Neptune Finance: New Money Market Launching on Terra

Recorded: May 26, 2023 Duration: 0:58:39

Player

Snippets

sorry guys
I am absolutely getting
rugged by Twitter
I was speaking that I thought
did a really nice introduction there
and saw that my mic
honestly swear that I did unmute
MBE, did you catch any of that introduction?
Hey Rebel, no actually
miss you completely
oh well, it was a good practice run then
I was basically
that's unfortunate
hey Keegan, yeah
welcome, welcome, it's Rebel DeFi
on the Orbital Command account here
this evening we've got Netune Finance
who we're going to be talking to
about their upcoming launch
as well as
a discussion of
their governance proposal
where they're asking for their audit money
to be, or audit cost
to be reimbursed
there used to be a programme where TFL
would cover these costs
some of us experience on Twitter spaces
getting rugged
there seems to be a sort of vibe that
some projects feel that they were kinda rugged by TFL
the promise of getting audits
covered was literally
just taken away like that
so projects are now going to
the community pool or coming to the community
asking for community pool funding
I think the majority of the
community think for legit projects
is entirely justified
yeah, it is
10.05pm in the UK with me
MBE, what time is it with you sir?
We're just a bit up to 7am over here
Right, well I'm most definitely off the coffee
because I'll be going to bed within a few hours
but I presume, have you had a cup yet?
Yes, in full swing
coffee in hand, thanks very much
Absolutely, on the ball
Keegan is over in Canada
so it's been a bit of an issue to
schedule this space but this seems to be
the best slot for us
what time is it with you Keegan?
It's currently 2pm on a very
lovely and sunny afternoon
See, Northern Hemisphere, the place to be
we had a brilliant day in Scotland today
absolutely fantastic, we have an
expression called Taps Ath
which is the Scottish vernacular for
it's a very nice day, men
can walk about with
no t-shirt on
so there was people in my village
walking around Taps Ath
which doesn't happen all that much in
So yeah, let's kick this thing off
we've got a hard stop on this space
at the top of the next hour
there doesn't appear to be a
huge audience in but hopefully we've got a nice
recording so people listening
back on TerraSpace's recording
will be able to learn more
Neptune Finance
MB do you want to kick it off or are you
happy with me to
lead things out?
Yeah, go for it Rebel, no problem
Yeah, you're sounding a bit
Keegan, so
MB and myself both
had the pleasure of
testing out the Neptune
Would you like to
refresh people's
memory? I mean, Neptune was one of these
projects on the original Terra
that was, I was particularly
excited by it
I liked the way you guys were
well, obviously I don't know what was
happening behind the scenes but
as far as the users were concerned
felt like you were being quite cautious
and rather didn't want to rush the product
which on one hand was like
we want to use this thing
but on the other it was like wow
these guys are really taking care of what they're
Do you want to give us a quick
run through of what's happened to your team
since the
crash up till now
would that be a good way to start?
Yeah, sure thing, I can give you a good
executive summary
I think the last time we talked not too long ago
I gave more of a detailed overview
of how Neptune pivoted
and what the app is
designed to do now
like you said, we're taking the same
approach, we're cautious in the way
that we build, we take security
and financial risk very seriously
we also like to
build good products and not rush them to
so the long story short was
in a Terra Classic
in the original blockchain, Neptune
was designed to be a leverage investment platform
it was built on top
of the anchor back end
and users could bring collateral to us
and we would leverage it through anchor
and make an investment
and then we had some high level design
where we would protect you from liquidation
and compound all your investments
highly automated product
which made it like a one click solution for the user
and we were
all ready and audited
to go live on mainnet
that was around the time that the ecosystem collapsed
that's when UST depegged
so it was very unfortunate timing
but at the same time we were grateful
that we didn't have to do any damage control
and that actually
gave us an opportunity
to kind of see where
the flaws were in
not only in Terra and stablecoins
but in our own product
and in money markets as well
and that's where we came up
with our new design now where we
wanted to keep our leverage investment
product and build a better
money market to plug it into
so that's where we're at today
Neptune is now
a highly advanced
money market built for Cosmos ecosystem
firstly launching on Terra
our beta went live almost about
two weeks ago now
like you guys said we had some
private testers before going public
we got some good feedback from them and now that
we're public we're getting some really
good engagement, some really good feedback
as well. Unfortunately
some of the bugs that users are facing
at the DApp are coming from bugs in
the station wallet
so we'll be working on integrating
more wallets as we roll out
and keep developing and
keep working with TFL to fix
some of those bugs as well
so we're really happy to have users
using the app and getting
the feedback from them so we can take
notes and start making improvements
so that's where we're at today
Awesome, thank you very much for that quick
run through
I noticed a post
today from station with
a really fancy video I don't know if it's from
station or TFL, one of the two
it looks like some nice
updates, or it looks like a nice video
anyway, about station
as I'm just looking
at your site just now
beta.net.finance
I can see the station wallet
the leap extension
is that a new
integration or have you always had leap?
I don't believe we actually integrated
leap into the
beta, let me just check on my website
because I don't think that should be a thing
that may be a phenomenon with
your browser
interesting
so we have station and we have wallet
connect available that we will be integrating
the other Cosmos wallets as well
okay, well
some feedback live on
Twitter spaces, I am using
Chrome, I'm using a Macbook
and when I click connect wallet
it gives me the option of station
leap, I don't have the
leap terra wallet
oh no I do have it installed, I wonder
so if I click
it seems to say
do I want to connect leap to the website
I can approve that
maybe, okay maybe I can
practice with that a bit later
but that kind of interesting
with regards to launching
a new money market on terra
do you have high hopes?
I mean it's fair to say that
and I think everyone in this room is aware
of like a sort of general
lack of liquidity
in the ecosystem
so I'm just wondering what your expectations are
yeah we've
you know we watch the markets
constantly in how Cosmos DeFi
you know it develops at an extraordinary
rate and unfortunately
the liquidity doesn't keep up at the same rate
but you know that's a condition of current
financial and crypto markets
at the same time as well
but for us in particular
as a money market it's something we
look at constantly
and in depth because
the tokens that we
use as you know borrowing and lending assets
and then more importantly collateral assets
we have to consider the
risks of using them in our money
market and
there are you know several significant risks
when considering these
and we have a
framework that we can plug a token into
and see if it fits
and if it's worth taking a risk on
in Terra specifically
the more significant problem is
the first party
liquidity
and what I mean by that is how
much liquidity there is in Terra
and honestly right now there's not much but that
sentiment goes around all of Cosmos
at the same time
so if you look at Ash Report I think there's
about between 10 to 12 million depending
on the date in liquidity on Terra
most of that is in
lunar based assets
there's some depth in stablecoin
we look at that and we consider
what assets we can use as
collateral but then we also look at the secondary
markets so we look at Osmosis and what
liquidity is there and what tokens have
and when we consider these
the important aspect is if
there is a liquidation
event where
collateral prices go down quickly
and liquidators have to come in
and start liquidating
is there going to be enough liquidity
in Cosmos markets to support
this phenomenon
so if we're using a collateral that doesn't
have a lot of depth in Terra
it's very likely that the liquidity will run out
fast and then
there will be no incentive for
liquidators to be able to
make a liquidation and take a profit
at the same time
so that for us right now is a real
concern but we're working
with other teams, we're working with
and TFL and
we're in contact with Noble Chain
talking to them about when native USDC
is coming out and everything
we're still mapping out what
is going to be the tokens
that we haven't launched
and then what tokens will follow
Great, so I mean
just looking at the beta just now
we've got USDC and Luna
as the two assets
that we can lend, you were talking about
liquidation events
how is that
handled on Neptune?
few lending markets that do exist in
Terra right now
adopted the
Q system that Anka innovated
and that's
a system where you queue up liquidity
and it sits idle and then
if there is a bad
data then that liquidity
is used to
liquidate their debt and seize their collateral
in our system
we opted not going for the Q system
forces liquidity to sit idle for a while
and it's not very capital
efficient and everything we designed at our market
is about capital efficiency
so in our system
it's a bidding system
I'm sorry, not a bidding system
it's a race system
so liquidators, anyone
running a bot can search for
potentially bad debt and then
once that position does become bad debt
they get to race each other to see
if they can capture the
liquidation event before the next person
and this is more
ideal for liquidators
capital because while
there's no liquidation available
they can be using that capital
to be performing arbitrage
or yield farming
or market making or any other activities
so it doesn't keep that
liquidity idle
it keeps it moving in the ecosystem
that's pretty interesting
we actually
have a member on
the Orb Talkman team
who is quite adept at writing
bots so this
may well be right up
his street
so I mean
you were talking about the Q system
Cavern has
just regular DeFi
users like myself
I can just leave some
idle liquidity waiting
on these liquidation events
I suppose
that's the downside in the sense
that the liquidity is idle
but the sort of plus point would be that
as a DeFi user
some might say
a power user, certainly not power bags
but at least
I can participate in those liquidations
it sounds like
on NetTune there's much
more of a technical
background that's required
is that fair to say?
That's definitely fair to say
that's definitely something we explored
when we started designing this protocol
we're always in favour of
the public being able to access
these financial tools
that's the best aspect of DeFi in my eyes
so we talked
a lot with the Kuji team
in the early days because they were the ones who
innovated Orca and we really liked their design
they kind of made the anchor
liquidation queue accessible
but right now you can kind of see
a bit of an issue developing with
Kuji introduced Ghost
which was their lending platform
and if you go look at all
the liquidation markets
there's just too many of them now
and the liquidation is kind of stretched thin
and it still takes a lot of
active management on the DeFi user
to figure out where to place
their liquidity and what's going
what collaterals are at risk
and where they should be parking their assets
and how often they should do it
that system
more importantly for our system we want to see
a next level of innovation where
there is public
access to say
you're running a bot and you're
really good at it, there's definitely an opportunity
for you there to
make this bot more publicly accessible
so that you can take on public
funds to fund your actions
of liquidation
and market making
and then you can share those profits around
so you have the better tech
to be a better bot
but you don't have the capital
well that's a business opportunity for you right there
I'm loving the sound of that
I mean not that it's a business
that I could necessarily get involved with
I love the idea
well this is more than an idea
the reality that different
products can
or different protocols can build upon
each other, I suppose as Neptune
was kind of building upon
Anchor back in the day but now
you're sort of offering this kind of liquidation
business idea, you're just throwing it out
there saying listen, why not
someone go for this
and I suppose when liquidity does come back
into the ecosystem that could be
a really nice
opportunity for
some people
we're trying to make that more accessible
so if you go into our documentations now
you can actually see our developer docs
and what you can get access to and how you can
create a liquidation bot
but in that same thread
you can also get access to
connecting to our lending pools
so we want Neptune to
lending markets and exchanges
are definitely the backbones to any financial
experience so we want Neptune
to be this liquidity engine that fuels
Terra and fuels Cosmos DeFi as well
so we want
these B2B connections where people can start
building into Neptune and we're happy to
help you get started
Great stuff
I mean one thing I appreciate
about your site and for anyone that's not
been there yet just throw out the
URL again at the moment
for Neptune
I often make the mistake of typing in Neptune
the full word, it's not that
beta.net.finance
and then you have to
change your wallet on to testnet
and then you can go and play around
I mean just looking at the site
I like, or I really appreciate
the simplicity
the cleanliness
the Terra feel that it has
I'm assuming that was on purpose
but do you want to talk a little
about the design of the site?
Definitely
Terra experience is definitely one
we held close to our heart
when I first got into DeFi a little more
seriously as a user
Terra caught my attention because it was just
so much easier to use and understand
it simplified the user interface
so in designing our frontend
we went through more than a few iterations
you know, testing it internally
playing around, getting feedback
so the designer right now
we're pretty happy with
it's intuitive and now we're adding
more tool tips to make it even
easier to understand but it was
very important for us to
make the user experience easy
while at the same time offering these
user rich features, it's kind of this middle
ground of hey we've got some pretty advanced
features and how do we make them easier to understand
and use and I think we're
at a pretty good point for that right now
Cool, so then just looking at
the borrow section
on the website
there's five collateral listed
and the first three
everyone I'm sure is very familiar with
we've got Atom, Luna
and then the next two are N Luna
and N USDC
would you be able to talk a little bit more about those two?
Sure thing, so
when we were designing how
we want to enable
collateral usage
in our lending market
we wanted to give the user more option
so if you go use
the most common one, Aave
for borrowing
and lending, a lot of the
time when you lend out
say Ethereum
and you want to borrow against it
or you want to use
the Ethereum as collateral more specifically
you're forced to lend it out at the same time
while you're using it as collateral
someone else is borrowing it which makes money
more efficient but it also adds an additional
risk to your collateral being used
it's a risk of
solvency, so if there is ever
a volatile
a volatile spike in the crypto markets
and there always is, then
there's a chance that you want to be able to
manage your collateral because there's not enough
free liquidity in the Aave market
so when we
considered our designs it was like we want to give
the user the ability to
use their Luna as collateral
and to borrow against it
additionally to be able to lend out
their Luna and then
be able to lend out their Luna and
use that as collateral at the same time
so now the user
has the option to say
I want to use Luna as collateral
but I'm a little scared of
the solvency risk
so I'm not going to lend it out at the same time
but if a user
is saying I'm going to lend out my Luna
for a long time and I want to be able to borrow against it
we have given them
that ability too, so that's what those
end token collaterals are
those end tokens are the receipt token
for lent assets
in the NetTune lending market
it's very much the same as
AUST in anchor when that was around
so an end token is just
a representation of your share
of the lending pool and it's an
interest bearing token
so you can actually go lend out your Luna
it's gaining some interest and then
you can go use that as collateral to borrow against it
Okay, how would that compare then to a liquid staking version of Luna?
I mean is N Luna an LST?
N Luna is not an LST
I mean it is yield bearing like LSTs are
but we will definitely be using LSTs
so one of the big opportunities we see
especially in Terra
but Cosmos DeFi as well
LSTs are definitely a favorable
collateral type
you're staking it
and you'll only be yield against it
so your collateral is going up in value over time
so to be able to use a collateral
that goes up in value over time means
it can be a
collateral that pays its own debt over time
at the same time
so we've been looking at the
Luna LSTs specifically
and what exists
we're working closely with the Eris team
with the AntLuna
and the Stride team as well
and the unfortunate part about LSTs
in Terra is there's not a lot of liquidity
for them in
the money markets in the DEXs
so when we consider which ones we would use
there's a high use of LSTs
there's a high use of LSTs
used as collateral in Terra
if you look at Cap-A-Pole
if you look at Cavan Protocol
they're all using LSTs
and the potential risk of that is
if there is a liquidation event
all these money markets
are using the same LSTs
they're all getting liquidated at the same time
and all of a sudden there's not enough liquidity
for a liquidator
to be able to cash out
their liquidations
if the liquidator
can't cash out then they'll probably stop
liquidating because now they've run out of capital
to be able to liquidate
and the argument for that
typically is well
you can seize an LST
someone's collateral and then you can
un-stake it over that
two to three week bonding period
but the significant
time delay in that un-bonding period
in liquidity for
that significant amount of time
so right now in the Terra ecosystem
the most favorable
LST is StrideLuna
because it's got a couple million dollars
in the Ash Report pools
so that gives a little more breathing room
if there is a liquidation event
but we definitely want to see
other LSTs come into Terra
and we want to start using them as well
we're really looking at like
STOsmo or
STAtom or any other LSTs
we definitely want to enable them as
collaterals because we can see this
chain effect that will happen
if NetTune starts enabling
certain tokens as collateral
now you can start unlocking value against them
because money markets
enable this great value
extraction in that
I'm holding onto tokens and I'm doing it for a long term
I'm not going to sell them but they're just sitting there
so if you can stake them and now you can borrow
against them you're unlocking
value in the Cosmos ecosystem
which can now get used in other
platforms and that's the beauty to
money markets in DeFi
so I mean
just following on from that you mentioned
a few different
on Terra, Cavern,
CapiPolt, I mean I think Edge
is still a thing although
hardly any
TVL at the moment
yeah Edge
Edge is definitely a
study case for us because
you know they were doing well when Terra
was Terra Classic this sort of thing
before the second chain
and they relaunched when
the new chain went live again
but the problem there is there's not sufficient
liquidity for users to come in
without someone like a
market maker coming in and
placing liquidity in their system well then
no activity can happen so
in observing that we know
that if we want to launch correctly we do need
a certain amount of liquidity
in our markets at launch
so that users can actually be able to use
our markets
because I think there's only a couple hundred dollars
in Edge Protocol right now
yeah it's
looking that way so you frame
the issue as
you need to have some liquidity
in NetTune so that other
people are going to come in to use it
like do you have
some whale friends that
are going to come and deposit that
initial liquidity?
Yeah part of that will
roll out to mainnet because we're
definitely getting better connected to potential
market makers and whale friends
and blockchain ecosystems
you know the teams behind them
community funds as well
we're looking at all the ways we can potentially seed
and incentivise NetTune
to draw that liquidity in
to make it more usable
Okay that
sounds interesting maybe you don't want to
share that information quite at this stage
which I suppose is fair enough
but I mean you did mention
community
pool funding there so I suppose that's a nice
segue into your
proposal that's currently up I think
was it posted two days ago maybe
three days ago
posted three days ago and it's
getting good reception so far which we are grateful
for and the appeal there
is I think you mentioned it
in the introduction TFL previously
were offering audit reimbursements
which was a really
good initiative like
if you're launching a project on a blockchain
you really want that security
there in place so to be
able to have security audits reimburse so that
you can have this added safety
for the users was a really good
initiative but TFL didn't
run that for very long so
like a few projects
before us were appealing to the community
to have our audit
reimburse
and that those funds will actually
give us a little
extra room for our planning for our
mainnet launch
that sounds
pretty positive
I can see that
Orbital Command have already put their vote in
we voted in favour
some Pikachu, Ghidorah
I saw PFC was in the room earlier
he's not voted yet
talking of station
I don't know if it's a bug, a little glitch
I see that ProNodes 75
is both in the Abstain column
as well as the
Yes column so I'm not quite sure
which way they went
that might be an issue
interesting
I think it's something to do with maybe voting
one way and then changing their vote
but then it somehow just leaves them in their initial
I will note that there is
currently a bug with the station wallet
if you're trying to use a ledger
on Chrome
your wallet may freeze
which is unfortunate timing
for our proposal to go live
but I just wanted to bring some awareness to that
can you expand on that
your wallet may freeze
your funds are locked
never to be recovered
no no it's not that
it's just the Chrome extension
the station extension
you just may see a grey screen
so your funds aren't at risk
that's not a problem there
you just won't be able to interact with the
Chrome extension
OK and do you want to make a pitch
for people to
decide which way they're going to vote
I mean I'm
well I mean personally I did vote
in our internal
vote in favour of this proposal
I really encourage people on this call
and validators as well
I don't really mind if people vote
one way or the other
I do think it's important that we vote
because it just doesn't make
it's just another thing that's less attractive
I think about any chain
if governance
if people aren't even bothered with governance
it's like what is the point of even
trying to get excited about a chain
if people don't care about their own chain
just go out and vote people
yeah let me give a pitch for it
a yes vote on our proposal
would definitely help us get to
mainnet faster and safer
and Neptune getting to terror mainnet
is an opportunity to bring
more users and
more activity and
more tokens to the terror ecosystem
with Neptune we'll be able to
list collaterals and tokens for
lending and borrowing
which enables more DeFi strategies
in the terror ecosystem
one we're excited about is
if you look at the cabin protocol right now
you can get a about 12%
yield on Axlar USDC
well if you can borrow that cheaply from Neptune
you can go loop that into Axlar
you know that classic D-dren strategy
that we all kind of used to love
so a yes vote for Neptune will definitely
help us out and bring
back some exciting
DeFi experiences to the ecosystem
that was really interesting to me
what you said about
the cavern option there
like I kind of thought
okay Neptune, cavern, they're in the same business
they're kind of competing but
do you see yourself as maybe sort of more
sort of synergistically
cooperating rather than being direct competitors
oh definitely any money markets in the
in the Cosmos space that definitely
have a synergy between us because
there is an opportunity for arbitrage
and interest rates
which just enables more
market activity
and more users
more money moving around
more gas paid on chains
which is always good
because if you consider like
between us and Mars
if you can borrow USDC cheaper
on Neptune you're going to borrow it from us
and then you're going to lend it on Mars
at a higher rate
than you would do on cavern
and then you know that whole activity
is you spend some gas on Terra
you spend some gas on Osmosis
you're moving money around
you're seeing IBC transactions
this is all good activity for DeFi ecosystems
absolutely
and I mean if anyone
is going to be engaged in sort of sending money
around IBC
there is a pretty cool platform
you could consider using
definitely a good platform
but we're looking
to be integrating TFM
into the Neptune DAP so that users
can get an aggregated swap experience
without having to leave the DAP
sounds fantastic
I was on a space yesterday
and BeeBands was there, she's in the audience
just now, we were talking about shilling
I think that was a little bit
soft shilling there, BeeBands for TFM
not too hardcore
something that BeeBands
taught me as well was
talking of the Nest
and I think I confused Keegan
about the Nest as well
I had no idea what the Nest was when I first heard it
but apparently the Nest
is this bit at the top where we can share
so I just shared the Neptune Finance
tweets read about their
beta being live
up in the Nest
yeah, I've lost
my train of thought here
I'll come in there
Rebel and say
please follow Keegan's
comment before about
cooperating, the different
money markets cooperating, I think that's great
and something I didn't know exactly
but one thing that perhaps Keegan's
too modest to point out is the difference
between the other money markets like
Capapault and
and Neptune Finance
and the thing that stood out for me is the fact that
Neptune has built their money
market up in the ground by themselves
it's, as I understand it
one of the strongest development teams
and I think that's also another good reason to consider
supporting Neptune
for their proposal
Yeah, I appreciate
the kind words
and that's true
we have built our money market from the ground up
we didn't clone any
repositories doing this, we really
came back to the drawing boards
and was like, okay, money markets work
but let's make them better and we've come up with some
great initiatives in that
our interest rates are double
dynamic, meaning not only does
the interest rate change as usualisation
does, so does the curve
and this is a mechanic that matches
lenders and borrowers together at better rates
and targets
better utilisation
we have sub-account features
meaning users can open up multiple
cross margin positions without
risking the first or the next one
we've got more advanced features that we're bringing
to the table as well that we will be rolling out
once we get the MVP to mainnet
and our team, like you said
we are highly experienced in DeFi now
we learnt a lot of important
lessons in the Terra crash and
I think that's really valuable to
go through this experience, see what's broken
and learn from it, but our team as well
inter-chain qualified, we've got
experience in building blockchains, we've got a
couple PhDs behind us in simulation
and physics, we've been
in crypto for years in many different
I'm really happy with my team, honestly
it's one of the best experiences about building Neptune
as I get to do it with these guys
and not only that Keaton
but you mentioned that your team
also consults or supports
several other projects
that are quite exciting projects
happening around Terra and Cosmos
and perhaps we can talk about that a bit later
but I also
based on the
innovative way you described
Neptune, perhaps you
could compare Neptune's position
arguably competitors
or as you say potential partners
with the other money markets in Cosmos
whether it's Yumi or GEMEX
or these kind of
protocols and how you see Neptune
positioning itself
Sure, I think of a couple comparisons
In the Terra ecosystem
I think the next biggest money market
is the cabin protocol
and the use case there is
it's definitely better for the lenders
than it is for the borrowers
Right now you can lend Axlar, USDC
at about 12% I think last I saw
and if you want to borrow
you have to use a staking derivative
but the catch to that is your
yield on the staking derivative is
sacrificed to the protocol. It's actually given out
to the lenders and this was a way to
replicate the effects of anchor
to make it a healthier anchor and I
respect their design
but in comparison in the Neptune
implementation
when you use a staking derivative as collateral
with us you get to keep your yield
and that makes it a much better collateral
in our system
If you come to us
with Staked Luna, so you call it
Amp Luna, you're making I think it's 22%
on that right now. Use that as
collateral, you borrow Luna
from us and then you could stake that
into Amp Luna and loop your position
and then just keep stacking that collateral yield
So that's one comparative there
in the Terra ecosystem
If you look at maybe the
next closest ones like Umi or Mars
a couple features
that we have that they don't
which is our sub-account feature
like I just said before, a user can
create multiple cross-market
positions so you can have
one leverage position where
you're doing a lot, you're using
Luna as collateral, you're borrowing USDC
and you're investing that into
something else and you're planning not
to close that position for a year
and then all of a sudden you see an opportunity
in the market where maybe you want a short
or you want a long
set for just a day, you want a day trade with it
Well you can open up a completely separate
margin account
using the exact
same wallet
and be able to trade on
that position without risking the other position
that you're going long on. So this makes
it far more composable for a
user strategy, it also makes it more
composable for developers as well
because now you can design
leverage investment platforms
that tap into Neptune and then
you don't have to commingle all your assets
you got this easy to use separation
Another separation feature which is
a big piece
of innovation for us and for money markets
as well is our
we're calling them PID controlled interest
rates and what this is
it's a reactive
interest rate curve
so if you look at Aave, look at Mars
Protocol or UMI
when you look at their lending rates
you see a graph of it, you'll see this linear
curve in which
our rates are measured against
so if you're at X utilization
call it 50% utilization
you can look at the graph and you can see what
the interest rate will be
and that's a fixed curve, if that curve
wants to get changed
then that has to go through governance
and governance has to update that curve
to change that curve, but with Neptune
our curve is actually a polynomial
curve, so
it's actually a curve shape
that can change over time
based on our market activity
so what Neptune does
if we have
Luna being lent to us and
not many people are borrowing it
well when Neptune says well if we can reduce
the borrow rates it's going to incentivize
more people to borrow, so it drops the
rates, more borrowers come in
and it keeps doing that
until it hits in ideal
utilization, and then it starts to increase
the rates if we go
beyond that ideal utilization
and it keeps
doing this over again and again and again
just as much as the market moves
to always target this high
capital efficiency, and what that
lenders get a better rate because more
of their assets are being used and
generating yield for them, if you go
look at Aave markets right
now you can see that a lot of the lent assets
in there are barely being borrowed
therefore they have really low lending rates
but if what Neptune
enables is this dynamic
interest rate design
matches borrowers and lenders at a better rate
that they get to decide
it's this
sentiment of crypto and DeFi
it's like code is better
and automating it is even
better again, so we let
code decide how the markets work
So just as a point of reference
in the past Keegan with
Anchor, how were those
imbalances dealt with
when they occurred with Anchor?
Can you explain?
The imbalances of
borrowing lending?
Correct, you were describing Neptune
having an automated
function there.
Anchor was definitely more of a unique
case and there was definitely a big problem there
in that there was way too
many assets being lent and nowhere near
enough being borrowed
and that was a big problem because
that was supplementing the interest rate
with tokens
that were just pushing into the protocol
which kept up an artificial interest rate
but with no one borrowing them
these tokens weren't, this UST wasn't doing
anything for the ecosystem
and that's where Neptune v1
came into the picture
it was like if we automate borrowing
then we can forward that liquidity
into other dapps and
build and that liquidity actually does a service
for the ecosystem because now you've got deeper pools
and you've got better launchpads
that's what we designed
into Neptune as well in that
this interest rate system
allows and
encourages for more borrowing
so you don't have
all this locked up liquidity
borrowers are actually coming in
they're using the money elsewhere in the ecosystem
can I just
come back in on one thing
you were talking about a little bit
I think, not to that
response there, but the prior question
and I can see Chubby
is requesting to come up
and then this is
I don't want to speak for Chubby
but one thing we sort of debate
quite often, often ingest
but there's a lot of seriousness
behind it is
a discussion
of Luna itself
and some people
joke about how Luna is now becoming a shitcoin
or a mean coin or whatever
and Keegan said
talking about stacking
Luna yield
stacking yield, that all sounds great
but like, if Neptune
had been live six months ago
and I was trying to stack Luna
yield and I was
ramming in some amp Luna collateral and
borrowing Luna, staking that
into Eris, or not staking but
liquid staking into Eris, get more amp Luna
collateralise it
borrow more Luna, loop it round
and try and stack my Luna yield
brilliant, I'm making more Luna
Luna's tanking in dollar value
does Neptune do
anything to sort of help
Terra Luna ecosystem with regards
to value of Luna
Yeah, that's actually
a really great point, it's something we
discuss a lot and you
mentioned the amp Luna guys
Eris Protocol
actually does a lot for the Terra ecosystem
they expand cosmos wide
something I really respect about them
is their arbitrage
bot, they have an active arbitrage
bot that arbitrages liquid staking
derivatives and brings back
yields to the public investor
but it helps keep staking derivatives
on peg to what they should actually be
claimable for
and that's something that actually helps our risk tolerance
in the Terra ecosystem
but to talk more about
stacking Luna and generate
more yield, but does that really help Luna?
You're definitely right, that's not helping
Luna itself
what Neptune will enable and what is actually
better for Luna is
the bottom line of what's
generating yield for Luna is
transactions on chain, and without a good
DeFi ecosystem, without stuff
to do, without NFTs
to buy and other things
to ggen into, then
no one's making, no one's paying
fees on the chain, and that's what
the original chain did best, you had this
great DeFi ecosystem, there was
lots of stuff to do that was always interesting
to move money around and you were paying fees all the time
with Neptune, what we're doing
in two aspects is
we're bringing more users into Terra
just through
the access to our DApp
because there is features in Neptune which you
can't get elsewhere, therefore you're going to
come to Terra to get them
additionally what we're doing is
by enabling Luna
and its staking derivatives as a collateral
unlocking the value of Luna
because now you can use it as
collateral and borrow against it, which means
you don't have to sell it, you
can hold on to it for longer
and be able to use
its value as leverage
into other things that you're going to achieve
and that in combination
with other DEXs and other
learning protocols
that really helps the
Luna value together
that was always the dream with Anchor, wasn't it?
We'd never have to sell our Luna
Luna to 1000
Yeah, exactly
MB, do you want to come back in?
I mean, I've got more questions
I think we need to get some people up
if anyone wants to come up and
ask a respectful question or
respectful comment, Chubs
MB, anything else before we
bring some people up?
Yeah, look, I may have some more
in a sec, but I'm happy to bring up some
like Chubs, who I'm sure is going to
ask a great question
I want to hear it
Absolutely Chubby, there is no
racism in this space whatsoever
no anti-Chub racism
so come on up, let's keep it respectful
please, my friend
Yo, Keegan, what's good
MB, Rebel my G
How you doing man?
Hey, Chubs
One thing
I was looking for, I was asking in the
Punk's Discord too, you mentioned
you know, things are growing, so
where are you seeing these stats, where can I
look at like daily active users
on Terra for example?
We personally do a lot of our own
research, we scrape nodes
but some good resources
I'm blanking on their name right now
It's okay
It's run by JD, it's okay when it comes back to you
I guess maybe try and pin it or something
because you know, there's a lot of talk
about that, also, what's your
definition of decentralization?
There's a few aspects of decentralization
definitely in control
of the protocol, you know
this is one I'm passionate about not only in
finance, but you know, in social
media or anything that is a public
access good
to be able to have a voice in how
the algorithms work, I think
that's an important part of decentralization
but also in how the
money is used, like
one of the things I really respect about D5
was the accessibility to the everyday man
before that, you know
it was very much, you could only
get into it if you had a lot of money to begin with
but now you can be a small guy
in a big pond and have
the same access and the same yields as
the big guys, so those are two
very important factors for me
Okay, and so a proof of stake
chain to you encompasses
the decentralization values
Proof of stake definitely has its flaws
especially in the tenement model
where, you know, you've got this compromise
in tenement where if you
introduce more validators, you're
slowing down the performance of the chain
and tenement can definitely
go through some iterations to
make that better, I know there's been some proof of concepts
with like a thousand validators
we've been consulting with a project for a while
I know, MB, you were curious about it
we're working with a project called
the Cooperative Denon and we're helping
them introduce some new standards for governance
it's definitely ideas we've been exploring
so proof of stake
has its limitations, a lot of
those are technical
due to performance of the blockchain that you want to achieve
and you kind of see this in
Ethereum a bit as well, it's going
through some iterations where
Ethereum is really
about the decentralization but that's
at a compromise of the cost to use the chain
so we haven't found
the perfect solution yet but I would really
love to see us move towards one
I'm just wondering about the stats too, everyone's talking
about how this is growing, Terra's growing
and Shippa, no one's showing the number
Yeah, I think we definitely need
more dashboards, I always love a good
public dashboard for it
Everyone loves a dash, yeah
I'd agree with that as well, Chobhan
Yeah, we'll
find out where these stats are
because it's nice to be able to talk
about hard numbers rather than just
our own beliefs
I mean, we can
all have our own beliefs but we can't
all have our own facts, so let's
find facts and then
discuss them
Yeah, any idea
what's going on with Anchor by the way or is that
just the glitch and the
huge drop today?
I'm not familiar
with what's going on with Anchor
It's down like
The token value?
I'm not sure what's going
on there, I wouldn't be surprised if it's just way more movement
than that
Okay, cool
Dude, that sounds like
New York or something crazy
I don't know why this guy's honking at me
He probably faded Pepe or something
but yeah, good luck to you man
We're entering a phase in the market
I guess the next bull market too
I don't know, there might still be idiots out here
but I think people are waking up
to the vaporware that's around us
and the success of Luna
and Cosmos just being
backed by VCs
They're running it back with Injective
and all that stuff
Good luck to you
if you could extract some money out
the community pool
or do whatever you've got to do to stack up
That's good
Rebel knows how I feel about the alphabet Luna
That's what I call it
Good luck, bro
Thanks, I appreciate the questions
I think you're right, definitely about the vaporware disappearing
It's something
It's definitely a tough time to go through
especially for old teratines
purging the market of businesses
and models that really didn't make money
or didn't offer value
Although that's hard to see them go
it's healthier for the ecosystem in the long run
I appreciate those words, Keegan
We're coming up to our hard stop
Is there any final words
you would like to share
about Neptune or MB
anything you want to close with?
I'd just like to say
just reiterate that our beta is live
and would love for people to test it
and give us feedback so we can make improvements
You can go to
beta.net.finance
You can access our faucet
on our Discord to be able to get some tokens
to use in the beta
Additionally, we have a proposal live in Terra
and we would appreciate a yes vote
to help us get to mainnet
in a similar way
to help us get to
mainnet in a safer
and faster manner
Fantastic
Last question, it's got to be
so you're in beta just now
where we say beta in the UK
if you're over the other side of the pond
Great question
Like I said earlier and throughout this
is we're identifying all the risks
and the tokens we can use
and one of the big ones is
maybe waiting for Noble to introduce
USDC, native USDC
because I very much believe once that's
enabled in Cosmos
it's kind of going to introduce a whole
bunch of liquidity and it'll kind
of sweep over all the wrapped variants
So instead of creating
a tech debt and using a wrapped
USDC version, we would like
to see native and we don't think that's
So if I'm hearing you right, you would rather
wait until that's out before
the full launch
Yeah, it's
definitely safer and better to do
Awesome, well
with those thoughts of safety and DeFi
thank you very much Keegan for being
here, thanks for stepping up with some cool questions
Chubbs, MB, thanks for co-hosting
Everyone, thanks for
joining, we appreciate your time
and we will see you
next time, thanks very much
Thanks guys