# DeFiDay - Ponzinomics debate - OasisApp, Euler & KlimaDAO

- Channel: [CryptoCanal](https://streameth.org/cryptocanal)
- Date: 2023-10-07
- Duration: 48:02
- Watch: https://streameth.org/watch/yt-Gme_vKcIVkU
- YouTube: https://www.youtube.com/watch?v=Gme_vKcIVkU

## Description

On April 25th 2022 we hosted DeFi Day during Devconnect in Amsterdam. Enjoy this fantastic debate about Ponzinomics with 

Frank Brinkkemper (Oasis) https://twitter.com/fbrinkkemper oasis.app/ 
Seraphim (Euler) https://twitter.com/MacroMate8 https://euler.finance/
Marcus Aurelius (KlimaDAO) https://twitter.com/KlimaDAO https://klimadao.finance

We would like to thank our partners and sponsors that made this event possible. 🌷

Ethereum Foundation https://ethereum.org/en/
Balancer https://balancer.fi/
Oasis https://oasis.app/
Perpetual Protocol https://perp.com/
Lido https://lido.fi/
Figment: https://www.figment.io/
Uniswap: https://uniswap.org/

🦦 CryptoCanal offers education, event and consultancy services for the crypto industry. Join our telegram community and stay free. https://t.me/CryptoCanalCommunity
ETHDam in the making. https://www.ethdam.com/

## Transcript

foreign [Music] let's make it fun so without further Ado markers could you introduce yourself please uh hi everybody I'm Marcus from clementow um at clementau we believe that climate change is the most urgent and pressing question of Our Generation and we need climate action now yeah so uh you know I think the question is how do we Implement that and uh I'm personally pretty convinced that political Solutions are not going to be able to be implemented quickly enough or at a large enough scale to address um the problem so at climate out we are trying to align economic incentives to encourage climate action using um an existing Market the voluntary carbon Market to drive financing from people uh like us frankly who have money and want to make climate action happen but maybe don't have the time or energy or skills to actually Implement climate action ourselves so there's an existing mechanism for coordinating this funding it's called the voluntary carbon market and we aim to scale that market from the current size of around a billion dollars to ideally somewhere in the several trillion dollar range we're doing that by creating liquidity basically creating a market on chain using same D5 Primitives we've been talking about all day I'm sure we'll get more chance to talk a little bit about how that works cool quick question for everyone who here believes in climate change who here wants to do something about it yeah thank you we're not as interesting we're lending protocol but definitely uh not as interesting as saving climate change oil as a lending protocol uh We've improved a lot of things that component are they have Pioneers including Mev resistant liquidations reactive interest rate uh permissionless listing um all sorts of things that should make borrowing and lending a lot more palatable experience in D5 so we're not saving trees unfortunately so but we are also not saving trees at oasis.app but we are also not using any polynomics uh within always adapt to to do such a thing so at Oasis what what we're doing you can come to our website and we're the most trusted place to deploy your Capital into D5 so we're not uh trying to give you those 100 or higher apis that are definitely not sustainable we're trying to give you the more sustainable uh less risky yield out there cool thanks a lot guys to kick everything off could you share from your point of view what is ponzinomics and what is yields yeah so my interpretation of ponzinomics is that it's an economic system where um early participants are rewarded disproportionately um compared to later participants at least within the context of the system and in the question is what are you using this economic mechanism for uh so in the case of the classic Ponzi scheme the original Ponzi um he was basically robbing Peter to PayPal he was taking people's money in and using the new money to pay off the old money the old uh investors obviously a Ponzi um and specifically designed to not have any value for there not to be a real business no actual value creation just transferring money from new investors to Old investors um so that's what not to do when you're using ponzinomics you need to have some value prop you need to have some actual um real world value that you're going to deliver and in that context ponzienomics is effectively an adoption strategy it's a marketing scheme and if you're using it as a marketing scheme to attract early um attention to get people in the door so that your value prop can be delivered then I think it can be an effective tool but if you're using it as the foundation for your entire economic system I think uh then your then your Ponzi scheme this is becoming this panel where I start agreeing with our panelists I think I personally think Ponzi nomics is a combination of a sale of your token and actual usage so it's a bootstrapping mechanism where people well you Channel your tokens into a specific activity rather than just selling to VCS or retail investors you know but if you're doing it in a way that is like really just buying uh or giving the profits to early investors uh only by attracting new users so that the new users are actually paying paying out the exit liquidity for for the initial investors I think that that's just a plain out bonuses human and like you see various D5 protocols I'm not going to name names here that that have well at least some very like similar mechanics to that um yeah so maybe can you expand on that because I I was actually thinking about uh coming here in a t-shirt not with uh just daoit but with the market cap of Klima uh but but to to be fair I decided that that there was a little bit too harsh so um what do you say to the people uh who who had their money burned in clima because they thought oh this is gonna this is awesome a sustainable way to promote climate change [ __ ] hell um I have a few reactions that so I think on one hand it might be helpful to clarify the different types of ponzenomics that we see in defy um so the sort of classic um Ponzi game that we saw deployed a lot in D5 summer for instance was liquidity mining right like pool two incentives where you basically just print a token to incentivize people to provide liquidity as the traditional use case and when those incentives run out because your grant money is gone or because you've reached your max Supply or whatever the liquidity vanishes and that is really structured pretty much like a Ponzi scheme because at the end if you haven't won yet right if you haven't taken your your profits then there won't be anyone to give you like there's literally going to be no US dollar uh stable coin left in the pool for you to take and like have be your profits you'll just have your [ __ ] coin token you know with no use case so um that's the traditional approach to ponzienomics that we've seen used historically um so Olympus invented a new or applied a new uh type of ponzenomics to their token launch where they basically played a very High staking reward rate and by staking you would see your own balance go up at you know in at the peak like 120 000 annualized uh which is obviously unsustainable and I don't think anyone uh evaluating a protocol on its um quantitative economic structure would think that that type of inflation is sustainable um but it's a very effective marketing tool and as a marketing tool as an adoption strategy I don't see it as that different from liquidity mining um with pool two rewards the big difference is that the liquidity in pool two goes away when the incentives end right the liquidity in Olympus will be permanent as long as the protocol survives the liquid D will be in the treasury and so you won't be rugged right you won't be rugged of liquidity you'll be able to liquidate even at the very end of the protocol there will be liquidity uh are you satisfied with this answer well I'll I'll let you speak first then uh I'll come back to this I mean we have to it's not proven yet I think that if liquidity mining ends that the project loses TVO I mean we're going to see now with compact what happens to it like if they that indeed happens okay but I have a feeling that actually compound reached the level where the infrastructure is trusted people are still going to keep using it and probably liquidity mining disappeared is priced in so if that happens it could be you know the opposite I think that actually points out a really important um distinction which is uh what I was talking about at first if your ponzenomic model can end and you still have like real value being generated then you you've success it you success you succeeded right you've launched a new Venture you've started a new project and you've ended the sort of unsustainable poncinomic mechanism that you use to bootstrap your launch um the problem becomes when you don't have a plan for ending the Ponzi nomics uh and maybe you don't have any real value being delivered by your protocol then you're reliant on on the ponzienomics to survive are you reliant on the policy no makes to survive at the moment no why not we have non-dilutive Revenue um so clementow recently launched our retirement aggregator which is a tool for anyone to be able to offset their carbon footprint using uh cryptocurrencies and uh it provides a one percent aggregation fee directly into the treasury with no dilution so there is uh basically a revenue source for the treasury does that treasury value also then reflect in the value of the token because based off of your market cap comment yeah yeah well and that's uh you know I I can't comment on how the market values things but um the idea behind clima is that our token is backed not pegged so um there is a certain amount of carbon offsets in the treasury for every claima token in circulation um and we do sort of we stand behind that the policy team will take actions in the market to assure that cool do you have something else to say yeah just uh briefly coming back to the the on point um where uh where you're saying well with this uh this ohm is it's such a new innovation where you will always have have some money left in the reserves but uh when you have a supply that's um yeah I I don't know in one case for ohm it was also about 75 times uh or or even higher uh they're backing um so when you've got for every dollar you're getting uh one and a half cents um back um I'm doubtful people people will actually redeem it or they would rather say well [ __ ] it I I can't even buy a beer with my uh formerly 100 yeah and I would ask the same question I I think it's a good opportunity to kind of zoom out and look at ponzienomics outside of um the realm of cryptocurrencies because um these structures and mechanisms have been around for a long time um and in fact uh in the United States the Federal Reserve System is largely structured as a ponsonomic game where the member banks of the Federal Reserve System are able to access features of the system that are not accessible to individual holders of dollars and so like yes you're you know your own may only be backed by like a dollar worth of value but your dollars um I'm sorry to tell you are not backed by a dollar's worth of value okay there's a belief that the Federal Reserve will step in and defend the value of the dollar but we're already seeing in the current inflation we're experiencing that the buying power of the dollar is not assured by the fact that the Federal Reserve is backing it um so I guess what I'm saying is that um ponzienomics can be used for good and we have seen it used for Good In traditional Financial systems like the Federal Reserve that doesn't necessarily mean that it can't also be used to make a Ponzi scheme yeah sorry but but uh trying to compete with the FED especially here in a crypto crowd I I don't think you will um yeah make make many fans with that uh because like in traditional uh World indeed there's a lot of inflation now and people get basically a text through this inflation uh um and it's an an extra tax but uh then then saying like but hey inflation is good if you just stake it in our system uh I I don't really understand that uh Market a marketing mechanism yet yeah it has to be managed carefully right because um if you maintained a thousand percent inflation right If the Fed was inflating the economy at a thousand percent sorry which is the current uh inflation rate yeah so as you can see on climates out of Finance exactly clementell's current annual uh annualized uh claim of reward rate is about a thousand percent apy um that is not going to last forever uh I hope that's not a surprise to anyone um so we have a framework that we put out on kip3 and we're actually in the process of revising it where we will gradually reduce the rate at which um our supply inflates uh to sort of keep track with the growth of our protocol and also the growth of the broader carbon Market on chain at maturity we expect uh something in the range of like five to ten percent we're talking years in the future but that's sort of the the what we it's a risk-free rate that's what we're trying to eventually create as a risk-free rate on carbon offsets similar to how the treasury um bonds used to be considered a risk-free rate although now it's below inflation so as I think that comment was made earlier that you can't really beat inflation with the risk-free rate anymore so it's not really risk-free on the topic of inflation like um obviously people are in crypto the Bitcoin narrative is anti-inflation right do you think that the the kind of ponsonomi ponsonomics environment can how to say actually be an incentive for more people to migrate from this traditional obviously broken Fiat system to blockchain based systems and yeah that all the things that we've been talking about the whole about devconnect right we're talking about real-time real-life inflation you mean yeah like crypto is and like how how can we combat inflation by moving Society over to the crypto ecosystems and ponsonomics maybe being one of the incentive mechanisms to make that migration of society yeah the thing that I think about is what is what why inflation right like what actually is the cause of inflation and um you could say oh well it's printing you know too many dollars or printing too much of your token um but it's really about the relationship between value creation and token creation or the value creation and dollar creation if the economy was growing at you know in lockstep with the dollar printing then it wouldn't cause inflation the buying power would be constant um so really this comes down to like macroeconomics and monetary policy and old people yes old people too in in the sense that um the basically the world has changed uh we're all you know mostly on the younger side um in this room and um the way that the world worked for the better part of the century when the Fed was you know successfully managing um the global economic system has changed and uh we see that happening all over the world we see it um with the egregious crisis in Ukraine um I think it's clear that the world order is Shifting and the question is will the Legacy institutions uh be able to keep up with the pace of change or will we need new um Financial systems to adapt to that new world yeah I think it's more about the rate of inflation rather than presence of inflation itself like two percent inflation per year is not such a bad thing like if you were to look at the you know people look a lot at the dollar charts saying oh in 100 years it went from 100 to like 0.01 cents but you don't you're not alive for 100 years like continuously right you don't see that rate of decrease in your purchasing value per minute right now if you saw inflation like you did last two years and it goes up but it goes down by 20 the value of your stuff then you start caring right so I think it's about the rate of inflation um if a project can say Max inflation is going to be four percent per year and that's embedded in the smart contract maybe that's not too bad if it's like it can be anything yeah so it's about the rate I think so I want to ask you maybe I'm jumping ahead what do you think is a sustainable yield and do you think that it is proportional or like correlated to the maturity of the project paying it well I think uh to to get a sustainable yield um I I think there are certain certain yields in crypto which are fairly sustainable I think Market making is is sustainable in crypto I think lending markets is a sustainable way to get uh get a yield um uh and and then there's possibly a third with um like underwriting but that's also really hard so like a premiums for for both options and in insurance um so I think there's basically those those three types and then there's the the polynomic type which can add some additional sprinkle of yield on top of those um but I would personally not like to be involved with the project that's merely focused on this um yeah liquidity mining uh um yeah just just block rewards yeah oh sorry yeah so it's taking rewards I think that's also an a source of a stable yield so that there's actually yeah then four sources of of relatively um uh good good yields uh would you which you can build on top of and and yeah as at Oasis where we're more focused on that direction then um yeah trying to build a product on top of something that's that has a thousand percent apy and that you know is not going to last the thing is though like yield's supposed to reflect use are supposed to reflect risk right so stateive gives you a certain percent because it's less risky something risky gives you ten thousand because it's risky so if you adjust for risk on the yields very similar I'm just trying to think about it like actually if you adjust aren't they the same yeah that was kind of the way I was I was a bit of a leading question um because I was trying to get at the point that the appropriate yield for a project in my in my opinion is proportional to the maturity of that project and if you're early on you kind of have to pay a higher yield because you're further out on the on the risk curve right you have to attract um you have to attract attention um but I think that the sign if you're at maturity if you've been around for years and you've got you know thousands of users and everything's going well and you're still printing at a thousand percent that's when I think you have to start asking questions about what is the long-term strategy yeah definitely that's just not sustainable but um I'm questioning also more in in general whether uh allowing such well I I I wouldn't say that we should should disallow your project to exist because I think it's really great that you're actually trying to to add value to to combat climate change but but I mean more like um having a thousand percent apis uh on on front pages uh like across the space is causing people um uh like uh I I get questions like hey I've seen this rate uh would you advise me to put my money in in there and I'm like obviously not but why can't you think of this yourself and apparently there are many people who can't think of that themselves and think it's uh oh uh I I get sold this so if they can sell me this then it will probably be okay because otherwise some lawyer would have said no or something like that so I think it's just putting um the whole yeah space in a bad light and adding on top of the pile of bad things that web3 has do you think they should be regulated uh well I think if if you guys would have uh have who would have had a prospectus I think no one would have read the perspective so I don't think like that would have changed much yeah but yeah and I think that gets to an important point which is we are operating um in a new space right we're trying to do things not clima but like us right the crypto Community we were trying to do things that disrupt Legacy institutions um largely for-profit Legacy institutions who deserve to be disrupted for the record um they should be competitive Banks should not be given uh free passes for for negligence um but that's where we live in and uh in my opinion there is a role to play of economic theory in informing our decisions about how we disrupt that Legacy system and I think ponzienomics is one piece of economic theory that can be a very useful adoption tool I also think that the market Dynamic might change anyway like if you start looking at if you see that a fixed income protocol start growing and you can actually lock in your yields and start to Delta hedge your exposures which I'm seeing now in the space we might see in the two years that these rates will not even exist because you can immediately lock them in and hedge right so I I suppose so maybe that's just a short-term thing until people start locking these things in find a way to lock them in you know yeah and if you had a protocol locking in a thousand percent apy for a year then I would be running as far as I can away from that protocol right because um and this is where we come back to Value creation right um there there are very few Industries historically that have ever inflated their actual values at a thousand percent annually right I mean like you know microchips like the CPUs processing may be one of the few that has had that kind of exponential growth in actual value creation um but it's it's obviously unsustainable and that's where I think um in many ways the 3-3 apy meme has kind of died in that I don't think that most um people in crypto will fall for the like 100 000 apy the way that they might have once when Olympus first launched I can ask you right so you started with let's say a thousand apis at what point do you know that you have to offer less like what yeah okay I can explain a little bit how within the context of clima we think about um our reward rates so um as I said before each claima token is backed by carbon offsets um and our intrinsic value the sort of backing value is one ton of carbon offsets per one Prima that means that we can never have more claima than there are carbon offsets on chain so there's a fundamental limit to the rate to the amount uh that we can grow and so we kind of look at that now the thing is more carbon offsets can be brought on chain but there has to be an incentive to do so um so that's one of our big um initiatives right now is driving um demand for Andre and carbon which will bring more of the off-chain supply on but our limit our growth is fundamentally limited by that Supply so we will have to lower our reward rate to avoid ending our Runway um before we hit that limit of the current Supply but is there some sort of a curve that kind of shows you what these students is going to be like what's the point where a thousand becomes five yeah yeah that's a very good question and in fact historically the way that Olympus did this for instance is they published something called OIP 18 which is like a reward rate framework that lays out how the policy team will decide when the reward rate will be lowered but it's uh it's more of a guidance and like a framework than it is a specific prediction or a specific commitment um and we have a similar one but we've actually been adjusting it because the way Olympus does it kind of simple and we we have a more complex system to manage and as a person on the team if you know when when you're going to publish that and if you know what kind of rates you're setting into it you you know the point that you personally would want to get out of the 3-3 and actually go to the minus one where you sell all your stake this is an interesting point so um it depends on what your what gain you're playing so we talk about 3-3 a lot um but I don't think that most people have gone through the game theory of like what 3-3 actually means so the reality is that 3-3 only works in a very long time Horizon with perfect information okay if if the project is going to succeed then three three is your optimal outcome staying stake does your optimal outcome but no one knows that the problem is going to succeed because we don't have perfect information um so that's the big question if you believe in the long-term success of the project then selling your rebases or something like that or liquidating before the apy goes down is kind of missing you're leaving money on the table basically you're you're not aligned with the long-term success of the protocol so if you believe the protocol is going to fail you should probably just not be involved with that protocol if you believe it's going to succeed even when the apy goes down you should stay staked because the in the long long term all the apy reduction is really doing is like pushing your rewards um into the future indefinitely so if you're really there for the long long term and align with the long-term success of the protocol you would stay staked rather than selling even with an apy reduction quick question earlier you said um you know there's kind of like a guidebook of when they make the decision of how to change the the rate could those things or should they actually be like on chain in the smart contracts where it's automated I think so actually there's been some research lately research lately on how to kind of achieve what most ponzienomics has tried to achieve having the token go from 1 to 100 very slowly and steadily I think at the end of the day we're trying to do that like we're trying to make sure the token doesn't pump and dump right and there's ways to do it like by having a strong initial Supply to have high float to have a issue into a curve that looks like a bell curve so if you price these things in into the smart contract you might achieve something better than this right yeah I think it does depend a lot on what the system is that you're trying to manage because um like as an example um something like urine where they're managing you know um you know yield vaults basically it's a relatively simple economic system to model and so you can imagine designing a smart contract that incorporates all the relevant metrics in a couple oracles you know and you've got all the information you need to make reasonable decisions I think if you're managing an entire New Market on chain like what claim is trying to do it's much more difficult to imagine how you would programmatically Implement all that although it is theoretically possible we're actually we're planning to implement like a manual version of a of a controller kind of like a thermostat where we'll have a set of metrics that we're going to make our decisions on but still gated by like the humans doing some data analysis and like making sure that the numbers we're choosing are right but eventually it would be really cool to sort of have that whole model be automatic and and have everything go through a smart contract it just um you need a sophisticated smart contract for a sophisticated system if only we could look into the future um in general though wait I just want to say one thing is um guys like we're going to open up the audience questions so please start up voting and asking and all of that jazz because I'm going to go from the top down cool in general though I'm questioning uh a question for you both uh I'm very curious because we're spending uh all these um uh like brain power of really smart people uh like both clima and Euler have really smart people um uh on on this like uh liquidity Mining and um I'm just wondering is is it also possible without it like do we need to spend all this time uh I think it's possible but you can look at web 2 to see how that's working out like like uh it's kind of cool to have a token in general because I haven't seen a web 2 where you launch and there's 2 000 people on Discord giving you feedback like that doesn't happen the web too because they're never going to be a token right same with you it's like we had when we launched we had no we didn't announce any liquidity mining whatsoever we had zero yields no one's using it it I mean no one knows about us the moment we announced we're going to do some sort of liquidity mining suddenly there's apis going through the roof people start liquidating deposited withdrawing it's like it's what you do to bootstrap activity initially and make your youth look good and then you use that time to kind of create to have a product that works and once it's gone it's gone but in between hopefully you've eased your time you know why is it it's about product Market fit which in startups is perfectly normal and is really the the like the one important thing between life or death for a company so I'm sorry you can answer also but uh quickly to expand on that I'm I I've seen multiple projects that have announced before that they would do liquidity Mining and then you see the the TPL go through the roof and then they've got their token and then the TV are doing those down again um I think actually it makes much more sense to just do an announcement that in some time in the future we might have some airdrop for users um and and just never do it at all well it's a form of like it's like the token exists it's just not claimable that's how I see it you know because you embed expectations into people's minds and that means that's how it can exist it's just the part of the curve doesn't exist yet but it will you know so I think token exists like it's a it's a it's a default that's how it can exist even if it doesn't you know because imagine you have two projects they are the same almost the same and one has a token one hasn't if you're whale are you going to use one of the former like you're going to use them on as a token because that's the opportunity cost so that forces you now to have a token and I think for that reason alone like it's not like we have a choice to have a token or not we have to have a token because someone else is going to do it too right I want to move on to one final question then the audience questions because there's some there's some real there's some real big ones in there it if you're advising a D5 project would you recommend that they they integrate positive ponsonomics into their projects and if so via What mechanisms I think I know your answer but no by all means I think it's a good idea depending how like I know is this Shilling or not like can I explain how I do it how we do it yeah like we even sensitize borrowing on the lending protocol so people borrow across different markets and that pushes lending apis at higher but also you accrue tokens and you can stake them against different pools and in the next two weeks that ball is going to get those rewards it's also quadratic so there's diminishing returns and borrowing from the same pool right so people start shopping around different markets and you see generally lending apis tend to go up like across the curve not just in top three markets top 13. so if you incentivize what you want to see apis borrowing activity I think is definitely a good tool don't just inflate it away and give it to you know just give it for nothing you know yeah I want to actually answer your previous question at the same time um because you're asking like uh do you need Ponzi nomics should you I think that's the first question you should be asking yourself as a new project is like is there a need for what poncinomics provides the same way you would ask is there a need for what Discord provides or is there a need for what any other tool or in your economic toolkit that you'd use um so with clementow climate change is urgent as we've all agreed and I uh emphasized early on um and so we don't have any more time uh we don't have any other options than to use everything we have on the table to to force climate action now I don't think that if your goal is to create the next big you know uh 10 000 pfp nft collection that like having a ponsonomic token is necessarily relevant or good for you makes sense makes sense all right gonna go to the audience questions uh this uh I would like to remind you guys that this is being recorded before this and also I want to be clear that this is their represented this is their personal opinions and not represented of their organizations I want to make that super important because I really want honest answers on this because I think yeah it's important this is the most upvotes I've seen in all my panels is Luna a Ponzi scheme anchor slash UST starting off with the light topics I see um we were talking about this earlier you want to start uh well I think so um so yeah uh I think that's that's the answer enough um I I don't know do people need explanation on this even or I saw meme somewhere like uh uh stable coins create good times good times create unstable coins and bats but I mean I think there should be definitely a conversation around what is a stable coin you know a bank is a stable coin in the way but it's not over leveraged over collateralized is it yeah it's still a viable institution right so I'm not saying it's good or bad I'm saying uh treating anything that's not over collateral a stable coin might not be the best approach wow we have to recognize the systemic risks of having a token like uh Luna maybe so if you want to use it as collateral for a multi-billion dollar transactions maybe you have to be cognizant of these systemic risks that are being created but it may existence I don't think it's an issue you know like okay I'm going to add on to this like USD um usdt right there's been huge discussions about whether this is actually backed or not and now there's a lot of controversy around Luna is this the new usdt in a sense that everyone's just gonna like just accept it and it's like oh yeah it's fine we we don't need to know all the specific it doesn't need to be over collateralized like yeah what's your effect like what are your thoughts on the effect of this on the on the long term of the ecosystem yeah I think you got it exactly the right point in the same way that um you know is the US dollar the world's Reserve currency right uh it's a question that we all thought was settled for a long time and now it's not so clear um and I think you're right to ask the question you know is it is it safe or good to have you know um a project like UST and I think it remains to be seen honestly I think that um I don't really know what do Quan's like long-term vision is it's not totally clear to me but I think that if there is something more to it than just a um you know a stable coin collateralized by Bitcoin to attract Bitcoin Maxes into defy um you know I mean that's that's a strategy I don't know that it's a long-term strategy that is really set up for the success of the broader T5 space I think from a lending protocol perspective we need to make sure that we don't have a 2008 scenario in D5 and this is where we either wait to blow up and the regulator comes in and [ __ ] us all always self-regulates a bit and think prudently so you can list something as what's the systemic risk of listing something as collateral well you can list something that um cannot cannot be liquidated let's say it's not liquid in the event of a liquidation you cannot sell it there's no bids below one which often happens with stable coins and that's something we have to think about will there be any bids below that level or not you know so in terms of actually listing something as collateral I think this is where we have to think there carefully and they only list the highest quality assets uh which is why I'm of the opinion like there's no there should be only like five assets that should be listed as collateral even if sorry even if it's not a stable coin it may be fine because there's probably some liquidity across the curve the price curve so you can get rid of that collateral but with stable coins particularly it's either one or it you know like there's no liquidation right yeah uh I think uh Defy is basically eth and all of its staking variants so light does take these and Rocket police and stakewise Etc wbtc uh which is it's bridged as yeah I I I hope that that we don't get a systemic risk there uh die and UCC I think those those are pretty much the the most the four most important and all the rest is is just um yeah Us in this room playing around and having some fun and Magic internet money yeah literally um this one's directed uh to climadel so right now the MC slash TV right here for cleaners around one so clema is now fairly priced priced fairly so the oh so the only problem is that in the past speculators valued it too high question mark I wouldn't say that's well I would say that if you're looking at the price chart that's probably your interpretation of the problem I don't spend a lot of time looking at the price chart honestly um so um what I would say is that in terms of fair fair market valuation um so if you're buying something at 300 times it's intrinsic value I think everyone can agree it's overvalued if you're buying something at 1.2 times or 0.8 times I think it's a little less clear what actual fair market value means because there's risk in the in these assets so um you know like should there be a premium priced in for the earliness of a project should there be a discount priced in for the maturity of a project um I think these are all important questions that as an individual choosing how to allocate your money you have to decide do your own research um but yes like the whole idea of backing is that we can give some guidance to the market about what you should expect the fair value of a say a claima token to be yeah that's fair and I think there's um one guy Michael I'm going to call you out because you're in a crowd oh my oh Michael's happy to expand because uh Michael says they're being way too nice cleaner is scamming users out of their money with the promise of false apis and then donating this money to a good cause okay I can yeah it's the big short moment let's do this can we get the security in here please so obviously it was a little um I think I've been frustrated sitting here when you guys are talking about sustainable yields and comparing the yields on Klima to yields on Blue Chip protocols like Ave Etc the tokens on these other protocols give you a percent ownership in the protocol which is producing something of value which would be the fees for clima there's a circular logic where the tokens are being used to raise money for the treasury but the tokens also represent the treasury so the effective yields for clima is actually zero um because all these tokens are being printed out of thin air and it's actually less than zero because there's a percentage that's been taken uh by the founders and by the treasury so all of these apys are complete false promise um it is an effective fundraising mechanism but to me it is just a misleading fundraising mechanism there's no value to the actual users uh users would be better off donating their money directly to these projects that they care about instead of trying to earn a high apy okay I think I understand your point Thank you thank you [Applause] foreign so I think it's important that we address this issue at two levels so on one level there's a question of what is clima's Real World goal like what are we trying to affect in the real world and at that level I would push back a little on the idea that people should be donating directly to projects because the voluntary carbon Market is set up today to channel Capital it's just that the the capital right now ends up all being sucked up by middlemen in the Legacy market so you're talking about you know 30 markups just to get your hands on the credits because the broker Who currently holds them won't sell them to you unless you're you pay a 30 markup so we see there's a major market failure that we're trying to address um and the way we're trying to address it I think is what you're taking issue with rather than what we're trying to do is that fair okay with the mission it's just about the way cool okay good um so then the question is how do we do it and um that's where um I acknowledge a sort of grain of truth in your point which is um people were misled in the Olympus craze that went down in like October of November of last year not understanding what staking rewards actually are nor the presence of things like OIP 18 and kip3 that explicitly State these you know these reward rates they're not technically yields I think that's your whole point if they're not actually yields they're basically inflation um they cannot last forever and they will not last forever and a responsible treasury management team a responsible policy team uh managing an Olympus treasury will be very upfront about the fact that these reward rates must go down for the long-term success um first of all the point we'll take it on the first part um as far as talking about these rates lasting forever I would argue that these rates actually don't exist right now because in the price of an asset right it's a combination of this apply and the demand so a lot of times people have used the volatility of crypto in general as a way to hide the returns like if the token just stays above a certain level then even if it just stays at half its value now in a month you'll make your money back but with with clima these these uh apis like you say like you admit um and I agree with you I'm glad that we're on the same page is that this is just pure inflation and so absence of volatility in the crypto Market the yield would be zero with volatility it's obscured you can rebute his point and then we're going to yeah we can move on but I'm happy to talk to you later and go into more detail on this um so there is one point I will make that is different between Olympus and clima it's really important to understand the underlying asset is not priced in dollars it's priced in carbon tons right so we're backing clean with carbon and that carbon can become more valuable over time so there is a POS like basically you can think of clima as giving you exposure to the carbon offset Market not just as a slice of the treasury does that make sense thank you I appreciate that and thank you for also being respectful and not throwing your microphone at him yeah on on this point though um I I am really curious indeed at um okay there is uh right now five million tons how much is so it's a lot more it's almost 20 million total okay so with the ponsonomic game that you created uh you you got 20 million tons into the system with the poncinoma game you're creating I'm just kidding it's a liquid I think liquidity mining is is is a bit um more to the left on the on a risk curve than just the pawn Cinema game like home um but your um what what are you hoping to achieve um to say use it what do you mean like okay we've seen 20 million tons uh in the system and and that stayed there right other than the liquidity there's a small amount that flows out and in but yeah most of the tonnage is held permanently in the treasury yeah uh so so then after the liquidity program is finished on Euler how does Euler look like uh hopefully it's used as the underlying Cog for D5 for short selling so for Delta hedging Structured Products for Integrations for all sorts of things that are not related to liquidity mining so uh hopefully after one year even before that the distribution of activity shifts from liquidity mining to something else which is actually useful yeah that is the key right value creation that's sort of the thing underlying all this uh another question is um and we I just take one word one project for this from each of you are there any top 100 projects that you would like to call out as Ponzi schemes I don't want any debate I just want a project so it's a what one net project right out of the top 100 projects or it can be yeah I'm not fussed about that that you would want to call out as a Ponzi scheme as a true Ponzi scheme I think the elephant in the room when you talk about Olympus Forks is Wonderland time I really don't know much about bunsenomics to be fair I don't even care about these eduis I never you would find crazy apis I use lending protocols and emms and I keep it cool and are you fine whenever there's something really decent interpreting that as like [ __ ] it more ponzis honestly the opposite I barely use anything that has more than 20 apis or unless I leverage up or something like that so I don't even know what's going on there okay okay I can't argue with that I I really hope to see like an audit of of tether that that I would trust myself [Music] Jesus Christ um yeah like I think to be honest like maybe this is a nice question I think it's also important everyone put their hand up in the in earlier and I think all of you can maybe contribute to this is what are the D5 related ways can we combat climate change is this where I get to show clima or no like no I know I'm just kidding I'm just kidding uh I actually I'm curious to hear what you guys yeah yeah outside of clima what you guys think uh from my perspective I think uh yeah move away uh from Bitcoin uh or okay so I I actually think that this is gonna play out uh in this year or I hope it's gonna play out this year and um so uh the mainstream media is going to say in about six months from now hey ethereum went to proof of stake that's awesome uh oh and it and it's still working this system oh and it's still moving a lot of value interesting Bitcoin is on proof of work oh why are they still improved work and then you're gonna get this mainstream media uh Narrative of Bitcoin should move to proof of proof of stake as well uh why why can ethereum do it and uh and Bitcoin can't then you're gonna get all these um Bitcoin Maxes who are so against East and they just can't fathom Bitcoin ever going to approve of stake uh and then I think like let's say June of next year we're gonna see some some guy proposing just with all the code ready for Bitcoin to move to proof of stake uh people are going to follow it and there's gonna be a huge opportunity um for that and then we're gonna get the the scaling Wars again like is it going to be the Bitcoin fork or is it going to be the Bitcoin proofers take I'm not ready to go through all of that again like Jesus going through this transition or or are you gonna dump I'm not holding any Bitcoin there we go yeah I think you use D5 don't use track five that's how I think of it like if you worked in the bank if you worked in the bank or any shop you know there's 6 000 people in the middle office setting trades ethereum does that you know instantly on its own like it's just much more climate efficient whatever you call it to use D5 then track five so screw track five Long Live D5 foreign Beyond everything I've been talking about with what we're trying to do at clementell I think there is a more direct action that every protocol every project every blockchain in the space can be taking which is to calculate and offset your historical and ongoing emissions and we can help you um reach out to us we have a clean Infinity program where we are basically trying to do this I'm personally on a mission once the merge is complete I'm on a mission to offset uh all of the historical proof of four commissions of the ethereum network um so if you want to work on that and let me know amazing I'm super happy we could end on the sustainability topic actually because yeah there's only one planet and we can't Ponzi our way out of that at the end of the day so thanks ever so much guys thank you thank you [Music] oh