1 00:00:00,120 --> 00:00:02,720 FX offers 2 products. The first one is a leveraged 2 00:00:02,720 --> 00:00:05,320 product. It delivers leverage on EVE and 3 00:00:05,320 --> 00:00:09,120 BTC without funding costs. Without borrowing costs, users 4 00:00:09,120 --> 00:00:12,400 just pay a one time opening and closing fee and that's it. 5 00:00:12,400 --> 00:00:14,840 And in most cases they won't have to pay any fundings. 6 00:00:14,920 --> 00:00:17,960 And the difference with regular CDP is that we abstract the 7 00:00:17,960 --> 00:00:22,080 looping so we give overexposure to the collateral and we have 8 00:00:22,200 --> 00:00:26,200 this very innovative liquidation mechanism that prevents any hard 9 00:00:26,200 --> 00:00:29,280 liquidation. FX protocol is an evolved CDP. 10 00:00:29,480 --> 00:00:34,040 Whenever people are longing the collateral, it involves selling 11 00:00:34,080 --> 00:00:36,160 the stable coin for more collateral. 12 00:00:36,360 --> 00:00:37,800 Different pack keeping mechanisms. 13 00:00:37,840 --> 00:00:40,760 The first one is that stability pool on F of X. 14 00:00:40,760 --> 00:00:45,000 The stability pool is a yield strategy that takes both FX USD 15 00:00:45,000 --> 00:00:48,720 and USDC as pays assets. Each time FX USD is traded below 16 00:00:48,720 --> 00:00:53,360 1, the USDC from the YE strategy will buy a fixed USD in the 17 00:00:53,360 --> 00:00:56,760 market to put it closer to peg, and each time it's traded above 18 00:00:56,760 --> 00:01:00,000 1, it's sold back for USDC and goes back to the stability pool. 19 00:01:00,600 --> 00:01:03,760 Hey guys, I want to tell you about Nosis, a collective of 20 00:01:03,760 --> 00:01:06,600 builders creating real tools for real people on the open 21 00:01:06,600 --> 00:01:08,760 Internet. Nosis has been around since 22 00:01:08,760 --> 00:01:10,960 2015. In fact, it started as one of 23 00:01:10,960 --> 00:01:14,400 Ethereum's very first projects, and today it's grown to a whole 24 00:01:14,400 --> 00:01:17,080 ecosystem designed to make open finance actually work for 25 00:01:17,080 --> 00:01:19,680 everyday people. At the center of it all is Nosis 26 00:01:19,680 --> 00:01:21,520 Chain. It's a low cost, highly 27 00:01:21,520 --> 00:01:24,440 decentralized layer, one that's compatible with Etherium and 28 00:01:24,440 --> 00:01:26,600 secured by over 300,000 validators. 29 00:01:27,040 --> 00:01:29,760 So whether you're building a DAP, experimenting with D Phi, 30 00:01:29,800 --> 00:01:33,560 or working on autonomous agents, Nosis Chain gives you a solid, 31 00:01:33,560 --> 00:01:37,200 neutral foundation to build on. But Nosis is more than just 32 00:01:37,200 --> 00:01:39,600 infrastructure. It's also tools that people can 33 00:01:39,600 --> 00:01:41,800 actually use, like Circles, for example. 34 00:01:41,800 --> 00:01:44,120 Let's anyone issue their own digital currency through 35 00:01:44,120 --> 00:01:47,520 networks of trust, not banks. And then there's Metri. 36 00:01:47,640 --> 00:01:50,200 It's their smart contract wallet that makes it easy to access 37 00:01:50,200 --> 00:01:53,600 circles, manage group currencies, and even spend 38 00:01:53,600 --> 00:01:55,320 anywhere. Visa is accepted. 39 00:01:55,440 --> 00:01:59,280 Thanks to their integration with Nosus Pay, all this is governed 40 00:01:59,280 --> 00:02:03,200 by Nosus Dow where anyone can propose, vote and help guide the 41 00:02:03,200 --> 00:02:05,360 network. And if you want to get involved, 42 00:02:05,640 --> 00:02:07,320 running a validator is super easy. 43 00:02:07,680 --> 00:02:10,600 All you need is 1 GNO and some basic hardware. 44 00:02:11,160 --> 00:02:13,880 To learn more and start building on the open Internet, head to 45 00:02:13,880 --> 00:02:18,320 nosus dot IO nosus Building the Open Internet One Block at a 46 00:02:18,320 --> 00:02:21,000 Time. Welcome to Epicenter of the 47 00:02:21,000 --> 00:02:23,040 show, which talks about technologies, projects and 48 00:02:23,040 --> 00:02:24,960 startups driving decentralization and the global 49 00:02:24,960 --> 00:02:27,120 blockchain revolution. I'm Sebastian Kuchiro and today 50 00:02:27,120 --> 00:02:31,400 I'm here with Cyril, who is our core contributor at FX Protocol. 51 00:02:31,880 --> 00:02:37,120 FX is a really interesting yield bearing stablecoin that also 52 00:02:37,120 --> 00:02:40,840 utilizes A perps market. There's an interesting stability 53 00:02:40,840 --> 00:02:42,280 mechanism there that we'll get into. 54 00:02:42,720 --> 00:02:45,480 And also right now I think it's like probably one of the best 55 00:02:45,480 --> 00:02:50,640 yielding stable coins on the market with their stability pool 56 00:02:50,640 --> 00:02:52,760 yielding somewhere around like 1213%. 57 00:02:53,200 --> 00:02:56,360 So that's that's really sort of compelling and interesting. 58 00:02:56,360 --> 00:03:00,560 And I wanted to talk to you soon today about about FX and 59 00:03:00,880 --> 00:03:04,640 understand the core mechanism, you know, and also you know how, 60 00:03:04,640 --> 00:03:07,400 how they fit in the broader stable corn landscape. 61 00:03:07,400 --> 00:03:10,000 So hey, so nice, nice to see you today. 62 00:03:10,040 --> 00:03:12,760 Thanks for joining. Hey, thanks Sebastian for having 63 00:03:12,760 --> 00:03:14,240 me. It's a real pleasure to be here 64 00:03:14,240 --> 00:03:16,840 today. So, so you're actually based in 65 00:03:16,840 --> 00:03:18,280 France. I see you got the Ethereum 66 00:03:18,280 --> 00:03:21,880 France T-shirt. What's your like, What's your 67 00:03:21,880 --> 00:03:23,960 background? How did you get interested in 68 00:03:23,960 --> 00:03:26,320 D5? Like a, you know, have you 69 00:03:26,320 --> 00:03:28,360 worked in any of those big French protocols or? 70 00:03:28,880 --> 00:03:32,640 Yeah. I, I, I started D5 because I got 71 00:03:32,640 --> 00:03:35,360 wrecked with the crypto markets and I figured I wanted to make 72 00:03:35,360 --> 00:03:38,960 yields that and that getting yield on stable coins would be 73 00:03:39,160 --> 00:03:44,440 some somehow more predictable income than just betting on, on 74 00:03:44,440 --> 00:03:49,920 the market volatility. So and I had to, I had a bit of 75 00:03:51,720 --> 00:03:54,480 as funds on my on my company actually. 76 00:03:54,480 --> 00:03:57,640 And I went to the bank and I asked for yield opportunities to 77 00:03:57,640 --> 00:04:01,040 the bank and as a professional in France, they would offer me 78 00:04:01,040 --> 00:04:05,360 .15% APR with a six month look up. 79 00:04:06,040 --> 00:04:10,280 And I figured that it's point. 15% or 15%? 80 00:04:10,440 --> 00:04:13,360 No, no, .15 point 15 with a not 1%. 81 00:04:14,000 --> 00:04:19,079 Yeah, yeah. So I figured it was a theft and 82 00:04:19,079 --> 00:04:22,800 I should find something else. And I heard about Defy at that 83 00:04:22,800 --> 00:04:25,000 point. And, and actually what I didn't 84 00:04:25,000 --> 00:04:28,640 hear about Defy, I heard about Celsius as I was offering 85 00:04:28,640 --> 00:04:30,880 something like 8% and Nexo as well. 86 00:04:30,880 --> 00:04:35,760 And I started putting Euro there at the at that time and I 87 00:04:35,760 --> 00:04:38,640 figured, OK, how do these guys actually make yields? 88 00:04:38,640 --> 00:04:40,760 And this is how I heard about Defy. 89 00:04:40,880 --> 00:04:45,200 And it was right after the Defy summer and I bumped into a 90 00:04:45,200 --> 00:04:47,120 French community called Defy France. 91 00:04:47,520 --> 00:04:50,640 It's pretty close to maybe Lobster Dow, but for French 92 00:04:50,640 --> 00:04:53,240 people. And it's a group of Defy 93 00:04:53,240 --> 00:04:59,480 passionate people talking mostly about Defy and with 0 bullshit, 94 00:04:59,480 --> 00:05:02,000 it's mostly doing about building stuff. 95 00:05:02,000 --> 00:05:03,960 And there's a lot of builders actually in the group. 96 00:05:04,560 --> 00:05:07,800 And I started by reading everything, every single message 97 00:05:07,800 --> 00:05:10,400 in that group for months. And I learned a lot of stuff 98 00:05:10,800 --> 00:05:14,360 starting practicing Defy as well and getting involved into Defy 99 00:05:14,360 --> 00:05:18,840 France by sharing what I learned from the community and 100 00:05:18,840 --> 00:05:23,360 organizing meetups in Toulouse. And I've organized almost a meet 101 00:05:23,360 --> 00:05:25,160 up a month for the past three years. 102 00:05:25,160 --> 00:05:27,720 I just stopped before this summer. 103 00:05:28,360 --> 00:05:32,360 And this is how I I got to meet with people that came to the 104 00:05:32,360 --> 00:05:35,440 meet up to talk about their their projects and stuff like 105 00:05:35,440 --> 00:05:39,840 that and how I got people to reach out to me to get my 106 00:05:40,640 --> 00:05:45,560 opinion and different stuff. And regarding F of X, I did a 107 00:05:45,560 --> 00:05:50,520 meet up about F of X in September 23, so right after the 108 00:05:50,520 --> 00:05:53,840 first iteration launch. I've been following Aladdin Dao 109 00:05:53,840 --> 00:05:57,840 which is the the DAO behind F of X and and as well as 110 00:05:57,920 --> 00:05:59,920 concentrator and clever protocols. 111 00:06:00,440 --> 00:06:03,560 I've been following the DAF since the beginning and when I 112 00:06:03,560 --> 00:06:07,560 first read about F of XI just loved the design so I figured I 113 00:06:07,560 --> 00:06:12,040 should make a meet up about it and shared it on the community 114 00:06:12,040 --> 00:06:14,360 and this is how I I started to contribute to the project. 115 00:06:15,840 --> 00:06:18,360 Cool. I think like doing meetups is 116 00:06:18,360 --> 00:06:24,280 such an underrated kind of low lift thing that you can do early 117 00:06:24,280 --> 00:06:28,560 in your crypto journey. I organized a few meetups back 118 00:06:28,560 --> 00:06:33,520 in the day, Lille in the north of France and like, yeah, I 119 00:06:33,520 --> 00:06:35,480 know, like, you know, Brian, my Co founder here at Epicenter, 120 00:06:35,480 --> 00:06:37,640 like also organized like quite a few minutes in Berlin. 121 00:06:37,640 --> 00:06:42,160 And it's such a great way like meet people who, you know, you 122 00:06:42,160 --> 00:06:44,400 don't necessarily see online, right, like, but like they come 123 00:06:44,400 --> 00:06:45,640 out of the woodwork for the meet ups, right? 124 00:06:45,640 --> 00:06:49,200 And they they they it it built. It's like great great way to 125 00:06:49,200 --> 00:06:51,560 build a connection. Yeah, exactly. 126 00:06:51,560 --> 00:06:56,080 And it's one of of these few ecosystems left in which you can 127 00:06:56,680 --> 00:07:02,040 easily access to people that makes that make the ecosystem 128 00:07:02,480 --> 00:07:07,080 and as and you and you can just a gift to the community and and 129 00:07:07,080 --> 00:07:09,720 it will just bring so many opportunities, you know, just by 130 00:07:09,720 --> 00:07:18,120 being genuinely sharing stuff, it just just meet people and and 131 00:07:18,120 --> 00:07:20,320 it brings opportunity. Yeah, yeah. 132 00:07:20,320 --> 00:07:22,280 I guess what I'm trying to say is like, even, you know, even 133 00:07:22,280 --> 00:07:25,040 like 15 years into crypto, there's still opportunity for 134 00:07:25,040 --> 00:07:26,560 people to like have to. Yeah, exactly. 135 00:07:26,560 --> 00:07:31,720 It's like, like I encourage anybody to do that and like 136 00:07:31,720 --> 00:07:33,000 what, what's the relationship like? 137 00:07:33,000 --> 00:07:35,600 Well, what is Aladdin DAO and the relationship there? 138 00:07:35,600 --> 00:07:39,400 And you know someone was already working on FX before you started 139 00:07:39,400 --> 00:07:42,000 contributing to it and. Yeah, Yeah, it's a good 140 00:07:42,000 --> 00:07:44,480 question. Aladdin DAO is the DAO that 141 00:07:44,480 --> 00:07:48,240 builds F of X protocol. So it's the same team basically. 142 00:07:48,520 --> 00:07:51,960 And Aladdin started as an investment DAO something like 143 00:07:52,520 --> 00:07:56,240 four years ago and but it quickly created it's first 144 00:07:56,240 --> 00:08:01,240 protocol to just to to get what was missing to them in the 145 00:08:01,240 --> 00:08:04,160 define landscape. So this they they launched, I 146 00:08:04,160 --> 00:08:06,600 wasn't there, I wasn't contributing there at that 147 00:08:06,600 --> 00:08:08,800 point, but I was a user. Actually, they launched 148 00:08:08,800 --> 00:08:15,920 concentrator, I believe in 2021 maybe or 22. 149 00:08:16,400 --> 00:08:20,560 And and then clever, so considerate in a, in a nutshell, 150 00:08:20,560 --> 00:08:27,600 is an auto compounder protocol. So it auto compounds your 151 00:08:27,600 --> 00:08:30,680 yields, but instead of compounding into the underlying, 152 00:08:30,680 --> 00:08:34,159 it lets you compound into another yield bearing assets 153 00:08:34,159 --> 00:08:40,039 such as Steve, for instance, or, or since since Aladdin that has 154 00:08:40,080 --> 00:08:42,440 been very close with the Curve ecosystem in the first days, 155 00:08:43,159 --> 00:08:46,720 you, you can compound your CRV, for instance, instead of 156 00:08:46,720 --> 00:08:50,080 compounding stablecoins. So it's kind of it's a protocol 157 00:08:50,080 --> 00:08:58,280 that lets you DCA with your D5 farming basically and that was 158 00:08:58,280 --> 00:09:00,920 so that's the first protocol. It's still around with the over 159 00:09:00,920 --> 00:09:05,680 100 million TBL. And the second is clever that 160 00:09:05,680 --> 00:09:13,480 lets you leverage your CVX farming basically with without 161 00:09:13,480 --> 00:09:16,280 liquidation. And so the first two protocols 162 00:09:16,280 --> 00:09:19,800 are very deep into the Curve and convex ecosystem, while the 163 00:09:19,800 --> 00:09:25,080 third one, which is F of X solves the, the, the problem of 164 00:09:25,080 --> 00:09:26,880 decentralized Stabrocoins basically. 165 00:09:27,200 --> 00:09:29,960 And what I've loved, what I loved about, about the design is 166 00:09:29,960 --> 00:09:33,720 that it brings a real decentralized alternative into 167 00:09:33,720 --> 00:09:38,240 the Stabrocoins landscape. And it was the the origin of F 168 00:09:38,240 --> 00:09:42,840 of F of X is actually the USDCD peg in March 23, because Aladdin 169 00:09:42,840 --> 00:09:47,560 DA with the existing 2 protocols had a treasury mostly made of 170 00:09:47,560 --> 00:09:51,880 USDC. And they just figured it's such 171 00:09:51,880 --> 00:09:57,600 a nonsense to build defy in, in, in, in on the most centralized 172 00:09:57,680 --> 00:10:03,720 infrastructure and to rely on on centralized stable coins and to 173 00:10:03,960 --> 00:10:08,280 depend on on Trotfy even such as the SVB failure. 174 00:10:08,840 --> 00:10:14,360 And this is how the idea of F of X was raised in the 1st place. 175 00:10:14,360 --> 00:10:19,720 And and if it evolved to what it is today and today we managed to 176 00:10:19,720 --> 00:10:27,040 to bootstrap FXUSD to over 100 million market cap as well while 177 00:10:27,040 --> 00:10:31,440 having no VC funding while doing things 100% organically. 178 00:10:33,040 --> 00:10:37,360 Yeah, No, I I agree that like the the IT, it's, it's, it feels 179 00:10:37,360 --> 00:10:40,320 like such a huge failure on the part of the ecosystem. 180 00:10:40,320 --> 00:10:42,560 Sometimes. I think like the fact that 181 00:10:42,720 --> 00:10:46,920 centralized Sable coins have of dominance over the stable coin 182 00:10:46,920 --> 00:10:52,200 market feels like a pretty big failure on the part of, you 183 00:10:52,200 --> 00:10:53,840 know, proponents of decentralized tech. 184 00:10:53,840 --> 00:10:57,320 And it's really unfortunate that, you know, protocols like 185 00:10:57,320 --> 00:10:59,840 die and, and other decentralized stable coins haven't picked up 186 00:10:59,840 --> 00:11:03,640 more, more adoption than than they have. 187 00:11:03,640 --> 00:11:05,440 I mean, like there's sizable adoption, right? 188 00:11:05,440 --> 00:11:09,000 But it's like it's nowhere near where USDC and Tether are at. 189 00:11:09,320 --> 00:11:12,240 I mean, there's like a lot of regulatory risk there. 190 00:11:12,240 --> 00:11:15,680 And also, you know, DPEG risks and, and these sorts of off 191 00:11:15,680 --> 00:11:20,040 chain risks, what what is like the kind of core value that you 192 00:11:20,040 --> 00:11:23,720 think sort of the core tenants that a decentralized stable coin 193 00:11:24,080 --> 00:11:26,800 protocol should embody? Like, you know, if you had to 194 00:11:27,520 --> 00:11:29,720 kind of put characteristics on what's like an ideal 195 00:11:29,720 --> 00:11:32,480 decentralized stable coin protocol looks like, what would 196 00:11:32,480 --> 00:11:35,880 those be? Yeah, I think for a 197 00:11:35,880 --> 00:11:39,160 decentralized stable coin to work, people need to to to trust 198 00:11:39,160 --> 00:11:42,120 it to be reliable. So he needs to have a good peg 199 00:11:42,120 --> 00:11:47,280 obviously, and and to be liquid enough so that you can come and 200 00:11:47,280 --> 00:11:51,880 and buy it and set it in size. And it had, it needs to be 201 00:11:52,000 --> 00:11:54,760 collateralized so that the peg actually stays. 202 00:11:54,880 --> 00:11:57,960 So it's not just liquidity, but it's actually a good peg by 203 00:11:57,960 --> 00:12:02,520 design and good backing and and it also needs to to be scalable. 204 00:12:02,520 --> 00:12:06,640 It it all goes back to the stable control lemma. 205 00:12:07,600 --> 00:12:12,920 It needs to be, in my opinion, mostly on chain because so that 206 00:12:12,920 --> 00:12:16,440 you can abstract trust from it and just trust the code instead 207 00:12:16,440 --> 00:12:18,960 of trusting entities and and people. 208 00:12:19,520 --> 00:12:25,480 And yeah, that's that's and and and and it also brings 209 00:12:25,880 --> 00:12:30,240 censorship resistance with by by being on chain. 210 00:12:30,480 --> 00:12:33,840 So that's all these different key components. 211 00:12:33,840 --> 00:12:37,120 I guess that makes a good decentralized stable coin. 212 00:12:37,720 --> 00:12:40,080 In my opinion, the beauty of Ethereum is and, and 213 00:12:40,080 --> 00:12:43,560 decentralization is that it abstracts trust and abstracting 214 00:12:43,560 --> 00:12:46,400 trust from finance reduce the risk, right? 215 00:12:46,840 --> 00:12:50,080 And it's just like people just forget about this and, and, and, 216 00:12:50,080 --> 00:12:54,600 and just like the the trust file is used to, to, to, to trust and 217 00:12:54,600 --> 00:12:56,760 to have someone to sue if anything goes wrong. 218 00:12:57,120 --> 00:13:00,520 And why we can't just avoid trusting people using Ethereum. 219 00:13:01,000 --> 00:13:04,480 And in my opinion, makes a lot of sense to, to embrace that 220 00:13:04,480 --> 00:13:08,200 technology and to, to bring and, and this is actually what we do 221 00:13:08,200 --> 00:13:10,680 with FOX. We manage to deliver higher risk 222 00:13:10,680 --> 00:13:15,600 with lower, higher, sorry, that's higher rewards with 223 00:13:15,600 --> 00:13:19,080 lower, lower risks because there is no trust involved. 224 00:13:19,080 --> 00:13:23,880 And and in my opinion, that's a, a, a paradigm change that will 225 00:13:24,360 --> 00:13:28,400 come at some point with when they most of the new transfer 226 00:13:28,400 --> 00:13:32,920 guys would be crypto native and understand that that value 227 00:13:32,920 --> 00:13:35,920 proposition. Yeah, I certainly hope so. 228 00:13:35,920 --> 00:13:39,920 I mean like there's there's a, you know, centralized stable 229 00:13:39,920 --> 00:13:43,200 coins, you know, have a lot of have a lot of tailwinds. 230 00:13:43,200 --> 00:13:48,960 So, you know, and, and they have, I think, like for for that 231 00:13:48,960 --> 00:13:52,520 to happen, I mean, you know, it could happen, it could happen 232 00:13:52,520 --> 00:13:54,040 that like decentralized stable coins take over. 233 00:13:54,040 --> 00:13:56,440 But they would have to be some catastrophic event that like 234 00:13:56,800 --> 00:14:01,840 really erodes the trust in like tether or USDC to the point 235 00:14:01,840 --> 00:14:04,160 where, you know, decentralized stable course can kind of like 236 00:14:04,160 --> 00:14:06,960 come in and start taking that. I, I don't know that I think 237 00:14:06,960 --> 00:14:10,240 that, you know, decentralized stable coins can like slowly 238 00:14:10,240 --> 00:14:15,440 start creeping up and, and, and building up issuance to, to 239 00:14:15,480 --> 00:14:19,040 really surpass in a meaningful way, you know, the, the main 240 00:14:19,040 --> 00:14:21,600 centralized ones. I don't think, I don't think 241 00:14:21,600 --> 00:14:26,000 they will take over because the the centralized one will 242 00:14:26,000 --> 00:14:30,320 probably always be more convenient and and scalable That 243 00:14:30,320 --> 00:14:33,640 that's that's a fact. But I also believe that 244 00:14:33,640 --> 00:14:36,680 centralized table coin will all eventually disappoint at some 245 00:14:36,680 --> 00:14:39,960 point. And, and at that point, people 246 00:14:39,960 --> 00:14:42,600 will need a reliable alternative to use. 247 00:14:42,960 --> 00:14:47,080 And why would you use a more risky stable coin? 248 00:14:47,080 --> 00:14:50,640 So a more trusted stable coin with low risks, while you can 249 00:14:50,960 --> 00:14:54,240 most of the time use a decentralized one with higher, 250 00:14:56,800 --> 00:15:00,080 higher yields. You know, the idea is just to, 251 00:15:00,080 --> 00:15:03,480 to, to offer a reliable alternative. 252 00:15:03,480 --> 00:15:05,640 And this is what what we're doing. 253 00:15:05,640 --> 00:15:11,440 And and looks like people understand it since the protocol 254 00:15:11,440 --> 00:15:16,000 has grown pretty well lately. Yeah, that makes sense. 255 00:15:17,160 --> 00:15:19,080 I think. I think also maybe there's still 256 00:15:19,080 --> 00:15:21,640 like some lingering fear about decentralized stablecoins, 257 00:15:21,640 --> 00:15:26,360 right? Like where with with UST. 258 00:15:28,080 --> 00:15:31,040 So that might also contribute a little bit. 259 00:15:31,520 --> 00:15:33,880 I think also generally they're they're, they're harder to 260 00:15:33,880 --> 00:15:36,000 understand right then like a centralized stable coin. 261 00:15:36,000 --> 00:15:37,560 Like centralized stable coin people know like, hey, there's 262 00:15:37,560 --> 00:15:40,840 an institution behind this. There's all these banks, there's 263 00:15:40,840 --> 00:15:44,640 like, you know, KPMG audits to save the money's there. 264 00:15:45,160 --> 00:15:47,360 I, you know, I get that because that's like the model that most 265 00:15:47,360 --> 00:15:51,120 people are familiar with, with the decentralized stablecoin. 266 00:15:51,120 --> 00:15:53,280 Like, you know, you have to listen to our one podcast like 267 00:15:53,280 --> 00:15:54,440 this. So like, understand what the 268 00:15:54,440 --> 00:15:58,080 fuck's going on and. Again, it goes back to that 269 00:15:58,080 --> 00:16:02,880 trust paradigm of, of of the the old word in a, in a way. 270 00:16:03,440 --> 00:16:08,360 But yeah, definitely there's a PTSD of of UST and in most 271 00:16:08,360 --> 00:16:11,400 people I meet and and when the first question they ask about 272 00:16:11,640 --> 00:16:15,360 FXUSD is, is it an algorithmic stable coin because they heard 273 00:16:15,360 --> 00:16:17,120 about this. Yeah. 274 00:16:17,720 --> 00:16:22,360 It's dangerous and yeah, now it's fully collateralized with 275 00:16:22,400 --> 00:16:26,720 exogenous collaterals distance like stable coin. 276 00:16:27,960 --> 00:16:29,640 Cool. Yeah, Well, let let's maybe get 277 00:16:29,640 --> 00:16:30,840 into a little bit of how it works. 278 00:16:30,840 --> 00:16:34,400 And like the first time we chatted, you described it as 279 00:16:34,400 --> 00:16:40,720 sort of an evolution on the CDP model that Maker introduced to 280 00:16:40,720 --> 00:16:42,680 the world, I guess back in like 2016. 281 00:16:43,080 --> 00:16:46,720 So maybe maybe using that as a, you know, if that's helpful, 282 00:16:46,720 --> 00:16:48,600 using that as a comparison, 'cause I think a lot of people 283 00:16:48,600 --> 00:16:52,880 have that model and understand that model. 284 00:16:53,040 --> 00:16:55,680 Yeah, you know, how's it work and what are the different 285 00:16:55,680 --> 00:16:58,160 components? Yeah, for for people used to the 286 00:16:58,160 --> 00:17:01,960 CDP model, it's the easiest way to understand how FX works. 287 00:17:02,720 --> 00:17:08,599 It's it's indeed an evolved CDP design in the way that. 288 00:17:09,400 --> 00:17:12,839 So FX offers 22 products. The first one is a leveraged 289 00:17:12,839 --> 00:17:15,720 product. So it it, it delivers leverage 290 00:17:15,760 --> 00:17:18,800 on EVE and BTC or BTC. You can. 291 00:17:18,800 --> 00:17:23,079 You can choose directional leverage with without funding 292 00:17:23,079 --> 00:17:26,560 costs, without borrowing costs. Users just pay a one time 293 00:17:26,560 --> 00:17:28,640 opening and closing fee and that's it. 294 00:17:28,640 --> 00:17:31,120 And in most cases they won't have to pay any fundings. 295 00:17:31,240 --> 00:17:39,200 It can happen in very rare occasions, but so it brings 296 00:17:39,200 --> 00:17:43,000 predictability in the cost. And the difference with regular 297 00:17:43,000 --> 00:17:45,320 CDP is that we abstract the looping. 298 00:17:45,320 --> 00:17:49,720 So we give overexposure to the collateral just just like if you 299 00:17:49,720 --> 00:17:54,920 would use ACDP with looping protocols such as Defy Saver or 300 00:17:54,920 --> 00:17:58,080 Contango or stuff like that to get directional leverage, we 301 00:17:58,080 --> 00:18:01,240 abstract it, we, we include it into the, the, the product. 302 00:18:01,760 --> 00:18:05,280 So that's called expositions for the lungs, expositions for the 303 00:18:05,280 --> 00:18:08,240 shorts. You get directional leverage up 304 00:18:08,240 --> 00:18:11,000 to 7X predictable cost, just a one time fee. 305 00:18:11,880 --> 00:18:15,760 And we have this very innovative liquidation mechanism that 306 00:18:15,760 --> 00:18:19,760 prevents any hot liquidation. So you don't you don't get the 307 00:18:20,120 --> 00:18:25,040 half or 100 or the the entire position wiped out with a with 308 00:18:25,320 --> 00:18:29,720 if the market goes on the opposite side and you get this 309 00:18:29,720 --> 00:18:34,800 very progressive liquidation that keeps you as much exposure 310 00:18:34,800 --> 00:18:37,480 as possible and reduce the the risk. 311 00:18:37,800 --> 00:18:42,360 So on the leverage side, in a way it's a zero stress leverage. 312 00:18:42,360 --> 00:18:49,480 It's just a Zen perp if if you want using the CDP model in in 313 00:18:49,480 --> 00:18:51,320 the back end. OK. 314 00:18:51,560 --> 00:18:54,440 So maybe we'll stop it there and and kind of go over those 315 00:18:54,440 --> 00:18:57,640 different parts yet. So, right. 316 00:18:57,640 --> 00:19:01,080 So comparing to the CDP model, CDP you borrow against 317 00:19:01,080 --> 00:19:03,800 collateral, but leverage isn't included in the protocol. 318 00:19:03,800 --> 00:19:06,840 Typically people get that leverage by going through some 319 00:19:07,000 --> 00:19:11,040 external protocol like D5 saver or maybe Insta DAP and they're 320 00:19:11,040 --> 00:19:13,880 they're do they're kind of exporting the looping 321 00:19:13,880 --> 00:19:16,120 functionality to that protocol and then. 322 00:19:16,120 --> 00:19:18,520 Bringing the collateral by Yeah, like of the. 323 00:19:19,040 --> 00:19:20,800 Yeah, yeah, it's a huge pain in the ass. 324 00:19:20,800 --> 00:19:22,800 Like I've done this. It's just really painful and 325 00:19:22,800 --> 00:19:24,960 kind of scary to do. So like, and then you bring the 326 00:19:24,960 --> 00:19:26,800 collateral back and then they'll, you know, you're doing 327 00:19:26,800 --> 00:19:28,920 this loop and you may like get some levers from that. 328 00:19:31,280 --> 00:19:36,080 F of X has this built in so you can do up to 77X leverage. 329 00:19:36,480 --> 00:19:40,320 And then the the other part that you mentioned is that there's a 330 00:19:40,360 --> 00:19:44,440 gradual liquidation mechanism, which means that your collateral 331 00:19:44,440 --> 00:19:51,120 isn't liquidated in sort of a single transaction, It's more. 332 00:19:52,960 --> 00:19:55,440 It's very progressive. It's progressive, right? 333 00:19:55,440 --> 00:20:01,360 So, and I guess I've never thought of this, but like what 334 00:20:01,360 --> 00:20:04,200 makes that possible? And why is it that typically 335 00:20:04,200 --> 00:20:06,520 lighting protocols don't have a progressive? 336 00:20:07,520 --> 00:20:10,200 It's a very good question. Liquidation mechanism. 337 00:20:10,800 --> 00:20:15,080 Yeah, thank you for asking this. The why the other CDP don't do 338 00:20:15,080 --> 00:20:16,640 this is is because most of them we're. 339 00:20:16,640 --> 00:20:19,080 Just lending protocols basically, like, you know, why 340 00:20:19,080 --> 00:20:20,840 wouldn't Ave. kind of have this, you know? 341 00:20:21,040 --> 00:20:22,440 Progressive. Lending mechanism. 342 00:20:23,120 --> 00:20:26,680 Can't do this because they handle each leverage positions 343 00:20:26,680 --> 00:20:28,920 individually. So to make the liquidation 344 00:20:28,920 --> 00:20:33,160 profitable, it needs to be large enough so that the the keeper of 345 00:20:33,160 --> 00:20:37,160 the liquidator will actually be profitable to by handling the 346 00:20:37,160 --> 00:20:40,120 liquidation. And the the main difference with 347 00:20:40,120 --> 00:20:43,640 F of X is, is that all the leverage positions are handled 348 00:20:43,640 --> 00:20:48,600 together based on the the on on price ticks basically. 349 00:20:48,600 --> 00:20:53,640 So we aggregate every positions at risks to together to process 350 00:20:53,640 --> 00:20:57,200 the the liquidations. Meaning the liquidations are 351 00:20:57,200 --> 00:21:00,760 profitable even if the individual liquidation is very 352 00:21:00,760 --> 00:21:03,920 small. So to to illustrate the the 353 00:21:03,920 --> 00:21:09,200 design, if you're familiar with the LTV concept, each time your 354 00:21:09,200 --> 00:21:14,240 leverage position crosses 88% LTV, the protocol puts it back 355 00:21:14,240 --> 00:21:16,600 at 88% LTV, no matter the amount. 356 00:21:16,600 --> 00:21:20,760 It represents the dollar amount, the value of the liquidation so 357 00:21:20,760 --> 00:21:24,320 that your position never reaches 95% hard liquidation team. 358 00:21:24,960 --> 00:21:29,560 If that process ever fails and your position reaches 95% LTV, 359 00:21:29,680 --> 00:21:32,240 at that point the whole position is liquidated. 360 00:21:32,800 --> 00:21:35,560 So. But in most cases it shouldn't 361 00:21:35,560 --> 00:21:39,600 happen because yeah, it it it works. 362 00:21:41,000 --> 00:21:45,440 So you're kind of socializing the liquidate, the liquidation 363 00:21:45,440 --> 00:21:47,720 mechanism, Is that exactly the way we look at it? 364 00:21:48,400 --> 00:21:49,920 Yeah, it's a good way of of saying it. 365 00:21:49,920 --> 00:21:54,280 Yeah, it's so socialized. OK, interesting. 366 00:21:54,280 --> 00:21:57,520 And and no other D5 protocol does this like your lending 367 00:21:57,520 --> 00:22:01,800 people. Yeah, recently Fluid came up 368 00:22:02,200 --> 00:22:06,000 with a similar approach. They have this whole base 369 00:22:06,000 --> 00:22:09,680 liquidity layer, but it it's way, it's a way bigger machine, 370 00:22:09,680 --> 00:22:12,760 you know, because it's a it's a whole lending protocol and decks 371 00:22:12,760 --> 00:22:15,920 and and so on. We need it's on the FX side is 372 00:22:15,920 --> 00:22:18,960 way syncher it's just two collaterals and and CDP, you 373 00:22:18,960 --> 00:22:23,760 know, but they have a a similar approach in a way. 374 00:22:23,920 --> 00:22:27,680 The main difference on their side is I believe that the the 375 00:22:28,720 --> 00:22:33,880 liquidation penalty can fluctuates while on F of X it's 376 00:22:33,880 --> 00:22:40,760 it's fixed 2.5, on fluid I believe it goes from 1% to 8% 377 00:22:40,760 --> 00:22:42,400 so. Maybe just to put this another 378 00:22:42,400 --> 00:22:47,240 way, say we compare with Ave. Like Ave. each position is can 379 00:22:47,240 --> 00:22:49,800 be liquidated, has to be liquidated individually to 380 00:22:49,800 --> 00:22:51,160 protect the underlying collateral. 381 00:22:51,320 --> 00:22:55,600 Here, the underlying collateral is kind of pooled to represent 382 00:22:55,600 --> 00:22:59,960 all of the positions. And you know that that 383 00:22:59,960 --> 00:23:02,840 collateral is going to secure your position as much as it's 384 00:23:02,840 --> 00:23:06,000 going to secure someone else's. And the different positions may 385 00:23:06,000 --> 00:23:11,000 have different sort of collateral ratios relative to 386 00:23:11,000 --> 00:23:15,160 the overall collateral, which which is where you get this kind 387 00:23:15,160 --> 00:23:17,520 of socialization mechanism. So someone else's collateral is 388 00:23:17,520 --> 00:23:19,920 kind of like backing your position. 389 00:23:20,880 --> 00:23:23,120 Right. Not, not, not exactly. 390 00:23:23,120 --> 00:23:27,240 Your position is actually like your, your position collateral 391 00:23:27,240 --> 00:23:32,800 ratio is is monitored, you know, so there's no, you're, you're 392 00:23:32,800 --> 00:23:37,560 not actually. Each long position has its own 393 00:23:37,560 --> 00:23:41,280 collateral, but it's all cooled together and and all the, all 394 00:23:41,280 --> 00:23:45,800 the, the the leverage positions are monitored together. 395 00:23:46,040 --> 00:23:52,320 So and instead of of liquidating each position individually, you 396 00:23:52,320 --> 00:23:56,200 look at what's at risk on each position considering the current 397 00:23:56,200 --> 00:23:58,680 price and you liquidate everything all together. 398 00:23:59,840 --> 00:24:04,320 Is that is that easier way? Yeah, I think, I think that 399 00:24:04,800 --> 00:24:06,240 makes more sense. OK. 400 00:24:06,840 --> 00:24:10,640 And what kind of complications does this in does this because 401 00:24:10,640 --> 00:24:11,720 there's always trade-offs, right. 402 00:24:11,720 --> 00:24:14,160 So like what? What's the SO trade off of this 403 00:24:14,160 --> 00:24:19,520 approach? Regarding other landing, landing 404 00:24:19,520 --> 00:24:26,040 and liquidation design or or even CTPI think it's just it's 405 00:24:26,040 --> 00:24:29,400 just better because it enables higher LTV. 406 00:24:29,400 --> 00:24:33,440 This is how we we managed to deliver up to 7X while on RV for 407 00:24:33,440 --> 00:24:37,320 instance, you would get like 5X stops on on E for BTC. 408 00:24:38,440 --> 00:24:42,880 It is it, it gives us like I liquidating way more 409 00:24:42,880 --> 00:24:47,600 progressively. It it's, it's, it's, it's more 410 00:24:47,600 --> 00:24:50,520 secure in a way. Right. 411 00:24:50,760 --> 00:24:55,120 But is it, are there like unintended trade-offs like for 412 00:24:55,120 --> 00:24:57,640 example, like the the fee, you know, the the fees you can 413 00:24:57,640 --> 00:25:03,160 charge are lower or like you know, liquidations liquid like 414 00:25:03,160 --> 00:25:06,360 liquidators are less efficient. Like there must be some some 415 00:25:06,360 --> 00:25:09,680 trade off, right? On the liquidation side, no, I 416 00:25:09,680 --> 00:25:13,720 don't think, I don't, I don't think, I can't think of any 417 00:25:13,720 --> 00:25:16,480 trade off here. It's it's actually a more 418 00:25:16,480 --> 00:25:21,760 efficient way of of doing things now. 419 00:25:21,760 --> 00:25:23,960 I don't think of any trade off on that on that side. 420 00:25:23,960 --> 00:25:27,040 Actually the the cost of liquid of the liquidations is like the 421 00:25:27,320 --> 00:25:29,920 liquidation penalty, which is a keeper bounty. 422 00:25:29,920 --> 00:25:34,880 It's actually the same. It's way lower than on, on other 423 00:25:34,880 --> 00:25:37,560 money markets. For instance, if you compare 424 00:25:37,560 --> 00:25:41,120 with RV, when you get liquidated in RV, I believe it's, it's at 425 00:25:41,120 --> 00:25:46,160 least 5% penalty or maybe 10. And and the, the liquidation on 426 00:25:46,160 --> 00:25:50,720 TV on, on if it's or, or stiff something like 80% while it it's 427 00:25:50,720 --> 00:25:56,400 88 on F of X and, and when you get liquidated, you can get up 428 00:25:56,400 --> 00:25:59,160 to 50% of your position instantly rebate. 429 00:26:00,880 --> 00:26:05,680 That's a hit. You know, on F of X it can be as 430 00:26:06,080 --> 00:26:08,920 small as just .1% of your position wiped out. 431 00:26:08,920 --> 00:26:12,720 If the price just touches it and, and goes up again, you 432 00:26:12,720 --> 00:26:17,800 don't, don't get wiped more. The penalty is just .5%. 433 00:26:19,840 --> 00:26:24,120 These are our money market. It's, it's way more secure and 434 00:26:24,120 --> 00:26:31,320 efficient and it, it brings like relief in terms of how you see 435 00:26:31,320 --> 00:26:36,040 liquidations to compare with a regular centralized perp. 436 00:26:36,760 --> 00:26:39,920 It's still, since it's on chain, it's the, the liquidation of the 437 00:26:39,920 --> 00:26:43,920 TV, even if it's a partial progressive liquidation is still 438 00:26:43,920 --> 00:26:48,160 lower than on, on their centralized perp because like 439 00:26:48,160 --> 00:26:52,920 liquidations are processed with a 99.5% of TV on, on Binance, 440 00:26:52,920 --> 00:26:55,720 for instance. But it's a, it's just a 441 00:26:55,720 --> 00:26:56,880 different approach. You know it's. 442 00:26:59,120 --> 00:27:03,320 And so with this approach, you have near capital 100% capital 443 00:27:03,320 --> 00:27:07,680 efficiency like border to lending is nearly 100%. 444 00:27:07,680 --> 00:27:11,040 No, it's, it's still over collateralized, but it, it's 445 00:27:11,080 --> 00:27:16,240 since since it's more efficient, we, it's we, we can have a, a 446 00:27:16,520 --> 00:27:19,480 lower collateral overall collateral ratio than on the 447 00:27:19,480 --> 00:27:22,440 other CDPS. So it's more capital efficient 448 00:27:22,440 --> 00:27:26,360 than than previous CDPS. It's still obviously less 449 00:27:26,920 --> 00:27:29,840 scalable than a centralized stable coin, obviously because 450 00:27:29,840 --> 00:27:34,760 it's over collateralized, but still it it brings it a better 451 00:27:34,760 --> 00:27:38,800 compromise than anything before. OK. 452 00:27:39,800 --> 00:27:43,400 I'm I'm looking at the website, it says that $4 billion for 453 00:27:43,400 --> 00:27:46,240 almost $5 billion have been liquidated last month on other 454 00:27:46,240 --> 00:27:48,960 perp solutions and FX has 0 liquidations. 455 00:27:50,120 --> 00:27:56,320 Yeah, because like the hot liquidations only happened once. 456 00:27:56,320 --> 00:27:59,920 It was in the first days of the the current iteration of the 457 00:27:59,920 --> 00:28:04,800 protocol when there wasn't enough keepers processing the 458 00:28:05,160 --> 00:28:10,400 the, the the liquidation break. So that's the some position 459 00:28:10,400 --> 00:28:14,720 reaches not reached reached 95% LTV and got liquidated. 460 00:28:15,080 --> 00:28:18,520 But since that evidence, it wasn't on February the second or 461 00:28:18,520 --> 00:28:21,480 something like that, there was a massive liquidation event on the 462 00:28:21,480 --> 00:28:25,160 market. And since that dates there, 463 00:28:25,600 --> 00:28:28,080 there was no hard liquidations on Evox. 464 00:28:28,440 --> 00:28:34,840 Some got partially reduced in a way, but there was no hard 465 00:28:34,840 --> 00:28:38,240 liquidations. And the main, the main, the main 466 00:28:38,520 --> 00:28:43,760 point of of this design is that the leverage users keep as much 467 00:28:43,760 --> 00:28:47,280 exposure as possible to recover with the market. 468 00:28:47,280 --> 00:28:50,880 If the market ever recovers, if they made a bad trade, it won't, 469 00:28:50,880 --> 00:28:52,680 it won't save them. You know, if the market just 470 00:28:52,680 --> 00:28:56,800 crashes and goes to 0, they will go to 0, you know, but way more 471 00:28:56,800 --> 00:29:00,280 progressively than on any other Unchained leverage solution. 472 00:29:01,800 --> 00:29:04,800 Another thing you mentioned is that the that there's no funding 473 00:29:04,800 --> 00:29:08,920 rate for the leverage trades. You just have this one time fee. 474 00:29:10,000 --> 00:29:11,760 What's unique? What's unique about this 475 00:29:11,760 --> 00:29:13,760 approach? What does it enable? 476 00:29:14,280 --> 00:29:18,280 It's been it has been done before by Liquidy for instance. 477 00:29:18,280 --> 00:29:23,520 With the LUSD it was similar in a way people would just pay a 478 00:29:23,520 --> 00:29:26,960 one time opening fee. But the the main difference here 479 00:29:26,960 --> 00:29:33,120 is that CDP elect LUSD could couldn't scale because they had 480 00:29:33,480 --> 00:29:39,120 massive peg issues like the the LUSD peg is is not reliable 481 00:29:39,120 --> 00:29:43,320 enough to actually hold the LUSD because you end up buying it at 482 00:29:43,320 --> 00:29:49,000 11.05 and setting it at at .99. So it's not reliable enough. 483 00:29:49,000 --> 00:29:55,920 And we fixed this by still having this just fixed one time 484 00:29:55,920 --> 00:30:00,800 opening fee and closing fee. But we only add a small funding 485 00:30:01,320 --> 00:30:03,120 if the stable crime is ever depegged. 486 00:30:03,600 --> 00:30:07,040 And that funding is an an just like most of the fees generated 487 00:30:07,040 --> 00:30:11,160 by the protocol are distributed to a stability pool that acts as 488 00:30:11,160 --> 00:30:14,880 a peg keeper to attract more USDC earning. 489 00:30:14,880 --> 00:30:21,760 That's that's organic yield and helping with supporting FXUSD 490 00:30:21,760 --> 00:30:25,040 spec. So we have this organic peg 491 00:30:25,040 --> 00:30:31,440 keeping mechanisms that that just work and that let's FXUAD 492 00:30:31,440 --> 00:30:34,440 scale pretty well since we launched earlier this year. 493 00:30:35,840 --> 00:30:39,920 Yeah, let's, let's talk about that stability mechanism, the 494 00:30:39,920 --> 00:30:42,800 stability pool And there's, there's also, I think like I, I 495 00:30:42,800 --> 00:30:47,960 guess FX save is also. Related to here, yeah. 496 00:30:47,960 --> 00:30:49,400 Correct. Yeah. 497 00:30:49,400 --> 00:30:52,120 So, so, so like what's really impressive here, I think is the 498 00:30:52,120 --> 00:30:56,200 yields which range between like 10 and 20%. 499 00:30:56,840 --> 00:31:00,480 No, yeah, those, those, those approach Terra level anchor 500 00:31:00,480 --> 00:31:05,040 level yields. But yeah, why, why, why is this 501 00:31:05,040 --> 00:31:06,240 sustainable? How? 502 00:31:06,240 --> 00:31:08,800 How is this sustainable? It's it's a good question. 503 00:31:08,800 --> 00:31:12,200 Yeah, indeed Fxsafe, which is the main yield strategy on the F 504 00:31:12,200 --> 00:31:16,600 of X protocol as since we launched it has been one of the 505 00:31:16,600 --> 00:31:19,000 best yield, stable yield in Defy. 506 00:31:19,000 --> 00:31:22,600 If you look at the dashboard created by Inverse Finance 507 00:31:22,800 --> 00:31:27,440 called stable yields.info, you can compare all the main yield 508 00:31:27,440 --> 00:31:31,760 bearing stable strategies around such as FXF obviously S Dollar 509 00:31:31,760 --> 00:31:37,840 Stack, USR, SCRVUSDSUSDE and stuff like that and and most of 510 00:31:37,840 --> 00:31:40,600 them. And if you get this on different 511 00:31:40,600 --> 00:31:44,280 time frames, you see that FXF has been above all the time and 512 00:31:44,280 --> 00:31:48,800 like the next one is like 4 points below FXF. 513 00:31:49,280 --> 00:31:54,120 And, and that's, that's a huge success for us. 514 00:31:54,120 --> 00:31:55,960 We're very, very proud of of this. 515 00:31:56,320 --> 00:31:59,200 And, and most, and the main thing is that most of this youth 516 00:31:59,480 --> 00:32:04,560 is 100% organic and doesn't imply any human active 517 00:32:04,560 --> 00:32:07,280 management. It's 100% smart contracts on 518 00:32:07,280 --> 00:32:09,360 chain. There's yeah, nothing to trust 519 00:32:10,160 --> 00:32:11,920 as than the, the, the code, you know. 520 00:32:13,960 --> 00:32:19,280 And so to understand what's how it works, maybe I can break down 521 00:32:19,280 --> 00:32:22,280 the different, the, the, the back keeping of FX USD. 522 00:32:22,280 --> 00:32:26,040 So if you understand that FX protocol is an evolved CDP, 523 00:32:26,200 --> 00:32:30,520 whenever people are longing the, the collateral, it involves 524 00:32:30,520 --> 00:32:33,880 selling the stable coin, right? Because in the back end the 525 00:32:33,880 --> 00:32:36,000 stable coin is sold for more collateral. 526 00:32:36,560 --> 00:32:39,600 So it brings selling pressure. And this is This is why for 527 00:32:39,600 --> 00:32:45,640 instance LUSD ended up under peg are are are the the people 528 00:32:45,920 --> 00:32:49,840 getting leverage on liquidity ended up being redeemed because 529 00:32:50,920 --> 00:32:54,520 USD was massively sold. And we solved it with different 530 00:32:54,520 --> 00:32:58,240 Peck keeping mechanisms. The first one is that stability 531 00:32:58,240 --> 00:33:01,120 pool on F of X. The stability pool is a yield 532 00:33:01,120 --> 00:33:05,000 strategy that takes both FXUSD, the decentralized stablecoin, 533 00:33:05,360 --> 00:33:10,520 and USDC as pays assets and it acts as a Peck keeping 534 00:33:11,320 --> 00:33:14,880 mechanism. Each time FXUSD is traded below 535 00:33:14,880 --> 00:33:18,480 1 on on the main liquidity pool which is on curve against USDC. 536 00:33:18,480 --> 00:33:22,360 Each time FXUSD is traded below 1, the USDC from the year 537 00:33:22,360 --> 00:33:26,840 strategy will buy FXUSD in the market to put it closer to peg. 538 00:33:27,200 --> 00:33:30,560 And each time it's traded above 1 it's sold back for USDC and 539 00:33:30,560 --> 00:33:35,880 goes back to the stability pool. So that strategy keeps FXUSD 540 00:33:35,880 --> 00:33:42,280 spec and to attract capital, the incentives comes from all the 541 00:33:42,440 --> 00:33:44,560 the the the fees generated by the protocol. 542 00:33:44,920 --> 00:33:48,920 At the moment, the protocol generates close to $1 million a 543 00:33:48,920 --> 00:33:52,240 month and most of it is distributed to the stability 544 00:33:52,240 --> 00:33:55,320 pool or the governance truck and lockers. 545 00:33:56,120 --> 00:33:58,240 OK. So just just to stop there for a 546 00:33:58,240 --> 00:34:04,040 second, so, so the protocol does rely on on USDC at least in the 547 00:34:04,120 --> 00:34:07,000 stability mechanism to find its price. 548 00:34:07,800 --> 00:34:11,080 Yeah, it's not backed by USDC at any point. 549 00:34:11,760 --> 00:34:18,199 But like USDC is the like if you want, if you want any assets on 550 00:34:18,199 --> 00:34:23,320 chain to be back to USD, it's back to USDC or USDT. 551 00:34:23,320 --> 00:34:25,560 And actually on chain USDC is the most liquid. 552 00:34:25,560 --> 00:34:30,719 So This is why USDC currently is the most liquid device stable 553 00:34:30,719 --> 00:34:32,280 coin around. So if you. 554 00:34:32,440 --> 00:34:33,800 Is, is, is, is it? Is it? 555 00:34:33,880 --> 00:34:37,960 Is it safe to say then that like this mechanism it wouldn't be 556 00:34:37,960 --> 00:34:40,920 possible without an on chain stable coin that has a really 557 00:34:40,920 --> 00:34:48,040 high peg stability? The the other option would be 558 00:34:48,560 --> 00:34:52,600 companies that could handle their redemption with real 559 00:34:52,800 --> 00:34:56,639 dollars, for instance. But yeah, since we don't want to 560 00:34:56,639 --> 00:35:01,720 rely on, I guess the biggest company that does this currently 561 00:35:01,720 --> 00:35:06,320 is is Circle and and and Tether. But the most liquid on Shine is 562 00:35:06,320 --> 00:35:09,800 is circled with USDC. So that's. 563 00:35:10,080 --> 00:35:14,000 Currently the obvious choice. At some point if we scale FXUSD 564 00:35:14,000 --> 00:35:17,280 enough, we may not need it anymore and people will build 565 00:35:17,280 --> 00:35:20,560 liquidity with FXUSD because they want to be paired with 566 00:35:20,560 --> 00:35:22,680 FXUSC. But when you build the stable 567 00:35:22,680 --> 00:35:25,240 coin, if you want it to be liquid and at peg, you need to 568 00:35:25,240 --> 00:35:29,040 build liquidity with Currently the the the the most obvious 569 00:35:29,040 --> 00:35:31,960 choice is USDC. Right. 570 00:35:32,880 --> 00:35:38,000 And and so if if there was a USDCD peg, you know, highly 571 00:35:38,000 --> 00:35:39,880 unlikely, but like it happened before, right? 572 00:35:40,240 --> 00:35:42,640 What happened before and that actually triggered the creation 573 00:35:42,640 --> 00:35:47,720 of FOX? If the the stability pool cannot 574 00:35:47,720 --> 00:35:53,480 accept USDC like the USDC peg is monitored and when if ever D 575 00:35:53,480 --> 00:35:57,040 pegs, the stability pool won't accept more anymore USDC. 576 00:35:57,040 --> 00:36:01,360 So it's exposed but protected from USDCD peg. 577 00:36:01,720 --> 00:36:06,640 So you get exposure to both assets FXUSD and USDC, but it's 578 00:36:06,640 --> 00:36:10,720 protected from any USDC D peg. So the main risk here in that 579 00:36:10,720 --> 00:36:14,440 strategy for any LP is the FXUSD spec. 580 00:36:14,840 --> 00:36:18,840 And This is why there's different layers of peg keeping. 581 00:36:18,840 --> 00:36:20,800 The first one is the stability pool itself. 582 00:36:21,480 --> 00:36:26,920 And, and, and so the, the yield comes from the protocol economic 583 00:36:26,920 --> 00:36:29,840 activities. So people taking leverage, they 584 00:36:29,840 --> 00:36:34,840 pay this one time fee I told you about they can have in some, in 585 00:36:34,880 --> 00:36:37,720 some situation of funding. And I'll, I'll go through this 586 00:36:37,720 --> 00:36:41,680 in a, in a second. And and most of the leverage 587 00:36:41,680 --> 00:36:45,440 positions are backed by yield generating assets such as RAP 588 00:36:45,440 --> 00:36:49,520 state, EEF and that yield also goes to the stability pool. 589 00:36:50,200 --> 00:36:55,760 So if, but if it's not enough, so actually whenever FXUSD is 590 00:36:56,040 --> 00:37:02,120 trade below 1 is actually below .998, the stability pool buys 591 00:37:02,680 --> 00:37:06,800 FXUSD the market. But if there's not enough USDC 592 00:37:06,800 --> 00:37:11,080 into the stability pool. So whenever the ratio of USDC 593 00:37:11,120 --> 00:37:16,400 goes below 5%, we may not have enough USDC to support the PEG. 594 00:37:16,680 --> 00:37:20,320 So in that very situation, all the leverage positions get a 595 00:37:20,320 --> 00:37:22,840 small funding cost applied to their position. 596 00:37:23,040 --> 00:37:26,440 It's temporary and it's it's here to support the PEG. 597 00:37:27,080 --> 00:37:31,480 And that funding cost is the RV boring cost of USDC and that 598 00:37:31,480 --> 00:37:35,840 goes to the stability pool to attract more USDC deposits that 599 00:37:35,840 --> 00:37:40,120 will support the PEG and and then cut the funding because as, 600 00:37:40,120 --> 00:37:44,880 as soon as the distribution of USDC, it goes above 5% again, 601 00:37:45,320 --> 00:37:49,360 then the funding is, is off. But if it's not enough, there's, 602 00:37:49,440 --> 00:37:51,760 you know, different layers you always have to, you know, 603 00:37:51,760 --> 00:37:55,920 anticipate what could go wrong. If it's enough and FXU starts to 604 00:37:56,280 --> 00:38:00,640 depend for too long, it means when the EMA 42 minutes of FX 605 00:38:00,640 --> 00:38:07,040 USD on curve goes below .998. So it's pretty small DPEC, but 606 00:38:07,040 --> 00:38:13,240 long enough to be modicable, we trigger what I call the DPEC 607 00:38:13,240 --> 00:38:15,320 mode. And in in that situation, people 608 00:38:15,320 --> 00:38:17,760 can no longer open any long positions. 609 00:38:17,760 --> 00:38:21,160 So it prevents any further selling pressure on FXUSD. 610 00:38:22,080 --> 00:38:27,520 And at that point, a second layer of funding is applied to 611 00:38:27,520 --> 00:38:30,680 their leverage positions, which is way higher. 612 00:38:30,680 --> 00:38:35,560 It's, it's 5 or 1010 times the UEDC borrowing costs. 613 00:38:36,360 --> 00:38:41,240 I don't believe it happened yet because the previous layer of 614 00:38:41,280 --> 00:38:44,400 keeping were have always been enough. 615 00:38:44,760 --> 00:38:48,080 But in that situation, it brings a very high incentive for 616 00:38:48,080 --> 00:38:53,000 leverages to to to for either leverages to repay to close 617 00:38:53,000 --> 00:38:57,520 their loans because they can buy FX USD cheaper and close with a 618 00:38:57,760 --> 00:39:00,520 bigger profit and they can avoid these high fundings. 619 00:39:00,880 --> 00:39:05,200 If they keep their lungs open then it brings a very like like 620 00:39:05,800 --> 00:39:10,360 massive yield to the stability pool thus attracting USDC That 621 00:39:10,360 --> 00:39:15,920 will cut repair FX USD quickly and and cut the fundings. 622 00:39:16,920 --> 00:39:21,080 And there is a one last layer of peg keeping mechanism which is 623 00:39:21,080 --> 00:39:24,360 the redemption. When FXUSD is in in the PEG 624 00:39:24,360 --> 00:39:29,080 mode, people can can buy it and redeem it against the collateral 625 00:39:29,680 --> 00:39:34,040 minus a .5% redeeming fee. So that's sets the worst case 626 00:39:34,040 --> 00:39:39,600 scenario PEG at .995 basically. One question here is like, you 627 00:39:40,000 --> 00:39:42,280 know, I'm looking at the stable yields dashboard, which is great 628 00:39:42,280 --> 00:39:47,680 by the way. And you know the, the yield, the 629 00:39:47,680 --> 00:39:54,320 30 day average is almost 6 points above the second 630 00:39:54,320 --> 00:40:01,720 position, but only has well has less than half the the TBL. 631 00:40:01,720 --> 00:40:05,800 And if you look at Athena, Athena has 5.7 billion in TBL 632 00:40:05,800 --> 00:40:09,800 with also but the same you know 30 day average, there's about 633 00:40:09,800 --> 00:40:12,680 100 million in TBL as we were recording this on on September 634 00:40:12,680 --> 00:40:15,880 3rd. You know, with yields, with 635 00:40:15,880 --> 00:40:21,440 yields so attractive and a mechanism that appears to be 636 00:40:21,440 --> 00:40:27,360 sustainable and sort of safe, why in your view, why, why isn't 637 00:40:27,360 --> 00:40:32,120 there more TBL on FX? There's probably different 638 00:40:32,160 --> 00:40:36,600 reasons for that. First thing is that we are doing 639 00:40:36,600 --> 00:40:39,840 things 100% organically. There is no VC backing. 640 00:40:39,840 --> 00:40:42,440 So there's no, so we don't get it. 641 00:40:42,760 --> 00:40:46,000 We, we had to make all of our connections ourselves, you know, 642 00:40:46,000 --> 00:40:51,240 just by reaching out to people and meeting people into events 643 00:40:51,240 --> 00:40:53,560 and stuff like that. And, and the overall protocol 644 00:40:53,560 --> 00:40:59,160 TVL is over 400 million now and it's been built 100% 645 00:40:59,160 --> 00:41:01,280 organically. So it takes and I guess it takes 646 00:41:01,280 --> 00:41:05,440 time to build as you, as you said it previously, it takes 647 00:41:05,440 --> 00:41:09,000 time to build trust towards a decentralized stable coin. 648 00:41:09,400 --> 00:41:12,800 So for people to actually understand that the team want to 649 00:41:12,800 --> 00:41:17,200 rack pool, that it's actually secure and that there's the, the 650 00:41:17,200 --> 00:41:21,080 liquidation mechanism works and the, the, the state, the pack 651 00:41:21,080 --> 00:41:23,040 keeping mechanism works and and so on. 652 00:41:23,360 --> 00:41:27,800 And that did the yield will also be sustainable. 653 00:41:28,000 --> 00:41:30,720 The stable coin would be liquid enough so that people can come 654 00:41:30,720 --> 00:41:32,240 and exit in size and stuff like that. 655 00:41:32,480 --> 00:41:34,840 It, it, it takes time to, to build that. 656 00:41:34,840 --> 00:41:40,200 And we've, we've done that and we, we keep doing it and 657 00:41:40,200 --> 00:41:43,240 reaching out to, to getting in touch with more and more people. 658 00:41:43,680 --> 00:41:47,800 But I guess it takes longer when you're doing this just 659 00:41:47,800 --> 00:41:55,640 organically and without any massively back token TG event to 660 00:41:55,640 --> 00:41:59,080 come and stuff like that, You know, because the token has been 661 00:41:59,120 --> 00:42:03,240 liquid from scratch with fixed emissions over the next 50 662 00:42:03,240 --> 00:42:06,920 years. And yeah, there is, it's 663 00:42:06,920 --> 00:42:12,280 probably less speculative in a way than other VC back projects. 664 00:42:12,760 --> 00:42:17,040 And then obviously Efina is not exactly AD 5 products. 665 00:42:17,320 --> 00:42:22,000 It's it's highly centralized and relies on uncentralized 666 00:42:22,840 --> 00:42:27,240 fundings, which makes it obviously more scalable. 667 00:42:28,000 --> 00:42:31,800 And if if we were having 5 billion right now, the yield 668 00:42:31,800 --> 00:42:37,040 wouldn't be that high. But it's what we observed over 669 00:42:37,040 --> 00:42:40,000 the past few months and and scaling the protocol to over 400 670 00:42:40,000 --> 00:42:45,560 million is that it actually scales by growing progressively. 671 00:42:46,200 --> 00:42:48,920 The more TV there is into the stability pool, the more 672 00:42:48,920 --> 00:42:51,560 leverage activity we observe on the leverage side and the more 673 00:42:51,560 --> 00:42:56,160 fees we collect. And, and when, when you look at 674 00:42:56,160 --> 00:43:01,600 the collected fees over each month, you can, it's pretty 675 00:43:01,600 --> 00:43:07,320 clear that there's a pattern of, of, of stabilizing these fees 676 00:43:07,320 --> 00:43:10,920 and having them way more steady over time and growing steady. 677 00:43:12,760 --> 00:43:15,600 I don't know if I exactly answered your questions. 678 00:43:15,600 --> 00:43:20,840 I, I went to all different topics, but I guess doing things 679 00:43:21,080 --> 00:43:23,840 and you can do not VCs and 100% on chain. 680 00:43:24,840 --> 00:43:30,480 It's, it's the probably harder to, to, to, to scale a protocol 681 00:43:30,480 --> 00:43:33,360 that way. But in my opinion, and our 682 00:43:33,520 --> 00:43:36,680 mission with F of X and Aladdin DAO is to build stuff that will 683 00:43:36,680 --> 00:43:40,000 last for decades, if not centuries. 684 00:43:40,400 --> 00:43:44,000 And so, yeah, we're here for the long term. 685 00:43:46,320 --> 00:43:52,000 Do you think that like with, you know, the track record now that 686 00:43:53,280 --> 00:44:00,960 you've built, you know, this TVL and and a, you know, a, a peg 687 00:44:00,960 --> 00:44:03,560 that has held and kind of demonstrated that this works? 688 00:44:03,880 --> 00:44:08,160 Do you think that it would be useful to now go and like raise 689 00:44:08,160 --> 00:44:12,320 money to accelerate growth, to accelerate, you know, 690 00:44:12,320 --> 00:44:15,200 fundraising into the protocol, marketing, etcetera. 691 00:44:16,440 --> 00:44:21,120 Is that something you consider? We don't consider raising money 692 00:44:21,120 --> 00:44:25,240 from VCs because it's, but people are free to buy the token 693 00:44:25,240 --> 00:44:28,760 on, on the market. And it's if people do it 694 00:44:28,760 --> 00:44:32,560 actually helps because there's other strategies which are 695 00:44:32,560 --> 00:44:37,880 incentivized with the the token. But we're, but it, it definitely 696 00:44:37,880 --> 00:44:42,960 helps on one side is that when we talk to new funds and stuff 697 00:44:42,960 --> 00:44:46,440 like that. And it's way easier now that 698 00:44:46,440 --> 00:44:49,080 the, the, the, the stable coin is more liquid and, and the 699 00:44:49,080 --> 00:44:51,120 protocol is bigger than in the in the beginning. 700 00:44:53,400 --> 00:44:58,640 So it helps to, to raise in a way stable TVL for the stability 701 00:44:58,640 --> 00:45:01,880 pool because the more TVL there is in the stability pool, the 702 00:45:01,880 --> 00:45:04,680 more volume we can process on the reverse side because it, it 703 00:45:04,920 --> 00:45:08,480 can be PEC keeps. And so yeah, it helps on and we, 704 00:45:08,480 --> 00:45:10,600 and we've definitely seen the difference. 705 00:45:10,600 --> 00:45:14,040 For instance, we were discussing it with Paul, another team 706 00:45:14,040 --> 00:45:19,320 member like went to ECC with me this year as well as last year. 707 00:45:19,680 --> 00:45:21,520 And we've seen a major difference between the two 708 00:45:21,520 --> 00:45:25,480 editions in how people were interacting with us. 709 00:45:25,760 --> 00:45:28,800 Like when when we're talking to people and other builders, like 710 00:45:28,800 --> 00:45:32,080 last year, we felt like they were things. 711 00:45:32,840 --> 00:45:35,520 Oh, that's interesting. Let's see how it goes, you know, 712 00:45:35,800 --> 00:45:39,000 and now it was mostly, wow, guys, Congrats on Congrats on 713 00:45:39,000 --> 00:45:41,520 the growth. And it definitely it's way 714 00:45:41,520 --> 00:45:47,040 easier to to build partnerships when people already heard about 715 00:45:47,200 --> 00:45:49,400 the protocol and and start trusting it. 716 00:45:51,040 --> 00:45:52,640 So I wanted to switch gears a little bit. 717 00:45:53,160 --> 00:45:56,240 You you guys published an article a couple of days ago on 718 00:45:56,240 --> 00:45:58,880 your Twitter. It's Ethereum security model and 719 00:45:58,960 --> 00:46:01,200 strategic importance of decentralized stable coins. 720 00:46:03,440 --> 00:46:06,080 Yeah, give give me a jest of like what you're arguing for in 721 00:46:06,080 --> 00:46:09,760 this article. And you know how how you're 722 00:46:09,760 --> 00:46:11,920 thinking about, you know, Ethereum security long term. 723 00:46:14,600 --> 00:46:16,360 Yeah. So, yeah, the idea, the idea of 724 00:46:16,360 --> 00:46:20,080 the article is what it was to, to point out that the, the value 725 00:46:20,080 --> 00:46:25,360 secured bar if you're in, in centralized asset mostly, which 726 00:46:25,360 --> 00:46:28,720 is, which are real world assets and USDT and USDC and stuff like 727 00:46:28,720 --> 00:46:34,400 that is going so high that at some point these guys and, and 728 00:46:34,520 --> 00:46:39,160 today's Tether tomorrow, it could be another entity has 729 00:46:39,560 --> 00:46:44,840 major weights into any, into the, the, the, the protocol 730 00:46:44,840 --> 00:46:51,360 security, for instance, if there is any hot fork tomorrow for a 731 00:46:51,360 --> 00:46:55,920 new update, for instance, and that that major centralized 732 00:46:55,920 --> 00:47:01,440 entity doesn't want to support it, what's going to happen? 733 00:47:01,440 --> 00:47:05,560 You know, and by supporting all these centralized entities, we 734 00:47:05,640 --> 00:47:09,880 make that possible. We make, it's may, may not be a 735 00:47:09,880 --> 00:47:12,520 technical issue because obviously it's, it's very hard 736 00:47:12,520 --> 00:47:16,880 to compromise the proof of stake, but it could be a 737 00:47:16,880 --> 00:47:19,920 political issue at some point and, and, and economic issue. 738 00:47:20,560 --> 00:47:25,040 And, and the, the idea is not to say, as I told you earlier, that 739 00:47:25,320 --> 00:47:28,280 we should replace centralized table coins with decentralized, 740 00:47:29,160 --> 00:47:32,320 but the idea is, is that we want to make sure that there's always 741 00:47:32,680 --> 00:47:37,440 an, an alternative that you can use in most cases and just use 742 00:47:37,440 --> 00:47:40,840 centralized solutions when it's absolutely needed. 743 00:47:41,200 --> 00:47:44,800 And I like to compare some decentralization with privacy, 744 00:47:44,800 --> 00:47:49,320 for instance, It's not, it's not white or black, you know, it's 745 00:47:49,320 --> 00:47:52,600 not, it's not binary. You don't, you, you cannot be 746 00:47:52,600 --> 00:47:55,920 totally private and, and anonymous on Internet. 747 00:47:55,920 --> 00:47:59,400 It's, it's a, it's a scope, you know, and I know people 748 00:47:59,520 --> 00:48:02,560 decentralize decentralization. The scope is some kind of a 749 00:48:02,560 --> 00:48:06,520 meme, but it's actually true. You do your best, you just do 750 00:48:06,520 --> 00:48:08,840 your best. And if you can, you can use 751 00:48:09,120 --> 00:48:14,600 private product in most cases, like let's say in for search 752 00:48:15,560 --> 00:48:18,600 engines, you can use DuckDuckGo most of the time. 753 00:48:18,600 --> 00:48:20,960 And if you don't find the answer, then you'll go on 754 00:48:20,960 --> 00:48:22,720 Google. And it's actually better than 755 00:48:22,720 --> 00:48:26,080 using Google all the time and giving them all your private 756 00:48:26,080 --> 00:48:28,280 data. And it's, I think it's pretty 757 00:48:28,320 --> 00:48:31,600 much the same thing. If, if you can achieve what you 758 00:48:31,600 --> 00:48:34,000 want to achieve with your stables using the decentralized 759 00:48:34,000 --> 00:48:37,360 1, there is no point in using a centralized 1. 760 00:48:37,960 --> 00:48:41,920 So if you can get better yields while staying decentralized, you 761 00:48:41,920 --> 00:48:46,000 should just do it. And whenever you want to off 762 00:48:46,000 --> 00:48:49,600 ramp, because today on on off ramp goes through centralized 763 00:48:49,600 --> 00:48:53,200 solutions, then you can go with the centralized solution for 764 00:48:53,200 --> 00:48:57,240 that very moment. But in yeah, that's, I guess 765 00:48:57,240 --> 00:49:00,080 that's the main idea of what we wanted the the message we wanted 766 00:49:00,080 --> 00:49:05,680 to pass with that article. I mean, and I think it makes 767 00:49:05,680 --> 00:49:10,000 sense to kind of promote the use of decentralized stable coins. 768 00:49:10,000 --> 00:49:11,720 But like, yeah, it was, as we were saying earlier in the 769 00:49:11,720 --> 00:49:15,480 conversation, it's like, you know, at this point, USDC and 770 00:49:15,480 --> 00:49:19,400 Tether are so ingrained. It's like it, it almost feels 771 00:49:19,400 --> 00:49:23,080 like a little bit of like Ethereum's Achilles heel that, 772 00:49:23,080 --> 00:49:26,680 you know, we've built like the ecosystem has built all this 773 00:49:26,680 --> 00:49:29,240 amazing decentralized infrastructure only to recreate 774 00:49:30,760 --> 00:49:33,000 kind of similar systems that exist in tradfire. 775 00:49:33,560 --> 00:49:38,520 And yeah, the the it's not, it's not clear like what, what the 776 00:49:38,520 --> 00:49:42,400 solution is there to kind of mitigate for this as a as a 777 00:49:42,400 --> 00:49:45,920 space. Yeah, it's, I think it's a 778 00:49:45,920 --> 00:49:48,840 shame, especially when there there are actual, actual 779 00:49:48,840 --> 00:49:51,800 reliable alternatives. It's always a compromise between 780 00:49:55,200 --> 00:49:57,000 decentralization and, and convenience. 781 00:49:57,000 --> 00:49:59,800 You know, if it's convenient, if it's not convenient, you won't 782 00:49:59,800 --> 00:50:01,840 do it. It's just like ecology as well. 783 00:50:01,840 --> 00:50:05,040 Is, is, is very similar. People won't recycle if it's a 784 00:50:05,040 --> 00:50:07,760 pain to recycle. If they can just do it very 785 00:50:07,760 --> 00:50:14,560 easily, they will do it. And and as it and, and now that 786 00:50:14,680 --> 00:50:21,240 I believe we we brought a design that is convenient, reliable and 787 00:50:21,280 --> 00:50:26,800 secure and, and, and with attractive yields, then why are 788 00:50:26,800 --> 00:50:28,640 you using anything else you know? 789 00:50:30,960 --> 00:50:34,200 Now one, one other thing I wanted to talk about is kind of 790 00:50:34,200 --> 00:50:38,800 where FX sits within the broader perps landscape. 791 00:50:40,480 --> 00:50:46,320 So, you know, you guys are competing with Gearbox, GMX and 792 00:50:46,520 --> 00:50:52,000 Hyper Liquid and DYDX. It's a, it's a market that's 793 00:50:52,000 --> 00:50:54,240 very dynamic and it's changing all the time. 794 00:50:54,240 --> 00:51:00,200 It's like 2 years ago, DYDX was, you know, leading that market, 795 00:51:01,000 --> 00:51:04,480 had a lot of traction and now that's sort of lost prominence. 796 00:51:04,480 --> 00:51:06,520 Now everyone's kind of focused on Hyper Liquid. 797 00:51:09,240 --> 00:51:13,560 And I, I think it is, there is a big part of that that is driven 798 00:51:13,560 --> 00:51:16,800 by incentives that's also like driven by capital. 799 00:51:16,840 --> 00:51:19,520 And you know, like Hyper Liquid has a lot of money. 800 00:51:21,240 --> 00:51:24,360 How do you guys succeed in that space and, you know, maintain 801 00:51:24,360 --> 00:51:27,440 relevance long term when we know that like really well 802 00:51:27,440 --> 00:51:30,160 capitalized projects. I do IDX, you know, have lost 803 00:51:30,160 --> 00:51:32,800 prominence since in in such a such a short period. 804 00:51:32,800 --> 00:51:35,080 And who knows me like maybe hyper liquid in two years from 805 00:51:35,080 --> 00:51:37,440 now is like totally irrelevant in something new came along and 806 00:51:37,440 --> 00:51:40,000 it's much more interesting. Yeah, maybe. 807 00:51:40,000 --> 00:51:45,320 We don't know. Yeah, I think we mostly do our 808 00:51:45,320 --> 00:51:50,000 own path in that market, in that very competitive market, as you 809 00:51:50,000 --> 00:51:53,640 stated by we have our own blue ocean. 810 00:51:53,640 --> 00:51:56,520 I don't know if you heard about that book, but it's like we have 811 00:51:56,520 --> 00:51:58,920 our niche market in a way because we're not exactly a 812 00:51:58,920 --> 00:52:02,200 perp, we're not exactly ACDP. We're kind of in between 813 00:52:02,200 --> 00:52:06,440 delivering 0 stress leverage. And for many people, getting a 814 00:52:06,440 --> 00:52:09,080 leverage position just is a headache. 815 00:52:09,080 --> 00:52:11,400 You know, they don't sleep well and they are very nervous and 816 00:52:11,400 --> 00:52:14,320 they get liquidated. We've seen that James Wynn guy 817 00:52:14,320 --> 00:52:19,000 getting liquidated all the time and if that guy had been longing 818 00:52:19,240 --> 00:52:22,120 or, or trading on F of X, he would still be rich, you know, 819 00:52:22,600 --> 00:52:28,000 and, and we, we bring a solution to these guys basically. 820 00:52:28,080 --> 00:52:29,280 I don't know. I don't know who that is, but I 821 00:52:29,280 --> 00:52:34,680 feel his pain. Yeah, it's a it's a guy on on X 822 00:52:34,680 --> 00:52:37,560 that's shares his trades and people just observe. 823 00:52:37,560 --> 00:52:40,280 And there was another one fund, I don't remember the the name. 824 00:52:40,560 --> 00:52:43,680 And these guys just keep getting liquidated and a hyper liquid. 825 00:52:44,280 --> 00:52:47,320 And, and I've seen there's not even a a meme saying hyper 826 00:52:47,320 --> 00:52:50,640 liquidated. That's a good one. 827 00:52:50,640 --> 00:52:56,960 Because the other thing is that on all these semi centralized 828 00:52:56,960 --> 00:53:02,280 solutions, there is more risk. And, and on the hyper liquid 829 00:53:02,280 --> 00:53:05,920 side, there is a massive trust me, bro stuff on this on the 830 00:53:06,160 --> 00:53:08,640 Oracle side, and we've seen it recently. 831 00:53:08,640 --> 00:53:11,720 People got liquidated for no reasons on I don't recall what's 832 00:53:11,920 --> 00:53:16,280 what ticker it it, it cannot happen on F of X. 833 00:53:16,280 --> 00:53:21,000 Everything is 100% on chain. There's no, there's no, there's 834 00:53:21,240 --> 00:53:23,320 no to. To play devil's advocate here, 835 00:53:23,400 --> 00:53:28,800 like, like you know, there, there is kind of an Oracle and 836 00:53:28,800 --> 00:53:33,400 that Oracle is the US is like the Treasury bonds that are like 837 00:53:33,800 --> 00:53:40,520 backing the USDC that they're backing the USDC peg, right, 838 00:53:41,600 --> 00:53:46,080 because that that's a mechanism that's in that enables the 839 00:53:46,080 --> 00:53:51,480 stability pool to function. I think it like sure there's 840 00:53:51,480 --> 00:53:53,880 there's no Oracle and there's maybe no centralized Oracle, but 841 00:53:53,880 --> 00:53:57,720 there is a reliance on some centralized thing that. 842 00:53:57,720 --> 00:54:01,800 Yeah, of of. Of course F of X relies on chain 843 00:54:01,800 --> 00:54:06,800 link as an Oracle just like all Defy. 844 00:54:06,800 --> 00:54:11,680 And obviously we we were talking about Taylor being a, a, a 845 00:54:14,000 --> 00:54:18,120 democlist sword for defy earlier and and chaining is another one 846 00:54:18,120 --> 00:54:23,960 obviously. But yeah, as yeah, there is a 847 00:54:23,960 --> 00:54:32,560 reliance on, on chaining on, on, on F of X and and on USD spec, 848 00:54:32,560 --> 00:54:36,360 yes And no, not, not exactly because as I told you, like for 849 00:54:36,360 --> 00:54:39,640 instance the stability pool and FXA which is built on top of the 850 00:54:39,640 --> 00:54:42,600 stability pool is protected from from any USDC. 851 00:54:43,640 --> 00:54:45,440 OK. Maybe not vulnerable, but it 852 00:54:45,440 --> 00:54:49,680 like it relies on on the price on that price feed if you will 853 00:54:49,680 --> 00:54:52,200 like that, that's kind of the the equivalent of a price feed. 854 00:54:54,080 --> 00:54:58,240 But we believe that so far Chain Inc is the most secure and 855 00:54:58,240 --> 00:55:05,240 reliable Oracle provider, and if chaining fails on the E for BTC 856 00:55:05,240 --> 00:55:10,760 Oracle, I guess F of X is going to be the least of your 857 00:55:10,760 --> 00:55:15,040 problems. Yeah, yeah, yeah. 858 00:55:15,240 --> 00:55:17,600 It'd be, it'd be great to have just like a simulation where 859 00:55:17,600 --> 00:55:21,520 that happens just to see like you know how how we just all get 860 00:55:21,520 --> 00:55:24,280 rugged. Like a Defy dystopian story. 861 00:55:24,800 --> 00:55:28,640 Yeah, yeah, just just like build the simulation where you know, 862 00:55:28,640 --> 00:55:31,760 the, the, the, the, the, the, the chain link Oracle price for 863 00:55:31,760 --> 00:55:35,280 ether BTC just goes off haywire and then what happens? 864 00:55:35,720 --> 00:55:41,120 Well, I I don't have a because I I'm not the technical guy in the 865 00:55:41,120 --> 00:55:43,120 team. I I don't recall the exact 866 00:55:43,120 --> 00:55:45,760 Oracle design, but if I recall correctly there is different 867 00:55:45,760 --> 00:55:51,120 safeguards in the Oracle design on on F of X. 868 00:55:52,960 --> 00:55:57,160 Looking to the future, like Ethereum aspires to secure 869 00:55:58,560 --> 00:56:03,320 hundreds of billions, trillions in in RW as like stable coins 870 00:56:03,320 --> 00:56:08,560 are becoming a large part of the kind of crypto narrative. 871 00:56:08,920 --> 00:56:11,440 Institutions are hopping on the stable coin. 872 00:56:11,440 --> 00:56:16,440 So train there. I think we all kind of 873 00:56:16,440 --> 00:56:19,680 anticipate a proliferation of stable coins with many branded 874 00:56:19,680 --> 00:56:23,280 stable coins like PayPal is just like one of many. 875 00:56:23,280 --> 00:56:28,320 I think that will come. What are the opportunities here, 876 00:56:28,320 --> 00:56:33,520 I think for us as an ecosystem, and where does F of X fit in 877 00:56:33,520 --> 00:56:35,200 there? Yeah. 878 00:56:35,200 --> 00:56:39,520 So again, very good question. It it we actually already see 879 00:56:39,520 --> 00:56:43,640 opportunities and I think I will also answer in a different way 880 00:56:43,800 --> 00:56:48,880 one of your previous questions regarding how we can compete and 881 00:56:48,880 --> 00:56:52,040 and why the TBL is lower than Efinas for instance. 882 00:56:52,600 --> 00:56:57,280 These products since they are not hardcore define in a way 883 00:56:57,280 --> 00:57:01,040 that they're C defy stuff. They are already institution 884 00:57:01,040 --> 00:57:03,920 ready, you know, they can talk to institutions and they can 885 00:57:03,920 --> 00:57:08,000 build, they can sign contracts, actual legal contracts, not spot 886 00:57:08,000 --> 00:57:13,520 contracts with these guys. And so that these institutions 887 00:57:13,520 --> 00:57:16,360 can deploy capital. I know for instance, usual 888 00:57:16,360 --> 00:57:20,600 scaled like crazy by onboarding capital that was had no idea 889 00:57:20,680 --> 00:57:23,560 about crypto in the 1st place. That's that's crazy. 890 00:57:23,560 --> 00:57:26,560 They managed to scale to two 2 billion, if I recall correctly, 891 00:57:26,840 --> 00:57:29,960 with people from all around the world that had never done any 892 00:57:29,960 --> 00:57:33,440 transaction. You know, and, and, and as a 893 00:57:33,520 --> 00:57:38,200 Defy protocol is, is way harder because these institutions don't 894 00:57:38,200 --> 00:57:43,280 want to hear about this. And, and hopefully there's 895 00:57:43,280 --> 00:57:47,920 solutions now and there's new protocols filling that gap 896 00:57:47,920 --> 00:57:55,520 between OG Defy in a way and, and, and, and institutions. 897 00:57:55,760 --> 00:57:59,200 And we're currently working on a product with different partners 898 00:57:59,200 --> 00:58:04,440 such such as Lagun Finance 9, Summit, Nexus, Mutwald, APC 899 00:58:04,440 --> 00:58:08,680 custody solutions to build a tailored product for 900 00:58:08,680 --> 00:58:12,360 institutions so that institutions could harness the 901 00:58:12,400 --> 00:58:15,400 FXFX save yield in a very Safeway. 902 00:58:15,400 --> 00:58:18,880 And you're actually the first person I'd I'd talk about it 903 00:58:19,000 --> 00:58:24,080 publicly. The idea is to call this FX safe 904 00:58:24,320 --> 00:58:26,800 because it could. It would be the FX safe without 905 00:58:26,800 --> 00:58:32,880 the defy risks all created and and and institution ready. 906 00:58:33,400 --> 00:58:38,760 So that's a way to embrace the arrival of institutional money. 907 00:58:39,200 --> 00:58:42,080 And the other way is all these new stable coins you mentioned, 908 00:58:42,080 --> 00:58:45,320 I don't really see them as competitors because most of them 909 00:58:45,320 --> 00:58:51,080 are very attracted with our organic yields and some of them 910 00:58:51,120 --> 00:58:55,440 are already harnessing them. Many of these new yield bearing 911 00:58:55,440 --> 00:58:59,200 stable coins are made of other yield bearing stable coins on, 912 00:58:59,360 --> 00:59:03,240 on harnessing, on chain or off chain yields. 913 00:59:03,520 --> 00:59:07,280 And they actually use FX save or, or stability pool in the 914 00:59:07,280 --> 00:59:11,240 back end. So they contribute to, to our 915 00:59:11,240 --> 00:59:14,960 growth in a way. So there's, it's not just 916 00:59:15,200 --> 00:59:18,400 centralized solution versus decentralized solutions. 917 00:59:18,600 --> 00:59:23,520 There is a synergy between the, the, the 2 worlds and it's 918 00:59:23,520 --> 00:59:25,960 actually good because in the first places I could, I could 919 00:59:25,960 --> 00:59:29,000 see it in the like the good guys and the bad guys way. 920 00:59:29,320 --> 00:59:33,600 But it's actually, we can build synergies and, and, and these 921 00:59:33,600 --> 00:59:37,680 guys can help us bring build the alternative to what they're 922 00:59:37,680 --> 00:59:41,080 doing. Well, that's a great note to end 923 00:59:41,080 --> 00:59:43,720 on, said, Hey, thanks so much for spending the time on 924 00:59:43,720 --> 00:59:46,800 Epicenter Day. And yeah, looking forward to 925 00:59:46,800 --> 00:59:50,360 seeing, looking forward to seeing FX go up and to the 926 00:59:50,360 --> 00:59:53,240 right. Yeah, yeah, thank you very much 927 00:59:53,240 --> 00:59:55,640 for having me. If you enjoyed that episode, 928 00:59:55,640 --> 00:59:59,120 feel free to to join the Aladindao Discord. 929 00:59:59,120 --> 01:00:04,240 It's a very open community. We all started by popping up on 930 01:00:04,360 --> 01:00:06,960 on the Discord and asking questions and sharing ideas 931 01:00:06,960 --> 01:00:09,640 about the design. So it's always a pleasure to to 932 01:00:09,640 --> 01:00:14,120 meet new people and and discuss things, discuss defy between 933 01:00:14,120 --> 01:00:16,800 passionate people. Great. 934 01:00:17,080 --> 01:00:17,960 Thanks, David. Cheers. 935 01:00:18,720 --> 01:00:19,760 Thank you very much. Bye.