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Vault Bridge 101: The revenue lego for any chain
Recorded: June 23, 2025 Duration: 0:50:33Space Recording
Short Summary
Vault Bridge is launching as a groundbreaking DeFi product from Polygon Labs, aiming to enhance chain profitability and yield generation. With support for major tokens and a focus on risk management, it is set to attract significant user engagement and partnerships across the blockchain space.
Full Transcription
Thank you. GMGM everyone
happy Monday
very exciting week
we actually just had
an exciting announcement
but we will get started
momentarily sit back
let the space fill up for a few minutes
and we will get people
on stage and getting going.
So until then, enjoy the music.
coming to
stop She hit around corners and she lived on the bed
She killed it with kisses and the romance she fled
With every bubble she sank in the dream
And washed it away down the kitchen sink.
The gone days are over, the gone days are gone.
The horses I'm in, so you better run.
Run, pass for your mother, pass for your father.
Run for your children, for your sisters and for brothers. Leave all your love and your love behind. I'm gonna go, I'm gonna go
So now I've never lost it
What is my name?
Except for all these days
You had a nice love left to your dream
Oh, happy Monday!
Happy Monday!
All right, everyone.
Happy Monday.
Let's get a few other people on stage.
I am super excited to talk all about Vault Bridge.
It is probably my, I would say, one of the biggest product offerings.
I would say it's very exciting, especially for change. So we will start talking about it and get going. I do we have everyone. We have Sebastian. We have Mark. We have David.
David, Trevor, if you, I think I invited you to speak, but if you want to request an invite
and get up here and then we will get started.
I also just want to make sure, can everyone hear me?
Give me a thumbs up in the audience if you can hear me.
Yep.
Okay.
I'm like, fantastic.
I didn't know if I was just monologuing to myself and no one could hear me because that
would be kind of embarrassing, but glad we made it. So we'll get right into it. We'll start with some introductions and then get to some of the questions. If you guys can do us a favor, in the bottom right, there'll be the little quotation. If you can like this space, retweet it, share it with your audience. That would be fantastic.
and like this space, retweet it, share it with your audience.
That would be fantastic.
So everyone can know the beauty of Vault Bridge.
But why don't we start with you, David?
Why don't you just give a quick introduction?
Hey, y'all.
I'm David Silverman.
I am the SVP of Strategy and Product here at Polygon Labs and an advisor to the Katana Consortium.
Super excited to chat about Volt Bridge today.
It's something we've been cooking up with an amazing group of partners you're going to hear from today.
And look forward to the whole litany of chains that will be joining us this year.
Awesome. Yes, thank you.
And we'll go on to going left to right on my screen.
Mark.
GM, everyone.
My name is Mark. I'm on the growth team at Morpho.
I'm super excited to be on the space today and chat about the Vault Bridge.
Awesome. Love it.
And Sebastian?
Hello, everyone. Sebastian, co-founder of Stackhouse. We are the leading creator on Morpho and I. Super excited to be chatting about Vault Bridge 101.
And congrats to the Quintana team.
Excited to dig into things.
Awesome.
Yeah, so just to give kind of a high-level overview,
really what Vault Bridge is,
is a product that leverages AgLayer's Unified Bridge
to take bridge deposits from any stream and turning that into revenue.
So it shifts how we think about chain economics and then give the chain steady revenue through a way that isn't just token emissions and kind of diluting their own token.
and kind of diluting their own token.
So we'll start with the first question for you, David,
but can you recap kind of different stacks and teams fit together
through VaultBridge and then kind of explain
what VaultBridge does at a high level and the problems that it's solving?
Yeah, VaultBridge ultimately is designed to help make chains profitable and earn revenue. That's realistically kind of it. The old model for chains to achieve sustainability was transaction fees.
of how chains can kind of grow, but they're not necessarily aligned, right? As we keep trying to
bring transaction fees lower and lower to allow more and more users to use the chain, right? Chains
are cutting into their revenue. You can't just print tokens forever. There's got to be a real way
for value to be captured by these systems. And Vault Bridge was a way to say, hey, as a chain
grows, as more TVL is brought to a chain, a chain's revenue should grow proportionally.
And that's being done by taking some of the assets in the bridge, USDC, USDT, USDS, ETH,
WBTC, and putting them into Morpho vaults curated by some of the best in the space,
Gauntlet and Steakhouse, to allow for yield to flow to the chain operators.
And with some chains choosing to give that yield back to users,
like an example of Katana,
there's some chains that will be coming soon
that will be using it to offset their RAS costs
or to return value back to token holders.
It really becomes a new building block.
And while we're starting with the Aglaire Unified Bridge
using some of the Aglaire technology integrations
with other bridging providers,
we look forward to taking this to all sorts of stacks, all sorts of use cases, and having
it be a core foundational building block for teams looking to build chains, whether L2s
or L1s going forward.
Awesome.
Yeah, I love that you kind of answered.
It's funny, I had like follow-up questions where like, is it only for EVML2s?
But you kind of touched on it where like it's really designed.
And this is one thing that I think is really cool about it.
It's designed for basically any chain can do it.
So I think this is probably a question for Mark first.
And then Sebastian and Trevor, if you guys want to touch on it later.
But what tokens right now does Vault Bridge support?
And then what would the process look like to add support for additional tokens?
Yep, I can answer that.
So right now, the Vault Bridge supports USDC, USDT, WBTC, and ETH. supports uh uscc usdc usdt wbtc and um eth those are the four kind of canonical assets for the
vault bridge um i think was your was your second question asking about like how you would add new
assets to the vault bridge or um kind of how you, what was the second kind of part of your question there?
Yeah, so like, is it possible to support additional tokens?
So let's say you have an L1 that's like,
oh, we want to connect to AgLayer
and we want to support our native token.
Is something like that possible to do
and how would that happen?
Yeah, that's a good question.
So I think that goes back to
kind of the principles of Morpho in the sense that Morpho is a completely permissionless protocol,
and we can support any ERC-20 token as a loan or collateral asset. And so in theory, yes, right? Like any token can be supported as a vault bridge assets
on Morpho itself, right? Just because you can create a Morpho vault for that.
I think you need to go back to kind of the main use cases of lending on Morpho. And the reason why you need to consider that as one of the main questions of if this asset can be used
as a vault bridge asset is what are the main assets
that are actually driving interest revenue on Morpho, right?
And those are the type of assets that you want to support
use cases for as vault bridge assets,
just because the yield of
course from morfo is um then actually sent back to the um rewards manager and the ultimately um
the the treasury of the the team that has now like deposited into the vault bridge that owns
the contract so um that's the so that like those are some of the considerations.
And right now, the largest kind of assets on Morpho that users take out as loans are USTC, WETH, and USAT, and also WPTC.
So deviating from that list, of course, there's like small edge cases. But, you know, the reason why we
went forward with those four assets for Katana, who's kind of like using the first implementation
of the Vault Bridge is just because those assets are the most frequently borrowed
on Morpho. So that's just some of the like, the strategy and the thinking that goes into
the asset selection. I would, I would jump in real quick and say,
while Morpho is open source,
Wallbridge is not currently.
If you are interested in adding your asset
to be supported in Wallbridge,
definitely please reach out to the Aglare team.
We're in progress of getting a couple new assets onboarded.
But yes, it's great working with a permissionless system
like Morpho allows us to spin things up quickly
and easily. And definitely, though, the key thing is ensuring there's proper borrow demand
for these assets before making the investment and setting up the ball bridge system for them.
That is great. Thank you. Yeah, no, that's really interesting. I do like the idea of like,
I don't know, like, here's the state that it is,
but there's almost untapped potential for what can be, what can be done. So as someone who I'm
very interested in this, but like, and I think it's a really great concept, but there's always
whenever you earn yield, it doesn't, no is free, and there's always additional risks.
So I'll ask this question for, we'll start with Sebastian and then Travers, because I think you guys will have similar answers, but be able to help out.
What are some of the added risks?
And then what guardrails are in place right now to protect against those risks
yeah sure i can start on this one so obviously when you are earning a yield there is a counterparty
and uh i will uh i will go in some of the risk obviously just like any disclosures there is
always plenty of risk but you need to keep in mind as well that the vault we designed
for usdc is kind of a quite similar to stax usdc that we launched one was one of the first
vault on morpho in january january 2024 and it's there is no bad depth since then, and it's running, and there was never a liquidity crunch neither on this world.
So to touch on the main key risk,
I mean one is the smart contract, obviously,
the mitigant because you're adding a smart contract,
just like any bridge and so on,
you're adding smart contracts, so there is always a risk.
So what is great with Morpho is that the Morpho blue,
the market layer, Morpho is two layers,
there is a market and the vault.
The Morpho Blue contract was deployed 18 months ago.
It cannot be upgraded, so it's working.
There is billions of TV on it, nothing ever happened bad.
So on this one, we are kind of safe.
Then we have the individual markets those were
deployed quite a long time ago as well on this market smart contract so you know that the
configuration should be more or less good as in the the chain encroachers everything is uh quite
fine on this error i would say you have quite i wouldn't call it safety but i sleep well
if you if i can put it this way then you have the counterparty risk because obviously you are
lending against btc for instance or cbbtc could be more precise that's one of the biggest collateral
if the price goes down by more than 14 or or 10% in one block,
you might have an issue.
Now, obviously you can look at the history
and it doesn't happen quite often
that the price of BTC is going down by more than 10%.
And obviously never happened during this period.
And the last one that currently is fine as well,
and just on the previous one,
on the lending against the collateral
that can decrease in value.
That's why we, for the VOL bridge,
we are only onboarding the most blue-cheek collateral,
which are RAP-State-TIS, CBBTC, and RAP-BTC, if I'm correct.
So this is quite safe,
in the sense of it's going around for quite a long period of time.
And as I said, most of the lending is against CBBTC, which is quite active on the market.
Then you have the liquidity risk.
And let me touch down on this one, because I think this might be the most important risk you might face.
Meaning currently there is a 60 million in the bridge, or in the volt bridge of our USDC.
You might wondering if even one gets out,
does it work or not?
So, and you can go on the Morpho page,
that's one of the value of being free transponents.
You can see that there is currently 27.5 million of liquidity.
Now, Morpho is designed in a way that if you reach this, we have an external
setup at Stackhouse that will reallocate liquidity to the vault. And I can say with quite certainty
that if everyone wants to exit from now, in one hour, everyone can get out. So liquidity
is something you need to take in order, but it doesn't mean that there is no liquidity.
And I wouldn't say it's a significant issue,
except if the Volt Bridge USDC is going to 500 million,
then might be a bit more of an issue.
But again, at the same time,
I don't see why 500 million of USDC
would exit the ag layer at the same time.
Especially if you are going from one layer two that's supporting
the ag layer to another one, obviously you are not exiting the bridge, so it doesn't
impact equity.
So I would say there are those main three risks, smart contracts, risk of collateral
going down super sharply.
It doesn't matter, it's not an issue if CB be cbbtc is going down by 99 over the next
month that's completely fine if except for bugs obviously but that would be fine for the learning
market because there would be some acquisition just if it goes down very sharply let's say 20
in five minutes and the last one that i was saying is a liquidity which is more a temporary issue
uh but still something in the you need to take in account And the last one that I was saying is a liquidity, which is more a temporary issue,
but still something you need to take in account.
Got it. So like, basically it's the very, very far edge case
of that we haven't really seen ever
that you just almost have to set the threshold
for us somewhere.
So it makes total sense to me.
Travers, is there anything you want to add to that?
Yeah, I think Sebastian did a great job of laying out the risks.
I think, you know, the last piece is really curator risk, right?
And that's why I think Steakhouse and Gauntlet were brought on board here. You know,
you want to ensure that there are sophisticated actors who are able to monitor all those variables
that Sebastian mentioned and ensure that, you know, at the vault bridge level, which is really,
I think, one of the highest security, if not the highest security
application of lending that we've seen.
It's pretty serious.
It's users, you know, depositing their funds into a L2 bridge and expecting to have that
capital able to withdraw as quickly as needed and be able to essentially secure an entire chain, right?
So I think all those risks Sebastian mentioned, as well as smart contract and curator risk,
really at kind of the infrastructural level is super important.
Awesome. Yeah, you definitely, I would say that's probably when you have the most problems or I would say like people get the most upset is when they are unaware of the risk versus like, okay, I know the risk.
I'm willing to take this risk and therefore I'm doing it.
So I do think it's definitely important that those are kind of laid out.
Everyone involved has done a very good job at mitigating the risk and setting the thresholds for risk in a way where it's really designed to be more safe than high, high, high yield bearing, because we're talking about Vault Bridge. And Katana is going to be the first chain that goes live with Vault Bridge.
Public mainnet is going to go live at the end of the month.
And right now, I know that pre-deposits on Katana, I think last I checked about an hour ago, was around $180 million.
It was around $180 million.
So can you explain the flow for those tokens and then kind of how it works as far as revenue for the chain as the pre-deposits ramp up?
Of course, yeah.
several pre-deposit campaigns, but just VaultBridge alone is already sitting at 121 million.
If it was an independent vault management, it would be the 10th largest of everyone,
obviously far behind Steakhouse and Gauntlet, which is why we're super, super happy to have
experts like them helping make sure everything is safe and moving over there. The flow of how it
works, users deposit into Vault Bridge. They get back,
you know, if you put in one USDT, you get back one VBUSDT. That is then bridged over to Katana
and available for you to use in all of the DeFi applications there, such as our great friends at
Morpho, Sushi, Yearn, and many more. You know, the yield will be passed over to the Katana
Foundation on a periodic basis from the Vault Bridge team, which will grab the yield periodically off of Morpho and send it over to the Katana Foundation.
And then they will be using it to incentivize pools, both for liquidity pools as well as vaults and borrowing and supply over on Morpho L2, as well as many other applications over on the Katana L2
as a way for users to go earn that yield. So all yields from the Katana perspective will be
recycled back into the ecosystem. It's a great example of something that a chain can do
if they want to use Vault Bridge. So, you know, it's been very fun looking at DefiLama and watching,
this protocol start to climb the ranks.
And looking forward to launching not just with Katana, but the series of chains they'll be joining shortly after, as well as some other creative use cases.
Yeah, I've been watching DeFi Llama and seeing Katana pre-deposits like climb up the ranking list and find it fascinating.
And I do think it's, I would say like a great use case or example of why Vault Bridger is so powerful is you can create this product.
You can get all these users excited.
And then a chain can really focus on their own applications. And if it's a specific
chain, incentivizing their users or making the user experience so much better for what their
users want, because you have all of this added revenue. So like with Katana, you have so many
people that are very passionate about DeFi, very willing to pre-deposit on a chain that isn't live
because of the promises made by Katana Foundation or how Katana is going to use that revenue
generated. And I think it's just this brilliant mechanism where you can get, I don't know,
like now you can do it for a gaming chain that may want to reduce the gas fees of people transacting or whatever the purpose of the chain is.
I think it's a really, really nice use and way that I think it's just you're going to get a huge onboarding for chains when they start to leverage Vault Bridge to enhance the user experience.
start to leverage Vault Bridge to enhance the user experience.
I think it's really, really exciting.
Now, this is for Mark on the subject, and we were just kind of talking about it.
But where do you think we'll see the most adoption for Vault Bridge in terms of projects
that it will appeal to?
Is it going to be L2 chains?
Is it going to be other chains?
What do you think is most exciting about VaultBridge
and why will people come and use that product?
Yeah, I think first and foremost,
I think a lot of new L2s
coming from any of the largest RAS providers
probably will start looking at this implementation
and looking at this use case from Katana and using it as a playbook for their own ecosystem.
Of course, this makes a lot of sense, particularly for DeFi-oriented chains.
So I think that's going to be one of the core use cases. of course, other existing L2s or even EVN equivalent L1s, this could also be applicable
to them just because the whole idea of generating this additional yield for your ecosystem obviously
is super attractive. I could also imagine in the future a world where the Vault Bridge kind of fits into Morpho's, what we call our DeFi mullet strategy.
And if you're not familiar with the meme yet, the DeFi mullet is when we talk about the DeFi mullet being like fintech in the front, DeFi in the back.
like fintech in the front, DeFi in the back.
So fintech apps implementing like DeFi components
and DeFi like sources of yield
in order to like kind of like differentiate the product
and add some interesting kind of like use cases for their users.
And so, you know, I can imagine also fintechs
also taking like a look at the vault fridge
from a very high level and saying,
hey, how the Polygon Consortium has really structured the vault bridge and how it can offer predictable weekly payouts.
And that's really an attractive offering for a fintech who wants to implement a yield product.
It's a super simple integration.
It's very straightforward.
So those are, you know, some of the kind of the benefits that I could see a fintech seeing for integrating something similar to the bulk bridge.
So, yeah, I think it's going to be changed.
So, yeah, I think it's going to be changed, but then I also think maybe there's going to be some interesting fintechs who, you know, want to take a, you know, want to be a first mover on something like this.
Yeah, no, that, I do think when people finally get it, they go, oh my goodness, this is, this is brilliant.
finally get it they go oh my goodness this is this is brilliant um like i feel like you're
actually this is just my personal take is you're going to see a lot of l2s that aren't using vault
bridge and their users are going to look at katana and go like wait a second why aren't we doing that
exactly that is so funny yeah yeah no i mean it's to be super interesting. I actually, prior to Morpho, I worked at Optimism, right?
And so I was very familiar with all the L2s.
And there's a lot of DeFi-focused L2s right now.
And I could see a lot of people saying, hey, that looks like a really scalable growth strategy.
Let's go for it.
So excited for all those conversations.
It's funny you talk about fintechs.
I'm not going to dox them,
but I do see the alt of the lead devs of a fintech
that will be coming to ball.
Lurking in the space.
Oh, my gosh.
David, is that from Alpha?
A little Alpha leak
that we like to do on these spaces.
Very cool. Wow. Didn't expect that from you, David,
but hell yeah.
I was going to say,
I don't think David can ever not leak Alpha
on spaces, so
everyone, if you see David speaking on a space,
certainly listen, because you will get some
really juicy details.
And then this question is for Trevor and Sebastian.
And so Katana has set out
kind of how they want the yield to be generated.
And then, so I have a question. I guess it could fall
under governance maybe or kind of what's done.
But can chains that come on in the future opt into
conservative or aggressive portfolios? Like, do you see there being almost a marketplace of
strategies where either chains or if they are governed by a DAO, just picking, like, I would
say the amount of acceptable risk that they're willing to take on.
How does that process work?
And we can start with you, Trevor, if there's any wiggle room, I would say, within Vaultbridge.
Yeah, absolutely.
I mean, look, this is what Morpho's primary innovation and competitive advantage, I think, is, which is that it allows
you to essentially access a marketplace of risk versus reward, right? Whereas some of the previous
lending markets are protocols that were launched, you know, focused on one or two kind of service
providers setting parameters for the entire protocol.
Morpho really allows a modular approach, right?
So at Gauntlet, we offer multiple vaults, and it's the same over at Steakhouse, right?
That kind of serve towards a risk-adjusted yield profile, right?
Whereas for Katana and kind of this first Vault Bridge iteration, we opted for
our most conservative strategies. You could potentially see a world where other protocols
look for different risk reward profiles, right? And different allocation methodologies. And I
think that's something that we'll probably see
as Vault Bridge gets adoption.
You're going to see a diversity of L2s
who have potentially different views on risk
or different purposes,
or even specific collateral.
Maybe a fintech or an institution wants a particular asset
supported by Vault Bridge that has a different liquidity profile
than kind of these blue chips that Katana has opted for, right?
So I think Morpho by nature has kind of provided
an extremely modular and exciting route for these L2s. And I'm super,
super excited to see kind of what comes down the pipeline, especially around the unique collateral
side and some of the interesting challenges that come along with that. But that will be really,
really fun to solve. And I think there's some super unique opportunities,
especially on the institutional RWA side
for Vault Bridge in the future.
Yeah, not much, but I think one thing we need to understand
is that when you are making a bridge,
you need to cater to the most risk adverse users or bridger.
So that's why the vault on the vault bridge layer
will always be maybe a bit too safer for some users.
Might say, well, we are leaving yield on the table,
but it should really be the most safest for the,
or good enough for the most risk adverse breeder,
so the user going to the layer two,
otherwise this person will not be feeling safe
moving to the layer two.
So that would be really something to avoid.
And that's why for those votes,
it's really institutional grade
the decisions that was made and I cannot i cannot like it no that makes sense it's almost
like so if i understand you correctly it's like yeah you can have this marketplace but you're
going to uh within certain parameters you can't just go like a chain can't say whatever we want
to do 100 times leverage uh to long this asset no, we're not going to do that.
There's still somewhat of a risk limitation that you can take on.
Trevor, you said something interesting about RWAs, which I think is a really fascinating kind of like definitely on the edge,
but something next.
So like, what is one question is,
is there anything on the roadmap for this?
And then next of like, what does that look like for RWAs?
Like how does that play out in Vault Bridge?
And it doesn't necessarily have to be perfectly thought out
because I know we're not there yet,
but just kind of maybe at a high level,
how do you theorize it working?
Yeah, that's a great question.
And it's something we're really on the frontier of on the RWA, levered RWA,
all the way down to like, could we support VaultBridge for RWA assets? assets i think when you start talking about rwas really um the the largest unsolved problem uh in
a lot of cases is liquidity right um if you need liquidity in the market is there a route to access
fast liquidity for some of these more sophisticated rwas with potentially complex legal rappers, you know, you're introducing quite a bit
of complexity. I think a lot of these problems are being actively solved. I don't think we're
probably going to see it, you know, next month or anytime super soon, although perhaps David has
some alpha he wants to trickle on the rest of the spaces here.
But I think it's something that's interesting, and I think it's something that we'll continue to explore.
And we're continuing to innovate on the liquidation side.
Instant and atomic redemptions are one potential route to that.
like redemptions are one potential route to that.
But yeah, I'd be curious what others have to say,
especially Mark and David on that front,
if there's anything there that they see.
I mean, unless Mark wants to jump in,
I was going to say one of the things we're most excited to see
help unlock R2 is going to be Morpho V2. We're super, super excited by the new expressiveness that it
allows in the V2 of markets for actual fixed duration lending. That almost feels perfect for
the use case of BallBridge where it would actually allow for the curators in this case,
but Gauntlet Steakhouse to more accurately lend out the collateral according to
what the different chains or profiles are,
as opposed to kind of a one size fits all mentality,
as well as much more safely integrate RWAs into a system
and also allow for loans to be taken out
on other chains like Polygon POS,
which is the thing we're super excited for
because we're building a great RWA universe over there.
As for the instant redemption and building out liquidity for these RWAs from a liquidation perspective,
we have a great close relationship with Agora and a lot of what they're doing of the instant
redeemability of various RWAs directly into AUSD allows for a great liquidation pipeline and
working with them on building that out. Hopefully we can see Vault Bridge take advantage of that
as that develops.
I wouldn't say that we're gonna be first mover
on a lot of these things,
but definitely moving with size and moving with intention.
And so excited to see Morpho get the V2 code out
for Gauntlet and Steakhouse to get comfortable
using that code base and demonstrate some vaults
in the wild and then when the time is right, you know,
Vault Bridge will definitely move over as well.
Mark, do you have anything you want to add?
Only thing I have to add is that David should be
on the Morpho BD team because that pitch for V2
and what it unlocks is exactly what we're thinking about, right?
Like fixed rate lending has, you know, a massive TAM.
And also part of the properties of V2 is, you know, cross-chain functionality.
And so, yeah, those are, you know, we're rolling out V2 iteratively.
And once V2 is kind of like fully rolled out, then, you know, I'm excited to get Vault Bridge kind of implemented into the V2 as well.
No alpha leaks on timing, Mark?
No, see, here's the difference between you and me, David.
You know, I'm keeping this alpha to my chest for today, at least.
Maybe at ECC I'll start kind of spreading some alpha, but I want to kind of keep it close to my chest for today at least maybe maybe at ecc i'll start uh kind of spreading some alpha
but i want to kind of keep it close to my chest for now make sure to subscribe to mark's private
telegram group that's where all the others yeah no it's funny i was uh like reading through the
questions that we had my like unrelated to to necessarily Vault Bridge, but I was just super excited to talk about Morpho V2 because I was, like, I think the, it's, like, a really, really fun, even just for the individual user, it's a great advancement where it's, like, okay, you can have this modular infrastructure. And I think that's, um, personally, I kind of think that's where
the whole space is going of like, it's going to be modular and aggregated, but you can
have people really build, uh, the custom, like basically customize everything they want to do,
which I, uh, think is brilliant. Before we continue on, I do want to say anyone in the
audience, if you guys have questions, please
comment on the space because
we'll take some time at the end to answer
any questions you guys might have, whether it's
specifically about
Vault Bridge, if it's about something with
Morpho or Gauntlet or Steakhouse,
any of those questions, please feel free
to ask because I definitely want to make
sure everyone who tuned in
can learn what they want
to learn. But yeah, I guess this is a question for David, but what does Vault Bridge, what role
does it play in the broader AgLayer thesis? Like really what, yeah, I would say that's,
that's really the basic question of like,
how?
Yeah.
I think the broader role it plays is,
you know, it's a product built using the interoperability tech
that we've got from Aguilera,
using the Unified Bridge,
and really starting to take its learnings.
I think what you're going to see from the Aguilera team
over the next couple of quarters
isn't just continuing to iterate on
what it means to build great cross-chain foundations in terms of messaging and asset
transfers, but is a suite of products built on top of it to actually be consumed by end-user
chains and users. And that's really kind of what we see with VaultBridge, right? To be clear,
VaultBridge is designed for the types of chains that Aglaire is supposed
to connect to.
And additionally, Vault Bridge is going to be compatible with multiple interop solutions
using kind of Aglaire's cross-interop tech that's rolling out.
I would expect to see similar style products of like, how do we actually operate in a world
where there are multiple interoperability solutions, there are multiple messaging bridges, and how can chains leverage that and leverage those features into
enhancing their business models? So things that you see coming out on POS and coming out on Katana,
if you're a chain architect and you want to use some of these mechanisms,
odds are it was built by the Aguilera team and always happy to license that out.
always happy to, to, to license that out.
No, that's, that's fantastic. Um, I guess the,
a question for, and, uh, we'll ask Sebastian,
pass it over to you, but what happens when a strategy,
I would say underperforms, um, like where,
what happens in that case and how does that flow through
can you be a bit more specific on what you mean when a strategy underperform
yeah i guess like so let's say a chance of like i don't know a strategy says we're going to get
five percent yield and it underperforms and gets 1% or 2% or even doesn't generate a return.
What kind of happens then?
Because obviously there's risks involved in the curation and I'm just curious.
And maybe it's a question that actually can't happen and then you can just call me an idiot.
It wouldn't be the first time.
But I guess that's my question of if I'm a'm a developer, no, a chain, it's like,
can it fail? Can it go bad? Like what, what happens then?
Yes. So that two, two way, two way of answering this question. So if you want to look at the
micro level, as I said, there are three markets that you are allocating to. And actually, every market is separated.
That's one of the key features of Morpho,
is that markets are completely segregated.
So the risk is clustered only two to one,
and we have a fail safe to avoid
the proliferation of the risk.
But also we are running every, let's call it 30 minutes,
an algorithm to try to optimize.
Let's say someone is depositing a lot of USDC
against the Vrab BTC,
then we might remove some USDC because the yield is not enough
and put it in a better market.
So that's the micro, and we have algorithms
that run automatically.
We don't apply discretion here,
but algorithms are trying to optimize along those routes,
just to provide the best experience for users and that's what is also the value of having a curator.
Then on the more macro level or longer term, obviously the DeFi is not a space where you can go on vacation for five years,
come back and it's the same. Obviously, if we think we will evolve, we touch it, that there will be more
real asset, there might be a new kind of assets, like, for instance, last year,
it was mainly VBTC, now it's more CBBTC, that is the collateral of choice on
Northo, CBTC is less than one year old.
So obviously, there are some evolution, we need to do diligence on new asset
class that some borrower wants to be able to add them.
So again, on the MicroStrucure, we are optimizing in real time to get the best yield along those markets that were pre-accepted.
And on the longer term, we are always looking for how can we maximize liquidity and yield by adding new
collateral type.
And obviously, as we touched on as well, with more 4B2, there will be new tools at disposal
to improve the performance.
But overall, it's still market-based.
If the risk-review rate of the US government is going to zero, If Bitcoin is going down and no one wants to
ball against it, then obviously the rate will be lower. Let's call it 1% or I don't know
what it will be. We cannot make miracles, but by adding new asset classes and extending
the toolbox, if you want, we will make sure that we achieve our goals.
we achieve all good.
That is a brilliant answer.
I love it.
No, so it does.
It's one thing I learned about talking on the space of like the teams that are
building Aglayer are so smart and think of everything.
So it's always fascinating when it's even like,
what happens if it fails?
It's like, well, we have that covered too.
So I guess the final question before we go to closing statements i'll ask you david um is so vault bridge is a product for ag layer and uh ag layer connected chains does that
mean it's if you're not in ag, you don't have access to it?
Or what's the cost to use it for AgLayer chains or other chains?
Would be the open question.
Yeah, so VaultBridge is free for AgLayer chains.
If you are an AgLayer chain already and want to switch to it, please reach out.
If you want to build on AgLayer, we love and recommend you to do so.
And this feature is available to you. But Vault Bridge is not exclusive. There is a good number of chains that we are working on board before the end of the year that use alternative stacks, alternative
bridging methods, other popular interoperability solutions, and we are working to support those.
You know, if you are one of those or launching one of those, again, please get in touch or talk to your bridge and interop and say you want Vault Bridge, we're happy to get it set
up. I would say it is not exclusive to AgLayer or it's not exclusive to the AgLayer Unified Bridge,
but it's built using AgLayer's multi-interop solution tag, which we're very excited to begin
rolling out. Awesome. Yes, thank you.
So even if you aren't connecting to AgLayer and you are a builder,
it is accessible to you.
I think that's like, it's an exciting ethos where like AgLayer literally is
meant to connect all of Web3 and make it seamless.
And it's like, even if you're not an AgLayer chain,
you still have access to this product, which is really, really cool.
But, yeah, we are coming up to, I like to keep these spaces about 15 minutes.
So we have some time.
But, Mark, is there anything you want to leave the audience with?
Sorry, I was finding my unmute button.
Sorry, I was finding my unmute button.
Well, I guess my closing statement here is,
if you want to actually try out the Vault Bridge
and kind of understand more about it, right?
The first implementation of it is going to be on Katana,
and so you can actually participate in the pre-deposit campaign,
which assets that are put into the pre-deposit campaign, which assets that are put into the pre-deposit campaign
will be put into these Morpho L1 vaults
and will be the VB assets on Katana L2.
So I guess that's my call to action to the audience
is to go check it out
and let us know your thoughts.
Awesome. Yes, thank you. And Traver,
is there anything you would like to leave the audience with?
Yeah, I just echo what Mark said. We're very excited about this.
It's been a pleasure working with both the Polygon team and the Morpho team on this,
and we're super excited to continue to see Katana growth moving forward. So yeah, congrats to
everyone on the launch and very excited to continue this partnership moving forward.
Wonderful. Yes, we are excited too.
Wonderful. Yes, we are excited too. And Sebastian, any closing words?
Sebastian, any closing words?
Yeah, sure. I think it's a great launch.
I'm super happy to see Katana coming locked into the Ag layer.
I hope more will come so that it will be an access of
liquidity and create network effects.
That will be quite interesting as well.
Obviously, we will continue to evolve
and improve over time.
Fantastic.
And then David, you will round us out.
Closing statement, last chance to get your crates.
If not, go check out Turtle Club.
Katana is gonna be amazing.
If you are a builder and are interested in getting yield on your assets
for your users, if you are a chain builder,
if you're a fintech,
if you just want to have questions about Vault Bridge,
DM the AgLair account.
You can DM me or
find us on Telegram.
We're always happy to chat and
here to support anyone who wants to build this amazing
new primitive. You're seeing some of the
superstars behind this protocol in Morpho,
Gauntlet and Steakhouse.
And we're only going to make it better over the coming months.
Awesome. Yes. If there's anything these guys do on stage,
everyone in the audience, please give them the follow,
but know that they never stop shipping um it's just really fun
to see i feel like every couple days i see a new uh a new launch a new product a new uh breakthrough
so it is fantastic we are so thankful for everyone here to talk um what vault bridge is hopefully you
learned a lot hopefully you got some uh nice and really, really appreciate the thought and care
that went into this and how it's helping chains not get a cold start, but really just have a way
to generate revenue that they can take and turn back into improving the user experience, which I
think is just key for everyone. So thank you all for tuning in, and we will catch you next week.
Thank you all.
Take care. Thank you.
