Morning everyone, thanks for being here. We're waiting on Carter Monahop on and then we'll hop into a history of silk is the topic today.
Morning Moa. Thanks for being here. Also for everybody wondering why it's not Dalt's hosting. He is out of town for a couple weeks so it's a fiscal behind the shed protocol microphone today.
Hey Carter, let's pull you up here. There we go, Mal Carter, you should be good to speak.
Hey Clara, you'll be a fun one Muhammad. I don't know if you've ever I don't know if we're sat down and
I don't think so. I don't think they're being like a life like that. Like, both of us are at. You have to go way back.
Yeah, we'll give it a couple more minutes for people to keep filing in, but I think it should be an interesting conversation as well. I don't know if I've even ever heard the full strung together story of Silks Origin. Pieces, pieces here and there.
Yeah, definitely had some twists and turns. It's fun too, because in hindsight, there is like
Blessing in disguise that the vision was so big because it gave us time to really think through the minutia that really could have gone wrong. So yeah, we'll have to go all the way back to really January of
Yeah, that's two years ago. That's crazy. Oh, almost two years ago. We're getting there. Yeah, well, generally, I think what I think is that everything really started taking off for us on the area, designing, building up, self-gain, trade, making sure that I didn't
the promise we were I can then we would start getting a team around it as well as definitely a very very fruitful journey so far. Yeah well to talk about the other apps we were planning to do the thing before so it became the big one because that's kind of a fun little
like Easter Egg. I remember that. I remember that. That was like a brainstorming session we had for like almost three months in a stretch. Yeah. Yeah. A lot of small things that came together to make to make silk the well-positioned stable that it is now.
It's a wild story. But I think we'll wait until 11.05 here and then we'll get going and maybe Carter and Mo, you can kick us off with what you were doing before you met. What your crypto introduction was with a couple minutes and then jump right into the Genesis story of Silk.
Yeah, 100% I feel like I've given my intro to the space so many times I feel bad for for people that you know have to listen multiple
So I'll keep mine pretty short today, but Muhammad, I think like feel free to speak at length about your story and space because I think it's super interesting and probably hasn't been circulated as much.
Well, alright, everybody, it's 11.05, thank you all for being here for our weekly Twitter space. We've got some stable coins we're calling it, the history and vision of silk. So we'll take some time, we'll get a small intro to Carder and Moe where they came from, where silk came from, and the whole Genesis story behind
a little bit of shed protocol and mostly focusing on how silk became the extremely well-position stablecoin that it is today. So thanks again for you guys being here. Carter Moell passed it off to you. If you guys want to kick us off on the history of silk. Yeah, I'll be pretty brief. I was in...
University in 2017 had a pretty boring I was leading an IT job at the University had a lot of extra time on my hands and Started researching all things crypto had a cousin like link me a bunch of reasons
resources in early 2017 are pretty much just started spending all of my time obsessively researching the space at the cost of many other things. Started having all these different, you know, like 60 pages of notes on crypto and I read every single book I could find and most of the books were terribly written and at
60 pages of notes I was like I think I might be writing a book right now. So that kicked off three year journey of writing building confidence in blockchain and in 2017 during that research realized that blockchain was completely transparent and I found this project known as a NIGMA which was this Ethereum project trying to bring now prior
way back in the day and started contributing on the forums, gave some feedback on some of the mechanics and distribution. There's some like really old stuff out there. And then, you know, Enigma eventually transitioned into becoming Seeker Network and it was during that transition where I
met Muhammad, spun up the software development company, and along the journey I worked for the Secret Foundation, worked as the education lead for the Education Committee on Secret Network, and eventually was able to make the jump full time to shape protocol. So that's a bit of the backstory in myself.
Yeah, that's a lot. It's quite a journey corner there as well. I remember I think I got into crypto. I'm the same time you did actually 2016, 2017. The first time was like, I think it was more on the investment side of the big name because the high crypto was just growing on me.
a lot of word of mouth around the corner. Not to mention that I think the key aspect that really got me in crypto was the aspect of sending money across like you know without using a bank as an intermediate rate. Like we always have to use banks if you had to send money but crypto was like
like the only space that you could send value across without anything. And that's what really spurred the impression of cryptocurrency at the beginning of late 2016, I believe, around that time. And then I got into investment a little bit because I found this technology to be pretty useful. Obviously, there was a little bit of world-run at that point.
And then all of that stuff happened. And then I was like, I want to continue being in the crypto space. I, you know, once the bear came around, I was like, oh, I'll go into mining. And that's when I think the whole proof of work and proof of state came into context for me really. Services researching products at that time and I joined the
I just like you did the Enigma group and basically started meeting the Enigma. Like you're pretty much the vision there Enigma was throwing was privacy on a blockchain which was huge and they had done some research at that point like earlier.
back that up. So that is why I joined the NIGMA and I remember the bastard program as well as part of it. I don't think it crossed five then or maybe we did. I don't know. I don't remember anymore. It was a pretty exciting time. I met Kuro from the Secret Foundation at that point.
I was pretty excited to go deep into the blockchain. I think that was around the time in 2019 I was really exploring art with the new
since I was in university, I started a previous business, then I would come back and I would like to see the vision I see with actually doing actual projects. I think that's where I can plan for any of those projects. Let's bootstrap what we are working on.
and let's do this. I was gathering some experience out there as well. Working in different like devils around the corner but doing like the cryptocurrency has so that's been running for a while. And then I think 2021 we came around, we want to do a front.
That was like it's gonna be huge and I think this is very we have landed so far like building our shape protocol building us again the pretty cool feet Hey awesome thanks guys for that for that background on yourselves there now I would like to
direct the conversation to silk and shade protocol specifically. I know both of you worked on a couple other applications are kind of ideated in that area for a bit before you landed on silk and shade. If you could speak to where where that kind of genesis of the idea came from, that would be great.
Yeah, Mo, maybe you want to talk about secret, secret bizarre and then I could talk about the mirror protocol side of thing. Yeah, I remember that. I think at the beginning when we were bootstrapping a project, we were thinking about bringing privacy technology for what that was our initial
vision really like to bring what secret network had built the technology that was used to like the world and using blockchain technology to build services on top of. So I think our initial and first idea was really like how do we do this like payment system?
like verified documents kind of set up. So like, you have docuSign but I don't have blockchain. That was an interesting idea. And then we would like to make that into a bizarre way. We have like different type of services on like the blockchain provided by Secret Network. That was our initial goal really.
to build all these tooling and services on one platform, one come shop kind of thing that we were thinking of. And that was like an initial bootstrapping idea really. But we further did further research, talked to a lot of contributors and we expanded our vision and the scope and we saw
that was more of the market and then we came across other protocols and I think I think I already talked about the mayor protocol research we did here as well. Yeah, so yeah, secret bizarre was like can we cross secret network with ocean protocol and it would essentially be like a data encrypted data marketplace for people could sell
all cell data. But the more we looked into it, the more complex things became because Seeker Network really isn't designed to be a storage layer. It's really designed to be an encryption layer. And so actually I think Jackal ironically really ended up kind of fulfilling the vision that we may be
originally had before we pivoted. And so we ended up pivoting away from the encrypted data storage side of things primarily because of like the product market fit, like the whole data storage side of things that still somewhat of a question mark. And I think we even like proposed a grant that was kind of like, uh, this
didn't seem like how high-value enough. So from there it was like, all right, we're going to pivot full-blown to the the D5 side of things which I'd always been a huge like D5 fans since 2017, maker at Alistair, planes, etc., etc. But actually the the vision of shape protocol actually started with some
synthetic assets before it was ever a stable coin in many ways. We pretty much said could we bring synthetic assets to the secret network? And so we started researching mirror protocol and most people who've looked at our GitHub repo will actually know this and people have actually called us out as being scammers.
We forked the mirror protocol way back in the beginning. The history of the protocol beginning as some
something that was inspired by synthetic assets. And so at the time, we started looking at mirror protocols product and started realize that there was a lot of like any efficiencies with the over collateralized model. And as we, you know, dug into this, we kind of had this idea of like, wait a second.
Could we use this in your age mechanism that Tara had been using for UST could we use that for synthetic assets and make a drastically more capital efficient system? In hindsight that theory looks obviously very very dangerous in the moment it felt brilliant because no one else had been had you know
know, like kind of bridge the gap there and then like can we apply the burn mint model to assets that aren't stable coins. So, Muhammad, I'll let you jump in here. But I remember that that was kind of like the initial starting point with synthetic assets that are more capital efficient by applying Tara's model to non stable coin assets.
Yeah, so we really researched into how to bridge that synthetic gap really because even to that synthetic assets, especially that are not for occurrences, have very less accessability as well.
my key part early because the way to maintain the synthetic assets was to collateralize positions. At that point, it made more perspective from security, but not from a reflexive standpoint. We wanted to redesign that. Like Carter mentioned, we talked about implementing the third one.
Although it looks very lucrative at that point to us and we really sold our vision at that earlier aspect of the stability mechanism that synthetic assets would bring to the table, I think we all know that there is something we have to learn and go from.
So we decided to move on from even that reflective fully reflective model and context. But again, I reverted back to the history there. I think one of the things that we came around when we were building a synthetic model at that point was how do we tie this to like
a stable point really, right? We need people to have access to these synthetics. We need an entry point and the entry point really grew to be the stable point. So, that we were still thinking and designing at that point. So, we thought that, okay, now that we have a concrete entry point for all
of these synthetics, we can focus on the stablecoin itself because now the stablecoin will be the NK point towards a vast bit of different types of pools, accesses, utilities, we were thinking about synthetic crypto indexes which we haven't still got, which we are not throwing the idea out of the table
But there is definitely opportunities, but like the crypto space, especially on secret network needed access to a privacy point. And like the only way that was access to that was to a stable point. So we decided to build a privacy stable point. So we did this initial design.
even like models of self mechanisms based on Carolina models just because it was all looked at at that point right and it was a good competitor to us at that initial set up time I believe but like I think we did a lot of research on that front as well at that point I remember
We were not thinking of like, you know, just copying the mod all together. I remember we brainstormed and I think at one point we were like, you know, what do we peg this currency to since we wanted to be, you know, a moving peg really. And then I think we came up with G by D, like a global yield derivation, which is like the basket of global currencies at that point.
this would be a super thing that we could move towards and we were documenting that stuff. And I got like a couple of brain styling sessions that came back to me and it's like mom would have something super cool. Let's look at this. And I think that's a shade when we went to be right. That was super super interesting aspect of how we went about.
I do think it's cool to know how like because the entry point was synthetic assets, I think the original core contributors were like much more inclined to be creative with composition because synthetic assets by definition have like all this flexibility with like what they're trying to do.
tracking. And so because, you know, USD was this massive, cosmos stablecoin and pretty much everyone was saying, you know, there's no way you can compete with USD. It like really forced us to differentiate ourselves from, you know, the nearest, most powerful stablecoin. And so the differentiators were
like, "Hey, we have privacy and we're not going to be pegged to the dollar. We're going to have this basket of global currencies and commodities," which was inherited from the synthetic's idea. Not only would we have this basket, but it would be capable of evolving over time. Then there was even
to get a step further, you know, once we kind of decided on, hey, we have this vision for like really unique differentiation. We then started thinking about ways that we could make shape protocol more sustainable than terror because one of the biggest criticisms that existed in the original white paper was, you know, they have all these other apps
watching on top of UST and Luna, but there's no revenue streams to Luna Stakers other than UST being minted out and Luna gets burned. That was like the only kind of value of cruel mechanism. There was some transaction related stuff, but it was like, wait a second, what if we recreated
the Terra Luna model, but then every single app that gets launched on ShapeHardical, every single key DeFi primitive, was able to point the revenue stream back to ShadeStakers. This would create a stronger hypothetical floor of value than what Terra had. And then we built on top of that eduos, like, can we add in
and you know, an additional stability mechanism with Sky Arbor Shosh. Can we improve on Terra's model for providing stability, stability to the peg? And so like, I think it's going to be really interesting in hindsight as like historically, we would not be the project we were today if we weren't competing with, you know,
massive competitor that was a $50 billion protocol. This is just a bunch of group of devs all over the world and economists saying, "How in the world do you differentiate against someone that already has all of the adoption on paper? They've done everything right. They're the trailblazer. What does it mean to come along second?"
and differentiate yourselves. And I think that was the greatest blessing that we were forced to make ourselves so differentiated because it slowed us down. It slowed us down enough that Tara ended up collapsing and we got to rebuild the economic model. It slowed us down enough that
that we're seeing regulates are coming after dollar derivative stable coins in a really big way. And suddenly silk is, it's really learned not only its stability lesson, but also its legal positioning lesson. And it all started with that vision for synthetics and that vision for differentiation.
in a way that was more than just privacy. Yeah, thanks Carter for that. Obviously we're super uniquely positioned with silk as it being a composite stablecoin within our ecosystem also having it supported by revenue from all of the other applications that are built in the
stack, rewind in a little bit to the composite nature of the stablecoin and the regulatory status of that that you mentioned. Could you focus a little bit on how that uniquely positions silk outside of other stablecoins and the lack of regulatory risk that it offers?
Yeah, so in essence, whenever what we're seeing in 2022 and 2023 is if you peg yourself to a sovereign currency like the dollar or the euro, those governments are going to want you to exist within a regulatory framework.
The first five, six years of DeFi has been this wild west of innovation and discovery in building. But now it seems like the pulse of regulation is starting to be heard and be
be felt by these crypto projects. And because silk isn't pegged to a sovereign currency, there's way less of an argument for it to be heavily, heavily regulated. And so because silk has an ability to evolve it
It's a basket over time. If something like the US government told the silken said, "Hey, the dollar is attached to you." Silken governance could be like, "Give me two weeks." And then in two weeks, boom, the dollars are removed from the basket.
And that's a level of regulatory flexibility to be able to kind of fluidly move around the composition of the stablecoin in a way that reacts to global forces that no other stablecoin has.
have not seen anyone with that type of long term basket composition governance able to evolve it. And that's going to allow us to really fluidly react in 2023, 2024 as the the legal domain around sovereign pegs
stable coins becomes much, much tighter. Now, this isn't a guarantee, right? These are predictions. So I very well could be wrong, but from the folks that we have talked to, we're setting ourselves up really well. Which is going to be huge for us, I think.
Yeah, absolutely. We've really found shade protocol to be uniquely positioned after reacting to a lot of outside situations that we would have predicted, but has really allowed us to
to evolve what should protocol is, what silk is, into something that's fitting into all of the different frameworks that are required of stablecoins and of DeFi ecosystems. So I think in the future we're at a really exciting place where we have a lot of momentum
to move in forward and as we begin to launch products here we're really we're really going to start pushing into that into that new level of adoption. I wonder Carter and Mo if you could talk a little bit on what you see the future of silk and shade protocol adoption looking like.
All at Muhammad take this one. Yeah, this is like a, I think, uh, we have we always talked about stuff in context where we wanted to be available in our daily lives, right? Like we wanted to be able to do, I know, had the ability that and if you go to any coffee shop,
or start about, you can go ahead and use the source of payment. That's like our end goal vision really to bring stuff to really the hands of users and users. You don't have to worry about the mechanisms that
the background that's more for the core people, that's more for the people in the governance and the doubts to figure out and worry about. But you know, out of the end you know, it's more about the usability of like, oh, I just want to go and like, you know, buy something I should be able to do that with any stablecoin
And that's where surf really wants to go to. So with respect to surf, that's like really, really the end goal. I would say obviously surf by its nature is more of a basket is a spectroaboscop of local currency, so there's like local stability. So even if you don't want to
really use it for a cup of coffee, you could use it as a very good hedge against global economies. So you are invested in self because you want to follow the value of the ground terms. So that's a very, very big use case when you talk about
I mean, talk about like, you know, my edge is when you talk about, you know, a bad against inflation. So there's a lot of smaller and bigger reasons you're so good at paying to. This is a whole, right? But like again, maybe
The core concept comes down to, you know, it's so stable enough, it's just a building of dance and then it holds strong enough. And that's what we're building towards right now. So, we're to make sure it's stable, it's regulated, you know, we're not trying to break in regulations here, as well as like the regulations of fairs.
for the D5 stage. I think that's what it has to do. I think that's what it's going to be. I think that's what it's going to be. I think that's what it's going to be. I think that's what it's going to be. I think that's what it's going to be. I think that's what it's going to be. I think that's what it's going to be. I think that#
So, we want to be working alongside governments. There are many spaces so could apply to it. I think that's where the long term is not so far to come here.
I think for me the vision has evolved a little bit over time on what I picture for that. Credit to Ranger Ranger on this front. I think that state of protocol has the potential to be the liquidity hub.
for Privacy Preserving DeFi and like I think that if we launch I think like the end vision for me for shape vertical side would be we launch every single key financial primitive and so that anyone all over the world can privately have access to
financial applications and financial instruments that they don't have access to in their normal everyday lives, but because they have an internet connection, the doors are open to this privacy preserving hub of applications. And there's no limit to how rich that offering can be.
the breadth of applications that can be built out over time. Obviously, initially, we're targeting the core financial primitives, lending, stable corings, exchanges, options, derivatives, et cetera, et cetera. But I definitely foresee, you know, in the next five, 10 years,
that we could see an explosion from five apps to 100 shade protocol apps. It's all going to depend on the adoption and the revenue that's generated and how that revenue gets re-put to used for more building. But I'm excited about banking for the
people that don't have access to banking and while simultaneously protecting people's sovereignty so it doesn't matter where you are in the world you have that privacy. So that's the other side of the coin. If soaks one side of the coin and shades shades the other.
Yeah, thank you so much both really really fits into the shade and shade protocol vision of being being widely adopted and increase in accessibility and allowing allowing privacy to be something that is what we see it as of being a right to to defy users. At this point, I'm going to open a
up. We've had half an hour of history and vision of silk. If there's any questions that community has around silk, it's peg, it's composition, it's history, it's utility. Now it would be the time you can just raise your hand here or request to speak and I'll bring you up as a speaker one at a time if anyone's interested in asking questions.
Well, we'll wait on that Carter and mouth. There's anything else you want to bring up around around trade protocol or so can general feel free to talk I think it's just reflection that it's you know as a as a builder You don't get time to like slow down and think about the twists and turns because in many ways
When you're in the middle of it everything feels linear, right? Like you're always feel like the next decision is obvious But then you look back and there's all these zigzags in shape protocols history But those those zigs in those zags are what have brought us where we are today and like really
differentiate silk. And I think there's something to be said about giving really good ideas the time to mature and be challenged. If we could have launched silk a very, very simple version of silk.
with no baskets, no over collateralization, we could have launched a very simple stablecoin last year, probably in September. If you were to have a night of our... - I remember going to, that was an internal timeline that you're going to launch in like, you know, go live and like, and
of Q4 2021. But like here we are in Q3 of 2022 and still not live, it's like, but in drug perspective it was a good decision because we had to redesign so many things. Not to mention, you know, we learned from other networks in now.
I think the bare market is a perfect list to build. I think there's always this pressure for very new projects and new builders to go to market as fast as possible. That can be a healthy pressure, but in this
space, it's like there's so many moving pieces and there's so much competition that if you're not building first sustainability and scalability, then just like getting out into the market doesn't get the job done. I mean, I think Tara is an example of that. You know, they're $50 billion protocol first to market really on the Algo
side or one of the first to market. But if you don't build with the true sustainability in mind, then it doesn't matter how big your lead is. So it's like secure systems and sustainable systems and patients are extremely powerful forces in a space that don't have any patients. And I think we kind of
I think we kind of tripped and stumbled our way into patients to be honest, but I'm really glad I'm really glad it played out the way it did and that the early parts of the journey with synthetics and the data place, all of those things kind of informed our view on privacy and on what so could be. So it's just it's a cool reflection.
Yeah, absolutely. Thank you both for taking the time to jump on here and speak today and give us some history. Thank you to everyone else for jumping on, listening to the history of silk and getting a little bit more
context as to where we're at today. There was a lot of ziggin and ziggin like Carter says but I think where we've arrived is an awesome place for silk to be sitting and for shade protocol to be sitting and we're really well positioned.
in a lot of ways. So we're all grateful and excited for that. Thanks again for jumping on here everybody. Thanks Carter and thanks Mo for speaking. Have a great day. Happy building.