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Darthstabler shows us the true balance in the force of DeFi
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Darthstabler shows us the true balance in the force of DeFi
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USDFI is a universal banking protocol that aims to simplify DeFi by offering core DeFi features in one app. It includes lending, liquidity, and a stablecoin. They are currently in a 60-day presale to raise $2 million. The team has academic and finance experience and has leveraged their network to design the protocol. The presale involves buying their governance token called STABLE. The stablecoin, USDFI, can be minted by exchanging any crypto for it, but it cannot be redeemed. The crypto used to mint the stablecoin goes into the protocol's treasury and generates yield and fees. If the stablecoin loses its peg, the fees are used to buy it back until it stabilizes. What is USDFI and what is it trying to solve? So USDFI is what we call a universal banking protocol. And the problem we're really trying to solve is reducing the complexity of DeFi by delivering a single super debt, which means we have all core primitives of DeFi, lending liquidity and a native stablecoin in one single DAPP across any given chain. And that's basically what we're shooting for. Now the question is, how do we achieve this? And we have basically, we have several of these pillars integrated in our core architecture, the main one being sort of the liquidity driver of the whole ecosystem. That's our DEXT, which is, I guess, one of the main reasons why I'm in this AMA here tonight, is kind of solidly based, but we've discussed it for, I think, like five or six hours, why it's actually not right. And then we have our money market, which are also a core part of our super DAPP. And then we have our native stablecoin, which has a novel design. It's a sort of, I'd say it's sort of like this zero to one thing in DeFi. The design's not been tried and tested in that sense before, but we're just sort of bringing a novel design on how to actually start to design a DeFi stablecoin. You have like your presale essentially going on now, correct? When you look at the website, there's a countdown. So how exactly is that all going with the launch and the presale? Yes, I mean, we have sort of a very slow and steady approach. We have a 60-day presale. We're in almost two weeks right now. Our goal is to raise $2 million. We're short of $300,000 at this point, which is fine, I guess. I think the psychology of the people really comes into play here when you're looking at 60 days that many people just observed presale and how it's going, because they don't potentially see the point of locking up their capital 45 days beforehand. Right. Yeah, that's a lot of what I've been seeing as well. People are just kind of watching and waiting, which is fine. There'll most likely be a little bit of a rush at the end there. Yeah, I mean, if we compare it to the other launches we've seen recently, I think the most recent one was like, I think, Satin Exchange, right? I mean, I think they did $200,000 in their first presale, and then was it like $700,000 or $800,000 in their second presale, and both closed successfully. So we're quite confident we can get there as well. Yeah, it should be fine. It should work out. So usually with these type of things, I like to start with the ground level and talk about the code base involved. But you guys have so much going on with essentially, you know, last I looked and checked, essentially six or seven different protocols that all kind of nest into each other. So instead of that, let's talk about the team a little bit maybe, because I've been very fascinated with that. In case anybody has noticed in the USD5 docs and white paper, when you go to the team roster, those are definitely AI-generated images. But am I correct in saying that those are all your real names and your real credentials and backgrounds? Yes. So we do apologize for the mid-journey pictures. They were creatures of the night or really ugly to look at. But we're a docs team. Yes, that's true. Right. And then you have a lot of, it seems to me that you all have a lot of, you know, in real life, traditional finance and business experience. And I know when we talked before, like I asked you on one of the pages in the docs, there's all these crazy formulas with numeric variables I've never even seen before. And you told me a story. And it seems that maybe Switzerland is so small that everyone's right down the street. But you told me a story about right down the street at some cafe, there's some people with some high-level credentials that you went and talked to, and they crunched some numbers for you. So can you tell us about, you know, some of these connections and people that you know that have been helping you along the way? No, I mean, I have, next to having worked in ThreatFive for more than two decades, I also do have a background in academia, right? So I have, what we have here in Switzerland is this famous institute, which is called the Swiss Federal Institute of Technology. And you can really, the way to think about it, it's like really Europe's kind of Stanford or Berkeley or Harvard, right? And it really plays in the same league globally. And obviously, I mean, the smartest people in Europe, they sort of go to that institute, they study there, and I sort of use my network. I have, when sort of designing the protocol with my team to sort of leverage that network, I have also in academia to sort of fact-check and double and triple-check and model some of the things we're trying to achieve within the protocol. So one of our team members, he is actually this math nerd. He is, I think he has the, he works in the Swiss Federal Institute of Technology in the Department of Functional Genomics. So there's this group of, there's this team of GigaBrains. And whenever we had a question around modeling and stochastic and anything around math, we would just approach him and he would take it to his team back at the Federal Institute of Technology. And they would model it out, do the calculus, everything around the stochastic models, and come back to us with a solution. That was quite a fun process. Right. And when you were telling me the story before, that really appealed to me, because I feel like there is already long-existing best practices, SOPs, and things that exist in business and finance. And it seems kind of slow to be getting integrated into DeFi. And DeFi is a wacky world of its own, but it was really interesting to me to see that you guys are taking it to that same level, treating your DeFi project with the same level of scrutiny and analysis as, you know, like big billion dollar businesses in traditional finance. So that was something that really appealed to me when you told me those stories before. Yeah, I mean, we were just trying to find a solution to the problem that we were having at that point while we were sort of structuring, designing the whole tech stack. And I'm happy to dive into that if you want to have sort of discussion around that, because you previously mentioned that you want to discuss how the whole design happened. Yeah, we could dive into that for sure. It's up to you. I'm thinking also, though, a lot of people seem to be interested in exactly what's going on with the stable coin. We've got a few questions in the text chat about that as well. But I'm still curious myself with the presale. Like, how are we getting into this? So what are we supplying in the presale? What are we getting back? What happens with that whole procedure moving forward? Yeah, right. Little steps, little steps. Thanks for the question. So the presale, basically, what's on sale right now is our token. Our governance token is called STABLE. It's kind of a brain twister. STABLE is not the stable coin. It's the governance token stabilizing the system. It's kind of a brain twister, but I mean, we named it STABLE on purpose just to give you sort of that aha moment that you will never forget. I hope we're kind of achieving that. But what you're really buying is STABLE, the governance token. There's $200,000 on sale. We have a Genesis supply of a million. So 20% of the supply is on sale for $10 each. And that's that, right? That's why we're raising or focusing on raising $2 million. And this is really a bootstrapping, a liquidity bootstrapping event. So what you're, I mean, the money going into the presale contract is used to bootstrap the liquidity once the decentralized exchange goes live on, call it May 3rd or May 4th. All right. Excellent. Excellent. Moving on from there, it seems like a lot of people are interested in the mechanics of your STABLE coin, at least from what I understood. Please correct me if I'm wrong. But what's tied into that is, as we discussed before, the mechanics that Ohm taught us in buying and owning for the protocol to own liquidity. So as far as the STABLE coin is concerned, how is everything going to work around that? How are we going to mint it? And then what are all the mechanics that you have in place to protect the peg, so to say? Well, we have, the way it works is you give a dollar and you get a USDFI, that's our STABLE coin. So there's a difference between USDFI, which is the protocol itself. And then there's USDFI, the token, the STABLE coin. So there's a difference, right? And so you use, you can use any crypto to mint one dollar worth of USDFI and get a USDFI. And that's that. It's not, you cannot like redeem it again against the protocol. So think convex curve, right? It's just a one-way road. You mint it and there's no primary market for that coin. However, because we operate our own decentralized exchange, we can always offer a secondary market. Like the same way, for example, you would trade convex curve against curve on the curve pulls, right? What are, what is being used to mint the STABLE coin? And then after minting the STABLE coin, can it be redeemed? No, that's what I said. I do apologize for not pointing that out clearly. So any crypto you put in, let's say you put in a specific sample, right? You mint yourself, use one USDC. Maybe that's not a good idea. Yeah, it's a good idea again. So let's say you mint one USDC and then you get one USDFI back. What happens to the USDC? It goes into the treasury of the protocol and becomes protocol owned liquidity. Now that liquidity, I mean, that USDC is sort of paired against the crypto pools and those pools, they start to generate yield and fees. And in case there's a, let's say in a under pack situation where the coin de-packs, those fees are used to buy back USDFI off the market until it re-packs. In a very broad, let's say, this is like a really bad metaphor, but sort of the mental model you can use if you think about it. Let's say Uniswap does the same thing. And then they say, hey, whatever our STABLE coin de-packs, we're using all our fees. Don't go to the LP providers anymore. But in that very moment, we're using all our fees to buy back the STABLE coin until it reaches parity again. Right. Right. So what all assets can be used to mint the USDFI STABLE coin? Any asset, any crypto, it doesn't matter because it will just convert it in. It will get converted into that protocol owned liquidity. And that protocol liquidity obviously is always like the biggest pool with the highest liquidity and the highest fee generation in order to get the most stability to the ecosystem. But from what we talked earlier, from what I understood, the USDFI coin, you cannot redeem it. It's a one-way street. Exactly. Not on the primary market, only on the secondary market. That's what I meant by saying, take convex curve, right? Once you convert, for example, curve to convex curve, there's no way back. The only way to get rid of it is by using a curve pool where you're on the secondary market where you can just trade convex curve against curve, if that process is familiar to you. Right. Right. Right. So I think we answered the first question from Cheers Love because they asked, the treasury is going to act as the quote unquote reserve. What kind of liquidity assets are you going to yield with and guarantee stability? So I think we answered that pretty much. Pretty much anything people use to mint the coin is going to be put into protocol owned liquidity and the fees generated there will go into backing and stabilizing the peg. Their second question was the AMM profits are used as buybacks, but if the treasury isn't overcollateralized or perceived as using unstable asset backing, how do they prevent a bank run scenario, assuming there are limited AMM profits for buybacks and faith in VE arbitrage is low? And I know when we talked before, you had some other really interesting ideas and how to help stabilize and back the peg and get it back up to peg when under peg. So can you tell us more about those things? Yes, of course. So there's technically there's no bank run possible, right? Since the protocol liquidity, I think I called it a crypto sponge. You called it something different. But the way you think about it, it can't be depleted. It's in the protocol forever, right? So we're fine with sort of a soft moving soft peg. We don't aim or we don't shoot for sort of a high fidelity peg like other coins do. We're fine with that sort of wiggle room in the stability of the stable coin. And that's my design, because the way to think about it, it's about you have the protocol and that protocol is mathematically always buying back the stable coin, the oversupply from the market if there's a deep peg to the downside. So that everything is happening on contract level. There's no one meshing like buttons on a ledger. This is fully automated on contract level. And sometimes, yeah, it may take two weeks, three weeks, four weeks to re-peg, but it will re-peg. I mean, it's just what the math says. And if you sort of model it as a stochastic process, it has what is technically it's called like a positive drift, right? Which just means it's not a question of if, it's just a question of when it re-pegs. And that's why you can sort of have 100% confidence that it will re-peg. And because of this process, the game theory starts to kick in where people say, OK, we have a drop, let's say it drops to 85, right? And then it stays there maybe for a day or two. It's around 85-ish. And then the sort of the buyback starts to kick in, and you will start to see the effect of the buyback mechanism of the protocol. And then, you know, it starts to pick up. It becomes 86, 87. And then the game theory kicks in. People will start to front-run the opportunity, right? And then, because they will know it's free money at the end of the day. They can really make a dollar a year, and then they can sell it again for 99 or 98, OK? Because the protocol is using all the liquidity available to buy back USD5 off the market. And sort of this combination of expected volatility will be—so the expected volatility was quite large at first, but I mean, let's assume this process repeats 32 times. Then sort of the drawdowns will start to get smaller and smaller until eventually people sort of have the consensus that, yeah, I mean, really, this is a soft-peg coin, and the drawdowns will start to get smaller to maybe 90, 90 to 95 until people will jump back in and rebuy or buy that token itself to make that free money until it repegs, right? Does that make sense? Right. We just saw that with USDC, essentially. You know, everyone that bought USDC at $0.88, you know, pretty much within 24 hours just made a free 10% on their bags. But then, of course, when you start getting back up to parity and close to peg, people are going to start selling to taking profit. But that's OK, because that's going to be more fees running through the protocol and liquidity, which is going to mean more buybacks for the coin. But since we're talking about the stablecoin, and this is kind of getting ahead, you explained to me this plan with your farming aggregation layer that is going to then also help stabilize the peg. Can you talk about that, or is that leaking too much alpha? No, no, no, no, it's fine, it's fine. But I think let's talk about the VEUSD5 first, right? Because I think it's important to point out and to make people understand that there's actually several stability mechanisms, not only one. But as you pointed out correctly in the USDC situation, I mean, the main problem of any other stablecoin is that once the coin de-pegs, and it always happens, I mean, every stablecoin so far has de-pegged. There's not a single stablecoin in history which has not de-pegged to a certain degree. And the problem is none of these protocols ever had a contingency plan. So if it de-pegs, you know, all hell breaks loose because people don't know what to expect. Now, our stablecoin is sort of the first stablecoin where you have a protocol-based contingency plan. I mean, if it de-pegs, that's fine, that's in the design, and we can actually tell you exactly what's going to happen because it's just math. It's all in there. It happens automatically. And I think that's the big difference, you know, from a trust perspective. That's definitely one of the aspects. But yeah, please go on if you want to talk about all of the mechanisms that you have in place to support de-peg. Yeah, that's all stuff that I'm personally really interested in. Of course, happy to do so, happy to do so. So the second stability mechanism is that we actually, we can have, we follow sort of VE tokenomics. We can, I think that's a whole separate discussion. But for the moment, we can just acknowledge that we don't have single VE tokenomics. We have, for the first time ever in crypto, we have something which is called dual VE tokenomics. So what does that mean, dual VE tokenomics? Is that just another fancy word? Yes, it kind of is. But it also simply means that you can not only have one governance token, which is stable, you can lock it up and it becomes VE stable. And then you do the whole governance thing, you know, you lock it up for fees and bribes, but also our stable coin, you can lock up. So you can actually generate VE-USB-PHY, and if you create VE-USB-PHY, within the protocol, VE-USB-PHY is hard-coded to always one dollar. So as soon as you lock it up, you have always the economic equivalent of a dollar, right? What does that mean? So let's assume a DPEX scenario. Suddenly you're having a bull buying USD-PHY at 0.90, right, because it just DPEXed. And then what you're going to do? Of course, the first thing you're going to do is you're going to lock it up as a VE-USB-PHY, because actually now you're getting a dollar's worth of voting weight in the governance system, but also you're getting a dollar's worth of bribes and fees for a discount, right? So your APY, your net ROI becomes substantially higher, because you did not pay a dollar for a dollar, but you paid less. Does that make sense? Yeah, absolutely. It seems kind of akin to a similar situation where you see with a lot of solidly forks, where when, because the flywheel can work both ways, right? So when there's a bit of a downward spiral, what can be implemented are like locking bonuses, right? So, you know, 10-20% locking bonus. So you take the farm token, which is then also gets locked into the governance token. And then let's say you lock, just for sake of numbers, but this isn't the right math, but you lock in 80 tokens, but then you get 100 VE tokens. So it seems to me a bit of a similar thing, right? If the DPEG's to, you know, 0.9, then you can buy it and lock it. And it's essentially you're getting a 10% bonus on that. Well, I disagree. I disagree strongly, actually. Oh, go on. Thanks for asking, I appreciate it. The only way to achieve the process you just described is by inflating your tokenomics, right? So, I mean, it's a high price you're paying. Okay, you're sort of, you're paying a bonus or you're paying on top of what people already have because they're bonding their tokens. But you're just inflating and destabilizing your ecosystem. I mean, that's a high price to pay. And that's something we specifically wanted to avoid. You know, we are not inflating the token supply. We have actually like a crazy conservative token supply. You were laughing at me the first time I mentioned, but I mentioned there's a genesis token supply of a million tokens. And our token inflation is 7% a year. Not a week, not a month, a year. Right, yeah. I mean, that's a very good point that you make there. So, yeah, glad we talked about that because the inflation concept is important. Absolutely. And yeah, 7%, I didn't necessarily laugh at you. Maybe I did, but it is a wild concept because when you're doing like tokenomics analysis and review for a lot of these solidly forks, it's just a matter of fact that especially the very first week, there's insane inflation, you know, anywhere between 20, 40, 50% inflation just on the first week, which is, you know, a catch 22. You kind of need to have that with a good price to get those high APRs to pull in TDL. And long term, it definitely affects the math and the models. So the fact that you guys have such low inflation and how you're using the stablecoin with the VE system, it's very unique and interesting to me. Obviously, I mean, I don't know anyone else doing something like that, do you? No, no, we don't actually. And we specifically opted for very low inflation because actually, I mean, no matter how we thought about the inflation and tokenomics, we could just not find like an advantage of like having a super high token supply and then sort of running the risk of totally wrecking your whole digital economy with an oversupply because once sort of the spiral down starts, it's very hard to put the genie back in the box. So we sort of opted for the very conservative approach and said, listen, I mean, what's the worst thing that can happen if you have a very conservative token supply? OK, the token shoots up because there's very high demand. It shoots up in price. Yes, it can be overvalued for an extended period of time. But then eventually, I mean, if sort of the bear cycle comes, it drops and it drops to a fair value. It drops below. But you're still you're trying to get like the parameters right. Whereas with the token oversupply gets so massive with the high tokens, token inflation with the protocols that I mean, once sort of the tool space is out of the tool, you can't push it back in. That's kind of the same principle, or at least the way I see it. And it really endangers your whole ecosystem. And we're also obviously, if you look at the OG protocol out there, like, for example, Curve, and even Curve, OK, I think these days, their token inflation is people take around 25-ish to 30-ish percent. And like the biggest protocol out there with sort of the highest demand as far as tokenomics are concerned. Can you hear me? Hello? Yeah, yeah. Oh, OK. Sorry, because my screen blacked out here on my side, and I didn't know if you were still there. So I'm glad you can still hear me. So yeah, I was talking about Curve. So I mean, if you observe what happens, let's say in the past six months, like the OG protocol and we highly admire Curve. I mean, even their parameterization is really difficult because, you know, the token price starts to drop and you're inflating 30% a year, let's call it 30% or 25, into that drop. And it just drives your token price down and down and down. And I think by having sort of this contract level buyback mechanism implemented, that really helps to support the whole economy. Because what I did not mention yet is there's actually a switch in the protocol. So think of it as sort of a if-this-then-that switch. So there's two states. One of the basic states is if USD is defined, the stablecoin is at-packed. So you're still collecting the protocol fee. So where is the protocol fee going? It's actually going into the buyback of the stable token perpetually, right? So if at the standard state, you're constantly buying back the stable token, which also drives the price up indefinitely. And as soon as it de-packs that sort of that buyback, think of it as sort of as a buyback cage that gets automatically directed into the USD5 buyback until it reaches parity again. And then it goes back into the stable governance token buyback. Yeah, which is definitely a great design. However, this does raise the question. So the treasury, so to say, is going to be then acquiring because it will be buying lots of USD5 stablecoin, but then also the government's token, the stable token. So what is the treasury and protocol then going to do with all of those stablecoin and governance tokens that it acquires? Well, that's a good question. Thanks for asking this. I mean, the question really is, what is the protocol doing with that sort of supply overhang? Is it burning the tokens or what's going on here? And the question is really simple. I mean, a twofold, right? So first, what happens with the USD5, the stablecoins? I mean, the stablecoins really go into the protocol-owned liquidity pool, and the liquidity pool stays stable as long as there is not a supply overhang, but it's protocol-owned. The way to think about it is like Frank does with their AMOs, right? They sort of, they move into the pool and then sort of they keep the peg around parity by reducing and increasing supply. So this is what sort of technically sort of happens with the USD5, which gets bought back. So you can, it really deepens the liquidity and not only deepens the liquidity, but it also improves the fees generated because there's more tokens and fees, more tokens for fees to be generated on that way, right? And as far as the state tokens are concerned, they're also going back to deepen the liquidity into the protocol. But always think of it as like the protocol puts it back, but it puts sort of a limit order into the protocol to sell, always sell the token at a higher price, right? In order to avoid any sort of downward price spiral or downward price pressure on the stable token itself. So let's say if it goes into the pool and it's being bought at $10, right? So what the protocol does, it automatically generates sort of a limit order at, call it $10.05, right? And once the token price starts to rise, I mean, obviously there's enough demand because price is going up, which means there's more demand and it gets sold for $10.05, which also nets, again, the protocol more fees and more returns, which are reused to buy back more of those tokens. So you have sort of this, I like to call it within the team, we're calling this sort of the crypto cold fusion. I know that's sort of a very high target to achieve here or very high goal to achieve here, a crypto cold fusion, don't get me wrong. But I like to call it sort of lastingly a crypto cold fusion. Right. And I remember you were also, am I correct or not in this? I believe you're also saying that with your AMM, your DEX, the farmers, so to say, would possibly have an option to get their LP rewards in the stable coin, in the USD5 stable coin from the treasury that it stocks. Exactly. So this is that you're actually referring to sort of another stability mechanism, which you kind of thought of as a sort of a liquid driver type of model without actually an extra token, right? So what happens is we have implemented a protocol, which we call typical sort of the money legal protocol. And that protocol, the way to think about it, that protocol is for all external pools, not internal pools. Internal pools are the way you would think about is adding like those SAMM and VAMM, so the solidly volatile or stable swap pools. But we also, what we do is we build an aggregation layer on any other protocol. So we would say, let's say if your goal, let's make a specific example, right, is you are on PancakeSwap, okay? And you are farming BNB versus BPC, right? And then you're farming that at, it yields you seven, eight percent, and you're farming that. And now what you're constantly getting is, as we know, you're getting cake, which you sort of have to collect and sell in order to realize your staking yield. And that's sort of, I mean, A, it's bothersome, and B, you don't know how much cake, how much dollar for your cake you're actually getting because cake itself is very volatile. And you never end up relegating the APY you see on your screen the moment you establish your pool, your LP for the pool, right? So what we've implemented is monolegals, which simply means we use sort of in the backend, the frontend is USD5, but in the backend it's aggregating the PancakeSwap pools, and we're actually, we're auto-converting the cake to USD5. What does that mean? It simply means you're de-risking your portfolio because you're actually, for the first time, you're getting, as rewards, a stable coin, which means you're just locking your APY, right? So you really get what it says on the tin. If it says 8%, I mean, we're locking you 8%, assuming that USD5 is a parity at that moment, you're really getting 8% paid out in a stable coin, and you don't have to bother about sort of collecting and selling cake and being exposed to the volatility of that token. And that in turn sort of drives back, and also is also an instrument, we discussed this previously, sort of to buy back USD5 off the market once it de-pegs to the downside, because we have this system where we automatically calculate the boost. Let's say you're buying USD5 at 90, and then we'll say, okay, if it re-pegs, your yield is actually not 8% on that BNB BTC pool, but it's actually 8.9%, because you're also participating in the upside of USD5 re-pegging. Well, that was quite a talk. I'm out of breath. Yeah, see, that was actually a trick, because I wanted to talk about the aggregation layer before, and you turned me down, see? So I was able to guide it in that direction. Yeah, yeah, yeah, you tricked me into it, man. Thanks for doing it. Yeah, just to recap on that, because I think that this is a really interesting mechanism. So there's a farming aggregation layer. You can think of it, you know, I think as far as maybe like phantom networks concerned, you know, Liquid Driver was one of the big market movers in that setup. So your protocol will have its own similar farming aggregation layer where people can deposit LPs from other DEXs and other markets onto your platform, and then they can choose to get paid in the USD5 stablecoin that comes from the USD5 treasury. And if the USD5 stablecoin is under peg, like you said, at 0.9%, then when people choose that option to get paid out in the stablecoin, they're actually essentially getting a boost on their yield if they're essentially betting on the stablecoin coming back to peg, which, as you said, the math indicates that it should. It's just a matter of when. And therefore, it's all also kind of automated for the user at the same time. Yeah. Sorry for jumping in. And the more people use MoneyLegos, the more buy pressure is on USD5, and the quicker USD5 will be back at parity. You see the system, right? Yes, it's creating its own little kind of flywheel effect. Exactly. So there's a flywheel within a flywheel just within sort of the aggregation layer. But when we talked before, I think you went into more detail about how on the front end, on the UI, you're going to have like a cool little display that's just showing all the numbers and how much extra they'll essentially be yielding in the end if they participate in this aggregation layer when under peg. Yeah, exactly. This is actually something you can see on our Gitbook. We have pictures of our testnet. We have like a sector which is called more USD5. And then there's sort of a pitch deck, which is like just five, six slides. And then there's like a really extended one with 30 or so slides. And if you zoom in there in the bottom section, lower third, there's pictures of the testnet. And then you can actually see like the UX and UI of those MoneyLegos, how everything is displayed, how we calculate your yield and your potential yields and how much money you spend and your ROI and all those metrics. Right. And once again, I don't think that this specific strategy and tactic, I don't see it. I don't think I have ever seen this deployed in this specific way anytime before. So when we talked about this earlier, it really perked my ears because I was like, wow, this is kind of like a really interesting, unique, novel way to go about things. Well, I mean, that's the beauty of having like the entire ecosystem. I mean, that's like the main reason for throwing everything into one single app, because I mean, we sort of follow what I think Frax calls it the trinity, right? We call it sort of the universal banking protocol, which is kind of going into the very same direction. I mean, the fact that they're very technical, they're very sophisticated in their approach, and our ecosystem is, let's call it a bit more playful, right? And has all these little nooks and crannies we're discussing at the moment. Do we want to keep talking about the stablecoin peg and other mechanisms? Yeah, ask the community. Maybe there's a question. Someone is, let's read. Are people asking questions? Hello. Yeah, I mean, we've answered that before. What does the protocol do with the minted tokens? Yes, it goes, it becomes a protocol on liquidity. Yeah, Tom Baum has a question in a different channel. I think we covered all this already, though. He asked, do you maybe know if your stablecoin can be minted using staked LPs as collateral? Are you going to be accepting already preformed LPs as collateral to mint the stablecoin or just single tokens that you will then on the backside under the hood create LPs with? I mean, at the end of the day, it makes no sense because I guess we could operate just you can zap in LPs, but it would just cost some more gas fees and you will get sort of a fractional amount of a coin. So there's no point really accepting LPs for you as a dollar minter, right? Or providing, the other way around, sorry, the other way around. There's no point for you providing LPs as sort of the unit of account to be converted into USD 5, right? Because it just costs you more because we eventually have to change that LP back into the blue chip tokens in the most liquid pools we currently have on the decentralized exchange. And yeah, I think Tom asked another question somewhere else here, but I think we covered that already. Once people feed your protocol on liquidity by minting USD 5, what exactly does the protocol do with it? So yeah, I think we covered that already. And as an LP to serve as liquidity on your DEX, that's kind of an important differentiation there, I guess. So all of the protocol-owned liquidity that you'll be generating, you're going to be putting it on your own DEX, right? Or are you going to possibly... Exactly. No, no, it's going to deepen the liquidity for everyone. So although it's protocol-owned, it's helpful for the whole community or every user of DeFi because obviously you get less price impact and lower slippage if there's deeper liquidity. So if the whole pool, let's say eventually it becomes a multi-million dollar pool of protocol-owned liquidity, then that's actually used as liquidity for the DEX, which tremendously deepens the liquidity again. And you have sort of another flywheel going on there that the bigger the treasure becomes, the deeper the liquidity gets, right? And liquidity begets liquidity and so on. Right. And that's obviously going to attract more action from aggregators as well. So that's going to feed into it. Exactly. And this is also a reason we discussed previously when we were talking about the design that there's not necessarily an advantage of having what... Because you were asking about boosted pools, right? There's always a trade-off. I mean, what do you do with your liquidity? Do you want to sort of turn it into boosted pools or do you want to keep it as liquidity? There's a balance you have to achieve at the end of the day. Oh, yeah, that maybe is a good segue into another topic here because, yeah, we did talk about that before. I'm just going to be blunt about this. There's a fork season going on and everyone is adjusting to the nomenclature and vernacular being used that goes along with this kind of, you know, DeFi social movement at the time, I guess we can call it. And so when people talk about boost and they say, you know, are there boosts? What they're referring to mostly right now is the model in a lot of solidly forks to where you can get greater rewards from supplying your LP relevant to the size of the VENFP that you hold with that same wallet. And that is not what's going on with your protocol. You do, though, if I recall correctly, have a different kind of boost system, but it's not like that. So can you can you can you dive further into that and refresh my memory and let us know exactly what's going on there? Yeah, of course, happy to do so. So what you just described is the way, for example, Velo drone provides boost to the lockers, right? So what does that mean? If you lock up your VE Velo for a year, you get a higher voting weight in the governance of the protocol, right? And that's that because all the yields, they stay the same. You're just your voting rate gets higher, which means you're collecting a bit more fees and bribes. But basically, there's no knock on effect on the other side. But what we did is basically because we were sort of very struggling with the governance, I explained to you that our code base is actually not built on solidly itself, on solidly V1, but our code base is actually built on the beta of spirit swap V2, right? So because very early, there's a story to it. So when sort of the whole solidly collapse happened, then quite early on, spirit swap came out with their beta. And they fixed, actually, a lot of the V1 bots of solidly, and we were looking at the code base, and because my dev approached me, my team member and co-founder approached me and said, listen, I mean, these guys are onto something. This is a great tech. Let's look at the code. And we were looking at the code. We're like, okay, this is cool. They fixed so many things. And so hats out to spirit swap of actually being sort of the torchbearer for the solidly V1 fixes. And we were looking at the code, and we were like, this is cool. But you know what? Like, this I would do differently, you know? And this I would do differently. And this is how we actually started to build our sort of own tech stack based on the spirit swap code base. And what we did is, like, we fundamentally did not like the governance code in spirit swap. So we removed the whole governance section and reintroduced sort of the OG curve code base. So we went back to curve and took the entire code base of curve, implemented that into our own code base as governance protocol. But then what we did is we gave it sort of the solidly twist, the solidly twist being like, okay, the LPCs go to the sort of to the V lockers, and the emissions go to the liquidity providers. Like, that's what we call the solidly twist. And what curve does, many people forget about this, they sort of coined that term of a boost. And what their boost is, like, having a higher percentage of actually the liquidity fees you're getting. So not voting weight, but liquidity fees you're eligible to get as a VE governance participant. And that we kept. So our boost actually means you get more of the fees when you lock up longer and not more voting weight. Does that make sense? Right, right. And then kind of solidly model boost system, and it's based off the emissions. It's like Solid Lizard, for instance, they got pretty popular and they have the boost system going on. The larger VNFT you have, you get more emissions. But in your model, and similar to curve, the more governance power you have, you're getting more fees as opposed to emissions, which I think is also an interesting differentiation and consideration. Yeah, I mean, the way to think about it, it's what you actually want to have, right? Because if you think about liquidity in three categories, you can sort of, you can rent liquidity, or you can lease liquidity, or you can buy liquidity. So buying liquidity obviously is the thickest. Think of it as sort of the Olympus own framework where you can sort of have all three flavors in one protocol. But most of the protocols, like the standard DEXs, they just have, you can just rent liquidity or they rent liquidity. And you go to PancakeSwap or whatever DEX, SpookySwap, and you farm there. They give it, they give you their token, their reward token, but you can withdraw at any time. That's sort of, that's renting liquidity. Then obviously that didn't work, and that sort of wrecked many protocols because the token price goes to zero, there's constant sell pressure. What curves sort of introduced is leasing liquidity, right? They say, okay, you give me your liquidity, we give you our token, but you have to be locked for a certain period of time. That's leasing liquidity. And then there's buying liquidity. Buying liquidity means like Olympus, you know, you give us your crypto, we give you our own, and if you lock for longer, we give you even more own. Okay? And we never give you back. We just give you more own. That's buying liquidity. That's protocol owned liquidity. That's a great concept to implement correctly. So what, basically what you're doing is if you're just adding more voting weight, coming back to Velodrome, and you're giving everyone the same yield. Yeah, you're coming back to just renting liquidity because that liquidity can be withdrawn at any time. Everyone's getting the same yield. So the aggregators, there's many of them out there, they will just farm and dump your token constantly, but they're getting the same yield as your most loyal people who lock up for four years, right? Like the really hardcore maximalists, they're all getting like, if a pool gets percent, they're all getting 6%. It's not like, okay, the farmers, they lock up just for a week, they get a penalty, they're getting 4%, and the people you really want to have in your protocol who lock up for four years, yeah, they're getting 10. No, it's not like that. Everyone's getting 6, and that is sort of a misalignment of incentives, and we never really, or we just prefer to have an alignment of incentives by having that boost back into the rewards you're actually getting. That was, again, quite, you know, sorry for going back to Adam and Eve with the explanation, but I think it was necessary to make people understand why it's so important to lease liquidity or buy liquidity versus just renting liquidity from people. Right. I mean, I personally, I love to geek out on this stuff. I love to go super deep. I've mentioned this here and there in the Millennium Club server, but I'll say it now. We had a three-and-a-half-hour phone call conversation after a lot of texting back and forth, and I still think in that conversation of three-and-a-half hours, we only covered maybe 20% of everything going on with your protocol at most, because there's so much going on. There's so much synergy and symbiotic relationships between each layer of the protocol, and each one of those interconnections all comes with its own little details, its own little twists, and I remember that I was kind of being a devil's advocate, and I was trying to pick apart every little detail, and you had what, in my opinion, a really good answer for every little thing. I personally like to go into great depth and detail, and we're going to record this so people can skip along if they want. So we were just talking about, or you were just talking about your guys' decks, your AMM that you're making, starting with—essentially inspired by SpiritSwap and Curve. Am I understanding this correctly? You're essentially starting with all fresh code and logic using your own tech stack as you're building this deck, correct? Exactly. I mean, obviously, we were inspired by the names I just mentioned, but you can't just throw everything into the same mix where you get a really buggy code, which is not executable. So we had to adapt every line of code to the ideas we were actually trying to implement. So every number, every variable, every metric, every parameter is sort of custom to and therefore a specific purpose because we're trying to achieve different things with different functions, right? That's the way to think about it. I personally really appreciate that myself because code can always be improved upon in the technology sector in general. It's always moving so fast. I'm not going to talk about other forks and stuff, but the basic solidly code, a lot of people have looked at it afterwards. And in my opinion, Andre, as far as cryptography is concerned, the guy's got a lot of good ideas, you know, like Lachesis, the consensus protocol for phantom running on a DAG. That was back in 2018, I think, when he developed that. You know, and I think it's a very interesting and groovy consensus protocol running on a directed acyclic graph. But as far as the code base is concerned, a lot of people have criticized it, especially with the UI and the UI logic. So, you know, the fact that you guys are taking your time, you're starting fresh, it's in the docs, you've done audits, you have more audits coming. As far as I know, you've been on testnet with this stuff for about six months now. So I personally really appreciate that, you know, you're not just copying code, you're creating code. And as far as I can tell, you're doing it properly every step of the way with lots of precaution, lots of testing, getting quality auditors to audit it. So those are all things that I personally thought were interesting as well with your product here and your project. However, when you're talking about curve and then throwing in some solidly twists, I am curious, how is the voting going to be happening? Because I personally kind of don't like snapshot voting. One thing I liked about solidly was the integrated voting with the VENFPs. But as far as I know, you're not going the NFT route. So how is the voting going to be done with snapshots? Or do you have some kind of integrated platform for the voting? You mean for the DAO? No, I have the governance. I have acquired governance tokens. And I want to vote on the gauges to earn the fees and the bribes. So how do I go about raising my votes? So think of it as the same as Velodrome, right? I mean, we are—or that's very similar to Velodrome or Athena. I mean, we just have your vote. We have a sort of a customized voting UI. It's not the same thing because I think there's many aspects you can approve of when it comes to sort of the user convenience and actually understanding what you're voting on. But from the process, the technicality is the same. So you vote, you lock up, you vote per epoch, and then that's that, right? It's very straightforward. Yeah, sweet. It's all going to be super easy to handle, integrated, its own UI. We're not using snapshots. No, no, no, we're not doing that, no. Don't be afraid. Man, I don't—I'm not trying to be negative in any way. I just feel like, yeah, the integrated— But I love, like, having sort of a good quality discussion, you know, agree to disagree. I like that. It's fine. I like that you're poking holes into the concept and, you know, because there's always a thing we may have not considered in full or we may have forgotten about in the meantime. It's always great to have a counterpart like you asking in-depth questions and saying, yeah, hang on, how does this really work? I didn't understand that, and that makes no sense to me. So please explain it to me. That's great. Thank you for that. Yeah, and then everyone in the audience, if you've got some questions, just drop them in the AMA text channel that's right above the stage channel. Open invite to try to attack here. Yeah, and I think what is—maybe what we have not discussed yet is why it was actually necessary to come up with such a concept of dual VE. I mean, you mentioned briefly governance and voting, and the dual VE design is quite unique or is unique to the U.S. D5 protocol. And I think it's sort of—to close the whole thing, the logic of the design, I think it's important to point out why there's actually dual VE, right? Yes, please do. Go on. Let's hear about this. But you recall our discussion. I explained it to you the other day. So I hope you still remember some of it because it's a longer story, right? Because you were asking about, I mean, about Spirit Swap and how we came to implement the curve governance system and because we were struggling to have a proper governance implementation because we always felt like something isn't right and something just doesn't add up. I mean, even with curve, we said, yeah, I mean, it works, but then it doesn't work. I mean, how do we actually make this sustainable? How do we make this a VE protocol which basically lasts forever, for years and decades? And the problem about VE is, about VE33 also, they share the same problem that they seem to be a zero-sum game, right? And I was, like, struggling with that because you also pointed it out, right? I mean, the government, at the end of the day, it's a zero-sum game, also with these governance tokens, even if you lock them up. And then while we were building the protocol, it was maybe late last summer or early last summer, and we were struggling to come up with the ideas. We were kind of stuck. And all of a sudden, I discovered this paper, this white paper from Tarun Chhetra. Tarun, we all know from God with fame, cryptos, Giga Brain, and he releases this paper. He releases many papers, and this is not quite well-known, but he released this paper last year with his colleagues from Berkeley and Stanford, where he basically says, I mean, it's about the own design itself, how the own design, how all those parameters we discussed, like renting liquidity, buying liquidity, and leasing liquidity, actually reduce volatility in a given ecosystem. But that's not the—I mean, that was the main point. But he came to very interesting side conclusions, and one of those side conclusions was that he actually sort of mathematically showed everyone that, yeah, Ohm is a VE, and VE33, that's a zero-sum game, and if it's a zero-sum game, it's a non-cooperative game, and a non-cooperative game means there's no equilibrium, so you can only lose—you can only win if the other player loses. Okay? That's—let me catch my breath here for a second. Are you still with me, Sonny? Oh, yeah, absolutely. And the zero-sum issue is an issue, and that's another thing that I like what's going on with your project is you're focusing heavily on the fees situation and the very low inflation rate, because when you do the math and you model things out, I mean, the numbers just don't lie. So what's going on with the really high inflation, in order to combat that having a negative effect, there comes a lot of—a lot of game theory comes into it, and a lot of psychology, really, and you definitely need the community and also the partners as a whole to not just, you know, farm and dump. You need everyone to kind of play along with it, but then that kind of does open the opportunity for—to then, like you say, with zero-sum, the only way for them to make money is by essentially taking it from someone else. So I really like the idea that you guys are—you have this in mind, and you are working towards a goal to get further away from that and to close the gap, essentially. Exactly, exactly. So we sort of deeply analyzed that paper, right? I mean, obviously, I don't understand stochastic equations, so what I had to do is I went back to those geeks we discussed, like, an hour ago, right, at the Federal Institute of Technology, and I showed them the paper, and I told them, listen, explain this to me like I'm five years old, because stochastic is not my thing, right? So they explained it to me, and I said, does it really mean it's a non-cooperative zero-sum game? And they said, yeah, that's exactly what it means. And then I asked, obviously, the question, yeah, but, I mean, how do I actually resolve the zero-sum game? And then they told me, yeah, you have to make it a non-zero-sum game, because the way it currently is structured, the whole digital economics of every crypto protocol is you end up with—I mean, there may be a solution, but there's really, like, the VE is a solution to these, what is called Hamilton-Jacobi-Isaac equations, and they're really non-trivial. I mean, people spent a lifetime and a career resolving those, and you have to make it less non-trivial than that. And going back to my question, I asked these guys from the Department of Functional Genomics here, but what's the solution? And then they said, yeah, you have to add a dollar. And then I was thinking, oh, okay. And then it kind of struck me, yeah, we can actually add a dollar because we have our own stablecoin, right? Because we were sort of coming up with those designs in parallel. And then I had the idea with my developer, who was helping me with the whole design, that we actually—we can not only have one VE token, but two VE tokens, the second one being the stablecoin, right? And if you can always add money, if you have two stochastic processes in parallel, it's always a non-zero-sum game because you're always adding a dollar, right? And if these run in parallel, you have a less non-trivial solution to what previously was a non-cooperative game. And that in a nutshell. But obviously we had that problem. We were initially discussing if you can just game the system or game governance by adding more capital. That's not the way to do it because the whole system comes apart if you can redeem your stablecoins at any given moment in time. Hence, we had to come up with that own style of treasury idea we were initially discussing a little bit—we were discussing half an hour ago that you actually add the liquidity, but there's no primary market to redeem the stablecoins. And that's exactly the reason you can't redeem them, because they would break the dual VE system. And like this, it's like sort of one coherent, seamless system where everything has a very specific reason why it's in place. And I hope this sort of closes or sort of bridges everything together, why there's actually dual VE and why we had to come up with one governance token which is volatile and one which is not. And the reason we had to include both in the governance system, because that's actually how you actually achieve a non-zero-sum game. Also from a game theory perspective, with the possibility to actually make a stochastic model which tells you this is not a zero-sum game, it's actually working. Right. And I feel like in our previous talks and now, I'm able to follow along with these concepts. But in my opinion, this conversation that we're having right now and the conversations we've had before are conversations that I have never had in DeFi before. Not directly with projects, like with friends and stuff, you know, we'll go on these long tangents and talk about all sorts of stuff. But as far as what a project is doing and how that you're actually identifying the issues, you're going to experts in these fields, the nerds that you call them. I'm sure that they're all really awesome people and you're getting these experts. They're very good friends of ours. They're very good friends of ours. Right. As you said, you know, in Switzerland, everyone's just down the street. You're identifying the issues, you're isolating them, you are having experts analyze them, you're then creating solutions and then you're taking these different isolated pieces and putting them back together and reassembling them into a more efficient and streamlined overall protocol and project. I personally feel like this is, yeah, just a lot of stuff that I've never really encountered yet in DeFi and I really like everything that's going on there. I do remember we had a conversation, if you're ready to move on to another topic there, because we discussed how, you know, the original solidly code base, what a lot of people are doing is they're forking stuff. The original solidly code base, what a lot of people are doing is they're forking stuff and they're going fully immutable. Other people are doing upgradable contracts with proxies and I believe I said to you that just the way that the solidly code base is, which of course, like you're not using that, but this got brought up by me saying that the way that it just is and the way development and things are moving, I personally thought with that model, upgradable contracts may be the smarter solution or the way to go. And I know a lot of other devs, they like upgradable contracts because it's like the oops factor, you know, like I made a mistake, oops, we can fix that. But you were explaining to me how you feel that there isn't truly a need for upgradable contracts and there are ways to layer things to where you can keep building out and adding. So I don't know if you remember that part of the conversation we had before, but if you could go over that again, I think I really liked what you were saying. I don't know if I fully understood it then. Yeah, of course. I mean, you're referring to the fact that protocols, they prefer to have like proxy contracts in their contracts in order they need to do updates, right? And the way proxy contract works is, obviously, I mean, they serve a specific purpose and can you upgrade the contract? Yes. But there's always that sort of, like, that nah factor, that trust factor, because you can essentially rock all users, right, at any given moment in time. Because, I mean, as soon as someone has the admin keys with the proxy, you can sort of introduce any sort of code into the protocol and then that's that. I mean, it's game over, right? And not only is there sort of the trust issue factor, but there's also the factor that every given proxy always makes all transactions in a protocol much more expensive because you always call on the proxy contract and the proxy contract calls on subcontracts and you have all these loops and circles and your gas efficiency, I mean, really goes down the drain. So instead of, like, paying, I don't know, on the phantom chain, maybe half a cent for a transaction, all of a sudden you're paying 30, right? And that's just triggered by having a proxy contract in the design. And what I was telling you that in most cases, or almost any case, it's not even necessary to have sort of a proxy contract in there. I mean, you can have, like, your users safe and secure and then sort of, like, use a multisig approach to have sort of parameters you're sort of willing to accept as risk, which do not endanger users in general, like little switches, stuff like this. But those do not require having a proxy available in your protocol. Right. And then I believe you were also talking about there are strategies and ways to keep building and layering on to, if you have immutable contracts, that you have a methodology in mind to where you can keep adding, though, and layering onto them. Was that correct? Yes and no. I mean, there's obviously, there's specific things where you cannot avoid a migration, right? But I think I was mostly referring to the fact that in most cases, it does not make sense to have, like, your contracts fully immutable, right, from the get-go, because that sort of hinders the development very much. So you sort of opted for what I was just describing, not having, like, a proxy contract in there, because that's, like, really meh from a perception and a reputation perspective, but really just having, like, these little parameters which are still amendable with multisig anatomy keys, but while not endangering the user itself. Right. And those little parameters, I think one of them is something we discussed before, like adjusting fees. So maybe we can talk about the, a little more about the AMM, because, and I might be leaking alpha right now, but you know what? I'm going to just go for it. No, no, no, it's the alpha time, sir. It's okay. When we were discussing your DEX design, because this is something that I've, I've personally have always wanted to see, because I've always been a big fan of the balancer technology, I asked you if you were going to, A, have multi-token pools, B, if the pools were going to be able to be weighted, and C, if you were going to have dynamic fees, dynamic fees would be one of those parameters that the multisig could adjust. Obviously, there should be, you know, some minimums and maximums, but as far as those three topics are concerned, can you touch on that? Yes. So, I mean, I'm, of course, happy to do so. So let's, let's start with the last question, because that's the most easy one. I mean, as far as variable fees are concerned, we already have that in the code base. That's something we always, I mean, consider to be important, just to have like specific protocols or partnerships where you can adjust fees. That's implemented already. My understanding is that the other solidly forks like Velo, they're implementing that now with the V2, so it's already available in our code base. There's this forthcoming, and what we're also doing is like we're fully implementing balancer pools with all bells and whistles, and this is really, I don't know if you want to call it alpha yet, so here's the alpha, but the only way, the only thing keeping us back now is that balancer compared to what we currently have as a tech stack is a boatload of code. I mean, literally, I mean, it's really like adding balancer pools versus like the whole protocol we have as an ecosystem. I mean, it really triples your code, like your lines of code, and that's just so much weight. There are people maybe who are not like technically or code savvy or familiar with how Solidity works as a programming language, but it's adding so much code, and that's sort of a very tedious process to get everything right, but we're working on that. It's on the roadmap. That's official. Everybody can read it up. It's on our Gitbook. We have sort of a roadmap section where we disclose that, but we're actively working on it. Let's say it's near term. There's a silver lining on our eyes at this moment. It's not something we're trying to push back, but it's something which is coming, let's say, further down the road. Call it summer, late summer, depending how much time the auditor needs to re-audit the code, because imagine, I mean, the auditor has to go back and say, all of a sudden, like the lines of code have tripled. That's quite a challenge. Oh, yeah. The balancer tech, it's thick, man. It is thick and complicated. Yeah, we're double C, right? Thick. Yeah, yeah. Yeah, with two Cs, exactly. So let me just see if I have this right. So the DEX is going to launch, and when it does launch, it's not going to have the multi token and weighted pools in it yet. No, no, not at this point, no. Not at launch, not at launch, yeah, yeah. When you're having immutable contracts, though, how are you going to then add that later without some kind of migration going on? Because we don't have to migrate the pools, it's new pools, right? So balancer pools, they work differently. I mean, the way balancer works, balancer is one single giant pool, technically spoken, right? Whereas solidly is each pool is separate, and all the tokens in balancer, that's what makes balancer unique, that every token goes into this giant pool on balancer. So you're not adding, you don't have to migrate pools, you're adding pools, you're adding a different style of pool. Right, yeah, I think balancer calls it a vault. But yeah, all of the tokens go into that one giant, I don't know what to call it, not like a slush fund, but yeah, into the vault. And that is the kind of core of the technology there. I really like that concept. I think balancer and DtovanX, I think it's really awesome how people can make their own multi token weighted pools. And then if you have some governance power, you can direct some emissions there. And it essentially becomes this self balancing portfolio, like you want to put a bunch of blue chips in there. And you can also, if you set some higher fees, you can create kind of arbitrage overflow pools. And I think those three concepts combined, the multi token pools, weighted pools, and then also with the dynamic fees, I think that's a really powerful combo. So when we talked about that before, it got me excited that you do have that in mind on the roadmap. Yeah, I think it's also important to understand that balancer pools can make the ecosystem itself, the whole crypto economy, much more resilient because there's like specific pools which earn substantially more fees than just like these LP pools, right? You can see that phenomenon on Beethoven, right, where you wonder, I mean, why is this sort of stable coin, eight pool earning substantially more fees than if I sort of quadruple an LP on another DEX? This is simply just by the mechanic and the arbitraging on the blockchain works with all the bots working themselves through all the trades, you get substantially more liquidity and thus fees and thus a more resilient ecosystem because you achieve a higher buyback power with your protocol on liquidity. That's why for us, it's key to have those in rather sooner than later. Yeah, absolutely. I agree. There's also really cool concepts with all that balancer technology, like the 80-20 governance token concept. And I know balancer, I think I saw the proposal. I haven't kept up on it, but I think they were going to do some kind of grant system for, I don't know if it passed or not, but they're going to do a grant system for other protocols that were going to be using the 80-20 governance token model. And that's kind of a cool and interesting concept and also the adjustable fees for other protocols that are trying to start off. And they perhaps might want to use your project, your DEX, your platform for their initial liquidity. And I think that segues into the, if we're going to move on to another topic now, what I was calling the liquidity launchpad and incubation program that you were- I can also comment on the LPVE idea, if you want me to in the meantime. Yeah, get in there. With balancer. Yeah, you know, just that remark, I mean, for so many things, this is also obviously something we sort of considered to make an LP as sort of a VE token, kind of like balancer, right, sort of aching for to achieve the same result. And there's a trade-off, right? I mean, the first trade-off obviously is, is it like 80% ETH and 20% balancer? Is that right? That's the way it is? So bear in mind that sort of for every- if it's 20%, let's say balancer is 20%, I mean, for every sort of million of LPs you're generating, you're selling 200,000 of balancer, unnecessary. I mean, you don't have to do it, but you have- people are receiving balancer emissions and they're selling it to buy ETH, right? So you're adding sell pressure on your governance token. And that's okay. I mean, if that works, the trade-off that you're sort of pairing is with ETH, that's fine. But then at the same time, I mean, you must be sort of expecting that your own performance of your own governance token, the balancer token, is ETH, the performance equals the performance of ETH or worse, you know? Because if you're- basically, balancer is telling you, yeah, we don't expect this token to outperform ETH, because we're pairing it with ETH, and hence it's in the same LP, so ETH is actually dragging the price up. Because if it would be outperforming relative to ETH, ETH would be dragging the price down of the balancer token. So that's what they're kind of explicitly saying there. Sorry for just throwing that in, but it just crossed my mind, right? I was just talking here. There are some give-and-takes with that situation. I think one of the positive things that a lot of people look at with the 80-20 governance system is, if you are compounding or auto-compounding into that, like let's say it's 80-20, I don't actually- I haven't looked in a long time, so I don't know specifically, but let's say, yeah, it's 80 BAL, 20 ETH, and then if people are compounding into that pool, as opposed to a 50-50 pool, you're actually selling less of the BAL to ETH to compound into that pool, which I think is attractive to some people. But yeah, as far as the price action is concerned, there are some drawbacks, absolutely. So there is a give-and-take to that. But what I would- Yeah, I think that there's a trade-off. I mean, you sort of- you do your governance design, right? I mean, there is like- that's the nice thing about crypto, right? I mean, everyone sort of adds their own flavor into- you have like the VE system, but everyone's sort of rethinking how to improve the system. And it's fine, like there's not a proven VE system that works into perpetuity forever. So we have to sort of- I mean, that's crypto, right? We have to experiment, like try different things. Maybe, you know, we'll jump on an AMA half a year from now. And I will tell you, this meant- I do apologize. That idea was total crap we had with that design. We're about to change that. I mean, I fully expect that to happen, actually. But I like sort of like the challenge, the intellectual challenge of trying to improve things around specifically difficult things like governance, because we touched on it previously, that very quickly includes like very complicated processes of like theory and modeling and stuff like this, you know? Right, right. Absolutely. And what I was trying to do was kind of shift over to the liquidity launchpad and incubation program. What did you call it? P4P? Is that what it is in the docs? Yeah, exactly. We came up with this term. P4P simply stands for Protocols for Protocols. So really, we really want to be sort of also the liquidity launchpad, as you call it, for any given protocol, offer sort of the flywheel. And this really made Saltly so famous, like, and sort of, I think this goes back into sort of like the OG intention Andre Crony had with Saltly. I mean, one of sort of the core elements was being able to provide a protocol, which is always there as a liquidity launchpad for new protocols without totally breaking their tokenomics or being far too bad that they actually have a shot at surviving the first few weeks, months and years, maybe. And this is really what we want to be. So USD5P4P is really that initiative where we try to offer a liquidity launchpad to any protocol which approaches us. I mean, we do have sort of a whitelisting process that solidly didn't have that. Ours is like, it's not a complicated thing. You get in touch with us and you say, OK, this token, this is what I'm trying to do. Here's the link to CoinGecko and let's go. There's not much to it. You touched on that specific point there. And I think this is something we talked about before is how, yeah, Andre's original vision, I feel, was exactly was a protocol for protocols. What's going on now, I feel like that's kind of being twisted. And what we're seeing a lot more of are these forks are kind of geared more towards protocols for the LP providers, focusing kind of more on bribes and fees. And that's fine. I'm not making any judgments there. I'm sure there's probably a balance between the two that could be struck that would be very good. However, I really do think, though, it is important to to help with other protocols in the ecosystem. And I think as far as like, let's just say for you at DeFi, I think that could be a bit of an investment. You know, there's been a lot of projects out there that start off, they start off small and then they blow up. So if you help them with your program, with liquidity on your decks, and then they just blow up and they decide to essentially stay loyal to you and keep their majority of liquidity on your platform, then that's just going to bring in a lot more fees and create this this mutually beneficial partnership. So when I was reading over the P4P program, you know, this was all going through my head and your project overall definitely seems more of, you know, a stable, low and slow, steady approach. We're not just going to be blasting out, you know, million percent APRs and and seven thousand percent inflation in the beginning. So those are all kind of things that were going through my mind. And I really I really liked when I read that in your docs. Yeah, exactly. I mean, the approach is not much more slow and steady simply because we have to kick start so many different flywheels and flywheels within flywheels. So obviously, if you just kick start a flywheel for liquidity, that's far easier to be like kickstarting a flywheel for liquidity and a decentralized stablecoin and a money market because there's so much things, so much more liquidity required to get things going like the initial liquidity threshold is much higher. So it's really much more of a slow and steady takeoff than just off we go to the races. And we're not Formula One cars, but we're taking sort of the Swiss slow and steady way. But I mean, once sort of there's momentum, I mean, that thing should become unstoppable. Yeah, there's a lot of there's a lot of awesome potential that I see in this. Absolutely. One thing that we haven't talked about specifically, though, is the money market. So you're going to have your own money market. Obviously, I assume there's going to be some reserve involved in that, you know, collecting some fees for the protocol. Are those fees, you know, A, is that what's going on? B, are those fees going to be also going back to the treasury to help with buybacks on both the stablecoin token and the governance token? And C, what other kind of juicy alpha can you drop us regarding the money market and how it's going to tie into every other aspect of the protocol? Well, I mean, obviously, we're trying to sort of, as you said, to generate or to form a very symbiotic ecosystem. So one of the nice things about having your own money market is being able to, like, customize collateral for a specific purpose, right? So all in all, I mean, it's aching to be very similar to, like, what Aave offers, like or Compound, where you just deposit your tokens and you're able to earn a fee. But we're also incentivizing it with a fixed amount of protocol emissions. So it will be quite lucrative at times to deposit your crypto there. But we're, in the medium term, what's also on our roadmap, we're also aching for including the money markets into peer-to-pool type of, think of it as a GMX type of perk trading. So the cool thing would be sort of, you can deposit LT tokens into the money market. And then to be just more capital efficient, you could also use them as, let's say, very conservative collateral, call it 10% LTV, to trade perps on the exchange. And that's sort of a way, I mean, to increase capital efficiency throughout the same ecosystem, for example, just as an example. So this cross-collateralization procedure really helps with having multiple sources of potential income or trading income. Yeah, we haven't touched on the perpetual trading market quite yet, but focusing on the money market, you just said depositing LT tokens. So is it going to be more of a situation like Cheato, or is it going to be more like Aave to where it's just a single asset that you deposit for collateral, or is it going to be a mix of both? Yeah, well, the intention is to have a mix of both, but further down the road. But also bear in mind, the money market has to be very big, because, I mean, money markets were tremendously risk-averse, and will not allow any shenanigans to go wrong with lending and borrowing, and too small of a pool size for a given collateral, or to have tokens there which are easily, which can be easily manipulated as far as the price is concerned. So all these things we don't want to have really should be sort of a support to the rest of the ecosystem more than a main pillar as a money market, because that takes some time to grow. And we have the patience, but we just want to grow it first to a given size before we start any of those cross-collateralization type of options within the ecosystem. Yeah, definitely probably a good idea to start slow and safe. Price manipulation and flash loan attacks are a thing. We just unfortunately saw that with the EUR protocol. Yeah, I mean, one of the most common things, or one of the things you see the most often is when something like this happens, there's so rare there's a money market in the background where things were able to go sideways, and we are super, super risk averse. We will sort of go very slow and safe also with that money market. Yeah, I agree. It's most likely the better way to go for sure, because kind of attacks happen, man. It's just extremely unfortunate. And then there's from the shortfall comes windfall to where there's this trickle-down effect of negativity that overflows onto other protocols that are in some way tied into that money market or with those tokens. So yeah, there's a lot to consider there and better to err on the side of safety. Absolutely. You just talked about the perpetual trading market. So what's going on there exactly? I don't think you answered the question with the money market about the fees, that there's going to be fee collection and what that's going to be used for. However, I assume Yeah, no problem. Listen, no problem. With the fee collection, the fee currently, the fees generated is at the moment, they're going into the DAO wallet, right? But further down the road, we are planning on also having these automated to be part of the buyback system. However, at this point, that's not yet been implemented on contract level. So that's a manual process at the moment. Excellent, excellent. And then so with the perpetual trading market, is there going to be a similar situation? The protocol, U.S. DeFi protocol as a whole, is going to be earning some fees on that as well and using those fees for a similar purpose? Yeah, exactly. I mean, sort of the main challenge for us, obviously, is to have sort of all these flavors of different DeFi services, and then sort of to take the arm of that DeFi service and twist it in the right way in order to fit the whole ecosystem in the way we want it to fit, which means how to maximize sort of the buyback in order to stabilize potentially the stable coin, or if it's not being stabilized, if it's a part to buy back the stable governance token of the market and put it back into the protocol as protocol liquidity. Yeah, I've always said for probably years now that I feel the true value in a project would essentially be the services that it provides. When we get outside of hype marketing and Ponzi-nomics and stuff, I don't mean to use that word necessarily, but for lack of a better term, I feel like the true value at the baseline is going to be the services provided. So that's another thing about U.S. DeFi that I really thought is interesting is that providing so many different services that you can select legitimate fees off of to help support the protocol health overall. And I think that that's something very unique and interesting. The perpetuals market kind of made it akin to GMX. Is there going to be any unique twists and turns with your perpetuals market, or is it going to be more simplified more or less to something like GMX, just to use that as a reference for things that people might be more familiar with? Are you going to have anything? Good question. For the sake of time, can we have a separate session potentially in the near future about that? Because that's sort of a very long discussion, and I'm happy to share the details, but I also, it's getting very late here, I don't want to be impolite, but maybe we could ask the audience, take some more questions, or maybe someone wants also to join the call, ask a question, and then we call it a day and sort of postpone the discussion for our next session. Is that okay for you? Yeah, yeah, that's absolutely okay. Fine, fine. Yeah, we are nearing the two-hour mark, and I know you and I can probably go on for, you know... Yeah, yeah, because we will go on for five hours until we all of a sudden realize the audience is gone, there's only the recording going on, and no one else. Let's ask the audience a question, maybe they have a question, otherwise we can maybe keep that as a separate discussion, because there's so many things we have not even touched on yet from the whole ecosystem, that it would be great to have sort of another discussion soon to come, and then dive into those details. Yeah, absolutely, yeah, we discussed that before as well, there's just so much to cover, it's impossible to squeeze it in, even into two hours. So, yeah, anyone in the audience, if you've got any questions, I'm keeping my eyes on all the chat channels, you can just drop them. Is there anything else you want to add as we wait to see if more questions roll in? No, I'm happy, I mean, my brain, I'm feeling brain fatigue at this point, you know, because it's already, as I said, a bit late here, but I'm fine, I'm happy you offered a platform for USDFI to sort of explain or give us the opportunity to explain all the nooks and crannies of the ecosystem to the audience, and to have sort of a quality chat about what we're trying to achieve. Oh, yeah, absolutely, I mean, it's my pleasure mostly to tell you the truth. I really geek out on all of this stuff, you know, just the potential of distributed ledger technology in Web3, and, you know, still in its infancy, I think, I think there's still a lot of problems to solve before Web3 really overtakes Web2, and before DeFi really overtakes, you know, traditional finance, but I see a lot of potential, you know, so this is stuff that I always love to just geek out on, but I'm not really... Yeah, that's fine. I mean, my offer still stands. The other day, I offered you to come on our Discord and have to sort of the same discussion now. I mean, it doesn't have to be our protocol, but we can sort of, you know, jump through several hoops and discuss all of DeFi, really, and then how we think about the implementation of all those different DeFi flavors into our crypto economy. And because, as you said, there's so many things we haven't even touched on yet at this point. So would you accept my offer and to come and join our Discord? I don't know, in the coming days or weeks and continue the discussion? Yeah, absolutely. Just for everyone listening, that was something that DarthSaber and I discussed previously. It would, of course, just be on my own accord, just for fun, not officially related to MCLB business at all. But yeah, some kind of fireside chat so we could put together some kind of organization and schedule, parse each episode up into different segments, focusing on different features of the U.S. DeFi project. And yeah, we could do, you know, five to ten episodes, whatever, make sure we cover everything. That'd be fun. I'd definitely enjoy it and accept the invitation. It's like HBO, but with DeFi, right? Like a TV miniseries. Yeah, we'll see how long it takes to cover everything. Because yeah, once again, yeah, we've done two hours here and we haven't even covered probably not even half of it. So absolutely open to that. So yeah, I'm not seeing any more questions roll in right now. So speak now or forever hold your peace, listeners. Yeah, Darth, thanks for stopping by and discussing this. And yeah, I got this recorded so I can share the recording with you later if you'd like. We'll share it with everyone else that rolls in asking for it. Is there any closing remarks that you would like to give? Yeah, thanks for having me today, Southpire. It was a pleasure. Always honored to be on Millennium Club and let's talk soon. Thank you very much. Absolutely, buddy. All right. Well, thanks for everyone for joining in and y'all have a really good day or night.
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