DeFi risk over the past year - Panel w/ definikola, TokenBrice, 0xdaryashakh, PrimozKordez

and we are back with one of the most anticipated D5 panels in this history in this conference in the history as well not gonna lie so first I want to call to the stage our moderator you know him as the captain but we call him as our sweetheart welcome Captain Nemo [Applause] next up one of our panelists comes from the local company which we all know and love called defy saver please welcome Nico on the stage [Applause] next up we have one of the biggest ogs in the D5 space Bryce from liquidy [Applause] so next panelists you probably know her if you are deep in the space as all of you are of course please welcome Daria from Xerox thanks and finally a company that supported this event so many so much in in so many ways please welcome pretty much from block analytica I'm Gonna Leave Captain Nemo here otherwise I'm gonna abandon the ship good luck thank you okay hi everyone so first of all let's start with a basic question can you just raise cans how many of you use the lending protocols in D5 such as other and compound just to sense their own okay how many of you tried decentralized exchanges such as like curve unisfab sushi so on and so forth how many of you ever use Bridge from L1 to L2 okay nice okay so majority of the crew here nice okay so let's start with the easy things right so like let's can I ask you guys to just give us like a short intro about like what you're working on what's your project about and then we can dive into the other questions so we can start from here yep thanks my name is Nicola I come from D5 saver and I'm basically doing the ecosystem research trying to figure out which protocols should or should we not integrate on our platform thank you Bryce hi I'm Bryce I work with a liquidy protocol and uh yeah my main focus around liquidity strategies and cross chain for our total cancer USD and lqty oh okay my name is Daria I'm Business Development from Xerox I've been with the company for about a year and a half and Xerox itself focuses on Deck segregation and smart order routing so basically swaps for you so if you ever use matcha XYZ for example this is your ex or if you know like obviously you probably have metamask as well we are one of the providers under the hood who power swaps in there hi I'm pretty much I'm founder of block analytica and we provide risk parameter proposals for maker Dao and we also build customized risk dashboards for makerdale but also other different Landing protocols thank you guys okay so first because the whole panel is like navigating the risk and discussing what are all of the things that we survived not just in the last 12 months but maybe even before that and with that in mind I think let's start with addressing uh obvious elephant in the room so I'll start from Bryce and can you tell us a bit more like how do you see like in the last 12 months like we have FTX collapse right we have trailer Capital we had also systematic risks such as Terra and Lola ecosystem can you tell us like a bit more about that like how it was like during building all of these things how the perception when they're yeah so definitely there was a a lot of events happening related to risk next year uh pretty much a year of Market trauma If we're honest and you know a first perspective is is first it's kind of good because it's a stress test of the system so we had quite a few events in a row that were you know considered a black spot lover like usdc depicting or things like that and so this kind of allowed us to see what what happens actually in D5 when those things not exactly blow up because usdc didn't go to zero but still depict for like three days as well as all the stable coins so that's the first thing is kind of the stress test anger uh of course you know sympathy for people who lost money and all of that I'm talking about system perspective here um the other thing that is interesting I think is we realize counterparty risk existing in crypto and we were kinda it was a bit of a big black box for everybody so what I mean by that is as Tera FTX and also blew up they took with them in their form many other companies projects and whatsoever that were lending them money or you know had various kinds of relationship with them and at least for me the big surprise was seeing those long terms and agreements so some of them actually leaked and it's actually insane to see it's pretty much like a piece of paper hey give us 750 million dollar we might give it to back to you in 15 days if you ask for it all right bye bye and and money moves on something like that so that was quite uh quite surprising yeah so I guess I would be the two takeaway like a stress test yeah do you see the do you see like in your eyes the difference between these actors right because Cheerio Capital was a fund that majority got wrecked uh FTX was uh well for the the better word fraud uh and then like we had terrarona that was more systematic risk like so how do you yeah how do you perceive like do you see the differences between these actors in your opinion in your eyes or uh well I mean I'm more surprised about how many people got committed with these actors despite all the factors being available publicly to assess that they were not reliable and to be trusted be Terror be it some from FTX so for me it's more about and this is what I say to people you know people say like oh I'm not trading the markets because the VCS they're so good they have Alpha but look at the VCS they got Terror straight in the face and most of them got FTX right after so if you as a private investor avoided Terror nftx you are beating 99 of the VC in terms of risk management well good point I would like to add probably the most important difference between those actors is that for Terra for example we had everything transparent and their own chain so everybody could look at the code and it was surprisingly um to see you know so much people um taking the risk for that 20 on 20 something percent apy because it was I would not say obvious but if you can you know if you have let's say gone through a lot of D5 protocols finding the flaws in design I think should not be that difficult and I think in case for Terra it was not so I think that people who are in the industry who were in the industry for some period of time knew that the the protocol was you know not sustainable by Design and I think that was the difference you cannot see that because of the the no transparency existed for the other actors it's interesting and actually maybe you can start and then I would like to hear from Daria um interesting thing that is happening is like maybe some of you know already but triara capital is raised in managed to raise a new round to start some new projects and so on and so forth so from the perspective of like these all new actors that caused the market crashes and lost billions of dollars um how like what how we can as a community actually prevent these things from happening and is it on us and how we can authorize Bad actors uh more effectively and with that in mind do you see the world where these actors become net positive in your eyes or in the eyes of the the the the crypto space you can start and then okay uh well I think that the focus here should not be on them raising money again I think that we as a community should focus on users uh in terms of Education of what uh of what has happened previously and explaining those events explaining how and why did they happen and to react by providing some uh non-custodial Solutions and maybe improving the ux of managing your own funds and you know trying to to bring the transparency into the world of Finance so yeah but we already somehow like we already have like tons of protocols that are transparent and everything and as you guys mentioned still people expose themselves to the risks doesn't matter if it's essential is as essential is the the human society as a whole and the grid level that we as humans have is something that is constantly influencing people so do you see the world where we as the the crypto native Quantum fault D5 World somebody that cares about titos do you see the the world how we can actually help out more and in which way to I don't know educate people or help them out to not go there even if it's like 20 000 apy or something like that yeah yeah uh I want to maybe add slightly different perspective here so I know the people who are talking about they hurt a lot of uh like users and I totally support the education part uh because again but I have a question about these people who like uh committed uh these like actions are they really bad people or are they like bad entrepreneurs because like in startup Vault like everybody knows it's like Mantra 95 percent of startups fail in crypto probably even more so the question like their next startup do they have a right for it because basically lots of millions like thousands or even millions of people lost their money and can they like basically recoup their like scenes with this new venture or like should we just punish them as a communion to tell like basically like in centralized world where some Bad actors are not allowed to go into industry anymore so like this is like a question for me still and I think this should be decided by the community and Community should be much more well educated to make these choices on themselves and to assess this risk so if this guy is like convicted criminal in the past can he still be like uh good in his next action and how much of risk I'm willing to take it maybe not all my savings probably so this is my take yeah Fair Bryce it feels that you want to add something to your hair yeah I both agree and also there's a good bit where I think it's a matter of self-policing essentially so if you think about every industry they usually don't self-police because they have regulation falling on their face here we neither have really regulation in the terms of you know those guys like they're not in jail they're sleeping well all those scanners most of them so it's not working this side and we're not doing self-policing so I think this is where it fails you know it's like we don't the other day put it like that D5 doesn't has doesn't have a human system so you can be a repeated scammer and it's actually a viable business plan and that's really the problem incentives problem so you know uh you and another thing I would add is to uh to your point of are they bad or not is some a lot of them have I I would not assume about the character but I could just say they do not care about pushing a proper protocol to maintenance so that was definitely the case on Terra or or you know other things and just recently like today Atomic wallet got drained okay 20 million dollar loss of user fans it got drained because of a security flow reported by a guy a year ago um so you know here there is no debate possible Atomic wallet guys are incompetent and not looking to push a good product sometimes it's quite obvious I would agree with you that case where it's not that obvious and um I would just add that it's not because it's experimental that you can do stupid stuff and you know say oh it's just an experiment let's go I find it's always it's often a kind of waiver you know like oh yeah it's just experimental you do you this can break but like it doesn't lift your responsibility of why are you putting this on the network in the first place you know and it perfectly goes into pretty much I would like to hear your opinion on those like to dive into now like on the orgy protocols and like generally like in our defect space I want to dig deeper into the some of the big uh Market maker liquidations that were happening like uh some time ago even before 12 months how like I'm curious from growth of the perspective of like a risk but also how it looks like internally like how the teams are managing in these situations that are maybe not like they are systematic risk and it's something how the protocol works but still those are the risks that can influence and cascadely influence everybody everything else thank curious like from your perspective how these things work how the team manage these situations and so on and so forth yeah so last year yeah it was quite stressful working in different risk to be honest I think the most stressful year ever um actually for maker is started even before Luna USD when there was some first bigger stress test so maybe some of you know there's this volt power user called seven siblings we actually named it so because he used to use seven volts so then became seven siblings um and he's still with maker he has one billion of collateral but early last year um I'm not sure when it was I think January February he just we all you know the power users who always look at them we have this risk dashboard to look at their CR and we see how they behave right because one of our things is to focus on Behavior of borrowers and yeah it was Friday night this user just wasn't reacting there was a you know crash in the mark but not not really crash just like heater dumped a bit and we saw you know he might get liquidated and his position was 600 million which uh you know if you compare it with defy liquidity liquidating this amount of heater could be quite devastating right um it it could lead to cascading liquidations because heater gets told sold the price decreases more and then you get other users liquidated and you know it can be pretty devastating um so it was a fun night um luckily maker has this different way of auction system where we liquidate in chunks it's determined by governance so the Chunk we set the maximum amount of being liquidated was 60 million and this turned out to be the right amount because this is something the default liquidity could handle so every 25 minutes he would get 25 um no sorry 60 million liquidated and the first cycle happened and then we're hoping for the best right like if this continuous like it drains all the different liquidity things can turn out really bad um but luckily this guy amateur did crypto Twitter woke him up but he turned you know he topped off his collateral and only yeah 10 of his loan was actually liquidated and all was fine but then we can another problem because you know how everything works said maker is predetermined right it follows the code so when this set of liquidations happened the huge amount of stability fees were paid and the Surplus auctions happened which means maker tries to buy mkr at the market and burns it right this was at least the case back then now the the bind burn is disabled and yeah the amount was again too big for the market to handle and we're worried you know protocol could be buying chemical at too high price and we couldn't do anything about it right because it's all predetermined so long story short everything was fine um some arbitragers market makers showed up and you know it was 112 1012 good stress test but like the long story short what I would say here is that you know even though it's great like D5 you can truly audit in real time what's happening like there's no like background stuff happening like we saw with C5 lenders um there's still you know this trade-off like when this series of events happened we were just looking really um because any parameter you changed should make or at least back then it requires 44 48 Hours um to be effective on chain and that's because to you know um to to not have governance attacks possible um and we were just hoping all the parameters were set right in place and we're hoping for the best and yeah it turned out it was okay but it shows you how important this part is right um it's all public it's transparency it's real time but there's like 12 parameters with auctions like if you screw with one parameter it's it's game over so yeah yeah and also like I think when we are touching risks something that is Maybe not immediately obvious but I think it's important to address is we saw some turmoils built clarus and Aragon and we were showing like generally like how in your opinion uh governance is something that is part of the different risks and do you think that governance is also something that we should take into account uh when we are calculating the risks and in what sense so like you can start and then Bryce maybe you can add a bit more of Garners yeah definitely there's a risk with it um it's maker for instance we try to do this um how they call it lock you know when we vote and then it usually takes uh now it takes three days actually to have garnish about the fact that effective and we even go that far that it doesn't go effective between weekends because you know people are not active maybe so sometimes it takes like five days um to have on-chain change effective and it's kind of a drag in some cases right like you want to react but you can't so you're kind of optimizing for our business and governance side at the same time we want to react against certain changes so we're always doing this trade-off and uh yeah it's not easy sometimes we need to be prepared in advance so yeah Bryce yeah I mean for me it's like not a debate uh it's obviously part of a risk assessment uh you know so some protocols can have that the code change and it's done through governance and then you know if you understand that you understand then it's part of your assessment and I would be more explicit in the sense that mostly in two ways so there is a first way uh I would call it the governance modalities and essentially attacks for governance so you know if they are not careful enough they don't have time lock or things like that they might get Liberty attack on their governance so we've seen that on a few protocols where for instance assets were drained because they were executing governance was instantly and one guy managed to uh One Way Or Another We're not gonna die but essentially vote like hey give all money to myself poop done so you know governance parameters are a big thing but something that people Miss also is governance is by definition a long-term threat to the protocol meaning that ideally you want to do without governance if you can do it but then there are definitely cases where you need governance so don't Don't make me say what I didn't say I'm not saying governance is ever I'm just saying essentially governance should be minimized is my perspective so if you can do with other governance you should really do without it but then some topics like we see on maker for instance deciding which assets are suitable to others collateral I don't think we have an algorithmic solution to do that uh in a consistent proper manner yet and so it seems sensible to me to use governance to do that but no you need to understand that it turns governance into a long-term threat to the protocol because no governance is making calls on essentially where the protocol is heading uh and to explicit it a little bit with my love for maker but don't worry it's like you know make us governance decided to onboard an increasing amount of real-world assets and that change the parameters of the maker protocol essentially where no there are those trusted collaterals meaning you have less guarantees on die and I mean there are reasons why they do that it's economical and whatsoever I'm not saying it's completely stupid I'm just saying it changed the nature of the protocol and that evolved any character the the features of dye changed because of what governance decided and so there's just something to have in mind in your risk assessment too yeah because you know it adds uncertainty towards the future essentially you are assessing something one no but it will evolve and maybe you will not like the direction it evolves to and also like um there are like a lot of these moving parts right like so from one perspective if you're looking at we are talking about different risks here but we can't skip the C5 in the whole story and uh especially because like as we are getting more and more tokenized in the whole D5 aspects uh it is all of these tokens are ending up on also some centralized entities maybe some Blackboard Solutions so on and so forth and when the the risks are happening it's kind of like spilling over the whole ecosystem and Nikola from that perspective like how do you see the differences with like assessing the risks with both of the C5 versus D5 Landing how do you kind of like perceive that area um well I think that when the assessment when the risk assessment is concerned um in D5 you basically just need to take time and to see what's happening on chain before you make any decisions and when it comes to to CFI it's a bit more tricky because um you you don't have so much information which you can use as a you know to back up your your decision but whatever that can be so I think that we should definitely shift in The Lending space I mean at least for the landing space we should shift more to the algorithmic protocols I mean the the D5 protocols because essentially the C5 and custodial Solutions are under the hood using uh D5 yeah um they're making their decisions uh probably based on the data they also fired on chain so I think that it should it makes more sense to just you know um make some work around uh around CFI and use the D5 directly okay pretty much do you want to maybe add and then price yeah so um you know that when was it like yeah last year or early last year before all the collapses right um all the particular maker we got a lot of criticism for you know High liquidation ratios yeah so not not being able to borrow that Capital efficiently it's maker that specific case because you have one hour Oracle delay to repair adapt so you know for users having high liquidation ratio but this one hour delay kind of makes sense but even if you look at our you know the liquidation ratio is still in range of or should I say ltvs are in the range of 80 to 85 percent and you know when we do risk modeling you know this is usually what works with some simulations um you know when you simulate you simulate price drops how users behave was the slippage launcher and so on and we always got a bit of sheet of high high liquidation ratios but then you know I talked to some institutions and I asked them okay so what are the terms of Genesis right because Genesis was the biggest C5 lender like their loan book was tens of billions you know five times as big as the whole default Landing so they were the you know competitor of chain and they were saying that yeah they can borrow a Genesis at a hundred percent LTV so basically 100 and they can go even Beyond and they have 24 hours to to top up their collateral so of course in D5 this doesn't work right um and you were surprised like how are they taking such risk and you know it turns out there were actually few institutional borrowers real powerful powerful one like 3ac or um Alameda and so on and all the sifa lenders were actually competing for these power users and they were giving the giving them the best loan the best terms like totally irrational but you know there was some kind of trust and yeah it's just insane now looking backwards when we talk to each other it's insane but you know C5 risk management practices were were insane but you know I I think if there were to be transparent as we were like I I found out about these terms like by occasion really but if this would be on chain everybody would look at it was you know there would be like a huge problem like people would complain and maybe they started it but that's that's the problem like it's not transparently a hundred percent agreed and it's like uh funny because it was leading me to a point I just wanted to share with you it's uh when uh ft started to blow up and there were issue on this front you had quite a few actors that were boring both from C5 lenders and from D5 protocols so they had positions on RV for instance or maker maybe some but also borrowing from the C5 lenders and who do you think they paid back first that's the funny thing is they paid back the protocols because you know the protocols you can't really call the guy and be like hey give me a couple more days for the money because I don't have it like you can't do that with Savvy all right it's a contract you don't have the money you get liquidated end of the story so I think it kind of shows something to where even those guys understood that you know they paid back the defy loan and then they call the C5 lenders and begged and made the little dents to get a few more days or whatever that attempt but like I think it's really insightful to really show that you can't do this little dance with a protocol and I think that's quite healthy you know going back on the trust you were saying for those loans yeah immensity for space and I fully agree that if we were seeing those terms publicly when they were signed they probably would have had massive backlash but also like Bryce while we are there um we can't keep like stable coin risks right like we had I remember in one moment like just chatting with the friends like which stable coin can I hold and not get wrecked basically like we had debegging of so many of them we had like a lot of mechanisms that were much more risky than they should be swollen and so forth how do we kind of like mitigate and how do we assess and how we the approach the the stable coin uh world right now oh so it's clearly topic for hours so if you're interested I did a talk about this yesterday uh but yeah the point I really want to carry out I guess is it's just like everything you know there is no perfect stable coin and so I'm really trying to communicate in terms of making sure you understand the uh the the pros and cons of the one you're using essentially that's more about this than being like oh this is a perfect solution I mean there are systems that makes more sense that also I would say you know so like some system for instance are slightly bit more scalable than another but like 10 times more risky so for me it's like not really interesting but it depends of of the people yeah without being too long just like you know I think everybody got the drill on centralized stable coins or what is a bit harder is a decentralized stable coins get tricky to assess essentially uh it really depends of what kind of risk you're willing to take but yeah if you're willing to trust the governance for instance or not if you're willing to take counterparty risk because you're using a system that relies ultimately on usdc or die or flux which means essentially Dollar in a bank account uh or rap TBN or other and stuff like that uh so yeah it's really like no the poison you're drinking I would say but it's hard right like it's generally like if you look at our ecosystem like there is you can point in almost any stable coin right now and find historically the challenges that are happening now almost all of them had like a d-peg in one moment so on and so forth and pretty much what's your opinion what's your take on this particular topic like around the stable coin risks yeah I I think token price had a nice presentation two days ago so I think he carved more or less everything um you know there's this dilemma I think we call this pentema we're all aware of it um I can tell I can say for for die specifically you know the the focus is on scalability this means focus is on pack so you know what we're really focusing on is trying to satisfy our liquidity reserves so whenever you're selling die you can be rest assured maker has enough liquidity that can be redeemed you know so even now when maker is investing in bonds um there's a framework and the idea is to invest in the short term bonds so you know there's a basically an asset liability management component of how maker Gardens now works so focus is on that but again yeah that's because the the main idea is about scalability and back but as as you said you know some users prefer something else right they want the centralization aspect or or something class so it's a huge Market you know there's tons of stable coins people can decide based on the risk profile so that's it yeah and also like if you look at any bull market and this high pressure hype train that is going on constantly that also influencing the decisions in teams right so Daria from that perspective I'm wondering what's your take on collateral management or basically decision making on which collaterals are taken into the protocols account and also like how to write the Skype train as a project as a team but not endangering or destroying the vision and the vision vision of the project that you're part of please go ahead no no no go ahead yeah okay um yeah it's maker we had quite a few so there's a process to list collateral like his garments based um and we did usually risk assessments and there was a period you might remember Define 2.0 period um when all the you know projects became boring and just the shiny new projects became fancy so we got a lot of [ __ ] of not innovating you know there were no Concepts back then and um there was there was struggle even internally maker uh you know you you had some guys who were totally on this D5 2.0 train hype and they wanted these tokens to be solicitous collateral at maker and uh yeah I mean luckily we have a pretty standard risk framework how we evaluate tokens you know there's always fundamental analysis then you check liquidity uh volatility profile you know and then technical of course if everything is based on multi-six and it turned out a lot of it was based on multi-six you just can't pass the test right but um there were some struggles yeah people really wanted to go with the flow with the hype and we said no I mean it wasn't really hard for us because everybody like maker is conservative so we went conservative stance and you know nobody really complained afterwards and then it turned out yeah this was the right approach but yeah it's always problem because people go with hype so yeah yeah I wanted to expand this stand because it's not just about collateral we as relaxed so like we see a lot of like chains for example approaching us to integrate uh like different layer tools which you know there are so many right now and when it's hype like chains are coming up new chains like new dexes are coming up and all they come to us and say like we have money we can pay you please integrate us like we can do whatever and we also we're quite conservative actually because uh maybe now they have users maybe now they have money and maybe they have users because they kind of pay to these users to use these protocols for example but when the Hypes dries out it's really important to see if there is like organic roles if there is like uh if the product actually works if it brings value uh and same for chain uh chains like do devs actually build on it because it's like Cool Tech and not just because they get incentives and we're also quite conservative actually and uh like we try to look at like metrics like TV uh you might selective users there is like a really long list down there and still like even in the bear market like I getting by friends like please integrate us and it's very tough to say no like even to friends but we need to do this to stay conservative and to be like the Guardians for our users in a way in the industry and Nicola you guys are all around the collateral so what's your take on this one well I think that the conservative approach I outsported especially from the you know stance from The Lending protocols Etc um I think that the liquidity when assessment when doing assessment for onboarding some collaterals or let's say integrating protocols to your platform I think the liquidity should not be the only parameter you should assess because for example if we take for example USD it was on Ave so I think you should go deeper and assess the protocol that is behind the token you're trying to to add to your platform because you're essentially representing that safety layer that users can come to your platform and say okay if this protocol has been around years it should be safe to use it and to use those protocols it has on board and onboarded on their platform and with that actually like let's dive immediately to the liquidity assessment right because how do you see like liquidity assessment as part of the risk mitigations and everything maybe pretty much you can after Bryce yeah just before we get to that on under risk and Integrations between protocol I do think there are things we could do better so for instance I am a bit I do a lot of governance proposals and about six months ago I started to do militantism in how I do my proposals so they are of the highest quality of writing and one thing specifically I make sure of they give you the full exposure of risk of the protocol I am suggesting we we add explicited so you know if I'm like hey let's do a pair for blusd and USD like okay LUSD comes from here here are all the risks that come you can be I mean we sell USD it's very minimal luckily yeah and then brusd it's a bit more but you literally have all okay so you and now can trigger this function unwind would mean this and this happens so if there is an issue with this contract you might lose this part of the money and you know it's it's really rare actually to see protocol being explicit on the risk and it's quite crazy because you think they come to a Dao to ask something like hey guys collateral then be like okay smart contracts are here audits are here you deal with it no you tell me what I risk if I add you so that's kind of like one of the things yeah maybe we can do better for liquidity um yeah it's it's not the only topic I definitely agree we should look at all the qualitative things about the projects the risk scope and so on but yeah liquidity is also uh the the Trap I guess people fall into is looking at the present and that's it you're not like oh there's tons of liquidity now okay cool but where is it coming from who sustains it uh will it still be here in a year if I kill the whole team there is still liquidity if the whole team goes to jail is legally still here you see kind of this kind of question of like essentially how sustainable is the liquidity because that's a big factor you know it's really nice to have billions of liquidity but if they gone tomorrow when you actually need them to liquidate uh it's useless pretty much yeah it's it's a lot about liquidity being sustainable especially after the whole ill Farm era you know a lot of debt liquidity was not organic so you need to keep to have this in mind but I'd say there's another aspect when it comes to liquidity in relation to Landing protocols and uh you know just overall we're going to do a risk assessment of collateral essential liquidity is one of the most important aspects um it's of course on chain liquidity right the amm liquidity because when the losses occur like worst case it's all from liquid foundation events so when liquidations happen it's about on-chain liquidity really if it's sustainable and what we do when we're asked when we run the risk models it's we look at you know slippage from aggregators if you are selling some some collateral what kind of slippage you get and you apply this you know simulation you know you get potentially a loss and you see how big your debt ceiling should be and this is the classic way of estimating risk you know for landing protocols but one thing that maybe some people are forgetting is that you know they look at Landing protocol and you know they simulates 10 let's say 10 million of some years 20 or being click with it and apply the slippage but they're forgetting you know D5 is much wider you know you could have you could have leverage of some token across differ right and when this is getting liquidated you should actually take that exposure into account and apply slippage on it and this is what what's missing so for maker is especially important because maker options are slower there's this one hour delay and when we simulate slippage you know it could be that you know when we simulate liquidation um that in that Tower already a lot of positions unwant on compound and have ever got liquidated or other protocols and all the liquidity drained right um and then yeah what's left for maker unwinding so we also need to keep this in mind there's there's also a way um there's also underestimation of liquidity on chain because some tokens they really truly have most applicability of chain for instance on finance and a lot of debt liquidity flow is coming to on-chain when there's uh you know just through Arbitrage so that's something we're also saying okay but it's not so bad that you see on chain actually some of that flows from off chain world so yeah it's quite complicated but I'd say it's one of more important topics when you when you do risk models and for liquidations and so on and what about also like on the other side that maybe it's not super obvious when it when we talk about different risks in general but it's like we as a whole Community suck at communication like it's horrible like from numerous perspectives like when exploit happens when there is a risk when we are trying to point out risks instead of like trying to point out things we fight with each other like we every five days like you see like seven Founders like fighting each other on Twitter like they're like in kindergarten literally the level of insults are roughly like six to seven years old so like from that perspective how much you think the importance of the communication the whole D5 risk is Bryce maybe you can start with the your opinions for me the biggest problem is not how we communicate it's a tribalism we see in defy so it happens to me often that I share a perspective on a project informed and argumented and I get a hate train of people who don't even read it they just essentially read that something negative about my Coin Attack and you know that is a problem and it's also uh I guess some projects are actively weaponizing this in the sense that you know they unleash the community against people who put forward they might not put them in such a good light in an attempt to silence them so I'll just share that with you if you see that happen you know that this project is 99 up to no good because I can give you the track record of the previous guys who did that and you know them all dokwon SBF and so on you remember how dog corn will address criticism on Twitter it would insult people it would be like your size is not size oh I don't care about you a bit like how some addresses criticism about drugs he will not answer them or he would say okay you're producing a stable coin for ends I don't care about what you say you know this kind of dismissing statement that literally addresses nothing about the content and it's all about the Twitter ego game and I think this is literally like the worst part because we cannot have a proper discussion and I guess yeah maybe the the original scene is we're having this discussion on Twitter which is optimized for anger emotion and reactions but not for like an actual discussion where we try to sing with one another like we're doing now yeah yeah do you that are pretty much do you want to add something on this topic yeah I'm not sure I could add here I I agree I'd say one or how we communicate risk at least for maker where we do most of the work um you know every decision every every decision that we take you know there's there's an analysis behind it and we always use a release dashboard to actually argument every decision so every parameter change everything is argumented and of course users when they see that post they don't know what the hell we're talking um but again like it's some users do know within the community and you know there's a live audit that can be performed all our models or you know everything is open source so they can see it um so I guess yeah that's that's at least better than what is always see far again um otherwise yeah just in general communicating Chris King if I don't know like people are of course greedy they go after the yield and that's it the Gamble um I'd say like if the yield is high of course there must be some risk even though you have cases where you know there's yield farming going on and it's not necessarily risky but again it's not sustainable then so usually it goes lower I'd say now that deals drops it's it's kind of you know now you truly see what's risk and what's not like you know if there's like two three percent yield it's kind of you know low to medium risk like Benchmark let's say and if I um if it's 510 it's high risk I I think people learned now a bit you know after all the crashes and events you know and the Market's now a bit more rational than it was yeah and also like if you look D5 as a whole like we can easily say that majority of the D phase built in the last three years like all of the mechanisms all of the the new ideas new protocols for different types of the things and still like whatever we call some of these projects even OG now and they're like maybe three years old and it's really interesting how we are forgetting how young the whole industry is how totally new all these things are and with that in mind Daria what's your opinion about I'm is Diva ready for this cliche question now like is D5 ready for this Mass adoption or should we take it down a notch should we approach it in a different way what's what's your take on it uh I would say we should take it slowly because I have like for example two years old nephew who is like already very good with iPhone and I'm sure he will be defined native modified native that I will ever try to be because he is basically born with like computer he is born who is like and uh I will explain him crypto in a few years oh basically but the idea is that uh when it comes to mass adoption uh it takes it's like on the side of web 2 or web 2.5 companies at least for me because still they have user base and this means we are talking about companies like Google or like apple or like really big names uh we work with uh one of such names Robin Hood for example um it integrates your X and it's wallet for swaps and basically Robin Hood and states has like it's fintech who has 20 million users and when we uh started or working with them one of the big questions for us was like how do we do it what happens if all these millions of users suddenly becomes like Define native and they all go on polygon and start swapping on polygon how do we solve for this and basically the result was a newly like fully redesigned product for like Gaslight swaps that we kind of introduced uh just recently so I feel like uh defy should like first figure out the basics and the next step you need to figure out the scale and that's what we've been doing like with these big players but many more will come obviously there is like huge Enterprise interest right now especially after FTX as well like people are a bit cautious about the C5 but they really want to go into DFI but this means like uh cycles of years like at least one in two or like 10 years for them to actually go into industry so yes it it we will get there but not immediately yeah Nicola do you have anything to add there yeah I would agree with the statement that from the user's perspective we should take it slowly um because D5 tends to move fast and break things I I probably should give an example for example if we have some Oracle attack and some different learning protocol they'll you'll be seeing let's say in a month completely new brand new Landing protocol saying well if you have used thus that would not happen I mean offering a new type of solution for what has happened um and I think that um D5 actually tries to um bring people in and to test things that are completely brand new and that's why I think we should take it slowly and that for a mass adoption we first need Mass adoption of knowledge sharing and the mass adoption of the ux improvements and literally just starting from explaining to the people who want to learn more what is like an ethereum account and what are the types of those what can you do do with those and Etc so yeah and also like the the the last part that I want to kind of to hear the question from multiple view is um some of the Primitives that we're building right now in this ecosystem are super important for the society but it's hurtful for people that are in the power in different governments in different countries different entities so on and so forth right and we already saw that some of the people were hurted because they were public uh well public they were known figure by the name by surname where they live Zone and so forth um how do you perceive the anonymous culture and how in the importance of the anonymous culture inside of the D5 ecosystem maybe Daria we can start Romeo like what's your take on that one yeah sure so basically uh like building on like Mass adoption topic uh for me uh I think there are two angles here the first angle is innovation so if you want to be on the edge of innovation it's probably better to be alone and uh because regulation uh Frankly Speaking is not always supportive of innovation in many countries so if you want to be built like the new stuff then it's probably not to disclose your identity too much at least from my side or live in super friendly crypto friendly country which there are not so many of those at the same time if we're talking about Mass adoption again you coming back to Enterprise clients if you will be like some Xerox data even on Twitter they won't talk to you they will be like who are you why should I do business with you and like why should I trust you because all like web tool business then you need to speak their language so this is I guess it's up to you and up to each project to decide where you stand like for Xerox because we uh end up being Gateway between like web tool volt and web 3 volt we're kind of in between so for example in our dials there are there are like people that I don't even know the in the gender of them I asked once we just not to be sure how to address a person and she was oh he was like like this person was saying me like uh I was like okay it's like if the person wants it then I should like be okay but my team members yes I know my names and I know where they live overall so it really depends yeah price yeah just building up on this for me anonymity is absolutely essential component of the crypto culture and it's what makes it significantly different so you know those scenes of oh accessibility or uh having enough woman or making it friendly to transgender or people from all around the world thanks to anonymity is essentially a non-topic because you don't know his gender you don't know if he's Palestinian or Israeli and you don't like this country or whatsoever yeah and you know and we've seen that a lot and what's disappointing is when the mass goes down so you know like for instance some guy uh defy advisor for who knows him is like most people they just they like his takes on Twitter and stuff they don't know who he is and then when they got a new panel and from his accent one guy could tell he was Israeli and had a problem with that you know like you know this is it's also interesting to that there is like Seafood situation okay so he was like people went nuts when they realized the connection between that person and the real human being that was already into some shadowy things so from that perspective like where is the Border in your opinion between Shadow ianon and Shadow is super cold around on like the the the positive positive one on side and the negative side because if people did not know who is sifu he could spin out something again as a nanon again and people would maybe praise him all over the thing uh born with you because you guys did something interesting is there is you know the guys were on and it takes me 10 minutes to know who they are and the guys were on and I tried for four hours and I still don't know who they are those are not the same Anon and in that sense maker did something about the Delegate for that where they're like go try to dox them because they want to make sure they are actually proper unknown you know yeah and I would say another new conductor now you should probably forget about this guy all together you know he wasn't able to set a proper object for his anonymity which is the coursing he's doing so don't think he's going to be able to push solidity code or grow a product or this is not going to happen uh yeah and I guess just on what you were saying institutionals are nice and dandy but remember they also immensely stupid one of the worst risk analysis of the space and they come with absurd ideas like they don't want to talk to Anon and they want all kinds of things that are you know Insanity for crypto people so we say we literally right now I would agree we're not at the master option stage but we are at a critical moment because essentially it's do you let those institutionals see that space like they did with the internet 20 years ago or do you join with us and and Mary build together and I think it's really the best time to come around get involved and be on and when we say build let me explicit that it doesn't mean necessarily coding okay I don't know solidity and I still call myself a builder because I build communities I build Integrations collaborations many things that do result in more adoptions more people are getting involved and for me that's equally as important if not more than the code and just to wrap this up uh I guess it's also a bit counter-intuitive because all of we send Bill is about trustlessness and decentralization and so on but the more I go I know it's been five years I'm in this space and the more I result back to very simple thing I want to work with decent human being and I want to see them being passionate about what they build because at the end of the day just like everything else just like why is Bill Gates so freaking cool it's because it's done with a song the organizer have a song they have a spirit for what they want to do and they put love in what they're doing and this is how you build great things it has a song and you throw love to it at the end of the day even for code you need love [Applause] perfect perfect wrapping up here okay I'm wondering anybody from the audience we have maybe time for one two questions is there anybody that is excited to ask questions any of our panelists yeah I don't see so they will help me out one or two questions for me um one quick question okay so before we switch to the next speaker go ahead Primo mentioned that when you look for collateral for maker to create a risk analysis through a number of fundamental research first then alternative research I just want to ask you if there's an open source database of your methods that you use for you to create a scoring of these potential collateral and I know that you work on Project Levon for credit on individual wallets do you have an open source list of ratings for projects that you look sorry I cannot hear well to be honest you're asking about collateral assessment with maker yeah how do you do it if there is an open source method that you use um and if you're trying to transition project Levon from Individual wallets into projects that you are also looking to add as a collateral form maker and many others I think I lost you again I'm sure I'm not hearing well from this side um so there are how will at collateral it's it follows pretty standard template like if you go with collateral assessments at maker um it all follows same path so um you could read them more about it there but there was a follow-up question I didn't get sorry unfortunately we are out of time and I want to thank you all for participating outside this panel and having an amazing talk and sharing your knowledge with our audience so can we please get our huge Applause for our panelists okay