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Sustainable DeFi FTW in 2025 💪 The Aggregated Ep. 116
Recorded: June 6, 2025 Duration: 3:20:24Space Recording
Short Summary
The conversation highlighted the launch of Yuli's new song as an NFT, the innovative features of Katana's Vault Bridge technology, and the growing trend towards Sustainable DeFi practices. Participants discussed the importance of partnerships, yield generation, and the need for ethical considerations in the evolving crypto landscape.
Full Transcription
Thank you. Thank you. Hello, you hear me?
Yeah.
Before we get going, I think we're going to play Yuli's new song.
Just pin that to the Jumbotron.
Full of transparency, X entirely me and uh i've tried three
different devices to just make this song not be suppressed um but uh so if it cuts out for like
five seconds every now and again we can blame crypto taxing
blame CryptoTaxon. Polygon over years Infinite tech and scale memory
Polygon, end of game
Get together and replicate
Fill it in, scale it all
Polygon, end of game
Better future is the aim
Keep us strong, don't let us down
Longinx, I trust
We bring the best to God enough Unify liquidity
Cross the chains, we'll find what makes us free
Build a bridge, take me there
And I don't care
If you're a bull or a bear
Falling on, ends the game
Get together, aggregate
Scale it in, scale it down
Oh-oh-oh
Falling on, end of game
Better future is a theme
Keep us wrong, don't let us down
Don't tell me don't fantasize about SDK
Roll ups and side chains and stuff
Don't tell me don't wanna be one of us
Vote and then discuss liquid doubt about it I'm not a teacher, not a preacher, I'm an educator, I'm a big fan of the team of aggregated.
Rocking the stick here, making sure to make it clear, so case that won't disappear. Let's go.
Love it.
Love it. Not AI today. just a beautiful voice of yuli good morning everybody
rock you there bro good morning good morning gmgm gm good morning good morning good morning yuli beautiful song we i actually was here for it
this time i did listen to it and and i put out my uh my video about listening to it for the first
time a reaction video um but i i have to say darren did his best trying to play the song for everybody but you gotta go and listen to it
live and now it's live yuli do you want to take uh just like a minute to tell everyone where they
can find it and uh i think you can buy it too now i need to look into that yeah i actually funny
thing i i don't even know if you can buy it, but I guess you can. It's like literally everywhere, everywhere.
You can find it on every streaming platform out there.
And I'm actually looking into making this song into NFT.
I think it would make sense, right, guys?
I think that would be great.
And I'm really proud of what we did.
And thank you, team, for your support.
Thank you so much for sharing, for your feedback.
Even, like, guys, even my dad liked this song.
And he's, like, he's a former musician.
He's always very honest with me when it comes to music, to songs.
He knows that, like, if I can can do better he will always tell me like hey
you like you should try again but this one like he absolutely liked it and and I trust him and my
Uber driver yesterday was listening to it as well so like every everybody even people like
out of crypto they loved it some of them were asking me like, but what are you saying about? And I'm like, well, it's a blockchain.
It's a project, you know?
So it's kind of a great way to slightly shill Polygon to non-native, non-crypto natives.
Really, thank you.
Thank you so much.
Yeah.
Once again, it wouldn't happen without you guys and i'm so happy that everything
aligned uh this way thank you a lot yeah the jumbotron um i think you can get it on spotify
apple music marshall also said you can get it on itunes if you want to go back to 2019
also said you can get it on itunes if you want to go back to 2019 um and then yeah
marshall's also selling um cds of the back of his truck nice nice yeah hopefully they're they're
yule k uh cds but i think uh an nft would be awesome. And of course, hopefully, you know, you create more songs.
And yeah, you worked with some really high profile people on this.
I think it's a smash hit.
It's awesome, Yuli.
So it's so awesome that she actually released it on the show too.
I don't know, maybe like three or four episodes back.
And everyone needs to follow Yuli to continue with her journey she's she's uh you also stream on abstract and pretty
much just a star around the space so yeah much love yuli thank you for sharing i really appreciate
it thank you thank you so much thank you for your support. Thank you, Aztec.
Definitely.
Definitely.
I got to support Polygon people
and I'd like to support everyone.
So much love.
So today is Sustainable DeFi, FTW,
for the win in 2025.
The aggregated episode 116. We've been
doing this for a little bit.
Much shout out to
Polygon for everything
they do to support us and
make this show
possible. Quick swap.
You guys are beasts.
Much love to
LDA team. Much love
rock.
What's up, bro? Are we ready to talk to Katana everyone wants to know what's going on with Katana that's that's what everyone's probably here for right
now so you want to dive into it you have anything to say before we do that I'm here ready to go. I'm actually co-hosting here from the Tiger Mansion from Mike Tyson's
old mansion from the 90s with a complete with Tiger Dan and yeah it's the house from the
hangover. So I'm here for the week and uh ready to go have you been sleeping in a tiger then
yeah yeah yeah i've been sleeping with the tigers when you said tiger mansion i immediately thought
of tiger king that guy if y'all remember that no that that's next week that's next week johnny
next week good times yeah this one uh isn't this the mansion that was in Hangover?
Yeah, this was in Hangover, yeah.
So if anyone's watched the Hangover, it's the mansion that was,
I think it's where the tiger was.
Like, there was an actual tiger, if I remember right.
And I think somehow, like, the tiger got lost or came with them some
when they got all messed up and stuff but yeah something like that but yeah michael turpin
owns the property now uh of bid angels yeah so cool man i'm jealous i was gonna stay with you
uh but i had to go back go back with the kids and everything.
But good times, man.
Is it on Airbnb?
No, no.
It's Michael Turpin's residence, and he's just having me and Cindy, him and Joyce are having me and Cindy stay for the week.
good times good times yeah michael turpin's a solid guy um big big uh oh they call him the og
Good times, good times.
Yeah, Michael Turpin's a solid guy.
of crypto and the godfather of crypto cnbc called him that and it kind of stuck
so good times good times let's let's jump into this. So, um, Justin, what, uh, crypto Texan,
what, what is the, maybe we could start just high level first, uh, 30 seconds. What is Katana
for those that might not know? What is it? And then I have like a bunch of kind of,
I want to kind of deep dive on Katana and learn some of the intricacies.
Sure. Yeah, absolutely. Happy to do that.
And happy to be back on this Spaces.
Yeah, my name is Justin Havens, also known as CryptoTexan on Twitter.
I've been in the crypto space for about four years now working in the crypto space for four years now i started in the crypto space in 2017 from like a buying bitcoin and trading
perspective uh been at polygon for a little over three years and now i'm uh working full-time at
the katana foundation and just like very high level because there's a lot of stuff that we
can talk about when it comes to katana um katana has been in the works kind of ideating for for
quite some time and really it was just like a group of defy users um and some defy developers
that just kind of took a step back because we were starting to see like DeFi-focused chains
and more vertical-focused chains spin up.
And just kind of thought, you know,
what is it that us as DeFi users like really want?
Like what do we really care about?
Like what, and the thing was like,
A, we want high yields, makes sense.
And also we want deep liquidity as well. And so basically we just kind of started from there and started to reverse engineer
and build a blockchain and some mechanics that really just focused on giving users
just that high liquidity or high yields and deep liquidity to result in just like
a better user experience. And so that's very high level. And then I think you've got some questions
so we can dig in deeper if we want to later. Definitely, definitely. Thank you for sharing
that. It's exciting to hear a little bit about, you know, how everything came together. I also want to introduce TwoCent.
Timmy, what's up, brother?
Before we dive into all the juice.
TwoCent.
Yeah, what's going on?
I missed you guys last week, both you and Rock.
It was, I hope you guys had fun.
Yeah, we missed you, man.
We missed you.
We had, but we know that you crushed it.
We had fun on the ground there at Bitcoin Vegas and Lightwind Summit.
But very cool.
Yeah.
Yes.
So for the audience who doesn't know me, I am two cent Timmy.
I am on the Polygon marketing team.
Just up here having a good time and hope I know Justin will crush the Katana stuff, but there's other things. If he
misses, I might have questions for him
because I don't know.
I think Katana has a lot of
very, very cool mechanisms and certainly
when I'm describing it, I forget like, oh yeah,
this is also something that's awesome.
Very cool,
man. Back up.
You always got to have
backup. I'm Rock's backup here.
So good times.
Is anyone
behind the Katana account that I should
introduce?
It's just hanging out.
It's just hanging out.
Poor guy. Just chilling.
Well, much love, Katana
account. Thank you for being here with us as
well. We see Panda down here. Panda, Darren, what's up, bro?
Do you want to introduce yourself or are you just hanging out with us to play the song?
Probably to play the song, right?
Yeah, I just forgot to kick myself.
Okay, good times, man. I just wanted to make sure that we got you too.
So let's dive into katana guys um one of the things i'm interested in kind of diving into first because because i
also want to use this technology uh so can you explain the vault bridge what it does and how it
benefits chains and the yields expected for users yeah that's a great question so the vault bridge
uh protocol is it's a protocol that is developed by the ag layer team so uh and this was announced
uh probably like a little over a month ago i think polygon ag layer came out with an announcement
kind of talking about vault bridge in general and this And this is a protocol for any team or any chain, I guess L2s right now, to tap into.
And I think if you're connected to the AgLayer, there's not a fee charged to teams using Vault
Bridge if you're connected to the AgLayer.
But I think there is some sort of fee if you're an L2 that wants to use vault bridge and you're not connected to the ag layer.
And it just so happens that Katana is the first layer two that's using this vault bridge
technology. And what vault bridge actually does, you can compare it to other bridges
in ecosystems, right? Like you bridge over to base or you bridge over to Arbitrum.
Like what's happening to your assets there?
Well, what they're doing is you're on Ethereum.
You're sending your assets to a bridge contract on Ethereum and you get minted.
What's basically a receipt token on the layer two, right? And so your assets on Ethereum are just sitting there
in a bridge smart contract, doing nothing,
just waiting for the user to bridge back to Ethereum
so they can redeem their asset on the layer one.
And the Vault Bridge just kind of takes a look at that
and says, you know, that can be seen objectively as an inefficient use of capital.
If you look at all the bridges to and from Ethereum,
there's billions of dollars in assets just sitting there doing nothing.
What if those assets could not only benefit the chain, the L2,
or the users on the L2,
but also benefit Ethereum DeFi as well.
So that's what Vault Bridge does.
A user deposits an asset into the Vault Bridge.
Those assets are then sent to lending strategies,
low risk curated vault strategies through Morpho that earn yield.
That yield is then routed to that specific L2 that the user wants to deposit onto. And that
yield can be used by the chain for any number of reasons. If they want to subsidize gas costs,
if they want to take that revenue and just keep
it for themselves, they can. But on Katana, what we've decided to do with all of the yield that's
generated by Vault Bridge is to take that yield and then use it to boost pulls on Katana DeFi.
So if you look at other types of liquidity mining campaigns that you see, they're usually
just token emission based, right? You use the poll token to boost yield for a little bit to
attract liquidity. But those token related emissions, typically those campaigns have an
end date. And then after that campaign is over, all that mercenary capital, all that mercenary
liquidity that went into those pools typically leaves to go to the next incentive campaign.
And one of the really beautiful things about Vault Bridge is that this is basically a perpetually
funded liquidity mining campaign with real yield. So the yield that you get in these pools are not
CAT tokens or any other type of governance token. It's real yield. So if you're in a USDC,
USDT pool on Katana, the boosted yield that you're getting is in USDC and USDT.
And as long as there's assets in the vault
bridge and as long as they're earning yield uh that program is remaining funded and so that's
kind of a high level overview of of vault bridge i think i hit all the key points but if you have
any follow-up questions uh yeah let me know definitely so if you're bridging over to katana
and you're you're there with the vault bridge you definitely want to participate in d5 if you're bridging over to katana and you're you're there with the the vault bridge
you definitely want to participate in d5 while you're there uh and and then you're getting a
piece of the um the yield as well that's another good point that you're that you're bringing up
that i can i can touch on too and, so there are other chains who have done
similar implementations of this that they pioneered this, I would say blast is a,
is a project that comes to mind. But what blasted is, you know, when you bridged over,
users would get that yield, but they would just get that yield by just, you know, if the asset
was just sitting in their wallet on L2, they would be the beneficiary of that yield that's generated through the bridge.
And what happened there, that kind of stunted the growth of Blast's DeFi ecosystem.
And so it made the assets on the chain like pretty unproductive.
And TVL is definitely a metric that a lot of chains count.
But we think that the TVL metric that you really need to be paying attention to is like the TVL
of assets that are actually used in DeFi. And what we didn't want to do is we didn't want to
incentivize users to just bridge over and just have those assets sit idle in their wallets on L2.
We want to encourage users to actually use those assets in DeFi to actually participate
and contribute to the health of the ecosystem.
And that's why we decided to take that yield earned from Vault Bridge and boost specific
DeFi pools.
That way you have what we call
productive TVL. And you can think of, you know, chain TVL, which is just like what you see when
you look at L2 beat. And then you've got productive TVL, which is assets that are in
DeFi protocols, like what you would see on the DeFi Llama TVL charts. And yeah, so that's kind
of goes into our philosophy there. Prioritizing productive TVL as opposed to just idle TVL sitting in wallets or idle TVL just sitting in a bridge contract on Ethereum L1.
You went into it a bit with saying, you know, low risk strategies.
Maybe you could dive in a bit on, you know, just like the risk factors there.
And then also, like, where is it getting the yield from?
So you mentioned some of the vaults.
Can we kind of take a microscope there yeah we can dig into that
as well so the the way morfo works is you have uh vault curators and these are isolated lending
markets as compared to something like uh traditional compound or or ave where all the
assets are basically pulled together um you pulled together, it's a little bit
more isolated. So the risk that a user takes by depositing into a vault in Morpho, they're only
exposed to the risk within that vault and not through all the vaults on Morpho. So that's a
differentiating factor. And for Vault Bridge, there's been two risk curators that have been tapped here. And one is Gauntlet, who has a pretty stellar reputation for risk management and treasury DAO management and governance and stakehouse as well for like data analytics, risk management and things like that. And so, yeah, so these strategies that these vault risk curators
implement, it has to be in line with the risk tolerance of what Katana wants for the vault
bridge and what the Aglaire wants for the vault bridge as well. And that risk tolerance is very
low. You know, these are not long tail assets that are being deposited into the vault bridge.
These are highly liquid, um, marketable assets.
So that's, uh, ETH, WBTC, USDT, USDC for starters.
And, uh, the yield is generated by, by the strategies that those vault curators decide on.
And that's, but, you know, the majority of that coming from people borrowing against, you know, right?
So you're depositing assets into these vaults.
It's permissionless.
Anyone can borrow against those assets.
And as long as people, there's borrow demand for those assets on L1, that's where the yield is coming from.
That's beautiful. And just for those that might know, what can you explain what long tail assets are? Because you said they're not long tail assets. You're basically using liquid, very known assets on Volbridge mentioned ETH dc um what what what are long tail assets just
yeah long tail assets you can think of just like meme coins or assets that don't have a lot of
borrow demand all right that's that's another thing like i think another question that people
typically ask um about vault bridge is you know't pole, uh, an asset that can be
deposited into, uh, vault bridge. And, uh, you know, it's something that could be considered
in the future, but right now the, the, the main thing is there's not a lot of borrow demand for
pole, right? People do like to borrow ETH, USDC, WBTC, USDT. So it's a combination of the need for liquidity and
activity within those markets, and then also borrow demand for those assets as well. And like
long tail assets would be like, you know, anything that has a lower market cap or has a lower trading volume than these other
four majors that I have described, like meme coins, you can consider those as incredibly
long tail assets, right? There's typically not a whole lot of liquidity in the ecosystem,
and there's not a lot of borrow demand for those assets. And if there is a lot of liquidity and there is a lot of borrow demand, it's usually just
within a short-term timeframe within the hype cycle of that specific mean coin.
And I kind of said this earlier, but the strategies for the vault bridge, it's optimized to return like a repeatable, sustainable, low risk yield, not optimizing for the highest yield because, you know, the higher the yield, the higher the risk.
Typically, just want to give an additional boost to the users and generate a sustainable, repeatable revenue source for the chains that are using
Vault Bridge. Yeah, I think it's genius. I love the idea. It's something that I want to use as well.
So I'm getting live questions coming in from friends. This one is, it's right on topic. So can a chain migrate their bridge to Vault Bridge?
Yeah, they can. That's definitely a possibility. I think what you would have to do, I can't,
I don't really know about the technical aspects of it, but it's just a matter of, you know, if you are a chain that has a bridge to Ethereum,
there's likely a multisig or some sort of governance
that has some sort of control over the assets of the bridge.
Not ideally, but in most cases,
like this is just something that happens.
So you would have to go through governance,
use that multisig to transfer those assets
into the Vault Bridge strategy.
Or what you can do is you could set up
an additional route on your bridge
to where users can opt in.
And then maybe they can get an additional
different type of token.
For example, if arbitrum uh wanted to
integrate vault bridge right they've got their own canonical bridge that they use right now
if they wanted to have users opt into vault bridge they could give users a different token like a v
usdc like arbitrum vault usdc and then what they could do is they could redirect the rewards that AV USDC, like Arbitrum Vault USDC.
And then what they could do is they could redirect the rewards that are
generated from Vault Bridge to pools, if they wanted to,
to only pools that have AV USDC pairings, right?
So that's like an option.
And that's kind of similar to what Katana does uh is going to do also like the vault
bridge is uh for katana is opt-in right so uh when you bridge uh eth usdc wbtc usdt to katana
what you get in return is what we call a vb token so this would be vb usC, VB WBTC.
And so the pools that will be incentivized, boosted with vault bridge yield, rewards from the vault bridge, will be those VB token pairs or those VB lending markets specifically. You can bridge just regular USDC to Katana and regular WBTC to Katana.
But the rewards and the boosted yield
is going to be directed to the VB token pools.
That makes sense.
Wow.
So we've kind of gone over Vault Bridge
and the benefits for users that are that are uh in those pools
uh of tokens two cents to me is there anything that maybe i missed i'd like i want to kind of
shift the conversation to the tech stack but um i want to check in with you no i think i think you got it i think justin did a great job covering the vault bridge and kind of
like how it works and i do think it's like a a huge unlock i think the biggest thing of like
you don't have to have idle assets it's like taking on one additional smart contract risk for like this very real revenue that you can use to deliver back to users.
So I really see it as something that is a true win-win situation for everyone involved.
Definitely, definitely.
And that's what we're talking about today, sustainable DeFi for the win.
So this is sustainable DeFi.
This is, I mean, this is really well thought out.
It's really exciting to see this unfold.
I'd like to actually, before I jump into the stack,
I should probably ask about sequencer fees.
So I heard 100% of the sequencer fees will go back to,
into the ecosystem.
How does that, is that true?
Yeah, no, yeah, that's a great question.
Yeah, that's part of, there's quite a few mechanisms L2, you've got to pay a fee to the sequencer, right?
You've got your base fee plus like a tip typically.
And, you know, the majority, you know, some of those fees go to pay for gas cost on Ethereum, right?
Because that L2 has got to batch those transactions
and send them down to Ethereum for settlement.
And then you've got to run the sequencer.
So there's like hardware related costs to running a sequencer as well.
But then there's excess outside of that.
And so like, you know, we'd like to say that on Katana,
100% of net sequencer fees, right?
Because you still have to like pay for the sequencer and pay for settlement.
Those get redeployed into the ecosystem in two different ways.
Number one is through chain-owned liquidity, which we can touch on more later.
Or they can be routed to further boost yield on DeFi pools as well.
So, you know, we kind of see quite a few different mechanisms in layer two ecosystems that tend to extract value from the users and the ecosystem that's on that chain. And what we want to do is basically take any type of value extraction tool
and redirect it back into the ecosystem.
And so, yeah, basically instead of extracting value from user activity, right,
user activity generates sequencer fees,
Katana just wants to recycle it back into the DeFi flywheel
by providing boosted yield yield more boosted yield
for DeFi pools and chain owned liquidity. And we can talk on
chain owned liquidity more in a little bit too.
That's why I definitely want to hit that. But with the
sequencer fees, it there's there's whole memes around, you
know, where the fees go? Where's the sequ you know, where, where the fees go, where, where, where's the sequencer
fees or, or, uh, where, you know, where's all these fees going, you know, but you, here
we know, you know, it's going back to the infrastructure and it's going back to the
users.
It again, going back to the title sustainable DeFi.
I mean, it's, it's from what I am hearing, you know, you have ball bridge going back to the users ultimately, and you have the sequencer fees going back to the users.
Is, is this basically just cover, you know, the chain itself?
Is this, is this why you call it sustainable defi is, is this a, does thisFi? Does this basically cover the costs and everything?
Yeah, absolutely. And I think another thing is when it comes down to it,
we call this the Katana flywheel. And every action that a user does creates higher yield,
deeper liquidity, and just like this reinforcing loop, right?
You bridge your assets to Katana, that's generating yield, that boosts yield for DeFi
pulls. You do a transaction that generates sequencer fees, that goes back into the ecosystem
through chain-owned liquidity or further boosted yield, right then you know there's also a usd which is which
is another uh revenue stream i mean there's quite a few different revenue streams that we have coming
in to further boost the ecosystem and i'm just going to list those revenue streams right now
uh i won't get get into details on all of them but but right. Like if you think of like a traditional DeFi ecosystem,
like one, uh, if users use the DeFi protocol that generates fees, right? Like if you,
like you swap on a DEX that generates a fee for the, for the liquidity providers on the DEX,
right? So you've got native DeFi protocol yield that's base everywhere. But then you add vault bridge yield from Ethereum.
Then you add the sequencer fees. And then we've talked a little about chain on liquidity that generates its own yield. Where does that yield goes? It goes back into the ecosystem too.
And then AUSD, similar to other centralized stable coins, it's backed by U.S. treasuries off-chain, right? The difference here
from USDC and USDT is that with AUSD, that yield generated from the treasuries gets routed
from off-chain back on-chain to further boost AUSD-denominated pools as well. And then there will be cat emissions as well,
which is not real yield and it's not sustainable, but it's just an amplifier in the short term to
get all these other things going. So it's like, it's just a powerhouse of yield, man. That's
awesome. You know, we've mentioned chained own liquidity a couple of times. So I, you know, I've heard of protocol and liquidity with, with DeFi solutions.
I'm guessing it's similar, but maybe you could break it down for, for people that don't know about this.
Yeah, I think for me, like this is my favorite part of, of Katana.
Everyone talks about the high yield, which is like super exciting,
but you know, with, with chain owned liquidity, that's where you really get the sustainability
aspect in my, in my opinion. Right. So, uh, chain on liquidity is similar to protocol and liquidity.
If you know protocol known liquidity, this is where a DeFi app kind of retains their own kind
of base layer liquidity and can direct it to specific markets to make them deeper, more efficient,
less slippage, et cetera, et cetera. But you don't typically see this, or I don't think there's a
whole lot of places that do it, on the chain level. Also, a portion of these net sequencer fees
will go to build chain-owned liquidity. And it just further helps less of a
reliance on this mercenary capital that you see come into ecosystem. It compounds over time,
so you've got this reserve base layer fund of chain-owned liquidity that's deployed into like uh sushi or morpho and um
yeah that earns yield right where does that yield go it either compounds into deeper channel
liquidity or it can be read that yield earn from channel liquidity can be redirected to further
boost uh yield on on markets so where this is really exciting is for me it's like if you have
this like consistent base layer of chain on liquidity in a lending market uh that provides
for more stable and predictable borrow borrowing rates right because traditionally like in in a
lending market the way that the rate curve works in defy if you have a huge like in a lending market, the way that the rate curve works in DeFi,
if you have a huge whale in a lending pool
that's supplying assets
and they want to pull a lot of it out,
the interest rate is going to go through the roof
for those borrowers, right?
It's a variable interest rate for the borrowers.
But if you have a majority of it going,
you know, from channel liquidity that is sticky
and it's not going to leave, that provides a lot more confidence from borrowers in that market, which generates more borrow activity, which generates more sequencer fee activity, which provides more yields for those that are, you know, deposited, you know, are providing assets in that lending market. And then on the, on the deck side,
you know, if you've got deep liquidity in a USDC, USDT pair, uh, the slippage, you know,
whales can trade with size with like minnow sized slippage. One of our content writers wrote that
one time. And I thought that was a really funny way to do it. Whale-sized trades with minnow-sized slippage. And I think another thing that is really exciting, too, is because channel liquidity is so sticky and it's not moving, in times of extreme volatility in markets or an extreme bear market, when users are withdrawing and leaving Katana
and withdrawing from these DeFi pools, chain-on liquidity is going to stay. So it acts as like
a reserve to where people can still participate in DeFi when the bear market comes. And also,
as users withdraw from a liquidity pool, the chain on liquidity is in,
that means the percentage of that pool that is owned by chain, that is chain owned grows.
And if we redirect all of the yield generated from that to that specific pool, it actually
provides an outsized return for the users who actually
stay in those pools during those times of volatility.
So, you know, it's built for the bear market and the bull market.
I'm really excited for the upcoming bull market, or if we're here, that's great too.
But I'm also really excited to see how well Katana performs in the bear market as well. Because we see the yield generated from chain-on liquidity
and the yield generated from AUSD, off-chain T-bills,
as kind of like a bear market-resistant revenue flow as well.
Well, I get what you're saying. Predictability is so important with trouble sometimes. And this really makes a better home for people's liquidity all around with all the different points that you've touched on.
Wow.
I get what you're saying.
I want to check back in with Two Centimmy.
Is there anything you want to,
anything that we might've missed
on any of the points we've brought up recently?
Yeah, one thing that I've found,
like it was for me just talking about it
and hearing people talk about it
on the chain-owned liquidity.
And I know Justin touched on it,
but like the chain-owned liquidity, and I know Justin touched on it, but, like, the chain-owned liquidity
can actually prevent whatever you want to call it,
like, a bank run on, like, as users are withdrawing
if they want to pull from Vault Bridge.
Like, there's this...
It was really cool and very deliberate, I know,
how Katana was designed to not only boost yield but like
do it in a safe way and as it was being designed it was like what's the worst case scenario
how can we mitigate all of these problems and like it was done i think in a very clever way
it's like in this very positive bull case here are are all the benefits. And then in this bear case, here's how we don't get hit by the bear market as well.
And like, I mean, like it's almost as if it's designed.
I mean, you talk about like high risk, high reward or like those things.
Like you actually get a higher reward and it was designed with a higher reward and lower risk than what.
And I don't want to say there's no risk, course but like for these other d5 specific chains um it actually provides a lot lower risk um just because of the
way the mechanisms were built so like i don't know it's a nice counter to a it's too good to
be true and it almost sounds too good to be true until you go into the mechanics and you're like
no we're actually like building this chain of liquidity and it acts as a safety net and backs it off and then like it
gives me as a user someone that like really will want to do a lot on katana a lot more
confidence in the um in the chain itself i i love this uh-owned liquidity, COL. So this has been something some protocols have used for a while, normally called protocol-owned went super hard on it in the early days, and I wish we would have.
I mean, if we would have taken just some small part of fees, as an example, QuickSwap generated over $100 million in revenue in its first year on Polygon, or it might have even been Matic at the time.
But if we would have taken some small percent of this and just put it in whatever Bitcoin ETH or
ETH USDC and then let that grow over the years, there could be a hundred million in protocol on
liquidity on the platform, just generating consistent sustained yield over the
years so i think this is super cool to do at the chain level yeah definitely great architecture
guys and it definitely sounds very competitive uh you guys kind of touched on you know
just comparing other d5 chains so So this sounds very competitive for the future.
Also, another thing, and thanks for both of your thoughts.
I know you guys are only with us for maybe another 15 minutes or so.
Really appreciate you guys coming on and sharing about Katana.
I know I have a couple more questions,
but before I jump into some of my other questions, guys,
look, we all want to
spread the word on katana so please uh hit the little circle in the bottom right hand corner
of your screens go in retweet also ask some questions maybe i missed something that you
want to know about katana in the last maybe five minutes i'll jump in there and and try to see you know
if there's any comments that or questions that uh we we missed but yeah please share the space
and much love everyone that's here hanging out with us today on friday but um both uh crypto
texan and who sent timmy talked about the the yields. And one thing that I've been wanting to ask is the cat emissions.
I think this is exciting.
You know, we've talked about all the different types of yields users can get.
If you're just joining us today, you're definitely going to want to rewind and listen to everything.
But with cat emissions, what does that look like?
How much extra are people getting right up front?
You know, that's a good question.
And I just, I think it's somewhere out in some of our documentation,
but I don't know that answer specifically right now.
But, you know, I think when it,
there's a couple of things I'll say about cat emissions specifically.
Number one, there's three ways to get cat right now,
or get credited to get cat right now.
And that's one you can deposit into the Katana crates front end where you
deposit, you get these Katana crate loot boxes.
And inside those loot boxes is like a random allocation of cat,
right?
Anywhere from five cat to 10 million cat is in these loot boxes.
Also,
we've got like a crypto punk.
We've got a few miladies.
We're about to put some Pokemon ENS donames in there too.
So that's Alpha for the chat right here, which is fun.
So yeah, there's that.
And then, but right there, the rewards are a little bit randomized.
But if you want something like a little bit more predictable,
we have like the Turtle Club front end as well,
where it is just like traditional boosted cat emission defy,
pools.
And so the difference between those two is,
you know,
for you to get the full credit on the,
the cat APR earned on turtle club,
you've got to keep it locked for three months.
You can withdraw whenever you want,
but you just kind of take a haircut on the rewards that you get.
And then with the Katana crates,
you know, as soon as mainnet launches,
you can withdraw as soon as you want to.
There's no lockup period there.
So kind of random,
potentially outsized rewards
on the Katana crates,
and then a little bit more predictable
and consistent rewards
with the Turtle Club front end.
And then also stake your pole. If you have poles staked, and then a little bit more predictable and consistent rewards with the Turtle Club front end.
And then also stake your pole.
If you have pole staked,
Katana is going to distribute 15% of its total cat to pole stakers over a period of time.
So stay tuned on that.
And that's taken into account on a time plus amount weighted calculation on,
on the,
on those.
And then,
you know,
when it comes to,
you know,
once mainnet is live,
yes,
cat will be used to further boost pools in addition to all the other
revenue streams that will be boosting pools that I had mentioned.
But the idea is that, you know,
we rely on these early bootstrapping cat emissions at a much shorter timeframe
than other blockchains have to rely on their emissions.
So they're being used.
So they're being used, I mean, this is what I've always said, is emissions should mainly be used as bootstrapping mechanisms.
I mean, this is what I've always said is, you know,
You can compare them to, for example, eBay and PayPal in the early days.
So when Elon was competing with Peter Thiel and they were building their own versions of PayPal with
X or Confinity. And then they eventually merged because they were competing each other kind of to
death with rewards. And that's what we're seeing in this industry right now is everybody is giving
emissions. And if you don't give emissions, someone else will, but they're, they're not a good long-term
play.
They're good bootstrapping mechanism.
And eventually eBay, PayPal, all these companies stopped doing it.
They did it to bootstrap.
And so you guys are thinking from the very beginning, okay, cool.
We can use this to bootstrap, but then we'll have sustainable emissions through the sequencer
fees, through the vault bridge extra yields.
And there was one more.
And then I guess protocol on liquidity having a little bit different.
But yeah, go ahead.
No, yeah, you're right.
Yeah, there's vault bridge yield.
There's sequencer fees.
There's yield earned from chain-owned liquidity, and then there's yield generated from AUSD's off-chain treasury bills as well. for what we call VCAT, which allows you to direct future CAT emissions
to specific pools.
And then you get a portion of the fees
generated from those DeFi pools
by voting to direct emissions there.
It's very, very similar to a VE,
you know, a 3-3 model and that's you know that that
just kind of goes even deeper into like how defi native we want this chain to be like our chains
token is a defi token when it comes down to it wow that's actually pretty cool so there's like a
bunch of different uh things going on on this chain that's that's pretty cool so essentially
for those who don't know um with uh like curve and others you can it by holding tokens you get
to vote on where emissions go so it's like kind of governance um at an even higher level because now you're managing sort of the finances of the chain in a way.
So you're using VE for the chain.
curve and then later with convex these these uh curve wars which were people buying up you know
the token uh clamoring to buy the token and the token going up a lot uh which i'm i don't know
you guys probably can't comment on that part but this is what happened you know with curve and then
with convex um people were buying up the token because they wanted to direct those emissions
and so um yeah that, that's pretty cool.
It gives a whole utility to a token.
Yeah, we're really excited about that.
And I think there could come a time in the future, too, where we could get Alex,
who is like the gigabrain behind the CAT tokenomics mechanisms,
to come on and kind of talk through all of that.
But that might be later down once we have it all completely fleshed out.
Yeah, it's pretty cool.
I think Aztec will probably go in at some point on this episode.
We've been discussing in the background using a couple of these mechanisms,
A couple of these mechanisms, including Vault Bridge, for LitVM, which is the new Polygon Litecoin L2, Aglayer Litecoin L2, that a lot of you have been seeing that Charlie Lee and the Litecoin Foundation and a lot of people are kind of supporting, endorsing, backing.
A lot of people are kind of supporting, endorsing, backing.
And so it will be super cool for these chains to play together in Aglayer using Vault Bridge.
Definitely, definitely.
I want to save that maybe for after because I know we only have so much time with Katana crew.
But yeah, I'm really excited to all all these chains using this awesome technology
um and and speaking of technology there is uh oh i wanted to jump this oh two cent timmy you got
your hand up yeah i just wanted to add one thing real quick about the tokenomics from like a
a community perspective one thing that i think is super, super cool about Cat
is there was no pre-sale.
So like there's no VC investors
and there's no preferential unlock ahead of users,
which I think like,
and if you look at the token breakdown,
100% of the tokens are going to either the community or the core contributors to in a very
I would say fair way but it's almost like this was built with users in mind first so like the
idea of like oh it's a VC chain you probably sold x amount of tokens at a very cheap price
and people are going to unlock it like even that part isn't true so I think it's a VC chain. You probably sold X amount of tokens at a very cheap price and people are going to unlock it.
Like even that part isn't true.
So I think that's a really, really user-friendly,
like I think Justin said it,
like DeFi from first principles.
But one of those principles
is you take care of your users.
And that was really, really exciting to see
on the actual cap token breakdown.
That's all right.
Right now.
But guys, it's been great.
Would love to come on again and love you guys.
Oh, okay.
Okay.
Much love, man.
Thank you for answering our questions here.
I had a couple more, but I really appreciate your time.
Yeah.
Really good to see you, Texan.
Yeah.
To me,
do you want to answer some questions or,
or should we just,
I can do the best that I can.
I know Justin's much better at it,
but if you do have some questions,
I'll see if I know the answer.
I can give it a shot.
Definitely.
Okay.
Actually, I'm on the network shot. Definitely. Okay. Um, actually, uh, Omnity, uh, network,
I see your hand up. Do you want to say something before I jump into a question?
Oh, I have a question, but I'll wait my turn. No problem.
Oh, no, no, no. Go ahead. All right. So, um, uh, I'll, I'll skip you the long story about
interoperability and start by saying thanks for having us on the show.
To keep it pretty tight, I just want to ask if there's any intention for a partnership with other Polygon CDK chains,
namely Merlin and B-Squared, which were critical bridge partners of ours.
We've temporarily paused those bridge interfaces to lower our workload, honestly,
just to make it easier to
build out more products and maintain less interfaces. But if you guys are thinking about,
you know, some Polygon CDK chains that have BTC file on them, we want to know.
So I'm giving you an opening here for some alpha. But if you want a declined answer,
And so that's also okay.
that's also okay. I'm just expressing an open and genuine interest.
I'm just expressing an open and genuine interest.
Yeah, so I will be honest.
I don't know all of the interoperability plans.
I know that Katana is the first chain that was built with the OPGETH tech sack that's going to connect to AgLayer.
So that was something that was really exciting to see as far as interoperability
go like it is plugging into the ag layer and it's designed to really bring ag layer a lot of
liquidity um but beyond that i will be honest i don't know what the interop and bridging plans are
one thing that we can talk about here is that vault bridge and aglier are
are built to be usable with all chains so merlin is a cdk chain um and then you have for example
bob build on bitcoin is a op chain and these are both Bitcoin focused chains, but one is built on Polygon CDK, one
is built on Optimism's OP stack, but actually both of them now can use AgLayer.
And I'm assuming, I'm not sure, but I'm assuming either now or soon we'll be able to use
Vault Bridge.
um that was part of the reason my understanding that katana uh is building using um
i don't know if it's just vanilla op stack or not um i don't know if timmy or anyone else may know
but basically using op stack as a base but then pluggingLayer. So this was a proof of concept that you can be an
optimism OP stack chain and plug into AgLayer, which is pretty incredible. And
is some, one of the reasons I've been so bullish and, um, really cheering on Polygon's AgLayer
for so long is because optimism with their, their OP stack and their super chain, and then, um,
arbitrum with their orbit, these are, you know, what they're called, what people are calling
clusters, which basically mean if you are on an OP chain, then you'll be able to have like,
you know, easy bridging in between different OP chains over time,
but you won't be able to bridge to an Arbitrum chain or to a Polygon chain
or to an L1 somewhere else.
The difference here is what Polygon is doing is they're trying to do
an all-encompassing, all-chain solution and go against the cluster narrative, right?
And Vitalik has talked about this.
This cluster thing is not, this is not the way.
We are not going to, we do not want to have a bunch of, you know,
semi-walled gardens that are like, you know, okay,
these 15 chains, you know, can use this bridge interop protocol
and these 15 chains can use this bridge interop.
And then ZKk sync is building their
own and you know so polygon when they very early on decided we're going to do this open source
we are going to make this usable for everyone we're not going to charge people rent so they They acquired the mirror team for 400 million. And I think it was Hermes for 175 million.
Anyways, so they acquired all these technologies, the teams, including like the best, yeah, the best roll up ZK roll up roll-up teams, and other, and other, like, you know,
tangential technologies, and they brought all these teams together, and then they open-sourced
everything, and so from the very beginning, they've always tried to be all-inclusive,
they've tried to work closely, or inclusively with all these teams, And I think that is the way. And so, yeah, Bob,
to answer your question there, Omnity, which is a Bitcoin-focused protocol on optimism,
they can use Aglayer if they want. And there's some pretty good reasons for them to do so.
There's two great reasons right off the bat.
Actually, let's make that three.
So one is, and I don't want to make this a competition between Polygon and Optimism.
I like Optimism.
But Optimism charges, I believe it's a 10% or 15% fee.
I forget.
But whatever it is, they charge a pretty big fee to be plugged into their super chain stack um polygon won't charge anything so if you use super chain you you pay that fee
and you can only play with optimism chains um if you use ag layer you'll be able to play with all
chains no fee secondly vault bridge uh only ag layer has vault bridge so you'll be able to give your users this optional
extra yield or your the chain builders this optional extra yield um another revenue source
for for the chain uh builders themselves so it could be another revenue source. Yeah. Yep.
So no 10% fee vault bridge and all inclusivity instead of being in one small cluster.
So there's a lot of reasons I think people will consider even using OP
stack as base layer and, but ag layer as your sequencer roll-up stack and bridge stack?
Definitely.
I've seen a lot of videos recently from Mark and Sandeep
talking about it's not going to matter.
The AgLayer will be able to be for...
Any stack will be able to use the Aglator.
So they're like, it doesn't matter which stack you're using. That's actually really exciting.
Um, yeah, as an example, you know, not just, these are not just ETL2s guys. So right now the LDA is incubating and Aztec
is the main founder of,
by the way, LitVM,
which is a Litecoin layer 2.
So this is a Litecoin
layer 2 using ZK rollups
plugging into AgLayer.
So this technology,
AgLayer, is not just built
for ETH L2s.
This is built for L1s or L2s of these other L1s.
And one way or another, we're getting Litecoin, Bitcoin, Doge, all ETH L2s,
all plugged into, all talking to each other finally, um, and, you know, connecting to Ethereum.
So how, how cool it'd be when we have Bitcoin and Litecoin and Doge and all these changes, Cardano, um, maybe even, maybe we'll even, you know, be nice to the Solana guys, um, all, all plugging into, uh, one big interop bridging cross-chain DeFi and composability ecosystem.
That's definitely the future, in my opinion, seeing everyone work together.
I mean, Rock and I, we definitely like to bust on some chains specifically.
But, you know, in the end, it's really about all of us working together.
We're such a small community.
You know, we're growing very quickly.
The industry is growing very quickly.
And money is flowing in, you know, from institutions at a higher rate than it ever has.
at a higher rate than it ever has. But at the end of the day, I think maybe two weeks ago,
I brought up the stats for just how many crypto users there are in the world. And I think roughly
7%, maybe more at this point, a little more, but that's still a long ways off from some of the higher adoption rates. Like if you look at people that just use like Web2,
the internet in general, I think it was like, I'm going to misquote it. So I don't want to say,
but it's like 60, I'll just say, I think it was like 69-ish percent or somewhere around there.
or somewhere around there.
59 or 69, I can't remember.
But you can see there's a lot of room for growth
with people that own crypto
and when you compare it to other technologies.
So we're still early and being early,
we should be working together.
And so I love the spirit of the Ag layer.
Like as soon as I heard that Polygon and many other teams were all contributing to the Ag Lair,
it was just something that I needed to be a part of.
That's why we named the show The Aggregated, because we believe everyone's going to be aggregated.
Certainly makes sense to me.
Yeah, all right. Well, we'll keep an eye on katana and
we're already keeping an eye on y'all's work and you know we we were talking to polygon way back
in the day about super chains and i think the the way forward with open source chain development
kits makes a lot more sense so appreciate you guys speaking on that
definitely definitely my i think my phone is starting to uh it's getting a little buggy when
it's when it gets a little buggy that means it might kick me in the next five minutes so if i
just stop talking guys it's uh it's probably because i got kicked by elon but yeah we rock
what what do you is there any other questions that you have i mean i i was thinking about asking a little bit more about uh the op stack and all that but i think we kind of
went over that there there was some questions from the audience so to send to me i don't know
if you want to answer maybe one more question or if we should just dive into you know defy in
general i want to introduce her i'll take one more. Yeah, one more. Okay.
Yeah, because I feel bad.
I said I would answer some questions the last five minutes and I didn't
we didn't have time, of course.
You know,
CryptoTexan is a busy man.
There was this really good question about
from Peace.
She's asking about
the CDK
OP stack and how it connects to Polygon AgLayer.
We really kind of jumped into this.
The last part of it, she says, can you explain how this integration enhances cross-chain financial transactions and liquidity provisioning compared to non-AgLayer chains?
And I think that Rock kind of summarized, uh, that, um, already. So that was
actually one of, one of the questions that I wanted to read off. That was from peace. That
was pretty much already answered, but here's another one. This is from by, uh, Viola and
they're asking, um, how have polygon Labs and GSR influenced Katana's development?
And what's, let me see.
I think, yeah, I think the first part of the question is probably most relevant just for this.
So, yeah, how has Polygon labs and gsr influenced katana's
development we we haven't talked about gsr uh today and i know they're a big part of the chain
so that maybe you can answer some a little bit about this yep so gsr is basically the market-making partner.
I don't know much more beyond that. I can speak to how Polygon Labs has influenced the development of Katana.
So really, the origin of Katana came from AgLayer, right?
So AgLayer is obviously, and we talked about it, like the, a primary focus for Polygon Labs, we want to have
this like open web three where everyone can talk to each other. And for the user experience,
it doesn't matter what chain you're on. So we really wanted to find a, going back a little bit,
you need, you need deep liquidity to do that, right? You don't want slippage going across chains.
You don't want all of these problems that we have.
Fragmentation is a huge problem in Web3.
So we wanted to find a chain that we could connect to AgLayer that would have really, really deep liquidity that would enable all of these cross-chain transactions.
And long story short, we couldn't find it.
It basically didn't exist.
And then, so when a chain doesn't exist,
when the solution doesn't exist,
Polygon basically said,
okay, well, if it doesn't exist,
that means we can build it from the ground up. So Mark, our CEO, and a lot of the DeFi team,
David Silverman was one of them, Alex, Matt Fisher, Justin, really got together talking about
if we were to build a DeFi-focused chain, how would we do it? So it was basically Polygon Labs DeFi team
got together and said, we want to build a chain.
And I say this affectionately.
It's basically with like, what do a bunch of DGens want?
And they were active participants in DeFi.
And they used Blast, they use Sonic, they use Bear Chain,
and they were able to identify kind of all the problems on those chains, and then built Katana
with, I would say, similar designs, inspiration, something to that effect, and then didn't have
any of the problems or avoided all the pitfalls those other chains had.
So they just said, we're going to build Katana from the ground up
with the Polygon Labs DeFi team, and then they launched it,
is really the influence.
I would say the structure of the chain, the mechanisms, the tokenomics,
the chain dome liquidity, it was just...
I mean, part of it is, and you guys can probably know,
like through LDA is like,
you have a lot of smart people on the LDA team and on the quick swap team.
And you can just like,
it doesn't mean they only people that work for on the quick swap team don't
only use quick swap.
Like it goes beyond that.
So it's just like,
okay,
well we want to build it.
You're going to get all the best minds in the room that you have and that you trust and then you just launch a
product so that's really how polygon labs influence it and for gsr like i said i on the
polygon team i was not privy to the conversations that were had with gsr so i would not be the
person to answer that. Definitely.
But I appreciate, you know, all the info you could give us.
So, yeah, this makes sense.
I think, you know, Katana becomes an integral part of the Aguilera universe.
Because, I mean, for all the many reasons we discussed today so very excited to see
you guys kicking off and um there's a lot of incentives there guys so like i keep on seeing
i haven't i personally have not jumped in fully yet because i've been traveling and busy while
the launch like actively went live.
And obviously there was a lot of people that were surprised because you guys
were cooking in stealth.
Very similar to kind of how we were cooking in stealth with LitVM.
So it's exciting to see you guys out now.
And so, yeah, guys, anyone that wants to participate, you know, there's all kinds of
initial rewards and there's all these great yields that we've spoke about today. So if you
want to learn more about that, I highly recommend following the Katana account that's here on stage
with us today and just keeping up with them because obviously as
you can see they're on the cutting edge they're doing some really uh great initiatives and and
if you kind of read between the lines it's kind of it's still early like there's there's a lot of
great yields that you can get probably today and and uh prizes and things like that but i mean
like the cat emissions haven't really even uh launched yet and and uh you know you can if
you're staking paul if you're i'm not sure if like there's so i'm not part of the team, so I have no idea how the airdrop is exactly going to work.
But if you're staking pull, we're all going to get airdrops.
So that's also exciting.
So a lot of exciting things here today.
Maybe we should jump in.
When airdrop, Timmy?
Yeah, actually, I mean, I can speak to that.
We talked about it in the tokenomics blog on the Katana website, which is katana.network.
So this was actually, if I can just talk a little bit about it, one of the coolest things that I thought the team did when designing it.
So most airdrops, they just take a single snapshot. Here's the tokens that you held, and then they just distribute the rewards.
For Katana, the way it's working is the longer you stake your poll, the bigger your airdrop is going to be, relatively speaking.
So, basically, like, I know there was a story that came out a little while ago where, like, Justin Tron, or Justin Sun, basically made a huge deposit.
Yeah, Justin Sun made a huge, like, deposit for Etherfy, like, and then got outsized rewards, even though he wasn't involved for longer.
outsized rewards even though he wasn't involved for longer and we said like that's one example
but we really didn't want to we wanted to reward the people who have been participating and
enhancing the polygon ecosystem for longer so uh i think april like the polygon team designed a
really awesome dashboard on the staking site to calculate your stake weight. And the first snapshot was taken April 1st.
And if you go there, you can see like,
I had two wallets, let's say that were staking pole.
One had 10,000 pole-ish stakes.
And if I had another that,
and that had been staking since April 1st.
And then the other one I just deposited, let's say 50,000.
The $10,000 pole will actually have a higher stake weight.
Uh, if the airdrop was tomorrow, because it's almost like, uh, how much ball have you been
staking for so long?
Um, which is, I personally like, it's like you, you ride with the people who were there
from day one.
Um, and like you give them the rewards, but when the the how far back does that go so like if i was i've been
staking yeah ld lda me personally i'm sure aztec have been staking for i don't know years five or
six years since staking started yeah i think i think it started april 1st uh of this year of
like when they were able to design the snapshot um like and built it out and then
it's i i don't know the full mechanics truthfully i know that like every month i see that like
another snapshot was taken um but it could be also daily snapshots i wouldn't i don't know the exact
mechanics to that i just know that we said like you know what way and that goes along not only
with katana but with the maiden airdrop coming up with the um privado id airdrop we said like, you know what, we, and that goes along not only with Katana, but with the Maiden airdrop coming up with the Privado ID airdrop.
We said like, we need a way to actually calculate stake weight.
And I think they just made the decision of we're going to start it when we launch it.
But then for the airdrop itself, there's 15% of the cat total supply is allocated for the airdrop. 7% of that. So
10 billion cat total, 1.5 billion is allocated for the stake. When cat becomes transferable,
transferable. 700 million of that is going to unlock. And then there's going to be 1% each year
on the anniversary that cat becomes transferable. So you'll still be able to see the cat that you
have, but it won't be transferable for a little bit as basically we get the chain running and
functioning. And then after that that
will unlock and then one thing that i think is pretty cool too is there's going to be
my cat tokens for liquid pole staking native to katana so that's another really cool
thing so basically the airdrop you'll get as soon as cap becomes transferable um and your airdrop
will be designed if you stake your poll today it will be bigger than if you staked it a day before
um the airdrop happened so i think that's a really nice nice way to get back and yeah
definitely and uh i think what you're well you're not you're not saying this but i'll say this
uh if you're not staking your poll let's take it now uh good times guys i want to introduce
everyone that's joined us today we have a packed panel here of uh brilliant giga minds that want
to talk about sustainable defi today so um let's let's go ahead and introduce everyone it's been
awesome talking with katana and i hope you guys stay and continue the conversation but um let
let me check my yeah i i gotta run real quick so it was great but i appreciate it i will uh
i will talk to you guys again, I'm sure.
Definitely, of course.
Thanks for your time, Two Cent Timmy.
See you, Timmy.
So it sounds like you'll get, was it half?
Seven and a half or seven out of 15 mils, so almost half you'll get up front, and then the rest will be released slowly for as you continuously stake your
poll over years yeah that that's what i'm hearing as well he had a hop off he just left but uh good
times uh rock i i want to introduce everyone and i and today since we're like mid-show and we usually
do introductions in the very beginning,
we had a little bit of a different episode today because we were talking with Katana up front.
I still want to introduce everyone really quickly, but I'm thinking about trying this new thing where we make everyone do an elevator pitch about themselves.
So I use a timer.
Just give everyone 30 seconds.
What do you think?
Should we introduce everyone, or is there anything you want to say? No, let's do it. All right, guys. So it's a bit of a challenge,
you guys. We don't usually do this, but then sometimes when we're introducing,
like one person gets like five minutes and another person gets like 30 seconds, you know? So
let's all do elevator pitches and then jump right in back into the meat of the conversation.
I'm going to go left to right.
There's no particular order.
I'm just using my screen to go left to right to get everyone introduced.
So Omni Network, I'd love for you to be the first person.
I'm going to start the timer now.
So thanks for having us on at Omni Network.
We've been building BTC5 with interoperability for a couple of years now.
We've been running our runes indexer built on ICP for about a year and two months.
In that time, we've only had six hours of downtime.
I'm pretty proud of that.
So we've got a lot of different products and features, but basically we offer things for retail and regular folks like the first open source runes decks called Rich Swap.
And also a number of open source developer tools that we're going to continue launching more of like for ordinals starting next month.
I tried to cram it in as fast as I could.
You got it in 32 seconds, man.
That was awesome.
Yeah, much love, much love,
and thank you for being here.
Let me go ahead and pass the mic on over to Adam.
What's up, brother?
Great to have you back.
Hey guys, no, great to be here.
I'm Adam, head of BizDev over at Abond.
We are a OTC platform that focuses on protocol
on liquidity for projects.
We're white-labeled on QuickSwap's front-end.
We've been raising protocol-owned liquidity for about three years now.
Really, the educational factor here is what I see as kind of the biggest hurdle, but to
get partners in front of our user base, purchase tokens of that partner so that they can then raise protocol-owned liquidity to help sustain. Really similar way with how chain-owned liquidity
works is just finding that sustainable way to survive during a bear run, but also being
able to thrive during a bull run. Wonderful to be here. I'll yield back here.
Much love. Awesome. Yep. 42 seconds. Still, still very good. Very good. All right. Brandeasy,
passing the mic on over to you. Hey, Aztec. Hey, Rock. Great meeting you guys again from Vegas.
So I'm the founder of Rugpool, which started as a scam prevention tool using AI to evaluate the
social profiles of people launching and promoting tokens. And we're expanding that into an investment advisor agent matching you based on your social
interests and preferences to help drive liquidity from scam projects into ones that suit you
personally, which should help with risk tolerance and encouraging people to hold longer because they're personally involved in an actual community. So helping projects get discovered
and again, saving liquidity from going to all the bad ones.
Very nice. 36 seconds.
And great to have you here. And you said you met us in Vegas?
Yeah. So I met you at LitVM,
the Litecoin conference summit.
Definitely. Okay. Very cool, man. Good to have you here with us today.
Yeah, I appreciate it.
Let's see. Let's go ahead and pass the mic on over to ChangeNow.
Hi, everyone. Pauline here, Chief Strategy of ReChangeNow. It's a non-custodial crypto exchange service, and we've been helping people to swap between
hundreds and later on thousands of cryptos for seven years now, since 2017.
Super excited to be here.
Thank you so much for having me, Rock and Darren over a quick swap.
Super stoked for the convo.
I did my own timer and I'm in 29 seconds. Yeah, technically you kind of stopped right around 36
with the actual explanation of who you are. So you're the, or sorry, 20, 26. So you're the, or sorry, 2026. So you're the shortest elevator introduction.
Very, very nice.
I like to keep it short and sweet.
There we go.
Much love, everyone.
Let's see.
Let's go ahead and introduce Paul.
Hey, brother.
Hey, guys.
Great to be on again.
This is Paul.
I head of protocol strategy at Gauntlet. I guess very quickly, Gauntlet is a DeFi optimization company. We provide
quantitative advisory services for a bunch of protocols including Uniswap, Compound,
Eigenlayer, and we also manage risk curated vaults so users can deposit their funds into
Gauntlet curated vaults where liquidity is allocated and deallocated
to optimize risk-adjusted returns.
So those vaults are around 750 million TVL across Morpho, Drift, and Symbiotic.
And hopefully that was under 30 seconds.
Right, just right over like 30, 34 seconds.
I was trying to turn off the thing.
I didn't want to, the alarm, but a great, great. Yeah. This is a new thing. I wanted to try it out to see if we could get everyone under 30 seconds. And also to be fair for everyone, because sometimes we double click a lot on one particular person. So yeah, just like a quick way to get everyone introduced
and then we'll jump right back into the meat of the convo. Let's go ahead. And I actually
want to swing back to change now in just a second because I heard they're giving a giveaway
today. But before we do that, let's go ahead and introduce Anton.
Let's go ahead and introduce Anton.
Thank you for your invite.
I'm Anton, co-founder and active builder of EvidentiaFi.
So we're a CDP stable coin platform backed by collateralized short term
and midterm governmental bills, T-bills.
And we're targeting emergent markets. So it's non-USD, non-euro, non-GBP, but
emerging markets, stablecoins.
Very nice, right under 30 seconds. So I think, I think you
almost tied with a change now there. So and very interesting
technologies, everyone. Let's definitely dive in to what everyone's building
over the next couple hours here.
Introduce yourself, Aztec.
I'm Aztec.
I'm the CSO at Lunar Digital Assets.
That's the full-stack blockchain venture studio
that Rock owns here.
And I'm a founder of LitVM.
So we're bringing programmability to Litecoin,
more utility and yield for people that own Litecoin.
So a lot of opportunities there.
So I don't know.
I think I got it.
I didn't time myself.
I should have timed myself.
All using AgLayer too.
Yep.
We're using Polygon technology, working with Gateway.
We're also working with BitcoinOS.
Another development team on the Litecoin roll-up side will be plugged into AgLayer.
So definitely follow me.
I'll be sharing more about LitVM.
But I got to keep it short because everyone else did.
So, Rock, do you want to introduce yourself?
Sure.
I'm Rock Zacharias.
You guys may know me as co-founder of QuickSwap,
but I'm also the CEO of Lunar Digital Assets,
venture studio that incubated Polygon and QuickSwap
and is now incubating LitVM and some others.
I'm also, I serve on the board for Polygon Grants,
and I'm the head head of global leadership council for
bid angels the investor pitch network by michael turpin as well as a mentor for
tim draper's bitcoin fly accelerator
very nice 35 seconds and very impressive titles.
Rock.
Change now.
I think you're doing a giveaway.
Is that correct?
Yeah, we're doing a giveaway.
And there is one simple condition.
Right now, there is a post where I have shared the space on our corporate account.
So if you are listening and if you like that post and retweet it or repost it, rather, since we're not on Twitter, we're on X.
And tag three of your friends, then you're eligible to win $100. And we will choose five people for a $100 bonus in USDT.
We will declare the winners on Monday.
Very cool.
Very cool.
Thank you for doing that.
We have to get it up in the Jumbotron up above.
Do you know how to add it to the Jumbotron up above uh do you know how to add it
to the jumbotron if not you can dm uh there it is there it is it's jumbotron already perfect okay
it's probably loading for me but guys if you're in the audience it's in the jumbotron that's the
little uh that's the little posts that are right above all of our heads.
You can just scroll to the Change Now giveaway.
Go ahead and click on that, participate, and you have a chance to win $100.
It's pretty cool.
Thank you, Change Now.
No worries.
And you can adjust me as Pauline since I'm the one piloting the corporate account today. And again, I'm the head of strategy, someone who represents the brand all around the internet.
So yeah, this is going to be me hanging out with all of you beautiful people over here.
Awesome.
Much love, Pauline.
All right.
So let's dive into sustainable DeFi guys. I think at the top of this conversation,
we discussed Katana and how they are bringing
a sustainable DeFi to life.
But I want to ask everyone here, in your opinion,
or you could even bring up your project
if it is working uh working on sustainable defi but what does
sustainable uh what does sustainability and defi actually mean today like beyond the buzzwords what
what is your guys's opinions anyone can jump in if you're new to this show you don't have to raise
your hand just jump in and and uh you know go ahead and piggyback off each other and give your
answers we'd like the free-flowing combo.
I'll kick it off really shortly.
I mean, I think there's an addiction to new users in this space
that we can just tam-sam-sam our way through an entire product lifecycle.
Not to sound too buzzwordy about it, but just in short,
as long as it doesn't completely depend on new money coming in constantly,
then I think we've got a fighting chance.
You know, you could talk about protocol yield.
You can talk about yield that comes from a chain,
like, you know, the product and service being offered
is the gas that's being spent to operate the chain.
I think that's valid.
But I think there's at least one not to do,
which is to count on new money coming in.
You know, there's a large number of Ethereum L2s
that failed based on that model.
Blast is a really easy example
that they blasted up and blasted right down.
So I just, I want us to learn from that,
that we have real product, we have real revenue.
There's cool stuff hanging around.
You know, the margins in there is where we got to find it.
That's my two cents.
What I kind of wanted to add onto that is I've actually written, um, an article
for being crypto that's, uh, going to come out shortly in a couple of days.
And what I have been talking about with people all across the space, we had a
conversation with our can and vein, like with our cane Canem Ventures a couple of weeks ago about how if we want to build a sustainable DeFi ecosystem, we actually need to incorporate or rather make peace with the fact that there is going to be some centralized finance features within the DeFi ecosystem.
And why I believe that that's going to attract a little bit more people into the space is
I believe that the more decentralized as it is currently, the project is, the less accountability there is
of the projects to their users.
And if we start, that's going to sound weird,
but if we start centralizing our DeFi a little bit,
that is actually going to make the DeFi space a little bit more approachable to people,
especially to those that are newer. And this is going to be like the case with Hyperlayer and the
DEX and SUI, I forget the name of it, where there was some sort of like a liquidity collapse and they actually reversed the chain a little bit so that the average user would retain a little bit of money that would otherwise be lost.
So I think that a lot of DeFi projects should be kind of doing a little bit more of that.
That is going to compromise decentralization a little bit.
That is kind of obvious, but I do not think that it's a bad thing.
So these are my kind of two cents on the situation.
Can I respond to that just briefly, and then I'll pipe down and let somebody else pick in?
Because I think there's a delineation between like distributed and decentralized.
Right. You're talking about liability gateways. Right.
You're talking about points where, you know, people become responsible for what they do with their dollars or what they do with their euros.
And, you know, you shouldn't just be able to bring dark money on chain and wash it real quick and easy.
That era is long over. Of course. I'd be interested to read that article.
Yeah.
Then, you know, especially given your recognition there, I'd love to read that article.
Any other feedback, guys, on this?
Because I think there's a pretty long list of, you know, product-oriented targets we
could talk about, but liability and risk really doesn't get enough discussion in crypto.
Yeah.
Thank you so much for adding on.
I am shutting up now.
When you say you're not bringing dark money on chain,
can you explain that more?
Sure.
So when you look at OTC deals in the way that they used to happen,
there was a lot less responsibility, liability.
It was easier to kind of do things without friction
because A, Tether hadn't gone through the problems
that it's gone through in the past six to eight,
I guess more like six to seven years.
But B, also because there just wasn't law and law enforcement
that were paying attention to what happens on chain
and they are now. So I think that's a pretty positive step forward for the average person,
but it also means that money that had been laundered through traditional means in traditional
monetary systems, those dollars had opportunities to flow through Bitcoin. In some cases, they did.
There's a lot of people's
eyes I could be poking talking about this, but I think there's a pretty easy use case that you can
identify through records that are still around through Potcoin. If anybody remembers back in the
day, there was a large amount of cannabis shops in Colorado that needed banking services. They were handling cash. They
were getting robbed. You know, the feds would literally come in and, you know, confiscate their
cash. I'm forgetting the phrase for that right now. Civil asset forfeiture. Yeah. So because they were
accused of breaking the law, all this money would just be taken right from them. So there was a
number of coins. I think
there was really like four or five successful ones that were used to transfer money between
regular businesses trying to do regular business that disagreed with the federal government.
Perfectly fine there. No issue there, right? Enter Scottie Pippen for whatever reason.
I don't really understand why, But was it Dennis Rodman?
Am I mixing the two up?
There was a famous basketball player who took a noteworthy trip to North Korea.
And there's an accusation that he took private keys with him physically so that a large amount of pot coin could be washed through the network.
Because there was a peak of something like 1717 million that went through pot coin in a matter
of days when they were normally seeing that volume over the course of like a couple of months.
And, you know, that's an example of taking a very positive and reasonable, you know,
not dark money operation, someone who's just seeking to be banked, who's unbanked by their
government and, you know, turning around and seeing that system be used and abused by someone who sees an opportunity to use a public system of, you know, private keys and public keys that are connected together.
So I think that we've come a long way since then, but it's important to recognize that as we pursue individual sovereignty, that also has benefits for folks that have been,
you know, playing the game kind of abrasively over the past 150 years or more.
So it's not that I'm trying to actually target somebody in saying this. It's that
mechanically, I've been asked to wash money before. I've said no, of course, because I'm
an American. I know better than to get myself in trouble. But I know how people like that went and
did it. And
a lot of people actively did. The reaction from governments to come back and say, hey,
we can't just allow this big problem to sort of exist in our face and challenge us on authority.
I understand that. I may not agree with it, but I can sympathize. And that turnaround for us in
DeFi should mean that we draw boundaries around where
we're willing to let governments touch the stuff that we're doing. So if you are, let's say,
a cryptocurrency exchange, you have liabilities, right? You're supposed to be vetting who buys the
assets. You're supposed to be tracking some of those assets. According to a global OFAC it's within two hops
so this is a natural evolution that you know just like banks uh crypto institutions that touch government money they they have a responsibility to check identities well are you are you may not
be the case for change now uh defy in that i think there's a good argument for the government shouldn't be involved in in a defi
transaction and i think especially if a defi protocol is not holding custody of anyone's funds
if they're just providing a set of smart contracts and and then it's up to the users and it's it's
their responsibility to talk to their lawyers about what is, you know, legal.
And I think generally the DEXs, the lending protocols, shouldn't be too involved in that stuff.
And if we don't fight for that, then we recreate the banking system and we recreate, you know, these controls that governments, banks, etc cetera, have over humans.
I mean,
I absolutely agree.
There is a good argument to that.
However, we as a service,
which kind of a lot of people turn to,
since we don't require accounts,
we don't usually ask for any type of documentation. With the money that is getting
passed through us, we get the reputation of a service where people usually take their money
after they've kind of like done a bank run on a DeFi service or like a loan provider.
a DeFi service or like a loan provider. And this is actually one of our like social
responsibilities, I guess, to prevent that money from being stolen. Like remember Compound where
$18 million were stolen and those 18 million actually went to us and we have managed to thankfully we have managed
to catch them and return them to compound's founder who was super grateful to us uh we like
there still is um an nft in there somewhere but i mean um this is something that we as a space that we as an industry need to come to a compromise with.
Because, again, this comes to, you know, liability concerns and like liability discourse, which I guess is going to be pretty prevalent in DeFi spaces going forward.
Because again, if you basically waive all of the irresponsibility off of yourself as a DeFi protocol
and you expect people to lawyer up anytime something goes wrong and kind of expect other people like other
web3
players to
kind of catch
your stolen money
that is going
to scare quite a lot of people away
I mean this might sound
controversial but
this is just something that
we as kind of like a community of builders
need to be mindful about well it's reality that we have to pick where we draw the lines right
at omni we're an extra legal organization we just hit the highest common denominators we do open
source software it's super easy for us you know i i'm certainly not coming for pauline and change
now but i think there's a you know an ongoing discourse that's going to happen, not just through OFAC guidelines, but through direct communication with banks, where if you see something at a certain level, you've we really should not be responsible for doing this sort of thing.
And that range between 50,000 and 5 million is where we should keep having that debate about how we manage those liability gateways.
I don't know that the number to me is where you draw the line in the sand. I would think it's more the type of risk
or the type of liability or the type of hack
or the type of theft.
So as an example,
if someone stole funds...
Let's see, there was a recent example.
Let's say someone stole funds...
From the SUI back?
Sure, from SUI. example uh if so let's say someone stole funds um sure from from suey um i personally am not a fan of the chain freezing funds and that's what sue did right um if if someone stole funds like if
if someone somehow convinced someone to hand over $100 million on Ethereum,
I would not want the Ethereum validators to go and try to freeze or return that money.
I think that gets into very dangerous territory.
This did happen once with Ethereum, with the DAO hack, long, long, long time ago.
And I think we all agree that that was a one-time thing and should not ever happen again.
That's my personal opinion.
Well, look at the Poloniex response.
You don't have to necessarily do that.
You just make that money unusable, right? If you reach those liability gateways, if you message a change now, if you message a change-ly,
if you message any swap provider and say,
Hey, you know, you need to blacklist this address because they're wanted by multiple governments.
And you guys are going to have problems if you let these guys swap. Like, I think that makes
sense. You don't actually have to recover the assets. You just make them unusable. And, you
know, that's enough disincentive to break most hackers desire to do the wrong thing.
Well, it depends on where you're doing it.
So would you want the Ethereum validators?
If someone hacked or stole funds some way, would you want the Ethereum validators to blacklist them?
To either freeze funds or stop the movement of funds, whatever you want to call it?
I would say that Rpc providers and exchanges
are probably the the ones go ahead go ahead yeah it's already happened and they haven't
done anything with bybit so the korean hackers north korean hackers tried to and actually stole
more than a billion uh of usd value and they have easily transferred this money to uh to bitcoin through tor chain
yeah i know around like several hundred of millions were secured via different channels
but like more than a billion were transferred and nobody yeah we actually nobody did we actually
managed to um catch i think a few hundred thousand dollars from the Bybit hack.
Because again, when something like that happens, everybody knows where the funds are going to.
And we are in touch with a few blockchain forensics investigators and just Good Samaritans,
as well as our own AML providers, such as as AMLbot and Summon Substance and Crystal.
So we basically are always alert.
And when the Bybit hack happened, we also have managed to catch some of the money that
people tried to pass through us and again I'm not insisting everybody does it
in the deep like in the crypto space I'm not insisting that we should you know have the police
and speed dial anytime something like that happens I'm just saying that perhaps if we don't want to
kind of let regulators into the space,
perhaps there needs to be some like inter,
I mean, internal community initiative
to kind of self-regulate and prevent people from losing money. Because there was also
a point that Omniti Chain made about, you know, deciding what amount of money we should kind of
let slip and what amount of money we should, you know, get authorities involved for and i think this is kind of um thinking in the wrong direction because again
uh over a change now we mostly service retail investors and uh those are usually people with
not as much money like we're talking uh maybe like maybe like $10,000 max.
And those are usually caught in the crosshairs when, uh, massive hacks happen.
So I don't think, um, you know, that like whales need protection from losing funds
because when a whale is doing something like that, they're more or less prepared.
But when we're talking about people who have been in crypto recently,
who do not have as hefty investments as the big guys do,
they are mostly going to be losing the most relative to their own capital capital relative to their own fortune.
Yeah. Align with that.
I think when it comes to prioritization of regulatory bodies like the SEC,
I'm no legal expert here from, but from what I understand,
there's a ton of convoluted complex strategic implications that affect what
types of cases they go after.
I think one factor may be, hey, like how large is the headline loss number? How big was the hack?
But there are other potential implications as well. For example, maybe there's like a larger
cohort of retail users that they are more inclined to protect, or there are certain cases
that they want to pursue in order to sort
of set some sort of precedent. So yeah, I think when it comes to the retail consumer protection
side of things, internally, as a community, we probably have to be very, I guess, opinionated
on where to spend our resources and what types of users to protect in the absence of any regulatory protection.
Just to kind of add on to this and get your guys' thoughts, can insurance play an effective role in this kind of discussion? Or does that also kind of, or does it kind of stop the scaling speed,
make it more cumbersome?
I think when it comes to expanding DeFi's distribution channels to onboard
DeFi as kind of a,
I guess,
backend infrastructure for centralized exchanges or for fintechs and
otherwise insurance is something that I think they think about. I guess, back-end infrastructure for centralized exchanges or for fintechs and otherwise.
Insurance is something that I think they think about. I think in the traditional financial world, obviously, this is a product that enables greater adoption and more liquidity.
I think the problem that we're facing is that I think idealistically, you know, insurance would increase adoption, but so far no viable insurance product has been built around DeFi, around smart contract risk, around economic risk.
It's just incredibly difficult to price that kind of risk.
And the amount of scale needed probably isn't high enough to justify those blended returns for insurance issuers.
blended returns for insurance issuers. So yeah, I think like whoever cracks that code in terms of
how to price that risk while still being profitable. Yeah, that can definitely, I think,
facilitate more liquidity, but it's just very difficult to price at the moment.
I agree. And that's kind of why I'm asking because we're talking about, you know, having these centralized entities come in and find a way to stop decentralized kind of, you know, the descent, well, try to help the
decentralized world, which is, you know, and then we're trying to find a balance. I wonder if there's
maybe something outside the box, because, you know, that's what're trying to find a balance. I wonder if there's maybe something outside the box
because, you know, that's what our industry is about is thinking outside the box, you know,
trying to find solutions and improving on archaic models. And so I wonder if insurance
could be a way to help scale, make people feel more comfortable with bringing liquidity in,
maybe even help with regulators.
And maybe that mechanism is built using sustainable DeFi.
Maybe if sustainable DeFi is part of the mechanism of like a chain or or or or but it's just you know you have some type of
sustainable sustainable mechanism in your salute your defi solution you know maybe that's going
towards not only protocol own liquidity or chain own liquidity maybe it's going towards
uh chain or protocol insurance and things like that i mean what's your guys thoughts
insurance and things like that i mean what's your guys thoughts so aave does something like this
sorry yeah aave go ahead jim uh yeah sorry uh what i wanted to say is that we as a space i believe
should be a little bit more um compassionate and mindful of again, like the smaller retail
investors, the little guys, because power and I guess the power of the Web3 community,
it lies in numbers.
And if we kind of make them feel unwelcome by making the point of entry so difficult to reach, again, for no-coiners,
for people who are just finding out about the space,
then we as a community at large are not going to reach anything.
Yeah, this is just my two cents.
I'm sorry for interrupting you, Rob.
no problem we always like to do ladies first here anyways um so yeah i was just saying that
No problem.
We always like to do ladies first here anyways.
ave uses um something kind of interesting basically um ave which is staked is used in an insurance
um they call it a safety module and basically what that means is if Aave ever breaks,
then some percent of that, I think it's 30% of that staked Aave,
could be used to cover users on Aave.
So there's a bunch of different ways to do this.
Another great team that's working on on-chain insurance is Atomica.
Really good team.
We're working with them on some different protocols.
And the cool thing is, you know, you could have lots of different risks in Web3.
So in just one single protocol, you may have risks of, you may have bridge risk for the funds that have come over a
bridge. You have protocol risk, like smart contract risk. There's DPEG risk if stablecoins
are used at all in somewhere in the stack. If they're using like Lido staked ETH somewhere in the stack or somewhere in these
kind of DeFi strategies, then you have to insure against Lido's risk. So there's all kinds of
risks in this industry. There's leverage, unwinding risks. There's unknown risks even.
I think a lot of people didn't foresee that when FTX collapsed,
it would lead to a cascading collapse of six other major protocols.
I mean, there was Terra Luna, there was FTX, there was Celsius, Voyager, and all of
these things had created liquidity. What's that? The whole Cosmos ecosystem, additionally,
just got hit really hard. Oh, because Terra Luna was on Cosmos, yeah. So people were forced to
sell their assets, which could create liquidity, crushing events.
This even happens in the macro markets. If we have World War III, then people start selling
off assets and that creates these unwinds. So there's all kinds of risks in the world.
that creates these unwinds. So there's all kinds of risks in the world. And you can choose if you
want to put insurance as a user on a protocol you're using, you can choose which of these.
I think that's the ideal way to do it. And that's what Atomica does is you can choose,
okay, do I care about polygon bridge risk? If that costs me, call it 1% of my yield,
That costs me, call it 1% of my yield.
Do I want to pay 1% against Polygon Bridge risk?
I might not.
Let's say the yield I'm getting is 6%.
If I have to pay a 1% fee to protect myself against Polygon Bridge risk, I might not.
I might just say, you know what?
I trust the Polygon Bridge.
It's been around for seven years.
Tens of billions, maybe hundreds of billions have flown through it.
Do I really need to insure against that?
Maybe not.
Do I need to insure against Lido?
Some people would say, eh, if Lido goes down, we're all screwed.
So maybe I don't care about the Lido risk.
Do I need to have DPEG risk on USDC?
Choose your own adventure.
But go ahead, Jack. Hey, and real quick, Jack, I also want to welcome you to the show, brother.
Great to have you back. Also, Hummingbird, welcome to the show. But yeah, Jack, take it away.
Yeah, also, sorry for all muted and then like accidentally shouting down the microphone. I was
just, I was dealing with a few things on my end.
So if that was a chaotic and strange entry to the space,
apologies, everybody.
You're good, man.
I do have a few things to weigh in on this, though.
Some things that might be a little controversial,
but I think it's worth testing the point
for the sake of enhancing the discussion.
You're like controversial.
First thing is, I'm a big fan of Aave
and all the stuff that they've done.
They're, like, one of the – they're probably the main pillar of DeFi.
They're, like, they've got a monstrous amount of TBL.
They're giants in the space.
And they're the inspiration for a lot of stuff that we do at Stratix.
So, Stratix is a project I'm co-founded on.
Just for clarification, it's a yield strategy marketplace but the question i wanted to ask and this is like
you know we talk we're in discussions about safe module style um as part of the insurance on
stratx and you know one question that that comes up with this and this is why we're not doing this
as the primary thing we have like a lot of different elements to the insurance but the
thing that worries me about safe module style insurance is I might be getting this wrong
So apologies and anybody can correct me if they want to jump in
but it scares me a little bit insuring something in the in the protocols governance token because
um, let's say that there was a some kind of hack a big hack and you know this this insurance fund was deployed a
you know, this insurance fund was deployed.
A lot of traders are going to front run that news
Lot of traders are going to front run that
as soon as they know that the hack is big enough
to cause the safe module to be activated.
And by doing that, you know,
the price of that token could get crushed pretty quickly
because people realize that, you know,
X amount is going to have to be deployed in the market
to make users whole.
And then, you know then the issue with that is, let's say they've covered a certain amount of the hack.
Well, if traders front run that, by the time they get those funds, that certain amount
is going to be smaller than the actual hack itself.
Now, bear in mind, Aave is massive.
It's never been compromised.
So this is not really a massive concern.
But it's like one of these long tail risk things that are out there in the industry
that I think probably like I'm sure that there's brighter minds than mine
that are working on this stuff.
You know, and we've looked at various different ways to do insurance.
A lot of projects are taking like a multifaceted approach
where they wrap in some brokered insurance from partners like nexus mutual
they do a safe style module and then they have other things like in our case we allow the
strategist to stake into the strategies themselves so they kind of take the first loss because it's
their strategy and so they should be confident in their own work you know we're working with
some chains to have some other insurance components but i think insurance in defy is a
real like hot area and it's something that as the trad fi uh funds we know this from like you know
recent conferences and and other things within the industry where trad fi is like it's really
really is here and it's trying to aggressively come into the space to get as much yield as
possible because they know it's an area
where they can get an outside return on stablecoins, for example,
and ETH and BTC, which they may want exposure to anyway.
So there is this huge demand, but one of the bottlenecks is insurance,
and I think this is an area where I'd love to work with people to solve this,
and I think there's probably a lot of other founders in the space um that really really want to solve this problem because
i would say there's probably like tens of billions of dollars in tvl that is waiting for solid
insurance and for like insurance capacity to to really ramp up to meet demand and not just that
but the insurance that is offered to accurately price the risks so
that when they they can go and take out some insurance they know that it won't eat all the
principal because there's not enough demand for insurance to make it efficient and sorry not the
principal it won't eat all the yield um and or the other case where the insurance premium is is too
low and it's inaccurately pricing the risk so i think there's a lot of work to do on insurance i think it's probably one of the biggest bottlenecks right now it used to be
like legislative and um like on ramping and stuff around like you know when they had operation
choke point that was like the biggest bottleneck where bigger institutions just couldn't interact
with the space i think that's all clearing now or has cleared already. And then the next step is like, okay, how can we make this space safer for the funds that are really, you know, quite conservative, but are massive.
Some of these funds, you know, $50 billion, $100 billion funds, but they don't want to take, you know, they're not comfortable taking a chance at 100% loss on anything, even if it's only 0.1% of the portfolio.
loss on anything even if it's only 0.1% of the portfolio and so for those guys it's about okay
uh we need to get some kind of insurance because we can't accept like in d5 sometimes things
literally go to zero they won't they won't accept that so there needs to be a more robust insurance
infrastructure built out at least that's my opinion anyway are you guys aware of the problem
in cyber security insurance though because like there's a huge problem in technology insurance in
general like the underwriting for this stuff is difficult to manage like being pragmatic about
this is a lack of expertise in underwriting that keeps up with the space or what is that in your
opinion no i'm not saying there's a lack of expertise um i've experienced this in enterprise
cybersecurity like publicly traded companies that that want to you know create a fail safe
like they're contracting all kinds of IT help from the outside.
They want to make sure if something goes wrong that they'll be made whole.
There's a really difficult time for the handful of cybersecurity insurance companies
that are qualified to handle something big, something more than a small business.
And you have to adhere to the terms of underwriting else the policy doesn't abide.
When we think about DeFi insurance, we think about it being all on-chain and it being sovereign in
the way that we want to operate, but realistically, the majority of DeFi protocols have off-chain
vulnerabilities like the safe signing instance, the Coinbase leak of someone's identity through
a person in a call center taking a picture you know there's real business level security policy that has to be put to test and you know
and upheld and and that's really not that's insane it's not crazy but it's a operational
cost that most businesses like are are not ready to take on even coinbase you know they if they
had a third party contractor on the coinbase thing for a second so this is something that's really interesting to me and i'm glad that you brought
it up because you see this like you know coinbase itself probably has like you know a billion a
billion dollars or something of cyber security across the whole company um and it was compromised
by a call center worker that probably makes less than ten dollars an hour um and that being like
a systematic thing they realized that they could exploit these people who you know make you know
really low wages and they could approach them and offer them a large amount of money as lump sum to
compromise users and it's like how do you how would you realistically how do you even solve for
that it's very very difficult because if you you know the human vulnerability is often the issue
and again the same with the safe signing thing back in um back in 2024 or early 2025 um similar
thing right human vulnerability they they swapped some things on the safe interface they didn't check
it's a very difficult thing to solve that human element you know and that's why a lot of the
social social engineering that's why a lot of centralized things are going towards decentralization you know
like even even some of these big centralized entities are saying they you know over time
they will become more decentralized or pivot more towards their decentralized options. I think the main kind of mistake Coinbase's processes
have made while kind of handling the user documentation
is you don't really, like you shouldn't really let
your overworked and underpaid staff look at such critical data.
For example, we sometimes do handle user documentation, but we work with an outside provider who has all the necessary security certifications and things that handles KYC for us.
And I think that this is the way to go.
I'm not saying that it's ideal, but more businesses should be employing that.
For example, we use SummonSub for KYC checks, and our support staff never looks at user documents. That way, it is literally impossible
to compromise any of the user data because we don't have access to it. So for example, when
our email system requires a source of funds check, we carry that out through an authorized, competent provider who
does that for us without letting 20-year-olds, interns with an entry-level job look at other
people's IDs and passports. I mean, I'm sorry. I've talked a lot about the Coinbase thing online and with colleagues and with other people in the industry. I think that's insane.
of hold their ground when they're approached uh and offered like five thousand dollars for just
letting those people look at some documents that they might not even know the importance of um
that is just kind of insane to me i'm sorry this is kind of a painful subject
this is real quick guys isn't this why zk technology is so important you know
this decentralized technology that we're all helping to build you know you if if everything's
slowly going to the blockchain and you have the ability to prove uh
you know different different uh like verify different, whether it's who you are or
amounts of money or whatever. And you can do that privately in a decentralized kind of way
using ZK. You know, that's, that's why we should probably be focused on moving more things on chain and building these systems that don't that require
less of outside needs you know outside regulation so I just want to mention something that it's to
do with the that what we're talking about hacks and security vulnerabilities.
I'm a big decentralization maxi, right?
I want everything to be decentralized.
Usually the point of failure is a human or a centralized system somewhere that contains personal information.
But I also want to call out the decentralized side of the industry a little bit.
And this is just a personal thing that I don't like,
is when there is a hack,
there's this kind of dark thing that emerges within the industry
where you get, so as you can see, you know,
or you can strongly think that the funds are being washed
through certain platforms.
And then you'll see those platforms talking about record volume.
And it's just a little bit, i think personally for me like that's a
little bit too far and i think like we we love decentralization and we want it to be but also
we don't really want to be like aiding you know people that are doing really bad things in the
industry and when talking about the um the bybit hack as an example uh when that happened i'm not
going to call out the name of the platform for obvious reasons but when um when that happened i'm not going to call out the name of the platform for obvious
reasons but when um when that happened there was a platform that was talking about record volume
as verifiably those funds were being washed through that platform and i think like we we
need to do we need to have a higher standard really for it doesn't have to be kyc because
that's centralization and we don't want that, but we need to have a higher standard
of ethics where, like,
if we know that the platform is being used
for, you know, means that are not good,
then we should, as
teams, work to prevent that and definitely
don't endorse it, which is
kind of like, you know, an unfortunate
part of the industry. Li-Fi is a good example
of this. I think even Zach ZBT
just put out a quote about this. It was specifically with Li-Fi is a good example of this. I think even Zach ZBT just put out a quote about this.
It was specifically with Li-Fi and DPRK.
It was Li-Fi kind of bragging about the $3 billion in volume that they had.
And it has to be at least somewhere between 15% and 25% at a minimum being DPRK,
you know, washing their stolen funds through Li-Fi.
So someone as large as Li-Fi is still
seeing something like this, but kind of hiding behind the skirt of being in a decentralized way,
I do see as being problematic. But again, I'm not sure if we're going to find any solutions in this,
but just wanted to contribute to that thought. Yeah, I thought that was a great part that you actually just said, who has ever just
spoken before, Hugh, who said KYC is not what we want to do.
And I'm going to be really controversial here, but maybe isn't KYC the only way you
prevent this?
Because then if you could identify that these accounts belong to these people, then you
can shut those off.
And I know that's a big risk.
No, it doesn't have to be KYC.
That's why in TradFi, right?
Like you can't go steal money
out of a brokerage account, really.
No, it's an easy button.
We can't be hitting the easy button.
It doesn't have to be KYC.
You can do behavior tracking
and you can look at individual wallets
without identifying their physical human user
with a passport and so on.
And there's a lot of platforms
that do this right there's risk monitoring platforms that will tell you like hey you don't
associate with this address it's been you know a lot of the defy guys will know and use these
platforms my main point is like regardless of you so there'll be some people who are
decentralization maxes in the space and be like you know i don't my smart contracts are open to
use by anybody that can use them.
I'm not going to interfere.
And that's fine.
Totally get that.
I understand.
But there's a difference between that and then advertising it as volume.
Like, do you know what I'm saying?
Like, that's like you kind of.
But is there a difference?
I mean, the company is still better.
The platform still benefits from it.
They still make all the money off the wash trading.
They still helped, you know, in a
legal organization, hack and steal from a, you know, a legit organization. So whether you advertise
that you got that volume or not, that's, it doesn't matter. Like you still made it possible.
Like if it wasn't possible for someone to hack $20 million of crypto, take it, wash it, and then
get it out of crypto into their economy
if that wasn't possible well then it wouldn't happen that's why you could have insurance
but let's let's uh let's think of the most regulated and kyc'd system on the planet
with a with a trillion dollar military behind it that is the the U.S. dollar. And the U.S. dollar benefits every single day from dirty stuff.
Yeah, but the U.S. dollar doesn't have KYC.
Like, I don't have to KYC to hold $100 of cash.
And that's my point.
So in our system, you can have layers.
you can have layers. If people want to play in the regulated KYC, heavily regulated world,
like putting their money in a crypto bank or a crypto exchange, fair game. You want to have KYC,
especially if the government's going to legally require you to, by all means. kyc uh in defy i say fuck no and i say we should resist that at all
costs no matter the temptation no matter what deal the government or regulators try to give us or
try to entice us with or you know attracting institutional money or whatever we should resist that urge at all costs we should
fight to the death to not have kyc and defy because that slippery slope will continue on and
on and on until the government controls every aspect of your life and i'm a proud patriot of
america what decentralized finance is decentralized finance doesn't mean we don't all agree to a certain set of rules. It means that we all have a chance to put in $1 and get the yield from decentralized finance or trade.
So I think sometimes we misconstrue decentralized finance, which means taking the liquidity out of banks and institutions hands and allowing me to put in $100 or your company to put in $10,000,
that's the decentralization.
But if we still allow basically people to steal and harness and hack using those same protocols,
then that's why the institutions just aren't going to come in, and that's why you can't insure it.
Because you could just do self-hacks all the time then.
You could say, oh, oh man i got this insurance
policy man my funds were just stolen well how do we know your funds were stolen how did we know you
were hacked you could have just paid a buddy to go and hack your account get the insurance premium
and then do it so uh trust me i don't like it i don't want the government because the government
doesn't really do a good job at doing most things they do, but there has to be something that identifies so that you know who to go after and you can prove
that it wasn't a person doing it themselves or else you're just not going to get insurance.
You know, like,
there is plenty of people doing insurance on un-KYC money there, and there's plenty of ways to do it.
But not at scale and not big enough to really allow big money to come in, which I don't mind, right? I don't want institutions coming in to defy.
It's possible at scale, just not for free. There's a cost. It's doable, but it's not a one-person cost center engagement, right?
doable, but it's not a one person cost center engagement, right? Like if I'm a whale and I'm
pulling up with 50 million, maybe the protocol will insure me up to 10,000, but not for 50 million.
Like there there's give and take on this. I'm just saying we don't have to be brutal.
If something is happening at a minute scale that doesn't really impact anything to me means it's
not happening. Right. So if someone can go get insurance for 10 grand, but not on 50 million, what's the point?
But aside from that, I don't really mean like a whale would bring their own insurance, but like a protocol would keep it lower.
Gentlemen, I understand the topic is getting a little bit heated and I love a lovely discussion, like a heated one as much as the next guy but don't you think that like I mean decentralization
uh comes with consensus and I think that in this case we could replace consensus with a compromise
and why can't we have both so we have like uh crypto punks who are probably like anarcho-communists who want to exist entirely on-chain, who don't want the government to get involved.
They mostly probably deal in Bitcoin and cash and nothing else.
And that's fine.
They do have a right to exist in the space.
They do have kind of a place to exist in the space. They do have kind of a place to exist in the space.
And at the same time, there is, again, the little guy, the retail investor,
who probably deserves to have a little bit more consumer protection within the space to exist comfortably,
which is somewhere on the verge between CeFi and DeFi.
What do you think?
I think optionality is cool.
If people want to play in a world, let's say you could have two protocols.
This is what the free market does.
You could have one protocol that is KYC'd and they're going to go after the people and they're going to,
they're going to have the police go to their house if they hack or whatever, which by the way,
we should do regardless. You don't need KYC to find hackers, right? Hackers aren't going to use
KYC anyways. They're going to use fake IDs and all kinds of stuff. So there's all kinds of ways
we could find hackers without KYC. But if you want to have a protocol that has more kyc and one that has no kyc i think that's a good world uh let
people have that optionality it's the same as i say for bitcoin bitcoin has optionality if you want
cold deep store you know deep cold storage bitcoin uh that um that is not in some banking system you have that option if you
want to hold an etf because you don't trust yourself with custody or because you want to have
some kind of fdic insurance or the blessing of you know some government sure do that. But I think we should strongly, again, resist government coming in and forcing KYC on DeFi protocols.
It will destroy this entire thing.
We will just recreate the traditional banking system with all of its flaws again.
I agree 100%.
I wasn't saying government enforced.
I was saying more self-enforced.
And you brought up a good point of hackers hackers are so easy to find without kyc then how come literally like
no crypto hacker gets caught it's not true we've caught we've caught lots of them i mean the big
ones you know i mean is it just because they're all in north korea and like we can't go there and
get them no it's being a drill analysis and on-chain forensics. A lot of high-profile industry hacks do lead back to Lazarus and nation-state threat actors.
You do have a point with that, by the way.
You're never going to catch them because it's not illegal for them to do that in their country
because they're being sponsored by the government.
Again, KYC.
Fraudsters know how to get around KYC, right?
So the question is, we acting kyc now you put this this undue burden
and privacy invasion on all you know law-abiding citizens to maybe catch some criminals right
the reason the dollar has worked so well is because there's a cash version of the dollar. I think as that version gets more regulated, more sanctioned, more
weaponized, the dollar is losing dominance, right? People use dollars around the world,
our enemies, our friends, good guys, bad guys, people use the dollar. Money to me should be a
neutral platform. It should be like math. It should be like math it should be like a ruler
it should not be something where you know we're using political decisions to freeze people's
money or sanction countries because we don't agree with you know whatever cultural thing they have
um i think that's a huge mistake of the dollar and why our industry has a chance to take over a lot of the traditional finance system because the traditional finance system has been weaponized so deeply.
Wait, so are you saying that every country should just use the same currency like for money and there should be no difference between like what value of exchange in like the United States versus the value of exchange in another country?
Not sure where you got that. No, I'm saying all currencies, if they're smart, will not weaponize
their currencies. But I am a hundred percent for...
All money could be a standard unit of measure, like a ruler or something like that.
I never said that. No, no, no, no. No, I said money should be mathematical or yes,
that. No, no, no, no, no. I said money should be mathematical or yes, like a ruler. That doesn't
mean everybody has to have the same one. Everybody can choose their system. I'm really big on
competition amongst money. I think that's one of the greatest things that our industry unlocked
is that now we have competition amongst money. Before there was no real competition amongst money. There was
competition at the country level. But if you're a person in your country, you're just forced to
use your currency no matter how bad it is. And you can try to get out of that and you can go
into black markets and things. But for the most part, the citizens of the countries get destroyed
every 10, 20, 30 years. Their wealth gets wiped out
because of irresponsible governance. And so I'm big on us having competition.
Let Bitcoin compete against the dollar. The dollar can continue to compete against the Euro.
And if the dollar keeps weaponizing and keeps sanctioning then you have countries like bricks
who say enough is enough we don't trust you anymore and we don't want to risk that if one day
biden or then trump whoever it may be might disagree with our policies and freeze our funds
right so that's where bitcoin and all of our whole industry come in because we we are more
neutral and we should stay more neutral if i could suggest an ethical framework for
d5 protocols uh when it comes to this kind of stuff first of all let me echo what you're saying
rock about the money should be completely neutral they like uh and uh ideally permissionless.
So there shouldn't be any KYC or anything like that, in my opinion.
And then the way that you would kind of deal with this issue of threat actors is the first thing is, so if you have a platform that has been experiencing
some kind of money laundering wash through the
funds from that should be documented and there should be a governance vote and those funds
should then be redistributed to the victims of the hack this is my personal opinion um and then
we should work with third-party monitoring tools that are really really good at identifying some
of these wallets that have you know uh multiple interactions with bad of these wallets that have multiple interactions with bad actors
or wallets that have been associated with hacks previously,
and those should be blacklisted from the platform.
And then in that way, you can have an ethical approach to this
without demanding somebody's passport.
Because as some previous people said in the space,
there's lots of places, like places in the world, unfortunately,
where you can buy passports
fake passports and you can pass KYC or you can get a digital id that's usable on exchanges that
cost like a small amount of money and requires very little uh in terms of documentation and so
while that is still a possibility you're not going to use KYC to eliminate threat actors especially
sophisticated well-funded ones. So with that
in mind, as a DeFi community, we should use an approach that's more based on ethics and good
governance rather than KYC requirements, it might be. And also going back to KYC,
you mentioned about the US dollar rock. There's been several instances of top banks like HSBC
was caught at one point laundering billions of dollars for the cartels.
So this is not an issue that TradFi does.
Every bank.
Every bank.
Yeah, and they paid fines.
JP Morgan Chase is fined billions of dollars every year.
They were held accountable and they paid fines in the millions and billions of dollars for doing that.
I don't know how accountable they really are.
I mean, for them, it's just the cost of doing business.
I mean, look at EOS as an example.
This is a totally different situation,
but like it comes to mind,
EOS raised $4 billion,
kind of screwed over all their investors.
I don't know that it was or was not a security action.
Probably not because of the disclaimers they give but they paid a 20 million dollar fine and they laughed it off they raised 4 billion
20 million dollar fine is like you know they sneeze that um this is what the banks do too
they they work with you know cartels etc And then every once in a while they get a $50 million fine,
a hundred million dollar fine.
Yeah.
So if you think a bank that's fully doxed and fully accountable would laugh it
off as a course,
then wouldn't a DeFi platform that probably has owners that are, you know,
a non anyway, as the platform owners, they would probably,
I don't think the defy,
I don't think the defy platform should give a shit.
I don't think that these defy platforms should be, you know,
regulatory bodies.
Just like,
I don't think that social media platforms should be censorship machines.
They should,
people should speak their mind and the,
the social media should not be there to choose who's
right or wrong.
You know, DeFi protocols, these are smart contracts.
Ideally, there is no team.
Ideally, these things are just completely decentralized and just code on the internet
that anyone can use.
And good people will use these things and bad people will use these things.
Yeah, but we know that's not the case.
All these platforms have teams
that are constantly working on them.
They're getting paid.
They're raising funds.
So, I mean, it's like, yeah.
Some, I agree.
Some are what Gary Gensler called
decentralized in name only, Dino.
But there are some that are very decentralized.
Bitcoin, for example.
I mean, again,
if we're talking about DeFi platforms as financial instruments, Bitcoin, for example? way. And I don't think this is something that we should be kind of pitching to the general public
if we're talking about crypto mass adoption. Yeah, but if you have to change the core of
what crypto is to get mass adoption, then you've lost the plot already. I mean, those people
can't just stay in the same place. But that's what's happening, right? That's what happened
with Bitcoin already. For Bitcoin to get more mass adoption, they had to put it into a banking product.
But Bitcoin itself isn't involved in that.
That's different ways of, yeah, that's a derivative.
I think in the efforts of Bitcoin adoption and crypto adoption, I mean, this, I don't
know if you guys missed this, but this announcement's huge.
X just partnered with Polymarket.
I mean, that is massive guys you guys
comment on this already no we've just seen it super cool that is massive for polygon i mean
that's huge i mean the all-in podcast my favorite podcast over at chamath polyapathy and co
i've been listening to it for years and they are officially uh partnered with uh polygons
polymarket as well so they do all kinds of uh bets on there that they talk when they talk about
things on the show they make markets for them it's really cool yeah oh funny a funny a funny market
we're getting a little off topic here but real quick real quick guys like and first of all can
you hear me i'm guessing you can hear me uh i was rugged for a while but just on on one of the last comments here i wanted to say
and this is something i continue saying through this this show but it is sounds like we're still
kind of talking about some of the same stuff but i i think you know we don't want to change
why we're all here you know a big a big part of that is decentralization it's just finding
creative ways new ways outside the box ways of solving these problems and hopefully over time
it's less and less of the status quo, less of these centralized solutions that can be
misused or turned against the people. We've talked about caring about the little guy today.
I mean, for me, it's really caring about everyone, you know, like, it's just money
loss. It hurts anyone, whether it's 1% of your portfolio or, you know, for a well, or, you know,
the whole, you know, $1,000 for someone that is just getting into crypto, whatever it is, you know,
it matters. But, but I think that it's important that we try to stay true to all the different reasons we're here for.
And I think that we are, as an industry, able to find these solutions without going back and recreating the banking system.
Going back and recreating the banking system.
I totally agree. against many law-abiding citizens, why don't we figure out, and we already are, by the way,
figuring out how do you prevent the hacks in the first place, right? Through auditing,
through battle testing, through battle-hardened Lindy effect of these smart contracts. There's
all kinds of things we can do to fix these things, having better wallet experiences.
MetaMask and many others are making a much better user experience where if you go to do
something stupid, they warn you, hey, do you know that you're doing this here? Read more about it
here. Are you sure this is safe? Are you sure you trust this person, this new address that you
haven't interacted with? Or do you know that you can't read what this code is doing? You should
look more into it. And it's still clunky and shitty
on the wallet side but it's getting better and there's a bunch of platforms that uh offer like
security protection stuff where they they'll scan a smart contract for you before you interact with
it and they'll tell you if there's any you know uh any problems it can see and so like this is
like the the traditional internet by the way, you know, a long time
ago, you used to really have to know what you were doing to not get, um, not get hacked
or not get viruses.
I don't even, I mean, does anyone really like barely think about viruses other than I just
don't download links?
It's something I still stick to, but you know, a lot of this stuff has just been built into
the different operating systems, into the phones. There's better security at the software or the hardware level, the software
level by, you know, Apple. It's very hard to get a virus on an Apple phone, right? Because
they've found ways to make these things, you know, safer. So instead of us relying on KYC to find
people as a crutch, which the criminals aren't going to use real kyc anyways
let's figure out ways to battle harden the smart contracts and the wallets right and educate people
but i think educating people you know is is good in the short term but in the long term i think we
just need to build stuff in so that the users can't themselves but how does that protect against
people that are malicious like there's still the opportunity because if the code is solid you can't fuck themselves. But how does that protect against people that are malicious?
Like, there's still the opportunity.
If the code is solid, you can't be malicious.
That's the point.
That's a good point, you know, the code being
solid. But also, we...
Come try to hack quick swap.
Come try to take money out of a quick swap contract.
It's never happened.
I hope it never will,
but we've been around, I don't know, six
years, and we're safe thus far.
Same with like Aave or Ethereum.
I trust my assets on Ethereum.
Now on a new smart contract, you're taking a risk, right?
And you got to – I don't personally use anything that's brand new.
I like to – many of these smart contract protocols, unless they are built on
top of something and there's like minimal lines of code change and yada yada. I mean, we're in the
early days of this. There's going to be lots of new smart contracts like SUI, SUI and that DEX.
I mean, that's a newer protocol. And what happened? It got hacked. So, you know, you can, as a user
in these early cowboy days where we're paving a pathway and learning new things and this system still being built, then maybe stick with the more trusted things.
Bitcoin, Ethereum, Polygon, the things that are battle tested for five plus years.
Uniswap, Aave, Quickswap.
of a quick swap.
Yeah, it's also important to realize
that there is no perfect system.
And that's not an excuse, but it's just the truth.
You know, you look at, Rock, you brought up viruses.
Viruses still exist today, but what did people do to...
And people are still getting hacked
like all the time in crypto you know with
viruses uh and all throughout the internet um and it's not like we can just make the viruses go away
or or uh you know they're still there so but what did people do they created uh software and code that helps people mitigate falling into these pit traps or being
social engineered and, you know, getting their personal information out of the dark
web and et cetera, et cetera.
You know, like, so it's about building these systems and hopefully in a decentralized way or in a way that doesn't
require the government or regular bodies to to jump in because you got to think about it like
when i say we don't want to recreate the banking systems for many reasons but but a big part of
this whole movement that we're we're doing is for freedom. And you can look even over the past several years,
how many people have been targeted by banks because they think differently or they're
stepping outside the line or it's religious or whatever. Or they didn't take a COVID vaccine.
Yeah. And this is crazy. We don't we don't we don't want that we don't
like this is it's ridiculous uh no one should be being targeted uh you know for there were people
in the world where their bank accounts got frozen because they either didn't uh get a vaccine or
they spoke out against it or they protested it uh canada with the truckers that's a first world country
that's a democracy and they froze their bank accounts and the way we got around it was we
donated including myself tens of millions of dollars to the truckers in canada same thing
with the hong kong protests they froze their bank accounts the the china froze hong kong's bank
accounts the protesters and so what did we do?
We, including me, sent them money in Bitcoin.
So I think we got to resist as much as possible bringing KYC and political, partisan sometimes, you know, censorship into this industry.
That's what this industry was founded on guys like we have to think about it's
not just about making a bunch of money and getting all the institutions in and getting the banks in
it's also this is about aztec said it this is about freedom this is about us having rights
this is about privacy yeah and i just want to clarify when i said kyc i'm referring to overall
just know your customer i didn't necessarily mean that that we have to do passports and stuff like that.
And on the actual platform itself, like QuickSwap, interacting or QuickSwap itself, because that's not an off-ramp.
So my thought was that you have the right, whether it's the community that agrees to a certain level for how people would take
this money out of the ecosystem.
If they can't take it out and they can't use it, or like you said, platforms can then
blacklist wallets that have been like tracked in a hack or something like that.
That to me is still KYC because you're identifying people and stuff like that.
So I just want to come out and say, when I'm saying KYC, I'm referring to the overall
of knowing who is behind something,
but it doesn't have to be with a passport.
And there are certain protocols
where you don't need it
because it's not a protocol
that someone can take that money out of the system
and go do something else with it.
And I think that's what exchanges do, right?
So exchanges are already doing that,
which is how you would off-ramp crypto into to fiat or something like that but the community itself could come up with certain
things where like if something is done or like i mean i don't know we don't have a like other
industries have regulatory bodies like a cpa right like there's the cpa association that governs that
it's not the government right so i don't remember who it was, maybe change or someone else that if we had a community appointed council or body that like if a hack was done or something like this and then it could go to a vote and that wallet would be like blacklisted from these off ramps.
Yeah. To me, that is kind of accomplishing the same thing. So I just didn't want everybody to think that think that like i think everybody needs to turn in their passport for everything they're doing
i don't know if you remember the um with the uh old fact sanctioned e flash a few years ago
so there was there was a whole thing a few years ago with um basically there was some sanctions
put on ether gunfrey tornado cast and this is to demonstrate the kind of utility of this solution that was basically
what they did was they um sanctioned a bunch of these anything that had gone through tornado cash
so if you got set if you then send that to your coinbase your coinbase would blacklist you right
the problem with that is some guy probably a bit of a crypto activist decided to send out, you know, 0.001 Ethereum or 0.001 USDC from these
OFAC sanctions addresses to like 100,000 or a million wallets at random. And so the point,
including BlackRock's Biddle Fund, which was like a $100 million fund they had,
the wallet was public and they sent some to that wallet send them sent some to that wallet as well And so the point I'm making is you know the you can't you can't stop anybody sending you
Decentralized currency for any reason the wallets don't have a disallow function for you to receive currency
so this is where it gets tricky because like I may be a completely good actor and have never done anything wrong in my life
I could be you completely good actor and have never done anything wrong in my life. I could be – my wallet could be your mother's wallet or whatever.
And then some guy who has got an axe to grind against the authority sends me 0.001 OFAC sanctioned Ethereum and suddenly you're blacklisted forever and you can't use an off-ramp ever with any funds.
Well, let me let Alex up here.
Alex up here, she's got her hand up, but I just want to say one last thing on that.
She's got her hand up, but I just want to say one last thing on that.
I just want to say one last thing on that is that the Ethereum system, while it sort of,
you could call buckled under that pressure of the tornado cash sanctions, I forget the
number.
It was either like 42 or 52 or 58 or I don't know.
Some amount of the validators did not reject any transactions having to do with
tornado cash and even some censoring people that had just interacted with tornado cash,
other people. But the system held, it was scary to see so many validators blocking the transactions,
but the system held and there were validators who continued to post those transactions.
Now, the website was taken down, so you had to do it through smart contracts and not the interface
because the company had to take their website down. I'm guessing someone maybe made other
front ends for it or something, but Ethereum, the system, continued to pump and continued to
publish those blocks. Now, you can argue were the validators doing that, breaking the law or not. I don't know. But now look in hindsight, all those fucking charges
were dropped. It was, it was political lawfare and that's fucked up. And it's good that we have
systems that, and, but what, you know, what if those charges weren't dropped and those people
just were put in jail because, you know, look at a Snowden, look at Assange, you may agree or
disagree with them. Um, but sometimes there's opinion here, there at Snowden, look at Assange. You may agree or disagree with them, but sometimes there's opinion here.
There's political rhetoric.
There's examples that are made.
And I just don't think our system should be subject to those kind of debates and rhetoric.
It should be decentralized.
Go ahead, Alex.
Interesting pronunciation of my name.
I almost, we work with two Alexys. Interesting pronunciation of my name.
We work with two Alexys.
I'm teasing.
I have a terrible migraine right now.
So this will be an interesting discussion here.
But I actually did an article for Coindesk on Tornado Cash that they're not actually doing anything that the government isn't doing. So, um, it's a very interesting, uh, the, the takedown that they did of, of
Tornado Cash itself is actually something that is, uh, the, the CIA invites people into their,
uh, their mixer that does the same thing, literally the same thing, and invites criminals to do the
same thing. So it's very interesting. Can you expand on that?
Yeah. So Tor is actually, it was created by the government and is actually something that the government uses in order to disguise its own assets and essentially people who are coming over from other countries that are, you know, that are either foreign government assets or things like that. And one of the problems that they had with the
chatter that they wanted to disguise was the fact that there wasn't enough chatter, right? So what
they did is try to add more chatter, right? And so one of the things that they did was open it up to everyone, including illegal activity. And so they actually
welcomed a huge amount of illegal activity, which brought, because they knew other governments were
listening to the activity on tour, but they covered it, the activity that they had that was basically espionage with a bunch of illegal activity of other agents, basically like Bitcoin stuff.
But it wasn't just Bitcoin. It's other criminal activity, people who are ordering hits on other people and things like that.
people who are, you know, ordering hits on other people and things like that.
They covered espionage activity with other illegal activity and people doing other stupid stuff that are just investigating, you know, what is TOR and stuff like that.
Sometimes people just want to use an unindexed Internet. Right.
So it's not all illegal activity, but there is a significant amount of protecting journalists.
activity, but there is a significant amount of it. Or protecting journalists, right?
Well, yeah, and stuff that just, you know, stuff that they don't want tracked.
Or you're in China and you don't want the firewall to see that you're using YouTube.
Like North Korea uses it, Russia uses it, and there's an entrance that the CIA opens to the public. Everybody can
use it. And I posted it on the site. Anybody is welcome to use it. And they want as much
chatter as possible. So they open it to as many people as possible, specifically to cover their
own illegal activity, right? So the idea that creating something that the
government has created, which is kind of a mix of activity, which may be legal or illegal,
but fundamentally the activity itself, right? The idea of combining actions,
that action itself is not illegal, right? So opening up TOR was not illegal.
It's just this mixing of activities, some of which may be legal or not illegal, but the
operators of TOR are not in control of what's going on. Now, the CIA could very well be monitored. They could cut off all of the illegal activity.
They choose not to because it benefits them.
It's very difficult for me to say that the government, for their purposes, it's okay for them to have a lot to welcome in a legal activity.
But for example, for this mixer purpose, it's not okay to have any type of activity to hide accounts.
When there are people who need to have their accounts hidden and mixed, like there are people who are running from abusive spouses and they
need to make sure that their money isn't tracked. You know, there are people who are leaving
from countries that are hunting them down and they need to make sure their transactions aren't
tracked. And that, you know, the government's like, no, that kind of activity is not okay.
Where really what it is, is the government saying, if we're not, that kind of activity is not okay. Where really what it is,
is the government saying, if we're not orchestrating it, it's not okay. And that is something I have a
problem with. So that was the crux of the article. And that's, so the nature of the, they're saying
that the charges say the nature of the activity is illegal, but that's really not what the illegal
thing is. The illegal thing is that the nature of the operator is what they found illegal. But that's not what the charges were.
Yeah, you know, there were countries during the Holocaust, by the way, where they had
written down everybody's races in a census. And that was how the Nazis found the Jews in those
countries by using a non-Nazi country.
They just, you know, invaded and then took their census.
And so the country was trying to do the right thing.
It wasn't trying to hurt anyone.
But then Hitler came and was like, oh, you've got a census that tells us where all the Jews are and who all the people.
Thank you for the records.
Exactly.
Thank you for the records, exactly. Thank you for the nice records. I mean, what also I believe needs to be said is we are like, like throughout the space,
we've been saying like, this is legal, that is illegal, this is illegal.
But this is kind of like a very America-centric approach because there are quite a few regimes on earth like in the world where the definition
of illegal is very broad and things that might be legal and okay in America would not be legal
for example in Russia where and vice versa a lot of things yes where in like in Russia A lot of things. Yes. We're in, like in Russia, a lot of things are currently illegal.
Sometimes even the most ridiculous ones.
And I do believe that this is kind of a strong argument against allowing way too many regulators into the space.
And an argument for the space actually self-regulating like the early stages of the
internet when um companies who made anti-virus software came in and were very helpful and this
is like i believe we are currently into like the Genesis stage of that with a lot of like blockchain forensics companies like Liptic, Crystal Chainalysis and so on and so forth.
This is a pretty good ground to build from because we do need companies, we do need players in the market that will need to make crypto safe and um
i think that the way to build sustainable defi if we don't want to kind of uh have it touch
the government way too much any government in the world then we need to kind of support blockchain forensics companies.
Well, I'm actually building stuff closer.
I'm just going to say, meh.
I met and know some of the guys at Chainalysis.
Eh, fuck those guys.
They're...
I'm just going to put out...
This stuff is, yes, it is used to attract criminals, but this stuff will be used against legal law-abiding citizens.
And just so you know, like you just mentioned, there are laws that are, you know, one country it's this and one country it's that.
There are laws in single countries that are contradictory where your state says one thing, but the federal can't agree with the state.
And you get held in the middle.
Let's read some fun laws in the United States.
In Asheville, North Carolina, it's illegal to sneeze on city streets.
In Alabama, it's illegal to wear fake mustaches in church because it could cause laughter during church.
In Connecticut, pickles must be able to bounce I forget what state there's one where you can't
have an ice cream in your back pocket because it was used at one point to steal horses or
something stupid I mean there's I just my point is all these things they start in the name of
we're trying to protect people we're trying to you know catch the criminals but these things, they start in the name of, we're trying to protect people. We're trying to, you know, catch the criminals, but these things get used against us, against law abiding citizens.
So I'm actually working on something that, and I, I think that, and I, when I came in,
you were talking about, uh, we don't want to create, uh, uh, like a, a different banking
system or whatever. So I'm, I'm actually not a fan of the banks. For people
who've known me, I'm definitely kind of, I'm pretty anti-bank for a lot of reasons, right?
But I do think we need an alternative financial structure, right? There are a lot of things that
banks do that we need to have, but I don't like the way banks do them. So I'm actually creating
an alternative structure where we can convert fiat into crypto without banks. And it's completely
legal and compliant, right? It's the only structure that's completely legal and compliant.
I don't think we should actually go through banks right now. That is the thing that's completely legal and compliant. I don't think we should actually go
through banks right now. That is the thing that's always been our choke point in blockchain. That's
been the big issue for us because when an administration decides that banks should accept
crypto, great. We can actually have on and off ramps and do business. But when they decide
we can't, then suddenly we're on the bad list with porn and cannabis, which by the way are also
legal. But suddenly it becomes difficult to custody funds, to move money in and out of
blockchain accounts. All of that, there shouldn't be a choke point,
right? So nobody was building it. So I'm building it, right? The access for it. And I think that we
also need the financial tools also, not the, and pardon me if anybody is going to be offended by
this, but most of DeFi, and I literally wrote a book on it, right? Understanding DeFi. O'Reilly asked me to write it. I didn't want to write it because I was like, I need to write a book. No, they asked me to do it. But most of DeFi right now is just garbage decentralized finance that doesn't use banks, right?
So real financial tools where people can make investments, where people can actually gain interest because they're actually getting real returns.
And we need to create the asset-based economy that is essentially the opposite of what banks do. Banks create
the debt-based economy, which I think is garbage. This is basically leading to collapse after
collapse after collapse, where what is actually being formed and has been formed with blockchain
is a bunch of assets. I don't know if people realize, but the token tools
that we've been forming are actually assets. And so what we can actually create here is a full
asset-based economy. And that's what I'd like to start building. And that's what I'm working on,
which is starting with this on and off ramp. And yes, I am building a digital ID that goes with this on an off-ramp, but it's
very different from the KYC forms that the banks use, right? It's different because I don't think
anonymity should ever be used as a weapon. It should only be used as a shield. I believe in
anonymity. I don't think you should actually need to know the identity of someone else in a transaction, but I do think that a lot of people use anonymity and they weaponize it in
order to hack, in order to scam, in order to run all sorts of rugging. And I don't like that,
right? I don't think you should be able to use your anonymity in order to conduct activities that are illegal.
So you should be identifiable if you commit a crime.
But I don't think that you need to be identifiable in transactions.
And I don't think you need to be identifiable to the wallet itself.
And I don't think that you need to be identifiable later on down the chain.
And that is how this is built. So there's a lot of things in here that are far more privacy
oriented and protective than a bank is. Because remember, a bank was just supposed to be a
distribution mechanism. That's not what it ended up being, right? They found all sorts of loopholes.
They created lobbies and all sorts of garbage
that ended up making them rich, rich, richety rich at, you know, at basically our expense.
Every time you pay anything for your bank account, if you pay a single charge for like an ATM fee or
anything like that, you paid for them to make a profit that you didn't get part of. So, I mean,
this is like, to me, banks are such a scam. It makes me like,
I'm like, well, first of all, why didn't I go into it? Alex, can I just ask you a question
real quick, Alex, on your asset-based system real quick. So I love it, by the way. Like I love
asset-based lending, did it in the TradFi world for a while. And I really agree with a lot of
stuff you're saying, but what about the whole side of the lending industry, mortgages and cars and all that kind of stuff that has an income feature
for qualification?
Are we saying there's no more using income and credit to qualify?
It all has to be asset-based?
Not at all.
You could have parallel systems, right?
So you can have one system that functions on debt, but you can also have another system that functions on assets. asset. And I'm just using this as an example. Let's say that you have a vineyard and you make
brandy and you lose a crop. And this is because most lending for banks is collateralized lending
that's based like 20 to 40% of whatever collateral you have if you are trying to further a business. So this is based
on small business lending, right? So if you lose a crop, for example, and you need to fund your
crop and you want to take out a loan, that loan has two problems. One is it's limited. Let's say
you want to, you're going to collateralize it with a half-done barrel of
brandy that you're a brandy producer. You do this in the regular course of business.
You're going to do a seven of 15 year brandy. And they're going to give you first 20 to 40%
of the value of that brandy that you have. That is a much smaller amount. So you'd have to collateralize a lot more
than you would ordinarily want to because they're only going to give you a small fraction. The
second thing is it's a loan. So you have to pay back the money with interest. So you're already
paying back. You have much less money. So first of all, you have to borrow either a lot more than you actually need,
because you have to pay back part of it with the money that you just borrowed,
and you have to collateralize a lot more than you want, because they only give you a small
fraction. So instead, you take one barrel instead of collateralizing five, you take one
barrel, you put NFTs on it, and you keep some of those, right? But you also you sell some of them,
and you sell them at a discount because you are it's a seven of 15. And you say, okay,
I'm going to sell this this barrel, you put some legal protections on it. And you say,
this barrel, you put some legal protections on it and you say, I'm in the business of doing this
and you will get rights at 15 years. You'll be able to get the profit of this particular
brandy. All of the income that you get from that NFT, right? You're selling the rights to this
brandy, but all the income that you get from it, you can use right now. You don't have to pay it back, right? That's revenue that you got from that brandy.
So you buy your crop and you get to, now you have a crop for this year.
Hooray.
At 15 years, you sell the barrel.
Now, everybody who has an NFT, including you, right, automatically gets paid.
Everybody gets a profit.
Now, the person who bought the barrel, they have a unified interest in that barrel.
They don't have NFT splits or anything like that.
All the interests are collapsed.
That new owner can then sell new
NFTs, they can drink the barrel, they can bottle it and sell it, they can spill it on the ground,
they can do whatever they want with it, right? So they have now a new 100% ownership. Everyone
else has been paid, you've been paid, you have 100% of your crop done. This is a much better, healthier system, not based on debt, right?
Limited loss, much better built on debt.
If you want to purchase, now I'm actually working with a client.
We've developed another system for home ownership, right?
Based on limited loss and debt and also working with tokens.
I'm actually trying to figure out how to rework a lot of these debt systems
so that more people can gain assets as opposed to, you know,
trying to figure out how to, you know, sink deeper into debt, right?
Because the whole purpose,
like what people really need to do is get into assets.
Everyone has to have assets.
The problem is when people talk about the economy,
the economy is doing well, the economy is doing poorly,
what they really mean is asset holders are doing well
or asset holders are doing poorly.
It doesn't mean anything about people who are working or people who are like salary people or people who are just holding debt.
It doesn't mean anything about that, right?
Or like common debt, not like bonds, but common debt.
not like bonds, but common debt. So this is a huge issue. And this is something that I don't
So this is a huge issue.
think most people really think about is that you really need to own assets. And once you own assets,
the world of finance really opens up to you and you can do many more things, but also it's the
only way to really build your net worth. So anyway, this is the future, in my opinion.
No, I mean, that's really cool.
And I'd love to chat with you on the side about how to do it on mortgages and autos
and stuff like that.
I've got a 20-year background in mortgage operations and capital markets on that side.
That'd be really great.
But yeah, thanks, everybody, on the show.
I'm going to hop off to go do another call somewhere.
But yeah, Alex, we'd love to learn more about how you're building that. Cause you're
exactly right. Like we need middle America. And again, like selfish to America, like we need
middle America to have assets, not just income. So if we can educate people on how to do that,
I think it'd be really cool to do. So really awesome stuff, Alex.
Yeah. And thanks for joining us again. We're actually at the top of the third hour guys and
i'm so happy to see another connection on the aggregated it happens so often uh you know people
just connecting and then start cooking together on random things so much love to everyone here
um i'm really thankful for this conversation. You know, even when we have
differing opinions, it's so nice to talk to each other in a civilized way and just think about,
you know, different perspectives, challenge our own ideas. That's the only way we're going to
get forward. And that's what, you know, that's a big part of this show, you know, trying to have these hard conversations and, and, um, and thank you all for, for, uh, giving your own
opinions. Omniti Network, I see your hand up. Uh, we, we have to go soon. Um, what did you want
to piggyback off something? No, I, I, I should say that, um, personally, I'm very interested in
that topic. Omniti is quite far away from that subject matter, but Alex and I know each other, so
I definitely keep an eye on her work.
Be really excited to see more about an asset-based economy and less about a debt-based economy.
So thanks so much for having us on the show, and I'll personally be keeping an eye on Alex's
work.
See you all around.
Awesome, awesome.
And Pauline? Yeah. What I wanted to say to quote Wendy Williams, Alex, you are a legend and icon and you are the moment.
And I just wanted to thank you all, legends, for having me on the space. It's been super cool. I have learned a lot
and we have talked about a lot.
And yeah, I wish everyone
a very nice day or evening
and next week ahead of y'all.
So yeah, thank you so much for the discussion.
It's been real.
Much love, Pauline.
And we have to have you back on the show.
Same with everyone here.
Really great conversations.
And, you know, I respect all of you guys very highly.
Rock, did you want to send us off or anything else before we go?
Yeah, I want to talk to you later, Alex, about what you're building.
Sounds interesting.
And, yeah, I guess I'll just say one more time.
We said it a lot, but I think we have to resist the urge to recreate the traditional banking system here.
There's a lot of benefits of what we're doing.
And it's not just like, I don't think everything is just a foregone conclusion.
I don't think that the path is the path and we're just going to get there one way or another.
I think how we speak on these spaces, how we communicate with each other, how we educate
and how we kind of will things into existence is important.
And if we start saying, oh, you know, yeah, maybe KYC is okay.
Maybe we'll do a little KYC.
And I don't know why that reminds me of the
South Park where Stan's dad is in the backyard. He's like, just going to get a little cancer,
Stan. Just look, I'll be in there in a second. Anyways, if we start having a little bit of KYC,
remember these things always start as, oh, it'll only be, we'll only do KYC on people transacting
over a million dollars a year. And then it's, oh, a hundred thousand dollars a we'll only do KYC on people transacting over a million dollars, uh, you know,
a year. And then it's, oh, a hundred thousand dollars a year. And then it's, you know, now
anything like if you do, if you, uh, send over $600 in a year on Venmo, you have to like report
it to the IRS. Like, you know, it just keeps getting worse and worse. So just be careful,
you know, and while I love our government and my ultimate goal is politics, I don't trust government and I don't want them invading our industry and ruining it.
I mean, there's certain things that I'm supposed to say as a brand, but I would love to show up in a space or two as like a private person.
I would love to show up in a space or two as like a private person.
And I might have a lot more things to say about decentralization and how crypto can actually make the world better.
Yeah, totally understand.
I mean, yeah, I want to know more about what you guys do, but I think we're ending here.
I guess just before we go, just really quick.
So you guys have a centralized aspect and a decentralized aspect.
Maybe we could just do like one or two minutes real quick on that.
Yeah, we basically combine centralized and decentralized exchanges under our hood.
And we are non-custodial.
So we do not hold on to any of our customers assets
um aside from like a little bit if you want to swap bitcoin for eth or bitcoin for polygon
which we have supported for a very long time uh even since like its inception i believe
um you give us the money that you want to swap and we give it back to you within two minutes.
So we don't lay any claim to any other assets that you own.
And this is where we kind of have found the middle ground between being fully decentralized and retaining some of the centralized exchanges kind of philosophy.
So I believe we have a pretty solid niche that we occupy
where we retain just enough of the accountability aspect
that a lot of the DeFi players in the space kind of lack,
where we promise our clients a service and we are obligated as a
service to fulfill that service except for the cases where we cannot but then we will just
return your money and send you on your merry way. Interesting. Cool.
Oh, Aztec, you got to give a shout out
before we go about LitVM, man.
We didn't really get a chance to talk about it.
And this is huge news,
bringing Litecoin into Ethereum,
linking it to Bitcoin,
linking it to Doge,
linking it to even Cardano,
but all Ethereum chains.
Yeah, tell people about VMM.
This is huge news.
Definitely.
It was exciting.
Last week, we unveiled at the Litecoin Summit a bunch of legends there that we got to meet.
um i'm not sure exactly how much i can share just just yet but we've we've uh we have someone
from the litecoin foundation that joined our team that's official i mean we announced that
live on stage so david schwartz from the litecoin foundation is uh officially on uh the vm team
maybe you're talking about exactly what he'll be doing with the governance and grant system. Right. Right. And
then also, um, there's another individual that joined our team. Uh, I'm not sure if we can talk
about that yet either. Uh, but basically the, uh, you can mention, yeah. If it's who I think
you're talking about David Chom, David Chom. Yeah. Okay. Yeah. Awesome. So, uh, everything is
moving so quickly. The, the, the main thing is that we have a lot of brilliant minds working on this, on our platform, LetVM. And, you know, we're going to bring programmability to hard money.
So we're standing on all the things that we've talked about and loved for years, you know, Polygon, AgLayer.
Also, we're working with Bitcoin OS, who have been champions and pioneers on ZK technology for Bitcoin,
but we're working with them to, you know to build the roll up for Litecoin. So basically in short,
bringing programmability to Litecoin. So now Litecoin will have a set of just sitting there
and being only used for payments or peer-to-peer transfers. And now you'll be able to have
yield on top of Litecoin and use Litecoin in really interesting ways.
A big goal is to have real world assets backed by Litecoins.
So you can see real estate or art or other commodities backed by a bit of Litecoin
and bringing more opportunities
to this entire ecosystem.
So very excited to unveil more as we go
and share what we're working on and building together
with all these strong teams.
Yeah, I mean, you guys might've seen Polygon tweeting
that Litecoin is coming to Aglier and to Polygon.
So, and this is really awesome. Polygon tweeting that Litecoin is coming to Aglier and to Polygon.
And this is really awesome.
It's really great to have the support of the Litecoin Foundation and of Charlie Lee.
He's been giving quotes to the press and the Litecoin account and Foundation account and Litecoin Foundation members have been tweeting about this pretty much every day almost
at this point um yeah it's just really cool to see um i've been such a fan of charlie lee and
litecoin since my early days in in crypto um i think as you were saying it might have been your
first uh you think you want to go back and check but it might have been your first coin you ever had
go back i wrote i recovered it like when wasn't the first yeah because i couldn't remember if
i bought bitcoin to buy light coin or if i just purchased light coin uh but light coin was the
first coin that i ever wanted way back in 2006 uh yeah 2016 and uh and I figured it out.
So yeah, Litecoin is the first coin I ever purchased.
And I've held Litecoin for a very long time.
Traded it early on, but held it for a long time in cold storage.
And it's kind of crazy that it's all kind of coming back to my early days with, with crypto and, and that we're building alongside partners that we've helped incubate and that we've known for a long time.
So we're, so it's, uh, it's kind of crazy how things work out.
It's a joint effort between, you know, LDA, Litecoin, uh, foundation, Polygon, even some QuickSwap team members are involved.
Gateway.
Gateway, BitcoinOS.
I mean, David Chom, the godfather of cryptography who invented MPCs
and invented a lot of the stuff that led to Bitcoin.
He wrote his 1982 dissertation on – the name is actually more complex than this,
but I'm going to summarize it as anonymous digital e-cash essentially, and these like
computer network systems. This was like before the internet was really prevalent. He was writing
about this, somehow writing about basically modern day crypto, but before internet was even really
around. I don't even know how that's,
how he could think so far ahead, but yeah, his systems along with Adam backs, hash cash,
proof of work and other things are how Bitcoin was born. And now he's on our team helping us
build this. So really exciting stuff. Definitely. And we're just getting started so a lot more to come guys i'll share more in a future
space but i do have to hop um yeah i'm i think one of the the most exciting things also for me
personally is just getting to work with you on this rock uh and it's going to be a fun journey
and we we have a stellar team so aztec is the founder of this.
I'm really excited to be working with Aztec.
We're co-founders.
Much love.
But Aztec's the boss.
But yeah, cool.
You guys will be hearing more about this.
I'm sure you'll see Polygon posting it more soon and and litecoin and everyone uh mario nafal was posting about it talking about this is going to create a new uh litecoin meta a lot of people shib toshi there's a ton of people talking about it so it's
it's exciting stuff i've been a fan of litecoin for a long time it's good to see litecoin actually
um like getting some utility finally and you can do so much more with it now with full programmability. And the cool thing is it's true ZK rollups to Litecoin,
pure ZK rollups to Litecoin,
and still plugging into Ethereum through AgLayer.
There's nothing else like that.
So really cool.
All right, guys.
If you want to look at that, by the way, you can find it.
It's at Litecoin VM.
So it's LitVM for short, but the handle is at LitecoinVM here.
I'll put something in the Jumbotron here.
I need to update my bio to actually have the tag.
I was keeping it kind of silent because we were unveiling, but now I got to drop it.
Yeah, I just put in the, I don't know if you guys could see it yet.
Sometimes it takes a second, but I just put in the Jumbotron tweet from just today from Litecoin.
They've been really, really supportive on this.
We're so pumped.
Definitely.
I'm thankful for them supporting us and the endorsement and everything
i mean dude yeah it's pretty crazy it's wild i'm trying to get sandeep and charlie lee on a call
soon yeah yeah we've been yeah yeah we can't share too much but yeah good times guys uh let's uh
yeah i i got a hot brock but much love everyone thank you for the conversation today
it was fun hanging out you know uh we'll be here every friday um bringing up all kinds of
crazy topics from around the industry and and uh talking with giga brains like all the people that
were on the panel today so definitely follow the quick swap account, polygon and hang out with us.
We're here every Friday.
Thank you so much.
You guys,
I massively love to yap with y'all.
So we'll,
we'd like to be back if you guys let me,
because I love yapping.
Yeah.
We like to have vigorous debate on this show. That's how
we all harden our ideas together. 100%. Definitely Pauline. We'll, we'll have you back. Um, so yeah.
All right, guys. I hope you all have a great weekend till next time. Never give up on the
future of money. Take it easy. Cheers guys. Bye-bye.
