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Secret Spaces ft. @Shade_Protocol on the release of Shade Bonds!
Recorded: Aug. 23, 2022 Duration: 1:00:37Space Recording
Full Transcription
Hello, everybody.
It is time for another Secret Spaces, August 23rd edition.
This week we're featuring Shade Protocol.
Very exciting day, and they have some alpha to share, as always.
We've got Carter, who's their core researcher, joining us.
So we'll get everybody up here on stage in just a second.
Stay tight.
Please share the link to this space around your communities.
There's a lot to go over, and Shade is one of the apps that's been building for the longest
in the Secret ecosystem on the DeFi side, helping expand what's going to be possible with Secret
DeFi.
Super excited to hear what they have to share.
So please do us the favor.
Share this link around your communities, throughout the cosmos, outside the cosmos, in your DeFi
communities.
There's probably going to be some crazy stuff leaked today, because there always is.
Stay tuned for just a hot second while we get everybody up here.
We do Secret Spaces every Tuesday, same time, 4 p.m. UTC.
So next week, we'll have different guests.
The week after, different guests.
We are going to keep running this back, as long as there's awesome things to be highlighting
from inside and around the Secret Ecosystem.
So if this is your first Secret Space, welcome.
If it's your 12th or more, welcome back.
But we always look forward to Tuesday, because we always get to feature some amazing builders
inside and nearby the ecosystem.
Cool.
Well, we have all of our hosts here on stage, all of our speakers here on stage, which means
we can pretty much go ahead and get started.
As I said, please do us the favor of retweeting the space so we can pack the room.
These do get recorded, but it's always better to hear it in person.
And there's a lot to hear today.
I'm looking at our agenda right now.
We've got at least seven things that we got to talk about.
So get the link out there.
And we're about to kick off.
I think we're pretty much ready.
I've asked Patrick to pin the tweet here that'll teach you a little bit more about how you can
claim your secret badge, your Freedom Mint NFT, from attending today's space.
So he'll get that up in a second.
But I think we can go ahead and just start diving into things.
We only have one representative from Shade here today, but it's a very special representative
and probably the best person that we could have on to represent Shade and talk through
some of their app design, economic design, crazy stuff.
So please join me in welcoming Carter, who is the core researcher of Shade Protocol.
Welcome to Secret Spaces.
Thank you, Tor, for having me on and hosting Shade Protocol here today.
These secret spaces continue to grow and play such a key role in the ecosystem of allowing
builders to tell the story of these amazing applications that are only possible on Seeker
Network.
So thank you, as always, for hosting these.
It's our pleasure to do these.
It's awesome to be able to feature people who, of course, do most of their work heads
down trying to ship these dApps.
And we know you guys are building a lot of really complex stuff that's never been shipped.
So we appreciate you taking the time out of your day to feature some of that work so that
the community can get a little bit more awareness of what's coming and how they can get involved.
So just before we kick off with introductions, Patrick has pinned the tweet here in Secret Spaces.
That does include the link to claim your secret badge for attending today's space with Shade Protocol.
Click through there.
You can get the link to get your free to mint secret badge.
Prove you were here or, you know, keep it private.
That's completely up to you.
Collect all these secret badges from around the ecosystem.
They unlock things, and sometimes they've got secret stuff inside.
So the claim code today relevant to Shade is SPARTAN.
All one word, all capital letters, SPARTAN.
That's your claim code today.
So thanks to everybody who's attending and claiming these.
We really appreciate your support of the ecosystem and the builders.
And I'll say this, this badge has something very, some alpha nested inside of the private metadata.
So this is a solid one to definitely claim and check out.
Well, that sounds pretty interesting.
So, yep, a special badge today for a special guest.
And with that said, housekeeping is done.
Let's kick off.
Before we even get into what Shade is, let's do a guest intro.
So, Carter, who are you?
Yeah, so Carter Wetzel here.
Been in the crypto space since 2017.
Started out in the space kind of being a massive Ethereum maxi, loving all things decentralized finance.
And it quickly became apparent that blockchain was completely transparent on the transactional layer, on the application data layer.
And so it begged the question of who is building privacy for smart contracts and applications?
If we want to scale these decentralized apps to the entire world, there's going to have to be some amount of granular privacy that builders are going to be able to take advantage of.
And so, you know, 2017, 2018, 2019, those years kind of clicked by.
And the project that I found, really, the only project that was doing it pragmatically was Seeker Network.
And so from there, got super involved in the Seeker Network community.
I served as kind of an educator for the community.
Helped put together the gray paper for Seeker Network, which was super, super awesome.
I also served at the Seeker Foundation for about a year, helping with all things community building and events.
And, you know, during my journey with Seeker Network, I really had a heart to want to help build out the key DeFi primitives on Seeker Network.
I am not going to lie. I always felt like collectively with Shade Protocol, there's like a chip on our shoulder because people seem to think that if you're building DeFi on a privacy network, that the only thing you could possibly add on to it was privacy, which is a massive feature and feat in its own right.
But we really set out collectively to do something truly special beyond just privacy, but also advancing the capital, capital efficiency of all the different primitives that we're launching.
So the other piece of the journey, too, is I'm a published author from 2017 to 2020, spent three years writing and publishing a book called Building Confidence in Blockchain.
So if you want to want to check out a fun read, that's a really good intro to blockchain and finance.
We highly recommend checking checking that out. So that's that's a little bit about me.
Amazing overview. And yes, I will definitely emphasize what you're saying.
The whole point of having a network with privacy by default isn't just to put stuff inside of a black box.
The whole point is to expand the design space. There should be things you can build on secret that you can't build anywhere else because we have this capacity for generalizable smart contracts with programmable privacy.
So it's not about just how private can we make things? It's also about what kind of new mechanisms can we create?
And some of these mechanisms, you know, even if they could be built on public by default networks, why would we continue to build on those sort of vulnerable foundations when what we really want is a DeFi ecosystem that is permissionless, that is inclusive, that is global?
And it's awesome to see Shade Protocol at the DAP layer on top of the layer one, keeping that mission and ethos alive and pushing so hard on the application side to find ways to get people and users all over the world actually included in using these applications in a way that's not just driven around like rote speculation, but something much more sustainable.
So let's get into that then, in your own words, not mine. I can speak certainly at length about secret, but there's nobody better in the world to be speaking at length about Shade.
So while we have you, Carter, let's kick off with that. What do you feel then is the main importance or the main differentiator of Shade Protocol?
And you might want to explain the full breadth of Shade here because people may not understand exactly how broad your vision actually is.
Sure. So in one sentence, Shade Protocol is an array of connected privacy-preserving DeFi applications.
And so what does it mean to build an array of applications? Essentially, we want to build every single key DeFi primitive and have them all work together.
So what does this mean? It means we want to launch a decentralized exchange.
It means we want to launch a stable coin, a lending platform, derivatives, all of the key financial primitives that we've come to know and love in DeFi.
We want to connect all of them and have them on this privacy-preserving network that is Seeker Network.
And by having this multi-primitive vision from day one, this unlocks a couple of key things.
The first piece is the user experience. Eventually, users are going to be able to come to ShadeProtocol.io and go to the swap page, the lending product, derivatives, bonds, staking, governance.
All of your DeFi activity will all be located in a single location.
You won't have to go to seven, eight different websites to pull off your combination of activities.
Instead, it's all going to be in one seamless location, all privacy-preserving, protecting your user experience.
And the really cool part about ShadeProtocol is because we're building with this multi-primitive vision in mind, it increases the design space.
And so the example I always like to give is imagine you have a DEX with governance token A and you have a different project with their own stable coin that has its own governance token B.
When they come to work together, it ends up being kind of this trade where they're meeting in the middle.
And this can create confusing incentives, especially if you multiply the fact by the fact that we have hundreds of tokens in DeFi.
And one of the things we noticed very early on is it seems like a lot of these DeFi primitives are built in order to drive value to a token as opposed to optimizing for the user experience and having value accrual be at the end of it.
So in short, every single Shade protocol DeFi primitive, there's no new application token, right?
There's only one token, it's Shade.
So every time you launch a new DeFi app, there's no divergence of incentives, everything is completely, completely unified.
And because these smart contracts all fall under these unified incentives, these smart contracts can have permission to access to each other to allow super unique behavior.
A good example of this is something we have a Shade protocol arbitrage bot that is tied to the decentralized exchange known as ShadeSwap.
And because of this unique relationship, we can essentially drive value and build a better pricing system because these two primitives are working together.
And that's just a single example.
So long and short, why is Shade protocol super unique?
It's privacy preserving.
It's this long-term multi-primitive narrative.
And it's going to be featuring best-in-class user user experience.
Well, that's an incredible overview.
And again, it's incredible to see the foresight and the thought that's kind of gone into the design of this suite of applications that are interconnected and providing this kind of universal value.
So let's talk then a little bit more about the decision to build specifically on Secret and how that's going to inform the roadmap for Shade.
Now, obviously, Secret is not a vacuum.
We're interconnected with a lot of different ecosystems, especially in the cosmos.
But scaling well beyond that, we recently announced our partnership with Axelar.
We have a big vision for how we can be the privacy hub at Layer 1 for the entirety of Web3.
So why do you think then that this forms a strong foundation for the future of decentralized finance and how that's going to impact Shade in its own roadmap and adoption?
A hundred percent.
So when I think about Shade Protocol's decision to build on Seeker Network, it really comes down to three key pieces.
The first piece is ethos.
The second piece is utility.
And the third piece is adoption.
Although two and three are tied very, very close together.
So let's start with the first one, which is ethos.
So I'm of the opinion that privacy is a human right and that privacy should be the expectation by default for whatever app that we build.
And so in the world of blockchain, you know, we started off by having total transparency kind of, you know, applauded as this feature.
But as the design space has expanded, I think we've all collectively seen that just like with everything, there's trade-offs.
And so total transparency has trade-offs.
And that's why, like, I believe we need to have the granularity of having that privacy.
And I think it's just it's an important part of society and what privacy can unlock.
And no one is more eloquent about the value of privacy than you yourself, Tor.
So maybe at the end of these three points, I would love for you to also jump in and talk about, you know, the ethos side of things.
Because I think you're probably the most eloquent speaker I've ever heard on that front.
Oh, boy.
Oh, boy.
No pressure.
The second and third piece, which is utility and adoption, really go hand in hand.
Specifically, you know, one of the flagship products of Shade Protocol is Silk.
It's a stable coin.
And in order to truly bridge back to Web 2 in our everyday lives, we need a degree of privacy.
The example I like to give is if you went up to a hot dog stand, you know, with Bitcoin and purchased a hot dog right there and then with Bitcoin, right?
The cashier, if they're savvy enough, would be able to know your entire Bitcoin balance and every transaction you've made since the beginning of time with that wallet.
In many ways, a lack of privacy in Web 3 is even worse than a lack of privacy in Web 2 because in Web 3, everything's immutable, right?
So just like from that simple standpoint of like, how do we bridge back to commerce in a pragmatic way?
You have to have privacy.
And Silk as a stable coin has this vision for being used in commerce.
It's a huge part of creating a sustainable economy and creating sustainable demand.
So I think a lot of stable coins to date are going to struggle with this problem over time because they chose to build on a totally transparent tech stack instead of building on something like Seeker Network.
And the really special part about Seeker Network, too, is there's this auditable privacy.
Users have viewing keys.
They can decrypt their own encrypted transactions.
They can hand off a viewing key to an auditor if need be.
And so Seeker Network strikes this beautiful balance where ultimately users have the sovereignty and control over their own data and how they want to interact with, you know, regulators.
And yeah, I think Silk will be super well positioned because of that.
And that's ultimately that privacy piece, that sovereignty piece is so important to long-term adoption.
And the second bullet point is utility.
There's, you know, minor extractable value on totally transparent blockchains.
There's really no limits to how bad it can get.
There's actually a Laura Shin had a podcast recently focused purely on the long-term dystopia of what MEV can look like.
And it's crazy seeing everyone trying to over-engineer solutions to try to solve for it when instead you simply could just have a private by default blockchain like Seeker Network where MEV is just not – it's essentially a non-factor.
Privacy makes the entire – like the majority of interactions completely equitable.
So I guess that would be one thing I'd say also informed our decision to be on Seeker Network.
Privacy is equitable when it pertains to financial transactions.
No one has – there's no – there's not a – like when you have total transparency, there's an asymmetry of what certain actors are capable of acting on.
As in when you go and make a trade, you're fighting against, you know, hundreds of bots that are all parsing through the transparent blockchain and finding ways to take advantage of you.
And you're just a normal user, right? But if you move that transaction to a private chain, everything's flattened, right?
No one has an asymmetry of information that they can act upon. It's just perfectly neutral.
And so that's one, two, and three.
And I would just advise everyone, be on the lookout for all these complicated over-engineer explanations for how to solve for MEV when the real answer is just to have privacy by default.
I like when you keep saying MEV, like it's somebody's name.
MEV – I always say MEV, but MEV is so short and sweet.
No, you got it nailed.
I mean, like I don't have terribly much to add to what you've already said except to just sort of emphasize the idea around, like, again, privacy as a means by which we achieve other goals,
that we achieve other core principles, like you said, fairness and decentralization and all of these things.
And the privacy by default foundation is how you achieve these sorts of things.
The only thing I would also say is that privacy by default is also critical if you're looking to keep composability.
And if every – what I found is like every individual DEX or DAP suite or network tries to roll their own individual privacy solution for solving something,
like with privacy as a feature in kind of a small silo, it's really, really hard then to get that benefit out to all the users.
You're kind of relying on every single user eventually ending up in this small, not so interoperable silo,
which is why we've always kind of said the message around the importance of privacy at layer one and privacy by default.
So, yeah, adding that piece around composability with generalizability, with inclusivity, a lot of ividies, but all very critical.
So with that foundation laid, let's talk a little bit about the nitty-gritty of Shade Protocol and what's launching.
If people read the episode description here, they'll see that it's concerning the release of Shade Bonds.
And Bonds are a really interesting product, and they have not existed in the secret ecosystem before.
So, Carter, what are Shade Bonds?
Why are they important?
Why are they so important that you guys have prioritized them in the roadmap for Shade?
Yeah, another thing I would jump in there is maybe someone can jump into the Twitter space at the end,
but I'm not even sure Bonds as a product exists in the cosmos yet.
I know originally Olympus DAO was planning on a collaboration and going on to Terra, but that was pre-collapse.
So this actually might be one of the first time Bonds has come to Cosmos collectively ever,
which will be a really cool accomplishment.
But I could be wrong about that.
So someone feel free to correct me on that assumption.
So Bonds are a really interesting product because it's essentially a trade, right?
The Shade DAO is sitting on all of these Shade tokens that have a lot of potential upside and a lot of value over time.
And it doesn't have any other uncorrelated assets, right?
It just has Shade.
And so the way Bonds work is the DAO essentially says,
hey, you have tokens A, B, and C, and I have this token over here called Shade.
I will give you some Shade at a discounted market price,
and you deposit your tokens into the DAO.
And after some vesting period, you're able to claim these Shade tokens.
The cool part with Bonds, though, is that this is actually more generalized than just giving away Shade.
The protocol can also make a trade with respect to Silk being minted and being given out for this.
It could also give away other Treasury assets that accrues over time.
So eventually the Treasury has one, two million secret, maybe it decides to issue a secret bond in exchange for some other assets.
And so Bonds, quite plainly put, is this extremely powerful bootstrapping mechanism.
Now, what is Shade protocol trying to bootstrap?
Why Bonds?
There's really two distinct things missing.
The first is liquidity, and the second is assets that are needed in order for certain utility functions that the DAO has access to over time.
We'll start with liquidity.
There's been this ongoing debate about the efficiency of liquidity providers,
and protocol-owned liquidity has essentially emerged as this really clever solution by which the protocol is the automated market maker,
and it's the capital that's also being traded across.
And so Bonds will allow Shade protocol to own an over time and increasingly large percentage of capital in the trading pools.
And so as we head towards Shade Swap, the dream would be that there's some, you know, on a per-pool basis,
the DAO issues bonds and bootstraps, you know, up to a certain amount of capital.
So like, let's say there's a secret silk pair.
Maybe the DAO owns 20% to 30% of the silk secret LP tokens.
And so as a user and as a trader, you know that no matter what, there's always going to be this base amount of liquidity that can be traded across,
and that that liquidity isn't going to go anywhere.
The super optimal end state, which there's technically long-going capital efficiency discussions on the Shade forums on this front,
but the vision I personally have in my head would be if the, you know, protocol owned the majority of the liquidity on the DEX,
because at that point, it would no longer have to emit rewards to attract capital to provide the service.
The DAO would essentially be performing 100% of the liquidity providing service for traders.
But that's a very esoteric end vision that will literally take five to 10 years to even begin to realize that type of long-term vision.
But the tools are in place to begin to bootstrap and head towards that.
So the first piece is liquidity.
DAO owning its own DEX liquidity.
DAO has the ability to incentivize people to hand over liquidity to the DAO permanently.
That's the first one.
The second one is utility.
So the best example I have here is Shade Protocol has its own essentially arbitrage bot that's tied directly into the DEX.
Extremely powerful tool, but it needs a certain amount of base capital to be able to ARB between ShadeSwap
and other seeker network DEXes like Sienna or potentially multi-chain like Osmosis.
And so part of the bonds that are going to be issued that have yet to be announced will be acquiring certain Cosmos assets to be able to bootstrap this protocol-owned arbitrage.
And this starts to be really cool, right?
Because then we have protocol-owned arbitrage acting across protocol-owned liquidity.
And you can start to see where it starts to be like we're owning the whole vertical tech stack of DeFi primitives.
And it all starts with bonds grabbing that capital to create that efficiency.
So as a user, this is a super cool opportunity to acquire Shade at a discount and also contribute to bootstrapping the DAO.
Because when you receive Shade tokens and you hand over capital to the DAO, you just receive the token that governs the very capital that you just gave to the DAO, right?
So that's also kind of an interesting incentive paradigm.
And within this kind of e-liquid world of Shade right now, because LP incentives haven't really kicked off for anything, which has been intentional,
in terms of slippage, this bonds opportunity will be by far the best way to acquire Shade.
The only other better way at this point will have been if you qualified for the airdrop way back in 2021.
So that's the brief summary of bonds.
Amazing. What a great overview.
And since we're halfway, we're nailing this, right?
We're right 30 minutes in.
This is also usually when we restate those secret badge details.
So a good break before we go into a couple other questions that I've got for you.
I'm going to restate the secret badge details.
Go check the pinned tweet in this space.
It does have some details about how you can claim your freedom and secret badge for attending today's space.
You just need the claim code.
If you don't have the claim code, you can't claim the badge.
But the claim code is SPARTAN.
All one word, all capital SPARTAN is your claim code.
You can claim the badge.
And Carter, can you remind people why they should claim this badge?
You should claim the badge because there's an image encrypted in the metadata of the badge
that you only get to see if you claim the badge that has an image that holds some very, very distinct alpha about Shadeswap that hasn't been publicly revealed yet.
It's somewhat ambiguous.
But for those of you who are careful, that you should be able to connect the dots.
So it should be a fun one to claim.
Highly recommend.
Go check out Stash.
Interesting.
All right.
Well, if you like alpha, then this might be the space for you.
One other thing before I move on to the next question, because this was a thought I had today.
And this isn't a promise, but it's an interesting idea that one day bonds could be generalizable
where any project would be able to use Shade bonds to also issue their own bonds using their token.
It's something that I've been thinking about how easy would it be to generalize bonds to everyone.
And it could be, you know, if we ended up doing that right, you know, Shade Protocol could benefit from receiving a revenue stream from people issuing bonds.
And then those projects benefit because they're able to bootstrap themselves in really unique ways using this powerful tool.
So just food for a thought on the fly I was thinking about today to think about how bonds could go beyond just Shade Protocol,
but perhaps to the entire Cosmos one day.
Sweet.
Well, a good addition then.
All right.
Well, let's quickly move on to we got three more questions here that I wanted to get to.
So why was the airdrop multi-stepped then?
If people have been following the Shade airdrop, you've seen that it's not all getting released at once.
A lot of it is tied up with some of the product launches that they're doing.
But I think, Carter, you can probably best explain, like, why is this the approach that you guys took?
And why do you see it as kind of connected with Shade's long-term sustainability?
That's a really good question.
I know when the second airdropper was released, started to see some comments of, like, oh, like, only 10% of the airdrop.
Like, this is slow.
This is painful.
I don't understand, like, the strategy behind this.
And I think those complaints are fair within the context of a lot of the 2021 airdrops where it's kind of like all at once.
But back in 2021, we really, like, sat down and thought about, like, what is the purpose of an airdrop?
And ultimately, it's twofold.
It's a user acquisition strategy, and it's a decentralization strategy, right?
Let's start with decentralization.
That's the easy one.
Tokens get emitted to a large subset of actors.
The more people and the more set of entities that hold Shade, the more decentralized the system generally becomes.
Obviously, this is, you know, token amount.
There's more to the story than just number of entities.
It's about distribution of the tokens themselves within that set of entities.
But as a whole, airdrops decentralize the protocol, which is, you know, it's a part of the ethos, and it's part of the security of the entire system.
The second piece is user acquisition.
And this is where we put a significant more thought into it.
But if you have a multi-product rollout, let's say five or six products, and let's say, you know, since Shade Protocol airdrop to Atom Stakers, Secret Stakers, and Terra Stakers, what's going to bring, you know, when you first come, you claim your airdrop, there's not too many products there.
What's going to make you come back to the project in an extremely compelling way to see all the progress that's been made on the products?
The traditional answer, if you don't have a multi-step airdrop, is, well, they hear about the products, and they come check it out, and maybe they use it, right?
And that's an option, right?
Like, that works.
But we kind of felt like the strongest incentive for people to come rechecking in with the project is the airdrop itself.
User comes back, you use the Bonds product, you use Shade Swap, you use Silk, and you unlock the next portion of your airdrop.
And the hope here is that all of those airdrop folks from way back in 2021, when they come check it again in 2022, they're going to say to themselves,
holy smokes, look at all of this progress, this UI UX is beautiful, we have all these different financial primitives all seamlessly working together.
This is super, super impressive.
And the reason they came and checked it out is because that's super strong incentive there.
And the interesting part, too, is this really rewards the people that actually use the products,
the people that actually tangibly go and interact with the different smart contracts.
So it means that the net community of holders are people that value and enjoy Shade Protocol's products.
And that's ultimately where the airdrop should be put into.
It's the people actually using the protocol, interacting with the protocol.
So that was the game theory behind it.
And I think the idea has merit.
I understand that there's probably trade-offs to that because there's trade-offs to any sort of distribution strategy.
But because we're so focused on product and the number of products being rolled out,
I think in the long run, we'll look back and say it was a very strong marketing initiative
where we re-educated users on the protocol every time they came back.
And we gave them a really good reason to come back and celebrate the progress that's being made.
No, and that makes total sense, right?
Again, like the whole point about building these kinds of protocols is long-term sustainability.
And yes, impatience is hard and I suffer it from it as well.
And everything in crypto is a million miles a minute.
But there's something to be said about taking the long view for these kinds of products and protocols.
Absolutely.
We have in general with Secret at Rail One,
good to see DAPS kind of taking the same approach in the ecosystem as well.
But that doesn't mean that there aren't incentives beyond the airdrop
for people to be getting more involved in the Shade ecosystem.
So I have a note in here that we're supposed to talk about an LP campaign.
Can you tell me what that's all about?
Absolutely.
So the goal of the LP campaign is twofold.
One, it's to introduce people to the Stake Secret staking derivative built by Shade Protocol.
It's one of the primitives already launched.
It's the second largest TVL contract on Seeker Network.
I believe it has the second highest TVL of any LP pool on Seeker Network as well.
So super successful product.
And essentially the way the LP campaign works is you can go to Sienna,
which is a privacy preserving DEX on Seeker Network and create the Staked Secret Shade LP token.
And once you've made this LP token, starting on the 29th,
I believe is going to be the final finalized date,
you'll be able to begin start earning Shade LP rewards.
It's going to be pretty fun to see that liquidity get built out.
And the reason we're beginning to have this LP campaign is we actually want to prep people in
advance of the first bond, because one of the one of the first bonds will be for that LP tone for
that LP token.
So the protocol can own a percentage of that liquidity pool.
So we're really giving people since September 12th is the launch of bonds.
We're giving people a two weeks heads up to prepare, get their LP tokens ready.
So that when September 12th rolls around, they're ready to deposit their LP token into the Shade bond.
This will also be one of the first times that, I think this is the first time that we're deepening
liquidity for any Shade pair.
So this will also make user acquisition for Shade easier in the next month,
which lines up well with people circling back and checking out the protocol.
All right.
So I hope people internalized all that, because there's clearly a bunch of different ways that
people are going to be able to get involved.
I also have a couple other notes in here, if you're looking at the same agenda that I am,
if you want to talk a little bit more about Silk specifically.
That's the first thing I think people think about when they think about Shade or had been
thinking about first when they thought about Shade.
I think it's useful to sort of restate for people what's going on with Silk, how it relates
to the bonds product and the longer term roadmap for Shade in general.
Sure.
So Silk is the privacy-preserving stablecoin pegged to a basket of global currencies and
commodities.
It's going to be the first ever native stablecoin to Seeker Network, and it's going to be one
of the first stablecoins to come to the cosmos since the collapse of UST.
So we're super excited to bring Silk to market.
And so the Silk bond is essentially a fascinating opportunity that we're going to be creating.
The idea goes like this.
User, once again, comes in and deposits some sort of stablecoin into the Shade bond opportunity.
And after a certain number of vesting days, the user will be able to acquire Silk.
And Silk bonds are super interesting because it's a much more stable form of APR compared
to a Shade bond because Shade tokens are volatile.
So during the vesting period, while you're waiting to claim your Shade, there's a chance
that your bond could become significantly more profitable, or there's a chance where
it could become not profitable at all, where it could actually be a loss.
So a Silk bond, due to the stability of Silk as a stablecoin, if the bond is offering, let's
say, a 5%, 6%, or 7% yield for the user to experience a certain vesting length, that is
essentially an almost guaranteed form of revenue at the end of it.
Now, that's a very dangerous word, the word guaranteed in 2022.
So we'll just say a very high probability, assuming the promise of stability holds for
Silk, of course.
So Silk bonds are going to be a way for the DAO to bootstrap itself with other stablecoins
in advance of Shadeswap launching, so that when Shadeswap goes live, there's going to be
stablecoin liquidity ready to be deployed from the DAO directly onto the DEX to begin kicking
off the trading experience for the Cosmos.
So it's going to be, definitely look forward to more details on Silk bonds, and that will
also be the first chance for users to get their hands on Silk.
So it'll be a historic moment for the protocol in late September.
Amazing.
Amazing.
Always good to hear about Silk.
So this is also the time where we are going to open up the floor for anybody with questions
for the Shade team.
We usually try to leave at least the last 10, 15 minutes for those kinds of questions.
So if you've got a question, please put your hand up.
We will try to bring you up here on stage so you can ask your question to Carter.
And then if we run through all those questions and you've still got other questions or comments
about the secret ecosystem more generally, we'll go till the top of the hour and try to
fit as much in as we can.
So start sticking your hands up now.
But in the meantime, Carter, was there any other alpha that we didn't get to that you
wanted to touch on?
Well, one more piece I'll add is that the September 22nd, I believe it's the 22nd, so I'm going
to have to correct me on that, is the next 10% of the airdrop will be unlocked.
And it'll be unlocked by users interacting with a secret bond.
So users will deposit secret secret and in return will be able to claim the next 10% of
their airdrop.
So if you were a secret staker or an atom staker or a original Luna staker from November
7th to December 13th, way back in 2021, then this is a really cool opportunity for you
to re-engage with the protocol.
So be sure to mark your calendars.
We'll be tweeting out about it, of course.
And just super excited to get this product out to the market.
And also, it's a massive UI, UX overhaul.
Staking derivatives will now not live on its own standalone page.
It's going to be living on the same page as the bonds page.
And it'll also be a standalone portfolio page, as well as an integrated wallet solution, documentation,
and a fascinating way of approaching, educating new users to a protocol.
That's as much as I'll say about that.
But I think our UI, UX is going to really blow people away.
Wow.
All right.
That's good enough for me.
Well, we already got two questions with people with hands raised.
So let me bring up Logan, and then I'll bring up Red Eye.
And we'll have them ask their questions in that order.
But Carter, are you ready to go?
You ready to start talking to people who aren't me?
Let's go for it.
All right.
So adding Logan, adding Red Eye, and then I see a couple other hands up as well.
So hopefully we get through everybody.
Logan, go ahead.
You're first on stage.
Do you have a question for Carter?
What's up, Carter?
How are you?
Doing good.
Glad to see you again.
I'm excited to be here and plug into the community and absorb as much knowledge as possible.
So my question is more so, and I'm a smooth brain, guys.
I throw money at projects that I see have potential, and then I kind of figure out how exactly they work later on.
So kind of like firing and ready.
So I'm getting these questions answered one at a time.
But basically what I want to understand is with Secret Network, like obviously Shade's a protocol within Secret Network.
So is it similar to how like, for instance, Luna or let's say like Kujira was a protocol within the Terra ecosystem?
So that's essentially like what Shade is to Secret Network.
And also too, is there, you know, a hypothetical situation where Shade just completely dominates, like sucks all the air out of the room compared to, because I know there's Secret Token, obviously.
But just Shade has like, let's say 100 times X market cap versus, you know, Secret.
Is there a situation where that can take place?
So kind of a two-part question.
Yeah, so it's good.
Good questions.
I'll start with the first piece.
Shade protocol is specifically on the app layer of Secret Network.
And what does that mean?
It means that we are, you know, smart contracts deployed on top of Secret Network.
And we're not actually baked directly into the protocol logic.
And the protocol logic is what's really being, you know, executed by all the different validators on the network.
So we're on the application layer as opposed to the protocol level.
And yeah, Kajira would be a good, you know, comparison or a mirror protocol or a white whale for using the Terra analogy where users are able to interact with these apps that are driving value back to a certain token based off of the service that they provide to users.
And the real key differentiation, to go to your second question, is that interactions with Shade Protocol require Secret as gas, right?
So if a user wants to move Silk around or if they want to trade or lend, they're always going to need Secret to be able to perform those interactions.
And so this is really, really good for Secret Network because the more usage that is driven to commerce on Shade Protocol, the more, you know, demand that's going to be for Secret as gas.
So it's a symbiotic, it's a symbiotic relationship.
I would say the only jarring component of that symbiotic relationship is the user experience because there might be users that, you know, they want to use Silk, they want to use Shade, but they don't really, you know, it's confusing for there to be like a gas token involved.
And so that's something that we're actually long-term solving for with relation to wallet experiences, gas vouchers.
There's some long-term planning where what we care about is users can use Shade Protocol without having to know about the complexities of gas.
And so no matter what, gas will have to be used on the back end, but preferably in an optimal end state a year from now, two years from now, three years from now.
So users don't even necessarily have to know that that component exists in the actual user workflow.
Yeah, because that doesn't make sense because like with Secret, you know, like I said, when my buddy showed me how to buy Shade, it's like, okay, you go on KuCoin, you buy Secret, send it to Kepler, you know, do a secret bond or whatever, and then swap a secret into Shade.
I'm like, just seems a little bit weird that I have to transfer into Secret originally.
So is this something that you guys are working on where you can directly list Shade on an exchange like KuCoin or some other type of exchange outside of that?
Yeah, so in terms of what I'm aware of with centralized listings is there needs to be deep liquidity built on DEXs first.
There's some specific wash trading risks and silk stability risks if you sprint to listings too quickly.
So those types of listing initiatives are definitely on the roadmap and should, in my opinion, definitely be achievable over the long haul.
But when the Shade Swap launches, I could transfer hypothetically, like if I had USDT, could I just transfer that directly into Shade?
Like what types of pairs will be available on Shade Swap when it launches?
Yeah, so we're targeting different stablecoin pairs with USDT, USDC, and whatever Cosmo stable merge.
So the end user story would be you bridge from something like Binance to Seeker Network, and then, you know, you're one or two clicks away from that transaction.
So, but preferably we get it on centralized exchanges and we have it on DEXs.
That would be the optimal end state.
Got it.
Appreciate the answers, man.
100% great.
Great questions.
Amazing.
Thank you, Logan.
Let's move to Red Eye.
Hey, guys.
Thank you for giving me a moment to ask my questions.
Hopefully everyone can hear me well.
Yep, I can hear you loud and clear.
Okay, awesome.
My question is regarding the silk bonds.
Carter, I'm curious when or what the estimated starting vesting link for the silk bond will be because, I mean, when you talk about this, my first thought is trying to extrapolate.
When will silk be launched?
When will I have actual access to the silk that I'm acquiring through these silk bonds?
And so, if you have even a guess for what the, what that starting vesting link for the silk bond would be, that would be phenomenal.
Boom.
Asking the gigabrain, gigabrain questions.
This is, this is how you know you have a really freaking sharp community when people ask questions like that.
So, so right now, because essentially what Red Eye just asked is when is the actual real launch of silk, and he's able to extrapolate that by me giving the vesting length for that silk bond.
So, super sharp question.
I'll say this.
I think I can say this.
Optimal end world, is it somewhere between 30 to 90 days?
That's awesome to hear.
I mean, personally, I was expecting a longer time frame, definitely longer than the vesting lengths for the single-sided asset, like the initial shade bonds, like Secret Secret, and then the Stake Secret Shade LP token.
I mean, I know you've kind of given some estimates on what we can expect as far as the vesting, potential vesting lengths, and how they're associated with the discounts that are given for the bonds.
But yeah, I'm, you can count me in as one of the first people that's going to be looking for these silk bonds.
So, any information that you're able to give us, I'm more than happy to eat up.
So, I appreciate you giving me that clarity.
Yep.
And we'll have more clarity on the forums.shadeprotocol.io.
So, for anyone that hasn't checked out the forums, definitely encourage you to go do so.
You can click on the Shade Protocol Twitter, click on the link tree there, and check out the forums.
Just super, really good, detailed discussions on there.
And it's our preferred place of giving, you know, product updates and at-length written forum discussions on the decision-making behind some of these things.
And silk bonds, once we can have specific clarity on vesting length and discounts, that's where that info will go.
So, and I know personally, I'm pumped also to jump into silk bonds.
Because if you believe, if you believe in silk and you believe in the opportunity, then it's going to be a really cool historic moment to be part of.
So, excited for it.
Yeah, and last little plug before I hop off here.
If anyone is interested in learning a little bit more about Shade Bonds outside of the Shade documentation, I recorded an episode with House of Shade with Kyle and Carter talking about Shade Bonds.
So, there's some really good information in there as well if anyone's wanting to dig a little bit deeper.
Yeah, House of Shade podcast, be sure to go check it out.
And Mid-Eye is such a committed community member that he actually swung by the Shade Protocol headquarters based out of the Midwest.
So, super awesome community member.
Has put in a lot of time, energy, and passion into the Shade Protocol project.
And just please go support House of Shade podcast.
They're doing phenomenal work.
So, amazing.
All right, we got two other hands up here.
I'm going to start with Topaz Trooper.
And then we have another one from Implementing Now.
So, if you guys have questions for Carter, you can go ahead.
Topaz, are you able to talk?
Can you hear me?
Yep.
Okay.
Actually, I have a couple of questions.
First of all, I would like to ask about the staking.
You talked about Atom staking, secret staking.
And were there any snapshots already or it will be taken in the future?
Yep.
So, the snapshots have already been taken in 2021.
It was from November 7th of 2021 to December 13th of 2021.
So, it's definitely been a slow rollout.
So, if you weren't included in the snapshots, then your best way to acquire Shade will be through Sienna or Secret Swap, which are two DEXs on Secret Network.
And you can also look forward to acquiring Shade from Shade Swap later in the fall, as well as from Shade Bonds.
So, those are the best options there.
So, actually, it will be possible to swap and to get some Shade, right?
Yes.
It's currently possible to do that, correct?
That's true.
Thanks.
And the second one, actually, as I'm not an English-speaking person, I have heard twice the secret word, but I couldn't understand exactly what the secret word is for the part.
So, if it's possible to repeat it, then we could.
If not, then okay.
Could you repeat that question one more time for me?
No, no.
I think it's more like the question for the host.
And I mean about the secret word for the part, because I could not hear it.
It was said twice, but I could not realize the secret word.
Oh, is this for the badge?
Yeah.
Yeah.
Gotcha.
So, the code word for the badge is Spartan, and you can claim that badge by clicking on the Twitter space pin and going to Stash.
Tor, maybe you want to add any additional light?
Okay.
Okay, thanks.
Oh, sorry.
I missed the question.
It was about the badge.
I think just like a general rundown of what the badge, what it is, how to claim it.
Yeah, I'll make it really quick.
If you want to claim the badge, it's a free-to-mint NFT.
And secret NFTs are special.
They can have private ownership.
They can have private metadata.
So, when you're claiming the badge today for this secret space, we partnered with Shade Protocol to get that badge up.
You claim the badge.
Inside the private metadata is a special alpha leak looking forward at a product on Shade, but you don't get to see it until you claim the badge and you look inside of it.
It's like you get a treasure chest, and then you've got to open it up.
And it doesn't cost any gas to claim.
It's all paid for you.
And if you haven't been collecting secret badges for secret spaces or from dApps in the ecosystem, there's never a bad time to start because sometimes projects do like to reward all the secret badge collectors.
Okay.
I see.
Great question.
Sweet.
And we got time for one more.
So, implementing now.
Did you have a question for Carter as well?
Are you able to hear me?
Sort of.
Yeah.
Regarding the stablecoin issue, I mean, I'm worried that wouldn't any government, again, be have more control over any of the stablecoins?
Like, I have seen USDC having restricting, like, Tornado cash, those all things.
I'm just seeing whether this kind of stablecoin would also be restricted by government or they will have more control over any stablecoin coming up.
Gotcha.
Yeah.
So, this is a really good question.
I'm actually working on a long-form write-up about, essentially, the stablecoin dilemma, which is really tied to stability, decentralization, and depth of liquidity.
And so, there's, like, it's a super nuanced conversation.
It's all about what collateral should be trusted by decentralized stablecoins in 2022.
There's a super strong argument to be made that USDC shouldn't be trusted at all.
There's also, you know, definitely valid points about USDC and USDT and some of these other stablecoins being an important part of building out stability for any stablecoin project.
So, I don't have the off-the-cuff answer for you right now because it's too nuanced for, like, a flyby answer.
Like, it's worthy of a 30-minute read in terms of my response on this.
And also, we want to get community feedback from everyone about the different stablecoins and the different assets that will be part of, you know, ShadeSwap and the DAO itself.
So, long and short, great question.
I don't have an immediate answer for you.
Sorry about that.
But be sure to check out the Shade Protocol forums because I have a long-form answer coming about the stablecoin trilemma.
Okay, thank you.
Just one more question to the secret net host.
Yeah.
I have seen Toronto Cash going down and down, like, just...
So, I mean, whenever I see a privacy-related thing, I'm seeing that many governments will be targeting any privacy-related protocols now.
So, wouldn't the scenario be similar, secret situation will be similar to that of a torrent?
So, good news for people who have been following the secret ecosystem for some time, right?
We've actually been talking about this risk forever, that if you build something like Tornado Cash, where you have a public blockchain,
and then you try to build solutions where you keep things private by putting something on top of it,
that looks to governments like, you know, like you're trying to hide something.
When you have to opt into privacy, so you're trying...
They try to go after...
By the way, I'm obviously very pro-privacy as a human right, right?
So, I'm not saying governments are right or wrong to do this, but they go after things that make it look like you're trying to hide something from them.
And something like Tornado Cash is designed in a way where you are having to opt into a system that allows you to hide information from other parties.
And they use that to try to get people riled up against these things, to put a bad face on privacy,
because governments don't like when they don't know things.
They want to know everything.
That's kind of what they do.
They surveil.
That's part of how they maintain state power.
So, with Secret, we didn't want to build something where you constantly have to opt into privacy on top of something public.
We just built the whole thing private by default, because the idea is that everybody deserves to have privacy.
We deserve to have it be an expectation.
And then if you choose to reveal something, and we always give you that choice,
you can choose to reveal it with whomever you want, for whatever reason, under whatever circumstance.
That becomes a really powerful foundation for any kind of application.
And it's a lot more sustainable and a lot more defensible than building something like Tornado Cash
that's really just designed to help you hide something from certain people under certain circumstances.
It doesn't mean you're wrong to use Tornado Cash.
It just means we think that secret network is the way that you'll be able to build privacy-preserving systems,
but also have them be sustainable and become the sorts of things, actually, that governments like,
because of the degree of programmability that it provides to developers and users,
as opposed to something that they're trying to ban.
Okay, great. Thank you.
So, if you don't mind, I think you have repeated the code twice, but I'm unable to understand it.
Like, would you mind repeating the code again?
One more time with the claim code.
It is SPARTAN.
I'll even spell it.
S-P-A-R-T-A-N is today's claim code.
All capital letters.
Yes.
Well, thank you for attending the space.
Anybody who's here, you definitely deserve, after an hour with Carter,
you deserve your own secret badge, and you deserve all the alpha that you got leaked today.
So, thank you again, Carter, for joining us on today's Secret Spaces.
Thank you for sharing all of these amazing insights about Shade and yourself.
If people want to stay in touch, obviously, they should follow you.
They should follow Shade.
What else should they do as a sign-off here to make sure they're staying on top of everything Shade?
Yeah, definitely.
I would just say, get involved in the community, the Discord, the Telegram.
We want to engage with the community, and there's so many amazing contributors.
And the vision of decentralization is impossible without an engaged community.
So, I just would invite you to come join and bring your energy and your ideas.
The second thing I would say, too, is get involved with Seeker Network.
Join the Secret Agents program.
If all of this, you know, Shade Protocol stuff is new to you, and there's a lot of complexity,
and you're trying to figure out what is this stuff all built on top of, I would go to SCRT.network
and join the Secret Agents and learn about Seeker Network, learn about this amazing technology that we're built on top of.
And I'll close with this.
There's plenty of room in the shade, and just looking forward to getting products out to the community.
It's going to be a fun fall and winter for all things Shade Protocol.
You heard it here.
There's plenty of room in the shade.
Thank you, Carter, again.
Thank you, everyone, for your questions.
Thanks for listening to us for this last hour.
These do get recorded.
Make sure you keep an eye on the Secret YouTube for when we get this uploaded.
But in the meantime, look forward to next week's Secret Spaces every Tuesday, 4 p.m. UTC.
We'll have more information on that soon.
But everybody, have a great week.
Stay secret.
Stay safe.
And we'll catch you on the next Secret Spaces or around the Discord.
Oh, and stay tuned for more news this week on Thursday.
Keep an eye out as we've got some fun community stuff launching.
But that's a secret.
See you soon.
