Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
Mastering Stable Yield and Taming Market Volatility on Mantle Network
Recorded: Nov. 23, 2023 Duration: 0:35:58Space Recording
Full Transcription
Can you hear me?
Yep.
Can you hear me?
Yep.
Yeah, you're good.
Alright.
Hey, bro, by the way, should I be calling you admin or defiant maestro?
That's admin or do.
It'll be easier.
Okay, sounds good.
Let me check with Jinxiong.
Okay.
Okay.
Yeah.
Okay.
Yeah.
Yeah.
Yeah.
Okay.
Yeah.
Yeah.
Yeah.
Okay.
Oh, the mental accounts here also.
oh the mental accounts here also
do we have the list um the mental accounts co-host
i don't know i'll just try and see if they accept yeah sure
Hello, can you hear us?
Yep, might test.
Okay, sounds good.
Let's just wait a while for more folks to come in.
Let's aim to start at 10.05, sounds good?
Yeah, sounds good.
Sorry about that.
I think I accidentally muted everyone.
All right.
I think we can get started with the AMA today.
So good evening, everyone.
My name is Kester from ByteTrade, and I am the project lead for KTX Finance.
We are one of the AMA, and we are one of the AMA, and we are one of the AMA, and we are
the host for today's AMA, and alongside me today, we have Jing Xiong from Solve and Edmund
from Mental Network.
So, perhaps before we start the conversation, maybe let's have our speakers introduce themselves.
Maybe Ting Xiong, maybe I can go first.
I am going to speak to you all of the AMA team.
finance. On Mento right now, what we are building is an asset management platform where we want
to give users access to a broad range of offerings, a broad range of strategies. And in the coming
days and in the coming weeks, we're probably going to see a lot more exciting offerings
we have on our platform.
All right. Thank you for that. Admin, maybe you want to give a quick introduction about
yourself as well?
Okay. Thanks, Kester. Hi, everyone. I'm Admin. I'm from Mento Network. So I'm mainly
in charge of doing ecosystem research in Mento and focusing mainly on the DeFi sector for
Mento. So I think my day-to-day runnings include designing incentive programs, looking out for
what the network actually misses and trying to make sure that the DeFi ecosystem is built
out as holistically as possible. Yeah, I think that's a short summary of what I typically
do at Mento. Over to you, Fester.
Yep. Thank you for that, Jingxiong and Admin. So for the listeners that can kind of sense,
KTX works closely with Mento Network, in particular Admin and Sol, Jingxiong. So for listeners that
have not heard of KTX Finance, KTX Finance is basically a decentralized derivative exchange
that launched on Mento in September this year. In essence, KTX utilizes a hybrid multi-asset
liquidity pool, also known as the KLP pool, comprising of 50% USDT on one side and 50% BTC,
ETH and Mento tokens on the other side. And the main purpose for today's AMA is basically
to announce a new partnership with Solve Protocol on Mento Network. So Solve and KTX has partnered
to introduce the KTX Delta Neutral Pool, a new fund that has been live since the 15th of
November that's only accessible to users with the citizens of Mento NFT. So by participating
in that fund, participants can receive an added bonus on top of the yield that they receive
from KLP. So both Solve and KTX will be offering KTC and Solve token rewards to all the investors
of the fund, bringing the estimated APR to close to 50%. But at the early stages of the fund right
now, the APR is close to 130%. So with that as context for all the listeners,
I think we can get the conversation started. So perhaps we have some questions for Jingxiong
today. So for listeners that are tuning in today, some might not have an understanding
of how Delta hedging works. So Jingxiong, perhaps can you explain how Solve Delta Neutral Pool works
to reduce risk for LPs on KLP?
Sure. Thanks a lot, Kester. So as most of you know, as what Kester mentioned, KTX is a
perpdex, right? And probably one of the first ones on Mento. And for us as a protocol, what
we like to do is we like to supply liquidity to this perpdexers. For KTX in particular,
it has a basket of a few tokens. You can think about that as almost like an ETF. So while supplying
liquidity, what happens is that we would be generating trading fees on the back of that.
But because it's a basket of tokens or it's a basket, it's like an ETF, the value of this pool
will actually float up and down depending on the analyze. Like if Mento goes up, this pool
can get affected. If BTC goes down, this pool can get affected. So what we like to do and
quite a lot of our users like to do is they actually like to hedge out this exposure, which
we call Delta hedging. So if there's one BTC holding, we would hedge a one BTC holding
Bitcoin and vice versa. So this in particular, what it would do is give users a Delta neutral
or like they don't really have an impact of the underlying tokens, but at the same time
generating the fees or the trader fees from users of the TX platform.
Thank you for that, Jingxiong. Perhaps to add on as well, as an LP on KTX Finance, you're
basically buying into an ETF. That inherently means that you are 50% long on the tokens that
I mentioned earlier, Bitcoin, ETH and Mento. So to be exact, what Solve does is they short
the relevant amount, the corresponding amount to ensure that any price fluctuations of the
tokens will be canceled out. So that leads us to a very important question for Solve and for Jingxiong as well.
So I think since that you're managing users funds, can you elaborate a little bit more about Solve's
risk management system and how do you guys ensure fund stability and investor security?
Sure. I guess first things first. So any funds that users will invest via Solve or invest via
protocol, I think we take it very seriously. And it's a sign of trust that you have in us.
And we definitely take risk management. We take security very importantly.
So first off, I guess we would usually have...
Sorry. So usually for a strategy like this, what we see a lot of our competitors out there,
they usually create smart contract vaults and stuff like that. So for us, I think we are kind of like a hybrid solution
where on the DeFi side, we would usually run a multi-sick where the funds will go in and they will stay in,
they cannot be taken out. We would have what we call ACL, so smart contracts written above,
to ensure that the fund manager or the trading desk, whoever's managing this pool can actually trade,
but they don't have the ability to withdraw funds, right? So they can...
Any asset manager that we work with can still be trading their strategies and trading the pools,
but they don't have the ability to remove funds. That's the one part.
For the second part on the hedging side, in this case, we are using Bybit.
So we usually offer our investors or users a few options.
Number one is they can actually use our Bybit account.
And why we like that is because we have a pretty high fee tier.
So that actually helps in generating additional returns.
Number two, we also plug into various kinds of prime brokers or custodial solutions,
stuff like Copper and stuff like Hidden Road.
So we are quite flexible and across the whole platform,
we use a range of these solutions depending on what our users prefer.
Got it. Thank you so much for that very elaborate answer.
So I think you mentioned something about returns in your answer.
So I think this fits well into the next question.
So given that Solve has been active in other chains, including Arbitrum,
could you potentially share some insights on the historical performance of the funds managed by Soft Protocol on other chains?
I think that's a good question, but it's also a tricky question.
I think what I'll be honest in saying is that we haven't seen a strategy that consistently does well throughout the year or throughout markets.
There are certain strategies like, let's say, like what you guys are running, like the Delta Neutral versions of some other chains.
We see those consistently running in a range of maybe like 15% on an annualized basis.
But when volumes are down throughout the DeFi or even on the CeFi space, we have seen this returns dropping down to the single digits.
On the other hand, we see some of your more aggressive strategies like your CTA strategy.
These you expect much higher returns, maybe 20%, 30%, 40%.
But so are the drawdowns as well.
And similarly on your arbitrage strategies on the CeFi side, I think those average between 10% and 15% as well.
But it also tends to be cyclical.
And that's why what we like as a proposition is to have a range of offerings where investors can choose and investors can actually see what is performing and having the ability to move around and switch around.
Great. Thank you so much for the answer.
And I think Solve, the new asset management platform for Solve is currently still quite new.
So perhaps could you provide us with a quick update on how the current fundraising climate is and how has it evolved over the year?
I think in terms of fundraising, and I guess specifically for fundraising, what you refer to are investors investing to the strategies.
I think over the last two weeks to a month, we have seen quite significant uptick in volumes in this space.
And I think a lot of that is driven just by macro sentiment, investors, users, DeFi players, everyone just being largely more bullish, largely more optimistic about this entire sector as a whole.
So on the Arbitrum side, over the last two to three weeks, we have seen our volumes going up to close to 30 million on just one.
And similarly, that's what we're looking to do on the mental side.
And we are quite bullish on things actually getting better.
And we are actually putting a lot of time, a lot of effort to make things work on the chain.
Oh, good.
At the same time, I think since mental is still a budding DeFi ecosystem, I would also like to understand how is Solve using their V3 to create more new use cases to enhance liquidity and participate in different LPs, apart from KTX, of course.
So, given I think we are relatively new to the mental ecosystem, we are quite happy being on board and being on the chain.
The mental team has actually been extremely helpful with the resources, very helpful with connecting us with the various protocols.
So apart from KTX, behind the scenes, we've been speaking with quite a few of, let's say, your competitors or some of the AMM DEXs, where we are going to look to run various kinds of hybrid strategies, whether it's supplying liquidity and hedging or having actively managed LP solutions on it.
So these are things that we are looking at right now. We're having discussions. And that's why I'm quite excited. Over the next few weeks or so, we're going to start launching more and more of these things.
And hopefully we can help to contribute more to the ecosystem and actually help build it up.
I think we like getting involved right at the beginning because we want to play a part in it and we really want to help grow the ecosystem.
That sounds very good. And talking about the mental ecosystem, perhaps Edmund, you'd like to share with the listeners as well.
What are some exciting plans that mental network has lined up for the rest of this year and perhaps for the first quarter next year?
Okay, for this, probably the end of this year, in December, we will be likely to launch our MEF.
MEF is the liquid IF staking protocol that we have developed internally on mental.
So MEF will be launched on L1 and then after that, it will be brought over to mental L2.
And I think at the same time in December, there is a airdrop campaign that we have planned for mental.
But I think I will let the PubCom's team review more details about that.
I don't think I'm allowed to talk too much about that.
But I think this also signals that in December, there should be more native mental points being deployed in December.
And this comes in line with us actually deploying our 200 million eco fund into projects.
And these projects that we invested in, some of them will be deploying in December to early Jan.
So I would say that in the next two months, we can expect to see our DeFi ecosystem grow.
More protocols for the whole ecosystem to collaborate with, to build composability with.
And hopefully there will be more excitement in the ecosystem in the coming two months.
Also, I think the next few months will also mark the end of our mental journeys season one.
So I think the season one that was sort of a test season that we ran to see how we can reward both our devs as well as users who actually are involved in the ecosystem.
And there were a lot of learning points that we actually learned.
I wouldn't say that it was perfect.
There were a lot of mistakes that we made that I think we will learn from.
And we have been hearing a lot of feedback from the community and we will be taking all this feedback in and improve the program.
And then we'll be launching a new program shortly after season one actually ends.
And last but not least, I don't think I'm allowed to review the rest.
But we have some other things planned up in the coming two months.
But probably it's best for the main official channels to actually announce it.
If not, I'll spoil the surprise for everyone.
That sounds like a very exciting remaining time for this year and a very exciting first quarter as well.
So I mean, given the excitement, what are you most excited to see being built in Mental right now in the current DeFi ecosystem?
I think in the current Mental DeFi ecosystem, I think we are a new ecosystem.
So I do feel that we are lacking in many aspects that we are continually trying to work on and improve.
And in particular, I think the LSD and RWA space will pick up significant traction in the coming months.
I think the both of these segments has been one of the key areas of focus that we have been looking into.
And with the development of the MEF and now also us having onboarded USDY from Ondo, which is the RWA stablecoin that allows users to get yields just from folding the coin.
I think this opens up a lot of possibilities for protocols to build on.
And both the LSD as well as RWA sectors, the growing sector in DeFi that we see increasing traction with, which I think we will continue to grow over time.
So I'm pretty excited to see how protocols actually use the yield from ISDs and RWA and integrate it with their protocols,
be it like based on collateral or they do some form of looping yield farming strategies.
I think this stuff will be exciting to watch and it will only benefit users to have more choices to actually choose from.
Outside of this, I think something interesting that I've been looking at recently is intent-based apps whereby apps are actually designed very differently from the traditional apps
and it's based more of intent swaps or intent-based codes.
So apps such as like CalSwap and like OneInch have so-called brought more efficiency to the traditional way the app functions.
And I think this intent-based apps have generally gone under the radar.
They can greatly improve the efficiency for how that performs.
And especially in terms of gas costs, it's a lot cheaper and a lot more functional to function.
But of course, it's also a lot more complex to actually code out.
But I feel that once intent-based apps get more traction and more recognition,
more apps will actually build such intent-based apps and the users will be the one that ultimately benefits from all of these new forms of apps.
That sounds very interesting.
I think given the very grand DeFi vision of Mental,
how do you think Solve can fit into this vision and help Mental achieve their objectives as an ecosystem?
Well, I think there's a few folks, right?
So firstly, we as a protocol, we can't function by ourselves.
We need partners, right?
So we need guys like you guys.
We need guys like the AMMs.
We are happy to run strategies.
We're happy to provide liquidity.
We're happy to provide options to users.
But it's an entire ecosystem and how it interacts with each other, right?
I think you can see us as potentially maybe like a group where we try to plug and play across different things to actually have good offerings for our users.
Thank you for that.
And maybe just to chime in as well.
I think I see many of the Mental ecosystem projects in the listener base tonight.
So I think most of them, we're probably going to be working together in some form or another in the near future.
So for our listeners, please do look forward to that.
And with that, I think most of the listeners or at least myself have gotten a much better idea on how the ideology behind Solve,
how they have accrued investors in terms of fund stability and security.
And at the same time, we also learned a lot more about Mental's DeFi vision and how they plan to grow the ecosystem.
So with that, I would like to thank Admin and Jingxiong for their time tonight.
And before you go, let's perhaps stay for another two, three minutes to see if any of the listeners have any questions.
Actually, I have a question. This is more for Admin, right?
You mentioned about mental journeys. You mentioned about learning opportunities.
Can you maybe share with us a little bit about what's one good thing that came out of it
and probably what's one learning opportunity that you think can potentially change?
Yeah, okay. Thanks, Jingxiong. I'm happy to share more.
So for mental journeys, I think one good thing that actually we saw from mental journeys is that we can,
we saw that users are actually interested to participate in the ecosystem that allows them to,
I would say, have some fun while having that journey inside like the DeFi ecosystem or mental right now.
They can accrue points and they can be part of a so-called community that they are involved in and they can actively compete with other people inside the community.
So if you hop onto our Discord, I think mental journeys has been a common topic that is commonly being discussed with all the users on mental.
So we're happy to see that actually that the users actually enjoy the first iteration of mental journeys.
And hopefully we can continue to build on this excitement and get users to feel more, I would say, more connected to the ecosystem as they continue their journey on mental.
And probably one of the bad things that we see from mental journeys is it incites competition.
So I'm not sure if that is a good or a bad point.
Even among like our protocols or users, everyone's competing to actually get points.
And then it gets a bit heated at times whereby the protocols want to have higher points than other protocols.
And then they question the matrix that we actually, how we actually get score the points and we have to let continuously try to explain the points.
But I guess this is all part of the fun whereby once we have a scoring system, there is the, I would say, tendency for both protocols as well as users to get more competitive.
Of course, everyone wants to be the best and we're happy to see that everyone's interested to participate in this.
And hopefully in the coming seasons, a lot of this so-called the downsides of like the user experience and the glitches can be resolved quickly.
And then we will, everyone can enjoy using mental journeys more actively.
And we can possibly add a few, a few more features that can improve the experience for both users as well as protocols.
Then in this way, everyone can have a more holistic experience like on mental and have fun while like the genning on like the defined ecosystem.
Thank you so much.
Thank you so much.
And then for that, I think it, we, we, I think everyone in the ecosystem is extremely excited for, for, for what's upcoming for, for mental and all the other ecosystem projects.
Um, so, uh, we'll just pause for, for another minute here to, to see if, um, any of the listeners have any questions.
Um, okay.
Okay.
I think, I think, um, as of what I'm seeing right now, I don't think any listeners have any questions tonight.
Um, and then for that, um, I like to wrap up today's AMA.
Thank you so much for your time, uh, admin and Xing Xiong.
Uh, and for all the listeners, thank you for tuning in as well.
I hope you guys learn a thing or two about KTX, uh, solve and also mental.
Good night.
Yep.
Yep.
Thanks for having us.
Thanks for having us.
Have a good night, everyone.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
Bye.
