[music] [applause] Thank you so much.
Yeah, thank you so much for that nice introduction. Uh my name is Maximillian. Uh I lead business development at Curve Finance. So if you have any integration ideas, partnerships with Curve, you can come talk to me and I'll handle it. Um so Curve Finance, if you don't know, it's a stable coin.
uh focused decentralized exchange. So we help asset issuers like Circle, Tether, all the big ones uh to have efficient stable coin pools uh on Ethereum and other EVM networks. Um and I'm going to be talking about stable coins in general. Uh what I mean by them having one, which is sort of like they've taken over the money aspect of crypto. Um there we go.
So crypto sort of started back in 2008 with Bitcoin. if you all remember that. Um, it had two ambitions. Create uh a payment network system that's independent of trusted third parties like banks and central banks. And two, yeah, to create a new form of money.
So, creating a new form of money was really part of the original thesis uh of crypto. So, stable coins weren't included in that concept. Bitcoin was supposed to be this new kind of money that you could use to transact with people. Um, Bitcoin obviously got a lot of adoption. Um, but it was a very volatile unit.
Um, if you wanted to use it as a payment system using Bitcoin, you would have troubles with stability in your business because, um, price goes up and down. Um, if you have set costs in USD, your euros or whatever, you need to pay rent, etc. you really need stability and Bitcoin isn't the perfect use case for that. Um, so back in 2014, Tether launched. It was called Realcoin back then.
It uses the blockchain system. It uses Bitcoin. Um, but it doesn't use the Bitcoin asset. It uses something that's pegged to the dollar, USDT in this case. And this after a few years has exploded uh in crypto.
We have tons of stable coins. We have over 300 billion uh in circulating supply of stable coins. Um it hasn't grown much this year. Most of the growth was 2015 25 I mean I think we added about 100 billion in terms of circling supply. This year has been a bit slow but volumes have been going up payments have been going up and Visa card payment system.
So all of the activity is growing even though the circulating supply hasn't been growing that much. Uh and what is the reason for why stable coins are so popular? Well, it's quite obvious like if you have uh costs, uh invoices, incomes, obligations, all that kind of stuff. In the currency that you use, where you live, so in Europe might be euros, in US might be dollars. Um it really helps having a stable a stable asset.
Uh and crypto is used for paying things then that asset should also be stable. We and we even see this uh central like traditional finance systems adopting this kind of model. This isn't crypto per se. So like uh Swift is like running pilots with DBS city to send uh money between banks um over weekends which you know historically you couldn't do that. They're even adopting this kind of model now.
Um but yeah, it isn't stable coins. Uh but they're trying they're like copying parts of the stable coin. Uh what stable coins are able to offer to allow even banks to trade now u outside normal banking hours. Whether crypto still is able to solve this question of having an independent form of money. Um this this still an ongoing experiment.
There are like the most famous one is Ry I think doesn't have much liquidity on chain but they're trying to have an asset that isn't fixed to the dollar. It has a floating rate set by the protocol um using ETH as collateral in this case. Um it's very hard to get adoption for these kinds of asset because you have to convince people to accept it as a form of money. Uh and how do you do that? It's easiest if you're a nation state and you can enforce a currency.
Uh we don't have that in crypto yet at least where we can you can sort of like conferences sometimes accept payment in Ethereum trying to like make Ethereum money but it's still um challenging like that doesn't influence as much as a nation state telling you this is the currency we use in our country. um that it will be interesting to follow these kinds of experiments if we're able to invent a new form of money that's accepted by people that is more stable. Um but so yeah the cryp the stable coin space how does it look like? Well, we mostly have one currency on chain and that is dollars. Um there are obviously others but in terms of circulating supply dollars is the dominant one.
I even read an article today where like Trump and Washington, they're trying to influence um the stable coin space by like they're trying to make dollars the global reserve currency and they want to like weaponize stable coins and they want to like keep this going obviously and they want to make it even more dominant. Um I don't think that's like necessarily the best for end users even though I don't have anything especially against that but we need basically choices. uh if you live in a country where you don't use dollars um and you want to participate in D5 opportunities um most of D5 opportunities are sort of US dollars based um and that means that you'll be exposed to FX risk so even if you having a yield opportunity you're earning 5% uh 5% in yield uh you can still be like losing money relative to your own currency that you use back at home. So in terms of savings, you're not really saving anything. You're losing money.
You can be losing money if if for instance you live in Switzerland. Swiss Franks is very strong currency. Um if if dollars crash against Swiss Frank, you don't want to have a D5 opportunity that's based on dollars. You want to have it in Swiss Franks. Um how do we get that?
So there there are more currencies now on chain there. Here's just a few examples, but I I talked to a lot of asset issuers all over the world. Um, and there's like more probably more than 50 in terms of if you count. Uh, the euro ones, there's more than 10 different euro stable coins. Um, there's a few Brazilian reals.
Uh, yeah, there's plenty of them, but it's not there's not much circulating supply of these assets. And a big reason for that is that liquidity is very expensive. Someone has to pay for liquidity. Uh if you put liquidity in a say like an AMM because you need basically if you want to have any kind of use case with your asset, do you need liquidity on chain in an AMM pool or unis swapper curve? Um how do you get that?
Um you want liquidity providers to come give you liquidity. Uh but they only do that if they there's some kind of reward like they don't want to like lose money putting putting in a pool that can where you can be exposed to impermanent loss. Uh even if you're earning uh trading fees that is often not enough uh to beat out the sort of impermanent loss risk you take. Uh so that's a problem. Uh you can use incentives but then you yeah then you have to pay money to have liquidity on chain and that might not be something sustainable for your business.
Same thing for like lending. Uh if you want to have like a a lending use case like a morpher pool or whatever or a curved llama pool a market um if you want to have people like use say euro as a collateral to borrow USD or like bitcoin to borrow euro um you have to attract lenders the ones who supply the asset that borrowers can come and borrow. um borrow lenders, they live in this uh DeFi space where there's a lot of opportunities everywhere. Like Robin Hood, you could like earn 7% on USDG or something like that. Why would someone come and lend out money for 2% in a lending market like that doesn't make sense?
So you have to attract lenders uh but borrow and typically like you incentivize lenders with borrowers paying the interest rate to them. But borrowers also don't want to pay a ton of uh interest rate. Uh so how do you solve that? Like yeah some do incentives there as well. Uh but that might not be sustainable.
Uh so we recommend like because we want to see FX growing this space because it will give choices to people. So how how do you get more FX liquidity? Um we we recommend having it tied to some kind of demand. So there's an example of Nosis. Nosis is partnered with Monerium.
In this case, that's URE. U they they wanted liquidity on chain because they have a lot of demand for conversion between USD and euros because they have users paying in um paying with their card across Europe. I need to convert because some days they have like USD stables and they need to convert it to euro somehow. If they if you have that demand, what you can do then is you can use the swap fees generated by that to pay for the liquidity. So they they have we have a liquid pool on curve and FX pool using our new like FX amm that Curve like we're very proud of.
Uh that's very good. If you have an FX asset, come talk to us. Um you can use the swap fees there to help pay for this liquidity. So it's not just an operating ongoing cost. you're actually generating revenue for the business and you're using the liquidity to supply to make the business like useful and operate.
Uh in terms of lending that's a very difficult problem. Um what you can do is that if there's a yield bearing version of uh this FX asset. So here we've partnered with Frankencoin. They have a Swiss Frank stable coin. It's also a CDP based uh asset.
So they can take interest rate that they earn, they can give that out to a token called SV CCF, a very [clears throat] annoying token name. Uh so that because there's yield on that token, then you can use that yield to put it in a lending market. Uh so the borrowers will be able to borrow at a higher rate to attract the lenders. So then you don't have to pay as much incentives uh to find lenders uh because you have an asset that lets the the borrowers uh pay a higher rate. Uh but it's very challenging and there's still like some CRV emissions they're going which might not be super sustainable for us.
Uh but it's much cheaper. Uh another way you can do is uh CDPs are a super powerful uh structure you can use to get around some of these problems because with a CDP like collateral deposition if you know maker dowo or previously maker dow now sky uh curve we also have curved you take a collateral you put it in a protocol you're able to mint uh a stable coin so you're not borrowing from anyone you're just you're borrowing from the protocol so the protocol is able to mint it out. Uh, and if that so you can if there's if there's some liquidity for your FX asset, if you can get accepted as collateral in a CDP project like Curve uh or Maker, this guy, uh, you can get a much easier way of generating like make it easier for people to use it um for a lending use case. Uh you can also launch your own one. Um Frankencoin, they are a CDP.
So they have basically a similar setup. Uh if there's like a euro CDP protocol, then you can, you know, start accepting Bitcoin or Ethereum, you can accept USD to then borrow euros. uh that will be much cheaper um than trying to like just using incentives to bootstrap activity. Uh and another thing if there's uh already an FX asset that is sort of adopted. So for the euros that's USC by circle if that one is already has some onchain liquidity and you're launching a euro stable coin then you can just set up a stable pool with your euros and their euros.
Stable pools are much easier to set up. Uh you can hijack basically you can become a parasite on their liquidity because aggregators will handle swapping through the stable pool first before swapping uh in the other stable coins FX pool. So you can get around some of these things and we definitely recommend it to a lot of asset issuers. So yeah, I'm I'm actually almost yeah I'm basically done now. So what I want to say here is that I believe like FX will become a big part of uh D5 moving forward because people live all over the world.
They have different needs. They all don't want to use USD. Uh if we can get more FX on chain that will probably help boost sort of total DeFi growth because you can now accept more people across the world. Um and for those people who are already in DeFi, they can switch out to an asset they prefer. less FX risk uh can potentially put more savings and yeah, help help grow DeFi together.
So yeah, that's that's me. Thank you so much. [applause] [music]
Automatic transcript — names and jargon may be misspelled.