JAM, JAM can you guys hear me?
alright guys I think we'll start in like 2 minutes I still see some people streaming in so just give
it some time for users to join and then after that we can get this VMA started
Okay, I think we can get started. Okay, so thanks for coming to tune in to the showcase
radio for today. And today we have none other than Tasha from init capital. So Tasha, would
you like to give everyone an introduction of yourself? And, and well, after that, we can
start the questioning. So like all the questions that users have for init.
Hi, thanks for for having me and having init here. I'm Tasha, co founder of init. We just
went live on mental yesterday. So if you haven't checked out our D app, please, please go and
check it out. We also have a lot of things, a lot of incentives ongoing.
Okay, thanks, Tasha. I'm really happy to have you here today. So in it just went live yesterday.
So I'll be I can start off with the first question about init that everyone wants to know,
can you give us a brief overview of init capital and also the core mission driving the liquidity
hook money market? Yeah, so init capital is a more composable version of money market.
We, we use the concept of liquidity hook, which we got inspiration from Uniswap before hooks,
right? And we think that hey, like that's, that's a good idea for swapping. But how can we
adapt that concept to also apply for money market, which is another huge area, right?
So in the end, like our core values and our mission is to democratize access to liquidity
for not just users, but for other defiberate calls as well. So in this case, with init capital,
other defiberate calls can also integrate and build liquidity hook to borrow liquidity from init
and do various different things that those defiberate calls are meant to do, right?
So in the end, I think there are going to be two groups of users that can, that can interact
with init. The first main user group would be for sure, like, you know, end users who can lend,
who can borrow, but what's even more than lending and borrowing is you can access different yield
strategies that other defiberate calls build through liquidity hook. And these are accessible
through the front end, right? So making it very easy for users to access all those new strategies.
And then on the other hand, you know, other defiberate calls can easily integrate and build
liquidity hook and borrow liquidity from init. So let's say you're a margin trading protocol,
for instance, you can integrate, you can build liquidity hook and borrow liquidity from init to,
to margin trade on your protocol. So that's, you know, an example, but there are multiple
avenues of liquidity hooks that you can, you can work with.
All right, thanks for the overview for about init. So I think a one question that a lot of new users
actually have for init is the whole concept about liquidity hooks. So they always wonder
what exactly is a liquidity hook and how does it actually make init a differentiated
money market compared to like a vanilla money markets that you see in the space. So for those
new to the concept, can you kindly help to explain the idea of liquidity hook and its significance
in the DeFi space? Yeah, yeah, definitely. So I think better to start from a DeFi protocol
perspective, and then, and then as a result of that, it would generate benefits to the,
to the init end users, right? So as of now, there are quite a lot of challenges that
DeFi protocols face in order to borrow liquidity from existing money market. Some problems may be
that the existing money market is not as composable. Some other problems may be that
the token that the DeFi protocols are looking to interact with are not supported as collateral.
So it limits a lot of functionalities and so on and so forth, right? So the concept of liquidity
hook is enabling these other DeFi protocols in mental or in DeFi itself, able to easily integrate
and in a sense, we use the word liquidity hook to exemplify that integration and pretty much,
you know, set different logics before and after borrowing. So if you're a similar example, right,
if you're a, whether you're a bond protocol, or if you're a doing a ME flooping, which is a very
popular strategy now, or if you're doing a margin trading protocol, you would be able to integrate
and build that liquidity hook to use in its liquidity for that particular purpose of your protocol.
So that's the main concept, right? But the benefit that it entails for the end users is
because of these integrations that are happening behind the scene, we actually are showing all
these integrations and these liquidity hooks on the front end for the users as well, which means
that when you come to in it, it's not just simply lending and borrowing as the users, right? It
will actually be showing all the different DeFi strategies that you can do around that token that
you have. So if you come in, if you have MNT, for instance, and then we would show what are the
different liquidity hooks built around MNT. So you might be able to do, for example, leverage LP
into MNT pool on merchant mode, you might be able to do margin trade on MNT on another protocol,
for instance. So these will be like a one click accessibility through the front end itself
Okay, thanks for the very concise breakdown for this. So I guess you talk about the applications
of liquidity hooks and also how it is applied to the mental DeFi landscape specifically. So
perhaps you can dive deeper into what you mentioned and perhaps tell all the listeners
about the differences between this and liquidity hooks, money market, and how you guys operate
and what really makes it different versus really a traditional money market without a liquidity hook.
Yeah, so because we make sure that it needs to be a lot more compostable and easily
integrated and such, there can be different types of liquidity hook to be integrated,
then I think there are several key things that I think should be highlighted. The first thing
is that each position, like our D app, our contracts, understands everything as a position
base, which means that if let's say you have a rep SDE or maybe an ME collateralized to borrow
ETH and do let's say like 5x looping, that would be in one position and that would be a separate
position than using ME as collateral and borrow USDT, OCC. So that would be in a second position,
which means that if there's a price deviation a little bit of ME compared to ETH, only the
first position may be impacted in terms of liquidation or in terms of your health ratio.
Your second position will not be impacted. So by having this capability, it enables these different
ways of integrations to happen and still maintaining that solvency and that safety on our protocol
because each position is pretty much siloed and the risk is siloed among each other. So that's a
first thing that I want to highlight and then I think the second thing that is also important
is flash borrow. This is actually abstracted from users and so users won't have to know and won't
have to go through using flash borrow or anything, but this is actually the key functionality that
enables end users to engage in leverage functionality through the flash borrow. So for example, there
might be an external protocol that wants to build an ETH 5x leverage looping. They would not be able
to easily build that functionality if we don't have flash borrow. So these are some examples
that we make sure that in the end there are different types of integrations and liquidity
hooks that can be supported and ultimately these are the integrations and the yield strategies that
users will be able to access directly from in its front end and these new strategies are
built by different protocols. Anyone can integrate and build a liquidity hook.
Okay, thank you for the breakdown. Maybe just curious, since that liquidity hooks actually allow
for a lot more complex strategies to be implemented, it increases the composability of
what users can actually do with their assets. So since there is increased complexity,
it might be a bit intimidating for new users in DeFi to actually try it out and actually
understand how to actually do the different strategies. So maybe one question that I have
for you is how does the liquidity hook ensure that finance is accessible and empowering for
all users and not just for the DeFi veterans? Yeah, good question. And I think the key point
that we're actually wanting to address is like right now when users use money market,
after borrowing, you would have to know what to do with that borrowed funds to generate more
yields to cover that borrowing cost and then so and so forth. So you have to know what to do,
where to do, and how to do it, right? Which essentially, you know, require a lot of
research and knowledge and hence, you know, tailored more for DeFi veterans.
So for INIT Capital, by having all these different liquidity hooks shown on the front end for the
users itself, presented them already that hey, if you have MNT, these are the things that you
can do with it. Because these are the things that are already integrated and built through liquidity
hook from other external protocols. And hence, it shortens a lot of the process and making sure
that information is less asymmetric and shared more to beginner and intermediate DeFi users as well.
Because in the end, you know, once you come in, you would see all these different functionalities,
different things that you can do in one place. And you can also execute those things
Okay, thanks for that. Okay, moving on to the next question is that INIT actually just launched.
And we also see that we have quite a number of other protocols that will be coming to the mental
DeFi system soon. So for this new protocols that are coming into the space, how can they actually
integrate with the liquidity hook money market? And what benefits to this actually stand to gain?
Yeah, pretty much, you know, the key benefits are two main things, right? Like one is you,
you as a DeFi protocol would be able to integrate and borrow liquidity from INIT without having to
source your own liquidity. So that's the first benefit. The second benefit, which is also a
byproduct of the first one, is that because you don't have to source your own liquidity,
you don't have to keep, you know, incentivizing your protocol with your own token, or do different
strategies to gain that liquidity, right? Because a lot of the times we see that here, like different
protocols would have to use their own native token, project token to incentivize different
activities. And the main activity they're incentivizing is to source and boost up liquidity.
So in this case, you know, you would not have to do that, and you would be able to
borrow liquidity from INIT to do that. So in a sense, you know, right now there are a few protocols
already building different liquidity hooks to borrow liquidity from INIT, right? The first example is
ME looping that I've been mentioning. The second example is margin trading. So some protocols are
doing basic margin trading, some are doing margin trading with, you know, different functionalities
on top, like with stop loss, with different like add-on that you can do with it as well.
Some is also exploring to do a leverage LP liquidity hook. So all of these, you know,
will make it a lot easier for them because they don't have to source their own liquidity,
and they can borrow liquidity from INIT.
All right, thanks for the explanation. Now, I think previously you mentioned that
when funds are deposited to INIT, that it is possible to use the funds deposited for like
flash loans and other strategies in DeFi. So I think one important point that a lot of users
will be thinking about is about the risk management that is actually in place. So well, can you
explain to us that what are the risk management strategies that INIT capital deploy and to
actually protect its users and ensure stable operations?
Yeah, yeah, definitely. Every loan on INIT is over collateralized, right? Even on the end
users getting that leverage capability through liquidity hook, it is still over collateralized
on INIT because of the flash borrow functionality that we have. So I may not dive too deep on
flash borrow, but you know, if you want to read more, we also have that section on the
document on the GIT book itself. But because we have flash borrow, we can ensure that while
the end users have ability to go on leverage, our contracts are always over collateralized,
right? So when that's the case, then I mean, when every loan is over collateralized on INIT,
that means that the two things we need to ensure always, right? The first thing is that collateral
has to always be more than borrow. And then the second is, okay, if the condition needs to happen,
it has to be able to happen in time, right? So some of the things that we do to ensure that these
two conditions hold is mainly like making sure we consider not only just the volatility of the
tokens when thinking through like collateral factor and borrow factor, but we even think through
and take the modes or how correlated the assets are into consideration, right? And because mainly
like if the more correlated assets they are, and if there's only slight deviation from it,
leading to like slight lower of health ratio, that may be a lot worse than, you know, two
tokens that are not super correlated and have like a worse end ratio, right? So like we take in,
we take a lot of aspects of it and not just looking at volatility, but looking at, you know,
how hard the assets are and all those things to think of, you know, collateral ratio and borrow
ratio. So that's like a quick one example. And the second thing I think which will be good to,
to, you know, understand a bit more is also we have borrow cap as well. So if you try to
borrow a lot on in it, you may see that there might be, you know, an exceeding borrowing
cap warning allow, right? Because in the end, like from our contract, we also have to set
what's the maximum that everyone on in it in total will be able to borrow because let's say
if a black swan event were to happen, we need to be able to liquidate everything on
DEXs and hence, you know, liquidity on DEXs also matter when we, when we calculate like what's
the borrow cap and all those things. So all of these is to like ensure that hey, number one,
collateral is always more than borrow and number two, liquidation can always happen in time.
I see, this is quite a comprehensive number of things that you're doing to actually ensure
the security. I think one thing that I've always like to look at when I look at a protocol is that
I always like to see that security is always placed in the foremost importance for them.
Especially I think this is especially so for, for money markets, because we see some
exploits happening in the past before. So I think the users have heard about
in it, they learn about what are liquidity hooks can actually do for them. So maybe it's time for
you to drop some alpha for us. So I'm looking ahead, so what different developments and
expansions for in it can we expect? I guess you can touch on like how points will be used,
maybe certain timelines and also upcoming features that users can expect from in it.
Yeah, sure. So we just launched yesterday. So anyone can lend, can borrow. We also have point
system. So every $100 if you lend, you would get one point. Every $100 you borrow, you get seven
points. And there are also referral points and community points if you do different quests.
So, you know, there can be other ways that you can earn points without having to
only lend and borrow as well. So those are already live. And looking forward, we
you know, have a number of liquidity hooks coming up to launch. A number of them are built
as we speak by external protocols. Because in the end, you know, any capital is permissionless,
anyone can integrate and build liquidity hook to borrow liquidity for different device strategies.
So as those come live, end users will be able to access those
new strategies or, you know, these, yeah, these new strategies as a result of the liquidity hook
through our front end. So you would be able to do a one click and eat
five x looping very easily without having to like right now, I think a lot of people are doing
it manually. But yeah, with these liquidity hooks coming up live, a lot of these new
strategies will be automated and accessible to the end users.
All right. Did you want to touch on any of the upcoming timelines in places that maybe
a TGE or is that something that you still can't you still can't discuss publicly right now?
Maybe or even like token tokenomics release, I think a lot of users have been asking that
when when is the token now? And when is the token details out?
Okay, give us a bit more time. We just launched.
We will have a token. Yeah, but but cannot share too much on the exact time I already did yet.
Okay. Sorry for putting you on the spot. Okay. Yeah, I guess I get that. That's sort of
sums up the questions that we have for you today. Maybe you would like to share some maybe
spinal thoughts or any key messages that you would like to leave our audience regarding the
future of finance with in capital. Yeah, I think a lot of the you know, in end users, I feel like
have become like the information asymmetry has become increasing quite a lot over the years.
Because there are so many more, you know, DeFi protocols with many different use strategies,
different way that you can, you know, earn or arbitrage between different protocols, right?
So I feel like with in it itself, and the concept of liquidity hook, it would actually bridge that
gap better for beginner and intermediate users as well, because in the end, all of these liquidity
hooks are very clear and very accessible in one place, right, without having users to understand
and know where to go, what to do, how to do it, at every point in time. So you know, in
even though like in it just launched, but in the end, like we hope to be able to bridge that gap
and make information asymmetry a lot less in DeFi, while not holding back, you know,
the innovations in DeFi, right, but making sure that the beginner and intermediate users would
be able to catch up with all this innovation in DeFi. So yeah, really hope that liquidation liquidity
hook would be one of the key driver for that. And I think yeah, final point would be if you're
building on mental, if you're considering launching on mental, and if you need liquidity,
feel free to reach out to us, Discord, Twitter, we, you know, we're always open,
and we'd love to see how we can collaborate and support.
All right. Thanks, Tasha. Yep, that brings us to the end of the EMA. So I would like to thank
Tasha for Attending the EMA and giving us a very comprehensive breakdown of
In-it capital and also like what it actually brings to the DeFi scene on mental. I'm personally
very excited to actually see where it develops and also how other protocols can actually build
on liquidity hooks from In-it capital. So I'd like to thank all the listeners as well for tuning
into us today. I think today we can come to the end of the EMA pretty fast, faster than what
we actually scheduled. But yeah, I guess the information has been really
concise and also very, very easy for all the users to understand. So yeah, once again,
thank you for tuning in today, signing out. Bye. Thank you so much. Hope you are In-it.
Hope you are In-it. Good night, Tasha.