Building DeFi Protocols - TOKEN2049 London 2021

all right everybody this uh we'll have a fun time we're gonna keep this a lively panel um because there's really nothing more fun than talking about building d5 protocols um uh to start with we'll just let go through go through the crew let everybody give a brief introduction of themselves let's keep it brief guys themselves and what your protocol does um and then we're really gonna spend a lot of this time getting into the meat of what it means to actually be a builder in the space so munir why don't you start off yeah sam munir founder of parasab that io is a liquidity aggregator on the ethereum blockchain i've been a developer before and i'm still managing the products mostly right now hello everybody i'm robert lauco i'm the ceo and founder of liquity before that i used to be a researcher at dfinity also known as the internet computer i'm a lawyer by training but i always had a keen interest on technology and did some coding project already in my users uh yeah my name is chad baraford i'm uh one of the core developers for thor chain i don't really matter but what thought chain does uh is a cross chain uh d5 protocol where all chains and assets are agnostic so it doesn't matter if you operate with layer one bitcoin layer one ethereum uh it treats them all the same adding d5 to every chain in the ecosystem simultaneously chad i like that view that you don't matter i don't matter it's not about it's about the communities about the project it's not about the individuals um so everybody knows who i am my name is hart lamber i'm the co-founder of a project called um uh uma uma stands for universal market access um we're actually an infrastructure to allow developers to build synthetic assets and actually write generalized financial contracts in the d5 space um so i also get to be a builder here while talking to these guys and leading a conversation um one of the things i find most interesting is comparing the the process of building a d5 protocol to a web 2 company and in web 2 we have this very defined playbook you know you come up with an idea you go and you raise some seed money you and your founder like launch your proof of concept go do your series a hire some people hit some metrics do your series b everyone knows what it looks like but here building d5 protocols there really truly is no playbook um and so what i kind of wanted to go through the panel and ask you guys um give me the origin story of how you've actually built your protocols um what what's different and you know i'll add some of my own thoughts too so again we don't have to go in order but meniere okay um so it started with an idea as i would say any startup in some experiments launching a with a particular vision on how i think the market would look like and it was in the beginning a very naive approach of building a full retail or public dapp that anyone can use and that was summer 2019 only two years ago but it seems like ages if we in the defy or crypto standards which led me to pivot into building a product for a niche at the time that was called defy and it was uh early very early stage and then the process looks a little bit like building a traditional project where we iterate on a project and we push code and we have code reviews and build the team until d5 became mainstream and the paradigm shifts in the way we built protocol um became different so for instance at the time we didn't all did smart contracts because first of all we didn't have the means to do it but it was very acceptable like curve for instance when it launched uh it had multi-million dollars staked in a contract without any audits but right now it's a logo so the standards of building and the timeline for building became longer and more robust i would say yeah more or less that was my experience yeah robert your origin story too or also where you've become as an immutable protocol something that can't be changed like this is that there is no web 2 version of buildings ideating building something launching it and never being able to change it so tell tell us tell us about that yeah so um yeah i set out to build an interest-free borrowing system which is more efficient than like what was around back then like maker for example so uh yeah we just wanted to build something that is more capital efficient so it can basically allow you to borrow more against your ether that you look up as collateral and uh yeah one of the other key areas that like set us apart is that we are completely immutable which is kind of a risky endeavor i must admit because yeah what what can you do if there is a bug or yeah yeah or if you want to change something in hindsight which you cannot do um but i think we took a very security first approach to building this so we spent a lot of time on auditing and on also doing our own internal reviews code reviews so actually when you look at the timeline like we started in november 2019 and we released the product like now in april this year so one and a half years development time and i would say we already had our first more or less feature complete test version or prototype ready in june last year which means that we took almost like we spent almost like 10 11 months just on doing all this just on refining all the functionality and making sure that everything works correctly because yeah that's what you have to do if your your project or protocol is just immutable and roone's story i actually just learned just ahead of this that roon was restarted so i i don't know chad yeah so the uh thortun's first attempt was in 2018 and it actually didn't work out so well and the reason why that was is because the technology wasn't that the cryptography wasn't there threshold things didn't exist cosmos doesn't didn't exist quite yet you can't build what thought chain is as a smart contract on ethereum just completely impractical and so you actually need a sovereign chain uh to to do it and to and with polka dot and cosmos that now makes it a lot easier the roll rolling chain from hand by scratch is really really hard actually what i did when i first got into crypto is to roll my own chain from scratch just to learn how the inner workings of blockchain actually works it's actually really hard uh and so it makes a lot easier to have something like cosmos to be able to launch uh something much quicker much easier so the product didn't work out in 2018 because the technology wasn't there and the cryptography wasn't there yet but in 2019 it was uh and so it was kind of like a phoenix so to speak it kind of was kind of reborn in a sense and uh has been you know going for the last two years well but even for for thor chain uh many of the contributors are sort of anonymous like i actually don't even know who's sort of all behind it so um how did that rebirth even happen like yeah uh that's a complicated question yes um you don't have to tell us all your secrets but no well so uh so in the original team there's only two individuals who came over to the to the the new work on incarnation of it if you will and i had met one of those two individuals at a hackathon on cosmos um i caught a hackathon in berlin in in 2019 uh and him and i were just uh like oh let's partner up and and you know hack on something and actually that's where the first lines of code were was committed at that time um and we won i think they won the hackathon too and got some cosmos uh adam coins and stuff which i'm sure you remember if you won or not i'm sure you didn't yeah yeah yeah but yeah but uh that's kind of at that time it was different all right and so i mean this we met each other and uh we started kind of hacking this idea and um and some of the math has already worked out from the previous iteration so we just kind of started recoding it again with with a new mentality with a new um with like kind of started working on threshold signatures and how to implement that in a way that you can secure you know hundreds of millions and billions of dollars with enough individuals you know running that system across the entire planet which has never been done before in the history of crypto like there's a lot of things that throw chain is doing that like nobody's ever done before uh it's we are definitely trailblazing in a in a major ways um and so even you know today there's uh hundreds of millions of dollars on three's network that are all secured by random individuals well not random but but anonymous individuals across the entire planet and i have no idea who they are to be honest with you and i don't want to know who they are either so you know from the perspective of the audience i'm going to say that you almost have like three different stories here around this origin where like chad you're you've got this like hackathon kind of come together emerges from the ethos metaverse type thing creates this project robert for you your origin story to me looks like um an intellectual experiment that you like very thoughtfully considered dreamt up got a team around to build and then like launch into the world and maneuver maybe maybe it's best to say like you had a very much like uh very product focused like you wanted to build this product um that potentially looks slightly more like what like a web 2 path might look like maybe do you guys think this is the future of how d5 protocols get built do you think there will be no pattern do you think or separately you know a question i've been kind of considering is will there be a playbook like there is in web 2 of how these things get done that will emerge in the next five or 10 years mean i would say it's uh not a playbook in the beginning but as a playbook at the end because we're all trying to get to the same place in terms of decentralization and launching whatever protocol we're trying to launch how that all originates from it doesn't really matter it just kind of happens in different ways and mechanism different people getting together whether it's a hackathon or one of the other kind of uh mechanisms i don't think it's going to matter uh but but we all have the same mentality of where we want to get to right what we want to deliver and how we want to contribute to the world and create these public good networks that the only reason why they exist is just to serve humanity and not itself and so that's a very noble thing i think we're all kind of going after and so that's really more what it's about for me not so much the origins but the ending so let's talk about that guys like because this idea of decentralization it's like both an overused word like massively overused and you've heard it in this audience like way too many times but i also very much view that it is core to what drives our respective projects um tell me more like why does decentralization i think it's a good opportunity for us to educate the audience of like why does decentralization actually matter here and um yeah some of these are kind of layup questions for you guys but like like i i actually think we don't i think we don't spend enough time really focusing on like why this is actually critical to making these products function so i think it depends on the perspective for instance for a protocol like us or any of your guys protocols it comes down to security because not being decentralized means having a liability on the core team that can shut down that can have introduced maybe box or any kind of vulnerability so i think being decentralized is first of all equivalent to being secure first of all but also being unstoppable because being centralized is also another kind of liability in tomorrow's any whatever governments or a large corporation can make an attack and stop this protocol or maybe corrupt that protocol so i think decentralization is a necessity is not an option when you're building or building a decentralized protocol and it's also redundant if it's not decentralized i mean what's the point we already have fintech we already have uh applications that work in c5 for instance so we are building something that is better so it has to be decentralized if it's not decentralized we're just like doing the same thing and covering it with it decentralized i mean passwords yeah i completely agree i think security is one of the main purposes of decentralization like through fault tolerance like to decentralizing your system you can uh ensure that it remains tolerant even if there is like one or two or a number of parties that fail because you still have enough others that do their job um yeah we take this approach to its extreme i would say by even decentralizing the front ends so that's something that not many projects do because they focus on just decentralizing their protocol so yeah that was an experiment for us because we we wanted to we didn't want to rely on just one single part like ourselves running a front end and what we set out to do is creating an incentive mechanism to basically reward front ends for the turnover they generate for the protocol and it was an experiment because um yeah it was hard to anticipate whether it would work out but it did work out quite well i would say now we have like around 50 front ends that are up and running even though only like a handful of them make handsome profits the rest is just like the long tail um but what what's interesting is that by doing so we also we were also able to leverage kind of like this a second level marketing effect because the front ends they have like now an interest to um go out and seek more stability depositors because they are the ones that then generate the revenue both for the front and then for the end user so the incentives are aligned on the front it's an incentive to gather more and more users and uh yeah so that's another advantage basically the marketing effect the promotion that we get from the front end i actually want to go deeper on that because i think robert this is one of the coolest things liquidity has done um just to just to really almost repeat what robert's saying um there there is no front end that his project his team operates instead they've incentivized other people to run front ends for the protocol and um i actually think this is it's a it's sort of the extreme version of decentralization where there isn't an operator and more even more interestingly i think this fits into why decentralization is so important because you don't have a central team that's trying to retain control or extract rent or extract profits you actually have enabled this like secondary marketing level because the users of the protocol become owners of the protocol and i i mean listen we're all biased on this panel but that ability i also think you can't do that with a centralized business you can't like not only do not have the incentive i don't even know if you have the mechanism to make your users be your owners like uh it's unreal um chad i feel like i interrupted you though well i was gonna um i mean you were saying with the uis right there uh in like at least in my opinion ui should should not be web uis uh because of centralization and you can talk about ensemble domains and all these things but in the end you know you and you guys are you know paying people to or to or assisting people to create different us what makes more sense to me is making downloadable apps that once i download this app i always have available to this network i don't rely on any domains or any other service or anything to exist between me and the protocol so i download a version of like thor swap for example which is one of the apps that are available or one of the many apps that are available actually but that's one of them and once i download i have it forever and doesn't matter what happens the government can shut down whatever server they want the entire planet it does not matter i always have access to thor swap and i can you know swap my bitcoin for ethereum or tether or any asset of my choosing any point in time that i choose to do but in terms of decentralization uh we talk a lot about the technology and about the security and those are all like very important very valid things but i think we don't talk about enough is actually the human rights element to it this is actually the most important thing i would argue at least what i get very excited about in this in this space is that when bitcoin was created it created a new form of freedom liberty and self-sovereignty that the world has never seen before across the entire planet for every human on this planet no matter what side of an imaginary line that you happen to be born on that was a remarkable innovation and it created a a way of income equality that we've never seen before in history right so in order to work to achieve that in more in useful ways our protocols have to lean towards the central digit as much as we can reasonably push it because as we do that we actually grant more human rights for more people across the entire planet and we can restructure this place in a way that actually gives freedom liberty and self-sovereignty to everybody across this entire planet if that's not giving does that make you excited about what this industry is doing i don't know what the would because that's an amazing thing to get behind you know i'm the moderator but i'm going to make take a side note to to build on what you're saying and maybe a a more city of london type way so so my view on d5 [Music] my view my view on my view on finance on traditional finance is traditional finance is the history of legal contracts i think of every financial product and innovation is really a legal contract insurance is a very pure example derivative is a very pure example but you can keep going and everything everything in finance is in traditional finance is secured by legal recourse what does that mean it means that you only have access to financial products and services within your legal domain and so if you're american you get access to you have to be american entity to have access to american financial products and services canadian venezuelan what else sure and this siloed world great creates inequality in the access to financial products and services you have and it also you know uh means that we don't have this global system what does d5 do i look at d5 fundamentally as a novel contracting system a new way to write contracts that are not enforced by legal recourse but are enforced by blockchains plus economic incentives and the major advantage of this new contracting system is that it's global by nature and hence equitable right um or more equitable um also really cool and really exciting like all those other things that as well that as well um but okay so that was my tangent as moderator is why i think d5 is so cool and why i think traditional finance people should look at this as a novel contracting mechanism that lets finance be global by default but with that now actually let you guys all speak the the global nature of this what are you guys seeing and actually do you even know where the users of your protocol are um you know if this was a fintech event we'd be talking about like serving the european market or serving the american market but we're not fintech we're like defy so where are your users tell me more it's uh there is no deterministic way to say because we don't ask them who they are but uh we can like safely say that the vast majority are d5 or crypto natives who are using this because we can see the volumes that are going on on power swap and other protocols as well but also we noticed it shifts once we started launching on new chains for instance one two notch and binary smart chain in the polygon and recently an avalanche we saw a lot of retail coming coming in and that's those are insights we can see for instance the questions before we used to get very technical questions uh now we get very broad questions or very new new questions so we can see a lot of retail who came in and that's driven by some like economics like gas fees and all those things so i think now the adoption of defy is very broad and we see all over the world using using defy even in countries where defy is or crypto is forbidden uh this people became sophisticated enough to bypass all those barriers so we can say that yeah the adoption has is growing exponentially right now at least what you can see in our perspective yeah robert where are your users like and i mean i know you don't know in the same way munir does but give us the qualitative kind of ideas of who's using the protocol yeah so quantitatively i mean we have the stats we see like the size of the user's positions and we know our tvs so we can basically uh see like how they group like how big they are and and i mean just looking at the numbers it's clear that many veils are using liquidity like we have many uh positions that are above like two billion uh sorry two million in size like let's kind of now think the average like two million worth of heater being collette being locked up as collateral that's kind of the average i mean it's really hard to say who those users are i mean many users aped in within the first even 10 days of existence so they were i mean that was really interesting because we didn't really do any like concerted promotion or we were quite low-key and then we just came out and released this system and within a few days i mean we had already like 800 users or so and uh yeah many of them were like apes djinns who aped in and um got a nice chunk of the early adopter incentive and uh they are now kind of locked in because i mean locked in they just now have an interest-free loan and no no clear like pressure to pay back because yeah they can just keep it open for as long as they want but yeah it's really hard to say who those users are i mean yeah we haven't really seen institutional adoption yet but that's something they're now working on because that would also like open up the whole um user base yeah should i have anything that uh well i mean partially i don't like cairo users are in a sense uh but um we do see kind of why we we do see that there are some people that are just you know early adopters of thor chain just fighting liquidity something like this but even when the chain was launched back in april like uh shapeshift actually publicly had just ripped out their back end and then dropped thor chain in the middle of it uh so i was like now after i was talking eric voorhees and i was like are you sure you want to do it on day one because do you not want to wait a few weeks or something like that before you put your entire back end on a protocol that just launched yesterday he was like no i'm doing it all right man but uh yes we are you're seeing exchanges themselves that are great um we're in conversation with the centralized exchange right now uh they want to rip out their back end and put in door chain um because they have instant access to like all this liquidity and they don't like maintain a huge you know treasure trove of of a cold wall to maintain you know hundreds of millions of dollars they have instant access to any asset they need the moment they need it and so like that is very attractive to you know a lot of exchanges but even like wallet manufacturers are integrating with throw chain as well because you can actually make a profit uh facilitating swaps on thor chain right so if you have a if you're a walt that you're producing and you want to make some money to fund the production of your wallet you can actually use affiliate fees on the swaps to actually generate revenue for your project you can actually fund you know your entire well like most wallets struggle to figure out like how are we going to find money to pay the engineers and do these things that's the answer it's called thor chain you can just make swaps and every swap you get a little bit off the top and how much you get at the top is like your choice you just tell your users it's going to be you know 30 basis points or 10 basis points whatever you want to do they can choose whatever they want it doesn't matter uh and they can actually fund their entire project just by using thorough chain and meanwhile providing a really needed you know uh feature of like i need to exchange from layer one bitcoin to you know a a dogecoin or whatever it doesn't matter yeah that's a really kind of important concept it's a actually compelling sales pitch so uh uh but like the other thing that we we prepped or talked about chatting about um is this multi-chain world we're heading in because we're talking about defy here chad like multi-chain is actually core to thor chain very much so um i actually kind of think we have a nice range of perspectives here because robert you're very much ethereum-centric by just straight up design um and moneer you're you're kind of like in between started ethereum going multi-chain have seen advantages of that um love to get your guys your views on what this multi-chain world might look like for your project and just you know even your general views on this ecosystem with maybe a particular view towards composability so one of the things that has really made a defined ethereum kick-ass is this composability concept and um it'd be this is a hard problem so just be great to hear your your thoughts so yeah robert why don't we start with like your takes on yeah so maybe let me start with the general like composability as a problem because i see this as one of the biggest challenges i would say for d5s uh because i mean we've seen that like just running on one chain is may not be like performant enough so we need we need systems d5 protocols running on multiple chains just to be scalable but then you end up with like the problem that uh you need to make sure that you can still like make atomic transactions that either go through on all the protocols like living on different chains or they all fail because you want to um like make a transaction that is a combination of those and you don't want to just uh having half of your transaction being processed so i think that that's kind of um a technical challenge because you know there are like commitment schemes and stuff like that where you can or yanking of of like vitalik's proposal where you just basically put all the tokens on one chain and then you do your operation or put all the contracts on one chain do your operations put the contract backs on on the charts or like where they came before but i mean that's kind of seems like a work around and i'm not sure if we are there yet where we can we have a neck the solution for like atomic transactions across multiple chains really i mean that's one thing and then also like for us liquidity i mean there is another challenge which is i mean we have our own stable coin the lusd and it would be strange to basically create multiple versions of the same token on different chains without having them like coupled to each other in a fungible way so and that's not not like kind of obvious how you would do that because then you need bridges i mean if you want to allow people to borrow on different chains but at the same time you want to make sure that it's still the different token it's not enough to bridge the token i mean that's that's easy um yeah so those are like challenges we we have to see how to uh get along with them in the future but we don't really have now like short-term plans to go out and deploy uh multiple lsds on multiple chains so chad for for thor chain right it's obviously a multi-chain world where you're swapping between all these chains but where does smart contracting lie like i'm actually very curious to get your world view on like okay can we move between all these chains but what's the platform where people do the d5 like money legos thing uh well so this is a little bit of a contrarian perspective that's what we want but uh smart contracts actually don't make sense oh okay i know that people let me explain so you were talking about like web 2.0 world right earlier right the the equivalent of smart contracts and the web 2.0 is this thing called heroku right where i don't have to think about my infrastructure i don't think about like the security of my system i can just like build an app in a weekend upload to heroku and it just runs my app for me and and all that kind of stuff now no a self-perspective engineer actually uses heroku outside the context of like a hobby or a little fun little site or like a chat bot or something kind of somewhat silly because if you're going to build a real like platform you want to have complete control over your entire uh environment so i don't want to build an app and then have you know somebody else's app like being doing really well which causes my app to be not really usable because the gas prices are this blah blah blah these things like it actually limits you even from engineering perspective it limits what you're capable of doing right so in order for d5 actually be successful i would argue that you cannot do it with smart contracts we use smart contracts now because it was our only option for the last like three years right until cosmos and polka dot make that possible to have another option now which is actually really much more powerful much more flexible more technically complex just as running my own idea but infrastructure from my own web 2.0 app is more technically complex but it makes sense to have more control over your environment when designing and building your your protocol right and furthermore if you are building your d5 protocol on a specific ecosystem whether it be solana or ethereum or whatever you are pigeonholing yourself into a small subset of the liquidity of crypto right ethereum right now with all of the rc20s is like 25 of the entire liquidity of crypto right don't you want access to the full like two trillion dollars like you like you're not going to convince people to use your d5 protocol when there's some some other protocol that does exactly the same thing but has access to every app i'm sorry every chain and every asset in the system that's identically the same service so this is this is why you go to panels whereas you guys get this contrarian view right i love this so so chad here is uh a multi-chain maximalist where instead of having a smart contract you build your own chain yeah i think it makes sense two years ago to build an ethereum but doesn't make sense anymore i'm the moderator and i'm supposed to like not be neutral but i like vehemently disagree but i love that perspective i think it could be true if i've convinced you i've missed all of them [Laughter] uh i think it's like that's a super interesting view to think that um smart contracts are uh uh a distraction before you build your own chain but it does seem like you would lack a lot of composability features or at least easy composability so composability is more complicated but it's totally a solvable issue and thought chain is definitely going to be doing that actually there's already conversations working with other like even ethereum smart contracts of integrating the two like sushi has talked about integrating you know bitcoin swaps on and sushi using thor chain as the mechanism to to to get in and out of that system right uh yeah i just don't think that that uh smart contracts make sense and ethereum makes sense for you know for experimentation for like quick launches let's throw this idea together let's try this this economic model or that economic model let's try this different amm you know way of thinking of things and experiment with different ideas and then see what actually you know gets capital gets you know volume trading and all these kind of things to figure out what actually makes the most sense and then once you actually establish that this protocol whatever the program might be let's build that in a way that it treats it first achieves every asset and every chain identically the same in everybody including bitcoin is a first-class citizen instead of treating bitcoin as a second-class citizen where you have to do these wrapped or pegged assets which is not bitcoin obviously and you expose you to significantly more risk in your profile just because you want to use some d5 platform that's not required from a first principles perspective to be on ethereum it can be on anything so you can actually provide like like real d5 for like bitcoin for example without you know needing to go through these bridges that give you increased risk you can't even secure rap assets i'll go i can go on a rent with that whichever yeah yeah you've seen that one but um there's a whole thing about that i i love the perspective i don't know robert munir like any reactions to this thing i've emulated yeah i find very interesting i i think it depends on how you see a smart contract but there is no side if it's all maybe in some cases it will make sense and we've seen some experiments like compound who tried to build a new blockchain on polka dots if i remember well which may or may not sense but definitely the composability side is always an issue i mean whether you're building on a c on a cross-chain environment or a smart contract environments i would say d5 exists because composability exists and we exist because there is composition because parasite will not make sense if there is no not many taxes and there is no fragmentation um so i see smart contract as building on in gvm like evm and jvm and building your own blockchain is like you're doing c plus plus so see maybe you can you can see it this way but i disagree that's yeah it's like hiroku because it's more complex than that um our approach in cross chain i think is a necessity as well uh and breaking composibility we don't see another way to do i mean we don't see another alternative right now and but we think we can achieve atomicity but it's going to be an asynchronous atomicity not synchronous as we can see in a single single blockchain right now so far what we've seen is people using game theory mechanics in order to achieve this cross chain and have this security on on crosschain but nobody has got it right as we can see in a single blockchain so i think this will develop in the next coming years because multi-chain is is a reality it's happening and we see a multi-billion dollars markets are being already formed so yeah i think uh maybe one of the projects will do it maybe maybe you will be right in in few years so we don't know how this is going to play we haven't even imagined that cross multi chains like this side chains uh will be successful a year a year from now uh it's just happened this year so we don't know maybe you're going to be right in few years it's hard to say yeah we don't and i think apart from like having this fragmentation with regard to user experience i mean that's already like a challenge if every smart contract lives on its own chain i mean people need to have their wallets they need to have their own equipment and whatnot like private keys for those specific chains which makes it much more difficult to interact but i think that's only one thing but then on the other hand i mean how would you secure like that many blockchains i mean the more you fragment the less capital the less whatever like computational power if you use like uh proof of work you would have on those chains so i mean doesn't it make sense to concentrate rather like to have like a few platforms or like infrastructure blockchains that are optimized for general purpose applications and they are optimized for security and speed and scalability but like they would basically serve as the host for a large number of different applications or why do you see that it makes really sense to basically yeah have separate chains for all applications uh because if you if you put something as a smart contract within a specific ecosystem you're actually betting on a horse right that this ecosystem whatever it is right it can be us it can be ethereum it can be whatever you want to be but you're betting on a horse now thor chain is not betting on a horse it's betting on the race right because it doesn't matter which you know what which is the this ultrasound money or which is the this or that it doesn't matter it's still going to service the entire industry right that's a much better bet i will always bet on the race over the individual horse anytime because that's a smarter bet right um i don't see why why that wouldn't have that direction now there's different things like for example if you want to put the stock exchange onto a blockchain you probably would not do that as a multi-chain way because that doesn't make sense you maybe do use solana because it has you know high throughput for example so not everything would be a multi-chain in thor chain's case it is because it's trying to create highways between these isolated islands we now have called these blockchains and it's doing in a way of using an amm in the beginning right so you can swap from one asset to the other in a trustless way but you know once you have the the those highways built you can do all sorts of things you can do uh lending you can do synthetics composites uh all sorts of like new d5 protocols that can interact and interface with all these assets in the end you don't have to become like a thor chain fan you have to be a fan of bitcoin and then you would still want to use thought chain because it gives you you know a bitcoin layer one bitcoin yield on your later one bitcoin right so you don't we're not trying to convince everybody to come to us and like our ecosystem is the best and it's better than everybody else for the x y and z we're merely saying no no state whatever ecosystem you're in whether you're a bitcoin fan aetherium fan or solano fan or whatever terror or whatever you can just use us to help produce more yield or get in as an entry and exit to whatever ecosystem that you want to participate in that's a much more uh a stronger bet in my opinion than than trying to convince the world that my ecosystem is better than everybody else's it's so interesting i find this so interesting again but like as a contract if you take my perspective of like contracting system and let's go into tradfy you do sometimes bet the horse on like okay i'm gonna write my contract under u.s law under delaware law or under uk law there's like a handful of jurisdictions that people have picked as being the thing they actually want to be their enforcement mechanism yeah and in some ways what you're abstractly suggesting is like well then you have to follow the rule like if you're really going to build this thing right like build your own court system right it's sort of what you're suggesting which i think is very fascinating in some use cases anyways i want to i got another question for you guys but i love this perspective and i think it's really a really interesting world be like well maybe smart contracts have been this distraction and you're supposed to just build it in your own blockchain um that's that's something i learned so okay um other question um defy uh it's grown like hugely over the last 18 months um a lot of people have a thesis or view that it's going to like eke into traditional finance i think a lot of people in this room be really interested in that what do you guys think is necessary for uh d5 to get like mainstream traffic adoption and maybe the headline like the the kicker here is like think of grandma like what will it take for grandma's money to be um parked on d5 rails say say being being lent in a lending protocol or or something like that yeah yeah yeah i think it already starts with just keeping your your private key secure i mean that's already a challenge in by itself if you want to be really on the safe side so i think like having good self-custody solutions that just don't rely on on some quirky device or or they're keeping like hundreds of 20 words in memory that would already be like a good start or at least something where you can um yeah be be sure that that that it's your font and it won't get like misused and then also like it's so complicated i mean with the current systems like just installing metamask could that's confusing because you need different apps to run like in your browser you need like like different like protocol like you need different apps to communicate with different protocols to make use of your fonts or to basically do the actions that you want and and that's really like at the moment like it's way too complex so i think there something much more streamlined that is kind of guiding you through the process step by step where you see i start here and i end here and this is the process without like having you to google like what do i have to do to set up a wallet what do you have to do to connect to this application and then however do you find an exchange i think you need to have like a clear path and a clear step-by-step way to get what you want to do do you think it's possible for traditional finance intermediaries intermediaries to um use defy as the rails behind the scenes like in the same way chad was talking about ripping out the backhand replacing with 4chain do you think lloyd's bank here will ever rip out their back end and replace uh like grandma doesn't even know her money is in liquidy yeah i do think that like kind of the cd5 integration could help a lot so i mean it is like basically a compromise because maybe some users they rather prefer having like a banking relationship but they they want to still benefit from like some of the economic benefits of the d5 protocol that's running like on the back end but i think like such an integration could be really useful uh for um opening up the whole ecosystem to a new group of users that are not really crypto native that may that know how to use a mobile phone and know how to like know have some basic understanding of money but they have no technical understanding i think that could be a good start and uh yeah that's also something that we are looking into like basically like we have this decentralized frontend approach and and one obvious way to extend it is to have basically like financial institutions run a front-end and maybe also help their users to use a front end or even act as an intermediary maybe taking a charge a cut on the on on the benefits but then still offering a good user experience yeah i think so c5 makes sense in the short term in the interim to help kind of mitigate people onto the d5 space maybe that'll work out over the next like five ten years but like you know my grandmother won't be on on on you know the d5 space for another 10 20 years to be honest with you uh you know even the internet my grandmother wasn't on the internet for 10 10 plus years whatever and that was a lot easier than we're talking we're talking about changing money and money moves very slowly right like the banking system is largely the same as it was 400 years ago fundamentally right uh and so it takes a very long time to to to push on on money right um but in the end uh some c5 whether it be celsius or block fi right they're gonna offer you you know five percent interest and on just your on your first bitcoin or the second one you're gonna get like point two or something like this right like and then you're gonna tell those people like hey you can get five percent here you can get like 25 over here on the d5 space removing the the central entity out of it your your yield is significantly higher because you don't you don't have an infrastructure to pay employees and like all this kind of stuff that you have with uh a centralized entity of some kind so but we're i'm not even concerned about grandma because we are so far away from grenville we don't even have the infrastructure yet like like the lighting network needs to kind of need more time to mature and grow right it's a great protocol and i love what they're doing but they're not they're not going to build that in the weekend right it's going to take years to kind of grow that out and same thing with work change it's going to take years to grow that out and so like the infrastructure is way too early to be even talking about grandma you know uh people always want to use to get grandma on the system because that means coin goes up and you know and i now have many lambos or whatever right but uh but for right now what we really need to be focused on as a community is getting the infrastructure right and the design concepts right chad what you're also suggesting is um an alternative thesis which is that we don't get tradfi on d5 like don't even don't even go there just build your own crypto ecosystem from scratch have the metaverse in there have kids with jpegs and nfts like do all that and don't even worry at all about trying to bridge back to tradfy which i think is actually a contrarian thesis if you play that out i think most people at this conference would be like no no no d5 is going to suck in um some trad five stuff but i don't know what do you guys think maybe maybe that's actually a a distraction yeah it's a miner i've been talking too much all right now i was saying there are some already some innovations that try to create the middle ground where grandma can use defy and it's not custodial it's not c5 one example is argent who is like trying to do this retail play and it's very simple to use and non-custodial that's one one of the examples and i think the future versions of origins will look exactly like a revolut and abstracting all the complexity of defy without necessarily compromising on security and decentralization yeah sorry security security and decentralization okay so i mean do you guys like if the current infrastructure right now there's no undo button if anything goes wrong which to me seems like a prerequisite for grandma's money here i'll ask you guys another weirder question like traditional finance is premised around this concept of recourse if something goes wrong there is an ability to undo it by like suing somebody and that's powered by the fact that you know who they are you have identity so you can go and be like yo i'm suing you give me my money back d5 doesn't have that and most defy today doesn't even have anything close to a concept of recourse we're effectively embracing a system where there is no undo button at all well there is insurance which is yeah that's exactly yeah like nexus mutual is kind of doing like a like it's not going to undo a transaction on on you know the ethereum blockchain per se but if you get pwned in one way or another because of some exploit you get at least like a coverage you know i think that's viable but like in order to have a world money it has you need to have finality to it if you don't have finality to it then it becomes like this very loose thing that is not very viable as a as a current well but hold on you don't have finality in traditional finance you have world money yeah and it doesn't work well right it's like like like like the us dollar you know is like the best currency in the world quote-unquote right but yet it sucks right and so like we can just print it all day and we do it as americans we just print like in immense amounts like all day every day and we can and we do like you know i've actually had the irs put my personal bank out and cleaning the hell out right just because they felt like it right which is fine right but you're on stage talking about all the libertarian stuff man you know honestly i'm not even libertarian but i'm like but the system as it's designed is designed to empower the few and not empower the mass right that's fundamentally different and by empowering the math the the few you give them the power to be able to manipulate the system as they see fit for their own well-being uh and benefit you give a monetary policy where it actually is democratized and it's owned by the people underneath it grassroots up rather than top down you need that instant finality to be viable so not interfering with the finality we got 20 seconds left but we'll conclude that view means though you have a financial system with no recourse which is very interesting to conceptualize right yeah it's true so guys this has been pleasure thank you thank you