The MakerDAO-Aave Debacle: Risks and Rewards of Collateralizing DAI | Analyst Round Table
Summary
TLDRThe podcast episode discusses various topics in the blockchain and cryptocurrency space, including the high interest rates for staking USDE compared to undercollateralized loans, the challenges faced by private credit protocols like Goldfinch due to defaults, and the success of platforms like Pump Fund, which allows users to launch their own tokens. The conversation also touches on the potential risks and rewards of different DeFi strategies and the importance of risk management in the crypto market.
Takeaways
- 📈 The discussion revolves around various developments in the blockchain and cryptocurrency space, particularly focusing on interest rates, lending, and new projects.
- 💡 The arbitrum stylus proposal enables developers to build on arbitrum using languages like Rust, C, and C++, diversifying smart contract development beyond Solidity.
- 💥 PancakeSwap's deployment on Monad and V Drome's launch on Bitcoin's L2 ecosystem are highlighted as significant events to watch.
- 🔄 The importance of the ltip and staking snapshots in the Arbitrum ecosystem is noted, as they offer insights into protocol funding and potential alpha opportunities.
- 🚀 The growth of the Solidly flywheel and its impact on V Drome's success is discussed, emphasizing the protocol's all-time high fee revenue and volume.
- 📊 The airdrop fund updates, including Tenza Season 4 and Deep Book's native token introduction through a soulbound NFT, are mentioned as notable developments.
- 🔧 The challenges faced by the Solana network due to transaction failures and drop transactions are analyzed, with potential solutions like networking layer fixes and fee market improvements being discussed.
- 💣 The hot seat segment covers the MakerDAO proposal to collateralize with SSD and the controversy surrounding it, highlighting the risks and rewards of such decisions.
- 🔗 The potential of on-chain private credit is debated, with Goldfinch's recent default highlighted as an example of the challenges in this space.
- 🌐 The rise of meme coin launches through platforms like Pump Fund is discussed, with its simple yet lucrative business model garnering attention.
Q & A
What is the significance of the proposal to enable Arbitrum Stylus on Arbitrum 1 and Nova?
-The proposal to enable Arbitrum Stylus on Arbitrum 1 and Nova is significant because it allows developers to build on Arbitrum using languages such as Rust, C, and C++, which removes the smart contract development constraints that most EVM-based blockchains have had in the past. This opens up the ecosystem to a broader range of developers and can lead to more innovative applications being built on Arbitrum.
What is the role of ltip in the Arbitrum ecosystem?
-Ltip plays a crucial role in the Arbitrum ecosystem by allocating a significant amount of capital to protocols as incentives. This not only helps to attract developers to build on Arbitrum but also encourages the growth and adoption of the network. The incentives provided by ltip can be a key factor for protocols to thrive and for users to find potential alpha opportunities.
What are the implications of PancakeSwap deploying on Moneta?
-The deployment of PancakeSwap on Moneta is interesting as it will bring performance and scalability improvements to the platform. It also raises questions about whether any changes will be needed for developers who are already on Moneta, and how this deployment might affect the overall dynamics of the PancakeSwap ecosystem.
How does the launch of V Drome's decks on Bitcoin L2 impact the Ethereum ecosystem?
-The launch of V Drome's decks on Bitcoin L2 is significant as it represents a move towards cross-chain compatibility and the potential for Ethereum-based projects to tap into the Bitcoin ecosystem. This could lead to increased innovation and a more interconnected blockchain landscape, with Ethereum dApps potentially benefiting from the security and simplicity of the Bitcoin L2 ecosystem.
What is the current status of the airdrop fund for Tenza Season 4?
-Tenza Season 4 has started and the claim for the airdrop fund is open, allowing participants to claim and sell their tokens if they wish. The reactions to the airdrop have been mixed, with some traders who executed a large amount of volume receiving less than expected, while others who traded less got more than they anticipated.
What is the relationship between Axar and Squid?
-Axar and Squid have a close relationship as Squid is one of the core primitives built on top of Axar. Squid is a cross-chain decentralized exchange that enables users to swap assets across different chains, such as from Binance Smart Chain to dydx on Ethereum, using Axar's infrastructure.
What is the significance of Axar's upcoming upgrade to support smart contracts on top of its platform?
-The upcoming upgrade that will allow smart contracts to be deployed on Axar is significant as it will enable the platform to connect with more non-EVM chains and expand its ecosystem. This will open up new possibilities for real-world asset tokenization and other applications, further enhancing the utility and reach of Axar.
What are the main challenges currently faced by the Solana network?
-Solana is currently facing challenges with network congestion and transaction failures due to a combination of factors, including arbitrage bots spamming the network and issues with the network's quick implementation. This has led to a poor user experience, with transactions often needing to be submitted multiple times to be successful.
What is the controversy surrounding the MakerDAO proposal to extend a credit line to collateralize with SSD?
-The controversy stems from MakerDAO's proposal to use a $600 million credit line to collateralize with SSD, which some community members view as a significant risk to the protocol. The proposal has sparked debates about risk management, the potential for high rewards, and the impact on the broader DeFi ecosystem's composability and Lego-like structure.
What are the potential risks associated with the Athena protocol?
-Athena protocol's risks include potential defaults by exchanges, directional exposure during settlement periods, and the possibility of unauthorized access to funds by those controlling custody. Despite these risks, some believe the rewards outweigh the potential downside, especially given the high funding rates currently offered by the protocol.
Outlines
🗣️ Podcast Introduction and Disclaimer
The podcast begins with an introduction to the episode, highlighting the discussion topics such as interest rates, lending, and emerging market lending. A disclaimer is presented, stating that the views expressed in the podcast are personal and do not represent any associated organization. The podcast also mentions that the content should not be taken as financial, technical, tax, or legal advice.
📰 News and Governance Updates
The segment covers recent news and governance updates, including a proposal to enable Arbitrum Stylus on Arbitrum 1 and Nova. It discusses the benefits of Arbitrum Stylus for developers and the potential for increased innovation. Additionally, the segment touches on various deployments, such as PancakeSwap on Monad and V Drome launching on Bitcoin's L2 ecosystem. The discussion also includes thoughts on the impact of these developments and the potential for finding alpha in certain protocols.
🤔 Deep Dive into Arbitrum Stylus and Ltip
The conversation delves deeper into the significance of Arbitrum Stylus and its potential to be overlooked. It highlights the composability with Solidity smart contracts and the opportunities for developers in the virtual machine realm. The segment also discusses the Ltip process, its impact on protocols, and the potential for finding value in protocols funded through Ltip. The discussion includes reflections on the success of the Ltip process and the benefits it brings to the Arbitrum ecosystem.
🚀 Launch Updates and Airdrop Insights
This segment focuses on various launches and airdrops, including V Drome's new token on Aerodrome and the potential for new tokens on Build on Bitcoin. It explores the implications of token inflation and the impact of front-loaded incentives. The conversation also covers airdrop fund updates, such as Tenza Season 4 and the distribution of tokens, as well as the performance of different tokens in the market.
📈 NFT Marketplaces and Airdrop Strategies
The discussion shifts to NFT marketplaces, with a focus on the performance of different platforms and the challenges faced by new entrants. It examines the impact of meme coins and the attention economy on the NFT space. The segment also touches on airdrop strategies and the tradeoffs between incentivizing broad participation and rewarding active users. The conversation includes thoughts on the effectiveness of airdrop campaigns and the potential for new developments in incentive structures.
🌐 Updates on Permissionless Deployments and Cross-Margin
This segment discusses the importance of permissionless contract support on platforms like dydx and the potential for new opportunities in AMM vaults and asset issuance. It highlights the benefits of cross-margin exchanges and the potential for innovative financial products. The discussion also includes updates on the dydx ecosystem, including the introduction of permissioned smart contract support and the impact on decentralization and network robustness.
💡 Axel: The Bridging Solution
The podcast features a discussion with the co-founder of Axel, a platform that solves the bridging problem without being a bridge itself. Axel is described as infrastructure that enables bridges and other applications to build on top of it, allowing for the creation of chain-agnostic versions of decentralized exchanges, money markets, and NFT marketplaces. The segment also covers Axel's roadmap, including the integration of non-EVM chains and a focus on real-world asset tokenization.
🔥 Hot Seat: Solana Network Issues
The hot seat segment addresses the recent performance issues with the Solana network, discussing the reasons behind transaction failures and the impact of arbitrage bots. It explores the challenges faced by the network, including the implementation of the Quick protocol and the potential solutions being worked on by the Solana developers. The conversation also touches on the implications of these issues for users and the broader implications for the Solana ecosystem.
💸 Goldfinch Default and Private Credit Concerns
The segment discusses the recent default on a Goldfinch loan and the broader challenges faced by private credit protocols. It highlights the risks associated with undercollateralized lending, especially in emerging markets, and the potential for high default rates. The conversation also explores the impact of defaults on the protocol and the need for effective underwriting and loan recourse strategies.
🚀 Pump.Fund: The Meme Coin Factory
The podcast concludes with a discussion on Pump.Fund, a platform that allows users to launch meme coins on Solana and Binance Smart Chain. It covers the business model and the significant revenue generated by the platform. The conversation also touches on the potential for tokenization and the future of the platform in the context of the growing meme coin trend.
Mindmap
Keywords
💡Interest Rate
💡Arbitrum
💡Staking
💡DeFi
💡Private Credit
💡Emerging Markets
💡Pump.Fund
💡Tokenization
💡Decentralization
💡Governance
Highlights
The discussion begins with a focus on the interest rates and opportunities in the cryptocurrency lending space, particularly in emerging markets.
Arbitrum Stylus is highlighted as an important development that allows developers to build on Arbitrum using languages like Rust, C, and C++, diversifying smart contract development beyond Solidity.
The panelists discuss the impact of the recent proposal to enable Arbitrum Stylus on the development of new applications and the composability with Solidity smart contracts.
PancakeSwap's deployment on Monet and the performance of deployments on other chains is a key topic of interest.
V Drome's launch on Bitcoin's L2 ecosystem with EVM compatibility is anticipated to be a significant event, potentially attracting Ethereum-based projects to the Bitcoin L2 ecosystem.
The conversation touches on the importance of Ltip allocations and the potential for alpha or edge found in the protocols funded through this process.
The panelists delve into the success of the previous Ltip process, despite some seeing it as a failure, and the influx of builders into the Arbitrum ecosystem.
The discussion highlights the interesting point of V Drome's tokenomics, with inflation front-loaded in the early stages and a gradual decay afterwards.
Airdrop fund updates, including Tenza Season 4 and the claims process, are covered, with mixed reactions from the community.
The panelists discuss the potential of the Deepbook protocol and its native token, introduced through a soulbound NFT, and its expected impact on the NFT and crypto space.
The conversation addresses the challenges and potential solutions for the Solana network's recent performance issues, including the problem of dropped transactions.
The hot seat segment focuses on the MakerDAO and Aave controversy, discussing the proposal to extend a credit line to collateralize with SSD and the subsequent delisting proposal.
The discussion explores the risks and rewards of the Goldfinch protocol, particularly in light of recent defaults and the challenges of private credit lending in emerging markets.
Pump.Fund is highlighted as an innovative platform enabling the launch of meme tokens on Solana and Binance Smart Chain, with a unique revenue model that is capitalizing on the current market trends.
The potential for Pump.Fund to expand across multiple blockchain ecosystems and its possible transition into a token-based model are discussed.
The panelists contemplate the future of on-chain credit markets and the need for solutions that balance efficiency with risk management and default recourse.
Transcripts
I just can't believe that interest rate
you said 177% run so you're telling me I
can buy usde and stake it and earn three
times the amount as doing an under
collateralized loan as a lender in an
emerging market like that is you're on
crack like under collateralized lending
on chain is a great business for
borrowers and borrowers only like you're
insane to be lending on those
things before we get into today's
episode just a quick disclaimer the
views on this podcast by either myself
or any guests are the personal views and
do not represent the views of any
Associated organization nothing in this
episode should be construed or relied
upon as Financial technical tax legal or
other advice all right let's jump into
the episode what's up everyone welcome
back to another episode of zerox
research the blockworks research team is
back to bring you another analyst Round
Table this time joined by Brick and Matt
from the blockworks research team today
is Monday April 8th and as always you
can use code0x research 10 at app.
blockworks research.com checkout for 10%
off your annual subscription ren do you
want to kick us off with some news and
governance updates for sure thank you
Sam first of all happy Eclipse day to
those who get the pleasure of doing the
eclipse today um starting off the news
and governance updates first of all we
have a proposal to enable arbitrum
stylus on arbitrum 1 and Nova for those
that need a refresher arbitrum stylus
basically allows developers to build on
arbit using languages such as Russ C C++
and that sort of removes the smart
contract development constraints of
purely using solidity that most evm So
based blockchains have in the past in
addition there's some sort of ltip and
stip snapshots going on right now um on
other news we have a bunch of
deployments pancake swap will be
deploying on monad pancak Swap is
probably live on 11 or so chains today
um it'll be interesting to see what deps
Deploy on Monet given this sort of like
performance and paralyzation and if
there's any sort of like anything else
that they need to change for the devs if
they already playing on there um V Drome
is going to launch his decks on build on
bitcoin which is a Bitcoin L2 with evm
compatibility I think that one will be
interesting to see how many of these
ethereum dabs try to hop on into sort of
like the Bitcoin L2 ecosystem I'll take
a pause there but any thoughts between
arbitrum stylus pancak stop and vum
launching on this Bitcoin
L2 yeah I want to lean into arbitrum
Style
it's super interesting to me that it
largely gets overlooked like no one
really cares about stylish sure you see
a couple tweets about it but no one
really gives it any more thought than
just you know uh a passing a fleeting
thought but arbit from Stylus is a
pretty big deal it pretty much allows
any rust C++ or C developer to go code
smart contracts on arbitrum and then
additionally they're they're composable
with solidity smart contracts so you can
have apps WR in either language so when
you look at monad which is you know also
doing doing innovation in the virtual
machine realm it gets so much buzz and
hype and VCS are all over and it's got a
narrative on Twitter and stylus just
doesn't see it and it doesn't make much
sense to me and also I want to lean into
the ltip stuff a little bit but I guess
I'll give every in a second in case you
guys have thoughts on
stylus keep ripping while you're
cooking yeah so ltip is allocating a
ridiculous amount of capital to
protocols as incentives on arbitrum and
once again I think it's overlooked like
when stip happened the last time there
was arbitrum dowg incentives to
protocols it took weeks for people to
really realize oh shoot there's a you
know half a million or5 million fdv
crypto token that's getting half of its
fdv in incentives uh so I do think that
it's that it's actually a place that
there could be some alpha or some Edge
found found uh for those that are you
know looking through which protocols
were actually funded as a part of this
ltip process generally speaking Matt how
would you say the stip went were any of
the learnings from that implemented in
the L tip and on top of that is there
any protocols that are receiving the
ltip that are particularly interesting
for from your
perspective yeah so scip is a tough one
to to evaluate um if you look at it
purely from a fundamental basis of like
how much money was spent versus you know
the transaction sequencer the the
sequencer fees from transactions you
could probably go ahead and say that it
was a failure but I think that that's
really a misnomer because a lot of
protocols who wouldn't have otherwise
came over to arbitrum are like oh shoot
I want to be a part of this you know
incentives process I want some of the I
want some incentives from the arbitrum
Dow so we're actually seeing quite a few
Builders come into the arbitrum
ecosystem um for example even though
synthetics was not funded as part of the
ltip process they were largely
interested in becoming a arbitrum
focused or at least having some focus on
the arbitrum ecosystem and we see this
over and over again with other protocols
so I think from that perspective stip
could actually be considered a win for
the Dow in the arbitrum Eos system I
don't want to give any like Financial
advice so I would just go say look
through the arbitrum Forum post at which
protocols got funded and and do your own
analysis there on the uh front of vrum
launching a deck on build on bitcoin I
find that super interesting because the
the solidity flywheel like
solidly solidly flywheel not solidity
has like actually kind of started to
take off like we didn't see anything cuz
they launched in the the kind of the
peak of the bull like beginning of the
bear so is like honestly the worst
possible time for a solidly type
protocol to to launch um so it's kind of
cool to see vrum and aerodrum like
trading at all-time highs generating
all-time highs of fee revenue and seeing
the most volume they've ever seen so I
think this is like a really good time
especially with the uh the launch of
runes here around the having for for
vrone to be going over there I'm not
sure if they'll actually be partaking in
the runes protocol or not I'm kind of
confused as to actually what uh what
they're building on build on bitcoin
which is Bob I think is what people
refer to it as but nevertheless I'll be
watching that one I think another
interesting point about V Drome is
obviously they launch a new token arrow
for Aerodrome on base uh will be
interesting to see if they also decide
to launch a new token for their decks on
build on bitcoin I my good feeling says
no at some point like you can't just
keep on launching new tokens for every
chain you launch them but I don't know
seems to have worked out for air Dr
pretty well so that remains to be seen a
few other newsing governance oh sorry
Vick go
ahead no I was just going to ask aren't
um aerod Drome incentives also front
loaded or like there's more dilution in
the beginning which is interesting if
like the token wasn't doing that great
in the beginning and now it has still
like rebounded out of the um like not in
a Perpetual downwards movement but
really like starting to take off so
maybe this could be another curve likee
project where even though incentives
all the time coming in they could still
like manage fairly well yeah I believe
the first 14 weeks you saw inflation
gradually increase or not even gradually
like pretty aggressively and then from
the 14we period onwards it like decays
pretty gradually so I think inflation is
actually at the point to where it's
going down now um but that being said
like there is just inherently a lot of
token inflation that gets that gets
baked into these protocols so like I
definitely would wouldn't want to be
holding V or Arrow like in the beginning
of a bare Market if that makes
sense yeah definitely reflexive both on
the way up and on the way down a few
news updates on the airdrop fund um
tenza season 4 started today ER the
claim is open you can go claim and sell
if you want uh your tokens I think so
far mixed reactions there some to be
like some people that traded like a huge
amount of volume and there were like
Wheels who like didn't get as as much as
they would have thought and a lot of
people who like didn't trade much and
got more than they thought so it does
seem like they utiliz like some form of
T system perhaps like it wasn't as
tiered as like something like jeto where
like there were separate tiers with like
a fixed amount of tenser um for each
tier um but it does seem like there was
some sort of tier currently the tokens
trading at around 1.8 billion FTV and
that's in comparison to blast that 1.5
roughly uh sorry blur at 1.5 roughly
billion FTV um you can form your own
conclusion as to what do you think like
the salana nft marketplace should be
worth more than the ethereum sort of
like gold standard nft Marketplace um
but just one point interesting point of
comparison is unisoft and Jupiter
unisoft currently trades at a 11.6
billion FTV and Jupiter trades at a 14.3
billion FTB so make of the head what you
will um something else on the
air drop side of things deep book which
is a central order book protocol onu
introduced their native token deep
through a soulbound nft the token isn't
live yet but so far it looks pretty good
and I think that protocol actually does
like a lot of like volume in the grand
scheme of things sure like a lot of
protocols on S do have a lot of
incentives just from the S Foundation I
think like just every week like all of
these protocols get like half a million
dollar or something ridiculous but still
um it'll be interesting to see what it
is like the first big air drop on WE
given that I don't think there's been
like a large one so far any thoughts on
those like two air
drops yeah I mean it's always hard to do
air drop but especially following like
the jto thing where a lot of people
suddenly got a lot of money compared to
like how much they have put in so I
guess it always becomes like a tradeoff
between do you want to incentivize kind
of everybody or those who have really
really used the project and if you go
with the lad option you're always going
to run into the problem of like airdrop
farmers who are going to get a big chunk
of the like incentive structure so my
like kind of small thesis I've been
thinking about this that this is
something that we will probably or like
incentive structures or airdrop
structures overall are probably
something that we're going to be seeing
a lot of developments in or at least
like
um projects trying out some new stuff
here and there going
forward yeah the tzer one's tough for me
to digest just obviously it came like a
couple hours ago so I haven't had a ton
of time to think about it but nfts have
kind of been down only and from what I'm
hearing like people were farming you
know season one it was like the end of
2022 I believe so like if you were
farming this thing at the end of 2022
you probably got absolutely slaughtered
on the nfts that you purchased for
starters and then they didn't even
heavily wait the season one and season 2
activity versus season 3 so the people
who came in post goto airdrop and then
you compare that to the fdv of blur
which is obviously the defao nft
marketplace on ethereum and it's trading
at a premium to it it's just makes it a
tough sell for me um and on top of that
like the prolif proliferation of meme
coins like it feels like it's just
totally replace the the attention
economy on its salana from jpegs to meme
coins um and I don't know if I see that
changing to be honest and you even look
at Magic Eden's market share on salana I
haven't looked at it recently but you
would think that tenzer would have
commanded like a 95% plus market share
over salana volume considering it was
pre-t toen and granted magic Eden is
pre-t toen as well but you still see
them with like 30 to 40% market share a
lot of the time last time I had checked
so I don't know uh I don't know if I
would be buying tzer is I guess what I'm
saying but obviously not Financial
advice yeah but I mean I think that's a
good example of or showcase as well how
strong Originals have been recently like
a lot of people want to trade those and
then I'm guessing that okay I traded
ordinals on this platform let me as well
just like trade my salana NFD here's
like there's a lot of stickiness there
and uh as I think I mentioned earlier on
or on an earlier podcast that it was a
brilliant like business move from Magic
Eden to like push into this narrative
and grow through
that yeah that that statistic that you
mentioned s is little shocking to me to
be honest I would have thought like tza
would be like com be like above 80%
market share on salana all the time but
yeah as viick mentioned I do think that
could be strongly attributed to sort of
like magic Eden's command over like the
ordinal Marketplace and in that set of
nftd trailers flowing onto like other
ecosystems yeah you also just to mention
real quick before we move on to the next
note here like you you can download
their wallet and that get you like extra
points for magic Eden so like I think
that it like break you nailed it on the
head like people download the wallet
they use it and like they're like well I
might as well trade Salon nfts here
because I'm getting you know magic Eden
points as well on top of my ordinals
wallet it also feels that the like 10er
Hive kind of died down or I remember it
had to be beginning of the year when
Twitter was full of people like coming
up with different strategies and just
like trying trying to get as many points
as possible and then lately it has more
been like nobody really talks about that
platform
anymore all right a few last news
updates Ellipsis Labs founder of Phoenix
trade which is a crankers decentralized
limit order Book Exchange on salana Race
20 million last week um and the last
news update is that Antonio from dydx
say that dydx before will introduce
permission to Smart contract support
which will enable more powerful
opportunities for amm vaults structure
products asset issuance and a lot more
to be built on top of
dydx any thoughts
there yeah I think the permissionless
contract support on dydx is particularly
interesting um the way I see it likely
they want to enable you know a
traditional Dex for swapping and a
lending market and then you could see a
world where someone could build
something very similar to Athena fully
on chain on dydx chain uh meaning you
know a delta neutral stable coin or
something of that nature so basically
give uh Traders all the infrastructure
necessary to do delta neutral basis
trading on dydx chain so I think that
that's really really cool and I'll
definitely be keeping an eye there to
see if any projects actually go and
build uh kind of what I have envisioned
then there was also that interesting dyx
proposal that just passed to I believe
it was stake a portion of the treasury I
forget the exact amount to dydx
validators who were uh underrepresented
so to like smaller dydx validators to
help insury centralization of the
network and uh its robustness so I
thought that was a really cool proposal
as well so not only you know increasing
decentralization to dydx but also uh you
know getting some yield in usdc to the
dydx
treasury it's actually in uh that was a
proposal by stride so it's 20 million
from the community Treasury and they
autoc compound the usdc rewards back
into dydx so it's actually like a a che
little value acrel opportunity that they
capitalized on for for the dydx token
which I thought was pretty
cool but yeah going back to the
permissionless deployments it that's a
pretty interesting business move because
if you look at something like osmosis
they also allow uploading smart
contracts on their chain but it's
permission so like the community has to
vote on it uh which I kind of think
makes sense because then that doesn't
allow for any body to like spam the
chain with some like basically trash
smart contracts or whatever um but I do
say the like value in being
permissionless or um like the crypto
ethers and it's also like hard business
model to get right because for the
underlying chain itself it's like quite
tempting I guess uh to start scaling
vertically into the same like business
as the smart contracts or the new
projects deployed on top of the chain
are so like for
example um on osmosis there are already
like per platforms but I think there
would be a big incentive for osis to
like
uh integrate perp trading into the chain
itself because it's uh or like the
protocol uh or the project would allow
per per trading itself because it's a
like Great Value acral um like
possibility but then again like you're
basically disincentivizing anybody else
to start building on the Chain I feel
like dydx has always had this Vision
though of just pers trading like dydx is
one of those teams that I have to
commend on they've had this Vision their
entire time like we want to be a uh
order book centralized exchange user
experience on chain so we want to
compete with binance on chain just for
perss so I actually think that you know
even if they see some decks or lending
platform or something do a ton of volume
and have a great value crew model
they'll actually just stick with their
Vision like they've never strayed from
it thus far and I don't think they'll
start doing that
today I think there's some really
interesting things you could do too with
like cross margin um like obviously you
know dydx is a cross margin exchange so
like exchange so like it'd be kind of
cool if you could use your purpose
position as collateral on an amm or or a
structured product or vault or some sort
of thing like that I I don't know if
that would get a little bit too messy
and potentially introduce new risk into
the system but it'd be cool to see some
of that come to
fruition big Infinity po throwback
RP all right um now for a quick word
from Axel thanks to our fantastic
sponsor
dydx all right guys for today's dydx
segment we have your host axar
co-founder and director of the axar
foundation thank you so much for coming
on thanks so much for having me just for
quick starters do you mind just giving
us like a quick 30 to 60c overview of
what Axel is absolutely so um Axel the
way we like people to think about it is
that it solves the bridging problem but
is not actually a bridge right all of
you are familiar with you know Bridges
and all of the hacks over the past few
years Axel operates one layer below it
is infrastructure it is a platform that
allows Bridges and other applications uh
to build on top right so to make an
analogy the same way that on layer one
you can build decentralized exchanges
money markets nft marketplaces all those
great Primitives with Axel you can build
chain agnostic versions of those
applications right the cross chain Dex
cross chain Money Market Cross chain
nftd marketplace right so it's a
platform that powers Bridges but all
kinds of other applications as well so
we had squid rer on actually a week or
two ago how are you guys related to them
and the The Wider dydx
ecosystem great question so squid uh is
one of these core Primitives building on
top of Axel right and is the most
popular cross-chain decentralized
exchange that's built on Axel what it
enables users to do is take an asset say
uh BNB on this binance smart chain and
swap into usdc on dydx as simple as that
right a simple interface looks very
similar to Unis swap but takes an asset
as input on one chain and gives you an
asset on another chain now for the
particular use case of dydx all of the
collateral is in usdc so that's the
asset it delivers to the user and uh the
other cool feature that it has is that
it can do the whole flow in uh 20
seconds we have what we call this
Express features with Axel which allows
applications to express their
transactions and uh we have these uh
relayer services that take the whole
risk on behalf of the user so the user
can actually
uh get very seamless user experience get
their assets very fast on the
destination chain while assuming zero
risk you have this kind of uh Market
making entities that's one way to think
of them that support the user and take a
very small fee in exchange for the
service gotcha I appreciate that
explanation and I know axar has a lot of
exciting plans over the coming year so
would love to hear what's on the Axel
road map for the next six to 12 months
um sounds great sounds great so we're on
boarding uh many of the non evm chains
right now AEL has just evm and Cosmos
chains about 60 chains integrated to the
network but we have a big upgrade that's
going to launch Smart contracts on top
of Axel and make connections
permissionless so we're going to be
adding Solana suie stellar reple and a
couple of other non EVMS in the coming
months uh now usually when uh we decide
that we want to add a chain the
decisions is informed by the customers
right the applications uh building on
top of Axel and a big segment that we're
focusing on is real world asset
tokenization a lot of the real world
assets ISU want to be launching on
Solana uh because Solana has clearance
from some regulatory bodies in New York
there's only Solana and and ethereum
they also want to be launching onui
because that's a new ecosystem there's a
lot of excitement there a lot of
opportunity for new stable coin issuers
um so I guess given how close we are
with a lot of this real world asset
companies we are prior prioritizing some
of the nonm chains that they want and we
have a lot of very interesting
initiatives we're going to be announcing
in the coming weeks and months on the
real world doet side and also the work
we're doing with financial institutions
that's going to be a big part of what's
to come with
Axel nice well that is super exciting
and we'll actually have to get you on
for a full episode at some point to get
to get a bigger rundown of axar because
I know there's a lot of nuances but
thank you so much for coming on uh I
don't know if you want to share with
people where they can learn more about
axar or uh where they can find you
personally yeah for me I mean just
follow me on Twitter feel free to
message me I always respond to people uh
just type my name on uh on Twitter and
uh yeah happy to send you more
information about Axel but I think just
follow us on Twitter WE Post regular
update so you'll be able to find all of
the information there awesome thank you
so much we'll catch you sometime in the
future absolutely thank you so much for
having me now moving on to our hot seat
Kone segment I'm going to throw it over
to you Sam this week for probably one of
the more talked about topics in the past
week yeah I got a lar as a salana expert
here for a second but uh basically
anyone who has used Solano over the past
week or two has definitely realized it
is incredibly broken it's hard to land
any transaction without submitting a
request like three four five times and
nil on Twitter we can be sure to link to
this thread in the show notes but put
together a great explainer of of really
what's going on here so I'm going to do
my best uh to summarize it for you so
basically there's three passs for uh a
given transaction on Sal either one it's
successfully included and there's zero
errors so the transaction went through
and it was executed successfully that's
like the Happy case but then there's two
where the execution actually failed so
the gas is paid but the execution failed
because of some certain unmet uh
conditions so like for example if you
have too low of slippage set on an
illiquid Dex pair there's a chance that
that transaction actually reverts
because the slippage tolerance was set
too low and that's actually the the
chart that's been floating around on
Twitter that shows like 75% of salana
transactions have failed that's like
that's the reason it's mostly Arbitrage
Bots who are spamming the network to
some degree in order to uh get their ARB
through because transaction fees are so
cheap that you stand to make more on the
actual Arbitrage assuming it's
successful and you can you can afford
those failed transactions so that's not
really the problem here the problem is
actually the third case which is drop
transactions and this is the case in
which the block leader actually never
even saw the transaction request by the
user
so the N the networking layer is
basically the communication layer of the
internet and it's used to send packets
from one data connection to another so
for example TCP um and then there's
quick which was actually designed by
Google which I found interesting in this
thread but basically salana uses quick
and it gives the abil the builders the
ability to drop transactions based on
certain criteria in order to combat
chain halts during periods of high
demand and if you'll recall salana
doesn't have a mem pool so losing
connection here means that the
transaction never actually makes it to
the leader so the problem is that even
though block leaders can now like
throttle certain uh connections the
logic on which the connections are
throttled like the criteria that need to
be met are really like poorly
implemented and buggy so the it's just
not well defined and it's a poor
implementation of quick so that's
essentially what all the salon
developers are kind of all Hands-On deck
trying to solve right now but for the
immediate term it's not clear if any
sort of patch or fix will actually solve
the problem in totality um fired dancers
of course being worked on which is
supposed to address some of these quick
implementation problems but that's still
six plus months out so it's really
unclear as to when these uh issues
actually get resolved so I'll stop there
I don't know if you guys have any good
takes on the the porcelana performance
but I guess it's a good problem to have
is kind of my take it means you're
you're doing something
right yeah uh I studied distributed
distributed systems engineering over the
weekend and so I'm now like a PhD in
network engineering uh what I I'm
kidding I I'm not going to pretend to
know that much about like the networking
layer of salana but I think there's like
two two ways you can like sort of fix
this right one is like fixing the
networking layer and there's like a
bunch of like optimizations that a bunch
of teams including like Anza which is
kind of like a spun out like team from
the salana foundation or labs are
working on like the client um they're
working on like fixes to like the
networking component but the other side
of this equation is also like the fee
market right traditionally niss salana
has struggled with fee Market design
their base fee is still like a fixed fee
per signature and it doesn't take into
account the number of compute units that
a transaction utilizes and so there is
like a quite a large incentive for these
Arbitrage Bots to spam the network at a
relatively low cost and so I think the
eventual fix for this is both a
combination of fixes to the networking
layer and also fixes to the sort of fee
mechanism and I know like a lot of
people are hyped about 1.18 and sort of
like the new scheduler that's coming out
but I don't think that's going to help
this or like help what salana is
experiencing that much because that's at
the point where the transactions like
actually reach the block leader um but
right now like the transactions aren't
even reaching the block because of these
like Network and like propagation issues
so yeah I don't know when it will get
fixed but not going to lie salana like
does feel pretty unusable I think most
people have to like do transactions like
three to four times and that's just like
a pretty bad user experience so between
that or like a $100 like transaction
fees on the three just pick your poison
I guess the only thing that I think is
worth noting is that just three years
ago pre EIP 1559 ethereum had similar
issues or at least a similar user
experience similar negative user
experience and instead of it taking like
whatever a few seconds for your
transaction to drop and not go through
it was like tens of minutes or 10
minutes so you know while it's not good
it's it's a bad user experience it's
we've all anyone who's been on chain for
you know five plus years this is
something that will likely be solved in
the future and get better uh and it's
definitely not the worst we've dealt
with so I guess what I'm trying to say
is that having these problems now feels
so much better than the problems we had
you know just in 2020 which wasn't even
that long
ago what still isn't clear to me and I
hope one of you guys has some
clarification here is how the ore mining
actually plays into these problems cuz
like from my understanding is it's not
the Arbitrage Bots that are causing the
problem it's it's other stuff and it's
like is or mining really what ignited
this or or was it is that not really
that big of a part of the
problem should we be uh maybe give some
background on or mining Yeah Yeah so
basically there's like a proof of work
ripoff that's like an application on or
a smart contract on salana and you can
run this program to mine these ores and
there's like very little liquidity
there's only like 100k of liquidity
actually that was like a week ago when I
looked it's probably like half that now
but regardless you can mine these ores
that have no real function um and
apparently that's been contributing to
salon's problems but I I truly don't
understand
why I mean
this is all coming from Daniel our great
teammate who tried to explain this to me
one morning so I'm probably paraphrasing
and paraphrasing in a wrong way but like
he said that there's like a big
incentive to just like spin out nodes or
trying to get as much compute through to
the chain as possible or through the
smart contract uh which like emits these
ores when you solve the equation
basically so what people are doing are
they are for example hiring some like
professional RPC providers I think um
and then basically have them spam the
smart contract on chain which then I
don't know how big the effect really is
on the like bad experience but
apparently that could like bring about
some
problems I would have to imagine that
these problems existed before or and I
think like even before or right like
there were periods where Solana was like
slightly unusable I don't think or like
contributed that much to what's you're
seeing right now but it definitely like
didn't help and as far as like the RPC
font brick I just thinking like on one
hand M must be like crying at how
unusable salana is but on the other hand
this guy must be printing off his like
RPC
business I think it's just congestion in
general so like I'm sure or mining has
some contributes a bit but so does pump.
fund so does memec coin trading so does
everything else going on salana I think
it's just back to like Ren's point that
you know basically there's this
incentive to spam the network to get
your transaction in like if you have an
opportunity to make you know 10 bucks I
don't even know how many Salon
transactions you can spam to make that
still worthwhile but it's a [ __ ] ton um
but yeah I'm definitely not the most
well read on the situation
either actually that's an interesting
point um You' think it's like a
snowballing effect where suddenly it
gets a bit worse and then more people
start spamming the chain and then more
people start spamming the chain so the
like experience gets worse and worse
kind of a self- fitting
problem yeah the or problem would be
more interesting if the price was going
up because obviously that would
contribute to that flywheel that you
just that you just mentioned but I think
Dan and mert honestly would do this
conversation 10x more justice so we'll
be sure to link to the uh the most
recent light speed podcast which I know
they talked about this in depth so we'll
do that but outside of that Matt why
don't I kick it over to you for your hot
seeder cool Throne yeah so I don't even
know who exactly to hold in the hot seat
so I'm just going to hold this entire
situation in the hot seat uh it's the
makered out a debacle you might have
seen some of it on Twitter so for some
contacts so for some context maker Dow
put up a proposal to extend a credit
line of 600 million to basically
collateralize to collateralize die with
SSD so this is taking $600 million that
doesn't exist and die uh purchasing SSD
and you know receiving the yield that
Athena USD receives
uh so yeah this is a big risk the
protocol but at the end of the day uh
it's a risk that pays off and that they
think is a worthwhile risk directly
after this maker out proposal a or Mark
Zeller from a who leads a Chan put up a
proposal to
delist d as a collateral asset on a so
set the LTV to zero you can't use a you
can't use uh D to take out loans on a
anymore is the proposal that he put up
and it started a huge controversy there
are you know
his Mark Zeller and backed by Stan kind
of say that the reason for this was risk
optimization they think that D's risk
went extremely uh the you know the risk
matrices on die changed completely in
one day so they want to get rid of it
completely others are saying that you
know setting a 0% LTV is a drastic
measure and that it's basically just
severing the relationship between maker
maker Dow and a which kind of makes
sense given that they're starting to
compete a little more and more these
days but overall the whole situation is
just a giant [ __ ] show it's kind of
setting a new equilibrium for governance
across the board and uh yeah it's just
probably not a good look for the space
overall as it decreases kind of the defi
Lego composability value proposition
that we love and
enjoy I think historically like meral
has been I mean like it's always been
like relatively back but they've dabbled
in rwa a lot more and you know they've
extended what call like private credit
lines to various like credit managers so
to say I don't think like Sude increases
the risk of die being unbacked by that
much to be honest and if anything like
Sude quote unquote going wrong would be
like a slow unwind rather than just one
day like a borrower from a credit fund
saying like hey I can't beay like this
$50 million loan um so in that sense
like I I still think it's fine and from
A's perspective obviously there are some
sort of incentives that they have to a
has has its own stable coin go which I
don't think I've seen as much adoption
as they would like so it would make
sense for them to you know D this like a
die Market or like try to quotequote
like fud another like stable coin but
yeah would agree that like it is a [ __ ]
show and it brings up an interesting
point right like there are these like
new crypto D5 Primitives that people
have thought of they've quickly found
like product Market fit and ground to
like billions and billions of dollars of
like TVO or like AUM or liquidity at the
end of the day the whole thing about
crypto is sort of like defi Legos right
you get this vision of composability but
then now you have the centralized or
quote unquote centralized like Risk
Managers coming in and kind of like
cutting out the composability component
of crypto and whether that should be
allowed is a very good question and the
follow-up question to that is like who
should that sort of risk management lion
you know should it be on atina and they
should be the ones actively going like
okay like make it out [ __ ] out like
let's only do like $200 million dos of
like die credit for like SD or USD or
should that just be like purely on maker
Dow and then obviously there's like a
whole bunch of second order effects to
that with all of these protocols that
are integrating like all of these
different tokens in my opinion it should
definitely be a maker though I think why
this has gotten so much attention within
the maker Community is because like
historically maker hasn't really made
this or
a similar sized bet before especially on
a mechanism that hasn't yet been proven
in a like a Black Swan event and that's
tough to model out because yeah you're
basically just assuming like certain
probabilities for the blacks one event
and then based on that you get some EV
calculation and then decide to do it or
not um so I I know some community
members weren't too happy about like
yeah this is a great opportunity for
maker to print a lot of cash because uh
basically the last time I checked uh I
think maker was earning 80% AP wise
for uh like the die borrowed out which
is amazing if you have like 500 or a
bill in there um so I do see the
temptation to you know expand quickly
and kind of take advantage of these high
funding rates we have right now but then
again on the other side like if
something will or if something happens
to go wrong uh connected to Athena I
feel that it's going to be like a super
quick um unwinding or like an event that
you basically you either lose everything
or almost everything or then you survive
so it's tough situation to um be in then
yeah interesting decision to go ahead
with such a large like I don't know
decision yeah I mean I'm all for it I
think while funding rates are positive
like go for it and then you can change
parameters down the line if you need to
but I'm also like a usde bull I think
democratizing that trade is is a really
cool idea and a new primitive that we
haven't seen and I'm all for it but
maybe that's just because Ren and I
spoke with guy just this morning for an
interview episode so recency bias no I
mean I do see the vision I think it's a
great projects it's just that as always
with stable coins like the worst thing
is when the market loses confidence in
the protocol or the you know whatever
stable coin you have because usually
it's also quite irrational like what
happened with usdc where the peg was
trading
below um like the confirmed collateral
value that the bank still had uh
beginning of last year I think um and a
similar situation could go down with d
and you also have this game
theoretical uh situation where like
you're incentivized to front run all of
your Capital out of the project to be
the first one to like not take a haircut
and then the people who are slower are
gonna be the ones that are basically
left holding the
bags and maybe to clarify after having
said all of the I'm I'm not saying
anything of this is going to happen I'm
just like like trying to paint a picture
of what the maybe the worst situation
that could happen would be
here Athena's definitely got lots of
risks like there's the risk that Ste
deegs there's the risk that uh you know
copper clear Loop has 4our settlement so
even if one of the exchange if one of
the exchanges goes down like they'll
have directional exposure for a 4H hour
period of time binance doesn't actually
use copper clear Loop so if binance goes
down but at that point there's you know
a lot more to worry about than just
Athena um there's the risk that you know
the whoever controls the ability to
access the custody with copper clear
Loop actually just takes the money out
um you know there's no contractual
obligations like that could happen a
quote unquote rug I don't think that
it's at all likely but it's a
possibility so like there's all these
risks to consider but you know I do
actually think that at least from my
perspective and in my opinion like those
risks are outweighed by the current
reward that uh Athena is paying out at
least for me and only for me not
speaking for other people so maybe maker
down made a similar decision and you
know decided that $600 million was an
appropriate risk to take on given that
the expected value of their payoff from
this position um so overall like I'm for
it too I think it's a risk but it's a
it's a well thought through
risk yeah I thought it was interesting
that guy told us today like he wouldn't
be opposed to moving some of the short
legs on the eth trade into Stables given
the opportunity and like the risk
management deems that at a certain time
like I I just think that there's a lot
more things they can do to protect
against these risks than people are
giving them credit for and I also think
like they're diversifying their you know
their exchanges their custody providers
like all of that different stuff so like
worst case scenario in my view isn't
like really the risk of negative funding
it's it's actually like the risk of yeah
centralized exchange going insolvent and
not getting paid out on the short leg
but even then like if you've only got
20% of your open interest on one
Exchange then you're taking like what
20% of the you know 50% of the Hedge and
then that's only that it just ends up
being a very small amount so I don't
think this is a scenario like us where
all of a sudden you wake up one morning
and your life savings is gone I think
it's going to be at worst like 10 to 20%
haircut but I'll probably eat those
words in a bare market so tread
carefully no but as I said earlier like
there's still the possibility that
everybody starts panicking and then the
situation becomes worse than it
otherwise would um one question I had
and I don't know if you want to save
this for the other podcast episode but
like did you talk at all about the
insurance fund like what's the situation
with that has it been growing and like
through which ways Yeah it's gotten
really big actually so they're adding
about $6 million a week as of April 2nd
it's up to 33 million from the starting
point of two million I believe 10
million of that was added through the
recent raise that they had but I think
20 to 25 million is organic just growth
and I believe that that Revenue I
actually didn't ask this directly
because it was one of my questions I
wasn't sure where the acral actually
came from but it sounded like ssde
stakers get their Pro share dependent
upon you know how much of the USD Supply
is Stak and the remainder so the USD
that's just sitting in EAS that isn't uh
Stak in us sde that excess goes to the
Insurance Fund so yes at you know 30 40
50 60% funding rates they are absolutely
printing on that Insurance Fund I will
note that the original studies done by I
believe it was Gauntlet or chaos I can't
recall which entity but they recommended
$30 million of capital in the Insurance
Fund for every1 billion dollar of usde
supply and obviously usde has about two
billion of supply and only 33 million in
the Insurance Fund so right now that
actually is below the targeted threshold
that was done by a third party but the
internal testing that was done by the
Athena team suggested more like 15
million for every 1 billion of USD
supplies so it depends on which source
you want to go on uh I think probably
taking the more conservative of the two
is the better approach but nonetheless
like at this run rate like they're going
to be at 60 million for their two
billion USD in just a couple weeks and I
mean at that point though it's a game of
catch up because I'm sure the USD
supplies on a fast track to five billion
given that their sth campaign is kpi
based and time duration based so it's
either first to five billion USD Supply
or in six months whichever comes first
and if it's anything like the first
campaign then it will be a lot sooner
than six
months all right I think that's a good
point to sort over to my hot seat K
drone similar on sort of like the
private credit side of things I have
goldfinch in the hot seat so there was
another default on gold finch last week
this time from a company called Len East
that they just reviewed that they can
only repay 4.25 million out of their
10.15 million loan from the gold finch
Pro so that represents roughly a 58%
loss on that specific loan and it
represents 7.7% of active loans on gold
finch according to sort of community
members within the Discord
750,000 B from ginch was used by lendes
to repay other borrowers obviously in
Bach of the loan agreement you can't
really do that that's a big no no um and
yeah like a 10.15 million loan with a 25
month term paying out a
177% uh rate and yeah I think like this
is probably the third default that goldf
has experienced previously they had a
default from tund day one from Stratos
and a few like Alma vest po added
together is probably around like 20
million or so so gold V is in pretty
rough shape and all of these private
credit protocols have just been
continued to be battered like ever since
sort of like the Luna 3ac FTX Fallout
and if you would remember there were
like a huge amount of crypto market
makers that blew up and weren't able to
repay their private credit loans from
protocols such as like Maple finance and
it just seems like that Fallout
continues though even outside of crypto
borrowers um yeah I'm not sure what the
solution here is obviously like
underwriting jungle bonds especially in
Emerging Markets is pretty hard and
defaults are unavoidable like it'll be
hard to run a private credit fund with
like a 0% default rate but obviously
you're hoping that the the return from
your uh lending overcomes like whatever
default that occurs and so I don't
think like maybe there's a bit of an
adverse selection problem given that a
lot of their loans were like an emerging
countries in these sort of like sort of
like growth mode companies that were
doing like bike shirt
or whatever so that definitely like
doesn't help but it's also not like
whoever was like underwriting these
loans were not professionals you know
they had like professional like credit
fund managers like managing these loans
during the underwriting but yeah at the
end of the day there's always going to
be like a lack of accountability like I
underwrote those loans but like you know
if something defaults like it's not
really my problem and similar thing from
like a you know like if I'm like a
random like bike sharing company in
Ethiopia and I default like yeah like
gold was probably like my last lifeline
and like if I default then so it you
know um so yeah that's just another
thing on the gold V and like private
credit side of things but would love to
hear if anyone has any thoughts on how
we fix this to be honest or like if
private credit onchain should like even
exist I think it makes a lot of sense to
have private credit on chain uh just
because of all of the efficiencies you
can uh reach and all of that good stuff
like I think we've talked about it quite
a few times but to me it's just
interesting like if you look at private
credit funds just like in the Trad five
world I'm I'm not sure but my if I
recall correctly I think they produce
around like 15 20% yields default rates
are probably below like 5% of the AUM uh
which even at that point like somehow
sounds super hard to me or high to me um
and like compared to this Goldfinch
situation which what did you say like
20% of the AUM is now under default
that's brutal because like you kind of
assume yeah you know that private credit
and especially Emerging Markets are a
tough business and like riskier than you
know buying AAA bonds but still like you
basically take on more volatility than
um investing into equities and your
returns aren't like even close on par
with that um so I'm guessing like if
these news spread out more it's going to
be hard for um like this some of these
Deb protocols to you know attract
Capital especially in a bull market like
this when yeah we just talked about Thea
but that feels like pretty close to a
zero risk or I guess not zero risk but
much closer to like a zero risk
situation than um like investing into
this super super risky or I guess not
super super risky but still risky um
like the instruments in Emerging Markets
credit markets has always been the same
thing which is a assessing credit
worthiness and B default recourse so
when we like Maple Finance when it was
going through its uh its whole thing
back in the 3ac blowup days it had a ton
of defaults I forget the exact
percentage but it was even more than 20%
of AUM um maybe closer to 50 their only
loan recourse was reputational hit and
in a world where you know three was
blowing up uh reputational hit was not
good recourse if I remember correctly
and forgive me if I'm wrong I haven't
looked into gold finch in over a year
but uh they actually have contractual
obligation and Loan recourse so I'm
curious to see how that actually plays
out um and who would go and Sue the
defaulting borrower and additionally
like yeah it's a you know this is a
ridiculously hard space to solve uh if
we manage to get onchain credit to truly
work whether it be through digital
identities um you know I've always had
this idea that it's some sort of like
like ZK so basically your ident your
identity and your maybe it's like
connected to Plaid so your net worth and
all your different assets are tied up
into a ZK proof and then if you default
it's you know kind of unraveled to the
lender so that they can actually come
after you and there's contractural
obligations there so do you think one
day we get these onchain credit markets
to work and it will be what makes you
know in my opinion the next step for
defi like brings defi back into the
narrative but the solutions we have
today just are not there um and from a
team like Goldfinch who seems to have
transitioned a lot of their bandwidth
and brain kind of into other initiatives
of late so they launch this like AI
advisor or something um it it'll be
interesting to see how the situation
plays out but overall I'm I'm hopeful
it's a good team I I wish them the
best I just can't believe that interest
rate you said 177% run so you're telling
me I can buy usde and stake it and earn
three times the amount as doing an under
collateralized loan as a lender in an
emerging market like that is you're on
crack like under collateralized lending
on chain is a great business for
borrowers and borrowers only like you're
insane to be lending on those things I'm
I'm I'm sorry I think it's a terrible
idea until like that's on a private
blockchain and like actual like people
who have spent entire careers and under
collateralized lending and credit
assessment like that's when it makes
sense and you can kyc and there's actual
default recourse but otherwise like
that's a no for me dog yeah not that you
put it that way and make that comparison
to it is pretty crazy I mean technically
Goldfinch tells that all of its loans
are like over collateralized and they
say like they B do a bunch of due
diligence like it's collateralized by
like balance sheets like cash flows and
whatever but yeah I mean like it's still
kind of under collateralized at the end
of the day and if you're gonna make
three times that on Athena which is like
quote unquote like real yield then that
seems like a lot better R would yeah
I'll add that I don't know anything
about Goldfinch for the most part and I
do commend them for like trying it
because it is needed like defi is
fundamentally constrained until we have
under collateralized lending but like
today like yeah no you just put that so
simply and eloquently like yeah H hard
agree yeah I think uh one more thing
that I just like to put on the C own
this weekend has been making waves on
CTS pump. fund so pump. fund is a
website that allows you to launch a
shitcoin on both salana and blast and
basically how it works is that you
deploy a coin you add like a ticker your
image whatever and people can like buy
it on pump. fun and once it reaches
69,000 in market cap on salana it
deploys $112,000 of liquidity into a
radium pool up and basically as you can
imagine like thousands and thousands of
tokens are getting launched there every
single day and every time a token hits
the radium pool pump. fund takes a two
so fixed m migration fee so at current
prices that's probably like around $400
and pum fund is making
$350,000 a day and if you sort of
annualize that that's 100 million in
annualized Revenue which is like pretty
pretty crazy to be honest and like on
the other side of the equation like de
screener they charge like
$299 for an ad on like sort of like the
right side where you see like the price
the market cap and like that ad space is
always filled up so I think obviously
the main takeaway at least for me is
that picks and shovels are absolutely
eating especially like mcoin picks and
shovels which makes me think that like
telegram Bots will probably have to day
again um this cycle given that they've
been like pretty battered to be honest
over the past few months but it's just
crazy seeing like such a simple business
make so much money uh and like it's
something that's like super unique about
kryp and these guys are like a three-
person
team yeah I mean that so wait you're
saying for deck screener when somebody
links the socials to the coin they
charge 300 bucks yeah so that's one
component like when someone wants to
link socials they charge 300 bucks and
then there's also like ad space which
they sell on the sidebar and that's
probably like another like completely
guessing you but probably like another
few hundred
bucks that has to be such a good
business model because yeah yeah
basically every coin you look at always
has those socials there um and that's so
scalable or like you basically don't
have to do anything anymore you just
like you've completed your uh platform
and now you chill and enjoy the bull
market yeah I think it's it maybe it
doesn't make it uh sense for these
platforms to launch a token themselves
but like shout out to the team for
creating this stuff pump out fun has a
real opportunity like in its current
state it could definitely be like a you
know temporary time in the spotlight but
overall it's a simple idea right I'm not
sure if I mentioned it but the lp gets
locked so you know all you basically are
buying into this um you're buying into
this Cur liquidity curve with soul
you're buying this mem coin uh and then
eventually a large portion of the soul
that gets put into the into the
liquidity curve gets put into radium and
then those that LP token is burned so
it's no longer accessible uh so it helps
with like these Fair launches it removes
your risk of a in the traditional sense
getting rugged where you take out all
the liquidity from the pool you can
still get rugged other ways but the
traditional uh rugging liquidity sense
so it's like a great idea from my
perspective the actual platform is um
you know has a lot of room for
improvement but that said like if it
goes and launches across all these
different chains right now it's only
live on salant and blast but you could
easily go see it live on Bas and
arbitrum and everywhere else in the near
future there's no reason it shouldn't be
live there besides obviously instead of
using radium it be using Unis swap or
whatever um so I think that pump. fun
actually has like the legs to be a a
real like you said pick and shovel or
infrastructure product in crypto and I
definitely kind of hope to see it
continue iterating and and growing and
being better here's a question for you
all if you were one of the three
co-founders of Pumped off fun you're
making 100 million doll in annualized
Revenue today so that's probably like
$33 million each and chances are like
this meme coin like craziness continues
for at least like a few more months if
not like until the end of the year or it
gets even crazier from her would you
launch a token or no you launch a token
and I don't know like 80% of your
Revenue has to like go back to like
token holders just like some Fe switch
you have to manage a dial like just push
back uh now you have like Community only
like part of the protocol where it's
like if you don't launch a token sure
you don't get like whatever money you
can cash off the token but you're making
like $33 million each and like just cold
hard
cash if I were them I would be doing
absolutely everything I can to further
decentralize the actual product because
you are literally enabling the launching
of of you know shitcoins like yeah I
would want to distance myself from that
personally and I wouldn't want to just
be pocketing Revenue into perpetuity but
that's just my take Sam wanted to say a
two-word phrase that can't be said on
this show so bad oh my gosh uh yeah
there's a lot of liability with
launching tokens but I think more so you
know if I go launch a pump. fun
competitor to day and I shove a points
like just a point system on the top
right corner so that if you launch a
coin you get 10 points or you launch a
coin that successfully hits radium you
get 10 points you buy into a coin with
more than one Soul you get one point
like they will get vampire attacked and
eight so I do think that actually to
stay competitive they probably need to
have some sort of token or incentive
mechanism for users at some point okay
another uh interesting question would be
does anybody know if there's really like
being a token that's been launched on
buum that fun and then it's become like
huge
I think anam's cat H or whatever was
like a PP fun launch and then there is
like treat I saw I don't know if it's
true or not but like some guy launched
like 183 different tokens and he's made
like 650k so far so yeah I do think
there's like been a few like big ones
like not like whff level big but like
relatively big tokens that have been
launched on pump off fun I'm taking a
look right now it looks like shark cat
is the uh most popular
at um um hm not sure the exact not sure
the exact market cap but maybe 140
million or so followed by anom cat Hobs
at 50 million followed by what in
tarnation wit at 22 million so short
answer no but like those are substantial
numbers all right well I think that's a
good place to stop it I know we all have
an eclipse to go watch other than brick
who is fading the the coolness of the
the Eclipse which is insanity to me but
you guys can get after him on that in
the comments if you disagree as well but
thank you guys so much for coming on we
will see you here next week and uh yeah
thank
you
[Music]
byebye
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