, this will need a discussion and who is holding those keys.
But I suspect it has to be another operator.
I'm not sure other people outside node operator can.
But so that's one thing, and I think that's a very good thing
that we need to explore to be able to scale the app layer.
The other thing is about responsibility of who can pause
or not pause contract and this type of stuff.
So just a reminder that smart contract
in the APA can only do whatever anybody else can do.
Like any normal user of TorChain,
they have the exact same rights.
There is no exception.
There is nothing else.
Then we could have like an admin wallet that
can potentially post the smart contract.
And I think that's, I mean, it makes sense that also,
at our level level if we can
we we we trust those tools i uh i don't think however that we i'm not sure we can again i'm not
a security expert despite what you you say far from that but i'm not sure uh we can pause the contract just directly from the app player.
Because again, we can only do what other normal wallets can do.
So only the nodes have the option to pause via Myria.
Then on the new concern, I think I understand
is you don't want to have to monitor Android apps,
and that makes total sense.
I think most node operators would be in the same boat.
But it doesn't work to provide just the tools.
Like there are already three tools available.
You can either pause, so via mirror control,
you can pause the entire app layer,
or you can pause a specific smart contract,
or you can pause all the smart contracts.
I think the tools doesn't hurt anyone.
Like, then you don't need all the node operators.
If somebody spots an issue and decides to pause and see what happens,
I think the same way it's a good practice
for whatever happens on the base layer,
I don't see any hurt of having the same tools for node operators.
They are already there.
They are built in.
And it doesn't mean that you have to use it if you don't want to.
It's up to each node operator.
But it makes total sense to add them if it allows you to do.
So at least for people who think, oh, this is wrong,
and something should happen, having the option to pause,
I think I don't see any downside of having that.
I understand the fear of, oh, it's a big overall,
if it's my responsibility to monitor all that,
I don't think that's how it would work.
Most likely, people won't monitor,
and most of the day it would be good.
But one day something
bad might happen and that day some people will react and pause and then we see.
So on a security topic, I think at a high level, so we don't want to regress from decentralized custody.
I feel like the suggestion is regressing from decentralized custody.
It's moving more closely towards how centralized exchanges function.
And it kind of kills one of the main selling points of being on ThorChain to begin with.
begin with, which the main selling point is that you have this 100 plus node architecture doing
this decentralized custody of native assets, you know, critical native assets that you otherwise
would not have the ability to have native custody because they don't support smart contracts. So
like Bitcoin is the biggest example there. So that's basically the security service
that ThorChain provides
is that you have this 100 plus node
with ruined bonds
doing the decentralized custody of native assets.
And that should go both ways.
That should go for secured assets
and for just base layer liquidity pools on ThorChain.
So I guess I'm not really, at first glance,
without seeing any technical details of the implementation, I'm not seeing how that would
be a good selling point for Thorachain to move in the direction of more like three or four
multi-sig custody, which is reminiscent of how centralized exchanges do it um so i i just to
just to hammer it home i think that the a huge selling point of what thor chain brings to the
table is that you have this decentralized custody solution of native assets that do not have smart
contracts otherwise uh to do anything like that and And that should go for secured assets in the app layer.
I think there's a whole other separate topic on permissionless nature of the app layer.
This is actually coincidentally a hot topic on Twitter just this morning.
So the current plan, though, is that the app layer is going to launch completely permissioned.
Only nodes can whitelist approved contracts
or delegate authority of approved
whitelisted deployer addresses.
So I think it'll make more sense
as Ruggiero actually rolls out.
Maybe we shouldn't kind of put the cart before the horse.
Let's sort of let everything launch and settle out for a bit
because it'll make more sense. Rujira is kind of just building this core, vertically integrated
set of primitives, DeFi primitives on top of Thorachain, utilizing the secure assets of Thorachain. I don't know if the vision years from
now is going to be many Rujiras or if it's going to consolidate. There's even talks of eventually
pulling Rujira into Thorachain. I think that this is kind of just discussions that are probably years
out. And it'll make more sense as things launch and grow and stabilize and hit their equilibriums.
But just as far as like the secured assets go, I think that really is the biggest selling point of what ThorChain brings to the table is decentralized custody of the native assets.
And if you move to more of a multi-sig or move to something that's more centralized, you're kind of killing the main selling point of it.
Yeah, I agree with you. relaxing the hard cap on ThorChain is that the node operators are more and more divorced from
the rune price, from not owning any rune, and they're just using other people's rune to bond.
And so the pickle my brain is in is, you know, what's safer? You have like 100 anonymous people with no money at stake
who could, in theory, steal all those L1 assets.
And if they're truly anonymous, they can get away with it.
Or is that safer than for people who are doxed
and doing a three or four multi-sig.
Because being doxed, you've got like some legal security, right?
They can be harder for them to get away with it if they steal,
because you can track them down.
And so I'm kind of like, where's the line?
You know, like how many anonymous nodes are, you know, how many, like, you know many will they stay
maybe they're honest today will they
be dishonest tomorrow
and if we do open
the hard cap wide
open does that encourage a
whole bunch of dishonest people
to enter the network
because there's a very low barrier
or entry for them to
they don't have to
put up any money they just have to raise raise rune um maybe they can slowly eventually uh
attack the network and mean like while they're building up a number of nodes they're making
money right they're earning fees they're getting paid to basically attack the network so that's
where i'm stuck i can't know, I don't know how to
reconcile that. I mean, this is an aspect that I've been very vocal on on Twitter is that
the more that you scale up the network, the more you increase the coordination cost of even pulling
out such an attack. This is something that I've said to a lot of people is that actually,
to my knowledge, and I've asked, is there any examples that anyone can ever come up with,
there has never been a proof of stake blockchain network that has suffered such an attack,
where the existing validator set just decides to maliciously drain assets, you know, because it's not, you know, ThorChain is a
little bit unique in the sense that there's this custody of native assets, but it's also not unique
in the sense that there are a lot of blockchains. There's a lot of bridge provider blockchains,
for example. You can just look at like the Axlar network that are also doing, you know, bridge providers are custodying native assets using using either threshold security or some form of like a validator multi-sig.
And, you know, there has never been in the in the whole history of proof of stake blockchains, there's never been an example of this type of attack.
of proof of stake blockchains.
There's never been an example of this type of attack.
And the reason why is not just because people haven't tried it,
it's that the coordination effort,
as you scale these things up,
you know, if you think about it,
if you have a hundred plus anonymous nodes
and they've been honest this whole time
and they've kind of been working it very diligently for years and years
and years. You could say theoretically, it's technically possible. Theoretically, the sun
could teleport inside the earth and blow us all up, right? There's always a theoretical possibility
of a lot of things happening, but the practicality of it is divorced from the philosophy. The
coordination costs, and you get into this sort of gray area
where a lot of nodes are pseudo anonymous. And actually, that might be a selling point for
kind of pulling back a little bit that the traditional way that Cosmos SDK proof of stake
networks operate is that you don't have fully anonymous node addresses. It's actually more
advertised. And you have basically a ranked validator set. If you go look at like the
Cosmos hub secured by Atom, it's this big ranked validator set and everything's public and
competitive. And if you just kind of try to imagine the coordination costs of pulling out such an attack and these these validators are pseudo anonymous.
So there there would if there was a large scale attack where like one billion dollars worth of bridge liquidity was stolen, there absolutely would be ramifications for the scale of that attack. And so I think,
just to kind of round it out, if you think of the practicality of pulling off such an attack,
and if it's like, you know, it's a near zero chance of it actually being practical, and,
you know, the game theory of it just doesn't even
make sense when, when you, when you really get into those details. So, I mean, my, my stance is
that like, yeah, technically you can, you can think philosophically, there's always a remote
chance of, of something happening, but A, it's just like so close to zero that you, for all
intents and purposes, you might as well consider it zero.
And B, ThorChain wouldn't even be the juiciest target.
There's other proof of stake chains that have even more bridged capital in or juicy targets that would want to get hit.
juicy targets that would want to get hit based on if you look at the staked value compared to how much exogenous assets are deposited onto that chain.
There's some examples. I always laugh and bring up like Gravity Bridge, for example.
It's secured by like, I don't know, $300,000 and it's got millions bridged into it.
And that would be a juicy target way before Thor chain so it's it's like way down
on the ladder in terms of uh in terms of what a malicious actor would actually want to target
um you know to pull off such an attack well let's use gravity bridge as an example because
that like that one i just like why isn't north k North Korea taken a million dollars,
taken, you know,
gotten the majority of the validators in Gravity Bridge and it's taking that
money.
It'd be way easier than doing social engineering and like trying to hack into
someone's computer and convince them to download a program.
Like why don't they just like, they could just do it all.
Like, like legally code is law.
They could just, you know, why wouldn't they do that?
Yeah, because there's kind of, there's two ways that a proof of stake blockchain can suffer an attack.
One is that the existing validator set sort of coordinates somehow behind the scenes.
And then, you know, you get it, you get the 51% or I guess it'd be 66% for Cosmos networks,
but you have a coordination of the existing validator set to pull off an attack.
The other way, which is what you're talking about now,
is you have some new entity try to amass enough tokens
to take two-thirds control of the network.
And that has a whole other set of practical constraints.
For Gravity Bridge, it's you can't buy enough tokens on the open market without sending the
price to infinity in order to take two-thirds control of the network. So there's liquidity
constraints of pulling off this attack. And that exists for ThorChain as well. It's like,
as well. It's like, okay, if you even had a two-to-one ratio of native assets custody
compared to the bonded value of all Rune bonded, even at a two-to-one ratio, if a malicious actor
externally said, okay, I see a two-to-one ratio, I'm going to buy out Rune and take two-thirds
control of the network, you can easily see just how due to liquidity constraints, the
act of them trying to buy out enough Rune to pull off this attack would make it not economically
feasible to do so in the first place because of liquidity constraints.
Well, I totally agree with you there. I think the idea of buying enough rune to take over the network, it can't be done. I was thinking more along the lines of, like me, right? I'm trying to get more nodes in the network. I'm trying to attract bond providers. I'm not putting up the capital. I'm trying to get other people's rune.
And, you know, people know me.
I'm a known entity in third-chain ecosystem, and I still struggle to try and get bond providers, right?
So if somebody knew, I agree, it'd be tough.
But now I was thinking, well, what if they come in with, like, 0% operator fees?
And it just becomes a race to the bottom where every node operator is competing with each other in fees,
and they can, you know, try and do that.
But I agree with you.
I think we're talking about the 5% chance probability, 1%,
whatever it is, 0.1.
We're talking about the tail end risk here.
I agree that, generally speaking,
it's probably going to be quite impractical.
I think there are another thing that could be interesting
to implement, taking a photo chain,
taking example of more traditional proof of stake
Cosmos chain.
In those chains,
with the delegates can override the votes
of the validators that they delegate with.
And that's also a very powerful mechanism
to prevent a bad actor that is not using his capital.
Untouché is not possible.
You have to trust your node operator to do the right thing.
I think that could also be a way to reduce risk,
is to allow whoever bond with you to override your decision.
And I think it probably could be a big technical uplift with a bond with you to overwrite your decision.
And I think it probably could be a big technical uplift to implement that,
but it's how it works in the rest of the cosmos,
and that mitigates the risk you are mentioning.
Nice.
I think one of the things that I just keep thinking about in my mind is, I hear the juxtaposition between ThorChain and other protocols.
But if everyone here, Regera and ThorChain, my protocol, whatever your cup of tea is, or maybe it's all three,
I think it's becoming quite clear that what we're building here is truly revolutionary and it's going to be extremely, extremely powerful.
And so right now we can make the argument that, okay, like other ecosystems are more
of a target than ThorChain.
But I really believe that if we accomplish what we accomplish or we're trying to accomplish,
I think ThorChain can become the target, the target, right?
And if you've got to think ahead of some time here where we have privacy available on my protocol,
we have DEX aggregation going between Thor chain,
you know, people going to Zcash,
maybe we get some more privacy coins.
We have an entire DeFi suite
that's just exploding with activity on Rujira.
We have tons of swap volume.
You know, this is a bull case, of course,
but it's a hypothetical, right?
Rune's going up, Rugee's going up, everything is really, really well. This will be interpreted as
a threat. And I agree with PT in the fact that it's very hard to imagine how they can successfully
attack ThorChain right now. But I just want everyone to keep in the back of your mind
that do not take this for granted. And please, I think there is huge market premium, both ThorChain, Ruggiero, my protocol to be very defensive during this time, because we do have a period where things are looking relatively accommodating in some part of the world.
But we still exist in a very hostile economic environment.
And what we represent threatens literally everything,
everything. So I just want that to keep in the back of your minds. We're going to encounter
problems together, whether maybe scaling security might be a problem. No one's ever done anything
like this before. We are the pioneers, all of us listening to this, everyone listening to this
recording. So please, if issues arise, guys, I just encourage everyone, let's work together. Let's not throw haymakers on X, no crazy posts. Okay. Um, we're all figuring this
out as we go along. And, and some of the smartest people up here, um, they, they're ultimately
saying like, I'm not sure what's going to happen, but we're all wargaming in our mind. So, so yeah.
Um, Kenton, were you going to say something? I think I cut you off.
No, you're good. You're good. I just wanted to, yeah, I did have a kind of a question for PT.
You mentioned the nodes being pseudonymous.
And this is one thing, like if all the throw chain nodes were doxed, I'd have no problem.
Open the floodgates, right?
Because if everyone's doxed, it's very difficult to get away with it.
And, you know, my concern is people being anonymous and being able to get away with it and uh you know my my my concern is people being anonymous and
being able to get away stuff and i've had some people tell me well actually the there's you know
it's very like no note on thaw chain is truly anonymous it'd be easy to figure them out um
can you can you answer that is that true or not like is it you know just because you're anonymous
on twitter does that mean you're anonymous to the to the authorities, is it, you know, just cause you're anonymous on Twitter, does it mean you're anonymous
to the authorities?
Like, is it, if push came to shove,
could every node operator on ThorChain be discovered
by the authorities if they really dug into it?
That would be a quick, I mean, I'm not,
I'm not deep enough in the technical details of, I mean,
if you just take Cosmos Hub as an example, you have some validators that are fully docked. I
mean, you have Coinbase as one of the top validators, for example. So it's another case where reality is more complex than the theory. traceability back to centralized exchanges and is using, I don't know, is using Tor in order to
get access to Twitter so that there's no traceability back to their own IP addresses.
There could be any range of immense levels of operational security, but the practicality of it
is that that's just not how these things are. And you really, the validator sets for all these chains
are a mixture of big and small and corporate
and completely, you know, bare metal, independent people,
everything in between fully doxed
and sort of pseudo anonymous.
And, you know, there's a lot of public faces
and there's private entities
that are just providing their own capital and have like 100 percent commission to discourage other people from providing capital.
So it's just a big mixture. And when you when you just think about it, in one sense, the theory is that, well, technically, we don't know exactly what the composition is.
well, technically, we don't know exactly what the composition is, there could be 50% of the
validators are just some shadowy entity or organization, you know, plotting to take over.
But I think the reality is that you have this big mixing pot of everything under the sun, public,
private, doxed, pseudo anonymous. And just, the more that you scale this up,
the more you scale up the validator set,
the more that you increase the staked or bond value
of these networks, the more difficult it is
to actually pull off any of these attacks.
I feel like it would only really be realistic,
like a non-zero, everything's non-zero technically,
but the only like realistic possibility of pulling up such an attack would be very, very early on before
widespread distribution and when the network is operating at a smaller scale. And even then,
I don't think it's ever actually happened. So to what Patriot's saying, like, I think that, yes,
saying like, I think that yes, there's an immense opportunity for Thorachain to grow and thrive.
Thorachain, Rijura, you know, all the deploying applications, including Liquidy DAO, immense
opportunity. And at the same time, the more that you scale these things up, the more difficult it
becomes to pull off an attack. It's sort of like, you know, you think about the actual staked value
on Ethereum is maybe smaller than a lot of people would expect compared to the market cap and
compared to the amount of tokenized real world assets, including tokenized fiat, like the US
dollar. It's actually a small multiple. The staked value on Ethereum is less than the total tokenized value of these real world assets.
But it's operating at such a size and at such a decentralization of the node operator set for Ethereum
that the more you scale this up, it becomes increasingly
difficult. Same thing applies to Bitcoin mining. You can imagine all these theoretical scenarios
of what if China seizes mining operations or seizes the factory that makes the miners and
quietly accumulates enough Bitcoin miners to take control and 51% attack the network.
There's all these theoretical possibilities, but the practicality of it and as the asset
valuation grows larger and larger and you have more and more participants providing the security,
the practicality of actually pulling it off decreases as these things scale up.
practicality of actually pulling it off decreases as these things scale up.
I agree. I agree with you on the practicality stuff. I totally do.
But I do want to push back a bit on use the Ethereum as an example.
Like those aren't, those RWAs, like US dollars or bonds or real estate.
Those aren't bearer assets.
Like the TradFi can still stop those and freeze them.
WBTC, the Bitcoin, fine, they can take that.
Bitcoin is a bearer asset.
They can, you know, so that's, you know, the one thing I push back on trying to compare to other L1s.
They're not securing bearer assets like other crypto where a store chain is.
crypto where store chain is um so the best the now best comparisons we can make are the other
bridges that are carrying external assets to their own own token right um so i just yeah but but i
agree with you about the practicality i think you're right i think it especially as door chain
continues to grow you know if you increase the number of nodes and everything like it'll become
harder and harder.
And it's also kind of a gray area, right?
Because, I mean, there are centralized assets on ThorChain as well. Even if it's wrapped and kind of derivative, you still have USDC and USDT.
And you have Coinbase wrapped in Bitcoin.
All these things, in theory, like the deposit addresses that the nodes are securing
on ThorChain, those could be frozen by the asset issuer, at least in theory, right?
If you had 50 million of USDC being drained from ThorChain, that could all be frozen by
Circle.
So, I mean, I feel like it's just might, the big point that I'm really driving home
is that, is that the reality is very complex. And when you think about all the complexities,
it just, the, the, the probability of being able to actually pull off an attack in practice, like
is vanishingly small. I, we, we throw out numbers, like whole single digits of 1% or whatever. I think it's
far, far closer to zero than that. It would be fractions of a fraction of a percent.
So it becomes like, you know, I can't leave my house because I might get hit by a car. And you're
just so paranoid about being hit by a car. It's like, well, yeah, that's possible. But I mean,
you know, what are the chances? And then, like, what you do,
just stay in your house the rest of your life, and you just do nothing with your life, and, like,
be a prisoner, and, like, you can't, you have to accept some risk, you have to leave your house,
you have to go into the world and go do stuff, and I, basically, what you're saying, right?
You were also saying, so I think that's exactly the right analogy you used, and you were also saying so i i think that's exactly the right analogy used and you were also saying
that the more the network grow the more difficult it becomes we also have to think about it's like
instead of having this uh posture on security that is purely based on the spot value uh in the base
layer pools most people participate in this network, most operators and bonders,
I believe, because they believe in the future cash flows
that this network can generate for them.
And the more we remove concentrated growth
and we allow the economic activities, economic ecosystem
to flourish on top of the chain,
the more we grow the cash flows for node operators and bonders,
and the more it also become
difficult and attractive to just short-term attack it and and kill the golden egg goods or
whatever is the expression yes uh you guys we uh this has been a great conversation guys this is
awesome i wanted to add something but i'm not going to because we have a new speaker on the stage.
A friend has returned.
Familiar cow.
How's it going, man?
Yo, what's up?
Patriot Sounds, Kenton, and Pragmatic Monkey and Poston Ebrus.
Yeah, I actually super agree with everything that Poston Ebrus was saying,
so I just wanted to chime in because all the stuff he was saying,
that's all the stuff that I think of when people
talk about all the security budget stuff and just the potential of trying to steal from
DoorChain at scale, basically.
So I disagree with a lot of those points, and I just wanted to just throw that out there
that, yeah, I also agree that you know between like liquidity concerns of like there being
not enough liquidity to go and you know do an attack um yourself by buying a bunch of rune
and i'm sure like kenton you've experienced this like trying to get people to bond to your node
like it's not it's not difficult but i wouldn't say it's exactly easy and if you know you've
accomplished pulling off more than like a dozen i'd be pretty surprised of doing that which is like probably like the
it is lower than the minimum threshold you'd need to even take over one vault on the network
I just think that um you know and that's you as like a known person who's like you know really
put themselves out there to do that and like know, someone that someone can find if things were to like,
if you were to like run off with a bunch of money, right?
So I think that, you know, just the reality of like,
the story of like, oh yeah, this Anon comes in and like,
just gets a ton of bond from the community.
It's like, I just don't see where that's coming from.
Like, I don't think anyone's bonding millions of dollars without, you know, some kind of basic due diligence.
And while it's maybe technically possible to do it with, you know, thousands of smaller holders, I just, you know, I just don-on handle. But, you know, once you're going, like, you're talking about getting access to other people's money
in, like, the tens to hundreds of millions of dollars.
Like, it just seems, like, way too crazy of a scale to actually pull off.
Like, really, like, yeah, so you're either coming out from the one angle of, like, buy your own rune
either coming out of it from the one angle of like,
by your own rune,
or you're coming out of the angle of, like, use someone else's.
or you're coming out of the angle of like,
use someone else's.
And like,
both of which just have,
you know,
so many coordination problems actually come off of.
And,
you know,
I'm glad people are still talking about this,
but like,
yeah,
I think that,
yeah,
the best way to do,
the best thing to do is just scale up and out of it.
Like,
I think that,
like there's natural defenses that we could do.
Like, let's say we had a more efficient TSS mechanism.
Like, in GZ20, we have to have smaller vaults just because it's a less efficient protocol.
If we were to upgrade to another TSS protocol, and we get...
So, like, in theory, let's say that there's only one vault on doorchain and every single node is the guardian of that one vault.
Then the network is as secure as the bottom two thirds of the nodes that's there.
Like as it is now, we do sharding and you could, yeah, you could possibly take one vault
with like a ton of coercion and things.
I still don't think it's like, it seems too small of a target to even try to go after
like it seems too small of a target to even try to go after that,
that, but it is possible.
but it is possible.
But let's say you had a more efficient protocol where you could just run
every node into one vault and not really have to worry about charting and
things.
Then you just have a,
you know,
you need like,
you know,
70 nodes to,
to take it over,
which just is so,
you know,
like in,
in, in feasible that I think that could never happen.
So to me, just the best thing to think of is just scaling up and out of it just seems like the best way to get out of this problem, which is why obviously I was vocal towards
getting the security budget, just solve that problem.
It's a problem we create ourselves.
We can solve it ourselves.
And yeah, we can just change. We can set the monetary policy for the network and we can scale ourselves out of it. So yeah, it's just my thoughts on it.
Yeah, I agree. You know, I I'm at the point now I'm not worried about anonymous nodes coming into
the network, buying enough room to overtake the network, coordinating, getting into a certain Asgard, rugging something. I think we have outgrown that problem. The problem that comes to my mind,
this is like, so I'm trying to think of why our system will fail, right? I don't like to think
in terms of why we're going to succeed because there's innumerable variables that are bullish
right now. I think everyone in here would agree. You're all here for this reason.
The thing that I'm worried about and the thing that I don't know that I can't figure out is the privacy element and the success element making a multi-state actor
attack upon the node operators themselves. That's what I'm afraid of. I mean, you guys have to
remember the power of a decentralized Binance that allows privacy to anybody, anybody, any nation, right?
This is truly extraordinary. This is truly revolutionary. This is huge. And when I said
earlier, like ThorChain being a smaller target, yes, that is happenstance right now. But I think Thorchain, My Protocol, Ruggiero, we're poised to
be the ultimate target, not just from a stance of like an economic attack, but from an attack
that's trying to stop the emancipation of the world. I know this sounds a little, maybe a little
exaggerated, and maybe I'm giving a romanticizedness or embellishments, but
this is how the game theory works in my mind.
Just truly the power of what we've built here collectively
is truly extraordinary.
And at the point at which I will agree
with all the people who are,
because I agree the economic attacks that you mentioned,
I'm not too worried about those.
My mind will be at ease
when the world has capitulated
and accepted privacy as being a human right.
If that happens, I then at that point think we're in the clear.
Patriot, I agree with you.
Like I'm, for me personally, my concern is privacy is going to be the ultimate battle.
battle. That's where we're gonna have to fight. I don't think they're gonna go down easily on that.
That's where we're going to have to fight.
I don't think they're going to go down easily on that.
And, but I've been, you know, just thinking about ThorChain in particular, like,
forget it, forget a nation state attack. If we relax, remove the caps, have more assets we're
securing, we're gonna have more, that means more activity, more,
more yield to nodes. And, you know, if the nodes are constantly yielding like 20, 25% or something
like that, that's going to attract more bond, more nodes. So a good, a good defense could just
be a good offense, right? You know, if we, if we have consistently high yields on the nodes,
we're going to get more people bonding and more nodes in the network and help just secure it.
Right. And, you know, maybe it's like I've used an example before.
If you're, you know, if you're in your own hometown and you meet a girl who's like a five out of ten and she's, you know, so, so fun.
Like you're not going to cheat on your wife.
But if you're like on a halfway around the world on a business trip, you meet a 10 who's like super funny and awesome and into you.
Maybe you do cheat on her. Right.
Like it's a it's a spectrum of what you can get away with.
And is there risk worth the reward?
is the risk worth the reward?
It could be the same on Thorchain.
Maybe if we think about relaxing the hard cap,
it doesn't mean we instantly have $10 trillion on it.
Maybe it only grows, maybe naturally only gets
three or four times the size of the bond.
And it's just not worth it.
It just doesn't make sense to try and go through
because there's just not enough money there to steal type thing.
And so coming back to your nation state attack,
if we are having as much yield as possible,
juicing up those yield to nodes and have more nodes,
more decentralization, that's how we thwart them off.
It's the only way to fight a nation state
is just more decentralization.
And the only way to get more decentralization on thortrain we need more yield
going to the nodes that's the only way we're going to get more nodes so how do we get more yield
we got to get more assets we got to get more activity um we got to really relax the hard cap
um yeah yeah i would really i would absolutely echo all of that. Fully agree. And I would even add furthermore, there's a couple of additional points. So one is the topic of related to something that we brought up before, should the app layer end leave it as a sort of walled garden permissioned
app layer, then Thorachain can enforce revenue share and can ensure that the app layer is
providing essentially security through revenue share back to the base layer. And then you can
just let it run and scale, right? More revenue will scale the security of the base layer, and then you can just let it run and scale, right? More revenue will scale the
security of the base layer. Another point, unrelated to that, but related to security,
is that accessibility of bonding. I think right now, there's kind of a lot of hurdles, actually.
It's quite difficult, and it's getting better, but it's still compared to other proof-of-stake
blockchains. It's quite difficult for retail to participate in being a bond provider.
If you compare it to how all of the other Cosmos SDK chains work,
it's very, very easy.
People open up Kepler wallet and just click on whomever they want.
And it's people that they know, or, you know, it's basically businesses and providers.
or, you know, it's basically businesses and providers.
There's the whole list, you know, 100 plus validator sets
for a lot of these Cosmos chains.
And it's extremely easy for a huge amount of participants
to provide their security in the form of staking.
And just to echo everyone's points,
the more that you scale this up,
the harder it is to pull off any attacks. So you want as many distributed participants as possible to be a permissioned, high quality, decentralized Binance so that you can enforce revenue sharing back to the base layer.
And then the economic activity scales the economic security of the base layer.
And that's the recipe for absolute success over the long run, in my opinion.
opinion. I think the only issue with that is there isn't actually a direct correlation between
bond providers and security to the network. Like, just imagine the example of, like,
someone adds, you know, a million bond, or, you know, let's just say less than that,
like $100,000 worth of Rune as bond to a node. The network doesn't become $100,000
more or less secure. It really doesn't matter.
The security comes just from whoever is operating the node. The bonders are what allows the node to
become active and lets it win the auction in order to become part of the active set.
But the fact that there's more or less bond providers doesn't actually make the
network more or less secure it's really about the diversity of the node operators themselves so it's
only true as far as like more bond providers and being able to provide bond easier um would let
there become more diverse operators on the network so like, I generally agree that it's good to,
you know, make it easier to bond to the network.
It, like, it also doesn't, it affects it in that,
those are our own rules that we've set,
but it doesn't actually make the network
any more or less secure adding,
like any individual bond provider or, you know,
it could actually make it easier to attack the network
in like that economic attack factor that we're talking about.
So, you know.
So that's true.
We discussed that, actually, I think, before you joined.
That's true because currently on Torchchain,
bonders don't have any rights.
But there is another property that we could take
from other Cosmos SDK chain,
which is anybody that delegates with a validator can overwrite the vote of this validator.
And if we could replicate that for TorChain, so anybody can overwrite their vote,
and then their pro-rata share is like their vote take over to the overall calculation
of if something is going to pass whatever is the threshold or not.
Then suddenly you give, like every time you add more people bonding,
you give them, they also have power,
and then you decentralize the network and you increase security.
Okay, so that actually does make sense for governance and for things
like passing a vote or something.
That actually does make sense.
I actually really do like that.
But for the security of the funds itself, it doesn't matter because the only the like
a node operators has had a key share for, you know, it wouldn't actually matter whether,
you know, whether that is in effect or not, because the node operator always has access
to the key share, which is really what controls access to the funds which could be stolen.
So while I actually think that's a great idea and I would really like to see that for governance
and things just because I think it just makes sense to be able to override a node operator
for any given thing.
It wouldn't actually affect the security of the funds of the network... If you have a key share, you have a key share. It doesn't matter if someone can vote
one way or the other on your node. If you have however many key shares you need to rub a vault,
you could. Okay, thanks. I did not know that. So important clarification.
That's a clarification.
It would still be super cool on the governance side.
It would still be super cool on the governance side.
Yeah, it's kind of, it's generally true for like, well, literally any blockchain in existence is that at the end of the day, regardless of decentralized voting or anything, if you somehow amass, you know, two thirds control of the network, you are God.
You can do anything. Basically, you can upref to a different
version that just steals everything on the network. So basically, if you control two-thirds
of the network, you can do anything. It doesn't matter if other people can overwrite your voting
or whatever. And that's generally true for just pretty much any proof- stake blockchain. The way that you increase the security of a proof
of stake blockchain is by increasing the amount of operators and also increasing the distribution
of the operators. And some chains also go through an effort to try and balance out or sort of publicize how the balance of stake is weighted to try to reach
more of an equilibrium between the smallest compared to the largest. So there's a lot of
different ways you can tackle it. But really, what is required to make a proof of stake blockchain
more secure is you just need more validators and a wider global distribution of the validators. That's kind
of the goal for everyone. Yeah, I agree. And I talked to during the Bitcoin conference in Las
Vegas, you know, I got a lot of time to talk with Alex from my protocol and Orion. And I am thankful
because this is one thing I did mention, I said, hey, you know, maybe it's time, you know, we're
not there yet, but we need to start thinking about adding the capability for new node operators to come on. And just for anyone who's curious,
this will take a little work and maybe Cal, if you want to speak to this or not, I'm not an expert,
but this is something that we can do and it shouldn't be the most complicated thing in the
world to go beyond 120 where we're at right now. So, and I think this is something we probably should start thinking about
probably sooner rather than later,
because I do agree with PT,
increasing the amount of decentralization of this network,
especially all over the world
and doing the efforts
of these really wonderful node operators that we have.
And for those guys who don't know,
Runtard has been great in training new node operators.
And so has Slam Bammer and AutoStake.
This is a great initiative, guys.
And if there's any validators out there listing any node operators, I would encourage you, if there's space available, to maybe train one node operator and help this.
Because it makes the whole system stronger, guys.
Because right now we're still in the moment of uncertainty due to how powerful our protocol can be.
We need to make it more decentralized.
So I totally agree with PT on that front.
Someone else have anything else they want to add to that?
This has been a really interesting
conversation and guys, I love doing this stuff. I love talking about this right now. Um, because
I, I really want us all to drop the, any tribalistic notions of, you know, Thor chain,
Ruggiero, my protocol, Mocha, whatever. We're all in this together. Okay. And we're all going to
build this together and we're all going to figure this out together. Okay. Um, we are going to do this. So, um, what's why we're going to have spaces, hopefully every
week. Um, you know, I'm a pretty busy person, but I, I want to do these every week, um, with
Kenton and anyone else who wants to speak. I want constant communication. Um, so everyone's in the
loop and, um, you know, I encourage anyone to come up to come up on stage if they have any concerns, comments,
questions. Obviously, we want maximum transparency and maximum dialogue going forward. Does anyone
have any? Oh, go ahead, Kenton. Yeah, I was going to say, thanks, guys.
Conversations like this are really good for me. My brain works much better talking,
you know, hashing things out, hearing what other people say and trying to understand, you know, your points of view.
That really does help.
I did want to kind of ask PT, you mentioned keeping the app layer permissioned so that we can, the base layer can ensure it gets fees.
I'm curious on your thoughts on allowing permissioning
competition to Ruggiero.
Or do you think each app, each dev team,
should kind of have a monopoly on its product?
Yeah, what are your thoughts there?
Yeah, I mean, I'm going to be biased in this regard for probably obvious reasons, but I think in general, so I mean, just going back, I was kind of a class of 2019 Ethereum maxi.
And then during the 2020-2021 bull markets, I sort of branched out and discovered the Cosmos ecosystem and really latched
onto the AppChain thesis. And I loved the idea of the AppChain thesis. Just generally, my sort of
idea of where I think blockchain technology is going is that you're going to have this big
interconnected mix of public and private and everything in between as far as the decentralization
spectrum, all these different networks. Some will be permissioned walled gardens where the core
application verticals are built by the blockchain developer themselves. Some of them are going to
be completely open and
permissionless the way that Ethereum and Solana are, and you're going to have basically everything
in between. So I don't think that there's like a right answer, generally speaking, for the correct
architecture. I think that the correct architecture or the way that the world is going to end up is
that you're just going to have this mix and the market is going to basically figure it out.
Sort of like how on the open internet,
you have all sorts of different providers and all sorts of different product
developers and so on. Some are open source, some are closed source.
There's everything in between.
And basically the market is going to figure it out and find its equilibrium on
where it wants things to go. Now, as it relates to ThorChain specifically, you know, again, coming from the history, you know, Terra Luna, then following with Kujira and now with Kujira's migration over to ThorChain, I think it'll work best if the core verticals remain where you only have one application
that serves a core vertical.
If you only have one order book,
because then you get into fragmented liquidity
and you get into...
I don't think that competition in that sense
will actually increase the economic value
on Thorachain.
It might just kind of fragment things. I feel like
the best outcome is that you have basically amazing core verticals. And hopefully that's
what Rogier can provide. These amazing core vertical DeFi applications that serve the purpose
that the majority of users want and do it very well. And there's not a need
to fragment liquidity or have competitors. Now, there might be one-off cases. I think it's going
to have to be looked at on a case-by-case basis. If there's something that another team comes in,
they say, hey, we want to do the revenue share. We've built this application. And it does amazing
things that aren't provided by
the apps on Ruggiero, or maybe does something in a different way. I think that the, you know,
this is really going to come back to the ThorChain node operators, they're going to have to make a
decision on, is it going to provide enough economic benefit, you know, of allowing this in
and allowing the competition is going to kind of be on a case
by case basis. I don't think that there's sort of a one size fits all answer for it, but at least
for the time being, everyone's kind of fully on board with the Ruggiero DeFi launch. And we want
to see those go live and see how it plays out. And I don't really think that there's going to be that much interest from completely external teams wanting to sort of encroach and try to compete.
to compete with the incumbent and you'll have to share half your revenue to even be considered
by the Thorchain node operators after whitelisting. And you also have to undergo audits. And if it's
an external team, they're going to be financing all of that themselves. You know, Vergara is lucky
to have basically replaced the old CEO and brought JP on board and then brought in all these new investors
and you sort of have the whole thing that's going to become an entry barrier for external teams
that are trying to do the same thing and compete with the incumbent, which is Regera after it launches.
Okay, cool. So you guys all, you'll naturally have a moat anyway. Um, and cause I kind of,
Okay, cool. So you guys all, you'll naturally have a moat anyway.
kind of what I was, uh, why I was viewing app layers, kind of like how we have the front ends,
you know, the different wallets, uh, have Thor chain in their backend, like trust wallet ledger,
uh, uh, the Thor wallet, um, okay. Well, like they're not, I don't view them. Yeah. Technically
they're competing with each other, but I, i doubt anybody's switching from one wallet to another to go you know do swaps or whatever right
i think they're just they're just tapping into their existing audiences and so that's kind of
wondering reviewing app layers that okay regira you guys have an audience you have people you're
going to get users it's going to be great but maybe we should open it up for other teams to even if they create
the exact same product you guys have but they're tapping into their audience and they're going to
bring new users new people they're not taking anyone away from regira but they maybe they bring
in a whole new community and then that more activity kind of like activity benefits the whole. We all benefit from it, and we're all growing the same pie.
Yeah.
I think it's the other way around.
You should see a player as an extension of TorChain.
It's another set of protocols that increase the quantity
of things you can do.
But then all those different frontends,
they should look the same way they
work with torches they should look to work with the tool provided by rogera by the protocol and
rogera to extend the product offering of their own local audience and that's very much the model
we have in mind and i think that works much better than having like a 20 different app players competing on Torchain.
Oh, so you envision other apps, wallets, even websites,
whatever, to have like Regera in the background,
for lack of a better explanation.
We want to replicate.
So two things there.
We want to replicate the FB8 model of Torchain to allow the-end to add a fee on top of the fee we take.
And we'll likely do that.
But the more I've been thinking of it, the more I'm convinced what we need the most is a dual system of not just an affiliate that we charge on top,
but also what I call a referral fee, which you take from your own revenue.
I call a referral fee, which you take from your own revenue.
And that allows us to serve all the different providers
and front-hands without increasing the costs for the end user.
That's put us in a great position
to allow the integrator to come and scale and be competitive,
instead of having to add to effectively force
their users to pay for the extra cost. So, I mean, we will add two models.
I think that's very something we need to deal.
And then we can push out on getting all those integrator
also external XR functionalities.
Yes, and that's how the game theory works in my mind as well.
And that's why when we're going to have new protocols
we do spaces with, I want to talk to the interfaces,
the wallets that are already part of the ecosystem is not to delay. I'm trying to throw you a bone, you know, get in touch with these guys and be one of the first to offer these
primitives and start benefiting this. Cause this is a huge competitive advantage. And once you
unlock this competitive advantage, other protocols, other interfaces, other wallets are going to see
this and it's only going to continue to grow the network. Okay. Um, and so, yeah, there is, there is the incentives are absolutely clear
and I'm really glad you highlighted that PM. That was, that was well said.
All right, guys. Um, so does anyone have anything else they want to share? We've been going on,
we're approaching the two hour mark. I still have energy to go if you guys want, but if you think
we've exhausted the topic or if anyone else in the audience wants to come up and ask any questions,
feel free to request. I think we had a really wide conversation so far today. I'm very pleased.
I think we covered a lot of topics, but if anyone has an itch, they want scratched.
Now's the time, please.
Yeah, so I will have to drop off at the top of the hour here.
And I do want to just kind of circle back and provide some closing commentary on the
topic of the space, the relaunch of Liquidy DAO on ThorChain and Rijira.
Really, this is going to be great. The whole intent is
to be symbiotic. It's to get that flywheel going. Liquity DAO is going to be bringing and basically
injecting and seeding blue chip liquidity into the app layer to get the engine rolling. And
we're going to be doing
capital raises. We're going to be power users of the whole Rajira DeFi suite and generating
gobs of revenue and increasing valuations and building that treasury. All of it is not extractive.
It's not just for the benefit of the liquidity token holders. It's mutually beneficial.
It's going to seed the liquidity.
It's permanent sticky liquidity.
You don't have to throw incentives at it to keep it around.
It's not mercenary liquidity.
It's going to be there as long as Rudura lives and ThorChain lives.
And I'm sure we're also going to be branching out into the base layer pools as well.
And all sorts of exotic tools as they're released as part of the whole app layer DeFi suite as well.
So I think that it's going to be a beautiful symbiotic relationship to get that flywheel engine rolling and push these things to the sky.
Yeah, I totally agree.
And I think that was well said. PT, you're an excellent speaker and you articulated the vision of liquidity very well. And I'm very happy. And
I hope you come and do more spaces with us. You're a very knowledgeable person and you seem to have a
very good grasp of first principles. So I always admire people who think like you. Kenton, were
you going to say something? I would say hear hear. That's right.
That's right guys. Hear hear indeed.
Okay guys.
What do you think Kenton?
Go ahead Liquidy were you going to say something?
No, I was just going to second everything PT said.
That's the thing.
We are in a really symbiotic relationship.
I will not articulate it really well.
So, and I have to drop off as well,
but I hear we are closing off anyway.
So, really thanks for hosting us and having us
and giving us the opportunity to showcase us.
And thank you very much guys
for taking the time to come up here.
Kenton, it looks like we're losing all our speakers here, which is normal.
Hey, they stuck around for two hours.
I appreciate your guys' time.
I got to go get going too.
I think so.
I think it's a good time to wrap it up.
Okay.
You know, I did, you know, there is something I want to do to close these spaces.
That's going to be pretty much unrelated to the topic, guys.
There is something that is very important that's happened. We've touched on this before, and that's the zero to one that Maya Protocol has just done.
They've released Zcash on there, on Maya Protocol. And now for the first time ever,
there is decentralized permissionless access to privacy. When I was walking around in BTC Las Vegas with Alex,
and we were talking to people about what we have accomplished, many did not know.
And we spoke to some pretty popular, famous people about this, and they were surprised.
Okay. So the word has not gotten out yet. Okay. Um, but please
understand that it's coming. And we did see a few days ago, I think it was like 8,000 ZEC
we swapped for. Okay. These, these swaps are coming. And I think my protocol is poised to do
very well, but this is going to come with problems. Many of the things that we alluded to. Okay.
We're going to have exploited funds go through my protocol at some point.
It's going to happen.
There's, it's just, it is what it is.
I don't know when it's going to happen.
I don't know if it's three months from now.
I don't know if it's a month from now, a week, or maybe an hour after this space is done.
It is going to happen.
And there's one thing that I want to do up until this issue is resolved.
It's just put a reminder out to everybody.
Okay.
Please be ready.
Be ready.
Be ready for my protocol.
Be ready to defend them
because they were not only there for us.
If they attack my protocol for privacy,
it's an attack on all of us.
Straight up, okay?
The future of finance
is literally being determined right now.
And so I just want everyone
to recognize the moment. You are part of like the greatest transformation ever in the history of
finance. This is happening now. It's going to be solved right now. Okay. So you must all be ready
and ready to rally the troops. And so I just want to go over briefly some things that they're
probably going to say some arguments. Okay. They probably going to say, some arguments, okay?
They're going to say, you know, like there's exploited funds going through.
So we need to put a filter on 4Chain, my protocol, whatever, okay?
This is a fallacy, guys.
This is a fallacy.
It's the ever-moving goalpost fallacy.
Because there is no way that you can, with Bifrost architecture, to prevent this from happening, okay?
You can put whatever
filter you want. You can't stop it with, especially with all the different decks,
aggregation routes, the new addresses, um, with the mixers. Okay. There's no way to stop it.
And they want to use this as an argument that never goes away. Like there is exploited funds
on the layer one. So therefore we can never have a permissionless future. Fuck that. Fuck that.
That's dumb. Okay. We're going to a permissionless future. Fuck that. Fuck that.
That's dumb. Okay. We're going to have permissionless as a stupid argument. Okay.
They're going to say things like you're helping the DPRK, you're helping North Korea. No, no, no, no, no, no. Excuse me. We are addressing the first principle problems that led to the
exploits that the DPRK was able to pull off. Okay. We are fixing the problem. And that problem is centralized exchanges.
That is the problem. They cannot, custodying other people's assets is always going to problem.
And as long as we have this issue, it's always going to exist this risk. And we've invented
technology to help with this issue. You guys know VolteSig, right? We, every problem that is being
faced, this community, this surrounding ecosystem is trying to fix.
Okay.
They will mention things like the $1.5 billion that was lost from Bybit.
Okay.
Excuse me.
That doesn't even come close to the government corruption that has happened in my own country.
For those who don't know, my country, we're $37 trillion in debt.
$37 trillion.
What's a trillion?
It's a thousand billion.
Yeah, we got 37 groups of those. So 1.5
billion relative to that is insane. And you want to talk about what they did with this money?
Don't let these morons moralize to you. Don't let them co-opt the narrative of being the good guy.
Don't let them own the good intentioned reasons and the morality narrative. We've been funding
both sides of various conflicts all over the world, both sides.
We get pallets of cash going to our enemies and friends of like, all to feed the military
industrial complex. I have people I know personally in border patrol that know that the government
itself, my government, actively gives weapons to the cartel. It gets paid under the table.
Or they facilitate the sexual trafficking of children across the border.
Not only as a means to, as like a false parent to get them in.
But then after that, they make a little extra money by passing them around from guy to guy.
It's sick.
It's evil.
Okay?
Don't let these monsters moralize you.
What we're building here is right.
It is right and is necessary to free the world.
Privacy is necessary.
It's a human right.
KYC means kill your customer.
You've all seen the Coinbase data leak, okay?
And the various violence is happening to innocent people.
Obfuscating your wealth is crucial.
And wanting privacy for yourself is in no way,
it doesn't mean that you
are interested in committing crimes. No, seeking privacy is your best defense against your own
government wanting to commit crimes against you. So guys, these are just some of the arguments.
Many of you in here are smarter than myself. You know the arguments. Please be ready. Okay.
I need your help. We all need to be together this is coming i
don't know when but it's going to happen so just as a parting thought for everyone when my protocol
comes under scrutiny from you know who you know the the accounts are going to do this rally the
troops get involved and fight back because my protocol was there for us we're going to be there for them anyway that's
what i got patriot sounds how do you really feel oh man yeah i get wound up let me tell you brother
this is very important guys this is so important and uh and you guys all know that thank you so
much this has been a great space um i'm gonna keep reminding people to do this be ready boys and girls um okay we wrap it up there kenton that's great yeah thanks guys thank
you everyone and i'll i got your back my protocol i'm right i see you in the audience we got you
we got you yeah and trying to think how to bring this around in liquidity.
Welcome to ThorChain App Player, guys.
Looking forward to seeing what you do there.
Yeah, thanks a lot.
And we will try to showcase
Ruggiero's
old possibilities
and how they can be used
and simplified for those who don't
want to use them themselves.
Yep, appreciate it. And thanks for having us on.
Hey, thank you, guys. Thank you, Pragmatic Monkey, PT, and Liquidity. Thank you so much.
Kenton, you are a baller, as always. Guys, I hope you've enjoyed this space. Please share it if
you're just actually now listening to the recording um give a fancy
tag we need to um raise awareness of what we're building here if you want this protocol what
we're building to be successful please share the message it's um it's ours to win so let's win
that's what i say let's win okay guys all right take care. Bye everybody. Thanks, bye. Bye.
