DeFi Summer 2.0? Catalysts for Revitalizing Decentralized Finance

Transcript

I don't know if my mic is oh no my mic is working absolutely fine um I'm sorry to tell you all that we will not be taking our shirts off at any point in this talk but we could probably be convinced otherwise um thank you all for staying here and being here in the first part like getting to divide appreciate that my name is Lawrence I have the fortune of being both the co founder of the Wildcat protocol and moderator of this panel so what time is it now it's half 4 for the rest of the hour I will be talking with the defi heavy weights to my left about basically what do we need to reinen divize defi does defi need reinen vising at all or are we doing absolutely fine as we are so I would argue that it is I will get straight into the swing of

things I think all of you will probably recognize the names of the protocols that these people are working on but you might not know their faces so I will jump in by starting with Jordy and then switching around do you want to just quickly talk about who you are and what you're working on just a minute or so yeah sure it sounds good um good to see that we have a lot of exciting things going on and maybe at the end we'll take our shirt off and start boxing as well so I'm Jordy I'm the chief Alchemist at mantle mantle is a layer to on ethereum so we've been building for about 9 months now um very excited about the ecosystem and how that's going and I'm sure we'll dig in goe uh should we go Eugene sure uh hi everyone I'm Eugene

I work at Ellipsis Labs we are core contributors to Phoenix which is a limit order book Dex on salana these days we do3 to $500 million a day of spot volume totally unincentivized uh we're really big Believers in active liquidity over passive liquidity even on chain Julian hi um my name is Julian I'm the CEO and co-founder of AO uh previously known as rivon Finance in the last last cycle um yeah we are sort of a derivatives Dex built on ethereum um we are sort of using like the op stack and our we are also in ethereum layer to and we initially started with focusing on

crypto options but we've also started doing perps in the last six months great and last but not least Tenn yeah so I'm Tenn the CEO cound of Pendle um so Pendle is a protocol for the tokenization and the trading of yield uh one of the more prominent use cases that we've enabled recently is points trading uh it's currently deployed on five five different chains including that on mental um currently we have uh a little more than 4 and a half billion in TBL um daily trading volume exceeds that of 200 billion Grand I realize that we should probably push our mics up a little bit closer to our mouths I think all like shout um I don't know if they

like can people in the back hear us all right I mean I guess you can hear me because I'm shouting but that's fine thumbs up over there oh Grand okay um so look I'll jump in like thank you everyone I have spent a large part of the last couple of weeks and months messing around with the meme coin better right we've all been messing around with pump. fun we've been having a great time either kind of on salana or ethereum but that's not defi that's not necessarily who I am it's just it's fun to engage with and I think an accusation that gets tossed us quite a bit is that defi doesn't necessarily have a point right I I think there's a model of financial nihilism that's going around lately that markets don't mean anything and it's all

valueless and so ultimately like are we building the tools that promote that I guess who and what do you guys think that defi in what we are coming into calling the third or fourth cycle who is it for um I guess we Julian start with you yeah I think um I I have a bit more of like an accelerationist take on this I think mem coins sort of force people to go on chain I mean these coins are literally like created on chain the initial liquidity is on chain and the whole value proposition of this mem coin game that people are playing is just like how early you are in these things so by nature of the game that they're

playing you kind of have to be on chain to participate and I think you know it may be extremely um Zero Sum in the short term but I do think the longer sort of longer term effects is everyone now has a phantom wallet has a metamask wallet um and you know maybe this creates a bit more adoption in sort of the crypto rails that we can use to do real real things so yeah I mean short term it's kind of nihilistic but maybe long term it actually pushes adoption and let's just do like real real Finance yeah I mean I I hear a bunch of people say like oh yeah we'll just funnel people in once they've made it off their meme coins and they start using the

infrastructure that we build I'm not sure quite how valid that is but I mean like I could see the appeal of it right anyone else I mean we've been seeing this for a while I think yeah if you look at the volume on up bit for example in Korea they're not trading Bitcoin usually they're trading Bitcoin cash ABC which is basically a meme coin right yes and it sort of becomes less around what is the long-term investment and more like is there something that can make me Rich right away and I talked to a lot of young people you know trading buying crypto and um you know there's a part of the brain that just gets hit right away with the the dopamine receptors maybe with meme coins it's like a slot machine

it kind of has that like unexpected uh event which is let's just say much more engaging than um you know hold your Bitcoin and it'll go up you know 40% a year now your question is very good like does this mean like we're going to actually use this stuff and make them um I think so I think so like there's signs of it like on mantle we have um puff which is you know a mem coin that is starting to you know maybe engage with the underlying ecosystem in ways that um you know are stepping up and leveling up to something and I think we'll see more and more examples of that we saw how liquid um launch a meme coin called per but it seems to have you know a lot of

tyeing into that ecosystem and be very important so we'll see more of that yeah fair enough yeah I I have a view here similar to that of U uh Julian so so I I speak on behalf of our product right yep we build a tool in like initially it's intended for interest rate swap yep we started out in 2020 mhm and we only got more meaningful Traction in 2024 this year yep now in the process of that four years we have tried so hard to educate users about interest rate swap rates trading uh and the benefits of that would be you know like for someone who wants to speculate on yield there's a

more Capital efficient way to do so and for someone who wants to just lock in the yield and an attractive like say fix apy they can do that with Pendle as well it was never successful yep we had some traction last year but when points season happened we started to see a lot more traction now that is I think a good sign I mean of course I don't know how long the points game can sustain sure but that it it really accelerated our educational efforts because now I think a lot more people know the mechanics of YT and PT yeah and I I feel very encouraged when I see people just quoting PT and YT on Twitter so loosely now they don't have to say like they

don't have to provide a background or context what is PT in the past we have to provide so much material uh we have to help users understand like strategy this uh like what's the strategy behind it now we just have to outline a certain trait and then people can reverse engineer the entire trade and figure things out themselves and I think this is a very healthy growth um the use case wasn't quite expected yep um it never is yeah it never is what you think it is but I think it's it's it's a step forward for the entire sector I guess def's mechanism for financial education is a worthy goal but it's not quite what I thought that I would be doing I mean

like the Pendle docks are amazing and like really really well done you know I mean like I guess I don't have like much insight into Sal ecosystem so I don't know how that feels kind of like more a lot of the on the ground stuff in terms of me coinery is in your Playfield yeah I mean I'm not personally participating all that much in the meme coin Mania but it's undeniable that you know us as a you know Phoenix as a spot exchange has benefited a ton just from the increase in volumes yeah uh I mean I agree that undoubtedly we bring a lot more people on chain and if you look at the like I don't know the shape of the retail guys returns I don't think it's too different

in this current cycle versus the previous ones where maybe in the previous ones the you know majority of entrance are late entrance and they're buying BTC on binance or coinbase and then selling the bottom later and then now that's just happening in the memec coin Arena instead so I think it's a little bit better for that to be happening on chain where as Julian said people are uh creating wallets they're learning to save their 12 magic words or at least some of them are right uh and yeah it's a it's a zero sum game it's I think a very expensive boost dropping mechanism but I the end of the day the Market's going to do what the Market's going to do and we just have to make sure that you know at least some folks are building for the long term so it's

not just we played this Zero Sum game uh some people got very wealthy a lot of people you know lost some money and there's actually some value on the other side yeah fair enough so I mean I've just talked about like you know you are the one on the stage that's focusing on salana whereas the rest of us are on later to doing evm stuff um back when D5 first started you know like the summer of 2020 we really just had main net and we did have BC a couple of months later which is where you know that was the canonical place to go and play around we all work like I mean we've got two optimistic rollups on stage we've got salana I focus on mainnet but I'm looking at moving wild cat somewhere else as well just for attention because this game is a

liquidity one and it's an attention one and both of those beget each other is this a problem for defi I mean are we just bound to be relying on Bridges holding everything together for the rest of our careers like you know all fighting over 20 30 million on each individual chain does it matter yeah I think um I mean it is a good point I think we are sort of beholden to the ethereum's curse where this is sort of the way that the the the the sort of cars have fallen and this is now the road map of ethereum and I think just the nature of all the and liquidity being on Main net it's difficult for a builder to ignore it I think so for the

more pragmatic side of people like like like us I think we sort of just going to where the users are where the money is um and yeah I think just the the nature of how the ethereum scaling road map has played out is sort of forces to be on l2s as well so I I do agree that you know this creates so much fragmentation um but I I mean the other alternative is sort of going down the Sana route so I think both are like acceptable approaches and both will happen um yeah you just can't sort of wind Back Time on the theor of road map yeah I guess this is a question specifically for mantle as well you know like in terms of obviously the goal is to bring in as much as you

can and make it as active as you can and appealing but is that a primary goal or is it something that is being expected to happen kind of as a consequence of the defi work that's happening there um I think both it it is very competitive there's so many l2s and so easy to spin one up right now um two things one we'll get some consolidation I think there will be you know we see the op super chain um there'll be a few more of those sort of continents that group up and maybe you start having shared sequencers the bridging the wallets the whole experience starts feeling very different much smoother than it is now which I agree like it's um it's very fragmented yep so that's going to get a lot better probably in a 12-month Horizon

in the meantime um we see a lot of dead chains right that there's not much liquidity there's people airdrop farming that has been The Meta of uh there's been two metas I guess one was aird drop farming the other one is the like stake for um aird drops which is I guess still the same thing but you're staking to do it so that that's like the cuz people love tokens like I'm sure everybody loves just getting new tokens and then uh seeing what happens um man specifically you know we have a a very large treasure we're starting to deploy in strategic ways and that's ultimately being the differentiating factor and um if you have this like weapon of liquidity uh it really gives you a head start when you when you want to build an

ecosystem and we're using it now uh happy to have Pendle and um deploy you know more and more strategic treasury funds yeah I I'm I'm more optimistic I don't think um I I I think uh it's it's that part of the cycle sure right like um this this time of the cycle naturally there will be a lot of l2s l1s whatever it is but I I am of of the opinion that things will consolidate um and I'm also quite optimistic that things like chain abstraction can help improve the experience sure I mean but last cycle we

didn't have this kind of consolid you know like I I think the idea is that branches off and then it collapses in on itself whereas we've not seen that before and does that not then suggest that perhaps we're doomed as defi people to rely on the infrastructure people to come and save us with cross chain abstraction it's it's um I think it's uh you can't have one without the other right um I guess don't it be like the tail being chased by the dog like we're sitting there going oh we've got all these good ideas and we can bring all these things around as soon as X happens they're like well who's doing X we're like well they're over there you should pay attention to them you can't be good at everything right like very few chains very few teams even the ones that raise

hundreds of millions of dollars to build a ZK thing or that they're not good at the product side they're good at you know Advanced cryptography you know I'm very good maybe at the end user understanding the user but I don't understand the tech side and I don't know how you feel about it but when you're building an application you have ingredients that you can work with and if there's an ingredient that hasn't been built yet like you look last cycle there wasn't a lot of this chain you know account abstraction for example uh better bridging like a lot of the improvements on the wallet side on Solana for example on the ethereum side I think we're still trying to get there there's there's no like uh amazing experience there yet but these things that as an application Builder you want to see great ingredients you can make a

good meal and um it will be fragmented we will rely on underlying people to keep solving things while we're in the kitchen yeah that's fair yeah I think things have improved drastically in the last couple of years so I remain optimistic that like it will continue to be the case um and then we will probably come to a state where you can very easily deploy capital from like say a base and have it uh implemented um or deployed into a pool on ethereum yeah I mean I see Circle kind of aiming to do this kind of stuff itself but they have the chops to do it um I I I hope we end up getting there and I hope we end up

getting there soon because it would make life pretty easy for a bunch so beyond kind of like that needing kind of infra to to flag up a little bit where we can help where we can a lot of people say that you know kind of we've now invented all of the things that defi can replicate properly you know and they said there's this lack of innovation in defi I really don't agree with this but it's something that I hear quite a lot when I speak to people whether you know kind if it's institutional or if it's just people that are Vaguely Familiar or like did Def and quit and they like well there's nothing that's exciting for me these are generally the same people who say that oh the last thing they got Keen about was sque they were like oh we've done power perss on chain hooray so

we're all working in Defi and obviously we like the things we're doing and we think they're important because otherwise we wouldn't be doing them but I guess if it's either your own thing or something else like what's the thing The Innovation the the occurrence in defi that's most exciting for you right now like why I mean on stage I think we have some of the few people that are maybe innovating in a sustainable way we did have defi 2.0 life cycle and I would say we're we're back to a new 2.0 because that 2.0 we're not really building on it I think we're kind of scrapping most of it aside I don't know how do you guys feel yeah I mean I think there is some interesting stuff going on on the protocol design side it's just never

going to be as loud as some of these other growth games that are going on sure so if if you know I'm some new layer 2 and we're doing some big token incentive to juice the TV all today it is going to be a lot louder than uh folks who are innovating on the market micr structure who you know maybe we'll have to get loud at some point but aren't doing it today and I think a lot of these call them like circular pones games like they they they do collapse at some point I'm pretty optimistic that we're not going to have this uh massive fragmentation for a very long time and at the end of the day there's going to be a lot of differentiation based on the applications yep and so if you end up with like 30 or 50 or 100

undifferentiated evm l2s they're always going to be competing on these sorts of growth hacks uh and then if you have infrastructure that enables net new applications that people actually uh want to use more than just for an incentive farming then uh those are going to be the guys who are going to win and ifone those ever exists and I think like yeah defi just doesn't really deserve to exist if we can't create anything that's net new net useful it's only ponzi's then yeah we're back at the the sort of shitcoin nihilism or Ponzi nihilism case yeah I I actually do kind of agree with your point about like I I do think the low hanging fruit in defi has definitely been uh picked over the last few years

and I mean I'm quite excited about adoption I think there's no use for us to build a lot of complex stuff if no one cares or no one uses it so yeah I mean I do think this cycle everyone's trying new stuff on like the adoption like points I guess but I wouldn't really consider that Innovation but you know I think a lot of protocols now are actually trying to get you know tens of thousands hundreds of thousands of users where the last defi cycle no one cared about how many users you had um most prot top protocols would have 10,000 users uh and that's it so yeah I do think um this cycle the the theme is more about like actual adoption um like

real humans using these things instead of just like a bunch of us sitting in a room and passing our TV all on to each other there's a reason we still joke about synthetics having 12 uses in total right everyone got really excited about that at the time starkware too eight no um I I quite look forward to the development and a reaking uh I I think yeah just the igle layer pie um because there there um there are a lot of protocols that are building on top of it and then I think shed security makes sense to me um and of course

like abss um I think there there's a lot of room for for uh abss to to to FL it might take a while for some of these infrastructure to be built out and then maybe an even longer time for them to find the demand but I think in general it can make the asset that is State uh more more utilized uh and it also make um it it can probably be a more secure way uh for a lot of these protocols to operate yeah streamlines the resources as well

whenever I think about this I don't necessarily think of the restak mechanism itself as defi I mean it naturally is because you end up with a new asset you end up moving around but if you're thinking about shared security as a purpose it almost feels like it's kind of wolf and sheep's clothing its way in like we talk about things that we're excited about and I really like personally I've always really wanted to be excited about like the rwa um idea you like but this was kind of more in a real worlda like you know we've seen the meme about like real like real estate coming on WE tokenized stuff with real team Etc and now all it really means is we're just trying to shunt us Bill yields on chain which like kind of black builded me on this like I would like to

see a Resurgence and being able to get real world assets on stuff but we don't get to drive that that's a regulatory thing and for the last five years we have always said in two three years time it'll be clearer it'll be clearer and we will be dead by the time we probably get to like a sunny uplet that like lands so I mean we have just to kind of make the case for def since we're here talking about defi defi you know that Meme where the guy is like looking at the Earth in the space suit and he's like oh this has always been yeah all of crypto is defi I mean crypto what does it mean it's just economies digital economies crypto economic coins yes we have nfts fungible non 404s all this different stuff it's all Defi and all

this other stuff AI if you look into AI most of it doesn't make sense like crypto AI the stuff that makes sense is around building economies disrespect on stage he's just like me so building an economy for agents building economy for using U you know the centralized physical infrastructure stuff like that that makes sense but that's Defi and you can do things like take fixed yield you know move risk around between people who want the risk and don't want the risk stuff like that so ultimately you know gaming you look at gaming people want to look at web 3 gaming most of the tokenomics for those games need to make sense in a defi world and they need to have you know marketplaces and these things so it all ties in yeah you know this is the

backbone ultimately and having good ux focusing on the user good wallet experience like very clean docks this is what I love about about uh you know things like Pendle it it's intuitive and it takes something that everybody can use and kind of understand what's happening so um you know with mantle I've been trying to bring the same approach trying to abstract a lot of the complexities and ultimately just get to the root cause I mean what do people want they want on a savings account for their money some of it in Stables so you know you try to design a very good yield bearing asset for people to have if you're in the ethereum community people want to hold eth how about building like a how many of you have heard of meth anybody I'm not talking about the yeah I

mean well the stuff that's going to get us in jail but how many people here have heard of me e meth okay hands up few meth heads there are dozens of us in the back a very excited meth guy in the back so meth is mantle eth and it's something that you know you take ethereum and you try to build a community around it you give yield to it you try to make it engaging you give it a brand you create like a you know liquidity um it doesn't seem Innovative in the base building block but it it is an a in a user perspective yeah that's fair sorry to rant no you kind of slid into where I was going to end because we have seven minutes left so instead of doing anything deep about talking about regulation or Institution let's end

something where we get to pitch the bits we're on um any I desp the term Alpha but I'm going to use it unironically any Alpha in kind of what you're working on future facing or just thoughts about kind of where we're going kind of as a community at large sure I mean I I can start I mean I think I just want to piggy back off what ji said like like the history of defi is just like the financialization of everything and I mean stuff like like points were supposed to be non-f financialized and they're getting completely financialized with like what tn's building um stuff like what we are building is like these pre-market things like everyone's just trading speculating on like events now

which are like um which is sort of like an interesting place that the market has come to is poly Market def5 yeah I mean I it kind of is right like um what what Jordi said like all we're building is just like digital economy and people are just um trading stuff and if they're not trading stuff someone would build a tool for them to trade it yeah um so even everything from like the social side is getting financialized so yeah I do think like what we're building is kind of like the backbone we benefit from all these different use cases because they do get financialized at the end um so yeah that's a bit of my rent I don't have any Alpha fa enough buy meme coins buy your points which one yeah I also don't have any Alpha

I would say that the assets really matter whether they're rear assets as we imagine them today or crypt native assets that end up having some sort of real value some tangible value because like the only reason Finance is useful the reason Finance is positive some is because there's like these businesses or people who like naturally end up with risk for example like a farmer who's going to go plant corn they're going to be Expos Expos to this corn price for the next 6 months until they can harvest the crop and so there are these financial instruments called Futures where they can uh hedge out that price they can hedge out that risk because they're not Traders they don't understand those

markets uh certainly don't understand them as well as uh the most sophisticated market makers playing zero some games and that is where the real value in finance comes from so no matter how much we innovate on The Primitives you know your shirt says banking but worse you might even invent banking but a little bit better on chain y but it's still doesn't matter unless there are real assets that people have real demand to transact in Beyond uh just a speculative use case yes I mean I've been working on a under collateralized credit protocol credit is what powers the world economy yeah I'm trying to bring it on chain in a borrower driven way so you can kind of index on rates just to kind of see what the demand is like there because the presence of credit indicates your leverage and just kind of how superheated a market is um

that doesn't necessarily feel like it fits into a defi model and I'm using crypto rails visibility but and I'm using erc20 tokens to represent debt but there's legal stuff underneath it and it jars a little bit I'm excited about this we've seen credit like work either through cdy or through D platforms that have existed before it's a different attempted it but I don't think I ever get to say to myself like people go oh so you work in Def I'm like I'm not sure I don't know I guess I'll give you one thing that I'm pretty excited about and I think we've seen seeds of this I know we're not there yet but I think that the uh the social aspect for people will get a lot

better with crypto ultimately one of the signs of this is the nft collections that have been getting air dropped to them and this has been like a massive thing that's come up just this cycle py penguins and madlads and all these different uh communities in that sence the nft acts as like a reputation for your wallet it's like I am a part of this community maybe I'm in the Discord maybe I'm part of this thing and that lets you get targeted and as we talk about many times it's been said too many times that attention is very valuable it's very scarce that's like in a AI world where there's so much content real human attention is very scarce and I'm really looking forward to the development of like onchain identity for your wallet

whether it's an nft we have soulbound nfts now where you can't even transfer them so they're you know they're kind of like a proof of attendance like you attended this conf conference you attended uh you know you got a certain nft for doing an action on chain it's stuck to the wallet now that wallet starts to gain value and if that wallet's on your phone it's part of your identity and people learn how to custody it properly we'll start seeing like stacking more social Primitives on top of that I've you know I've been digging into quite a lot of the various kyc Solutions uh lately just mainly because when I'm dealing with credit that's something that people need for their risk and due diligence and it seems like now with the rise of ZK proofs that we're now able to start getting some pretty meaningful information without

kind of relaying data on chain so you can do things like you can check if you are on a machine that also has an active coinbase connection because you could just ping TLS stuff and be like you know am I actually signed in and that allows you to make some inferences about stuff and does that make people more comfortable about sharing stuff because they know who their counterparty is roughly um there is like there's a key ring Network which is like working now that you can kind of hook in a bunch of KY see things I feel like that all ends up and you can do stuff like issue tokens that are soulbound or whatever like credentials that exist to our wallet I guess this is all sort of the kind of thing same thing I nfts feel more a native mechanism for that like I

would sooner I think if I was doing something more degenerate air drop to skitso posters than perhaps anyone that's like demonstrably works on the kyc protocol but I guess the joy is that it's all things for all people right mhm we have one minute left so I guess this is the part where we all take our shirts off and square off against each other right otherwise thank you again TI Jordy Eugene Juliet really really appreciate the time here thank you all for sitting through it I realize that we've got a captive audience here I realize we only have about two hours left of the conference I hope that for what a little of it it is that you enjoy it and uh we will leave now thank you everyone

all right thank you very much you guys great job Lawrence