DeFiningDefi Series #1- DeFi Adoption: Path from $1B to $1T

all right everyone so i want to start off by saying welcome to this interesting conversation we're about to be having here that's brought to you by tomo chain this is a conversation focusing on the continuous growth and expansion what almost seems exponential at this point and that is the growth of d5 so the topic we're going to be focusing in on today is not only discussing generally what d fire decentralized finance is but how we're going to be going on the road from one billion dollars in assets which was hit back a couple of months ago and now on our roadmap to hitting the big figure of a trillion dollars can defy scale to institutional grade levels and really start to bring in everyday people that we haven't seen in crypto before for those of you may not know me personally my name is nicholas merton i'm gonna be hosting the conversation alongside some great other speakers here on the panel i want to start off by introducing everyone briefly and then i'm going to give them each a moment to talk a little bit about themselves uh we also we have long vong who is the ceo of tomoche it's coming out of vietnam we have stani as well who is the ceo of ave we have nick fett who is the cto or chief technical officer of teller and along with that as well we have nick who is also from a terra money stable coin project based at south korea so we have a lot of great people who kind of embody the oracles the deposit pools the stable coins and also the scalability solutions and layer two solutions that are going to be fostering d5 as a space and for those who may not know a little bit about myself i've been running a youtube channel in the cryptocurrency space for the last three years known as datadash i've been investing in financial markets over the last nine years and along with that as well i run my own cryptocurrency smart wallet called digifox which is built off the ethereum blockchain and basically aggregates a lot of the d5 services that many people probably know about the space so i want to go ahead and just kind of start off by letting everyone introduce themselves we've got a lot of interesting topics so i want to get to it very soon but long i want to go ahead and start with you tell us a little bit about yourself oh long i'm sorry you're muted long sorry sorry about that i'm still being booted so no worries no worries yeah so uh thank you for the introduction and my pleasure to be here with other so my name is longhu i am a ceo of tomogenes we are building public blockchain which is a fast secure and cheaper to use public blockchain we also evm compatible so you can deploy a smart contract that is compatible with ethereum thomas mayner has been live since december 2018 and we have been continuously building our buddha ecosystem and the communities in them for example we have to master the the sticking and on-chain governance we have two museums the protocol that allows you to send stablecoin and pay the fee in the car in the stablecoin automotive we also recently launched tumble x and the device the decentralized big chain protocol that allows you to build different reliable on top of the mics and we're currently running to modex one of the decent life chain as well so we have a lot of activity going on and um come to join us at our telegram channel or twitter if you want to know more about tumor change awesome that was a wonderful introduction i want to go over head now and jump over to uh stomy from ave so it's time to take it away uh yeah hey everyone uh so my name is tony i'm the uh the founder and ceo of ave to basically um other ave's uh well other protocol is a money market protocol where you can deposit cryptographic assets and earn interest uh and also when you're depositing a credit line is open to you so you can actually borrow other assets or or stable coins if you deposit for example eat or or the assets that we accept and uh we we launched the protocol in in january we have grown quite substantially i think there is uh more than 700 million value locked uh in in the smart contracts which is kind of like an interesting metric that we're using now in the dfi uh in in terms of how much people are trusting uh those smart contracts we started a few years ago or with the uh project called etland short from ethereum landing so basically ethan was the first uh on-chain landing protocol and kind of like uh started kick-started the whole over-collateralized landing space uh back in the days and now basically we're focusing on our governance module since the protocol has grown quite substantially our goal is is basically to take the governance of the protocol uh basically from the team to the governance uh for the uh of the token holders and that's kind of our plan and also uh we are trying to figure out uh how we make this product that basically has a very interesting uh well protocol market fit to get to other chains and and get this kind of like a cross chain liquidity which is very uh essential uh during the the times of high uh gas phase and i'm happy to be here and thanks for inviting me as well it's a pleasure to have you man and i i think again you guys are at a very exciting time for your project going into the governance phases that's obviously what a lot of people are putting their eyes on right now uh stepping into another space of maybe define enterprise blockchain nick i'm really curious to learn a little bit more about your background and stuff working over at teller and uh yeah take it away yeah thanks for having me i'm the second nick of the night um but so i'm nick fett i am cto at teller uh we're a decentralized oracle on the ethereum network so for those of you that don't know smart contracts on ethereum they actually can't read off-chain data so if you want to read an api such as the bitcoin price or the price of gold you actually can't do that natively from your smart contract so you need somebody to actually go and put that into your smart contracts the way that teller works is we have a crypto economic system where participants will stake a token and then they compete actually at proof-of-work mining to solve a random challenge and then once they solve the random challenge they submit back on chain the solution as well as the price of bitcoin or the price of gold uh what it allows us to do is it allows us to completely decentralize the process by creating sort of a competition out of the oracle process uh once the price is unchanged then anybody can actually look at that price and use the price in their smart contracts and parties can also dispute it so you can say hey that's that's not an accurate price and the person that put it there can get their deposit slashed um we've been live now for a little over a year uh and we're continuing to grow and integrate with projects and really help grow the d5 space so um if anybody needs cryptocurrency prices or uh other non-crypto prices even uh let me know nick i think that's really interesting and stuff so you're kind of using the combination of a proof of stake is kind of a leverage for when they get the proof of work basically the proof of work challenge correct in that case and they get choosed to put in the next validated kind of set of data for the network then the stake is kind of the leverage to make sure if you do get that then you better be putting in honest data in that case as the user i like that combination that's really interesting so i want to go ahead here and talk a little bit and nick uh tell us a little bit about yourself and what terra money is all about i've been hearing a lot about it is one of the biggest you know kind of projects out of korea that's starting to form and i'm really interested in stable coins which we'll talk about later on yeah thanks for having me here uh i'm nick head of research from terra and on a high level terra is a stable home project currently based out of korea um we are a decentralized stable plane so basically there's a decentralized stability mechanism which uses a secondary token called luna which acts as collateral and the protocol is essentially a market maker for terra using uh luna uh we're built in an independent tendermint chain we've launched um a bit less than a year and a half ago um and our focus so far has been to scale terra as um an efficient medium of exchange so uh we uh we have a d app called chai uh which uses uh terra as the payments back end and chai currently has uh roughly 1.8 million users that use tera to transact on dozens of e-commerce sites in korea as well as offline merchants so we've we feel like we've proven uh quite well the use case of using a cryptocurrency for everyday usage which i think is something that the crypto space has lacked for a while uh and now we're shifting focus along of course with the with continuing to grow the payments uh side of adoption into uh store value which inevitably touches uh defy and we are planning to launch a uh money market-like protocol quite similar to what um the guys at ava are doing um with the twist we've built in a uh mechanism which tries to stabilize the interest rate that the depositor gets uh basic idea being that if you want to scale um a money market protocol to the masses you need to be able to give some sort of predictability in the interest rate that you're offering uh and uh in a nutshell the way we do this is we let people take loans using um staking derivatives so for those that are not familiar the basic idea of a second derivative is that it's an asset that is backed by a proof stake token uh and gives you access to gives you a right to the cash flows of that token and the reason why i think this is interesting and this goes much beyond the protocol that we're working on uh is that um one of the trade-offs that inevitably someone needs to make when sticking is loss of liquidity right so it's a decision to say you know i'm gonna lock up my luna or my test or what have you for a specific amount of time i can't withdraw it in less than say 21 days and in exchange i'm gonna get this yield uh and you know that's great in terms of supporting the network security and so on uh but uh what it doesn't mean is that you can't really use that asset um to participate in any other applications you can't deposit in a smart contract and so the idea of a second derivative is let's use that staked luna as uh say collateral then let's issue an asset which is backed by that and gives you access to those cash flows and then you know that creates composability and it lets you both have a staked asset as well as participate in um a variety of other d5 applications right so i think this will be an interesting point of discussion and i see that growing a lot in the space and how this links back to anchor which is the the name of the protocol we're launching is that we let users take loans using sticking derivatives as collateral and we use part of that cash flow in order to provide a more stable rate uh to the depositor interesting stuff man i gotta look a little bit more into kind of tara's philosophy there but i think that's interesting using like you know kind of cutting out staking mechanisms to hopefully provide more stability in that case for depositors because i think and one of the killer applications we'll dive into it is obviously earning interest on your crypto people are interested whether it's staking or if it's actually just earning you know on stable coin deposits a fixed interest rate of some sort or adjustable rates i think it's really exciting but anyways guys i'm really excited to jump in this conversation i want to go ahead briefly it should be no more than a minute here i just want to go ahead and let everyone know about the format of how we're going to do this so we've done our intros here we're going to be doing a panel discussion for about 30 to 45 minutes after that we'll dive into some questions and and along with that as well for the format we'll be taking some questions from you guys in the community from the google form as well as taking some live questions from the chat here later down the line so if you have any questions watching this live for the event feel free to ask them in the chat and uh team will get back to you in the future and last but not least we're also going to be doing a mini game through google form that's going to be testing your challenge here in regards to recapping the content that we discussed on this panel but i think is a very important you know kind of question to ask because we really are in the early stages of d5 i know for us it's second nature we work in it every day but i'm curious to hear from you all if you had to within two sentences or less so basically just a couple of words describe what is defy to you personally and and how would you really go about describing it to someone so try to keep it brief here but if you need to take a little extra time feel free to i want to start off here with um with nick here from uh with teller and stuff so nick would you want to go ahead and describe how would you define d5 sure um yeah i think it's relatively simple it's defy is censorship resistant finance uh it is the ability to trade assets uh without the ability of anyone to step in the way whether that means code is law or the community governing the token that within the protocol that you're interacting with is law um it's it's straightforward and it's all on chain awesome man nice and solid simple description of it stani uh what do you what would you say is d5 in this case you know over the time you've been building aven you know obvious been around probably before even d5 was a term so as ethan so i'm curious and what's what's your take on it yeah i mean i usually attribute like multiple uh characteristics when it comes to decentralized finance uh one of the kind of like importance uh to me for example is uh the non-custodial aspect of uh interacting with finance uh in terms of uh of course these are a bit more technicalities but that basically you can interact with different kinds of financial applications with without leaving your funds to someone in terms of trust it's kind of uh challenging at the moment in the sense that uh not all the protocols are yet in the very last step of decentralization uh so so kind of like it there's still things that need to be done to to achieve that um and also kind of like uh when we get this kind of non-custodial way of interacting with protocols we basically don't need to trust but we need to verify code which basically means that the uh the code has to be uh secure enough that uh basically your funds are safe when you're interacting but uh also like another interesting part is the the the fact of of being permission on the system and uh that's i think which is the quite interesting part because it's not just permissions way to interact with different kinds of protocols it's also a ability to build things so anyone any part of the world could actually just build a financial application a defined primitive by using the current protocols and aggregate a substantial amount of capital and and that is very cool part because it reduces the the parts of uh kind of like barriers to innovation and and and the innovation is the whole key here in terms of like end user perspective the interoperability means actually opportunities so let's say you could be a user from malaysia philippines uh for example china venezuela and you could have a access for example to interest bearing accounts so one of the interesting things about ave is when you deposit for example die you get in return a die and that a die grows in balance in your wallet so kind of like you you everyone has an access to this kind of thing which previously might have been limited and of course lastly i think the transparency is pretty cool thing i mean we see everything uh on chain so so kind of like we see the true market but then again it's an issue in terms of privacy but i think those are like for me uh the characteristics and and what i what i myself love about the dfi yeah absolutely i think you brought a good point sign the the ability to kind of build on top of the d5 legos that are out there on the space and that goes as well into what you've been working on nick with with teller you know in the oracle space it's building in sub stacks of technology to actually build something that gets someone what they want from point a to point b um long i'm interested to hear from you as well you know building you guys your guys on protocol aiming to build something that's much more scalable i'm curious to hear you know what's your take on d5 what's the vision for jomo in this case in a short summary in this case um for how you guys plan to scale out d5 yeah next uh i i definitely agree with what standard and next test about device they are some of the characteristics of decentralization i would have something uh from a developer perspective that is defined also means varying the ease of integration ease of integration is is as a protocol with other protocols this is unparalleled in d5 you cannot do that with the traditional finance in d5 you have example of like an anonymous developer right deploy a smart contract and you have like 20 million dollars running to the smart contract in one time that never happened before i think that's that's very special and uh innovative and um i think definitely uh double chains uh trying to to add some more value in in the devices uh firstly i think uh we we know just given uh the popularity of ethereum and everyone is using e5 on it right now the the fee for that is very high a simple generation can cost you like 50 dollars right you want to do some new farming it cost you a lot of money so i think there will be uh as an alternative and we try to see value in a different area and uh that's what tumuchin trying to do like trying to build products that people use and um i think it's a still very early state of crypto industry in general and d5 in particular and we still have maybe like five to seven years of innovating every day awesome long i think that's a good vision you know that idea of constantly realizing that you know if i want to plug in a compound or i want to plug into ave or you know i want to build something like tomochain or plug into teller or use terra you know in order to have stable coins what's so great is if i'm building one of these applications i have all these services at my disposal and i can choose which ones i want to use it is permissionless as nick said earlier so i think it's a it's a very beautiful thing to view it yeah i know you couldn't do that with bank of america's backend systems and you know traditional fintech companies uh that are siloed in a sense so i completely agree i think that's a big value add and nick as well i mean obviously you've been focusing in in stable coins i think korea as well as a very big market you know i'm curious you know it to you what d5 means in this case and and what kind of world do you see with d5 and kind of a short summary so in terms of what defy is i think there's not much much for me that i think uh all you guys uh described it quite eloquently the idea that you have a financial system that is trustless uh non-custodial uh censorship resistant i think that really is the gist in terms of uh what angle terra is pursuing uh something that i also saw in the questions that um victor you shared uh so i don't want to get too much into it uh right now but basically the idea of usability right and the idea that inevitably there has been and i think will keep being a trade-off between pure decentralization and usability from from the standpoint of the consumer uh and so with tarot we've tried to we've been trying to explore exactly where we want to stand in that in that trade-off and we chose in order to kickstart adoption as fast as possible to initially er more on the side of usability so for example when it comes to try which is the largest d app built on terra private keys are custodial so basically users can create a wallet but then chai is holding the keys on their behalf and that's made it very easy for uh for us to track users who you know have no idea about how crypto works uh and in practice i think you know uh onboarding almost two million users in less than a year would have been practically impossible without uh making choosing that side of the trade-off uh but of course what is top of mind is how exactly do we evolve uh terror over time in a way that you know increases centralization without sacrificing about usability absolutely man trying to kind of bridge i guess the traditional expectations of fintech and kind of the softwares that people are familiar with but at the same time being able to utilize a lot of the empowering technologies to think under the surface and as you mentioned finding a way to make it all work in the middle i guess but yeah i mean to give you guys just kind of my thoughts i mean it's kind of an umbrella uh you know if i was to answer this question i've gotten it asked more and more just put it very simple for me decentralized finance i would even use a different term neck like it's almost it's not just permissionless but it's kind of open finance and the great thing about it i think that really solidifies it is as you mentioned it's not only permissionless so there's permissionless innovation uh you can't keep up with it you can't censor it but along with that as well it allows any of us here in this call coming from very different backgrounds geographically probably living under different types of governments and cultures we can all access an equal level financial services for the first time in history and i think that's just phenomenal i mean if you understand the differences between you know someone who might be you know i always use the analogy when i was pitching digifox of like a female thai farmer who might be you know living off you know ends meet versus someone maybe uh you know where i'm from on the east coast of the us you know and the difference uh quality of living they have is mainly correlated due to the differences in their financial services so i think that being able to have equal finance is going to be massive in that regard so anyways um in that message of equal finance here obviously i think we all have that shared vision i'm interested to start diving into some of these questions and one of them that i want to talk to you all about and i know i can speak a little bit on this but this was a good question that victor brought up and that was this idea of focusing on the user experience of decentralized finance we're at five billion dollars in assets now d5 applications are obviously the craze and the world of crypto but the crypto world is a bit of a bubble it's a little bit of a a bubble comparative to what the broader world is most people tend to defy so you know in the current environment of user experience how do you all believe we can go about improving this i can speak a little bit to this because i founded a cryptocurrency wallet uh that allows you to abstract the need of private keys and along with that as well you don't need eth to send transactions so these are two big barriers that we tried to remove but i'm curious as well maybe uh maybe nick if you want to chime in on this you know what what ways do you think we need to see improvements in d5 applications before people can actually start using them and maybe it might have to do with something you're specialized in regards to getting proper price fees and removing and mitigating trust um sure so you know i i think i sort of take a different uh view on it um you know as far as the ux goes it's it's always i think d5 and ux in the crypto world is always sort of going to be worse than ux in the centralized world um it's going to be slower and i think a lot of d5 is you know whenever you're building out one of these products if you're using a centralized database you can make it much faster you can do things that you could not do on ethereum just it's it's a fact and it's always probably going to be that way um so you know a lot of it is going to be educating people on it's okay if it takes you you know like to if you want a bitcoin it seems like bitcoin's never going to change you're going to have to wait you know a few block confirmations for it to go through and that's that's okay um you know like yes there's lightning and things like that but you know it's it's going to be sort of a slow process process but i think um more of the features we should focus on are just the openness of it and then focusing on trying to to get people you know obviously there's no excuse for an ugly ui but um it doesn't have to be this seamless you know i think a lot of a lot of times what we're trying to do in in d5 which i think is a mistake is we're trying to rebuild what the current financial infrastructure is so whether it's these high frequency trading dapps uh on and then we're trying to build them on ethereum and it's like we you know i don't know if the traditional finance world knows if they want high frequency traders like we don't we don't necessarily need to rebuild that here um so it it's one of those things that the ux is going to get better in the ux it's it's going to be be there but a lot of it is just going to come from educating users and making sure that we maintain just the openness and almost the integrity of it because you know sacrifi i think if we if you sacrifice the the decentralization or or sort of the integrity of your protocol to to increase ux like obviously you can do that i mean that's like what that's like eos is slogan and then you you can make you know you you can sacrifice a little bit on that side and you can get a little bit faster and more performant but it's just that's not what's going to win out in the end in my mind um you're always going to sort of be eaten alive once once the centralized guys come on board and start competing in the space because people if you don't care about decentralization it's it's one small step to just taking your three percent cash back from visa so yeah man i think that's a good point you can be very susceptible to being overtaken or or kind of led a strain stuff if you don't maintain that level of decentralization i'm curious what do you think about this question like you know about um how we can improve the end user experience of kind of getting from point a to point b for these services i know for avi that's probably an interesting uh thing to keep in mind is how can you get people from holding their crypto assets to actually using ave as a platform yeah that's interesting question i mean we we focus quite a lot actually on on user experience i mean we've we've been building for three years in dfi and we started originally with italian basically uh with a vertical approach because we really wanted the users actually have users that are using end users and and basically try to avoid the the kind of like a protocol vertical approach which everyone was having back there back then and the user experience back then was was quite horrible it wasn't pleasant at all and kind of like i i would say today if you look at the most popular defy stuff that there is for example the uh let's take for example uh unicef of balancer uh it's it's even more easier to trade uh these places than for example uh some of the centralized exchanges and that's kind of like the uh good uh i would say check point for us now to see that kind of like we are getting better uh and we are comparable to centralized finance but when it comes to network efficiency in terms of like the underlying network and the cost of of operating on that network these expenses are now and and the slowness are going into the end users and i think that's the kind of like a next big thing because d5 is growing quite uh substantial now with all the incentives uh that are basically thrown at the end users so what i think is uh important now is is kind of like find solutions to minimize the gas cost so that the end users who are actually uh getting the the value value added for for uh using this kind of like open finance decent class finance are now paying quite substantial cost so we created something that should actually democratize the whole uh financial space and give everyone an equal opportunity to participate and and kind of like even uh compete what what they have in their local uh financial sector and at the current moment basically d5 doesn't make sense unless you are depositing uh 1000 uh usdc or divorce of uh currency into the uh let's say to ave or or or to to um or or you're providing markets into uh unislop so i i think that's the kind of like underlying issue now so i mean the scalability versus security and i'm curious to see like how how this will going to end up because that's the current user experience i mean it's easy to uh interact but it's becoming expensive slow and uh i think also like the user experience wise that wallets that allow you kind of like easily to to to to store your funds without giving up your custody is also kind of important and and the the the gateways of course like that you can enter into the uh cryptocurrency award from the fiat world yeah started to build on that point you made i think the biggest concern i have is the just general cost for an end user now i think you know there's obviously a lot of solutions as you mentioned nick there's there's a lot of upcoming scaling solutions in traditional blockchain networks like bitcoin or ethereum but i'm really concerned about you know right now we're kind of at our defining moment for defy and you know swap on uniswap is costing and users as high as 20 30 bucks to make you know so it is something that i think cost is probably the biggest barrier right now or the lack of scalability um but at the same time you know as you mentioned guys earlier like you know the the ux's are getting better like the udy in this case the user interface that they're experiencing um and outside of that as well you're getting better fiat on-ramps you're getting these better tools that allow you to connect to traditional payment rails i'm curious to hear long what are your thoughts like what are you guys doing over at tomo chain to just kind of shake things up like and provide a much better user experience i checked out some of the tools that tomochain has and it looks like you guys have really focused on providing a familiar or kind of clean user experience for some of your dapps that you've made oh long sorry you're uh mike's still muted there sorry sure so uh as a car our network is a consensus mechanism called posv approve of state voting and um we developed a picture on uh on the base of ethereum goldberg and keeping a lot of other fusion from ethereum so right now on top of chains uh transactions takes two seconds and the fee is very close to zero i think uh i think we we have the most web right which is a similar service like cyber swap on on ethereum we have turmoil which is a version of ibex and um the general feeling i have from our user is it's much easier and cheaper to use right but obviously like you know ethereum is like my hunger very expensive but very crowded a lot of people a lot of utility and we have a lot of things to do right i don't want to sell our our blockchain to mass here but um i think i think gs uh kept like the free issue the network convention issue uh the how fast the transition is some of the issue we need uh collectively to solve for the end user to to expand the device service to uh to more people absolutely yeah i can see where you're coming from on that long i think that again you know trying to build familiar applications in that case like you guys have and and really trying more than anything right now to to make sure that it's open and accessible for anyone it's going to be very big um one thing i was going to ask i asked nick on your guy's side you've been kind of migrating into some of the traditional fintech platforms in south korea from my understanding and correct me if i'm wrong but tara has been basically kind of moving into a more familiar framework what have you guys been doing i guess on the design of your applications or the design of your network to just make that process more seamless it almost seems like in your case they don't even need to know they're using crypto in that case which is something that we really highlighted in our smart wallet we wanted to use stable coins and do things that were familiar to people so are you guys taking a similar approach in that regard yeah you're spot on so i think as i mentioned before it's obviously a trade-off right and um in my opinion it's it's not necessarily black and white in the sense that either you know your visa or um you require users to fully manage their private keys and if they lose them you know tough luck uh in my mind it's more of a process of educating users i think that education is really our only or our best and probably only bet at um scaling getting mass adoption for technology that can be decentralized uh and so yeah for us what we decided is we said look there's it's highly unlikely to get any serious traction um if we require that every single one of our users can uh do private key management and i think what's great about tera is that we've been able to acquire you know users in their um 70s 80s even 90s uh because precisely because they don't need to fully understand how crypto works and um some of them don't even know that they're using terra in the back end right now that is not the end state where we want to be right the end state is you know a grandma could you know happily keep using terra and have no idea um what's behind that and i think that's fine but we do very much believe in a world where more and more users uh are um have full ownership and custody of uh of their money and so i think this is sort of a fairly long game and educating people around what a private key is what it means to um for an application to be trustless what it means for no one to be able to um interfere and so on right and so it's something that we're slowly trying to take steps uh towards uh yeah but quite frankly i think that um you know if you look at the uh usage of most uh d-apps uh on on the blockchain uh you know we're looking at you know dear use of a few hundred users you know at best one or two thousand um and i think you know where tara has excelled by making this conscious trade off of saying look we don't require users to do full uh key management is that you know we're looking at daus in the tens of thousands um you know we're looking 40 to 50 000 bau on average um which yeah i i think uh with the exception of perhaps bitcoin uh or ethereum is something that is completely unachievable without making that trade-off that's one thing i was gonna say i probably really agree with you there on on that point nick it's that you know private key management there are other ways we can kind of streamline it the way we did it is we used a smart wallet on ethereum this basically allowed people to use their phone and email um it was just one way where again you can remove that barrier because so many people are used to typing their phone and email and what's nice is that we don't own control over their fees uh their their funds in this case it's completely separate it's non-custodial but it's deployed as a smart contract so it's a very interesting technology that a few other people have been deploying as well but it's just one of those things you can abstract while also maintaining decentralization so i think the more kind of opportunities we can get like that it seems like you guys have that road map and you want to move more towards uh decentralization and owning funds for those who do care about that trustlessness so it's maybe more of a medium in that case from either one of the extremes so i'm i'm curious to hear from you guys here and i i know this is definitely the elephant in the room sometimes that you know especially a lot of founders of projects i want to talk about stuff but i'm a market investor i'm a youtuber who talks about the markets in crypto we've obviously been seeing crypto as a whole as an asset class predominantly the oracles the decentralized exchanges the deposit pools the governance tokens all of these have been some of the leading performers in the crypto space and they've taken over crypto by storm so i'm really curious to hear from you all if you think a lot of this right now in your honest opinions if you guys feel that it might be a bit of hype at the end of the day um or do you think it's more towards the actual fundamental narrative of what's being built right now and then a second question i'd like to kind of tag on to that you know as the title of this panel is going from 1 billion to a trillion a very very quick answer for when you think we could actually reach that trillion dollar figure um you know for me just to give the kind of short answer from my end in regards to uh you know when we could reach those valuations and i think this is going to be a lot of hype for the next few years as all crypto or market cycles in general usually experience but i do think there's a real opportunity where generally you have d5 being the only place where people can get a yield on stable coin liquidity or dollars and along with that as well being able to access dollar liquidity across the world is a very valuable feature of itself and the last thing here is obviously the value of the crypto assets themselves going up and i think we could easily reach a trillion by the end of the cycle locked up in d5 and i believe that that's probably going to end sometime in november of 2022 stepping towards 2023.

So i want to start with stani what do you think about this man like what's what's your target for this and do you think that defy right now is mainly hype or more fundamentals yeah i think it's actually very very interesting question because in crypto space we we tend to have this hype cycles because we we have in imbalance of like supply and demand and kind of like a very long term expectations and that drives different kinds of value changes what's interesting about kind of like about bitcoin and cryptocurrent currencies over the years is that we we never achieved that option because of this uh kind of like volatility and that was difficult and in 2017 we basically had the ico period of this kind of boom and what was interesting on that time is that legit projects were raising funds but also non-legit projects were raised on so it was all about one waypoint so what kind of ibs you will be throwing money at and basically it had it it had it it's boom and passed what's interesting about d5 is that we we create financial applications that have certain type of characteristics like the custodial aspect transparency by default interoperability and of course like if we are able to build this infrastructure safely and have mechanisms to protect it like let's say uh using token economics uh as a way to stake and and and protect the protocols between ave or main thing as in maker is doing basically and all kinds of insurances we we kind of like are on the same side of the growth and we don't kind of ruin the whole thing but uh what's interesting about d5 that these applications are uh workable so so let's say if you have decentralized stablecoin i mean it's functional uh it has its utility and basically the more people adopt it uh the the uh the more the space will grow and then you have blending protocols and providing market of course like many of the things are a bit of speculative uh if you think about when you supply liquidity into uh automatic money markets you're doing it because you have a portfolio so you're in long or you're borrowing uh borrowing against your eat in in ave you're doing it because you have a one position on it and you need working capital so many many of these things are kind of like dependent on the the uh speculative behavior and that's pretty much what investments are but some of the functionality is pretty much uh payment and real finance type for example like the uh using stable coins for payments and uh getting an option on that or having interest bearing accounts for example that's also kind of part of that and i think to get uh to the next level like we do have good foundations uh to scale so i think like uh we went from one billion to five billion uh fairly quickly in in the efi and two trillion is also like something that can be doable it requires a bit more users and we're getting but it also requires that we have uh as safe and environment as possible and and we're going to have blow up so we recently seen saw a couple of projects basically deploying having the style of kind of like uh testing in production and that's very scary in the sense that we just need one accident to basically ruin the whole space and if you're able to take the security side uh the the growth is is absolutely will be amazing up to the three trillion mark but it really requires that everyone stands up and basically protects the space for for kind of like uh that we have best practices and everyone is is uh obeying them yeah you know i think you kind of hit the nail on the head there about you know we have a shared reputation to keep up in this space and you know what we saw the other day with uh i guess it was yam was the the cryptocurrency that came out was kind of a combination of a few different d5 protocols somehow was able to raise hundreds of millions of dollars from the community or basically get hundreds of millions of dollars of assets under management and basically because of one simple error within the smart contracts of one single line of code within the smart contract made it basically unusable and pretty much killed off the project as soon as it came up so anyways very very important thing to keep in mind i think that's a good point i'm curious to hear you know long and also nick if you guys want to dive into this you know this kind of topic of you know what kind of things should we keep guaranteed maybe maybe the things that we're not thinking about right now or people in general aren't thinking about in the sense of how are we really going to take us to a trillion dollars because one thing we talked about on my channel is that you know going from a billion to a trillion dollars that's a it's a lot more difficult to go from a billion to a trillion than from the same kind of vertical of a hundred thousand to a million dollars you're dealing with uh you know a much larger market skill excuse me 100 000 like a 100 million in that case so you're you're dealing with going from a billion to a trillion it requires much more liquidity much more checks and balances so long what are you guys kind of doing to make sure that you solidify yourselves in a good position as d5 starts to kick off so i think one trillion dollars you know is relatively small comparing to other traditional asset right because we know loans have market cap about 8 trillion and equity market and real estate market as way bigger than that but i guess well we i think we have like around five five million five billion five billion dollar asset right now we need more quality assets obviously uh usd state uh no last type of buy is is one of the important assets so i think so i just read today that the other market gap went from 10 billion to 12 million uh like yesterday right like today so in the last five five months they went from 5 billion to 12 billion so there is like 6 or 7 billion in terror i think so we need as a crypto asset like midfield and uh and we can add assets to go up by a lot to to get to the one two year maybe like five ten years so in terms of double chance i think we will really focus on onboarding a stable point particularly uh usb stablecoin uh i feel like the defined the device cycle right now people are focusing more relatively on stable quite comparatively to bitcoin so in 2017 2018 it really about kind of like bitcoin ether ico but is this uh the five cycle stable coin is is seem to be more important but also about you farming right you miss people going to do your family on good finance or even on jams so yeah i think we want to onboard stablecoins and more stablecoin i think it's also easier to object when stream user uses labelcoin yeah i think long i think those were some great points there in regards to just understanding where d5 really is right now and again as i've emphasized earlier our focus is on stable coins as well because it's a i think it's a great bridge where you can give something seamless i think anyone across the world you you might know this and obviously in vietnam and a lot of different parts of asia latin america dollarization is prevalent and a lot of people do want access to dollars in a lot of cases so being able to give people that world reserve currency in a case as well as all these kinds of financial services that give you great yields and that you don't have to worry about governments freezing by any degree i think it's really really exciting for a lot of regions now nick i i know you might want to leave a comment on this and i do want to give you some room for it but just to make sure on time i actually wanted to ask you a question that i thought would actually be very relevant to tara because it's something that i've been very interested in as well so we're on this topic of stable coins here uh kind of transitioning to this which is obviously a huge component of defy it's where the yields are for uh for cryptocurrencies and deposit pools like ave i wanted to ask you there was some news recently that came out it's becoming more and more clear that obviously we had companies like facebook and the conglomerate that they worked together with to create libra that project seems to be generally dead now or has kind of fallen behind due to regulations from the us government i'm curious to hear your thoughts because there was some recent news here from the fed stable coin that we've been hearing so much about so the fed coin that's been worked on and i'm curious to hear you know why you know and i i think i can already kind of guess your opinion on this working with tara but i'm curious do you feel that there's a place for central bank stable coins or cryptocurrencies in this world and whether or not you do or you support it or not i'm curious you know why do you believe maybe a decentralized um form of cryptocurrency a stable coin that that's backed by crypto collateral in a sense um would be more valuable and that's a great question uh and uh i'm not sure what uh what a what your uh projection of my pain would have been but to be honest i'm very supportive that's good man no i didn't mean that in the meanwhile i'm just yeah of course i mean obviously you know i i think that uh um you know scaling terra is what i've uh i believe in and i think that tara and most decentralized stable coins bring a um fairly fundamental advantage versus um central banks which i can get into but all in all you know i think that uh the more traditional finance embraces cryptocurrency um and the the larger the fraction of traditional finance uh lands on the blockchain in one way or another i think the better it is for the entire ecosystem right um so you know purely in terms of liquidity if we just think about it from a liquidity standpoint uh the ability to have digital dollars on the on the blockchain and knowing that those are backed by the federal reserve really doesn't make it easier uh to you know transport that uh liquidity on you know various blockchain applications right um so you know i think in that direction this is positive um that said of course you know a digital version of the dollar still comes with a lot of the limitations uh that um the dollar comes with right so one being obviously that um you know you're still bound to the rates of the fed sets right and we're we live in uh um zero or negative interest environment so you know their fundamental limitations to um you know what yield capital can generate in the traditional fashion world i think that is one of the most appealing aspects of d5 right so you know to touch on your earlier question i do think there is an element of inevitable element of hype in the current uh d5 bull run uh but i think part of it is driven by real macro factors right and one of those i think is uh zero negative rates right the fact that uh capital is just looking for um uh for yield quite desperately anywhere can find it another one is the um basically rampant uh issuance of new money to uh to keep up the economy so you know again that sort of shakes partly shakes faith in uh um traditional money and it you know i think it gets people more excited into alternative forms of finance so i think there are some strong macro uh tailwinds that uh give a lot of substance uh to d5 uh and now specifically with regards to terror i think what is exciting about what we do and i think a few other stablecoin projects are taken cue which is very is fundamentally different from what something like the dollar does is the idea that you can return some of the growth um to the ecosystem right uh so to get a bit more into this there's this idea of senior drill which i think is key to understand the basic idea being that whatever entity issues money be it be it a central bank or decentralized system the process of issuing comes with a certain um value that you can distribute right so if you're tethered and presumably you're holding everything um in cash then there is no senior age because i issue one tether i put a dollar in the bank and so there is no earning from that process right uh you know the other extreme is of course um the feds uh which prints at literally zero cost right and then you know it's up to the federal reserve to determine where that money should go uh and of course i think that is a limitation of central bank digital currencies that at the end of the day they are subject to the monetary policy of uh that central bank and that value will accrue to wherever they see uh that is fit right so if the fed thinks that buying uh bonds or potential equities is the best uh use of new money you know then uh participating in that system simply you know makes you um complicit into those decisions right which may or may not be uh the right ones uh versus a decentralized system like terra when we issue say a certain amount of terror then some of that value uh is returned to what we call a treasury um that happens in the form of luna so for example to issue terra the system buys back a certain amount of luna which we would call senior age and then some of that is deposited in the treasury which then via governance is allocated to various different uh initiatives right uh and so you can think about this very much as the centralized decentralized uh version of the treasury and i think what makes what gives this a leg up over a central bank digital currency is that we can have more creative and hopefully better ways of investing growth as opposed to you know just buying bonds you just speak on that i think that's a very interesting topic nick and i'm glad we kind of spent a good amount of time just to talk to you about that because i think it's it's interesting to me to see that a lot of the systems we're building are more kind of creative or competitive alternatives to traditional banking there's a lot of i think as you mentioned here in this case with the treasury there is going to be some decision making there is going to be some kind of control of where uh additional funds or value is allocated but this is what central bankers whether you're a monetist whether you're you know keynesian or if you're for example an austrian like economist or someone who fits into one of those those kind of views on the world it's constant negotiation of how much capital should be printed and also if there is going to be capital printed in the view of a monetarist where does it go um and i think having maybe a dow in that case it really it defines the the governance will actually determine the direction of luna and terra as an overall network so i'm i'm really interested i think that was a great description i'm glad you also had a neutral view where it's i think it's more of anything it's the let the battle begin in a sense between the central banks and the uh more decentralized or competing options i think at the end of the day you know i think it's it's going to be interesting to see what they do and if they maintain privacy and a lot of the other characteristics that i think many people would require from a fed stablecoin if they were to use that as an alternative to d5 um but anyways guys i mean we've talked about a lot of great questions there's some on the list here that i didn't really get to but i think we've had some good responses and that's what's better you know answering quality on the questions we've discussed i wanted to dive into some of the community questions that came through the google form here real quickly uh diving into questions from our community here uh the first one i saw here is how d5 will reshape financial services and how do you guys believe we can actually build incentive mechanisms to kind of build up the liquidity pools that we're going to need i think this is obviously um probably the biggest topic here it can break down into a lot of areas so obviously we've seen with governance tokens over the last few months with compound um you know i'm trying to think outside of compound as well i mean there's a balancer there's all these systems now that are basically trying to incentivize pooling and liquidity you also have uniswap as well that is basically giving basically a liquidity provider fee and they've been able to actually surmount to some of the highest assets for a decentralized exchange so i'm curious to ask you all here what do you all believe is the number one thing we can do in order to boost liquidity in this space for the broader uh decentralized finance space to grow in the long term uh maybe uh nick d do you want to dive in on that um yeah i mean i i think there's two questions there uh the first one i i think i would push back a little bit on whether or not the liquidity is really the problem here um you know we have i i think whenever you look at a lot of these things whether it's yam farming or um any of a lot of these token projects with governance tokens and and you have ins you almost have insane amounts of liquidity on these assets for the amount of actual usage or need that people have on them these are the most liquid assets in the entire world um and you know the the idea that we we would need more liquidity or that god forbid somebody pays a one percent slippage fee on something that may move in price by 20 tomorrow you know it it doesn't even make any sense to me like i i think how you know how you can incentivize that obviously like you can pay people you can have interest rates like ave you can print money you can just you know issue new currencies like uh nick was talking about there and and that can incentivize people to do different things i i think we should be careful about whether or not liquidity is is really the issue we think it is though yeah you know to build on that nick the one thing i'm curious to ask and i think this would be a good one for you to talk about stunning to build on nick's point i i don't think right now liquidity is a problem like on a good amount of cryptos on unispot i can make decent trades and i'm making decent-sized trades as you know trading in the crypto space um you know the one thing i'm really curious about is how do you go from the current environment and i think this as i mentioned is really relevant to stunning like of over collateralized crypto positions to under collateralized crypto positions i think that's something that that really is going to open up d5 to maybe hitting that trillion dollar ballpark and i know i'm not to be mixed with your project nick that's tyler there's another uh project that i follow on the d5 space that's doing this right now they're focusing on basically trying to that's similar uh similar name to the sense that they want to be able to provide um you know a solution in this case where people can get under collateralized loans so i'm curious cindy what's your take on that do you guys have a road map or vision for achieving that at ave if you don't mind me asking yeah definitely we have i mean that's that's one of the coolest things actually i've been thinking for a long time i mean uh the space is about over colloquialization i mean or we could just say collateralization the reason we over collateralize things is because we have a lot of volatility what is interesting is that uh when you go to a bank you you give a little uh the collateral is usually the house you're buying and and basically your name your reputation your credit scoring and the ability to pay back at some point in your life periodically all the time maybe and what's interesting about uh defy space is that we use very uh volatile assets glad all and we have to over collateralize things but uh what we have done uh previously for example uh because we we know that uh the the more scalable solution is that when you don't need to use assets as a collateral that you could actually use your ability to repay and what we do in in ave so we basically launched recently credit delegation so great delegation is interesting function where actually a depositor that is depositing funds into oven so let's say you might deposit die to earn five percent interest yeah you basically uh every time someone deposits you have a credit line that is open so what you're doing is that you are you know you can withdraw let's say eid or wbtc and use it in the ecosystem while earning uh let's say on your die so what you can do as a with the credit delegation is you can delegate your credit to someone you you know or to a smart contract that has uh pre-programmed execution functions that are that are that kind of kind of like uh the smart contract can't do whatever it isn't programmed to do and in the first scenario where you didn't get credit to someone you trust that is very interesting because it means that you could actually earn five percent on die then i get to credit to someone uh let's say who draws uh eat and pays you let's say three percent additional to that so you're earning eight percent uh basically because uh you let someone else to use uh your collateral but your your relationship with the person that you delegated it's basically under collateralized and you can secure that relationship for example with uh legal agreement and that is what we did we partnered up with open law and open law basically allows you to create a agreement template uh execute the agreement uh where both parties assign who basically know each other and then you can execute the smart contract from open law and what it allows you actually to do is that you are securing this relationship where you are delegating uh the credit and you can pull this model as well so you can actually scale it but what's actually even more interesting is that uh you could scale it um in a way where let's say you have a depositor who is depositing it or wbdc or land link and so forth and let someone else to borrow uh delegate credit and borrow let's say die or usdc and that could be even traditional financial uh money lender who draws that credit line at let's say two percent usdc uh and converts to usd which basically means that they're getting cheaper sourcing cheaper liquidity from d5 than for example raising a bond in the bonds market or basic getting liquidity elsewhere and they could take that liquidity it could be a money lender or feed that company and they could just imagine solfi sourcing like would it be from d5 this way and then basically uh letting uh people to to borrow that way uh further and and people who are basically buying cars or or or needing credit so part of it could be sourced from d5 this way and another part is the smart contract uh delegation where you delegate to a smart contract so let's say you have an interesting idea but you don't have uh capital you you basically uh you make some sort of like a strategy in the smart contract that let's say it could farm uh different kinds of tokens and you could request printed delegations to that and everyone can just delegate without any kind of like legal agreements and it will work perfectly so there is there is a way to kind of extend this and i could imagine the future uh people could build different kinds of uh underwriting systems and credit scoring systems or connect to real life credit card supporting systems and and just like scale this thing uh eventually yeah just to make sure i get it and just to make sure everyone else gets the concept as well for your vision in this case like of a compound on these protocols where you can lock up your crypto as collateral this is basically a tool to access an entirely new line of credit that wasn't available just a couple years ago and the way you see it kind of scaling up to the under collateralized markets is obviously going more back to the traditional route and dealing with identity having kind of a second layer like liquidity is under underneath the system and having a new system built where we can use traditional credit scores we can use other means of identification and credit scoring and cred determining credit worthiness in a sense this is something actually really similar i was originally doing an open source initiative a while back um that i was self-funding called project genesis and yeah and that was the whole goal of that was basically just to get people to allow maybe all of us here in this call we could be our own bank and we could tap into using die or usdc as liquidity and lending out under collateralized having our own credit measures so i think it's it's a very fascinating kind of concept and i think that's finally what the space is kind of coming to in a sense the in the sense how we can scale it out it's a matter of can we build the interface and can we make it a streamline for the end users so that's that's awesome to your standard you're thinking like that um i'm curious uh long d do you want to step in on this and maybe share your thoughts on on this kind of this kind of topic here that we've been discussing is there you know there's actually one thing i wanted to ask you about along actually i think would be more fitting is you know d5 obviously has been getting a lot of like traction generally speaking in the crypto space and obviously tomochin's kind of coming more from the protocol layer in this case so do you guys feel like at the end of the day uh you're staying ahead of the curb in the sense of kind of being the optimal protocol for decentralized finance is there any kind of key drives that would make someone want to build on the protocol versus say maybe ethereum or eos or neo or all these different other blockchains i'm just curious to get a little bit more knowledge on tomochain more specifically so i think i'm on tumblr change right now the wicked asset is tomo right and we we are around 100 billion we get pretty small relatively to other big public looking like or ethereum and i think it's a 25 to to work really well you need a lot of good assets with a good value good market cap and that's the reason i think the the attraction of ethereum is still really big compared comparatively to other public chain even ieos or or chong right because most of most of the biggest asset besides the native token besides the native protocol token as on ethereum we have linked on ethereum we have i think link and some other like fab token just people can use air collateral right i think so i think is expanding the collateral the asset that that is you for collateral but if compile i think the main for example like if you look at compound the main the main uk is the main the main asset people use for collateral is eater and moral stablecoin so you you really need a big market cap for work really well and i think that's something this contest comparing to ethereum in terms of poor poor product wise i think we are doing really well the product is running well the chain is very stable we never have any mixed standard or hot thing uh happening within two years ago yeah i think so how can we zone the pipeline creating more assets and more valuable assets on common chains i think the answer is you need to have your community right make a community and a better project i think so at some point i hope that some of the really good projects like abby's and some other can like look at other protocol like maybe like moving some of the population on google chain to try that and um i think also that's the reason we try to focus on stablecoin because stablecoin is like something we can grow the value relatively easily without uh without capitalize on ico high to create a lot of assets yeah i think in that case long it is going to be interesting to see d5 branching out to a few other protocols you know i mean most of it has been centralized or not so much centralized but centrally focused on ethereum right now so i'm very interested and i wish you guys all the best of luck with tomo chain i like i said i toyed around a little bit with the dex tools that you came up with that was a as you mentioned a replica of idacs and i think was very clean and just being able to open that accessibility to a lot of people by lowering the costs um or just basically having a network that can scale more is going to be really interesting so um but yeah nick did you wanna uh maybe chime in in this case like maybe any kind of like uh maybe interesting remarks in regards to tara that you think are important for people to understand for for your guys product and you know i'm just curious to learn a little bit more in depth on everyone's vision for what they're working on uh yeah so i think an interesting uh angle to briefly touch on which uh we're quite bullish on is the idea of um cross-chain liquidity and uh how important that is for proof of stake in particular uh so i briefly introduced the idea of taking derivatives basic idea being uh to be able to have a proof stake token that is uh staked and at the same time is liquid so you can transfer it deposit it in smart contracts and so on uh and i think the real power of a construct like this and more generally i think the real power of v5 will be unleashed if we can have um efficient and secure cross-chain liquidity right so the fact that for example you know a majority of collateral on uh protocols like compound is um ethereum i think is is very much a limitation right now right uh cross-chain liquidity for bitcoin there are a few solutions but i think we haven't really found the right one um you know some are centralized some just economically don't really make sense like um tbtc so i i think there's a lot of uh there's a big future and all the potential in cross-chain liquidity and how this relates to what we're doing at terra is as i mentioned before anchor is the new project we're working on which is a compound or ave like money market and the idea there is we would like people to be able to take loans uh using uh arbitrary assets as collateral including staking derivatives i think this becomes compelling when people from uh various different chains including say uh cosmos tesos algorand can very easily uh transfer liquidity onto the terror chain um and take a loan while still being able to claim their rewards right uh so for example let's say you get some yield uh and i'll go from the algorithm chain being able to have a mirror of that in the terror chain take a loan and then keep getting that yield i think that is an example of the powerful composability that the space should be headed towards um and yeah terra is excited about this and i think this uh my guess is the discussion around cross chain solutions that are both efficient and decentralized uh will probably increase a lot i think so far we've been happy with sort of centralized hacks uh but it's something that we are keeping our eye on to and will be key for how we scale anchor absolutely man that's nick that's awesome to hear you guys are exploring or at least excited to explore working across chain with different protocols and kind of building i guess standards that's one thing that i've been kind of you know i think there's so many problems that we have to tackle in this space but i think one of them that i'd really like to see and i think would further solidify collaboration in the space is having ways where we can um you know work with one another you know communicate cross chain and as nick you'd hit on earlier you know blockchains themselves natively are kind of siloed in a sense as much as we're decentralized they can only really communicate within each other so i think it's going to be really interesting to see us plug into the real world uh have you know financial applications that work see protocols as well like tomo chain that might be able to scale more and also in the case on your end nickel with tara to be able to start plugging into traditional applications and have unique forms of stable coins hit the market i mean guys this has been a phenomenal conversation i think that we we've done through most of the key areas of d5 we've gotten a lot of great perspectives i think from across the spectrum from all you guys and i i hope more than anything we can keep up the conversation as time progresses i was going to see victor if you want to hop in i think you'd probably be best at dealing uh this this contest here that we've got here that the tomo chain team has put together for the panel but the minigame that we discussed here are you there victor hey stu here hey awesome victors yes so do you want to go through and describe a little bit about the google form challenge for the overall panel discussion yeah so uh in general like we would have the google form and it will include like 10 questions you know the topic win over you know the whole session we discuss and anyone who join and you know make the answer uh correctly and quick win you know have some reward from thermal team yeah that's what i can describe quickly about it awesome yeah yeah so basically as as basically victor was mentioning here there's going to be about 10 questions that recap on the conversation and there's basically going to be five winners each of them receiving five excuse me 10 tomo in this case so if you guys are interested in that check out the link down below in the description for the conversation but all in all guys i gotta say it's been a privilege to be able to host this panel discussion to to cover so many different facets of d5 and uh to have so many familiar faces and names here in the conversation so thank you guys for giving me the opportunity and really appreciate you all making the time to join me

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