1 00:00:00,300 --> 00:00:05,000 This is epicenter episode 350 with guest Fernando Martinelli. 2 00:00:20,000 --> 00:00:22,100 I am Sebastian with you and you're listening to epicenter 3 00:00:22,200 --> 00:00:25,000 the podcast where we interview crypto, Founders, Builders and 4 00:00:25,000 --> 00:00:27,100 thought leaders. On this show, we dive deep to 5 00:00:27,100 --> 00:00:29,900 learn how things work at a technical level, and we fly high 6 00:00:29,900 --> 00:00:32,800 to understand Visionary, Concepts, and long-term trends. 7 00:00:32,900 --> 00:00:35,500 If you like epicenter, the best way to support us is to leave a 8 00:00:35,508 --> 00:00:38,300 review on Apple podcast. If you're on a Mac or iOS 9 00:00:38,300 --> 00:00:41,100 device, the easiest way to do that is to go to epicenter 10 00:00:41,300 --> 00:00:45,000 rocks. / Apple. Today our guest is Fernando 11 00:00:45,000 --> 00:00:47,400 Martinelli. He's the co-founder and CEO of 12 00:00:47,400 --> 00:00:50,200 balancer laps. Balancer is a generalized 13 00:00:50,200 --> 00:00:52,800 automated market-maker protocol or a. 14 00:00:52,800 --> 00:00:56,700 Mmm, it allows anyone to place liquidity into a pool and to put 15 00:00:56,700 --> 00:00:58,600 it to you. So, on one side we have 16 00:00:58,600 --> 00:01:01,300 liquidity providers who generally seek to balance their 17 00:01:01,300 --> 00:01:05,099 Holdings and they can do that by placing it in an M&M protocol 18 00:01:05,099 --> 00:01:08,200 like Bouncer and they'll get rewarded with trading fees. 19 00:01:08,300 --> 00:01:10,600 And on the other side we have Traders we're just looking for 20 00:01:10,600 --> 00:01:14,000 the best rate possible. So, one way to look at balancer 21 00:01:14,000 --> 00:01:17,400 is as a generalization of Yuna swap, however, balancer pools 22 00:01:17,400 --> 00:01:21,600 aren't restricted to the same 2020 split between two tokens a 23 00:01:21,607 --> 00:01:25,100 balancer, pool can support up to 8 tokens with any distribution. 24 00:01:25,100 --> 00:01:30,100 For example, one could create a pool with 70% wrapped eith 20%, 25 00:01:30,100 --> 00:01:34,700 die and 10%, link and balancer uses smart order routing which 26 00:01:34,700 --> 00:01:38,100 ensures trades get sent to the pools which provide the best 27 00:01:38,100 --> 00:01:39,800 rate possible. So, essentially, a balancer 28 00:01:39,800 --> 00:01:43,900 pools can be seen as a sort of Of balancing Index Fund, which 29 00:01:43,900 --> 00:01:47,300 pays you for contributing liquidity to the platform. 30 00:01:47,800 --> 00:01:49,700 So the inner workings of balance are quite complex. 31 00:01:49,700 --> 00:01:52,900 So thankfully we have mayor and sunny on this one to break 32 00:01:52,900 --> 00:01:55,700 things down and help us get a better understanding of how to 33 00:01:55,700 --> 00:01:58,000 Procol works. And also the token economics 34 00:01:58,000 --> 00:02:02,600 which allow it to function and the governance of the protocol 35 00:02:02,900 --> 00:02:08,000 enabled by Bal tokens This week the interview debrief is free 36 00:02:08,000 --> 00:02:11,300 for all subscribers and for everyone to hear and sunny and 37 00:02:11,300 --> 00:02:13,300 mayor. Go on for an extra 15 minutes 38 00:02:13,300 --> 00:02:16,300 and they talk about token economics and the business model 39 00:02:16,300 --> 00:02:18,500 of balancer. If you like the interview 40 00:02:18,500 --> 00:02:21,800 debrief you'll want to check out epicenter premium to get these 41 00:02:21,800 --> 00:02:24,400 every week as a premium subscriber you'll get access to 42 00:02:24,400 --> 00:02:27,200 a private RSS feed where you can hear the debrief after every 43 00:02:27,200 --> 00:02:29,000 episode. You'll also get enhanced 44 00:02:29,000 --> 00:02:31,800 features like episode transcripts and interview 45 00:02:31,800 --> 00:02:34,600 chapters that allow you to easily skip to specific sections 46 00:02:34,600 --> 00:02:36,700 of the interview. You also get access to 47 00:02:36,700 --> 00:02:39,500 Roundtable discussions and bonus content that we put out from 48 00:02:39,500 --> 00:02:42,700 time to time and you can sign up for a personal premium at 49 00:02:42,700 --> 00:02:46,200 premium epicenter, dot TV. And with that, here's our 50 00:02:46,200 --> 00:02:48,200 interview with Fernando Martinelli. 51 00:02:50,700 --> 00:02:54,000 So today we have on with us, Fernando Martinelli who is the 52 00:02:54,000 --> 00:02:58,500 CEO of balancer Labs, where they are building the balancer 53 00:02:58,500 --> 00:03:00,500 protocol. It's great to have you on. 54 00:03:00,500 --> 00:03:02,500 Fernando. Great to be here. 55 00:03:02,500 --> 00:03:05,500 Thanks for inviting me guys. Yeah, so me and me here have 56 00:03:05,500 --> 00:03:08,200 been like, you know, following the balancer work for a long 57 00:03:08,200 --> 00:03:11,000 time and I think we're here was very interested in sort of like 58 00:03:11,000 --> 00:03:14,000 multi-asset pools. I've also been really interested 59 00:03:14,000 --> 00:03:17,400 for a while in just like, you know, more advanced. 60 00:03:17,400 --> 00:03:21,300 Parameterization of Eunice. Or a M&M's because like I have 61 00:03:21,300 --> 00:03:24,300 this like giant blog post. I wrote like a couple months ago 62 00:03:24,300 --> 00:03:27,000 where I'm like oh I want to parameterize everything and 63 00:03:27,000 --> 00:03:29,700 M&M's and then someone's like oh you should go check out what 64 00:03:29,700 --> 00:03:32,100 balancer is doing and it's like oh wow, this is really cool. 65 00:03:32,400 --> 00:03:34,500 Yeah, happy to finally, like, no be able to chat with you about 66 00:03:34,500 --> 00:03:36,400 this stuff. So can you tell us a little bit 67 00:03:36,400 --> 00:03:39,700 about your background and how you got into crypto in the first 68 00:03:39,700 --> 00:03:41,600 place? What were you working on before 69 00:03:41,600 --> 00:03:42,900 balancer? If anything. 70 00:03:44,200 --> 00:03:48,100 So I'm a mixed Tronics engineer and I did a master's in robotics 71 00:03:48,100 --> 00:03:51,100 and image processing. I also did an MBA at the 72 00:03:51,100 --> 00:03:54,800 sorbonne University in Paris worked for beIN company as a 73 00:03:54,808 --> 00:03:58,900 strategy consultant in Germany. I actually created a few 74 00:03:58,900 --> 00:04:02,000 startups already in the past, I started very young. 75 00:04:02,000 --> 00:04:04,900 When I was 14, I created this cyber cafe. 76 00:04:05,500 --> 00:04:08,800 That was very, very successful because it was the time where 77 00:04:08,800 --> 00:04:12,000 people were addicted to Counter-Strike, and I was myself 78 00:04:12,000 --> 00:04:15,600 to, I figured I should create The my own cyber cafe. 79 00:04:16,100 --> 00:04:19,700 I went to Europe and after I work for being company, I 80 00:04:19,700 --> 00:04:22,200 created this company that allows people to prepare for 81 00:04:22,200 --> 00:04:26,600 interviews, called prep Lounge. Got back to Brazil and created 82 00:04:26,600 --> 00:04:31,400 an energy drink company, like quite different and how I got 83 00:04:31,400 --> 00:04:33,900 involved with crypto. In the first place was late 84 00:04:33,900 --> 00:04:36,000 2012. I got introduced to it by a 85 00:04:36,008 --> 00:04:39,500 friend and at first, I just like this, miss that completely, like 86 00:04:39,500 --> 00:04:41,800 this is a Ponzi scheme. You're only going to buy this 87 00:04:41,800 --> 00:04:43,200 thing. If you believe that others will 88 00:04:43,200 --> 00:04:46,200 buy it, And the value will grow just because, like, people are 89 00:04:46,207 --> 00:04:48,800 buying into it. And then, second time I looked 90 00:04:48,800 --> 00:04:52,300 at it early, 2013, it really struck me, like, how black 91 00:04:52,300 --> 00:04:54,900 revolutionary. This is and I kept kind of 92 00:04:55,400 --> 00:04:58,500 paying close attention and when he cerium came out, it really 93 00:04:58,500 --> 00:05:02,200 like, kind of caught my attention because I think that 94 00:05:02,200 --> 00:05:06,600 Bitcoin is very, is great for, like, a base money layer. 95 00:05:06,900 --> 00:05:10,300 But if you room has this flexibility, that allows you to 96 00:05:10,600 --> 00:05:13,700 create the financial system instead just of a coin, right? 97 00:05:14,200 --> 00:05:16,600 I was very excited with stable coins. 98 00:05:16,600 --> 00:05:18,600 That was something that I really believe. 99 00:05:18,600 --> 00:05:22,800 We need to get Mass adoption. Since then I still do any 100 00:05:22,800 --> 00:05:26,000 Theory, mm allowed that. And that got me like to be 101 00:05:26,000 --> 00:05:28,700 participating in the early days of the maker doll community. 102 00:05:29,100 --> 00:05:32,400 This is where I got to meet Rune, and Nicolai and all the 103 00:05:32,400 --> 00:05:36,700 guys, in early 2016. I collaborated a little bit with 104 00:05:36,700 --> 00:05:40,400 maker dowel doing some research on the control, mechanisms for 105 00:05:40,400 --> 00:05:45,100 the Target rate feedback mechanism that At applied and 106 00:05:45,100 --> 00:05:49,100 now there's like reflect sir that's actually Reviving all 107 00:05:49,100 --> 00:05:51,700 those control ideas with I mean and Stephen. 108 00:05:51,700 --> 00:05:54,500 So yeah, that is kind of an overview of how I got to hear. 109 00:05:55,900 --> 00:05:59,100 And so a lot of the like early balancer team is from like the 110 00:05:59,100 --> 00:06:03,200 Mako Community right to like Nikolai and like Mike McDonald 111 00:06:03,200 --> 00:06:05,500 as well. And was there, anything in 112 00:06:05,500 --> 00:06:09,500 particular like those are problem that you guys faced in 113 00:06:09,500 --> 00:06:12,900 like designing maker and you're like, okay, I need to go build 114 00:06:12,900 --> 00:06:14,600 this. Balancer is going to be the 115 00:06:14,600 --> 00:06:16,700 solution to some problem. We were facing there. 116 00:06:17,900 --> 00:06:20,500 It wasn't a problem we're trying to solve for Meeker. 117 00:06:20,500 --> 00:06:24,400 It was so bouncer started as a research project at blocked 118 00:06:24,400 --> 00:06:27,700 science, which is an engineering research and development 119 00:06:27,700 --> 00:06:31,100 analytics firm, and that was kind of me alone collaborating 120 00:06:31,100 --> 00:06:33,600 with them. And yeah, the reason why 121 00:06:33,600 --> 00:06:36,900 balancers started in the first place was like this idea of how 122 00:06:36,900 --> 00:06:41,400 can I keep a portfolio stable in terms of percentage of value 123 00:06:41,400 --> 00:06:45,200 distributed, like you want to be positioning trading and you 124 00:06:45,200 --> 00:06:46,800 don't want to have like to actively? 125 00:06:46,900 --> 00:06:50,600 Lee go and buy and sell tokens just because one of them went up 126 00:06:50,600 --> 00:06:52,900 by a lot. So you want to have this kind of 127 00:06:52,900 --> 00:06:56,900 Peace of Mind of being passively investing in a basket and having 128 00:06:56,900 --> 00:06:59,200 it being automatically rebalance for you. 129 00:06:59,200 --> 00:07:01,400 That, that was the beginning of everything. 130 00:07:01,500 --> 00:07:05,900 And yeah, we spent off of block science and created balancer, as 131 00:07:05,900 --> 00:07:08,700 its own company. And I showed this to Nikolai, he 132 00:07:08,707 --> 00:07:12,100 was extremely excited because he had this problem. 133 00:07:12,100 --> 00:07:16,400 I had was the problem myself to like, how can I put my tokens? 134 00:07:16,900 --> 00:07:20,800 Liquidity with them if back. Then only there was only you 135 00:07:20,800 --> 00:07:24,600 know Swap and you can just like put 50/50 Nikolai as being one 136 00:07:24,600 --> 00:07:26,900 of the major doll Founders. He has a lot more committee are 137 00:07:26,900 --> 00:07:29,600 at least I suppose then they need so it would be great for 138 00:07:29,600 --> 00:07:31,700 him to have an 80/20 pool, right? 139 00:07:31,700 --> 00:07:34,500 With mkr anyth and he really loved the idea. 140 00:07:34,500 --> 00:07:39,200 He then kind of a joint as our Chief Architect and Tech advisor 141 00:07:39,200 --> 00:07:43,600 wrote a lot of the code and then Mike McDonald joined as a CTO 142 00:07:43,600 --> 00:07:47,100 and co-founder as well. And yeah, this is kind of of how 143 00:07:47,100 --> 00:07:51,300 we got to here. so, if the original goal was to figure out 144 00:07:51,300 --> 00:07:55,400 how to like do passive portfolio management, something more 145 00:07:55,400 --> 00:07:59,200 similar to like set protocol, I would say, then what point did 146 00:07:59,200 --> 00:08:05,000 it transition to then becoming like also liquidity providing It 147 00:08:05,000 --> 00:08:08,600 was a consequence like when you want that to happen, then you 148 00:08:08,608 --> 00:08:10,900 need someone to do the trading for you, right? 149 00:08:10,900 --> 00:08:15,300 So the idea is that it's a two-sided Market where you have 150 00:08:15,300 --> 00:08:19,200 like the right prices in place for people to be incentivized, 151 00:08:19,200 --> 00:08:22,000 rational players to be incentivized to be doing the 152 00:08:22,000 --> 00:08:24,500 trades you want. So if your pool needs to sell a 153 00:08:24,500 --> 00:08:28,800 4B, you want to let people be marginally incentivised to buy 154 00:08:28,800 --> 00:08:31,500 be for a or, yeah, do the opposite trade. 155 00:08:31,500 --> 00:08:34,400 It then creates this massive amount of liquidity. 156 00:08:34,700 --> 00:08:37,600 We're like if everyone's using this common protocol, which is 157 00:08:37,600 --> 00:08:40,400 balancer, they're all like, creating pools and adding tokens 158 00:08:40,400 --> 00:08:44,100 to them that creates this massive liquidity, that makes it 159 00:08:44,100 --> 00:08:47,100 very easy and gives great conditions for people to train. 160 00:08:48,500 --> 00:08:52,100 I'm really curious about the generalization of Eunice we 161 00:08:52,100 --> 00:08:53,800 operate. So you have units of, which is 162 00:08:53,800 --> 00:08:56,800 this constant product Market maker in, which there are two 163 00:08:56,800 --> 00:09:01,400 assets X and Y and it's a pool, which is 50/50. 164 00:09:01,500 --> 00:09:06,000 And then in some ways, balancer extends, that Formula to it, 165 00:09:06,000 --> 00:09:09,500 introduces more terms, and it introduces exponents in these 166 00:09:09,500 --> 00:09:11,300 terms. And it's a generalization of 167 00:09:11,500 --> 00:09:15,400 Unis, of who had the brain wave of generalizing Unis for up like 168 00:09:15,400 --> 00:09:17,600 that. And how did that idea come 169 00:09:17,600 --> 00:09:19,900 about? It was me. 170 00:09:19,900 --> 00:09:24,400 So I came up with that formula back in early 2018, and since 171 00:09:24,400 --> 00:09:27,500 then, it was a long like process of modeling and simulating 172 00:09:27,500 --> 00:09:31,500 things in lots of things that formula, that aha moment came 173 00:09:31,500 --> 00:09:35,400 while I was sleeping. I had like, tried dozens and 174 00:09:35,400 --> 00:09:40,100 dozens of things and yeah, I've written a hundred maybe pages of 175 00:09:40,400 --> 00:09:43,500 mathematical skills, because one thing is to get that simple and 176 00:09:43,500 --> 00:09:46,700 kind of small or very simple formula. 177 00:09:46,900 --> 00:09:49,600 The other thing is to prove that At that formula. 178 00:09:49,700 --> 00:09:52,700 Like if you take partial derivatives of two tokens and 179 00:09:52,700 --> 00:09:55,100 you prove that your pool is going to always have the same 180 00:09:55,300 --> 00:09:59,000 value in each of the token. So it seems very simple, but it 181 00:09:59,000 --> 00:10:01,900 was a lot of time that I spent. Yeah, working on that. 182 00:10:01,900 --> 00:10:05,400 I also did during my undergraduate studies, I did 183 00:10:05,700 --> 00:10:09,800 advanced mathematics at the University so that helped quite 184 00:10:09,800 --> 00:10:11,900 a bit. Yeah, it was pretty much myself. 185 00:10:13,300 --> 00:10:17,400 Maybe before we dive deeper into the math, or could you maybe 186 00:10:17,400 --> 00:10:20,400 give a broad overview of, what is balancer? 187 00:10:20,400 --> 00:10:25,700 And what does the protocol do? Balancers and amm protocol for 188 00:10:25,700 --> 00:10:29,300 programmable liquidity and amm there since for automated 189 00:10:29,300 --> 00:10:31,500 market-making. It's a complicated term, but 190 00:10:31,500 --> 00:10:36,500 it's nothing but the protocol trades automatically, that means 191 00:10:36,500 --> 00:10:39,600 that balancer allows for the creation of the flexible. 192 00:10:39,600 --> 00:10:43,400 Liquidity pools that are continuously self rebalanced. 193 00:10:43,400 --> 00:10:46,500 So the protocol makes sure that those polls are very balanced. 194 00:10:46,500 --> 00:10:49,200 And that's what we just spoke. About the nice thing about those 195 00:10:49,200 --> 00:10:51,100 fools. And if you look at unit swap, 196 00:10:51,100 --> 00:10:55,000 you see that it also That if you go to contracts that you can 197 00:10:55,000 --> 00:10:58,300 swap has you're going to see that the eith value and the 198 00:10:58,300 --> 00:11:00,400 token value. So if you're talking about, you 199 00:11:00,400 --> 00:11:02,700 know, soft you want, you can you can see the Ethiopian token 200 00:11:02,700 --> 00:11:05,200 value, you're going to see that those values are almost the 201 00:11:05,208 --> 00:11:10,200 same, you know, swap always keeps that those pools at 50, 50 202 00:11:10,200 --> 00:11:12,200 percentage distribution of Valium. 203 00:11:12,200 --> 00:11:15,700 Now, bouncer allows you to do that with many tokens not only 204 00:11:15,700 --> 00:11:21,700 to, and not only like the same weight so you can have 20% 205 00:11:21,700 --> 00:11:24,400 token, a so can be and 60% token. 206 00:11:24,400 --> 00:11:28,200 See, you can have up to eight tokens and you can also choose 207 00:11:28,200 --> 00:11:31,100 the trading fee, that you want your pool to have, and that's 208 00:11:31,100 --> 00:11:33,100 fixed also for you to swap at 0.3. 209 00:11:33,600 --> 00:11:37,100 So you can think of a balancer pool as an index fund where 210 00:11:37,400 --> 00:11:42,000 instead of the Ali LPS paying a fee for the administrators to 211 00:11:42,000 --> 00:11:46,300 manage the fund and sell the tokens that go up, which is what 212 00:11:46,300 --> 00:11:50,400 happens in conventional Finance, it actually pays the LPS for 213 00:11:50,400 --> 00:11:53,900 providing liquidity to those funds, so it Kind of inverts 214 00:11:53,900 --> 00:11:58,000 that idea of, I'm paying for an index fund manager to take care 215 00:11:58,000 --> 00:12:00,700 of my funds and rebalance. And for me, it's actually, I'm 216 00:12:00,700 --> 00:12:04,900 getting paid for letting people use my liquidity in that Index 217 00:12:04,900 --> 00:12:07,700 Fund to trade. So yeah, maybe kind of 218 00:12:07,700 --> 00:12:09,100 finalizing. The answer you asked about, 219 00:12:09,100 --> 00:12:12,100 like, who our users, what's in it for them? 220 00:12:12,500 --> 00:12:15,800 There's two types of users, it's a two-sided Market on the one 221 00:12:15,800 --> 00:12:18,700 hand, you have the liquidity providers who are looking to 222 00:12:19,000 --> 00:12:21,900 both balance their Holdings. So they don't want to be 223 00:12:21,900 --> 00:12:24,200 Overexposed. Used to one of the tokens that 224 00:12:24,200 --> 00:12:25,900 they hold. So they want to be selling those 225 00:12:25,900 --> 00:12:30,000 tokens as those tokens go up and the other use cases. 226 00:12:30,300 --> 00:12:31,700 You're making trading fees rights. 227 00:12:31,700 --> 00:12:35,300 People sell Buy sell, buy your charging, a small fee out of 228 00:12:35,300 --> 00:12:37,700 each of those traits. So you're accumulating more and 229 00:12:37,700 --> 00:12:40,100 more funds. So it's a way in which you can 230 00:12:40,100 --> 00:12:43,500 generate some interests or some some trading fee Revenue. 231 00:12:44,200 --> 00:12:48,200 The other side is, you have Traders and they want to trade a 232 00:12:48,200 --> 00:12:50,500 4 B, they don't care where that's coming from. 233 00:12:50,500 --> 00:12:52,600 They just want to have the best rates. 234 00:12:52,800 --> 00:12:57,900 Or conditions possible in and balancer can use tap on the 235 00:12:57,900 --> 00:13:01,400 liquidity of all the pools to offer someone trade. 236 00:13:02,800 --> 00:13:07,400 So, one way to think of balancer is that balance, it takes to 237 00:13:07,400 --> 00:13:12,100 different parts of the financial supply chain or that two 238 00:13:12,100 --> 00:13:15,500 different parts in a traditional Financial supply chain and it 239 00:13:15,500 --> 00:13:18,600 kind of merges them into one. So, on the one side, you have 240 00:13:18,600 --> 00:13:21,600 the asset management supply chain, which is me, shipping 241 00:13:21,600 --> 00:13:25,300 some dollars into Fidelity and then managing the index fund for 242 00:13:25,300 --> 00:13:28,700 them for me. And this Fidelity has, you know, 243 00:13:28,708 --> 00:13:32,400 like trillions of dollars of assets on its balance sheet and 244 00:13:32,400 --> 00:13:35,400 then The other side you have the market makers, which are 245 00:13:35,600 --> 00:13:37,300 operating on the different exchanges. 246 00:13:37,300 --> 00:13:40,400 The New York Stock, Exchange, all of these exchanges and these 247 00:13:40,400 --> 00:13:44,400 market makers are people that have the assets and are always 248 00:13:44,400 --> 00:13:47,200 willing to quote, prices on on the asset. 249 00:13:47,200 --> 00:13:50,300 So they have US dollar in British pounds and they're 250 00:13:50,300 --> 00:13:52,300 willing to always coat an exchange rate. 251 00:13:52,300 --> 00:13:54,600 Between them the nature of a market maker. 252 00:13:54,600 --> 00:13:58,800 Traditional Market maker is that they need access to assets so 253 00:13:58,800 --> 00:14:02,500 that they can make the market and the nature of an asset. 254 00:14:02,600 --> 00:14:05,500 Manager, is that they have lots of assets, which have been 255 00:14:05,500 --> 00:14:09,500 sourced from all of the people, that own the index token. 256 00:14:10,000 --> 00:14:13,500 And normally, you know, like these two are quite siloed, 257 00:14:13,500 --> 00:14:17,600 these two functions of Finance are done by different entities. 258 00:14:17,700 --> 00:14:21,300 One of these entities has asset and the other needs assets, but 259 00:14:21,300 --> 00:14:25,900 the 2N never meet in traditional Finance, but balancer is almost 260 00:14:25,900 --> 00:14:30,900 the system where it's a smart contract, where both these parts 261 00:14:30,900 --> 00:14:34,300 of the supply chain exist. Inside one smart contract. 262 00:14:34,300 --> 00:14:39,000 So you have users that want an index supplying assets and those 263 00:14:39,000 --> 00:14:42,900 assets being used to make a market. 264 00:14:42,900 --> 00:14:45,600 And the market maker is the Smart contract itself. 265 00:14:46,100 --> 00:14:50,100 So it's like, it's compressing down the entire Financial supply 266 00:14:50,100 --> 00:14:53,900 chain into set of smart contracts, and allowing for a 267 00:14:53,900 --> 00:14:57,900 new kind of efficiency to emerge or because of that compression. 268 00:14:59,200 --> 00:15:02,900 I couldn't have done a better job at kind of doing that 269 00:15:02,900 --> 00:15:06,900 analogy, then you did that, that was extremely good and I totally 270 00:15:06,900 --> 00:15:10,100 agree with that. The idea is that balancer using 271 00:15:10,100 --> 00:15:13,100 etherium, which is an amazing product called an amazing 272 00:15:13,400 --> 00:15:17,800 Revolution for society. It just like Fred's the fees 273 00:15:17,800 --> 00:15:22,300 that are now going to Fidelity to NASDAQ, and NYSE to all those 274 00:15:22,300 --> 00:15:25,400 regulated entities, that have to spend a lot of money being 275 00:15:25,400 --> 00:15:27,800 regulated and paying lots of salaries. 276 00:15:28,100 --> 00:15:32,200 This is why You have to pay an index fund manager for them to 277 00:15:32,200 --> 00:15:36,200 to manage your funds for you, the beauty of the etherium, and 278 00:15:36,200 --> 00:15:39,600 yeah, decentralised finances that you don't need anyone for 279 00:15:39,600 --> 00:15:42,300 that because you have the smart contracts, controlling that and 280 00:15:42,300 --> 00:15:44,400 it's totally trustless and permissionless. 281 00:15:44,800 --> 00:15:48,600 So yeah, we're just combining those two sides of the market 282 00:15:48,700 --> 00:15:51,300 and yeah, spreading the fees across them. 283 00:15:51,300 --> 00:15:54,100 So no one's is getting in the middle anymore. 284 00:15:54,100 --> 00:15:58,300 And this is not only cheaper for everyone, it's more efficient 285 00:15:58,300 --> 00:16:01,100 and faster. Her and has a lot of advantages. 286 00:16:02,500 --> 00:16:07,200 So, one of the questions I have though here is I understand why 287 00:16:07,200 --> 00:16:12,000 it does well as a trading venue, but when you say it act, as a 288 00:16:12,400 --> 00:16:16,400 fund portfolio management, you know, when you do portfolio 289 00:16:16,400 --> 00:16:21,400 management, you usually want to rebalance occasionally, right? 290 00:16:21,400 --> 00:16:27,800 So in your portfolio, you have like 80% bonds, 20% stocks and 291 00:16:27,800 --> 00:16:32,400 then suddenly the stocks 2x or 3x and now Now, you have way 292 00:16:32,400 --> 00:16:36,500 more stocks and then, at some point you like rebalance, your, 293 00:16:36,500 --> 00:16:38,400 you know, you sell some stocks to equal out. 294 00:16:38,600 --> 00:16:41,400 But the problem is, you know, I feel like the portfolio 295 00:16:41,400 --> 00:16:45,200 management the prophet works because it happens at like sort 296 00:16:45,200 --> 00:16:49,500 of longer intervals. Where, you know, you let the 297 00:16:49,500 --> 00:16:54,100 stocks rise for a week and then you rebalance. 298 00:16:54,100 --> 00:16:57,800 But I feel like the problem with doing it on balancer is the 299 00:16:57,800 --> 00:17:00,900 rebalancing is almost it's like it's too. 300 00:17:01,600 --> 00:17:05,400 Overeager where it rebalances to quickly it can it's a continuous 301 00:17:05,400 --> 00:17:08,800 rebalancing and so your rebalancing before you even get 302 00:17:08,800 --> 00:17:12,300 to realize the profits of the stocks Rising. 303 00:17:12,300 --> 00:17:16,400 So for that reason, is it really act as a good portfolio 304 00:17:16,400 --> 00:17:20,599 management tool in that case? That's a great question, Sunny. 305 00:17:20,599 --> 00:17:24,400 So actually, there is a way to simulate what exactly what 306 00:17:24,400 --> 00:17:26,500 you're saying. Like, wait for there to be some 307 00:17:26,500 --> 00:17:30,400 profit for one of the tokens to go up by a given him out before 308 00:17:30,400 --> 00:17:33,200 you start selling that. And I wrote an article on that 309 00:17:33,200 --> 00:17:37,300 which is how to use balancer pools with high fees to simulate 310 00:17:37,300 --> 00:17:39,800 swing trading. So, when you have a high feel, 311 00:17:39,800 --> 00:17:44,000 it's a 10%, your pool is only going to sell or it's only going 312 00:17:44,000 --> 00:17:46,400 to be profitable. So let's say you theorem is 313 00:17:46,400 --> 00:17:52,300 $200, your pool with a 10% fee. Is selling at 220 and buying at 314 00:17:52,300 --> 00:17:56,600 around 180, right? So what happens is the price is 315 00:17:56,600 --> 00:18:00,300 stuck until someone trades. And if the external market price 316 00:18:00,300 --> 00:18:05,200 goes from 200, all the way to 221, that's when someone's going 317 00:18:05,200 --> 00:18:08,000 to buy from you. So you're going to be selling at 318 00:18:08,000 --> 00:18:12,300 220 and then if the price goes down and whenever it's between 319 00:18:12,300 --> 00:18:16,400 though that in that bandwidth, like between 180 and 220, you're 320 00:18:16,400 --> 00:18:19,600 not selling nor buying because it makes no sense for External 321 00:18:19,600 --> 00:18:23,600 factors rational actors to pay more or less than the current 322 00:18:23,600 --> 00:18:27,100 market price. So if it falls down to 180, then 323 00:18:27,100 --> 00:18:31,000 actually you start buying eith. So this acts exactly as you say. 324 00:18:31,000 --> 00:18:34,600 So that the fact that you can customize the feasts allows you 325 00:18:34,600 --> 00:18:37,300 to choose like what strategy you want to if you want to be 326 00:18:37,308 --> 00:18:40,900 rebalancing very often that would be a0 fie or if you want 327 00:18:40,900 --> 00:18:44,300 to rebalance like very sporadically when prices have 328 00:18:44,300 --> 00:18:46,800 huge variations that's a higher fee. 329 00:18:47,000 --> 00:18:49,900 So you can control that with the fee which is Cool right? 330 00:18:49,900 --> 00:18:52,200 Yeah, that's really interesting. You never thought about that 331 00:18:52,300 --> 00:18:56,000 because we're used to 0.3% on you to swap which is fixed, 332 00:18:56,100 --> 00:18:58,300 right? So that's why people I think 333 00:18:58,300 --> 00:19:00,500 never thought about that. But that's actually pretty 334 00:19:00,500 --> 00:19:01,900 powerful and pretty cool in my opinion. 335 00:19:03,300 --> 00:19:05,500 Is it possible to make these much more resilient? 336 00:19:05,500 --> 00:19:09,700 We're like, you know, sometimes the fee you want it to be higher 337 00:19:09,700 --> 00:19:13,900 for some reasons, when maybe there's higher volatility or 338 00:19:13,900 --> 00:19:17,500 maybe want to be lower, when there's lower volatility, or how 339 00:19:17,500 --> 00:19:21,200 Dynamic is, are these fees or is it like, you know, you set a fee 340 00:19:21,200 --> 00:19:22,300 one time or is it? Okay? 341 00:19:22,300 --> 00:19:24,700 We're doing 10% for this pool and it's stuck there. 342 00:19:26,000 --> 00:19:28,400 Great question. I think in order for me to be 343 00:19:28,400 --> 00:19:32,200 able to answer that I'd have to kind of explain a few things 344 00:19:32,600 --> 00:19:36,000 real quick, we have two types of balancer pools today. 345 00:19:36,200 --> 00:19:41,200 In balanced view one which are the private pools in the shared 346 00:19:41,200 --> 00:19:43,000 posts. So the first one is the private 347 00:19:43,000 --> 00:19:47,500 pools are owned by an address and only that address can add 348 00:19:47,500 --> 00:19:50,600 liquidity to those pools. And because there's only a 349 00:19:50,600 --> 00:19:53,100 liquidy from that address that addressed the owner of the pool 350 00:19:53,100 --> 00:19:54,900 can do whatever they want, so they can do it. 351 00:19:55,000 --> 00:19:57,500 Exactly what you're saying. They can start with a high fee, 352 00:19:57,800 --> 00:20:01,800 add more funds and then change weights, add new tokens, remove 353 00:20:01,800 --> 00:20:03,600 tokens and then decrease the fees. 354 00:20:03,700 --> 00:20:06,800 They can do whatever they want because it's therefore now we 355 00:20:06,800 --> 00:20:10,400 also have the equivalent to unit swap markets which are the 356 00:20:10,400 --> 00:20:14,000 shared posts which are immutable so you cannot change anything 357 00:20:14,100 --> 00:20:18,000 and that's necessary because other people can put money into 358 00:20:18,000 --> 00:20:20,500 that for as well. So if you allow the creator of 359 00:20:20,500 --> 00:20:24,200 that pool to change and add a new token, they would be able to 360 00:20:24,200 --> 00:20:26,300 just add there. Looking at the Own 100% of the 361 00:20:26,308 --> 00:20:29,100 supply and drain the funds up everyone else. 362 00:20:29,100 --> 00:20:31,800 So that's why shared pools have to be immutable. 363 00:20:32,300 --> 00:20:36,000 The nice thing about balancer is that you can have a private pool 364 00:20:36,000 --> 00:20:39,100 that's controlled and it's actually composability on 365 00:20:39,100 --> 00:20:43,600 etherium, it can be controlled by or owned by a smart contract, 366 00:20:43,700 --> 00:20:46,900 not by an address. So that's my contract, is what 367 00:20:46,900 --> 00:20:50,200 we call, or that whole kind of structure, is what we call Smart 368 00:20:50,200 --> 00:20:53,100 pools. So, smart pools are actually 369 00:20:53,100 --> 00:20:56,300 private pools at the base. Slayer, like they're seen as 370 00:20:56,300 --> 00:20:59,500 private pools By The protocol but the owner of those private 371 00:20:59,500 --> 00:21:03,900 pools are smart contracts, that can be gateways for external 372 00:21:03,900 --> 00:21:06,100 liquidity. And one of the like the use 373 00:21:06,100 --> 00:21:07,900 cases that I think is the coolest. 374 00:21:07,900 --> 00:21:11,600 Like one of the coolest ones is exactly what you said is like 375 00:21:11,700 --> 00:21:15,600 imagine a surge pricing pool or surge pricing for the pool. 376 00:21:15,900 --> 00:21:18,900 When there's a lot of demand for liquidity think black Thursday, 377 00:21:19,100 --> 00:21:21,400 everyone like is desperate to close their vaults because 378 00:21:21,400 --> 00:21:23,500 they're going to get liquidated. They don't care if they're 379 00:21:23,500 --> 00:21:27,000 paying 0.3. Five one or two percent, right? 380 00:21:27,000 --> 00:21:30,500 They just need liquidity. So this is when that smart 381 00:21:30,500 --> 00:21:34,500 contract that controls and owns. That pool says, okay, it's high 382 00:21:34,500 --> 00:21:37,400 volatility time. I'll just like, crank up my fees 383 00:21:37,400 --> 00:21:39,200 and I'm going to make this for more profitable. 384 00:21:39,600 --> 00:21:42,700 And then what that means is that it's like, uber when it's 385 00:21:42,700 --> 00:21:46,500 raining like no one wants to drive and everyone's to take the 386 00:21:46,500 --> 00:21:49,300 cab. So what happens is prices go up 387 00:21:49,400 --> 00:21:52,800 so you attract more drivers to the streets and that's exactly 388 00:21:52,800 --> 00:21:54,700 what happens by increasing the fee. 389 00:21:55,000 --> 00:21:58,500 Of that pool in times of high volatility, you attract more 390 00:21:58,500 --> 00:22:02,100 liquidity providers and that in turn makes that pull better for 391 00:22:02,100 --> 00:22:04,900 Traders because the slippage is going to be lower because the 392 00:22:04,900 --> 00:22:07,300 more liquidity you have the lower the slippage. 393 00:22:07,400 --> 00:22:10,600 So you actually are matching both sides supply and demand 394 00:22:10,700 --> 00:22:14,300 which makes that smart pool a lot more efficient for both 395 00:22:14,300 --> 00:22:16,500 sides. So I think that in the future 396 00:22:16,500 --> 00:22:18,800 we're going to see a lot more smart pools and we're working a 397 00:22:18,808 --> 00:22:22,300 lot on that and other teams as well as opposed to just shared 398 00:22:22,300 --> 00:22:24,500 posts that are inaudible, we're going to see a lot more of 399 00:22:24,500 --> 00:22:25,400 those. Horse. 400 00:22:26,500 --> 00:22:30,700 The difficulty with a shared like it with a public pool is 401 00:22:30,900 --> 00:22:34,700 that a public pool is probably good for trading, but as a 402 00:22:34,708 --> 00:22:38,600 portfolio management solution, a public pool is not so good. 403 00:22:38,600 --> 00:22:42,400 Because like once you set a particular set of assets and 404 00:22:42,400 --> 00:22:45,300 certain percentages for that assets, that thing is kind of 405 00:22:45,300 --> 00:22:49,800 frozen forever and can't adapt to changing circumstances. 406 00:22:49,800 --> 00:22:52,400 That's not an ideal portfolio for anybody. 407 00:22:53,800 --> 00:22:57,200 It is frozen, but you can withdraw your liquidity at any 408 00:22:57,200 --> 00:22:59,600 moment. So there's no lockup period of 409 00:22:59,600 --> 00:23:02,900 liquidy. So if you find that basket or 410 00:23:02,900 --> 00:23:06,300 like that, the fees of that pool are not ideal. 411 00:23:06,300 --> 00:23:09,300 Then you can just move my greater liquidity to the poor, 412 00:23:09,300 --> 00:23:12,600 you like more and we've been seeing that a lot happening on 413 00:23:12,600 --> 00:23:15,300 balancer lately. So pulls that were big at the 414 00:23:15,300 --> 00:23:17,500 beginning. Now people realize, okay, the 415 00:23:17,500 --> 00:23:20,800 fee here was not ideal. So let's move to a pool with a 416 00:23:20,800 --> 00:23:24,300 higher fee. So even though the pool is Your 417 00:23:24,300 --> 00:23:27,200 liquidity is not, you can migrate your liquidity anytime 418 00:23:27,200 --> 00:23:30,900 and we're also working with other teams and inside balancer 419 00:23:30,900 --> 00:23:35,500 as well to create like those intelligent migrations or 420 00:23:35,500 --> 00:23:39,200 migrators if we detect that there's a better pool for 421 00:23:39,200 --> 00:23:43,100 exactly or similar distribution or basket that you already have 422 00:23:43,200 --> 00:23:46,400 that tool with one click you can just migrate your liquidity to a 423 00:23:46,400 --> 00:23:49,700 better pool, that's more profitable or what not. 424 00:23:50,500 --> 00:23:53,200 But it does require active management. 425 00:23:54,100 --> 00:23:57,400 Yes, if you're talking about the shared posts but not, if you're 426 00:23:57,400 --> 00:24:01,000 talking about a smart pool, which is the surge pricing, 427 00:24:01,000 --> 00:24:05,200 special those Mark pools can. Also change the weights, can 428 00:24:05,200 --> 00:24:07,700 also change the. Yeah, add new tokens. 429 00:24:08,100 --> 00:24:10,500 And there's a very nice example of that. 430 00:24:10,500 --> 00:24:15,300 I like to give about a few actually, but Realty is this 431 00:24:15,300 --> 00:24:17,800 company that tokenize is real estate on etherium. 432 00:24:18,300 --> 00:24:21,400 They are building a smart pool that does exactly that like they 433 00:24:21,400 --> 00:24:23,500 are constantly adding new properties. 434 00:24:23,600 --> 00:24:26,100 To Realty. So instead of like having 435 00:24:26,100 --> 00:24:29,500 everyone migrating to a new shared pool with an extra 436 00:24:29,700 --> 00:24:32,900 property, what to do is they create that smart pool where 437 00:24:33,100 --> 00:24:35,900 they are two controllers of the assets, they can add new 438 00:24:35,900 --> 00:24:39,700 properties, they can remove old properties and if they have more 439 00:24:39,700 --> 00:24:43,000 than eight properties, so, balancer pool is limited to H 440 00:24:43,000 --> 00:24:46,500 tokens today in conversion one, what you can do is they can 441 00:24:46,500 --> 00:24:49,900 replace a property by a pool of properties. 442 00:24:50,200 --> 00:24:52,500 So now, instead of having just eight properties, you can have 443 00:24:52,500 --> 00:24:54,800 eight different cities. He's each city is actually a 444 00:24:54,808 --> 00:24:57,700 pool that contains properties in that city. 445 00:24:57,700 --> 00:24:59,900 So we have Florida, Detroit and Etc. 446 00:25:00,100 --> 00:25:03,200 The nice thing about that is that you're smart pool token. 447 00:25:03,200 --> 00:25:05,900 So actually also smart pools are tokenized. 448 00:25:05,900 --> 00:25:09,300 So you own a part of that smart people, that token does not 449 00:25:09,300 --> 00:25:11,100 change. Even though the like, all the 450 00:25:11,100 --> 00:25:14,200 properties are being updated and changing the weights, you can 451 00:25:14,200 --> 00:25:16,900 use that smart pool like the mother token. 452 00:25:17,000 --> 00:25:20,500 You can use it as a maker doll collateral because that token is 453 00:25:20,500 --> 00:25:22,100 canonical. It's not going to change. 454 00:25:22,400 --> 00:25:25,100 So that's really Full, of course, you have to trust the 455 00:25:25,100 --> 00:25:27,300 guys that Realty through already stressing them. 456 00:25:27,300 --> 00:25:31,100 To hold those properties on your behalf like tokenizing those. 457 00:25:31,300 --> 00:25:32,600 You're actually ready. Trusting them. 458 00:25:32,600 --> 00:25:37,200 Anyways, So, smart pool, if they want to do like they would have 459 00:25:37,200 --> 00:25:41,000 to, like Implement their own tokenization to distribute 460 00:25:41,000 --> 00:25:43,800 shares because, you know, the balancer protocol just sees it 461 00:25:43,800 --> 00:25:46,400 as a private address. So they have to sort of, do 462 00:25:46,400 --> 00:25:49,300 their own sort of shares, however, they want and, like, 463 00:25:49,400 --> 00:25:53,400 deal with, like, how to, you know, when people add liquidity, 464 00:25:53,500 --> 00:25:58,100 issuing shares, and all of that, Smartphones will have that parts 465 00:25:58,100 --> 00:26:01,000 of the controller of that private pool issues. 466 00:26:01,000 --> 00:26:04,900 Shares your see, 20 shares for people who provide liquidity to 467 00:26:04,900 --> 00:26:08,200 that controller, the controller. Then passes that liquidity down 468 00:26:08,200 --> 00:26:11,400 to the pool it controls. But then the controller itself 469 00:26:11,400 --> 00:26:14,100 issues, your see, 20 shares for people who are providing 470 00:26:14,100 --> 00:26:16,200 liquidity. We are working in almost 471 00:26:16,200 --> 00:26:20,400 launching an auditing right now. Smart pool Factory. 472 00:26:20,500 --> 00:26:23,100 It's like a template that anyone can create their own smart 473 00:26:23,100 --> 00:26:26,800 people, and they can actually decide what What rights that 474 00:26:26,800 --> 00:26:29,200 smart people that are creating will have, I can choose to 475 00:26:29,200 --> 00:26:32,000 create a smart people that can only change the swap fee. 476 00:26:32,400 --> 00:26:36,500 I can choose a smartphone that can add tokens, but not change 477 00:26:36,500 --> 00:26:38,900 the swap fee. So you have all those like, 478 00:26:38,900 --> 00:26:41,700 levers, you can change or you switches, you can turn on and 479 00:26:41,700 --> 00:26:44,800 off and then you have that smart but without having to deploy any 480 00:26:44,800 --> 00:26:48,700 code at all and all of those are your C20 compatible. 481 00:26:48,700 --> 00:26:53,100 So, they didn't issue shares that can be used as in your C20 482 00:26:53,100 --> 00:26:58,600 anywhere on here. I can sort of see two types of 483 00:26:58,600 --> 00:27:02,100 smart pools that or two broad categories and there's like 484 00:27:02,100 --> 00:27:05,400 really a spectrum but there's one which is more sort of 485 00:27:05,400 --> 00:27:08,400 governance Focus smart pools which are like you know you can 486 00:27:08,400 --> 00:27:11,700 imagine them basically being Dows and similar to maker. 487 00:27:11,700 --> 00:27:15,500 Almost like you use governance to make decisions and then on 488 00:27:15,500 --> 00:27:18,700 the other side you have you mentioned earlier, reflects your 489 00:27:18,700 --> 00:27:22,800 lab rational more automated like using smart pools and smart 490 00:27:22,800 --> 00:27:26,900 contracts to make better. Smarter algorithmic things that 491 00:27:26,900 --> 00:27:29,400 adjust the parameters and there's obviously a spectrum in 492 00:27:29,408 --> 00:27:31,800 the middle. So which ones have more traction 493 00:27:31,800 --> 00:27:34,400 right now and which ones do you personally? 494 00:27:34,400 --> 00:27:36,600 See as being going to be more popular? 495 00:27:36,600 --> 00:27:40,400 Going down the road. Right now, we're not seeing a 496 00:27:40,400 --> 00:27:43,200 lot of smart phones out there. It's like, really the early 497 00:27:43,200 --> 00:27:45,000 days. It's very nice and and 498 00:27:45,000 --> 00:27:49,200 incipient, but the guys at Pi Dow, did an amazing job. 499 00:27:49,200 --> 00:27:51,600 They've already come up with their own smart pool. 500 00:27:51,600 --> 00:27:53,900 They didn't wait for us, which was awesome. 501 00:27:54,300 --> 00:27:59,400 They have this doll, controlled smart pool, where the Dow can 502 00:27:59,400 --> 00:28:01,100 decide. OK, let's change the weight of 503 00:28:01,108 --> 00:28:03,500 this token because now they have the BT. 504 00:28:03,500 --> 00:28:06,200 C plus plus the USD plus plus spice. 505 00:28:06,300 --> 00:28:10,100 So now USD plus, plus it has Has your CT or usec? 506 00:28:10,100 --> 00:28:13,100 U.s. DC has some like trust issues. 507 00:28:13,200 --> 00:28:15,600 So let's agree that we should decrease that weight and then 508 00:28:15,600 --> 00:28:18,300 they vote. And then the Dow decides that 509 00:28:18,300 --> 00:28:22,100 the controller of that private pool like a smart bull has to 510 00:28:22,100 --> 00:28:26,500 change reduce the weight of that stable coin that is having 511 00:28:26,500 --> 00:28:30,600 problems so for now that's pretty much the smartphones we 512 00:28:30,600 --> 00:28:34,200 have around in terms of what's more promising. 513 00:28:34,600 --> 00:28:37,500 That's a great question II. So one thing that I think will 514 00:28:37,500 --> 00:28:41,800 be huge For bouncer is going to be treasury management. 515 00:28:41,800 --> 00:28:46,000 So, if you have a project or company or whatever that has 516 00:28:46,100 --> 00:28:49,600 funds, unchain you want to have like some sort of management 517 00:28:49,600 --> 00:28:51,300 where you don't want to be Overexposed. 518 00:28:51,300 --> 00:28:55,300 So, for example, an insurance product rule, they have 519 00:28:55,400 --> 00:28:58,600 different types of assets that they will need to use in case, 520 00:28:58,600 --> 00:29:01,400 there's some claims someone that gets hacked, they need to use 521 00:29:01,400 --> 00:29:04,700 that Insurance Fund, that Insurance Fund itself has to be 522 00:29:04,700 --> 00:29:09,000 risk, managed, so that if one of the assets goes, Up by a lot. 523 00:29:09,000 --> 00:29:13,000 You don't want to be holding 99% of all the insurance funds in 524 00:29:13,000 --> 00:29:15,400 that asset. So balancer is perfect for that. 525 00:29:15,400 --> 00:29:19,000 It will be selling that token as it goes up and it goes down and 526 00:29:19,000 --> 00:29:22,000 then it revise it. So, it's a great way to use a 527 00:29:22,000 --> 00:29:24,300 smartphone. Another think that another way I 528 00:29:24,300 --> 00:29:28,300 really like is the concept of liquidity bootstrapping pools. 529 00:29:28,700 --> 00:29:31,400 And that is our an article. We can maybe Link in the show 530 00:29:31,400 --> 00:29:36,200 notes by Mike McDonald our CTO, you talks about how project 531 00:29:36,200 --> 00:29:40,600 that's starting It has a lot of tokens that they want to sell 532 00:29:40,700 --> 00:29:43,600 like an IC o----. They can start with a smart pill 533 00:29:43,600 --> 00:29:48,100 that has 95% of that project open and 5% eith or die. 534 00:29:48,500 --> 00:29:51,300 And then, over the course of six months to a year, they will 535 00:29:51,300 --> 00:29:54,700 start flipping those weights. So at the end of a year, you're 536 00:29:54,700 --> 00:29:58,600 actually going to end up with 95% die and 5% your project 537 00:29:58,600 --> 00:30:01,300 token. So slowly, you will allow people 538 00:30:01,300 --> 00:30:04,600 to poke that smart contract and update the weights according to 539 00:30:04,600 --> 00:30:07,900 that schedule of a year. And what you're doing is you're 540 00:30:08,100 --> 00:30:10,900 Selling in a year, you're selling like 90% of your tokens 541 00:30:11,100 --> 00:30:14,700 and along the way you letting people trade, you're making your 542 00:30:14,700 --> 00:30:18,200 token, very liquid, which is one of the biggest problems for 543 00:30:18,200 --> 00:30:22,100 projects, right? They pay like a lot of money for 544 00:30:22,300 --> 00:30:24,900 private companies to be market-making on centralized 545 00:30:24,900 --> 00:30:27,000 exchanges. They for listing listed on 546 00:30:27,000 --> 00:30:30,100 buying ends, they pay for those market makers to make sure that 547 00:30:30,200 --> 00:30:32,500 there's some liquidity people can buy and sell. 548 00:30:32,800 --> 00:30:35,400 And now they can do all of that on balancer without paying 549 00:30:35,400 --> 00:30:39,600 anything and actually that maybe segue to The next topic, but 550 00:30:39,600 --> 00:30:43,100 they actually are getting bowel tokens in return. 551 00:30:43,100 --> 00:30:45,500 So they're getting some tokens that will allow them to have a 552 00:30:45,500 --> 00:30:49,100 voice or to vote in the direction, the future direction 553 00:30:49,100 --> 00:30:50,900 of the prodigal. So they only have like 554 00:30:50,900 --> 00:30:57,800 advantages in my opinion. About this like I do or Ido 555 00:30:57,800 --> 00:31:00,200 initial decks offering I guess you could call it. 556 00:31:00,200 --> 00:31:05,600 So let's like take an example of the ummah token launch so we 557 00:31:05,608 --> 00:31:09,800 just had Houma on the podcast last week and so for them, what 558 00:31:09,800 --> 00:31:14,000 happened was they were trying to sell off relatively small 559 00:31:14,000 --> 00:31:16,500 percentage of their tokens of their total Supply. 560 00:31:16,500 --> 00:31:19,700 Which is only about 2% on, you know, shop. 561 00:31:19,700 --> 00:31:22,100 They have to do like a 50/50 balance. 562 00:31:22,400 --> 00:31:25,600 It turns out, they weren't To put that much ether in either 563 00:31:25,600 --> 00:31:28,700 and it just the problem was as people bought in the price was 564 00:31:28,700 --> 00:31:32,000 just fluctuating way too wildly like it, just there wasn't 565 00:31:32,000 --> 00:31:34,100 enough liquidity to make it usable. 566 00:31:34,600 --> 00:31:37,600 How do you fix this in balance? Or is there some how I can use 567 00:31:37,600 --> 00:31:40,200 the weighting system of balancer to have done this better? 568 00:31:41,500 --> 00:31:45,000 So your project wants to sell your project tokens and saying 569 00:31:45,300 --> 00:31:47,700 in case of Uma they didn't have a lot of eith. 570 00:31:47,800 --> 00:31:51,600 So what they could have done on balancer is they could have put, 571 00:31:51,900 --> 00:31:56,100 let's say 20 percent of the weight of that pool in eith and 572 00:31:56,200 --> 00:32:00,300 80% in Uma tokens. So the overall pool would have a 573 00:32:00,308 --> 00:32:04,500 lot more value in it, which would have made it more liquid. 574 00:32:04,500 --> 00:32:08,100 So the slippage for the same size of a trade would have gone 575 00:32:08,100 --> 00:32:12,000 down so it would be much better for Traders now the That I like 576 00:32:12,000 --> 00:32:14,900 most about LBP. So liquidy boots, riding bulls 577 00:32:14,900 --> 00:32:17,900 that idea, is that what you could do is you start with a 578 00:32:17,900 --> 00:32:22,200 very high price to avoid this kind of bank run like everyone's 579 00:32:22,200 --> 00:32:25,400 trying to be the first ones to buy because they know that the 580 00:32:25,400 --> 00:32:28,700 price is starting as like the seed price and everyone knows 581 00:32:28,700 --> 00:32:30,700 that Puma is very successful, is a great project. 582 00:32:30,700 --> 00:32:34,400 So everyone is to be the first to buy it just to sell to dump 583 00:32:34,400 --> 00:32:37,000 on top of the late kind of laggards. 584 00:32:37,400 --> 00:32:40,700 So what you can do with bouncer is you start with a very high 585 00:32:40,800 --> 00:32:42,800 price. Ice and then what you do is you 586 00:32:42,800 --> 00:32:46,700 start decreasing the weight of your project open and increasing 587 00:32:46,700 --> 00:32:50,500 the weight of eith. If no one traits the effect that 588 00:32:50,500 --> 00:32:53,700 that has is your decreasing, the price of your token. 589 00:32:54,000 --> 00:32:57,800 So let's say you start with 95 5, a very high price and then no 590 00:32:57,800 --> 00:33:00,600 one buys and it starts decreasing the weight. 591 00:33:00,600 --> 00:33:04,500 At some point, the price will become interesting for someone 592 00:33:04,600 --> 00:33:07,800 and then what you do is, like, you completely get rid of that 593 00:33:07,800 --> 00:33:11,000 hype, or that those kind of a portentous people that just want 594 00:33:11,000 --> 00:33:13,400 to. Resale because people know that 595 00:33:13,400 --> 00:33:15,900 if no one buys, the price will fall. 596 00:33:16,000 --> 00:33:18,800 So they will wait for the right moment for them to step in. 597 00:33:19,100 --> 00:33:22,300 And if anyone wants to buy before that they can buy, but 598 00:33:22,300 --> 00:33:25,000 they know that the price is high and it will keep falling. 599 00:33:25,000 --> 00:33:28,100 If people don't just keep buying, keep buying the price 600 00:33:28,100 --> 00:33:30,600 will fall. That's so cool. 601 00:33:30,600 --> 00:33:33,200 It's basically like, a combination of a Dutch auction 602 00:33:33,200 --> 00:33:36,300 with an automated market-maker into like one sec. 603 00:33:36,300 --> 00:33:38,100 That's so cool. Yeah. 604 00:33:38,100 --> 00:33:41,000 So it's a Dutch auction because, yeah, anyone can Wade, and until 605 00:33:41,000 --> 00:33:44,100 the, the price goes down. But it's an am an, because, if 606 00:33:44,200 --> 00:33:46,700 along, the way people start buying the price will grow, 607 00:33:46,700 --> 00:33:48,700 right? Well, yeah, so that's pretty 608 00:33:48,700 --> 00:33:54,300 pretty cool. Going back to the topic of smart 609 00:33:54,300 --> 00:33:57,300 pools and the more algorithmic style ones to me. 610 00:33:57,300 --> 00:34:01,500 It seems one of the things that would be the most useful in a, 611 00:34:01,500 --> 00:34:07,700 in a better smarter. Mmm, would be essentially how I 612 00:34:07,700 --> 00:34:10,900 see it is when you design a fee model. 613 00:34:10,900 --> 00:34:13,900 There's three parameters, you can take into account, which is 614 00:34:14,199 --> 00:34:19,100 volume slippage, and volatility, and currently unit swap, only 615 00:34:19,100 --> 00:34:22,300 takes into account. Volume its point. 616 00:34:22,300 --> 00:34:27,100 Three percent times volume the one that you really want to take 617 00:34:27,100 --> 00:34:30,000 into account though. Is volatility, if you want, you 618 00:34:30,000 --> 00:34:33,600 want to be able to say that like Hey, Okay, as or thing is 619 00:34:33,600 --> 00:34:37,000 getting more volatile, automatically increase the fee. 620 00:34:37,600 --> 00:34:41,000 Can I do that on balancers that easy like it how you know you 621 00:34:41,000 --> 00:34:43,900 just Harvey to they started like sort of keeping this like 622 00:34:45,000 --> 00:34:50,400 historical records of prices and stuff and you know what how hard 623 00:34:50,400 --> 00:34:54,199 would it be to Construct a volatility index on balancer, 624 00:34:54,199 --> 00:34:56,800 that's consumable by a smart contract. 625 00:34:58,200 --> 00:35:01,200 That's a good question. So, I don't believe that where 626 00:35:01,200 --> 00:35:04,900 we want to focus on that because that's a quite a complex problem 627 00:35:05,300 --> 00:35:08,300 in and of itself, especially if you want, if you want to do that 628 00:35:08,300 --> 00:35:10,900 on chain, then it becomes even harder. 629 00:35:11,400 --> 00:35:15,500 You need an article, you need some like like some history of 630 00:35:15,500 --> 00:35:18,000 prices in the past. There are projects that are 631 00:35:18,000 --> 00:35:22,500 doing doing great work on that, for example, open their building 632 00:35:22,500 --> 00:35:25,900 on top of balancer as well. They have some some ideas around 633 00:35:25,900 --> 00:35:27,900 volatility and how you can get that information. 634 00:35:28,000 --> 00:35:32,000 Unchain today, what, what you can do with bouncers, what I 635 00:35:32,000 --> 00:35:35,600 said, like, you have a smart pull that it has a controller 636 00:35:35,600 --> 00:35:39,500 that can just change the trading fee, and it gets like some 637 00:35:39,500 --> 00:35:42,200 external source of data. Could be off chain. 638 00:35:42,400 --> 00:35:46,400 Someone, like, who really like a monkey watching the Monitor and 639 00:35:46,400 --> 00:35:49,800 sending the transaction, which is increased fee, decrease fee, 640 00:35:49,900 --> 00:35:53,800 or it can be like something more complex, totally on chain, using 641 00:35:53,800 --> 00:35:57,600 opens information. So, yeah, now now you do like, 642 00:35:57,600 --> 00:36:01,600 you do You need some external source of information to to use 643 00:36:01,600 --> 00:36:05,000 volatility but the cool thing is that you can write balancer. 644 00:36:05,000 --> 00:36:07,500 Pools are flexible. You can change the swap fee, 645 00:36:07,800 --> 00:36:09,500 according to the liquid to volatility. 646 00:36:10,800 --> 00:36:15,100 What data is available from balancer, that I can like query 647 00:36:15,100 --> 00:36:17,600 in from my old spark contract? Could I, you know, for example, 648 00:36:17,600 --> 00:36:20,300 Thor chain, they are doing, you know, along with the volume. 649 00:36:20,300 --> 00:36:24,300 They also take into account the spread of a, you know, how what 650 00:36:24,300 --> 00:36:27,300 the, what the slippage of a trade is and they charge fees 651 00:36:27,300 --> 00:36:30,000 differently based off of what the mystery, how much the 652 00:36:30,000 --> 00:36:31,700 quiddity is in that pool right now. 653 00:36:32,100 --> 00:36:35,000 Is it easy to sort of, like, paying the balance or contract 654 00:36:35,000 --> 00:36:38,600 for that information? So I can have my, my smart pool 655 00:36:38,600 --> 00:36:40,900 be take that. That into account. 656 00:36:41,800 --> 00:36:44,900 Yeah, there there's ways how you can control that. 657 00:36:44,900 --> 00:36:50,200 So what what you could do is, you have a trade function in the 658 00:36:50,200 --> 00:36:53,500 controller. So you say, like now, you cannot 659 00:36:53,500 --> 00:36:56,400 trade directly with my pool, because my pool is kind of 660 00:36:56,400 --> 00:37:00,800 turned off, the controller can set public swap, true, or false, 661 00:37:01,100 --> 00:37:02,900 and then why can they can do is like it's fall. 662 00:37:02,900 --> 00:37:06,400 So you cannot trade directly at the base layer, like protocol 663 00:37:06,400 --> 00:37:09,100 layer, as bouncer if you want, but if you want to trade, you 664 00:37:09,100 --> 00:37:11,700 can talk to me. And I will in this Atomic 665 00:37:11,700 --> 00:37:15,200 transaction. I'll let it be treatable and on 666 00:37:15,200 --> 00:37:17,200 at all times. Yeah, I'll turn it on. 667 00:37:17,200 --> 00:37:18,900 I'll set the fee. According to the amount you want 668 00:37:18,900 --> 00:37:21,900 to trade, I'll let you trade and then I'll turn it off again and 669 00:37:21,900 --> 00:37:25,100 you get your face with the feet that I want that. 670 00:37:25,100 --> 00:37:28,100 That's really cool. Yeah so there's also a team 671 00:37:28,300 --> 00:37:29,900 that's working on that. Yeah. 672 00:37:31,200 --> 00:37:36,200 So, essentially, they can pin the Indian balancer Visa, like 673 00:37:36,600 --> 00:37:38,500 the assets. You put in there are 674 00:37:38,500 --> 00:37:41,900 customizable up to 8, the weights are customizable. 675 00:37:41,900 --> 00:37:46,800 How much portion each as it gets, the fees are customizable. 676 00:37:47,400 --> 00:37:51,300 And we also discussed that when you make the fees customizable, 677 00:37:51,900 --> 00:37:56,700 you also get behavior that the trading frequency can also drop. 678 00:37:56,700 --> 00:37:59,100 If you increase the freestanding, frequencies can be 679 00:37:59,107 --> 00:38:00,800 dropped. So vfe is you get 680 00:38:01,000 --> 00:38:05,900 Customizability of trading fees. What's also, customizable is the 681 00:38:05,900 --> 00:38:09,800 control of a balancer pool. So, it can be an individual, it 682 00:38:09,800 --> 00:38:12,800 can be a firm, it can be a dow X cetera. 683 00:38:13,600 --> 00:38:19,100 What is customizable is the switching on and off of a pool? 684 00:38:20,000 --> 00:38:23,200 And what else? Well, at what point is this too 685 00:38:23,200 --> 00:38:25,700 confusing for users? You know, one of the things that 686 00:38:25,700 --> 00:38:28,900 attracted people to, you know, swap was it's like, you know, 687 00:38:28,900 --> 00:38:33,000 here's I have some Ethan died. I don't know what to do. 688 00:38:33,000 --> 00:38:35,900 Like I'm just gonna put it in this pool, forget it. 689 00:38:36,000 --> 00:38:38,700 But now it's like you know what? If there's a different smart 690 00:38:38,700 --> 00:38:42,700 pools who all are like, you know, for the similar pairs and 691 00:38:42,700 --> 00:38:46,000 they're like now there's so many decisions I have to make again 692 00:38:46,000 --> 00:38:49,800 and after like look, okay, who which smart pool is better at 693 00:38:49,800 --> 00:38:53,100 what point do we start to lose out on what made a? 694 00:38:53,100 --> 00:38:54,900 Mm, so attractive in the first place. 695 00:38:56,200 --> 00:38:58,800 Austin questions. I do think that we have we're 696 00:38:59,100 --> 00:39:03,600 very like opinionated there. We want to be the base layer do 697 00:39:03,600 --> 00:39:07,100 like the money Lego, the Primitive that people use to 698 00:39:07,100 --> 00:39:09,200 build cool applications on top of. 699 00:39:09,400 --> 00:39:12,300 So if you want something simple sign me because your users are 700 00:39:12,300 --> 00:39:15,600 used to you NE Swap and you just want to throw like two tokens 701 00:39:15,600 --> 00:39:17,500 there. You can just use balancer and 702 00:39:17,500 --> 00:39:20,500 create your own UI for balancer that does exactly that. 703 00:39:20,700 --> 00:39:24,500 Even better, like, balancer has this native function that allows 704 00:39:24,500 --> 00:39:27,200 you to provide liquidity with only one token. 705 00:39:27,200 --> 00:39:30,300 So you you have a pool of a token so you can just invest in 706 00:39:30,300 --> 00:39:32,800 that pool. Using one of your top, one of 707 00:39:32,800 --> 00:39:34,800 the tokens in that pool. So you don't need to have all 708 00:39:34,800 --> 00:39:38,600 the tokens and like kind of add them all together, you can but 709 00:39:38,600 --> 00:39:41,800 you don't need to. And if you want to do like 710 00:39:41,800 --> 00:39:45,000 something more complex, like we saw a lots of projects, 711 00:39:45,000 --> 00:39:47,700 interesting projects, building on top of balancer at HACC 712 00:39:47,700 --> 00:39:50,500 money. One of them is like my D5 pie. 713 00:39:50,800 --> 00:39:53,900 You can build so many things, you can go to Uma and you can 714 00:39:54,300 --> 00:39:57,800 like, start Synthetic. And then you can put those 715 00:39:57,800 --> 00:40:02,400 intetics into a balancer pool, you can change the the fees and 716 00:40:02,400 --> 00:40:05,000 the wait. So you, it's the spectrum of 717 00:40:05,000 --> 00:40:07,500 complexity that's on the a player. 718 00:40:07,900 --> 00:40:11,800 And we restrain like ourselves, or we restrict ourselves to 719 00:40:11,900 --> 00:40:15,800 being there a very good prodigal that is flexible that allows 720 00:40:15,800 --> 00:40:21,000 people like to get creative on top of So in some senses you 721 00:40:21,000 --> 00:40:25,200 know you know they're just added on project and the Arrogant 722 00:40:25,200 --> 00:40:29,200 project came and said we are building a framework for those 723 00:40:29,200 --> 00:40:33,400 other people are going to come and build the actual dollhouse. 724 00:40:34,000 --> 00:40:37,100 And our framework is so extensible and generalizable 725 00:40:37,100 --> 00:40:43,000 that we can conceivably match and a lot of the needs of users 726 00:40:43,000 --> 00:40:48,900 and balancers something like that except for these these 727 00:40:48,900 --> 00:40:51,200 pools You're building a framework. 728 00:40:51,200 --> 00:40:54,900 That's extremely extensible. And then other people will come 729 00:40:54,900 --> 00:40:58,800 and build the applications that go to the, to the end users. 730 00:40:59,600 --> 00:41:03,700 But flowing out of that, kind of design is a natural question of 731 00:41:04,900 --> 00:41:09,100 how does the how does the base layer extract value in this? 732 00:41:09,700 --> 00:41:14,200 In this economy of many people designing customized pools and 733 00:41:14,200 --> 00:41:16,800 are many other people contributing assets and and so 734 00:41:16,800 --> 00:41:17,800 on. So that's going to become 735 00:41:17,800 --> 00:41:21,400 interesting question when we talk about the business models 736 00:41:21,400 --> 00:41:23,400 around balancing. Hmm. 737 00:41:24,100 --> 00:41:26,500 Yeah. So the the answer to that is a 738 00:41:26,500 --> 00:41:31,700 re it really is up to the governance to decide when there 739 00:41:31,700 --> 00:41:35,600 will be if there will be a protocol level fee that base 740 00:41:35,600 --> 00:41:40,300 layer is all is where all the liquidity sits and it's also 741 00:41:40,300 --> 00:41:44,000 like where Traders tap onto for trade. 742 00:41:44,000 --> 00:41:46,600 So it doesn't matter if you have like a very smart pool. 743 00:41:46,600 --> 00:41:50,700 That changes your the swap fee. And there's like, more volatile 744 00:41:50,700 --> 00:41:54,200 times or if that pool is managing and treasury of a dow, 745 00:41:54,300 --> 00:41:57,500 it really doesn't matter for a Trader who wants to trade a 4 B. 746 00:41:57,700 --> 00:42:00,300 It doesn't matter where it comes from the balancer ecosystem. 747 00:42:00,300 --> 00:42:03,900 As long as it's in balancer, it will be used to get the best 748 00:42:03,900 --> 00:42:07,800 rate possible. And at that point the the 749 00:42:07,800 --> 00:42:11,200 protocol can decide that the governor's that hold battle 750 00:42:11,200 --> 00:42:13,400 tokens are governance. Tokens of the balance of 751 00:42:13,400 --> 00:42:14,600 protocol they can decide. Okay? 752 00:42:14,800 --> 00:42:18,700 From now on, we believe that we are adding enough value to to 753 00:42:18,700 --> 00:42:22,100 the Mmm, already, people are really using balancer, a lot. 754 00:42:22,100 --> 00:42:25,600 So we deserve like to to get a small fraction of that. 755 00:42:25,600 --> 00:42:28,500 It's up to the governor's, to the Token holders and it's a 756 00:42:28,508 --> 00:42:31,800 tricky decision because like everything is open source and 757 00:42:31,800 --> 00:42:35,100 it's anyone can clone and start a copycat. 758 00:42:35,200 --> 00:42:38,600 So if you charge too high of a fee, people can just Fork it and 759 00:42:38,600 --> 00:42:41,600 use a copy without any fees if you charge. 760 00:42:42,000 --> 00:42:45,200 Yeah, if you charge no fees, then at the same time, people 761 00:42:45,200 --> 00:42:48,900 might not be so incentivized to be to be. 762 00:42:49,400 --> 00:42:52,800 Attention to everything to be making form to decisions. 763 00:42:53,000 --> 00:42:56,100 So it's like in the marker. See like you have to pay the 764 00:42:56,100 --> 00:43:00,000 governors of President and and yeah at some point that could be 765 00:43:00,000 --> 00:43:01,700 the case, where there is some feasts. 766 00:43:01,900 --> 00:43:05,300 They're going to to Bala token holders to, to kind of 767 00:43:05,300 --> 00:43:09,800 incentivize them, to make the educated right decisions for the 768 00:43:09,800 --> 00:43:13,600 good of the protocol. Yeah, so I think maybe what's 769 00:43:13,600 --> 00:43:17,100 interesting here to act is to actually go into what the battle 770 00:43:17,100 --> 00:43:19,200 token is unless sunny as a different question. 771 00:43:19,300 --> 00:43:21,400 Ian. Well what I wanted to say was 772 00:43:21,400 --> 00:43:26,600 like so you guys pitch this as a governance token and this whole 773 00:43:27,100 --> 00:43:31,600 concept of a governance token you know 0x started like picking 774 00:43:31,600 --> 00:43:34,800 their token like years ago as oh the point of this token is a 775 00:43:34,800 --> 00:43:38,000 governance token. Would it be fair to say that the 776 00:43:38,000 --> 00:43:41,900 like true value of governance tokens is in its potential 777 00:43:41,900 --> 00:43:44,800 ability? Could add fees eventually that 778 00:43:44,800 --> 00:43:50,000 extract like value or do you think that there is some Larger 779 00:43:50,500 --> 00:43:53,400 external value to governance tokens outside of that as well. 780 00:43:54,700 --> 00:43:58,000 That's a very good question, philosophical one. 781 00:43:58,300 --> 00:44:02,600 I think if you were like a rational actor, Sunny the only 782 00:44:02,600 --> 00:44:06,900 point is like discounted cash flow of future cash flows, 783 00:44:06,900 --> 00:44:10,100 right? So, how much I can make with 784 00:44:10,200 --> 00:44:13,600 with this token that I'm holding in the future and there, you 785 00:44:13,600 --> 00:44:16,500 have to factor in. What's the percentage of chance 786 00:44:16,500 --> 00:44:20,200 that there will ever be a fee. And in all those calculations 787 00:44:20,200 --> 00:44:24,200 for a rational actor Will Define how much tokens worth today. 788 00:44:24,700 --> 00:44:29,800 And if you're like if you like a philanthropist or you like 789 00:44:29,800 --> 00:44:32,900 defined, you just want to be like part of the decision-making 790 00:44:32,900 --> 00:44:35,800 process. You might just want to pay for 791 00:44:35,800 --> 00:44:39,300 for about token, because you want to like, give your say and 792 00:44:39,300 --> 00:44:42,600 and have a voice into how things unfold in the future. 793 00:44:42,600 --> 00:44:46,400 So I think they're like, yeah. If you thinking rationally, then 794 00:44:46,400 --> 00:44:50,100 it's the probability of there being a protocol level fee, in 795 00:44:50,107 --> 00:44:53,700 the future, so yeah, yeah. So as my hero saying, let's 796 00:44:53,900 --> 00:44:57,100 maybe talk about The battle token itself and so you know, 797 00:44:57,100 --> 00:45:00,600 you guys have been very public and saying the goal is you want 798 00:45:00,600 --> 00:45:03,200 balancer Labs as a company to disappear? 799 00:45:04,300 --> 00:45:07,800 Why is that the goal? And how how you designed the 800 00:45:07,800 --> 00:45:10,600 battle token to achieve that goal? 801 00:45:11,500 --> 00:45:15,700 So that that kind of is something that is into in the 802 00:45:15,700 --> 00:45:20,400 DNA of the team that built balancer, we are like the purest 803 00:45:20,400 --> 00:45:23,500 that like it more like the early days of the maker doll. 804 00:45:24,500 --> 00:45:26,600 Developers. We don't want to be like a 805 00:45:26,607 --> 00:45:29,700 centralized company that's controlling The Prodigal and 806 00:45:29,700 --> 00:45:34,100 getting fees. Yeah, we want this to be like a 807 00:45:34,100 --> 00:45:37,900 really a community common good. And we want this to be 808 00:45:37,900 --> 00:45:41,100 self-sustainable and not to depend on us. 809 00:45:41,100 --> 00:45:44,000 We're like doing doing the the dev work right now. 810 00:45:44,000 --> 00:45:46,600 But we're seeing already, a lot of people building tools on top 811 00:45:46,600 --> 00:45:49,200 of balancer. You have pools that Vision 812 00:45:49,200 --> 00:45:52,800 predictions at exchange. So many nice tools that people 813 00:45:52,800 --> 00:45:55,800 are building and this is exactly the Correction, we want to go to 814 00:45:56,100 --> 00:46:00,800 in a near-future say like four or five years videos that it 815 00:46:00,800 --> 00:46:04,600 will be just like etherium, or just like like Linux. 816 00:46:04,600 --> 00:46:09,000 It's an open source software or platform that people are just 817 00:46:09,000 --> 00:46:11,900 incentivised to be building on top of and improving. 818 00:46:12,500 --> 00:46:15,000 That's kind of the idea. We don't want to be centralizing 819 00:46:15,200 --> 00:46:18,100 any decisions or how this should evolve. 820 00:46:19,700 --> 00:46:22,700 How have you designed the token? What is the band token? 821 00:46:22,700 --> 00:46:25,700 And What does it do? Because as I understand it, 822 00:46:25,700 --> 00:46:29,600 like, at some level balancer is an is an idea. 823 00:46:29,600 --> 00:46:32,400 Its design of how to build pools. 824 00:46:33,000 --> 00:46:35,600 Then you another asset that you have. 825 00:46:35,600 --> 00:46:40,400 Is you open source already code, which is so General, and 826 00:46:40,400 --> 00:46:44,700 extensible, that you can build various kinds of pose with it 827 00:46:45,400 --> 00:46:48,000 and then you have a token. So, how does it take token 828 00:46:48,000 --> 00:46:53,400 exercise any influence over over the cold, or on the design? 829 00:46:54,200 --> 00:46:55,700 What is the connection between these? 830 00:46:55,700 --> 00:46:58,000 These elements. Great question. 831 00:46:58,000 --> 00:47:02,800 So the the answer there is that we knew that it's hard to start 832 00:47:02,800 --> 00:47:04,500 with an unchain governance system. 833 00:47:04,500 --> 00:47:07,100 Very complex with lots of parameters that Governors have 834 00:47:07,100 --> 00:47:10,500 to decide. It's just like not realistic to 835 00:47:10,500 --> 00:47:13,500 start that way. So what we did instead was let's 836 00:47:13,500 --> 00:47:15,700 start with something that has no admin Keys. 837 00:47:15,700 --> 00:47:19,400 Has no kill switches has no upgradability, that's balanced 838 00:47:19,400 --> 00:47:22,700 everyone. You you deploy a pool that pool 839 00:47:22,700 --> 00:47:25,100 will live for As long as etherium lives. 840 00:47:25,600 --> 00:47:27,700 That that was like our like the objective. 841 00:47:27,700 --> 00:47:30,500 Let's be very conservative and there's no way you can gain the 842 00:47:30,500 --> 00:47:33,400 system or control it. There's no governance token for 843 00:47:33,400 --> 00:47:38,100 V1 now in the next versions. Not sure if you two already but 844 00:47:38,100 --> 00:47:42,600 33 before, probably will start getting the bow token more 845 00:47:42,600 --> 00:47:47,100 intertwined in the code and getting more of unchain 846 00:47:47,100 --> 00:47:50,000 governance like spouse like you having with maker. 847 00:47:50,000 --> 00:47:54,700 Dalek, you just propose this this You kind of feature on 848 00:47:54,700 --> 00:47:58,000 chain and you cast a spell and people vote on it and if it's 849 00:47:58,000 --> 00:48:01,600 approved, then it automatically gets implemented at the code 850 00:48:01,600 --> 00:48:04,000 level. At the like on chain level. 851 00:48:04,000 --> 00:48:07,900 Now, what we're doing is, we're already using balusters tokens 852 00:48:07,900 --> 00:48:12,400 for people to signal to vote on chain, but by signing messages 853 00:48:12,400 --> 00:48:15,200 only like carbon voting, they're not sending transactions. 854 00:48:15,200 --> 00:48:20,800 So by doing that, we can iterate very fast, how the the like, the 855 00:48:20,800 --> 00:48:23,300 governance and the decisions. Take place for example. 856 00:48:23,400 --> 00:48:26,900 Ample the bow liquidity mining program. 857 00:48:27,400 --> 00:48:30,300 We're Distributing tokens every week to people who provide 858 00:48:30,300 --> 00:48:33,400 liquidity on balancer. We want to provide liquidity or 859 00:48:33,400 --> 00:48:36,400 give about tokens for the liquidity providers. 860 00:48:36,400 --> 00:48:38,400 That are providing the most useful liquidity. 861 00:48:38,700 --> 00:48:40,200 What is the most useful liquidity? 862 00:48:40,200 --> 00:48:43,400 That's a very subjective thing. And instead of like doing like 863 00:48:43,400 --> 00:48:46,300 comped it and saying, well we're just going to distribute like 864 00:48:46,300 --> 00:48:50,000 one comp token per block, half half to lenders, and borrowers, 865 00:48:50,300 --> 00:48:53,300 and that's it. Now we decided to say, Well it 866 00:48:53,500 --> 00:48:56,800 Could be more complex than that. And it is, let's just like do 867 00:48:56,800 --> 00:48:59,800 everything off chain distribute like decide how we're going to 868 00:48:59,800 --> 00:49:02,900 distribute that off chain. According to some rules that the 869 00:49:02,900 --> 00:49:08,100 community itself will iterate on and will improve on, and they do 870 00:49:08,100 --> 00:49:13,000 that by using their bowel tokens and voting for for changes for 871 00:49:13,000 --> 00:49:16,000 your factors. And that has worked very well so 872 00:49:16,000 --> 00:49:18,600 far, it's really interesting to see how the community has 873 00:49:18,600 --> 00:49:20,900 proposed new things and they got approved. 874 00:49:20,900 --> 00:49:23,700 And yeah, it's really great. To see. 875 00:49:25,000 --> 00:49:29,500 To me like this fundamental thing, fundamentally, the issue 876 00:49:29,500 --> 00:49:33,800 appears to be that you have pools and yes, individual pools 877 00:49:33,800 --> 00:49:38,600 have utility to these Traders, and to the poor portfolio 878 00:49:38,600 --> 00:49:43,100 holders Equity providers agree. But you have essentially like a 879 00:49:43,100 --> 00:49:46,600 design and open source code, and, and that can be 880 00:49:46,600 --> 00:49:49,900 implemented, wherever it can be implemented in Cosmos, SDK 881 00:49:49,900 --> 00:49:54,000 substrate or X. Alana Different people can can 882 00:49:54,000 --> 00:49:57,200 can do the same thing. There doesn't appear to be 883 00:49:57,200 --> 00:49:59,900 anything, which is, like a network of pools. 884 00:49:59,900 --> 00:50:04,200 Some way in which there are 100 pools each having some assets 885 00:50:04,200 --> 00:50:09,100 together doing something, where each pool is getting more 886 00:50:09,100 --> 00:50:11,700 utility out of that Network level coordination. 887 00:50:11,700 --> 00:50:15,900 If you had a network of pools of some kind, then the balancer 888 00:50:15,900 --> 00:50:19,800 token could have some claim over value because like it's 889 00:50:19,800 --> 00:50:23,200 orchestrating that network, but that seems to be Absent from 890 00:50:23,200 --> 00:50:25,900 your system, doesn't it? No it's not. 891 00:50:26,200 --> 00:50:30,100 It is there. It will be more so in you in 892 00:50:30,100 --> 00:50:33,300 future versions but an example of how this is already, the 893 00:50:33,300 --> 00:50:39,000 case, no, here is when you have a trade, you you can use our 894 00:50:39,000 --> 00:50:41,000 Sor, you can trade with individual pools. 895 00:50:41,000 --> 00:50:43,900 So you can just say, well, this is a nice pool, has a lot of 896 00:50:43,900 --> 00:50:47,000 Ethan maker mkr. I'll just stay with trade with 897 00:50:47,000 --> 00:50:48,900 that bull, but this is not the ideal. 898 00:50:49,800 --> 00:50:53,100 The ideal move for Trader. The ideal thing, They should do 899 00:50:53,100 --> 00:50:56,600 is to use our smart order router, the smart order router 900 00:50:56,900 --> 00:51:01,100 looks at all the pools that are on balancer and he sees all the 901 00:51:01,107 --> 00:51:06,200 pools that have beef and mkr and then splits, your order in a way 902 00:51:06,200 --> 00:51:09,500 that is optimal for you to get the most return possible. 903 00:51:09,700 --> 00:51:11,900 So, whenever you're trading on balance, you're not trading with 904 00:51:11,900 --> 00:51:14,700 against a specific Port, your trading Against The Prodigal and 905 00:51:14,700 --> 00:51:18,200 the protocol uses that Network, as you said, 100 pools and 906 00:51:18,200 --> 00:51:24,000 chooses, okay, 1000 eith, I'll send 200, 200, 200 And 400. 907 00:51:24,000 --> 00:51:27,900 And that that way you get the most mkr back, and it's no 908 00:51:27,900 --> 00:51:31,200 different than what actually one inch is doing, you're ready, 1 909 00:51:31,200 --> 00:51:33,600 inches is doing that Network effect across the different 910 00:51:33,600 --> 00:51:36,400 protocols, right? So it looks for the credit union 911 00:51:36,400 --> 00:51:40,400 Swap and balancer on Oasis and it gets like the distribution 912 00:51:40,400 --> 00:51:41,800 that suits. Yeah. 913 00:51:41,800 --> 00:51:45,700 That trade or the returns the most from, from this trade. 914 00:51:46,100 --> 00:51:47,200 Yeah, I was just going to ask that. 915 00:51:47,200 --> 00:51:50,100 Oh, why, what's the benefit of doing that? 916 00:51:50,500 --> 00:51:51,700 Is there. Isn't that going to be someone 917 00:51:51,700 --> 00:51:54,300 almost? Of to do on chain and wouldn't 918 00:51:54,300 --> 00:51:58,700 like doing a off chain aggregation of. 919 00:51:58,900 --> 00:52:02,100 So what would be the benefit of going through this versus 920 00:52:02,200 --> 00:52:05,400 letting one inch use their node to query? 921 00:52:05,400 --> 00:52:09,500 Like every balancer pool and figure out optimal routing? 922 00:52:10,400 --> 00:52:12,600 We don't do that on chain sighs. Okay? 923 00:52:13,300 --> 00:52:15,500 Apologies. If that sounds like that. 924 00:52:15,500 --> 00:52:18,200 No, though. So our Sor is a JavaScript 925 00:52:19,000 --> 00:52:23,900 package that you just execute client site It asks for pulling 926 00:52:23,900 --> 00:52:28,800 information from our sub graph and then runs like some some Sor 927 00:52:28,800 --> 00:52:32,000 algorithm and then prepares already, okay, this is the trade 928 00:52:32,000 --> 00:52:34,900 that is going to be optimal and then unchain you just execute 929 00:52:34,900 --> 00:52:37,800 the trade, you just send like I want to trade with that pool. 930 00:52:37,800 --> 00:52:40,600 That much, that would that much and then you, you execute it. 931 00:52:40,600 --> 00:52:44,000 We do have, we're working right now in our own chain is, so our 932 00:52:44,400 --> 00:52:47,500 because many product was need that to happen on chain. 933 00:52:47,500 --> 00:52:51,100 They just want to say on chain balancer, I want to sell 100 E4, 934 00:52:51,100 --> 00:52:53,100 die. Please help me. 935 00:52:53,100 --> 00:52:56,100 You cannot access JavaScript packages, right? 936 00:52:56,200 --> 00:52:59,400 So we're finalizing our Ahn Chan Soo are as well. 937 00:52:59,400 --> 00:53:04,800 But what I told you about was off chain and yeah so short when 938 00:53:04,800 --> 00:53:08,600 you can do that can poke all the pools individually but it can 939 00:53:08,600 --> 00:53:12,100 get very nasty because we now have about a thousand fools. 940 00:53:12,500 --> 00:53:16,700 So what we do is like we make it transparent for them and give 941 00:53:16,700 --> 00:53:20,500 them already like a figure of what the the balancer ecosystem 942 00:53:20,500 --> 00:53:24,200 can offer in terms of bass lick. Be and then they use that as if 943 00:53:24,200 --> 00:53:27,600 it was just like a single units while pool, they can treat that 944 00:53:27,600 --> 00:53:30,000 much better. They cannot handle a thousand 945 00:53:30,000 --> 00:53:32,800 different exchanges which would be if they had like a thousand 946 00:53:32,800 --> 00:53:35,200 different pools. Each of them like treated like a 947 00:53:35,207 --> 00:53:39,500 Eunice Whirlpool, so we're kind of facilitating the interaction, 948 00:53:39,500 --> 00:53:43,100 the interaction of aggregators or integrators with that, answer 949 00:53:43,100 --> 00:53:48,000 with our own sor One thing I've always wondered is that these 950 00:53:48,200 --> 00:53:53,800 balance of pools. So each individual pool is at 951 00:53:53,800 --> 00:53:58,900 some level paying arbitrageurs to discover the exchange rate 952 00:53:58,900 --> 00:54:02,100 between assets. So when you think of something 953 00:54:02,100 --> 00:54:06,900 like he's and mkr, it could conceivably be the case that 200 954 00:54:06,900 --> 00:54:11,500 different pools are paying separately to discover that same 955 00:54:11,500 --> 00:54:15,600 price. Could that not be the value prop 956 00:54:15,600 --> 00:54:18,100 of the network of pools and balance. 957 00:54:18,100 --> 00:54:22,000 So that somehow this intelligence is it allows the 958 00:54:22,000 --> 00:54:25,800 sharing of this intelligence in some way and it makes in network 959 00:54:25,800 --> 00:54:28,900 of pools more intelligent on chain, and that's the value 960 00:54:28,900 --> 00:54:31,700 prop. That even if you want to build 961 00:54:31,700 --> 00:54:34,900 your own pool go, and join specifically the balance and 962 00:54:34,900 --> 00:54:38,300 network because the pricing intelligence is the best. 963 00:54:38,300 --> 00:54:41,000 They're totally. Absolutely. 964 00:54:41,000 --> 00:54:45,000 So what we'll see, Here is that we're not going to have 100 965 00:54:45,000 --> 00:54:47,500 pools that are very similar because this is still, it's 966 00:54:47,500 --> 00:54:51,000 rationally wrong, right? You're not going to put your 967 00:54:51,300 --> 00:54:55,500 create paying 50 or $100 today to to build it to deploy a pool 968 00:54:56,000 --> 00:54:58,000 or you're not going to put your money like your thousand 969 00:54:58,000 --> 00:55:00,800 dollars. You know 80/20 make arethe pool 970 00:55:01,200 --> 00:55:03,700 if in a pool that has another thousand dollars. 971 00:55:03,700 --> 00:55:06,900 If there is a the same exact pool with a million dollars, 972 00:55:06,900 --> 00:55:08,600 right? Because that 1 million dollar 973 00:55:08,600 --> 00:55:12,300 pool is going to be profitable for Arbors to trade. 974 00:55:12,700 --> 00:55:18,000 In generate fees with variations of price a lot smaller than the 975 00:55:18,000 --> 00:55:20,900 variations of price in a 1,000 dollar pool, right? 976 00:55:21,100 --> 00:55:25,100 So you're going to see naturally the liquidity coalescing or 977 00:55:25,100 --> 00:55:28,300 revolving around some sweet spots and the nice thing about 978 00:55:28,300 --> 00:55:32,300 answers that we're not aiming to say what the sweet spots are. 979 00:55:32,400 --> 00:55:35,400 We're not going to say 0.3% is the right fee. 980 00:55:35,500 --> 00:55:37,800 No, it's up to you. If you want to if you want to 981 00:55:37,808 --> 00:55:42,700 put 0.5%, if that is profitable Choice, what will? 982 00:55:42,800 --> 00:55:45,500 Happen is that people off chain will just observe all the pools. 983 00:55:45,500 --> 00:55:48,400 Will see that your pool was a good choice and actually my 984 00:55:48,700 --> 00:55:50,900 liquidity will migrate to your pool. 985 00:55:51,400 --> 00:55:54,600 Does that make sense? Don't you mean that doesn't make 986 00:55:54,600 --> 00:55:57,200 sense? Because to me one of the value 987 00:55:57,200 --> 00:56:01,100 props for that, hey, I can build my own portfolio. 988 00:56:01,100 --> 00:56:04,600 Now some person can come and say, in my portfolio, you eat is 989 00:56:04,600 --> 00:56:09,300 10% and maker history percent and some maker maximalist will 990 00:56:09,300 --> 00:56:12,600 come and say, hey, in my V 4u maker is going to be 80%. 991 00:56:12,700 --> 00:56:17,200 In each 10% and both are valuable and both skit their 992 00:56:17,200 --> 00:56:21,600 pools and the balancer protocol should be written in a way that 993 00:56:22,100 --> 00:56:26,700 both pools are viable. So I current I don't see, I 994 00:56:26,700 --> 00:56:30,500 don't see the two views as being consistent where you want people 995 00:56:30,500 --> 00:56:34,900 flexibility over percentages. So those are different pools. 996 00:56:35,000 --> 00:56:38,500 Whereas on the liquidity side, you're saying things between 997 00:56:38,500 --> 00:56:41,100 Ethan maker should get Consolidated into one pool. 998 00:56:41,900 --> 00:56:46,100 Is it the case that portfolio management actually requires 999 00:56:46,100 --> 00:56:50,500 there to be lots of pose with ease and maker and discovering 1000 00:56:50,500 --> 00:56:55,100 prices independently? Yeah, what I tried to say to say 1001 00:56:55,100 --> 00:57:00,900 is that for similar pools and exposures, then you're not going 1002 00:57:00,900 --> 00:57:06,500 to see so much fragmentation. But definitely, if there is a LP 1003 00:57:06,500 --> 00:57:10,900 that wants to be 90% exposed to Ethan 10% to mkr, it's not 1004 00:57:10,900 --> 00:57:15,400 compatible. Able to 90% mkr 10% teeth, 1005 00:57:15,400 --> 00:57:17,900 right? So there will have to be two 1006 00:57:17,900 --> 00:57:22,000 different pools for those two different needs but what I'm 1007 00:57:22,000 --> 00:57:24,200 saying is that you're not going to be a thousand pools. 1008 00:57:24,500 --> 00:57:30,500 So 9010 8911 8812 because there's like some, some 1009 00:57:30,500 --> 00:57:34,500 threshold where it makes sense to kind of a give up a little 1010 00:57:34,500 --> 00:57:38,700 bit on your exact exposure that you wanted to being part of a 1011 00:57:38,700 --> 00:57:42,900 very close exposure. But To in a pool that is huge 1012 00:57:42,900 --> 00:57:45,300 already. It's used very often and it's 1013 00:57:45,300 --> 00:57:47,800 generating lots of training fees and it's very profitable. 1014 00:57:47,900 --> 00:57:52,400 Does that make sense? So, going back to you mentioned 1015 00:57:52,400 --> 00:57:55,300 a little bit ago about distribution of bowel and so one 1016 00:57:55,300 --> 00:57:58,100 of the interesting things that you guys are doing is, you know, 1017 00:57:58,200 --> 00:58:02,300 people who are providing liquidity on different balancer, 1018 00:58:02,300 --> 00:58:05,700 pools, your sort of are dropping bowel tokens to them. 1019 00:58:05,700 --> 00:58:09,300 And this is sort of a, you know, it's a solves two problems of 1020 00:58:09,300 --> 00:58:11,200 one. How do you distribute a token to 1021 00:58:11,200 --> 00:58:11,700 use? Others. 1022 00:58:11,700 --> 00:58:15,200 I mean, okay you have to liquidity providers and also you 1023 00:58:15,200 --> 00:58:20,300 incentivize liquidity, but then, you know, with this whole crate 1024 00:58:20,300 --> 00:58:25,100 defy crazed with like liquidity Mining and yield farming and all 1025 00:58:25,100 --> 00:58:28,200 this stuff that's been going on, you're actually like, you know, 1026 00:58:28,900 --> 00:58:31,800 the first one we've had on who's like, you know, and part of this 1027 00:58:31,800 --> 00:58:35,900 whole, you know, game I guess what's been like, sort of the 1028 00:58:35,900 --> 00:58:40,600 takeaways from this process. And I also remember reading that 1029 00:58:40,600 --> 00:58:43,700 there was like You know, some sort of like, weird things where 1030 00:58:43,700 --> 00:58:46,300 people could game the liquidity Mining. 1031 00:58:46,300 --> 00:58:49,300 And so there have to be like what are the problems you ran 1032 00:58:49,300 --> 00:58:51,500 into and what Solutions are you guys working on? 1033 00:58:52,800 --> 00:58:57,600 So yeah, I absolutely think that this is a fuss first and 1034 00:58:57,600 --> 00:59:01,500 foremost a way to distribute ownership of your protocol to 1035 00:59:01,500 --> 00:59:05,200 people who really care about it and those are users. 1036 00:59:05,500 --> 00:59:07,300 Those are the liquidity providers who are making it 1037 00:59:07,300 --> 00:59:11,000 possible for Traders to trade. So that, that was the decision. 1038 00:59:11,500 --> 00:59:15,600 Like how again getting back to the subjectivity of usefulness 1039 00:59:15,600 --> 00:59:17,800 for liquidity. How do you say liquid? 1040 00:59:17,800 --> 00:59:20,300 It is useful. Well, usually how much people 1041 00:59:20,300 --> 00:59:24,200 are trading with with that fool, But that is very easily game 1042 00:59:24,200 --> 00:59:27,200 mobile. You can just wash trade and that 1043 00:59:27,200 --> 00:59:30,500 would be like a catastrophe, very hard to come around. 1044 00:59:30,700 --> 00:59:35,000 So we decided to say well if if you add liquidity to balancer 1045 00:59:35,000 --> 00:59:38,600 then you get ball tokens. And we knew that this this is 1046 00:59:38,607 --> 00:59:43,400 like was prone or very likely going to be gained because our 1047 00:59:43,400 --> 00:59:48,000 idea was to let the community step in and come up with cool 1048 00:59:48,000 --> 00:59:49,900 suggestions to improve this process. 1049 00:59:50,200 --> 00:59:54,300 So what we initially did is it's just like a percentage of total 1050 00:59:54,300 --> 00:59:58,400 USD value of the liquidity, provide proportional to the full 1051 00:59:58,400 --> 01:00:02,300 liquidity on balancer. And and and your token has to be 1052 01:00:02,300 --> 01:00:06,400 listed on coin gecko as long as there's like a price tag to your 1053 01:00:06,400 --> 01:00:09,400 token because if there is no no you cannot talk about u.s. 1054 01:00:09,500 --> 01:00:11,700 USD liquidity that you're providing, right? 1055 01:00:11,700 --> 01:00:15,100 So you have to have two tokens in a pool because you have to be 1056 01:00:15,100 --> 01:00:19,700 able to trade two tokens that have a price tag on coin Gecko 1057 01:00:20,100 --> 01:00:24,500 and then very quickly, we Yeah, the community and we knew that 1058 01:00:24,500 --> 01:00:28,200 already but we wanted kind of the community to step in and and 1059 01:00:28,700 --> 01:00:32,100 can't come to the same conclusion, Community realized 1060 01:00:32,100 --> 01:00:36,600 that if you have a pool that's 98 to that pool is even though 1061 01:00:36,600 --> 01:00:40,500 there's like a lot of value locked in dollars, that fool 1062 01:00:40,500 --> 01:00:43,500 doesn't facilitate a lot of traits because if you trade a 1063 01:00:43,508 --> 01:00:46,600 little bit, that will ready like change the price a lot. 1064 01:00:46,600 --> 01:00:49,800 So, you have a high slippage for uneven pools. 1065 01:00:50,100 --> 01:00:51,900 What? The community came up with was 1066 01:00:52,000 --> 01:00:55,500 okay, Let's introduce a ratio factor which says that pulls 1067 01:00:55,500 --> 01:00:59,900 that have very uneven weights, they're going to get less bow 1068 01:00:59,900 --> 01:01:04,400 for the same USD value locked and that's just like one of the 1069 01:01:04,400 --> 01:01:08,500 examples and other examples are hard packed tokens. 1070 01:01:08,500 --> 01:01:13,700 So if you create a pool that has died and a die, both are listed 1071 01:01:13,700 --> 01:01:17,400 on coin. Gecko and you can put like a lot 1072 01:01:17,400 --> 01:01:19,700 of money there. You know, you have no risk of 1073 01:01:19,700 --> 01:01:23,000 people like or of impermanent laws and then we Get back to 1074 01:01:23,000 --> 01:01:26,600 that again but there's no real risk of volatility there because 1075 01:01:26,600 --> 01:01:28,300 you know, those tokens are packed. 1076 01:01:28,300 --> 01:01:32,200 So if you have a pool like that, with a 0.5% fee, there's not 1077 01:01:32,200 --> 01:01:35,200 going to be one single trade on that pool because people can 1078 01:01:35,200 --> 01:01:40,700 just use the, I have a contract to to wrap and unwrap die to a 1079 01:01:40,700 --> 01:01:42,100 die, right? Yeah. 1080 01:01:42,100 --> 01:01:45,100 So we created this hard pack which says like you're going to 1081 01:01:45,100 --> 01:01:48,800 be slashed by a lot if you just provide that not so useful 1082 01:01:48,800 --> 01:01:53,600 liquidity and yeah and then so on so forth we have Have a very 1083 01:01:53,600 --> 01:01:57,000 complex kind of system to distribute liquidity today, 1084 01:01:57,300 --> 01:02:00,300 which has evolved according to the demands of the community, 1085 01:02:00,800 --> 01:02:03,300 which are how does, how does the slashing work it just like 1086 01:02:03,300 --> 01:02:06,700 governance based lashing. Like, oh sorry, maybe slashing 1087 01:02:06,700 --> 01:02:09,600 is the wrong word. Yeah, you get penalized for 1088 01:02:09,600 --> 01:02:12,000 providing liquidity. That's bet hard like 1089 01:02:12,000 --> 01:02:14,300 hard-packed. So you actually don't get as 1090 01:02:14,300 --> 01:02:18,700 much bow for the same USD as you would if you had beef and maker, 1091 01:02:18,900 --> 01:02:22,300 you know, mkr and he's so the same $10 here. 1092 01:02:22,900 --> 01:02:25,900 For die Aid. I will get a lot less about 1093 01:02:25,900 --> 01:02:30,400 tokens than $10 for mkr and eat if that makes sense. 1094 01:02:30,500 --> 01:02:33,800 And this little sort of possible because the bowel isn't being 1095 01:02:33,800 --> 01:02:36,400 distributed by like a smart contract or something, right? 1096 01:02:36,400 --> 01:02:38,800 It just being distribution. Okay, that was exactly that 1097 01:02:38,800 --> 01:02:40,800 point. Like, that, that was really what 1098 01:02:41,100 --> 01:02:44,600 differentiated us from compound like impound took a long time. 1099 01:02:44,600 --> 01:02:48,600 Actually, to to bake that into the smart contracts already. 1100 01:02:49,000 --> 01:02:52,400 And we believe that it's we're so much in the early days there. 1101 01:02:52,500 --> 01:02:56,500 So much to learn. And to improve that we decided 1102 01:02:56,500 --> 01:02:59,300 to keep that off chain. Because anyways, like if you 1103 01:02:59,300 --> 01:03:02,000 look at compounds governance, it's very concentrated. 1104 01:03:02,100 --> 01:03:05,400 The team has a lot of token so they can still decide pretty 1105 01:03:05,400 --> 01:03:07,500 much the outcome of the vote, right? 1106 01:03:07,500 --> 01:03:12,600 So there is a ready, like a social contract there that they 1107 01:03:12,600 --> 01:03:15,400 will let the community to decide, but still you have to 1108 01:03:15,400 --> 01:03:18,200 trust the founders that you're not going to vote and it's the 1109 01:03:18,200 --> 01:03:22,400 same for balancer, right? We the vote the team of advisors 1110 01:03:22,400 --> 01:03:25,200 and Investors in these early days. 1111 01:03:25,500 --> 01:03:29,000 Well, we haven't distributed so many about tokens yet. 1112 01:03:29,200 --> 01:03:31,400 So we could. Even if it was unchanged, we 1113 01:03:31,400 --> 01:03:33,900 could control the governance process. 1114 01:03:33,900 --> 01:03:38,900 If we broke this social contract that we have to not vote and let 1115 01:03:38,900 --> 01:03:42,300 the community kind of build and involved with with their token. 1116 01:03:42,300 --> 01:03:45,500 So if we already, if the community, is already trusting 1117 01:03:45,500 --> 01:03:49,300 us to keep that social contract. Why not just do like things off 1118 01:03:49,300 --> 01:03:53,600 chain, which is a lot more efficient and easy to work on in 1119 01:03:53,600 --> 01:03:55,200 to iterate and to improve, right? 1120 01:03:55,200 --> 01:03:59,400 So that was our thought process. So that makes a makes a lot of 1121 01:03:59,400 --> 01:04:02,900 sense right now, especially with it feels like with the protocol 1122 01:04:02,900 --> 01:04:07,000 like balancer. There is a lot of this so many 1123 01:04:07,000 --> 01:04:11,500 tokens and this point a lot of emergent complexity around 1124 01:04:11,900 --> 01:04:15,400 liquidity mining here, right? And maybe you want to be able to 1125 01:04:15,900 --> 01:04:19,600 tweak the distribution process as as things emerge. 1126 01:04:19,600 --> 01:04:22,400 Like maybe it's more valuable to to pay. 1127 01:04:22,600 --> 01:04:24,800 The tokens to some particular token. 1128 01:04:24,800 --> 01:04:28,300 That's in short supply for example or they could be a role 1129 01:04:28,300 --> 01:04:33,000 for human subjectivity here. One question it does come to 1130 01:04:33,000 --> 01:04:37,200 mind is like you know balancer Labs has has raised financing 1131 01:04:37,700 --> 01:04:41,100 and so is defined is all the financing raised by selling 1132 01:04:41,100 --> 01:04:45,500 tokens or are these Equity financing rounds of a company 1133 01:04:45,500 --> 01:04:50,200 separated from the the ow. Yeah, so this is actually we've 1134 01:04:50,200 --> 01:04:54,400 been quite Innovative and I think we were one of the first 1135 01:04:54,400 --> 01:04:59,700 SC f g, so agreement for future, Senator green for future 1136 01:04:59,700 --> 01:05:02,100 governance. What that means is that 1137 01:05:02,200 --> 01:05:07,600 investors not only acquired Equity but also the pro rata 1138 01:05:07,600 --> 01:05:11,700 share of governance tokens that that Equity maps to. 1139 01:05:12,100 --> 01:05:16,400 So what we did is balanced for labs the the company that raise 1140 01:05:16,700 --> 01:05:20,200 Venture Capital with a This place holder and other other 1141 01:05:20,200 --> 01:05:24,200 investors. It has the right to get 25 1142 01:05:24,200 --> 01:05:28,200 million tokens out of a possible cap in the future of 100 million 1143 01:05:28,200 --> 01:05:31,600 tokens. So if you have 1%, if you invest 1144 01:05:31,600 --> 01:05:36,300 at 1% in the equity of bouncer Labs, you have 1% of the 25 1145 01:05:36,300 --> 01:05:40,300 million tokens. So it's so the investors both 1146 01:05:40,300 --> 01:05:45,800 got equity and tokens and this is probably not going to be the 1147 01:05:45,800 --> 01:05:50,900 case for our future fundraising The rounds because yeah we kind 1148 01:05:50,900 --> 01:05:54,800 of want to make want to make it more simple Exemplar by having 1149 01:05:54,800 --> 01:06:00,300 this future Fund Raising fund, which will be used for ya for 1150 01:06:00,300 --> 01:06:05,400 selling tokens in new series. Yeah, that's really interesting. 1151 01:06:05,400 --> 01:06:10,800 So what you're trying to do in this SE f, g format is you're 1152 01:06:10,800 --> 01:06:15,700 trying to make your investors in different to where the value of 1153 01:06:15,700 --> 01:06:18,200 Google occurs. So if the value of crucial it 1154 01:06:18,400 --> 01:06:22,700 Can we have a cream on it and they fit as opposed to the 1155 01:06:22,700 --> 01:06:25,700 company they are working on that. 1156 01:06:25,700 --> 01:06:29,300 So you are essentially trying to make them in different so that 1157 01:06:29,300 --> 01:06:33,800 it gives you flexibility. Yeah though we have been very 1158 01:06:34,400 --> 01:06:39,700 upfront and and candid about the equity not being worth anything, 1159 01:06:39,900 --> 01:06:42,900 very likely in the future. Because since the beginning, we 1160 01:06:42,900 --> 01:06:45,700 had this in mind that this we want to make this protocol, like 1161 01:06:45,700 --> 01:06:50,400 a common good that is going. To be owned by the about open 1162 01:06:50,400 --> 01:06:54,600 holders. And the company, ideally will be 1163 01:06:54,600 --> 01:06:58,000 dissolved and the equity is not going to mean anything at all. 1164 01:06:58,100 --> 01:07:02,500 So that that that's hopefully the outcome that we're going 1165 01:07:02,500 --> 01:07:05,600 for. That's quite a radical 1166 01:07:05,600 --> 01:07:07,300 decisions. Do you find it? 1167 01:07:07,300 --> 01:07:12,100 Hard to convince people to join your team and because like your 1168 01:07:12,100 --> 01:07:16,200 Equity is going to be worthless. So why how do you incentivize 1169 01:07:16,200 --> 01:07:19,500 your employees? Then that's a great. 1170 01:07:19,500 --> 01:07:22,200 So, this is not something that's going to happen overnight next 1171 01:07:22,200 --> 01:07:25,500 year. So it's probably a long like a 1172 01:07:25,500 --> 01:07:28,800 longer process like five years, maybe two, ten years. 1173 01:07:29,300 --> 01:07:33,200 And what I, what I and that also includes myself, not only our 1174 01:07:33,300 --> 01:07:37,900 He's right over here. So what I think is that even 1175 01:07:37,900 --> 01:07:41,000 though the company itself is going to be dissolved, that 1176 01:07:41,000 --> 01:07:44,200 doesn't mean that the team. That's now working for balancer, 1177 01:07:44,200 --> 01:07:48,400 Labs won't be able to work further on balancer, right? 1178 01:07:48,400 --> 01:07:50,500 Because then we're going to have like we're going to find some 1179 01:07:50,500 --> 01:07:54,700 other common good ways of financing like get coin grants 1180 01:07:54,700 --> 01:07:58,600 or yeah, whatever means we can find to finance. 1181 01:07:58,600 --> 01:08:03,100 The development on a platform will probably be involved with 1182 01:08:03,100 --> 01:08:06,800 that. Like vitalik is not paid by the 1183 01:08:06,800 --> 01:08:10,200 theorem find Foundation as at least as far as I know. 1184 01:08:10,500 --> 01:08:12,700 But he's still involve is still doing work. 1185 01:08:12,900 --> 01:08:17,100 And there's many people are working for a for etherium with 1186 01:08:17,100 --> 01:08:18,800 other kind of incentives in mind. 1187 01:08:18,899 --> 01:08:22,500 Not not necessarily getting a salary from a centralized 1188 01:08:22,500 --> 01:08:25,100 entity. So this is how I Envision the 1189 01:08:25,100 --> 01:08:30,399 future of balancer. So given all this like liquidity 1190 01:08:30,399 --> 01:08:33,500 mining that or incentivisation that's been happening. 1191 01:08:33,800 --> 01:08:36,000 One thing we see on balancer is basically. 1192 01:08:36,000 --> 01:08:40,800 It's beating Eunice swap massively on liquidity, but not 1193 01:08:40,800 --> 01:08:45,500 yet on trading volume. So what why is this? 1194 01:08:45,500 --> 01:08:48,500 And what are sort of? What's your plans on? 1195 01:08:49,000 --> 01:08:50,899 We've got to liquidity now. How are you complaining on 1196 01:08:50,907 --> 01:08:52,700 attracting the volume trading volume? 1197 01:08:53,700 --> 01:08:56,600 Great question. So this is because we've been 1198 01:08:56,600 --> 01:09:00,600 around for a few months and you know, swap has been around for a 1199 01:09:00,600 --> 01:09:03,800 lot longer and you know stop is integrated with pretty much 1200 01:09:03,800 --> 01:09:07,600 everything in the Phi. Like whatever platform or front 1201 01:09:07,600 --> 01:09:12,899 and or like distribution app like Z rien or is that / fi 1202 01:09:13,300 --> 01:09:16,500 they've all like been integrated with UNICEF for a long time. 1203 01:09:16,500 --> 01:09:18,700 So, you know, swap is seen by everyone. 1204 01:09:18,700 --> 01:09:21,000 It's also like a brand. People think of trading they go 1205 01:09:21,000 --> 01:09:22,800 to Eunice what the centralized training, go take. 1206 01:09:22,899 --> 01:09:27,500 Go to Eunice wha so it's a matter of time until we have 1207 01:09:27,500 --> 01:09:31,899 like Integrations by zero xapi they're like finalizing their 1208 01:09:31,899 --> 01:09:35,100 integration or Khyber Network. They're also finalizing 1209 01:09:35,100 --> 01:09:39,800 integration. 1 H has started already integrated with balancer 1210 01:09:39,800 --> 01:09:43,500 from day one. So Paris swap is also working on 1211 01:09:43,500 --> 01:09:47,399 integrating balusters, we need time to kind of get integrated, 1212 01:09:47,500 --> 01:09:50,100 right? So that's the first thing and 1213 01:09:50,100 --> 01:09:53,300 the second thing is that actually you just flops Pretty 1214 01:09:53,300 --> 01:09:56,400 is the most efficient possible because it's always 50/50. 1215 01:09:56,500 --> 01:09:58,400 So there's a lot of liquidity imbalance. 1216 01:09:58,400 --> 01:10:00,700 ER, there's like a 200 million dollar pool. 1217 01:10:01,100 --> 01:10:05,300 One pool has 200 million dollars now, which is Wi-Fi and the 1218 01:10:05,300 --> 01:10:09,200 curve y, curve token that pulls a 98 to. 1219 01:10:09,600 --> 01:10:13,800 So, it naturally has effectively quiddity the effective liquidy 1220 01:10:13,800 --> 01:10:17,100 that that pool has is a lot lower than 200 million dollars, 1221 01:10:17,100 --> 01:10:20,400 right? So it's hard to compare volume 1222 01:10:20,900 --> 01:10:22,800 between unit, Swap, and balancer. 1223 01:10:23,100 --> 01:10:26,500 Because balusters allows for like flexibility, which means 1224 01:10:26,500 --> 01:10:30,700 that not all liquidity will be efficient or the most efficient 1225 01:10:30,700 --> 01:10:33,800 for Traders because that means they are like the poles are 1226 01:10:33,800 --> 01:10:38,500 50/50 or third third or 25, 25, 25 and that's not the case. 1227 01:10:40,100 --> 01:10:46,500 What would you say is the most unique or interesting pool that 1228 01:10:46,500 --> 01:10:49,700 you've seen? Or maybe it's not been deployed 1229 01:10:49,700 --> 01:10:55,200 yet but like, you know, that people are working on, there's 1230 01:10:55,200 --> 01:10:59,100 so many. So I think I'll be peace are 1231 01:10:59,100 --> 01:11:02,100 going to be a huge thing. As I said earlier, Sunny like 1232 01:11:02,100 --> 01:11:06,800 the the idea of the ideal like initial decentralised offer or 1233 01:11:06,800 --> 01:11:10,300 decentralized exchange offer, This flexibility of having a 1234 01:11:10,300 --> 01:11:15,000 smart people that like has this schedule of Weights flipping and 1235 01:11:15,000 --> 01:11:18,300 letting people not only by your tokens but also create 1236 01:11:18,300 --> 01:11:21,200 liquidity. All wrapped in one to me, this 1237 01:11:21,200 --> 01:11:25,700 is very powerful one pull that. I'm really excited to see coming 1238 01:11:25,700 --> 01:11:29,000 out and for all I don't know if you talked about that last week 1239 01:11:29,000 --> 01:11:33,800 you had Kuma here in the show. The there is this idea of having 1240 01:11:33,800 --> 01:11:38,300 a Perpetual synthetic pool. So what Obama does is they have 1241 01:11:38,300 --> 01:11:42,500 this This awesome system that allows you to create any 1242 01:11:42,500 --> 01:11:46,800 synthetic that has an expiry date and often what you see is 1243 01:11:46,800 --> 01:11:50,900 people seeking exposure to goad without an expiry date. 1244 01:11:51,000 --> 01:11:54,200 So they want to be just long gold but that doesn't work. 1245 01:11:54,200 --> 01:11:57,800 So simply like so so easily for a product like want to do 1246 01:11:57,800 --> 01:12:01,300 directly because maybe they explain that but they need this 1247 01:12:01,400 --> 01:12:04,900 expiry date in order for the underlying price and the 1248 01:12:04,900 --> 01:12:07,100 synthetic rights not to deviate a lot. 1249 01:12:07,500 --> 01:12:11,500 So what you can do is You can have different months, like 1250 01:12:11,500 --> 01:12:14,700 synthetics with expiry dates of different months, all in the 1251 01:12:14,700 --> 01:12:18,300 same, in the same pool. And I want you to do is is a 1252 01:12:18,300 --> 01:12:21,400 smart pool that as soon as one of the expiry dates is getting 1253 01:12:21,400 --> 01:12:24,900 close to maturation. You start decreasing that wait 1254 01:12:25,000 --> 01:12:28,000 to start phasing out that that goat. 1255 01:12:28,200 --> 01:12:31,000 Let's say September, because it's closed and you start facing 1256 01:12:31,000 --> 01:12:35,600 in Goat November. So, and that is naturally done 1257 01:12:35,600 --> 01:12:40,000 by arbitrageurs, that do those trades for Marginal profit. 1258 01:12:40,300 --> 01:12:43,000 So, your pool is actually leaking a little bit of value. 1259 01:12:43,500 --> 01:12:46,300 But, you know, that your pool will always have like three or 1260 01:12:46,300 --> 01:12:49,700 four different months that are being recycled automatically. 1261 01:12:50,100 --> 01:12:53,000 So not only you create this one place for people who want to 1262 01:12:53,000 --> 01:12:57,600 have exposure to goad November to trade with gold exposure. 1263 01:12:57,600 --> 01:13:00,400 September people can trade between those different 1264 01:13:00,600 --> 01:13:03,400 different months. You also creating an exposure 1265 01:13:03,400 --> 01:13:08,600 and a Perpetual exposure to go. Which is that your C 20 token of 1266 01:13:08,600 --> 01:13:10,900 the The pool. So that pool is issuing. 1267 01:13:11,000 --> 01:13:15,300 You see, 20 tokens that represent exposure to goad. 1268 01:13:15,500 --> 01:13:19,500 So that that's amazing have the option to, to have go December 1269 01:13:19,500 --> 01:13:21,400 and you trade for gold September. 1270 01:13:21,600 --> 01:13:24,600 But you can also buy the pool token, the bushehr, which is 1271 01:13:24,600 --> 01:13:27,700 just exposure to goad, and yeah, to me. 1272 01:13:27,700 --> 01:13:31,900 That's that's a very interesting example of for, that will be 1273 01:13:31,900 --> 01:13:34,700 soon launched and we're working closely with the ummah, guys, on 1274 01:13:34,700 --> 01:13:37,500 that. Yeah, that that I, you know, I 1275 01:13:37,508 --> 01:13:40,400 was riding with my friends at open and they that's, you know, 1276 01:13:40,400 --> 01:13:43,100 another problem they faced with, you know, saw and that's also 1277 01:13:43,100 --> 01:13:45,600 why they're looking at balance or to kind of do something 1278 01:13:45,600 --> 01:13:47,900 similar as well. Cool. 1279 01:13:48,000 --> 01:13:50,400 So what are you watch? Like the future. 1280 01:13:50,400 --> 01:13:53,100 Like, you know what's your is scattered throughout like the 1281 01:13:53,100 --> 01:13:56,500 docks. It mentions balancer V2 but not 1282 01:13:56,500 --> 01:13:59,100 a lot of details. What is what can we expect to 1283 01:13:59,100 --> 01:14:02,800 see? So, balance of e 2 will be a lot 1284 01:14:02,800 --> 01:14:05,000 more efficient in terms of gas costs. 1285 01:14:05,700 --> 01:14:09,200 We're going to go to this single Vault architecture. 1286 01:14:09,400 --> 01:14:13,500 So instead of creating like a new smart contract, for every 1287 01:14:13,500 --> 01:14:16,500 pool that's deployed, you're actually just creating like an 1288 01:14:16,500 --> 01:14:19,000 internal accounting for the pool. 1289 01:14:19,000 --> 01:14:24,100 You created inside of this big contract that is bouncer V2 that 1290 01:14:24,100 --> 01:14:27,300 will allow us to do cool things like huge flash loans. 1291 01:14:27,300 --> 01:14:31,300 So all of a sudden you have like all the mkr From all the posts 1292 01:14:31,300 --> 01:14:35,100 sitting on the same contract so we can have like flash loans 1293 01:14:35,100 --> 01:14:38,500 that are huge. And that also will allow you to 1294 01:14:38,800 --> 01:14:42,900 do Arbitrage between pools in a much more efficient way because 1295 01:14:43,600 --> 01:14:46,200 all you're doing is like you're changing internal accounting 1296 01:14:46,200 --> 01:14:49,500 balances of the pools. Inside the same contract, you're 1297 01:14:49,500 --> 01:14:54,800 not saying your C 20 tokens, like across different folks, 1298 01:14:54,800 --> 01:14:56,500 you're not paying for all those years. 1299 01:14:56,500 --> 01:14:59,700 He 20 transfers, all you pay is at the end. 1300 01:14:59,700 --> 01:15:03,300 This is what You're going to get token a, so then balance TV 1301 01:15:03,300 --> 01:15:05,800 transfers, you that amount and gets from you. 1302 01:15:05,800 --> 01:15:08,900 That amount of token, be that you sold so that will create a 1303 01:15:08,900 --> 01:15:13,300 lot more, a lot more possibilities for for Arbitrage 1304 01:15:13,300 --> 01:15:16,900 and for Traders. Yeah, and we'll have like nice 1305 01:15:16,900 --> 01:15:20,400 features as well, like more flexibility in terms of, for 1306 01:15:20,400 --> 01:15:24,800 example, you can have circuit breakers so you can set your 1307 01:15:24,800 --> 01:15:29,300 pool to stop selling if one of the tokens goes below price 1308 01:15:29,300 --> 01:15:31,500 Acts. And this is something that 1309 01:15:32,000 --> 01:15:36,100 gnosis has been asking for because if you have prediction 1310 01:15:36,100 --> 01:15:40,000 markets, one of the tokens can just like outright go to 0 and 1311 01:15:40,000 --> 01:15:42,500 that is a problem because the bull gets drained. 1312 01:15:42,800 --> 01:15:46,600 So having circuit breakers like allows you to say. 1313 01:15:46,600 --> 01:15:48,800 Ok. So whenever one of the outcomes 1314 01:15:48,800 --> 01:15:52,300 is known suppose would just freeze because the prices will 1315 01:15:52,300 --> 01:15:56,600 go beyond the threshold that I'm willing to to let people trade 1316 01:15:56,600 --> 01:16:00,100 against lots of nice, nice features and cool things. 1317 01:16:00,200 --> 01:16:03,000 That we are getting like feedback from the community like 1318 01:16:03,000 --> 01:16:04,500 you should do that and you should do this. 1319 01:16:04,500 --> 01:16:09,100 We'll do a lot of improvements. Also in terms of flexibility, 1320 01:16:09,600 --> 01:16:11,800 it's going to be very cool. Awesome. 1321 01:16:11,800 --> 01:16:13,800 Thank you. Yeah, thanks for taking the time 1322 01:16:13,800 --> 01:16:16,800 to chat with us and teach us more about balancer. 1323 01:16:18,100 --> 01:16:19,600 Yeah. Thanks a lot. 1324 01:16:19,700 --> 01:16:22,200 Send your men here. So, yeah, if you want to know 1325 01:16:22,200 --> 01:16:24,300 more about balance. So you can go to our Discord 1326 01:16:24,300 --> 01:16:28,700 Channel, you can go to, you can follow us on Twitter at balancer 1327 01:16:28,700 --> 01:16:31,800 Labs. I'm FC Martinelli on Twitter as 1328 01:16:31,800 --> 01:16:33,400 well. Yeah, it's been a pleasure, 1329 01:16:33,400 --> 01:16:34,700 guys. Great questions. 1330 01:16:34,800 --> 01:16:38,100 And yeah, looking forward to chatting more offline. 1331 01:16:38,600 --> 01:16:43,100 Thanks. So what did you think of the 1332 01:16:43,100 --> 01:16:46,200 project? I mean I've always felt 1333 01:16:46,200 --> 01:16:49,200 balancers a great project. Yeah. 1334 01:16:49,700 --> 01:16:54,800 I I wrote like this like Long blog post a couple months ago 1335 01:16:55,100 --> 01:16:59,900 called like the Unis swap or download our flying units Swap 1336 01:17:00,000 --> 01:17:05,700 and making the unit swap Network and I wrote this like long thing 1337 01:17:05,700 --> 01:17:07,900 and then as soon as I published it people like way you should go 1338 01:17:07,900 --> 01:17:09,700 check out balancer because that's exactly what they're 1339 01:17:09,700 --> 01:17:11,800 doing. Like, whoa. 1340 01:17:11,900 --> 01:17:14,200 Because like I looked at balancer early on when you first 1341 01:17:14,200 --> 01:17:16,600 showed it to But back then I was just thought it. 1342 01:17:16,600 --> 01:17:19,200 So it was just like you know, multi-dimensional unit swap the, 1343 01:17:19,200 --> 01:17:23,200 you know them but like I didn't realize that they were so 1344 01:17:23,200 --> 01:17:27,300 focused on like all this generalizable generalization, 1345 01:17:27,300 --> 01:17:29,300 which is what I find super fascinating because I just think 1346 01:17:29,300 --> 01:17:31,800 that hole. Yeah. 1347 01:17:31,800 --> 01:17:35,600 Like I always thought that look, okay, this x times y equals K 1348 01:17:35,600 --> 01:17:39,700 that this is no way that that's the optimal like formula that 1349 01:17:39,700 --> 01:17:41,700 just like, you know, someone just pulled that out of their 1350 01:17:41,700 --> 01:17:45,200 hat. And it's like, but But I'm 1351 01:17:45,200 --> 01:17:46,900 excited to see that, you know. There's so folks on 1352 01:17:46,900 --> 01:17:48,700 parameterisation and especially I imagine they're going to get 1353 01:17:48,700 --> 01:17:50,100 even more. You know, we didn't get to talk 1354 01:17:50,100 --> 01:17:52,600 about this on the thing. But you know I'm willing to bet 1355 01:17:52,600 --> 01:17:55,100 that, you know, they're going to even start doing other types of 1356 01:17:55,100 --> 01:17:58,600 Curves. Not just like the same constant 1357 01:17:58,600 --> 01:18:00,500 product. Launch the product one but like, 1358 01:18:00,500 --> 01:18:02,300 you know, we had there's other projects and morning. 1359 01:18:02,600 --> 01:18:05,200 Yeah, there's other ones that curve Finance which are more 1360 01:18:05,200 --> 01:18:07,400 flat for stable coins, or you can, I don't know. 1361 01:18:07,400 --> 01:18:08,900 You can do like some wacky stuff. 1362 01:18:08,900 --> 01:18:12,500 Probably that. Yeah, so I'm excited about it 1363 01:18:12,500 --> 01:18:15,000 from that sense. Night. 1364 01:18:15,600 --> 01:18:20,600 I just feel that that it's of it's a very elastic primitive 1365 01:18:21,500 --> 01:18:27,600 and it will end up entering into lots of different applications 1366 01:18:27,600 --> 01:18:33,000 and much of much of the use cases of back something like 1367 01:18:33,000 --> 01:18:38,100 balancer aren't just understood or imagine what I love about 1368 01:18:38,100 --> 01:18:43,700 this project is just its elasticity and how it can mutate 1369 01:18:43,700 --> 01:18:47,900 and Fill different niches. So what do you think? 1370 01:18:48,100 --> 01:18:52,000 One of the questions I have? Do you think a M&M's in general? 1371 01:18:52,000 --> 01:18:57,800 Are a long term. Sustainable concept though, like 1372 01:18:57,800 --> 01:19:01,700 just this, it feels like what balancer with all their 1373 01:19:01,700 --> 01:19:04,500 parameterisation. They're making a mmm, or they're 1374 01:19:04,500 --> 01:19:08,600 giving a M&M's, the opportunity to be smarter than x times y 1375 01:19:08,600 --> 01:19:11,000 equals K. But at the end of the day, I 1376 01:19:11,000 --> 01:19:16,600 still feel your automated marketing maker or you know I'll 1377 01:19:16,600 --> 01:19:18,600 go rhythmic Market maker ever, you want to call it like you 1378 01:19:18,600 --> 01:19:22,800 know algorithmic market makers like even Real market makers are 1379 01:19:22,800 --> 01:19:25,300 algorithmic. The difference is that a smart 1380 01:19:25,300 --> 01:19:30,500 contract Market maker doesn't have access to external data. 1381 01:19:31,300 --> 01:19:36,800 And I feel that because of that, it will always be worse than 1382 01:19:37,100 --> 01:19:42,600 like a real Market maker who can quote you prices but like has 1383 01:19:42,600 --> 01:19:46,800 access to real world data and it seems that what's hap like 1384 01:19:46,800 --> 01:19:51,200 what's going to happen is How I see automatic market makers is 1385 01:19:51,200 --> 01:19:54,200 that this is what they're doing, they know traditional Market 1386 01:19:54,200 --> 01:19:58,000 maker. You have someone with capital as 1387 01:19:58,000 --> 01:20:04,000 well as knowledge or information or expertise and they're 1388 01:20:05,000 --> 01:20:07,300 providing quotes and it's the same entity. 1389 01:20:09,200 --> 01:20:12,500 Amm seem to be splitting these into two different categories. 1390 01:20:12,500 --> 01:20:17,500 One is the capital providers and then there's the information 1391 01:20:17,500 --> 01:20:21,200 providers and the capital providers are like these dumb. 1392 01:20:21,300 --> 01:20:24,600 Cop over disease, Provide Capital and then all the 1393 01:20:24,600 --> 01:20:28,400 information benefits are going to the arbitrageurs. 1394 01:20:29,700 --> 01:20:36,000 And it seems that like the arbitrageurs are screwing over 1395 01:20:36,000 --> 01:20:39,000 the capital providers and unless you can get your fees to be high 1396 01:20:39,000 --> 01:20:42,500 enough like and this is the whole impermanence lost 1397 01:20:42,500 --> 01:20:46,300 situation, right? Where oftentimes the, if the, if 1398 01:20:46,300 --> 01:20:49,900 it's not unless you have enough volume, your Capital providers 1399 01:20:49,900 --> 01:20:54,600 really get screwed over and the smarter Market maker could do 1400 01:20:54,600 --> 01:20:57,000 better. So what do you think about this? 1401 01:20:58,600 --> 01:21:02,100 I totally agree. So that that is a downside of 1402 01:21:02,100 --> 01:21:09,300 this gen this generation of automated market makers that In 1403 01:21:09,300 --> 01:21:13,400 the sense that the automated market makers are, they are 1404 01:21:13,400 --> 01:21:18,900 blind and they are dumb, blind because they are unable to see 1405 01:21:18,900 --> 01:21:22,900 what's happening on other markets. and they are done, 1406 01:21:22,900 --> 01:21:27,500 because They don't have the information but they don't even 1407 01:21:27,500 --> 01:21:30,800 have the mechanisms to include that information into their own 1408 01:21:30,800 --> 01:21:34,300 decision-making. So we'll be safe for this. 1409 01:21:34,300 --> 01:21:37,100 A bouncer is making them less dumb but it's not making them 1410 01:21:37,100 --> 01:21:40,300 less blind. Yeah, it's not making them less 1411 01:21:40,300 --> 01:21:42,500 blind, right? So it's still blind. 1412 01:21:43,600 --> 01:21:47,000 So II. Do agree that this lack of 1413 01:21:47,000 --> 01:21:53,200 blindness is, is a disadvantage for automated market makers, but 1414 01:21:53,500 --> 01:21:56,400 it's also the case that we are. So, Early in the game. 1415 01:21:56,800 --> 01:21:58,700 No. I mean, you need to open 1416 01:21:58,700 --> 01:22:02,400 balancer combine this entire space has two years old. 1417 01:22:03,600 --> 01:22:07,400 And there is an eternity of 50 years, 100 years, to develop 1418 01:22:07,400 --> 01:22:12,300 this thing and and a lot can happen and I think, eventually 1419 01:22:12,300 --> 01:22:14,300 the bidet blindness will go away. 1420 01:22:15,600 --> 01:22:18,800 I'm not sure how they will acquire information from The 1421 01:22:18,800 --> 01:22:20,500 Real World because it's a hard problem. 1422 01:22:21,400 --> 01:22:27,500 So, but I do feel that it's just that the design space of these 1423 01:22:27,500 --> 01:22:32,900 crippled protocols is just so massive that Italians will be 1424 01:22:32,900 --> 01:22:36,800 surmounted and we will have automated market makers that are 1425 01:22:38,500 --> 01:22:41,500 we more efficient than today. Is, there is variety. 1426 01:22:42,300 --> 01:22:44,500 I think that's the optimistic cage case. 1427 01:22:44,700 --> 01:22:47,500 Are they going to remain firm or Niche assets or do you think 1428 01:22:47,500 --> 01:22:49,800 that? Like, they're going to overtake 1429 01:22:49,800 --> 01:22:55,300 like currently where I see them going is that they are the great 1430 01:22:55,300 --> 01:23:03,500 for like weird Niche assets like options or like Like wifey 1431 01:23:03,500 --> 01:23:06,000 tokens or whatever, but it's like prediction markets. 1432 01:23:06,000 --> 01:23:08,400 Are they gonna take over the BTC? 1433 01:23:08,400 --> 01:23:12,700 You sdt pair like where that pair is just like the biggest 1434 01:23:12,700 --> 01:23:15,100 pair on like all of the centralized exchanges is it 1435 01:23:15,100 --> 01:23:18,300 going to take over that? I think that's unlikely. 1436 01:23:19,600 --> 01:23:21,100 Today that's unlikely. I think. 1437 01:23:21,400 --> 01:23:24,100 I think, I think you've identified the market, it's the 1438 01:23:24,100 --> 01:23:28,000 long tail of assets that automated market makers are 1439 01:23:28,100 --> 01:23:32,400 really suited to today. And that's the initial Niche, 1440 01:23:32,500 --> 01:23:38,200 the end of populating. Now now the question is beyond 1441 01:23:38,200 --> 01:23:43,500 that initial niche Can they invade other niches? 1442 01:23:43,500 --> 01:23:49,700 And then one day do BTC USD were not only BTC USD word, one 1443 01:23:49,700 --> 01:23:52,400 finding the future. You want to do all Euro USD, 1444 01:23:52,400 --> 01:23:55,700 volume odd, automate market makers is the future like that. 1445 01:23:56,000 --> 01:23:59,700 I think it depends a lot on how efficient these things get. 1446 01:23:59,900 --> 01:24:04,000 These things can be made made to be and I think it boils down to 1447 01:24:04,000 --> 01:24:09,600 the question of What kinds of data can be given to these 1448 01:24:09,600 --> 01:24:12,200 automated Market. That Homeless intelligence, you 1449 01:24:12,208 --> 01:24:17,100 can put into them. And both are hard questions 1450 01:24:17,100 --> 01:24:22,200 because getting data means developing a protocol by which 1451 01:24:22,200 --> 01:24:27,200 you can trust the quality of that data and then intelligence 1452 01:24:27,300 --> 01:24:30,400 probably means a lot of computation. 1453 01:24:30,400 --> 01:24:33,500 And on both those dimensions blockchains are very limited 1454 01:24:33,500 --> 01:24:38,500 today now as if those Dimensions were to be solved market makers 1455 01:24:38,500 --> 01:24:45,200 would go a lot. but, But if they remain remain at the current 1456 01:24:45,200 --> 01:24:48,300 state, I think they are more suited to this long tail of 1457 01:24:48,400 --> 01:24:50,200 acids. What do you think? 1458 01:24:51,400 --> 01:24:58,300 II think that there. Yeah, I don't know. 1459 01:24:59,400 --> 01:25:02,500 I think that until they start until they figure out how to do 1460 01:25:02,500 --> 01:25:04,300 that. Solve that blindness problem. 1461 01:25:04,300 --> 01:25:11,500 It will as soon as there's a larger market for that the that 1462 01:25:11,800 --> 01:25:17,300 pair then, the mmm, it starts running into problems when the 1463 01:25:17,300 --> 01:25:20,800 largest pair for that market is the amm that it works fine. 1464 01:25:21,200 --> 01:25:24,700 Is because then they, mmm is the price. 1465 01:25:24,700 --> 01:25:28,700 It's setting the pricing but one, the real price, whatever 1466 01:25:28,700 --> 01:25:30,700 that means is being set somewhere else. 1467 01:25:30,800 --> 01:25:35,300 Then that's where the capital provider started to really get 1468 01:25:35,300 --> 01:25:37,600 screwed over because the arbitrageurs make all the 1469 01:25:38,100 --> 01:25:40,600 prophets there, right? Yeah. 1470 01:25:40,600 --> 01:25:43,500 And it's one of those reasons. I haven't contributed any 1471 01:25:43,500 --> 01:25:49,400 liquidity to a units or pool because because it's like as a 1472 01:25:49,400 --> 01:25:53,800 like if you think of my Easter or my Bitcoin like really liquid 1473 01:25:53,800 --> 01:25:58,600 crypto assets, I hold It's at some level, I'm holding these 1474 01:25:58,600 --> 01:26:03,500 crypto assets, cuz you expect them to go up in price. 1475 01:26:04,000 --> 01:26:08,800 But when assets grow up in price, and you've put them onto 1476 01:26:08,800 --> 01:26:13,200 a liquidity, provider you making losses at exactly that same 1477 01:26:13,200 --> 01:26:18,400 point. So, so at some level that, that 1478 01:26:18,400 --> 01:26:22,800 that that is what has prevented me from actually putting assets 1479 01:26:22,800 --> 01:26:29,800 into into the market makers now. Yeah, so I think I think are 1480 01:26:29,800 --> 01:26:34,700 very Niche assets like the reality real estate tokens or 1481 01:26:34,700 --> 01:26:41,700 these why tokens or the situation is different. 1482 01:26:42,900 --> 01:26:46,100 But let's see how it evolves. I'm actually quite bullish on 1483 01:26:46,100 --> 01:26:48,800 the space even though the solutions don't exist today. 1484 01:26:49,400 --> 01:26:53,400 My instinct is that the design space is so massive that it will 1485 01:26:53,400 --> 01:26:59,200 end up being solved, but it will take 20 years, do you were 1486 01:27:00,200 --> 01:27:02,800 asking quite a bit about like the network effects of the 1487 01:27:02,800 --> 01:27:05,700 balance, our protocol and you seem kind of skeptical. 1488 01:27:05,900 --> 01:27:09,400 Do you still are you, how do you feel after that discussion? 1489 01:27:11,000 --> 01:27:15,400 So my impression is that balancer has worked out a really 1490 01:27:15,400 --> 01:27:20,000 good. Pool design and at some level, 1491 01:27:20,000 --> 01:27:23,500 you know? I mean, if this was to be an 1492 01:27:23,500 --> 01:27:27,600 economics paper or something, if I imagine balance has an 1493 01:27:27,600 --> 01:27:32,200 economics paper, this might end up becoming are no one of the 1494 01:27:32,200 --> 01:27:35,900 most cited papers of 2018 2019 in the far future. 1495 01:27:36,200 --> 01:27:39,500 I will design and ideas level of that pool design. 1496 01:27:39,900 --> 01:27:42,500 It's amazing. That's, that's my impression. 1497 01:27:43,400 --> 01:27:47,700 But I'm not sure about the code quality, right? 1498 01:27:47,700 --> 01:27:49,500 How, how they design translate into code. 1499 01:27:49,500 --> 01:27:53,000 But let's assume it's average. It's better than average over 1500 01:27:53,000 --> 01:27:57,000 table, but I had when I feel very feel. 1501 01:27:57,000 --> 01:28:01,700 Balancer is kind of lacking, is that there is a great pool 1502 01:28:01,700 --> 01:28:08,700 design, there is this code, and then there's this token The 1503 01:28:08,700 --> 01:28:14,100 question of how this token actually captures value is not 1504 01:28:14,100 --> 01:28:17,700 well address. Now, of course you mentioned 1505 01:28:17,700 --> 01:28:20,400 Sonny that the token will someday say that. 1506 01:28:20,400 --> 01:28:24,900 Hey, there's a certain fee that you can add add to these pools 1507 01:28:24,900 --> 01:28:27,500 and, and that is how it will capture value. 1508 01:28:27,500 --> 01:28:31,000 But then the question just shifts to being okay, the token 1509 01:28:31,000 --> 01:28:35,000 holders decide to add a fee. What prevents these liquidity 1510 01:28:35,000 --> 01:28:37,400 providers from migrating to the next protocol. 1511 01:28:38,700 --> 01:28:41,400 And when you ask that question, what will prevent them from 1512 01:28:41,400 --> 01:28:44,900 migrating to other protocol? It's then that you kind of 1513 01:28:44,900 --> 01:28:47,800 realize it, okay? For this to be really viable. 1514 01:28:48,400 --> 01:28:52,300 There has to be some Network effect associated with multiple 1515 01:28:52,300 --> 01:28:55,600 pools now. Now the answer is that that were 1516 01:28:55,600 --> 01:28:59,900 given were, okay, smart order routing, but to me, smart order 1517 01:28:59,900 --> 01:29:02,900 routing seems like, completely off chain play. 1518 01:29:02,900 --> 01:29:06,600 Like chorus can come and build smart out, order order router 1519 01:29:06,600 --> 01:29:10,900 for balancer as a A centralized entity and capture the value of 1520 01:29:10,900 --> 01:29:15,700 around smart order routing which is what one inch is doing, which 1521 01:29:15,700 --> 01:29:19,100 is what one inch is doing. So it doesn't feel a good way by 1522 01:29:19,100 --> 01:29:24,000 which the protocol itself captures a defensive mode and 1523 01:29:24,000 --> 01:29:30,100 captures value. And I think like to me with 1524 01:29:30,100 --> 01:29:35,500 current balancer, that is the gap that I would. 1525 01:29:36,200 --> 01:29:39,900 I would think about when I Make a decision of whether to 1526 01:29:39,900 --> 01:29:44,300 purchase battle or not. Because if that Gap can be 1527 01:29:44,300 --> 01:29:46,900 solved then I think this is going to be one of the great 1528 01:29:46,900 --> 01:29:49,800 Investments of the crypto space. It could be worth the investment 1529 01:29:49,800 --> 01:29:55,400 of the trip to space, but the uncertainty around, then not 1530 01:29:55,400 --> 01:30:01,600 being able to solve the Gap. Is what What would make me 1531 01:30:01,600 --> 01:30:03,600 skeptical of buying the battle token. 1532 01:30:04,900 --> 01:30:11,700 What is your sense? Yeah, I agree. 1533 01:30:11,700 --> 01:30:19,100 I think the smart order routing isn't the solution I won Under 1534 01:30:19,100 --> 01:30:22,000 if yeah. Like you said there has to be 1535 01:30:22,000 --> 01:30:27,600 some way of where the Network's, all the, the pool of network of 1536 01:30:27,600 --> 01:30:31,700 pools are somehow sharing information with each other such 1537 01:30:31,700 --> 01:30:34,500 that they can help balance each other out. 1538 01:30:34,500 --> 01:30:40,500 And that way that's sort of almost That's sort of the key I 1539 01:30:40,500 --> 01:30:45,400 think that has to be figured out. because earlier in the 1540 01:30:45,400 --> 01:30:49,000 conversation, you're talking about how these pools are blind, 1541 01:30:50,100 --> 01:30:56,100 Now, okay, so an individual pool is blind, but even if you could 1542 01:30:56,600 --> 01:31:01,800 make it less Blind by having these that pool get info from 1543 01:31:01,900 --> 01:31:05,500 other pools, then it's not the perfect solution but you're 1544 01:31:05,500 --> 01:31:08,700 making it less blind. But if you can make things less 1545 01:31:08,700 --> 01:31:11,800 blind, then they they could be some kind of network effect. 1546 01:31:11,800 --> 01:31:15,800 That's my impression. You mentioned flash loans, 1547 01:31:15,800 --> 01:31:19,200 right? And in the V2, is there a way 1548 01:31:19,200 --> 01:31:24,600 where we can? Somehow restrict The Flash loans 1549 01:31:24,700 --> 01:31:29,200 such that you're allowed to use Flash loans as long as your your 1550 01:31:29,200 --> 01:31:32,700 arbitraging like within balancer pools. 1551 01:31:32,900 --> 01:31:36,300 So you can use a flash loan from this pool to go Arbitrage. 1552 01:31:36,300 --> 01:31:38,900 Another balancer pool, but you're not allowed to, but 1553 01:31:38,900 --> 01:31:41,800 somehow Place some restriction where you can't use the bout, 1554 01:31:41,800 --> 01:31:47,100 the flash loan to go, do you know, you can't go user to do 1555 01:31:47,100 --> 01:31:49,600 something on unit swap, or a compound or whatever? 1556 01:31:49,600 --> 01:31:53,400 You know, free. Patrasche amongst balancer, 1557 01:31:53,400 --> 01:31:57,700 pools only that that seems like a, you know, as there's more the 1558 01:31:57,708 --> 01:32:01,700 quiddity than the arbitraging basically gets better and better 1559 01:32:02,200 --> 01:32:06,000 on balancer alone, that, that would be really interesting. 1560 01:32:06,100 --> 01:32:09,300 That would be interesting. So I think some mechanism like 1561 01:32:09,300 --> 01:32:15,500 that, Is needed and I also think it's it's probably coming but if 1562 01:32:15,500 --> 01:32:18,800 Steve how many investors perspective, I would want a very 1563 01:32:18,800 --> 01:32:23,200 clear answer to that before buying the berry token. 1564 01:32:24,300 --> 01:32:26,800 Well you can't buy the real token anyways right you have to 1565 01:32:27,000 --> 01:32:31,000 go well I'm sure that you can buy it on a balancer pool but 1566 01:32:31,300 --> 01:32:34,300 yeah perhaps I can do some liquidity minding to get that 1567 01:32:34,300 --> 01:32:36,800 tokens. I'm not sure right. 1568 01:32:36,800 --> 01:32:41,200 Yeah I mean it's certainly I feel it is a really Testing 1569 01:32:42,100 --> 01:32:45,800 project and I respect the idea a lot. 1570 01:32:47,200 --> 01:32:50,100 My next pick is, you know how the idea translates into 1571 01:32:50,100 --> 01:32:53,900 business model, but we have time to solve that, right? 1572 01:32:53,900 --> 01:32:58,700 Like, this is a long game. Crypto is a long game, so, Well, 1573 01:32:58,700 --> 01:33:00,400 looking forward to seeing how it turns out. 1574 01:33:00,400 --> 01:33:04,500 Yeah. I hope you enjoyed the interview 1575 01:33:04,500 --> 01:33:08,100 debrief and you can get access to it every week by becoming a 1576 01:33:08,100 --> 01:33:11,100 premium subscriber as a premium subscriber, you'll get access to 1577 01:33:11,100 --> 01:33:14,600 a private RSS feed where you can hear the debrief every week and 1578 01:33:14,600 --> 01:33:18,100 you also get enhanced features like full episode transcripts in 1579 01:33:18,100 --> 01:33:20,700 your podcast player and interview chapters that allow 1580 01:33:20,700 --> 01:33:23,700 you to easily skip to specific sections of the interview. 1581 01:33:23,900 --> 01:33:27,300 You also get exclusive access to Round, Table conversations and 1582 01:33:27,300 --> 01:33:30,600 bonus content we put out from time to time to learn more and 1583 01:33:30,600 --> 01:33:34,400 become a premium subscriber, get a premium Epicenter dot TV. 1584 01:33:34,500 --> 01:33:34,800 Thanks.