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The Stacks DeFi Show #59
Recorded: April 1, 2025 Duration: 1:00:09Space Recording
Short Summary
The discussion highlights significant developments in the Stacks ecosystem, including the launch of a PerpDex, innovations in security and asset recovery, and growth in liquidity and stablecoin issuance. Technical advancements such as the use of multiple oracles and the introduction of e-mode and looping in DeFi protocols are emphasized, showcasing the ecosystem's resilience and innovation despite market conditions.
Full Transcription
Thank you. Thank you. Thank you. Great, welcome, welcome. Quick check if I'm audible.
Live and clear.
Music in the background while we wait for everyone.
That's good to hear.
We'll start soon. I'm going to go a little bit of a little bit of a little bit of a little bit.
I'm going to put a little bit of a little bit of a little bit of a little bit of a little bit.
I'm going to put a little bit of a little bit of a little bit of a little bit of a little bit.
I'm going to put a little bit of a little bit of a little bit of a little bit of a little bit.んんん
ん あさあ
んんんん
ん I'm going to put it in the middle of the middle. All right, let's slowly get started.
I'm just going to put in my headphones, and I'll be right back.
I'm just testing the audio, see if everyone can hear me.
All right.
Amazing.
Amazing, amazing amazing amazing amazing well really good to um to be here with uh
such great fellow fellow builders for uh 59 of stacks stacks defy show but um but yeah the show
where we talk about all things stacks defy right um and um of course everything we share is for
informational purposes only, right?
Not considered financial advice.
And, yeah, without further ado, let's briefly introduce ourselves.
So I'm Tycho, co-founder of Zest Protocol, the largest DeFi protocol in terms of TVL and stacks,
and the main lending protocol on stacks where you can collateralize stacks based assets and borrow borrow other
things and um um yeah next to that also contributor to stacks itself and and stacking down which uh
the air will uh will tell you more about um yeah lear do you want to introduce yourself next and
then uh jack hadan methyl can all can all maybe go in that order.
Yeah, absolutely. GM, everyone. Can you hear me? Can you flash the thumbs up?
Yes, we do. We do. We do.
Great. Awesome. Yeah. Another amazing edition of the Stacks DeFi show coming to you every Tuesday.
You know, I'm definitely just aware of everything, wary of everything I'm seeing on, of everything I'm seeing on crypto Twitter. Obviously,
it's April Fool's, so don't click on any weird links or believe everything you see on Twitter
today. But yeah, happy to be here. I'm head of growth at StackingDAO. StackingDAO, just as a brief intro, is the leading liquid staking protocol
for the Stacks ecosystem. We make it super easy for users to earn the consensus rewards
in any flavor of your choice, whether you want to earn Stacks rewards, SBTC rewards,
or we also have our native Stacking pool to earn rewards in Bitcoin01. So great to be here.
I'm sure we'll have quite a lot to talk about.
And, you know, as always, we have great guests on the show today.
Some of the leaders in Stacks DeFi coming to you every week.
But yeah, without further ado, let's get this thing going.
Amazing.
Jack, do you want to go next? Yeah, good morning, everybody. I'm here with
Hermetica today. As you probably know, Hermetica is the largest stable coin in the Stax ecosystem.
It's a Bitcoin-backed stable, 100% collateralized by Bitcoin, a yield earning stable. Most recently,
we paired with Velar where you can trade Hermetica stables and SBTC on their amazing new perp decks.
And honestly, guys, I don't know why I'm here today because I sold all my Bitcoin, all my STX, all my tokens,
and went completely long into XRP.
It's the standard.
It's going to be worth $15,000 per token in no time now.
But I'll just come hang out with you guys.
Happy April 1st, everybody.
Appreciate it.
Appreciate the little
across fools there, but
at least I'm identifying it as such.
Yeah, Mithil, do you want to
go next and head on
and know whoever unmutes first?
Sure.
Can you hear me properly?
Yes, sir.
Great. Very happy to be here again like last weekend.
Luckily, not an April Fool joke. Our Purp Decks went live three days ago.
I was very hopeful last week it would go live before this weekend.
I'm very happy this week it went live. So like Jack said from Hermetica, we went live with our PerpDex, first of its kind on Stacks and Bitcoin.
In 16 years, finally, on Bitcoin, we have PerpDex.
And thanks to SBTC and USDH, both, you know, the first pool we went live with was SBTC and USDH.
You know, the first pool we went live with was SBTC and USDH.
And for the first time ever in history, people can use a trust minimized Bitcoin version like SBTC as collateral and trade perps while keeping their Bitcoins in the native secured Bitcoin environment.
So very happy for all of us.
all of us
yeah I'm not sure
if Alex is still
still here or Hadan or someone else
maybe Alex Handel
when you're back just
start talking and then we'll do it like that
but yeah
big news in
Staxland this week.
And I see Alex requested back.
And let's quickly await so that they can introduce themselves too.
But yes, we can.
We can.
Let's do a quick intro.
Sure.
All right.
Well, great to join you guys today.
This is Hadan, BD Lead with the Alex Lab Foundation.
Alex is the largest DAX in terms of liquidity on Stacks and on Bitcoin.
Our sister projects include the Xlink Ridge, Lisa for liquid staking and yeah glad to share
some some updates with you guys today last week we made a significant step
forward with our security efforts and recovery of stolen assets
oh you're just just breaking up a little bit, Hedan.
Can you still hear us?
Oh, yes, I can still hear you.
Can you hear me?
Yeah, you just mentioned the recovery, and then you dropped off.
Oh, yeah.
So, yeah, later on, I can provide just a bit of a rundown of last week's security updates
of our latest breakthrough in our recovery efforts,
and what we have in store for the weeks ahead.
So we'll be happy to share those.
Amazing. And just a quick check,
you have to go before the end of the show,
or you're here for the hour?
No, no, I'm good for the hour.
Cool. Cool. Amazing. Amazing, amazing, amazing.
That it was like a really exciting week in StaxDeFi, especially with the VAR launch.
So, I mean, the stage is yours. How did it go? What should we do? Like, what's next? You know, give us everything.
us everything um so many things right i mean it first of all it went great the support from
community has been um you know has been always since day one you know like we have been lucky
i would say in that aspect that you know community has always supported us uh since day one so the
support from community is great uh we are getting lots of feedback critical feedback from ui ux side
from a lot of people that are testing right now.
So that's great.
You know, I mean, it's first PubDex on Bitcoin.
You know, it has to be thoroughly tested, critically tested.
And, you know, we need this feedback loop.
So what we are going through right now is this is all kinds of testing, but on chain and it's live with real money.
So for next few weeks, we keep our heads down, keep improving all the features,
keep getting rid of the bugs, make sure the system scales properly before we start rewards.
So eventually, our plan is to start and run a trading competition alongside the LP reward system for stakers, especially for Veras stakers.
It will be very rewarding. But of course, you know, more more details on that soon in a few weeks.
Of course, I don't want to finalize date because you want to make sure all the systems that are operational are working safely.
So, but the trading competition, I think I'm very excited about.
And a lot of our KOLs, investors and our LPs and a lot of my trading friends are very excited about
because that trading competition will bring in a lot of volume to Stacks
and a lot of volume to LR PURP decks.
It will bring a lot of users to Stacks
and very excited about it overall.
Apart from it, as the PURPDex is live now,
our primary goal would be to add support
to every Stacks token available in the ecosystem.
Eventually, we are waiting for,
like I said, we're waiting to test for a few weeks,
but then we start deploying,
we start working with other tokens in the ecosystem
and hopefully upcoming tokens like StackingDower
or Zest as well, probably Tyco.
So, you know, now I'm more eager
for a lot of Stax tokens to go live.
Of course, the market isn't as exciting as it's supposed to be.
But, you know, Stax as an ecosystem, I think, is very exciting, especially now.
And our goal with PubDex also was the same, to not care about the markets, you know, keep pushing the ecosystem forward,
keep the momentum going, bring back eyeballs on Stacks ecosystem.
And I think we have been, as an ecosystem,
a bit of successful in doing that, at least in the last week.
Yeah, and on that, you know, what, I mean,
today the main pair, right, is USTH SBTC SBTC, in terms of PERPS training.
So it's SBTC, PERPS with USDH.
What do you look for in an asset for it to be listed on PERPS?
What are the criteria you're thinking about?
Honestly, because our PERPDE purpose works in a unique way where every
every liquidity pool has is very independent and works as its own system
you know they have their own risk management system and the liquidation
engine so for us like the same way we created you know a community decks where
anybody can openly choose to list their token on our DEX, which is the Velar Dharma DEX.
We want to make the same with Perp DEX.
So as we have seen, a lot of tokens that go live across all ecosystems, they have a lot of attention in the early days.
they have a lot of attention in the early days and in a way that early days attention from the
community is the best time to also have to also give perps the community but but mostly like 99
percent of tokens are unable to do that because getting listed on perps on a centralized exchange
is is much much difficult and even i think i think no stacks token has been able to do that apart from stx
even well are even for well are going live on a centralized exchange with perps requires so many
criteria so much volume so much attention from community and so much money as well but we don't
want that to happen with happen with the community you know we don't want that to happen with the community. We don't want that to happen with smaller tokens or we don't want
that to happen with a lot of community-based tokens like even the Rucoin from Jack Binswitch
for example. They did such a great job to bring the whole ecosystem together, to bring the whole
community together but probably it will be very difficult for them to get listed on a centralized perps,
even if they go live with centralized exchange as a spot token.
So for Velar, we eventually want there would be no criteria
and people can eventually launch their own pools on our perp decks.
That's the end goal.
Of course, it can take a few months, but honestly, there wouldn't be any criteria.
You can reach out to us um and you know if you have a if you have a good community
it's good enough for us if you're doing good for the community i think it's good enough for us to
list um to list your token on the pub decks of course starting in a few weeks okay okay okay okay
and and um and so so so when when so you mean the markets are sort of isolated? It's like an isolated model, right? So essentially, if let's say one of the markets has a problem and it doesn't affect the other markets?
Yes.
Got it.
Exactly. Every pool works very independently. So the problem here can be, you know, so this is for the community, the potential problem can be that, you know, somebody can or the large whales of that uh token starts manipulating
Exactly.
Got it.
Got it.
those start manipulating that token and uh you know and using the spot market because we use
oracle prices to to uh to also choose the prices for the for the perp decks they can manipulate
the spot market to basically manipulate the perps market
as well and this can cause either a lot of profit or loss for the community and this can happen so
this i think this will happen as well which is one of the reasons that you know initially you
might have to put some social criteria you know it can be a community pool criteria or it can be
it can be something where they have to
prove they are doing the right thing for the community
but if that happens, it will
technically be very
bad for
people who have put trades on the other
side than the people who are manipulating that particular
token. So a lot of people can lose money
because on PubDex you
either make a lot of money or lose a lot of money.
I fully can't agree who loses a lot of money for sure.
More than I make.
But that's what makes the system go
around.
Yeah, that's true.
But yeah, because of that, even
if one pool is majorly affected and
users or
traders in one pool are majorly affected, it and users or traders in one pool are majorly affected
it won't affect any other pools got it yeah no super exciting super exciting and um and and um
also one one thing i'm kind of thinking about right like currently like you know sptc is
obviously there's no withdrawals open yet right they're going to open at the end of the month.
And the asset is at cap.
So I guess it can sometimes happen, right?
Where the DEX price of SBTC and the centralized exchange price of SBTC,
they can kind of diverge a little bit.
There are definitely ways for it to be out.
But yeah, there can be a bit of a difference
until the system is fully open and operational.
What does that kind of look like?
Can people get liquidated?
Is it based on DEX prices?
Is it based on centralized exchange prices?
How to mitigate that with liquidations and all that stuff?
Sure.
It's based on Oracle prices.
So we use third-party Oracles as of now.
But eventually, we also want to use a mix of Oracles.
So currently, what happens?
Like, how does an Oracle work?
Oracle basically aggregates prices from DEXs, centralized exchanges, you know, everywhere
available for that particular asset.
So for example, if SBDC is listed on four centralized exchanges and three DEXs,
then there would be an oracle like PIT, for example,
who would aggregate from all those seven sources and give you price in real time,
which is like an aggregated price of all those seven,
which allows you to mitigate up to a certain extent the volatility of
or manipulation in one particular source,
like one particular exchange. So we currently use Pith as an oracle, but eventually in Velaar,
we would use not just aggregated prices from sources of one oracle, but an aggregated price
from multiple oracles. And we would have backup oracles as well. that's that's the initial that's the that's the end goal but currently on stacks um there are very few oracles which are live like for example that's the
difference between a mature ecosystem like ethereum and and a new ecosystem like stacks right i mean
there are probably if not more than you know 50 oracles on ethereum and you can aggregate those
oracle prices to also in case one oracle gets,
you know, gets compromised, you can still rely on other oracles.
You can still get an aggregated price from all the oracles,
but that cannot happen in stacks as of now because it's a new ecosystem,
but eventually it will become more and more secure.
So we can also probably,
we will also decide to run our own internal oracle, you know,
from all the possible sources, the
same way Pith would do it.
But in case one of the oracles gets compromised, we need a backup Oracle as well.
We need some form of aggregation of those oracles as well.
That's how you make the system less and less prone to a single point of failure.
I see.
I see. I see, I see, I see.
So right now, if I long SPTC, it's the BIF price, right?
Which is centralized exchange price or whatever you see in CoinGecko, right?
You still like, you know?
Yes.
And then, so if I get, you know, liquidated, et cetera,
that's also based on that.
But then of course, if it gets liquidated,
then, you know, you it gets liquidated, then you or the protocol needs to buy that SBTC or something.
No, wait, it's USTH-based.
You don't have to purchase liquidations like the Lightning Protocol does.
So you don't have to actually sell any SBTC on DEX.
Yes.
Right.
Right, right, right, right.
Okay, so there's no problem with those constraints, actually. yes right right right okay so it doesn't really
it doesn't really
there's no problem with those constraints actually
like
you don't really
do you have any constraints from withdrawals not being open
is it is it constraining you in some way or not
not right now
no it's
I mean it's in the end it's the
liquidity pool and the LPs
right I mean
yeah
so you know, you either
borrow from the liquidity
pool or you deposit in the
liquidity pool. So, you know, as long as
there is,
I mean, so I don't see any constraint
apart from the total liquidity
in the liquidity pool, you know?
Yeah. Yeah. So the only thing that can
kind of happen with, I guess, different
prices on stacks is like, let's say I long, I long on Valar and like I'm right. And then I, I get, I get sort of paid out, but then SBTC might be maybe a lower price or a higher price on stacks than BTC. So maybe then my payout percentage is a bit different in the end.
Yes. Yes. Your payout percentage will be based on the price
of the pithorica of sbdc which might be different from what it's worth on chain at that time yes
got it well it's it's a minor it's manageable it's manageable just just to kind of try to
understand it because uh obviously for for for for zest right when we um do loans against sbdc
Zest, right, when we do
loans against the SPTC,
it would be very
hard to liquidate, right?
Because let's say
if we then buy up SPTC
collateral with a USDC,
we then need to sell that SPTC collateral
or the liquidator
needs to sell it on a DEX, right, to be able
to do the liquidation
again. So we're like dependent on
DEX liquidity, right, to sort of make the liquidation dope again. Right. So we're like dependent on DEX liquidity, right?
To sort of make the liquidations work,
which for you is not...
That's true, which can also affect...
Yeah, but that can affect your price as well
because you pay the DEX fees,
you pay some form of slippage.
Yeah, yeah, for sure.
Those things all need to be taken into account
by the quant success. uh yeah it's not
it's not easy but it's gonna get it's gonna get easier so um yeah no that's that's great maybe
just to bring in bring in jack as well because this is also like a big success story for for
usdh and hermetica but uh yeah yeah um if yeah i'll be here for five more minutes and i have
another call so you know
i'm happy to hear from jack and let's do it a little bit more yeah awesome yeah to to uh
mythel's point there you know ethereum has 50 oracles and stacks is still young right so it
reminds me of a post i saw yesterday. Someone asked,
why am I hearing so much about Stacks? What are they building? And T.O. had a fantastic response.
He said, it's not about what they're building, it's about what they've already built.
And that's the thing. In this space, we're operating in a lot of, we're going
to, we're going to, we're going to. And here it's about what's already happened. What's already
been done here. We see manifest all of the work that's been put into the Stacks ecosystem over years to where right now you can go to Velar, for instance, and take a Bitcoin backed stable
and get a PERP position in a one-to-one secure pegged wrapped version of Bitcoin that is
Bitcoin that is programmable. The idea of doing something like this was foreign several years ago.
programmable.
Very few people were even thinking along these lines, if at all. And that can already be done.
So it speaks to several things. It speaks to Stax Interoperability on Bitcoin. It speaks to, again, all the work that's
been done over the years by these fantastic teams and core developers. And it really shows a glimpse
of what's possible going forward. Because guess what? Two, three years from now, we're going to
be talking about some new breakthrough here on stacks on bitcoin that's
like wow i can't believe we're doing this this is amazing you know no one was thinking about this
um so yeah it's you know everyone's kind of bullish on stable coins now you know as of like
last week that became like the sudden meta all of a sudden.
As, you know, TradFi is just trying its best to catch up with crypto and identifying all of these opportunities in the market now that it looks like they're going to get the green light to participate.
But really, you know, stable coins are an essential part of of crypto just in general um you know one of the biggest problems in this space as a crypto native is when you need to off-ramp when you need to turn
your your bitcoin or your stx or or you know your velar tokens or your alex or what have you when
you need to to turn this into you know cash or fiat or what have you, when you need to turn this into cash or fiat or
what have you so that you can make payments where crypto payments aren't accepted.
It's a huge point of centralization in a space where we're like, no, we're decentralized.
Well, we're not as decentralized as we thought.
we thought, stables are going to be the means by which that problem is fixed.
Stables are going to be the means by which that problem is fixed.
Stables are really a method to bring all of this technology into our lives in such a way
that it hadn't been done previously.
And I penned an article that I wrote recently about stables in the comments here.
I recommend to check it out. It's a good time to be bullish about stables and the comments here. Um, I recommend to check it out.
It's,
it's a good time to be bullish on stables.
And what I,
what her Medica does,
it's so much different,
than,
than most of the competitors is it allows you to keep a position in
Bitcoin.
Cause again,
if we're sitting here,
if we're Bitcoiners and we're like,
we see the problem with fiat. We, this is why we believe in Bitcoin.
But I also recognize that I need stable coins for a variety of reasons.
Why do I want to go back into fiat?
And Hermetica solves that problem by allowing you to stay in Bitcoin with every token being worth $1 worth of Bitcoin.
It also allows you to earn yield if you stake your Hematica. And again, when you're staking USDH,
this now unlocks a whole new flywheel because USDH has a built-in yield mechanism very simple just based
on a delta neutral position on a spot price and a um short right so when longs pay shorts
this is how you get yield in a safe and secure way now Now, how many more protocols, how many more builders could then
take that and leverage it? And that brings us back to what are we going to see two months from now,
you know, two years from now in terms of all of these decentralized financial products being
built on Bitcoin. And that's really what this is all about. And, you know, having PerpDex on here is just massive. It's
something that has been needed in the marketplace for a long time. Doing a PerpDex in this way
is not easy, but it's so necessary. And I think that, you know, we're going to see a lot more
people coming into the space as a result of that, a lot more people learning about USDH, a lot more people learning about Zest, more people learning about Alex, more people learning about StackingDAO, and all of these things that STX allows us to do that can't be done otherwise.
And it's not just promises.
This is stuff that's already built. So, you know, everyone talks about
DeFi on Bitcoin or now they're calling it like BTCFi. It's already here. We've already got it.
Now begins the process of iteration and moving past, you know, DeFi primitives into more advanced products. And the Perp Dex is really a shadow of that and an early form of that. So
it's an extraordinarily exciting time to be here. Yeah, I think that's well said, Jack.
I think we can all acknowledge that stablecoins are really the breakout use case for crypto to
date. There's what, $230 billion of stablecoin liquidity, you know, in crypto.
And the vast majority of that sits in centralized issuers, you know, Tether and USDC.
And it seems like, you know, this train isn't stopping.
You know, it's only kind of going up and to the right.
You know, even though crypto prices might be, you know, weak, we're still seeing this
new all-time high as in stablecoin issuance.
And I think there's definitely room for more experimentation for more decentralized stablecoins.
That's why I love what Hermetica is doing.
You're obviously offering a nice yield.
I think last I saw was 11%, which is quite a bit higher compared to other ecosystems. I mean, now if
you're lending out USDC on Aave, I think you're earning maybe 4%. So you have definitely a nice
way to kind of juice stablecoin liquidity across the ecosystem, which is great. I think we just
have to do a better job of getting the word out and just making sure users are aware because,
you know, because naturally the yields
kind of speak for themselves. And obviously there's a bit more risk for holding something
like USDH versus USDC. So as long as we can be transparent about those risks and get people
comfortable with those risks, I think we'll see definitely a lot of growth in stablecoin liquidity on stacks. I mean,
clearly, I think the leading stablecoin right now is a USDC, which clearly is not optimal.
And we definitely need more stablecoin liquidity in stacks. And I think Hermetica is probably a,
is a front runner to get to drive a lot of that liquidity moving forward.
to get to drive a lot of that liquidity moving forward.
Yeah, agreed.
Well said.
And, you know, we're going to see TradFi do TradFi things.
They're used to doing things a certain way.
And a lot of people are going to optimize, you know,
they're just going to use TradFi stuff just because they know until we make
enough noise in our neck of the woods and show people how much more efficient this is, what the
benefits of decentralization are, and how it benefits the individual. And I think at the end of the day, DeFi wins. And it's because we can move faster.
We understand this whole space better.
We understand this technology better.
We understand the principles better.
And, you know, we're really on the precipice of huge growth.
That's why I don't get too caught up in the day-to-day looking at the price charts right now with the whole world and upheaval for this reason or that reason. important here because at the end of the day what this technology allows is it allows for everybody
to have access to financial services and products and um trad fi has not done that up until this
point and there's no reason to believe that trad fi whether bitcoin's you know being used in trad
fi or not that that this will. We alone have the power to change
that. We alone have the power to change the destiny of individuals, communities, and even
nations by, you know, building the products that give people access to use hard money, to use,
you know, even today I saw Jacob, you know, put out a post about who's using stablecoins the most.
And right now, we might use stables, like I said, to move some stuff around, to open some longs, to set any other.
You have people who use this as a currency because their local currency is just so horrible.
Like this is,
this is real guys.
This is,
this is ultimately why we're here.
We want to give people access to all opportunities that we have access to.
And this is the best way to do it.
And that's,
that's why at the end of the day,
at the end of the day, I know we're going to win.
I know we're going to win.
Here, here. I wanted to pass it to
Mithil, but he's already had to
hop off.
I'm just bringing
on Hadan here as well.
Hadan, can you hear us?
I can. Can you guys hear me? Yes yes yes yes you were you were gone for a second
but uh okay my apologies but yeah my twitter ux for some reason is really glitchy today but uh
doing my best to stay on board yeah yeah yeah it's uh it's a rocky ship you, these spaces on X. Yeah, but what's new in Alex land this week?
Sure.
So, you know, last week we published our monthly newsletter,
which was a good recap of a lot of the progress we made in the past few weeks.
The announcements of Alex Dam, Alex AI, our partnership with the Jolts, which is the Taproots wallet,
how Surge 3 went. And most recently, we published just a few days ago, our March security update,
which has been our most significant security update to date.
which, you know, has been our most significant security update to date.
Really, after months of extensive efforts and legal battles,
we were able to recover over a million stacks
from seven of the 15 centralized exchanges
into which stolen assets had been transferred.
This effort continues. changes into which stolen assets have been transferred.
This effort continues. There's still eight of those 15 for us to move ahead with.
All this information we make fully transparent on the Alex Reopen page.
But that's, you know, it was a big victory for the team.
It's been a lot of blood, squirt and effort to get to this point.
And that's, you know's a testament to our commitment to make all users whole, both through our recovery efforts and, again, all Alex Protocol revenue goes towards recovery grants.
And so those were the big headlines from last week.
And going forward, soon, we may soon be doing the rebranding for Xlink.
That'll be quite exciting.
But that's all I can say for the moment.
Hopefully next week we have a guest
that can speak to that in greater depth.
But yeah, that's what I wanted to share
with the spaces today
and very thankful for the opportunity to do so
and join you guys every week.
Yeah, and on all the recovery stuff, what does that mean practically?
I guess it comes down pretty close to wrapping that whole episode up, right?
Yes, it's definitely a major step ahead. And having those recovery grants and uh you know the expectation
there being is you know we're all in this space we're all in bitcoin we're all in stacks uh
because we do have the vision that we are on a a fantastic protocol and blockchain
that has the potential to 10x and potentially 100x in the future
um along with that we expect to see a proportional rise in Alex protocol revenues and uh and so you
know it is very much our hope that uh as soon as possible we're able to uh to make users 100
whole and uh and from there you there, move on and continue growing
Bitcoin DeFi to its full potential.
Yeah, that's right.
That sounds right.
Very bullish, very excited about that.
And Leo, just to quickly bring it to you,
I mean, there's also a big week, or this week,
sort of the week we're in right
now is going to be a big one for stacking now specifically on the on the staked stx to stx
liquidity on um on bitflow it would have been great if the bitflow guys were here too so we
could talk about it together but um um but yeah basically from uh yeah what what i'm gathering
it's going to be um the new the new bitflow pair
for staked stx stx is basically going to make it much much easier and much cheaper to unstack
from staked stx or staked stx ptc like in in the middle of the cycle um right like any um
any more color you want to you want to add there and share kind of what users should be looking forward to?
Yeah, absolutely.
So, you know, definitely won't be able to give it justice.
You know, we'll have Dylan or Diego from Bitflow hopefully on the show next week to discuss in more detail.
But basically, they're optimizing the pool for the STSTX-STX pair.
So, we'll make it a lot easier to swap between those assets.
There'll be a lot more liquidity and less slippage as you move. If you want to, let's say you're
holding STSTX and you want to move back to stacks and you want instant liquidity, it should be a lot
easier and you'll take a little bit less of a hit and have better price execution if you want to trade between those assets.
And just from a high level to describe why that is. So if you're holding STSTX, the ratio between
STSTX and STX gradually increases as rewards come in. I believe as of now, it's like a 1.08 to 1.
I think that's the current ratio loss that I saw.
And that only just continues to increase as rewards continue to come in.
But they're implementing something called a variable midpoint.
And that basically means that, you know, that that that ratio kind of comes closer to one to one.
closer to one to one so that if you're trading between the assets, you have less slippage.
So that if you're trading between the assets, you have less slippage.
So be excited to hear from Dylan or Diego when they come on the show, describe some
of the more technical features of this new pool and what it means for users.
But I think it definitely is great for anyone that wants to gain instant liquidity on their
STSTX because as I mentioned, you'll have just better price execution and less slippage
trading in and out of that pair. And something else I want to mention that we actually did ship
at StackingDAO just recently as another option for instant liquidity. We implemented an instant
unstack tool or feature on StackingDAO So that also if you're holding STSTX
and want to swap that for stacks,
you will have to pay a 1% fee to access this feature.
But assuming that there's idle liquidity
or idle TVL on our platform.
And as of right now, I'm saying we have about 5 million
stacks tokens that are just sitting idly on our platform.
You'll be able to gain instant liquidity. again having to pay a one percent fee so you know that feature is is live as of today
uh and um just wanted to make sure folks here are aware that if you if you need or if you want
instant liquidity that the feature now exists yeah yeah definitely just like i think a lot on the
whole right a lot of improvements you know that i've also been quite involved in on just making the mid-cycle unstack experience better.
So obviously for native stacking, you cannot get out in the middle of the cycle.
A stacking cycle is two weeks, so it can be locked up for two weeks or less.
So yeah, it can be locked up for two weeks or less.
And yeah, that's quite constraining, right?
If you want to trade, if you want to maybe buy something,
if, I don't know, price moves in one direction,
which kind of would compel you to do something.
Now, staked STX and staked STXPTC, right?
Like basically the liquid stacking solutions,
they kind of solve for this right
so you can get out in the middle of the cycle um but that's of course you know goes one of
one of two ways right you either swap on a dex or you or you unstack with the protocol so there's
now this unstacking with the protocol instantly but it costs a one percent fee because it sort
of depends on available collateral
or available liquidity in the protocol.
Because if I mint some staked stacks today
right in the middle of the cycle,
then this stacks that I minted it with
needs to be stacked, right?
But it can maybe still take a couple of days
before the next cycle starts.
So in that window, that SDX could be used to,
is basically used by the instant withdrawal feature
to service withdrawals, which is quite nice, right?
But people need to pay a bit for that.
So that gets passed back to the stackers then eventually.
But the other, by far the biggest and most important way
to unstack mid-cycle from an LST is a DEX, right?
So you just swap it for STX on Bitflow.
But the current pool is quite unbalanced,
and the tech is a little bit outdated.
And what we're now going to get is a state-of-the-art state stacks to STX pool,
which basically always stays balanced, always stays 50-50 in there.
You should be able to swap at extremely low slippage
for very big sizes, up $2 million or so,
just to get out in the middle of the cycle whenever,
to really get the price even lower and the liquidity even better.
So yeah, that's a big one.
And that then also ties into something else exciting
that we're working on on the Zest protocol side,
which is e-mode and looping.
Because, you know, as you've maybe seen,
like one of the large assets on Zest is STX.
And a lot of people are borrowing STX against staked STX.
And with this kind of e-mode, we can basically allow people to borrow much more of STX against staked STX collateral.
Basically, you know, because we effectively, those assets are correlated, so we can allow for more risk, like higher LTVs,
basically borrowing more against the same amount of collateral.
And that can sort of allow for looping, right?
So that would maybe not be a feature we would add like today
because it's still a little bit risky.
But when the DeFi ecosystem is bigger,
we can add basically a button on Zest that says like, you know, 5x loop, right?
And you can basically 5x loop your stacking yield up to say 15%, right?
Or 20%.
And stacking yield today is like around nine.
So you could get all the way up to like, you know, maybe 20% yield on STX.
And of course that relies on the looping mechanism, right?
So it basically mints staked STX and it borrows STX.
With that borrowed STX, it mints more staked STX.
It puts this collateral again, you know, and it does that in like five times.
And, you know, provided the market is large enough and interest rates are stable enough,
that's the kind of thing we can offer.
So for the mega Stax DGens, you know, you can basically then, you know,
loop your way to Valhalla, right?
With great yields on STX.
So yeah, there's a lot of things coming, but they're all predicated also on the staked
stacks to STX liquidity working.
Because if you want to unwind that loop, you obviously want to be able to unstack mid-cycle
very quickly, right?
At a very
low slippage like if if you would do a 5x loop and you need to unstack it with the protocol you need
to wait two weeks then you know that's like that's 10 weeks to unwind a levered 5x loop right because
you need to for every leg of the loop you need to sort of unstack it but if the liquidity is deep
then this this works way better.
And yeah, so all contributing on the use cases that we can do with STX,
take the STX, take the STX, BTC, and more.
So I know I've said a lot of stuff here,
but maybe Lear, you have some more thoughts on this.
But yeah, I know we've talked a lot about it.
I think it just shows that, look, we're still here.
We're still building.
We're still shipping.
We're optimizing all of our products, you know, just making the best user experience
imaginable for folks that are interested in Stacks or Bitcoin DeFi.
So, yeah, I mean, I think we're just, we have our nose to the grindstone and, you know,
we just want to offer the best that Bitcoin DeFi has to offer, offer our users the best experience, offer the best yields.
And, you know, we're always very responsive to our users.
So, you know, if there's any feedback or anything here in the, anyone in this audience that thinks that we should work on or things that we should improve upon, you know, our DMms are always open and we're always open to feedback yeah yeah some some good some good stuff coming and um does that mean you're
are you like transition are you turning zest into kind of like the the yearn finance of stacks is
that what's going on oh it's not necessarily like a year and yearn thing i mean if you if you look
at like camino for, for example,
on Solana, they also, they're a landing protocol.
And so very similar to, to Zest, but they,
they have these loops in their, in their UI.
So you can basically, instead of like, you know,
pressing like 10 buttons to like borrow and collateral
and borrow and collateral, you can kind of do it in a,
in one click, basically like wrap all these calls.
So it's more of like a little abstraction on top.
This is still something that we're working on.
Like today, if someone would want to loop,
I'd recommend maybe just doing one loop.
Just post your stake, the STX on Zest,
borrow some STX.
And the interest rate has been very stable around like like around eight
percent i would say average over the last um over the last two months um but you can check in the
in the in the assets details page on stx but it's roughly eight percent so that means that yeah if
you post staked stx collateral borrow stx and stake that again, you're basically earning another 2% on your STX.
So you can get your stacking yield from 9.5% to 11.5%.
So if you want to try that and get comfortable with it, this is what I would recommend doing today.
recommend doing today.
It's what I do too.
But yeah, to really go higher and to launch this feature
where you can sort of, you know, go 5X in one button click.
We obviously need the migration and the new barrel bit flow
to be very liquid and that to go well.
So yeah, that's going to come tomorrow.
So all eyes on that and then
we can expand from there and what's the main risk for someone that wants to engage in this
strategy is it that maybe the um the interest rates that you're borrowing blow out or they
they increase and make it unprofitable or um is there anything yeah so if the if the if the interest
rates to borrow at if they would blow out for a considerable period of time, then it's, A, the position is unprofitable.
And it can become so unprofitable that you hit liquidation threshold.
Because the debt just increases, it piles up.
And if it's worth too much versus the collateral that you have,
then you become open for liquidation.
And a liquidator can come in to swoop up the collateral and close the position.
So that's kind of what the main risk is.
I mean, I'm one of the large users of this.
So I also, I'm sort of very closely monitoring the interest rates
and, you know, unwinding a bit of my loops,
like whenever it gets too close and stuff like that.
So yeah, that's the main thing that it would take.
So basically keep an eye on the interest rates on SDX.
And if those get too high for too long,
you need to maybe pay down a little bit of debt.
Awesome.
Well, I know we have a few minutes left in the show
before we hit the top of the hour,
but maybe if anyone in the audience
has some questions for us.
Yeah, I think also,
I mean, I'm obviously hosting here.
Maybe we should go towards the outros as well.
I have like a hard stop at the end.
So I would have to get going.
But also happy for you guys to stay on
if you want to take some audience questions soon.
It's up to you, Lior.
Not sure if you have a hard stop.
Yeah, let's just go with the outros then.
Yeah, so as always, great to be here
and discuss everything Bitcoin DeFi and Stacks DeFi.
Again, how to grow of StackingDAO.
If you want to earn the Stacks consensus rewards,
which is average between 8% to 10%,
the best way is to go to StackingDAO.com,
mint one of our LSTs,
and earn those sweet rewards in the flavor of your choosing,
whether that's in Stacks, SBTC,
or native Bitcoin L1 rewards.
StackingDAO is the place to do that.
Yeah.
Awesome.
Hadan and Jack, do you want to go next?
Sure.
Be sure to follow the Alex account for the latest updates.
We've got a lot coming out in the next couple of months between the
for the street automated market maker, other features, the excellent green brand, I tease that,
and more to come, as well as a bit of a tease that a search for maybe in your works.
works. And so, yeah, give us
And so yeah, give us a follow and stay up to date on the latest
a follow and stay up to date
on the latest
analytics and DeFi opportunities. Thank you
guys.
This was a
great space. You know, it's
always really cool to hear about
what's going on in the realm
of DeFi on Bitcoin
and specifically in Stacks.
And here we are,
we're discussing ways that we can take our assets,
put them to work for us in an efficient way that we, you know,
are in control of our own destinies.
This is so far removed from the realities of the, you know,
traditional system that we all grew up in and so many people are stuck in
that you can't help but just be super bullish
when you hear this and you realize the ramifications
of what this actually means.
So it's a pleasure to be here.
Looking forward to talking to you, Chads, again.
I hope everyone has a great day.
And be careful what you read today
because they'll be eating snowballs in
hell before i ever ever sell my bitcoin or stx for xrp so you guys have a wonderful day
yeah that's right that's right i don't do you want to share a few words?
No, just again, glad to always share the spaces with you guys, catch up on everything that's going on. And yeah, hopefully we see the market slowly turn around,
realize that the pack we build is long term it's real it brings the necessary
utility to bitcoin that is uh that is necessary to it and so very bullish stacks very bullish bitcoin
um and let's let's go amazing amazing amazing amazing amazing then um yeah make sure to give
zest protocol follow they're up here as a speaker to uh stay up to date on all the all the great Amazing, amazing, amazing, amazing. Then, yeah, make sure to give Zest Protocol a follow.
They're up here as a speaker to stay up to date on all the great stuff in the Stacks ecosystem.
I see some people waving very violently from the audience.
You have to go, unfortunately.
But no worries.
We're going to be back next week, 10 a.m. Eastern time,
same time as now, and Arnold does now, like an hour ago
when we started. And yeah, we're going to
have more stuff to share about
all the developments in Stax DeFi.
Looping, levering up,
borrowing stablecoins against
your assets, and more.
So very excited about that. We're here
for the long run.
And yeah, it's always great chatting with you
guys and yeah, really appreciate everyone tuning in.
So on to next week.
Till next time, have a good one, guys.
Bye-bye.
Bye.
Bye, everyone.
Take care. Thank you.
Host
stacks.btc
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