DeFi by Design EP#84: Hyper-Liquid Applications w Sandclock

Transcript

welcome to D5 by Design where we talk all things blockchain and cryptocurrency while striving to educate Empower and enrich it's your boy Andy and welcome back to the D5 site YouTube Channel smash the like button on this video that really helps us out and sit back and enjoy the content thank you very much fam welcome back to the D5 slate YouTube channel this is D5 by Design today we have the pleasure of talking to Cristiano from Sand clock and we are stoked to go through sand clock and the new levels of scalability that are reached in the merge weak here we're going to talk all

about what sand clock is doing in a defy new primitive uh we're going to talk about how this is a spoon amongst the other D5 forks and how all of these New Primitives are available to us by the uh refinement and the evolution of the ethereum blockchain and the new era of scalability that is upon us I will pass it over to Cristiano how you doing today man I'm doing great how are you good good good good I am stoked to talk about sand clock obviously we are gearing up for a release I'm sure you can tell us much more about that and let's let's start by

going through What A Primitive is maybe we can talk about some of the Primitives that started in D5 you know like what what were the OG Primitives and then we can talk about how sand clock fits into that uh that picture of Primitives and and maybe we can touch on these money Legos and how they Stack Up foreign so I I believe the first Primitives were um money markets um like compounds have a um well perhaps uh if we want to go a little bit deeper we can talk about maker as well because not only are they

technically a money market protocol but more like a credit protocol uh but they they also create um a stable car a synthetic stable coin um and well they allow you to generate yields and then a bunch of protocols sprung forth from from this um from from these base components so to speak um the first one being yearn and then of course the the food themed protocols of course we also have synthetics and I have a nice project yeah the the meme coins and the food coins you know

they they were just one after one after another like you know I think Sushi stop swap started that craze by forking unit Swap and the the meme coins were like uh you know a fun New narrative that they could that they could put on the same technology to form a new brand and then we had sushi swap and then all of a sudden farming and and staking and auto compounding was the the thing of the times and we had yams and then the food and the you know we had Harvest finance that that some of these projects are still around you know they just kind of played into that that food and and meme kind of branding narrative

and now there's there's new kind of New Era Primitives you know we had defy 2.0 um which you know kind of brought in this concept of bonding curves and starting to starting to uh smooth or or change the the uh the bonding curve with ohm um and this led to you know a bunch of new Forks on on their own like uh Wonderland and time um you know these kind of started out as New Primitives where they were you know an initial experiment and the ones that experiment had some product Market fit and it started that idea started to get validated the idea started to kind of Ripple throughout the entire crypto

ecosystem and you know there was fourths of these Primitives that led into new projects but they were really just the same project with with a new name um and now you know we talk about sand clock this is a new primitive and and I'm curious you know how how is it a new primitive how has it uh expanded upon the set of basic smart contracts that we got with these initial money market decentralized exchange and stable coin Primitives yeah um so you obviously everyone knows protocols like yeah and such the OG yield optimizers we also know the

protocols like uh super uh super fluid I believe that allow you to stream uh your your money and sandbox is kind of like a combination of both um and if I had to equate it to a real world products it would probably be a wealth management platform so a wealth management platform is obviously in the in the traditional World operated by a human or a group of humans or obviously permission back ends and they they generate a return on El capital and

then of course periodically they allocate some of the capital to something that was predetermined when they created this this Foundation we although we call the metavolts um of course uh you don't have I mean you have a lot of flexibility uh with these uh but you you need a lot of capital because you these people need to be paid and you also have an element of trust um so Sun clock basically removes these two elements so it's obviously it's free it's permissionless and it's trustless

you don't need to to trust anyone uh and so basically when you deposit to sunplug the contract will keep track of of these assets these underlying assets that you deposited uh this is your initial deposits do people call it principal and then all the yield generated um from these assets is is also tracked separately and then you can you can do fun stuff you can say I want to use 20 of my yields to DCI into eth uh you can donate another percentage of your yield

you can send it stream it to another wallet that you want and it streams the yield in real time and of course you can also uh subdivide and allocate your principle to whatever you want really but this is obviously less interesting because you can just use the blockchain if you want to send assets without going through a smart contract it's you just send them but that is uh Sun clock in in a network yeah yeah for for regular transfers uh user would just send them on the blockchain but this is to stream

yield directly into a user's wallet or I take a smart contract where yeah and that that you know just to unpack that idea I think it sounds like a principle is put into a vault uh maybe a yield earning Vault maybe Ave maybe yearn and as it starts to generate interest that interest is streamable into maybe one wallet maybe only the wall the user's wallet who uh put up the principal collateral and maybe this yield is streamable into and this is all up to the user the user can set the yield to stream into multiple wallets or

some wallets and some smart contracts and that seems really powerful that idea where yields could stream directly into a smart contract and the smart contract could start to do Logic on what the yield that streamed into it how how does the smart contract start to distribute that Capital could really Elevate the frequency and the magnitude of compounding that capital what yeah and it unlocks cool stuff as well for for instance you we we always talk about uh like um save save give and invest because

these are three basic operations of I want to keep the yield I want to donate the yield and perhaps optimize my taxes or I want to use this yield to dollar cost average into eth or Bitcoin or some other asset but you can also do other fun stuff for instance you could build a lossless Subscription Service on this where instead of charging people a 10 for your month you just have them deposit let's say a hundred dollars two hundred dollars and it just collects the yield so all sorts of products that up until now uh were not possible

to to build uh are possible and quite easy to to build um other things like lossless lotteries like pulled together can be very easily implemented with SoundCloud by just streaming the yields to a contract that then um uses a vrf to run the lottery and tell us for for you know the the listeners who might might not be familiar with vrf what you know could you kind of unpack that concept yeah so vrf is is literally just getting a random number um

some some I mean it's it's never truly random it's pseudo-random um and when you're doing lotteries uh on chain there are different levels of Randomness so if you get Randomness From the Block it can be uh I mean it can be manipulated by by the validators uh whereas if you get it from chain links vrf for instance they probably use a much stronger level of Randomness that is going to be extremely hard to manipulate and so you can you can get um better security assurances that there

is fairness in this specific lossless Lottery guy yeah we we've talked a bit about uh cryptography and some of these backdoor functions that enable like higher higher security standards uh and in producing Randomness um and that's obviously a critical element of law of lotteries on chain um there's a lot of you know implications that oracles have uh when determining like some some of these outcomes and it's really cool how sand clock provides a base layer a platform for these other applications to start to integrate and the the applications uh are really

endless when sand clock starts to fit into uh like the the rest of the decentralized financial economy um the really interesting thing that I I like about Santa Claus is how one is a new primitive and then two um like all of the kind of unknown possibilities that that come about from uh introducing a new primitive to the to the ecosystem and I'm curious how how you kind of see our general uh economy this like ethereum nation state decentralized economy how do you see it progressing uh you know with the merge um and just kind of like zooming out for

a bit uh you know now there's even more Primitives that are that are available to us with enhanced scalability you know that that is intended down the line um yeah how do you how do you see uh like the the decentralized economy kind of progressing overall and um yeah yeah I think people will eventually and I don't think they have yet but I think they will eventually start realizing that user experience is important um we're not just building for our own communities we're building for at least that's my opinion we're building for the

rest of the world and accessibility should be a priority and unfortunately it isn't and um so Santa tries to to do to do this by building something that is incredibly powerful uh generate sustainable yield and is also easy to use by everyone so sometimes people ask me who who would use Sun clock what why is the user Persona that you have in mind and is it non-native is it Natives and my answer is always the same it's whoever wants to generate yields and program it should

use unclog just because the strategies are quite Advanced um and obviously they have a different risk profile but we can talk about that in a bit um regarding the ecosystem at that I think um well I'm really excited for the merge obviously uh that is the the beginning of something really fun I'm excited about um the the what's I I don't remember the VIP the EAP number but it will make Roll-Ups much cheaper to you well they throw dink sharding yeah yeah exactly

and then the sharding itself and this this is so much but I I I really do think that in the future uh it's not going to be about the base layer that is going to be something for the the app makers so to speak to decide what kind of security assurances they want to give their users uh I do think ethereum is going to win the Roll-Ups are going to win um But ultimately it boils down to that and they will be very much like a normal fintech people are not going to be all that worried about

how the yield is being generated although you should obviously have um disclaimers and and uh a risk analysis um yeah and I I think business development is is going to be key to to doing this correctly and uh hopefully the The Regulators won't put up much of a fight yeah which is awesome yeah that that is a uh we'll see we'll see on on the regulation and how it starts to impact uh you know maybe maybe further deeper down the stack um if we start to see some censorship at

the protocol level or if there's censorship um higher up on the stack um you know this will obviously have an implication on uh user experience accessibility and composability between uh you know two potentially separate ecosystems um and you know I think everyone wants to see the censorship question resolved but you know it takes uh reflexivity from The Regulators and from the you know the white house if you will and like you know these these U.S sanctions um it you know take some transparency

and some communication from the individuals who are making those decisions to sanction a uh you know smart contract address and without kind of their involvement we won't really see a resolution until it unfolds before us and it seems like The Regulators tend to work that way where you know they'll just kind of let the chips fall and then react right where they're just kind of like analyzing assessing the situation and then and then making some move after the fact not really to prevent um things from happening but once once uh there's malicious activity or intent that's discovered that's when The

Regulators will come in and start to you know kind of make the industry safer or you know according to them make the industry safer and then according to us make it less accessible and make it you know more permission yeah yeah um so hopefully there there's something that's worth right in that and proactive in that uh in that you know in the regulation that they're that they're uh putting forth yeah I I think that the biggest problem with this regulation is that it's going to Palm cryptos one of crypto's greatest strength which which is composability if everything is a Walled Garden

it's going to it's going to be hampered which is obviously not good um but I'm pretty excited about the most recent developments um the the pack that was created recently in order to start uh supporting crypto friendly uh politicians that's are a step in the right direction it's it's something that um was missing in the space I mean we have the deepest pockets of of any industry is obviously it's it's about Finance um and we have the greatest incentive as well to behave this way

and we're finally doing it we're finally aligning the incentives yeah there's there's more crypto representation in Congress people running for office the pack that you mentioned um and even even uh lawsuits uh coinbase is supporting I think six or seven individuals who are uh running a class action lawsuit against the treasury uh and yeah this is this is all supported for the ecosystem and um it it goes to show that we do have the deepest pockets and you know now that we kind of have the uh attention of America uh and The Regulators it's time

to uh make some change um and and and you know make it a two-way back and forth where The Regulators uh can have a communication Channel with the builders and you know we can together build um applications that are for the greater good not for the malicious actors who are siphoning off um you know the value that's created from uh but benevolent kind of builders you know and we could get into all the all the uh you know uh hacks and and um money that North Korean you know

hacker groups have have uh siphoned off of the ecosystem um but getting getting away from kind of the regulatory aspects of things um and you know kind of looking into what ethereum is doing um over time and and you know starting to to Shard starting to scale how is sand clock approaching this from a application perspective you mentioned how you expect layer twos to be the prime the premier uh application uh layer um where most users are are actually executing transactions uh you know on these Layer Two Roll-Ups how do you

approach that from a from a builder's perspective um is it you know like how how do we choose where to deployment yeah yeah like how do you choose when there's so many chains out here and this was a conversation during the layer one sort of you know uh frenzy you know what what are what are some of the things that stick out to you as a as an application developer that tell you which chain to deploy on F so obviously the reason why we uh are we prefer the the zero knowledge Roll-Ups is precisely because of composability they don't have that optimistic period

withdrawal period uh which allows for for liquidity fragmentation to not really be an issue so if there's liquidity on ZK sync and on stagnet you could in theory use a contract on mainnet to control the liquidity the liquidity of of both chains uh I think this is called um a dam um which is a centralized autonomous Market maker uh I mean this this concept was described in in this uh damn article by uh the the starkware team and yeah I that that is definitely a big

factor which is is liquidity going to be fragmented are we choosing uh is essentially are we choosing Our Own Prison or are we choosing an ecosystem that can that is not a world Garden um so that is why but we also plan on deploying to arbitrum for instance because I think there are some good opportunities there and it is the most popular optimistic roll up and they are production ready which is also very important because time is also of the essence um so these are the the two main uh the two main factors uh in in choosing

um the the the change that we want to deploy to and of course also communities help a little bit but only at this stage because the way things are headed I I do think that it's it's not going to be um like the chain Maxes that are going to dictate whether or not your your application succeeds or dies yeah that that's that's um those are the factors that we use uh it's liquidity fragmentation and also popularity and of course we cannot sacrifice uh security

but there are Roll-Ups yeah so yeah totally the uh the set of layer one chains out out there um most of those are side chains um you know when you we could even start getting into some of the evm compatible side chains um and then and then part of that part of that Set uh you know a subset is going to be is going to be some of these layer twos some of those are optimistic some of those are ZK and then the benefit of these optimistic and ZK Roll-Ups but these layer twos that you know the the benefit is that they actually inherit ethereum

security model unlike some of these other layer ones and side chains so then you know looking at kind of the best practices overview we can concentrate on these layer twos that inherit the security and then look deeper into like the popularity and the community uh behind some of these uh more secure um roll-up methods and then of of those chains it's really interesting now with starkware and kind of the account abstraction and the new uh smart contracts that are available there now we can start to build uh independent smart contracts that share the liquidity from a base contract and I'm curious you know we've seen

liquidity implementations for example on other chains like Solana like serum you know serum has this one kind of Base contract uh all of the LPS and the liquidity is just deposited into this one contract and then there's several front ends that interact and and call this one contract uh to make to make a trade or or you know some smart contract function is that similar to how these decentralized automated market makers might work in a framework like startware and ZK sync both calling on the same pool of liquidity or is there really two

uh pools of liquidity and then there's a method to kind of communicate and maybe share the liquidity from one to the other yeah so uh I think you have uh you have a set of contracts so you you have the you have a contract on on stock net you have a contract on ZK sync because just because it's what I used before and then they communicate asynchronously through mainnet ethereum and so so these contracts uh live on mainnet ethereum and they will just receive the state of the dam um upstream and they need to

they they need to keep um delays into account just because it is asynchronous and for instance.net is going to post proofs to L1 um every second or every 12 seconds um it's it might vary depending on the the activity and then these uh there is a base contract also on mainnet uh which receives the states of all of these three and interacts with the the the actual amm contracts on layer one so that's that's at least that's how

they structured it and it makes perfect sense to me but it is it's it's nice it's really nice because now you don't have the problem of fragmented liquidity and you don't need uh bridges that are prone to failure um which evade that seven day withdrawal period by just having uh liquidity on both sides and and perhaps have a different security model than what you would get from a roll-up yeah it reminds me a lot of Stargate um how Stargate was looking to do some cross chain uh liquidity provision

and it almost seemed you know like they had they had their own Bridge called layer zero and then depositing you know into one of their Stargate LPS would kind of give you access to other LPS on other LPS on other chains um and it didn't really require switching networks you could you could really just deposit into these other LPS and it seemed to handle the chain switching at the front end level um and now with starkware and ZK sync in this example both rolling up to the main chain

um we seem to circumvent kind of work around this issue of having LPS siled on different chains and then having to switch between these chains now we can we can switch between these chains from the protocol level where whereas before it might have been the the front end level um are you are you familiar with Stargate can you could you explain maybe the differences between how their implementation compares to start I I remember it but I don't remember um I don't remember how it works because I I've never used I mean I have used cross

chain Bridges um but let me see what kind of consensus they use um this was a concept that you know that they were able to do it was really to to capitalize on cross-chain liquidity um and it allowed users to deposit into these uh into these LPS on other chains but it didn't allow Traders or Market participants on the other side of the lp to interact with these

LPS from one central location and it sounds like on Stark where the contract given that it's a decentralized smart contract is is one Central concentrated point of the liquidity and to me that that creates new levels of uh Capital efficiency when we can start when we can pull uh liquidity together and have the benefit of um Less Price impact when when transactions are going through yeah and I also think it makes it a lot better in the sense that

you know when when you create your own roll up uh like why would how can can you attract people to build on it if you don't have liquidity how could I create a synthetic protocol if there's no way for me to liquidate the collateral because there's no liquidity for instance and if if we can abstract this problem away by just having this type of architecture at the at the base layer now liquidity is shared between all the roll-ups and you can very easily choose the the L2 solution that you want based on its technical merits as opposed to

the VCS like injector craft ton of capital into it yeah I think it also lowers the critical threshold for a lot of these applications to succeed when you know people are just spinning up a new application um maybe it's a novel idea like a new token standard uh there's kind of on-ramps and off-ramps to these other tokens like synthetics for example has all of these synthetic tokens maybe they track Nike or they track the NASDAQ or the S P they're pegged to these these different uh indices but these synthetic tokens require liquidity of Their Own and

you know for like for for synthetics to create its own contract and kind of Silo away it requires new VCS new injections of capital to capitalize the synthetic tokens themselves whereas if there's already uh say say eth liquidity on arbitrum and synthetics you know uh synthetics plus is deploying on optimism um you know maybe synthetics plus can supply its uh it's synthetic tokens on on its application on its chain on say optimism

and it can share the liquidity of eth on arbitrum so that maybe someone on mainnet can swap from eth on arbitrum to a synthetic token on optimism and maybe the chain is even some truth abstracted away where you know someone just wants someone has they want to swap into this synthetic token the synthetic token is on one side and it doesn't have much liquidity the liquidity for it is on another chain you know that I think is a really prevalent issue in in defy right now where there's a lot of tokens on on

maybe one chain and this probably could even stretch to nfts and the liquidity for it exists on another chain you know like mainnet and the ability for a user to swap uh agnostically between tokens on on a chain uh will seemingly really enhance the the levels of scalability of this system since um those synthetic tokens aren't uh hampered by liquidity uh fragmentation and lack of liquidity yep I mean the only downside to this is

that now you have kind of like a gatekeeper on mainnet because you need to essentially white list which which Roll-Ups get to interact with that contract and submit State updates but if if you do things right that shouldn't be an issue um and and now you you're not competing for liquidity uh and people can just build stuff on on your chain if they think it's better in a roll-up yeah for all and like a bunch of different front ends you know for for application specific

purposes or like all these front ends having their own contracts and siloing liquidity you know it seems like that fragments liquidity it doesn't really provide the capital efficiency that one base contract could but that introduces centralization risks uh you know whenever there's kind of like one Central choke point that that could bottleneck the entire system and and create Gatekeepers like you're saying um yeah that that you know is important I think as decentralization grows and kind of like the new uh and and really a z zero knowledge uh technology

increases and grows I think I think we'll start to see these problems become just solved you know I think um ideally like this decentralized automated Market maker could really uh unite the liquidity that is fragmented across the entire ecosystem now and we see kind of it honestly seems to me like it's the biggest opportunity right now because a unifying the liquidity uh it is a massive massive opportunity and then this white listing process that must occur would just require governance yeah yeah exactly and it could be done in a

permissionless decentralized way exactly yeah and and it's like right now it seems like you know there's we had all these meme exchanges and like these food coins and like you know people like you know that that created these applications you know they believe in decentralization and all this but like ultimately they're you know they're kind of Gatekeepers for their own liquidity they're they're kind of like rent Seekers on that liquidity where you know maybe they're managing the front end or they're managing the contract you know a lot of these exchanges are taking like a protocol fee and they're kind of renting out the liquidity um

you know to to Market participants um I'm curious kind of like what your take is on on rent Seekers overall um and this you know kind of plays into like intermediaries and how decentralized applications remove intermediaries um what are rent are there any rent Seekers you see um out in the in the world today that are just you know really ripe for disruption uh it would be one of them but I think even

in this space you need some level of rent seeking because uh it is the only way that and our systems can run autonomously otherwise no one's going to call the functions to to make the system move on to the next state you know like a liquidation how do you incentivize someone to liquidate the position because they're going to have to call that function they're going to have to provide the debt tokens and they're going to have to pay gas and how do you incentivize that you need to give them a little a little taste of something um so that those the the basis of of

these open economic systems and ensuring that they run autonomously um especially because in in crypto everything is discrete if it it only stuff happens in the blocks if it happens between the blocks it didn't happen really um but the the obviously the level of rent seeking that we do is is much much smaller in magnitude than what is done traditionally and then in crypto the the costs are just lower you don't have I mean some people say oh um Amazon web servers AWS will do this

10 times cheaper than even polygon and that is true but that is just one part of the equation there are many other agents in the real world taking a cut and taking a cut and then it goes to this other person who also takes a cut yeah you don't see that as often in this space and everything is a lot more transparent as well which is also another big Advantage you like you you know where your money is going and if you if you believe that that specific rent Seeker is getting a lot of money you're able to invest in them

essentially and extract some value there as well so yeah yeah I mean it is speculatory but I think everything is if you look close enough yeah do do you think if uh do you think if we had this decentralized transparent system um you know maybe over the last and this is speculation just like you you know like you just you just said everything is speculation so I I'm I have a question that that I'll pose uh for you to speculate on which is that

we've had we've had these this like era of money printer go Burr right like so much and and the evidence is inflation now like so much money injected into the system uh infl you know in high inflation lots of lots of um compounding and just adding money to the system and it's growing and that seems like Leverage where like the more just like artificial value maybe is a word for it but like there is there is an element of natural value where people are contributing their time their effort their brain power and ideas and creating you know base level value and then it

seems like we're just compounding that same and you know that maybe call that GDP growth and then we're we're like compounding this like gedp growth into just like levels of magnitude never before seen where we're injecting all this capital and it's it's just um expanding this this uh this base level value do you think if we had blockchain systems kind of like for the last 50 years that would have prevented us from expanding this bubble this I mean I call it a bubble but like do you this like this like expandable uh group of wealth this amount of wealth like you know if if it was much more transparent how much money rent Seekers

were making do you think the system overall would would start to draw back on on that and and there would be less leverage in the system now yeah there are a couple of layers here so for for one um if it were on the blockchain um assuming that there are rules and it's not just uh a trusted system assuming that the rules are are almost hard-coded and let's say let's say you have an Adaptive control on chain and the Adaptive controller uh this rate hikes and so on based on a specific input and the input could be

the velocity of money for instance obviously in this specific case the system is controlled by by the controller and the controller is updated by the ones who call the functions so so you have this specific facet of the problem where it's not human making choices or a collective of humans it is a controller and a lot of people will will share on controllers for solving complex problems like monetary policy but um a collection of controllers would

perhaps not be a bad idea um and then you have another component which is transparency and so even if you had a trusted party controlling the system uh the fact that there is absolute transparency would allow people to move their Capital very very efficiently because you know you have the equity Cycles you have the commodity Cycles and um of course even within this classes of assets you you have micro Cycles like specifically for energy

for instance and if you know exactly where the money is going you can you can escape inflation the system would be perhaps a little bit more unstable just because things would happen faster but it would work much better it would be much more efficient and um perhaps um I mean that there is no doubt that it is a much fairer system if it's transparent because right now the only ones that can benefit are the ones that control it and can run their decisions

and the ones that get allocated the the Surplus capital yeah and and that's an inefficient system right where it has the ability to front run and creating more fairness and transparency ultimately leads to a to maybe a little bit less predictability but a more efficient system where the desired output is more likely than what what we have today where it is relatively predictable I mean we can see you know that is probably going to rake like 50 basis points you know we can kind of predict that but is that going to curb

inflation like probably not maybe um and in this in this transparent maybe decentralized system um you know we might not know like how like what what this controller this fed controller is going to hike rates by who really knows but that is the fairness of it where like no one really knows it's like not even the individuals who built the controller and the controller ultimately has all of the information to make a successful decision at a desired goal which in this case seems to mean bring down inflation um yeah I mean they use adaptive controllers on on planes so they're

already being used for for Mission critical applications where if an engine were to fail on a random Wing the controller on the other Wing would adjust the thrust in order to stabilize the plane so you just don't just nose dive and die so these things are already been used in production and yeah in in life or death yeah it seems backwards to use them to use these controllers in life or death physical scenarios where you know we're we're kind of hesitant to use it in a theoretical scenario but it's probably even more practical that's that's true that's that's actually a good point because they can

actually valid they don't even have to do it in a in a trustless way they can just validate the output manually if they're so paranoid that it's going to it could have nefarious consequences yeah yeah you know Christiano we've talked about a lot on on this podcast it's been great we've talked about kind of like macro stuff and uh how decentralization can make you know a more macro economic efficient system um we talked about how liquidity is is you know currently structured in a fragmented way and how um scalability and um decentralization Can unite liquidity

across multiple different uh chains um and how this might lead you know application developers to choose one chain or another uh more so for Community or security practices rather than uh you know whether this chain is backed by a VC or not and we talked about how sand clock is capitalizing on on uh these new levels of scalability with uh its new primitive of streaming yield directly into a smart contract or a set of wallets or um maneuvering this yield into a stream uh that that is completely uh controllable by the user

um and permissionless and trustless and um we talked about how you know this has applications that that far exceed you know just moving money from one place to another there's logic that we can build into these payment streams um which can be built you know to the user's liking um and this really gave us a really uh holistic view on how sand clock fits into the not only the the ethereum uh state but how sand clock fits into like the entire macro uh economic State as well and we're nearing the end of uh our time so I I would be remiss if I didn't

ask about token go up when token is there a token if so what is the value accrual uh to the token yeah so that is a token called quartz um and the way the cruise value is so the obviously you have a performance fee the strategy is actually very smart um and as a different risk profile than what you see out there there is a an element of it could lose money but it likely won't um and this is made very clear as well so essentially the performance fee goes obviously belongs to the Dow

but instead of just sitting there doing nothing it gets recycled back into the vault but instead of it being a normal deposit it's called a sponsor so this what the sponsor does is in the spirit of losslessness uh the yield generated by this capital is distributed to all other depositors so if people were to stop to start withdrawing their funds um and let's say there's 10 million dollars boosting the apy for other people the apy would go up so this has a kind of like a flaw for the tvl

and eventually um quartzholders will be able to do whatever they want with this so if we're we're just going to implement whatever they want so if they want a rage quit mechanism that allows you to burn quartz and get a slice of the protocol owned liquidity you'll be able to do it if you just want to point all of these yields generated by the the performance fees to quartz holders you'll be able to do it but I I always say that a successful governance token a successful token starts out as a governance token uh the

centralizes and then becomes something more practical more utility based because otherwise you just are taking on risk for no real reason because right now Revenue in the beginning revenue is going to be very small until this reserves a crew uh yield so why put a Target on our backs uh by sharing revenue from day one instead of decentralizing and then uh just leaving it up to the dial to decide what to do and then we just implement it got it makes sense yeah

start out with and this the strategy is actually pretty ideal because it uses liquidy Yeah Yeah so basically it generates yield when they're they're uh if goes down because the liquidations will um will will sell Heath to the stability pool uh at a discount and then what SoundCloud does is place a a trailing stop loss order and so if it rebounds then this stop loss order will keep

going up um unlocking your profits and this is it's very cool because it actually does very well in the bear Market but also in the bull market because bull markets are have a lot of volatility and so I think the trailing stop loss will really shine during the bull market whereas during the bear Market the the returns will also be high simply because there are lots of liquidations so we expect to be able to have a lot of uh fees accruent to quartz holders awesome awesome Cristiano this was an absolute pleasure um where where can our community find you on on Twitter uh or Discord

yeah so on Twitter it would be zero x uh Cristiano um so my name no age and um on this card it's just a sunflower Discord you guys can go on soundcloud.org and just see great awesome yeah absolute pleasure really looking forward to uh using sand clock um and uh this was you know uh tons of great great information plenty of alpha stored here in this uh in this podcast so um cheers thanks for coming on