10% Yield on ETH? Here’s How Plaza Finance Does It

Transcript

Trump doesn't call me before he makes decisions. I built products for long-term investors. If ETH moves up or down five or 10% in a day, it honestly doesn't matter to me. I care about what ETH does over the next 5 10 uh 20 and 100 years. DeFi is pretty overcrowded. So, why should anyone care about Plaza when there's other yield generating opportunities out there and perhaps even some more juicy ones? I'll I'll push back against the more juicy ones because I think the price discovery of Bondi makes it trade such that it is always an attractive yield relative to other opportunities in the [Music] market. I'm here with Ryan Galvinc who's

founder at Plaza. Plaza is a platform for onchain bonds and leverage on base and also interop ventures portco. And today we're going to be chatting about Plaza which just recently launched mainet. We're going to be talking about the bond market for state ETH assets as well as leverage ETH and their recent launch which is really exciting. There's some interesting developments there. We'll talk about institutional adoption I suppose and also perhaps what's happening in the global markets right now. Um, hey Ryan. Hey, thanks for having me. Happy to be here. Yeah, it's great to finally get you on. It's been uh it's been a long time coming and congrats on the recent launch. Thank you. How's uh how's everything going since then? Um it's been growing great.

Our user base is entirely retail and organic and we are growing deposits at around 5% a day. Um, so we're we're quite excited that it seems like Plaza and our products are resounding with the market that we wanted to help and build for, which is regular people who want to invest over the medium to long-term in high quality sustainable assets. So exciting to see like early signs of of product market fit and excited to accelerate on the growth. Yeah. And it's uh it's really quite impressive that you're growing at 5% a day even especially given what's happening now with crypto markets. I I think ETH is uh flirting with 1700 right now. Uh we're

recording this on April 3rd. This is the day after the Trump tariff announcement or actually Trump tariffs went into effect. What's your outlook on on the markets right now? You know, I guess in maybe in the short term but also in the longer to medium-term time horizon. Um, I can give you my takes on like where I think the market is going to go, but my my broader take is short-term vault doesn't matter. I built products for long-term investors. I think the people that have done best in in crypto and the broader um financial markets are people who ha take high conviction bets over a long time horizon. If ETH moves moves up or down five or 10% in a day,

it honestly doesn't matter to me. I care about what ETH does over the next 5 10 uh 20 and 100 years and I just buy more continuous and hold it. So, I'm quite bullish on ETH. There's really smart people building on on Ethereum. I think ETH as an asset has the potential to acrue a lot of value through kind of roll-ups making transactions cheaper and then roll-ups ultimately paying the base layer and that acrewing to to ETH as an asset. ETH is still the most dominant DeFi used asset. So ETH based DeFi protocols call them a morpho pendle still have way more TVL than than any Bitcoin based protocols or or Salana based protocols. So I'm I'm quite

bullish on ETH in the in the long run. In the short term, looking at the wave of tariffs from the the Trump administration, looking at general cryptovall as people move between ETH, Salana, Bitcoin, memecoins, I think it's going to be choppy for some time. I think one thing that helps is hopefully we get some really good regulatory clarity in the US over the next six months, which is one bullish for for crypto because it unlocks um kind of the the the retail market of the largest capital market in the world, which is the US coming on chain in a material way and projects being able to market to them, be based in the US, do things around the US. I think that that'll

bring a lot more capital into crypto. But until then, like Bitcoin, Ethereum are essentially macro products. They they trade with interest rates uh and and kind of the opportunity cost of investing in other things in traditional finance. So when there's volatility in traditional finance, there's volatility in crypto. Um and I don't expect that to change for for the next few months. I mean, that is an interesting take. I guess I would maybe challenge the long-term that that like long-term investors are have done well or like better than short-term investors because like if you look at the top say like 10 coins. Um if you've been holding ETH for the last four years, you'd be exactly where you started. If you've been holding Salana, you'd be down. If you I

think like maybe you would have made money if you're holding Tron and uh XRP. Yeah. So, I mean like ETH holders holders have not been uh have not been rewarded for being long-term holders at least in the last four years. Yeah. But I view four years as as medium-term. And if you if you look at like the bond market, what is classified as like a medium-term bond is like anywhere between 2 years and 10 years. Like long-term is is like 10 years. And if you held ETH uh from I guess like longer than four years out, like let's say six or seven years, you've done extraordinarily well. And if you held Bitcoin early, you've done extraordinarily well. Like if you look

at four years back, you're like comparing kind of like top to what we'll I'll call now as like a midpoint. So like yeah, the returns don't look great, but if you think about like the percentage of the world that's onchain today versus potentially could be, then it's pretty clear to me that like if the world moves onchain, like ETH will be substantially higher, like orders of magnitude. And until then, it's like not really like in my interest to worry about like the short-term swings because I have conviction that like that world is going to happen as as people kind of understand why decentralization matters, why you want trans systems, why you don't need to to trust governments and

institutions and why that's better for for you as a user and why we can build more efficient systems on decentralized systems. So yeah, I I think four years is not the long term and I I think we're playing for for something bigger and longer than that. Yeah, I mean that resonates with me. I I guess like do you think that we're do you think that the cycle is over? Do you think that we're now in a sustained bare market or do you think that as I think a lot of people were predicting or at least considering including myself in the last 6 months that you know we would see the top of the super cycle sometime and 2025 2026 and that sort of like lined up with a lot of the previous

cycles. It feels now like maybe there's a chance that that doesn't happen. um especially given uh just the uh overwhelming interest for Bitcoin from institutions, the lack of interest for ETH and altcoins generally um as well as the geopolitical uh situation and sort of economic glo you know global macro situation with tariffs, war, interest rates, etc. And this maybe this is a little bit sort of like beyond my um my kind of like understanding of markets, but I've I've heard a lot of

people talking about this like 18-year, you know, cycle theory thing that like we're coming to the end of that 18-ear cycle with regards to the S&P 500 and that it's all downhill from now basically that we're going to like enter a huge recession in the next um little while. So like all those things put together, you know, what is the case for a mega bull market that brings everything back up, including altcoins in the next, you know, 12 to 18 months. Yeah. Um, so I I think cycles are a thing with an asterisk. I think there are repeated patterns in human behavior and market

psychology that lead to cycles. But I don't think cycles are this like set in stone thing that we are following the cycle and have no way out. So the answer is an unsatisfying one which is it depends and it depends on a lot of different things. The bull case right now is that um a lot there's a lot of institutional interest in coming onchain like big institutions like Black Rockck and Fidelity are legitimately exploring how they can leverage blockchain rails to do things like stable coins, asset issuance, keeping track of kind of customer positions, custodying assets.

All all of these things are like rapidly accelerating which is a really strong positive catalyst for more capital flowing on chain and more capital flowing into assets that are not Bitcoin. At the same time, another positive tailwind is the potential for more regulatory clarity and more retail investors from the US coming on chain. And then the the headwind is all macro. So it's high interest rates, high inflation, which makes the opportunity cost of holding an asset that pays zero yield, which is like Bitcoin or Ethereum quite high when you can own a a treasury bill that that pays you 4 and a.5%.

Macro at times is a headwind and at times is a tailwind. In 2021 when crypto ripped uh there were massive rate cuts, huge amounts of money printing and the policy direction of the US and other countries is going to determine whether macro remains a headwind or it becomes a tailwind. So that's a little bit tough for me to predict. Uh Trump doesn't call me before he makes decisions. So I'm I'm sitting on the sidelines just observing. And the types of bets I like to make are over long horizons where they're based on fundamentals like hey there's like really interesting technology here that adds value to institutions and that's why institutions will come on chain which is why I'm building in the space

and I think that there is already quite a big base of people around the world that are excited about decentralization and demand decentralization that will sustain the business regardless of like market cycles. So that's my that's my hedged bet. It's uh it depends on macro. There's a lot of things to be bullish on. There's some things to be bearish on. And we'll see where it shakes out in a few months. So, let's let's uh let's dive into this institutional adoption. Where do you think the most interest from institutions is coming from? Is it stable coins? Is it RWAs? Is it sort of building things onchain? Is it building app chains? Um what do you see? And perhaps like what do you anticipate will be the the catalyst that really brings

institutions on chain in the next you know year because I I feel like maybe just taking a step back here institutions have been coming for a long time. Uh back in 2015 161 17 folks will remember there was this whole era of permission blockchains when every everybody in the space was trying to build you know blockchains without bitcoin. Now, I think things are different now because there's more of a a an understanding of what blockchains are, their security um model, the sort of threat model, but also there's just like assets that weren't available back then. Like, you know, stable coins, I think, have done a lot to show institutions how they can use blockchain to improve things like transaction set,

you know, settlement, right? Like very basic things. But I happen to know that you think that it takes more than just cool tech for institutions to come online. So share a little bit about your thoughts there. Yeah. Um institutions only do things when the potential profit drastically outweighs the the cost of of getting involved and the and the risk. So right now it's it's pretty clear to me that like stable coins are like the the first hammer to fall. Stable coins have clear product market fit for people making crossber payments. You get instant settlement. You can send money with like a fraction of a penny in fees.

Where the alternative in traditional finance is like wait two days and send a $25 wire and then you have to call like five times to make sure that the wire actually goes through. So for things like remittance payments and and things like that, um stable coins are are clearly gaining huge amounts of market share and banks see that and I think one of the things that they're worried about is people self-custodying stable coins and no longer depositing in a in a bank because that kind of breaks this whole like process where banks use that deposited capital to go make loans. So banks are are trying to figure out ways to support stable coins. It adds value to their users by giving them a better

UX of fast and instant payments that are cheap and users are are demanding it. The next piece where we're starting to see some like early interest is one in in holding Bitcoin simply because it's now crossed this threshold in market cap where it's an investable asset from an institutional perspective. there's enough economic security behind it and and kind of ability to absorb large purchases without materially moving the price that it is now just like an asset that's uncorrelated to the other things that institutions have in their portfolio. So, they're like starting to allocate to it. Uh the asset is also done really well. So, institutions feel like they're like maybe fomoing a bit, but um the the on top of that RWAs are

are interesting. institutions are always looking for a new buyer base for assets because that improves kind of the efficiency of markets. More people trading a thing equals more efficient price discovery. So in a lot of these like assets that are getting tokenized, they are tend to be like real estate in like emerging countries because like that is easy to put on chain from a regulatory perspective. I think with the regulatory shift in the US, you'll start to see like more highquality developed market assets that people are excited to own. And the reason for that is it opens up a broader base of people who can buy those assets and hopefully those assets become more liquid and trade at a higher price because there's just a broader uh

broader buyer base. I think that one like RWA coming on chain in a meaningful way is a little bit of a chicken and egg problem. it's like do the assets come first or do the buyers come first because no one will put the RWA on chain unless there's like a significant buyer on chain. Um and at the same time the buyers don't come on chain until there is a significant asset coming on chain. And that's why I think like approaches like Black Rockck's approach of putting assets on chain and then matching that with capital is like the right way to bootstrap the market because they're bringing their own capital to be the buyer and their own assets. So they're basically viewing like the blockchain as a good way to custody this asset and justify the investment in building the infrastructure for a broader play. So I

think that'll be like a good way that RWA's come on chain for altcoins, alt L1s, things like that. I think it's really going to come down to where the users are. I think institutions will support chains and assets where there's significant retail flows um because uh it's essentially their customers demanding it and voting with their dollars that those institutions should service them on those platforms and with those assets. Um so I think for that that's a little bit of a longer time horizon and it's going to depend on on kind of retail flows. Yeah. Do you do you um do you subscribe to this idea that I guess like maybe my take on on the institutional part is that there's there's a real sort of use case for Bitcoin and stable coins,

but institutions that have not yet really understood and this kind of ties into the the decentralization thing we were talking about before the show, which is that the infrastructure that we're building kind of serves a purpose that institutions don't really find that appealing or useful which is speculation and also to some extent you know tax avoidance and avoiding the traditional finance system altogether. I think like there is, you know, a truly political project that exists in Bitcoin and by extension in in DeFi now that has been stretched to like, you know, absurd um sort of like absurd use cases like memecoins and things like that, right?

like totally exiting the system and and that counterculture movement I I guess if you want to call it that that way for for folks that are building in that space that are really sort of passionate and have you know for a long time wanted to uproot the traditional financial system with crypto like having to become buttoned up and going towards institutions regulation and compliance is really counter to their entire vision of the world and um and I think that That is also some of the pain that founders are feeling now and also perhaps you know why my altcoins are not performing so well because institutions have shown adop have shown interest in things like Bitcoin and stable coin and

RWAS but not so much in you know the social casino. So yeah what are what are your thoughts on that? I think that's right. I think like it's hard for institutions to wrap their head around decentralization because the main thing that you are cutting out with decentralization is institut that cost that that provide trust, right? So like I personally trust institutions like Black Rockck and Fidelity because they're highly regulated. I'm an American. I used to work in traditional finance. I think there are a lot of problems with these institutions. I mean sorry there you trust the regulation will come and save you if the institution acts badly but the institution I mean the trust that you

have in that institution is reliant on that regulation being there and being effective. Yes. Exactly. I think the well I think there's there's two things. There's both the regulatory trust building, meaning that if one of these institutions did something really bad to me, the regulator would step in and the cost of doing something bad to me and other customers is too high for them to justify doing it. And I also think that a lot of these institutions, the reason why they have succeeded and achieved such tremendous scale is because they value their brand.

So there's this like social contract between them and their customers that if they do something bad to their customers that will lead to a mass outflow of customers. Like there's competition. You don't have to work with companies that you don't want to. So these institutions not only have this like regulatory hammer, but they have this like social hammer that like if their customers revolt like they they won't be in business anymore. So both of these factors to me keep these institutions within a playing field that like I feel okay as an American. That being said, you can unlock a lot of efficiency and even greater degree of trust by cutting out these institutions altogether. And if you are a large institution, you feel

better about the fact that like this other institution who you work with and who you sign a legal agreement is like the one custodying assets and like that's how you've done business for centuries. So this idea where like you don't trust anyone but code is like a little bit foreign to them and is cutting out like businesses like theirs from this system from the earliest days of like this blockchain revolution. the earliest adopters and the people pushing it into existence or like the people that do not trust these institutions at all and are like I guess like fighting against demand to to build these systems and decipher punch. It's not from the institutional side the other way around like Black Rockck isn't going to

volunteer to forfeit their business. So to a larger extent, I think like the way that altcoins, alt L1s, all these things get to the scale where they're at Bitcoin and they're starting to work with institutions to hit that next leg of growth, you have to like win over the people. You have to convince people that like this is better for them in in some way. And I think we're not yet there on Ethereum is almost there. They're not there. Salana's almost there. They're not there. And then everyone else is like miles away. So until they get closer to that it's hard to see institutions bowing to like users are demanding this we have to service these things. Yeah I I think the the next shoot to drop maybe not yet but you at some point the new institutions that are

being formed now that are acting at the intersection between real world assets and blockchains i.e. the asset issuers uh I I I think at some point will also be cut out right because why do I need an asset issuer uh to issue like a bond on chain when the US government could issue that bond directly on chain now like there's structural sort of market there's things that structurally like the market would need to change and regulation would need to change and sort of understanding and adoption of these technologies would need to grow tremendously for that to happen but it's not impossible for these real world assets to exist you on chain title like land title registry like uh

DTCC type activities could exist on chain and those intermediaries would also be phased out. Now these are I guess crypto native inter intermediaries today or intermediary like you know companies like Black Rockck that that that are at the forefront but a lot of like crypto companies quote unquote right that are like building these businesses at some point I believe should also not be necessary you know if governments and I guess like consortiums in the case of the DTCC or other things like that start issuing assets directly on chain um 100% agree and this is why Plaza chose to build what we're building So I fundamentally believe asset issuers are like the worst middlemen that exist in the financial system that have a

massive grift. The people that bring the most value to the table in a in a financial system are the asset originators or owners and uh the biders of assets. It's not the people that sit in between and package these things really nicely, but that is where a ton of value is captured. That is the whole business of Wall Street. Uh and essentially like you could think of it as let's say you're like a consumer lender. The fact that you found a customer and took the risk and made a loan is the value point. The process of packaging those loans. Another value point is being able to provide capital to buy those loans so the asset originator can can make more loans. The value point is not the fact that Goldman

Sachs bundled these loans together and issued a securization. Yet Goldman charges 10 million in fees and ongoing servicing costs for supporting these structures and and kind of enabling this market in a world of blockchains. Like if the asset originator brings these assets to to the market and the market can freely bid on them and there's permissionless infrastructure that allows you to create these interesting structures, which is what Plaza is, then the people who who get paid for for these two things are either the asset originator or the asset buyer. And it's not the structure in between. All right.

All right. Well, let's talk about Plaza. Um, what are you guys building? Yeah, so we're a platform for programmable derivatives. It's a it's a fancy phrase that we made up that essentially captures that we're building tokenized structures on top of vaults. So, essentially assets sit in a vault. We create interesting structures on on top of that vault that are better suited to different types of investors. let's say a bond backed by those assets or leverage on those assets where both of those structures or or any of those structures are all represented as ERC20 tokens. So they're cross-chain composable, easy to integrate with other things in the decentralized financial system. You can bridge them anywhere, but those assets at the same time are

always redeemable back for the underlying asset in Plaza's vault. We're building towards more composability in the decentralized financial system and being able to provide medium to long-term investors with better assets that are uh more suited to their risk return profile. We're launching with two assets. One is called bond ETH. It is a bond backed by ETH. So ETH LSTs and LRTs sit in the vault and we issue a bond backed by that vault and that bond pays high yield in USDC. So stable dollar income and that bond can always be redeemed back for for ETH out of that vault. On the other side of that trade is which is levered ETH which is essentially levered exposure to all the

assets in the vault where that leverage comes from essentially the fact that the vault also issued bonds to to finance that leverage. So we we're starting with Bond ETH and Levy. In a few months, we're we're launching bonds and leverage backed by Bitcoin, backed by Salana, and then opening up the platform for any user to create any structure on any asset. So, in the in the paradigm where you're an asset originator who who who issues loans offchain, you can tokenize those loans onchain and do a securization through Plaza, where instead of paying Goldman a $10 million fee, you pay zero. instead of ongoing servicing costs, you share in the fee revenue with with the Plaza uh with the Plaza ecosystem. So, you get paid for bringing your assets to a securization

totally inverting this like asset structuring uh middleman uh dynamic. So, how much yield does bond ETH pay right now? And like how much leverage can you can one get off of Love ETH? Yeah. So, Bond Eith has a fixed coupon of 2.5% per quarter or 10% per year. Um, but Bond Eith is cool in that it's it it can find true price and yield discovery by by trading freely on on Dexes. So, there's this fixed coupon, but if the bond falls in price or goes up in price, that yield changes based on kind of the price of the asset. So Bodith should trade to whatever the market feels like the

clearing yield is for a overolateralized position backed by whatever the underlying asset is in this case Ethereum. So it's going to launch at a 10% yield and the market will decide whether 10% yield is appropriate, too much or too little. And that's really exciting because that creates a very sustainable yield structure on the levy side. Wait, just just just one sec. Like so like uh just to get this kind of yield thing correct, right? So, you said it's a 2.5% per quarter, 10% per year um coupon. In the docs, though, it says 2.5% USDC per bond ETH, 10 USDC per year. Is that a typo? No, that's exactly right. So, it's like, okay, $100, let's

say, par value. So, two and a half USDC a quarter is two 2.5%. Right. Okay. Okay. So, like one bond ETH generates $10 a year in in a coupon. Exactly. Okay. Like, so like why would anybody hold this? Cuz like that's not a whole lot of yield, right? I mean, you could you could hold um say like other assets in the like other ETHbased uh or ETHbacked assets that are generating a lot more yield.

So, I've yet to see an an ETH-based yield that exceeds 10%. But, um, the the the point of the asset is it'll trade to whatever the market clearing yield is for that level of risk. Um, so the yield should always be attractive through through price discovery. The reason why you hold it is because you believe that ETH will be worth something to continue to support your coupon payments. How that yield is generated is partially through staking or restaking yields and then partially through selling some of the capital appreciation of ETH. So ETH going up and you sell some of the tokens to to fund the USDC coupon. So like the reason to

hold it is because you want dollar income to help fight against dollar inflation. Maybe you need some some higher yield than you can get from lending out ETH or lending out stables. The lending rate for ETH on a right now is like 2% and the lending rate annualized and the lending rate for stables is something like 5%. So this is like a 10% yield in a relatively stable asset black backed by decentralized assets. So it's really meant to be an asset for long-term yield seeking investors. Maybe some of these people hold stable coins because they don't trust banks or institutions and that's where they park their money, but they're quickly realizing that like, hey, like dollar inflation is a real thing. Like my money is worth 5% less every year. So

having an asset that yields 10% but is relatively stable helps them not only like fight that inflation but but grow their wealth over time and is truly a onchain savings product for people that don't want to trust banks institutions and and only want decentralized assets. So just to be clear here one bond ETH is $100 is worth $100. So like one bond ETH is 100 is 100 USDC. It's not one ETH per bond ETH. And that that's where you're getting this this 10% yield on um correct. Exactly. So the at Genesis bond ETH is issued at 100 USDC. So right now that's like about 18 bond ETH per ETH.

Um and then the the price of bond ETH can can freely float. So it can fall to 90. It can go up to 110 as the market kind of discovers what the appropriate price and yield for bond ETH is. But the the where you get to the 10% yield is essentially two and a half per quarter times four $10 a quarter on $100 of par. So 10 bucks for every $100 you invest per year. And and why is it $100 per bond? We chose $100 because that's kind of the par value of bonds in traditional finance. So, in traditional finance, like people talk about bonds as like, okay, this is a par bond that trades at $100, uh, or it's a discount bond that

trades at $90. And we wanted to use that same framing for this first decentralized bond so that it's more understandable to to people who come from kind of the normal bond market. And uh, what about the leverage, ETH? How does that work? Yeah. So, the leverage is market set and dynamic. So the leverage is based on how many people are creating bond ETH relative to to levy. So it's going to launch with about a 3x leverage ratio. And then as people create more bond ETH because demand for bonds is higher than leverage or or vice versa, the leverage ratio will will move up and down. And that product is is meant for people who are long-term bulls on ETH. So people like myself who

believe that 10 years from now, 20 years from now, ETH will be substantially higher than it is today and want some leverage exposure to that ETH without risk of getting liquidated. Meaning that you don't get stopped out of your trade like you would in PERS if ETH falls significantly in price. I'm not worried about short-term volatility. I'm worried about what ETH is going to do over 10 to 20 years. So, right now, my only option if I'm bullish on ETH is to hold ETH liquid staking tokens or liquid restaking tokens and not take on any leverage, but I'm constrained in my capital. I want more exposure to ETH.

So, having some leverage would be great, but that breaks if ETH falls 90% or something and I get shut out of my trade and it goes to zero and now I no longer have any exposure to ETH. With Levy, because the leverage is dynamic, the asset should delever as market prices fall. So softening my blow, but also making sure that there's always some ETH that I'm long, even if ETH falls significantly, so that when ETH goes back up over a medium to long horizon, I'm in the game playing for it and participate in in that move. Taking a step back and looking at the derivative space, DeFi is pretty overcrowded. So why should anyone care about Plaza when there's other yield generating opportunities out there and perhaps even some more juicy ones?

So I I'll push back against the more juicy ones because I think the price discovery of bond ETH makes it trade such that it is always an attractive yield relative to other opportunities in the market. But the core value ad of Plaza is any asset profile that's that's better suited for investors. So any profile you can imagine backed by a hard asset like ETH or BTC. So the the breath of products that that can be created via Plaza is is much wider and and much better tailored to your specific risk return tolerances as an investor. And two, the the crosschain composable aspect. So the fact that these bonds and leverage tokens are ERC20s, always redeemable back for ETH on our platform

or bridgeable anywhere used across DeFi, that unlocks a lot of flexibility for users. So if you think about the the derivative space in crypto today, almost all of the players are unfortunately quite centralized and that's okay because users haven't seem to demand uh decentralization in the derivative space. But the downside of that is if you if you look at per example which is the the perpetual features are the derivative with clearly the most product market fit. Hyperlid is I don't know a 10 billion market cap and like two billion a day of trading volume. On Hyperlquid, you post collateral and you can open up a longer short on on any asset, but your collateral and position are trapped on Hyperlid. You can't take

your 3x long Bitcoin and go and lend that out or borrow against it or deposit it into a strategy vault because of kind of the structure of how pers work. They need that collateral there to slash it if if Bitcoin goes down. With Lev ETH, you can be levered long ETH or with Lev Bitcoin, you can be levered long Bitcoin and you have an ERC20 token that you can bridge anywhere to go farm incentives on another chain or lend out on a to earn some incremental yield or integrate with with a strategy vault that's taking that Lev and and doing something clever to to generate more yield. On top of that, Hyperlid can create perv or bond ETH. So we view the broader derivative space

within crypto as a good phase one. They opened up a lot of interesting products, did a lot of interesting experimentation, but we view ourselves as phase two of DeFi. So the next big leap in architecture that enables more composability and flexibility for users to be able to do with their assets what they want. a movement back towards this decentralized Garden of Eden that was promised where you you have full freedom to to move your money anywhere. So that's what we're really excited about with with programmable derivatives and and bond and levy. So when we first started talking and learning about Plaza, you guys were building this on Cosmos and you wanted to build it as an app in the Cosmos ecosystem, possibly on

the hub and and then pivoted to base which I think was a great move for you guys. But can you talk a little bit about what what pulls you away from Cosmos and and what pulled you towards space or maybe what repelled you from Cosmos? So this is a little bit of my my arc as a founder and so when I first got started in the decentralized financial system, I got involved because my good friends from college Magnus and Barry who are the founders of Skip Protocol, which is now Interchain Labs, showed me some of the cool things that you can do on chain. So we we actually still share an office with Interchain Foundation.

They were quite pivotal to me getting involved in the space. So naturally, we set out to build on Cosmos because our friends were building on Cosmos. I still firmly believe that the Cosmos tech stack is the best tech stack for high performance and full decentralization. We were originally building a sovereign Cosmos chain and we were working with a few other parties to deliver some of the core infrastructure we would need to be able to deliver a seamless UX to users. So those two dependencies were at that point in time there was no canonical version of ETH wallet signing for Cosmos chain. So everyone had to have their own Cosmos wallet which Kepler is a great product but the ask of going to a user of MetaMask or Robbie and saying hey you

you've got to download this new wallet and move funds into it was a little bit too high for us. So we were excited that someone was building a way to integrate uh ETH wallet signing into Cosmos chains. And the second piece was fast bridging from Ethereum Salana uh and other ecosystems to to Cosmos chains. So at the point in time which was September of last year the best bridges were like AxelR and Hyperlane and they took about 30 minutes to bridge from Ethereum to Cosmos which we felt like was too long and we wanted to see a bridge that was substantially faster than that where you can bridge in under 30 seconds like you can between an ETH2 to ETH2. Both of these things people were working on, both of them suffered massive delays and

honestly pauses because of infighting within the Cosmos ecosystem on what the right direction was. At that point in time, we were looking around and trying to understand, okay, like these pieces that help bring all this liquidity into Cosmos and open up Cosmos to to to new capital bases are not coming. And the current Cosmos user bases were were were quite small. So we felt like okay like we have to go where the users are and where the users are is on base. So we we met with a bunch of different uh L1's and L2s to figure out where the the best place to to get the most distribution for Bond Eith and Lev were. And we got really excited about BAS's focus on UX, how they're working on bringing the world onchain, especially uh in the US

uh where Coinbase has incredible distribution, their focus on amplifying products and their road map to decentralize the base sequencer. And all these things got us really excited about a world where you can buy ETH or Bitcoin and and on-ramp into web 3 through Coinbase. Easily move those funds into a web 3 wallet via Coinbase wallet and then deposit into Plaza and get exposure to better risk profiles for all without paying gas and all with a a single app that flows seamlessly. And that's what we're able to deliver on base that we couldn't do on Cosmos in September.

We're still quite excited about Cosmos over over the long long term. So in recent months, Skip now Interchain Labs has taken over stewardship over of the Cosmos SDK and development of the Cosmos ecosystem. So they're launching um something called Eureka, which is enabling fast bridging from Ethereum to to Cosmos and and we gave him a lot of interesting product feedback that helped shape the direction there. So we think that's going to unlock a lot of liquidity for Cosmos and we know that uh ETH wallet signing recently launched for for Cosmos chains as part of the Cosmos SDK. So both of those pain points are are now solved from a developers perspective. We're excited to see how that shapes up from a users perspective

and liquidity perspective for the Cosmos ecosystem. Plaza by core value believes that users should be serviced where they are regardless of what chain or ecosystem. So our products bond ETH lev ETH and future products on Bitcoin soul and any asset are bridgegable to any ecosystem and integrable across define and any ecosystem. So we are going to support Cosmos and are excited to to to work with the the interchain team on that. So we view ourselves as base is the hub base is where we've found the the most resonance with users and and where we expect to to find the most growth. But we will support everyone everywhere. Um and we are quite excited to see uh Cosmos now heading in the

right direction. Yeah, I think uh also excited to see Cosmos going in in this direction. I think there's it's still a long ways to go until um it can catch up with other ecosystems. But definitely I I I think that it continues to have Cosmos continues to be very well understood by people who are building great tech understanding that it is superior to a lot of stacks in the ecosystem and that and I think that the Cosmos ecosystem continues to have like great longevity and its core of you know user base token holder base that and that's something that you can't be said about some other ecosystems from I guess like the same

you know time frame uh you know from like 2017 2018 19 uh that have like lost a lot of its users and interest still bullish the fact that their tech is so good that like developers want to work on Cosmos and like uh the it's truly performant decentralized tech and despite the ecosystem often shooting itself in the foot it always comes back to to the core technology. So now that Magnus and Barry and and the Skip team are are leading Cosmos, maybe the self uh self harm that Cosmos has gone through over the over the last few years is is over. And I'm super bullish now. Same. What's your call to action to folks listening here other than of course like go check out

Bass and you know, deposit some ETH there to generate yield on your on your ETH or leverage depending on where you think the market's heading. Maybe both. like delta neutral. I think you should check out our our docs and our test net to explore closet products. So read about bond, read about levy. If it's interesting for you and you're looking for stability and yield or leverage on assets like ETH, then consider depositing in our pre-eposit program where we're incentivizing liquidity bootstrapping. And then if you're exploring kind of how to get into web 3, I would encourage you to to to look at Coinbase and and Coinbase wallet. And if you're already an onchain maxi, I would encourage you to uh explore some of the opportunities on on Cosmos because we

think the ecosystem is is really heating up and we're we're excited to work with them over the next few months to to bring something interesting to the table. Ryan, thanks for coming on. It's been great chatting. Cheers. Thanks, Ed. [Music] [Music]