The Element Airdrop & DAO Launch | Will Villanueva & Jonny Rhea

Transcript

hey bankless nation welcome to another episode of state of the nation we are super excited to talk to you guys a little bit about the element airdrop element this is a d5 protocol default d5 primitive we've talked about them before on bank lists basically fixed interest rates a new sort of d5 primitive uh and there's actually a lot to unpack with this element story so david i know you've got three things that you think are super going to be super valuable alpha in this conversation that we're going to cover can you talk about those and the guests that we have on today yeah yeah this is not your typical dow launch while that is where the conversation begins it is certainly not where the conversation ends element with the launch of element dao is bringing a

lot to the table first they have a brand new money lego governance primitive that all daos are freely able to use and plug into they explained it to me yesterday and i'm already pretty well convinced that this is going to become the new standard when it comes to dow governance tokens uh it's called a voting vault and it allows you ryan to have your cake and eat it too at least when it comes to yeah cake's great so we're going to take we're going to unpack what a voting vault is and why we think at least why i've been convinced that basically every single dow is going to adopt a voting vault structure second they are also pioneering a dow governance model a new governance structure which they think is faster and more effective and more efficient at

governance which is something that all dows need to improve and iterate on but lastly ryan and most importantly and most excitedly they're going to show us how we can get exposure to the merge like you said is a fixed interest upside exposure right outside exposure yeah uh or or maybe the the inverse if you so i don't want the inverse why would anyone do the inverse all right but okay as you said like uh element is a fixed yield interest rate protocol but with that tool with this money lego you can express bullishness as to the apy the yield rate of ethereum and so if you think that yield rate is going to go up i don't know why someone would ryan maybe they're expecting that i do think this yeah i do think maybe it's someone who's listening to a few bankless

podcasts might think this yeah so element as a tool allows you to get exposure to the merge so that is what we are talking about today the new governance primitive uh the new governance structure but then also how element is going to be useful going into the merge we are bringing on the ceo and cto of element uh will villanueva and johnny ray they have been in the ethereum ecosystem for a long time now they are both x consensus before they went off and built off their own thing with element so they have been around for a long time and they are fantastic community members and now builders building out a defy app that is actually a little bit closer to the actual protocol of ethereum rather than uh just in the application layer which

is another topic that we'll get into yeah that's super cool and and by the way we'll we'll start this whole conversation talking about the eligibility criteria for the airdrop and of course element i think was an airdrop that we uh had predicted would happen that probably would happen when we put out our big beefy airdrop guide like all the way back in november of last year so if you were listening if you're checking those boxes you might want to see if you're eligible for this airdrop as well so we're going to talk about that david before we do man we got an announcement uh super important so it is national youth hiv aids awareness day on april 10th and uh a new nft collection has been just been launched this is powered by consensus nft and i think this is a fantastic opportunity for first-time nft

buyers because it's an opportunity to support a really great cause with the nft could you tell them a bit about this nft and um you know how the proceeds from this where the proceeds from this go david yeah this is from mac cosmetics um maybe maybe the the men in the channel don't know what that is but the but the women in the channel certainly probably do a makeup makeup company making a bunch of cosmetic products they are working on an nft project with consensus where 100 of the revenue of the incoming money is being donated to aids awareness youth hiv aids awareness day which is on april 10th there are three tiers of rarity you got red red tear blue tier and yellow tier and

so if you have never participated in an nft drop maybe you just don't know which one is for you this one might be a nice one to start with uh 25 for the minimum tier for the red tier uh 250 blue tiers for at 150 each and then only 25 yellow tiers and a thousand dollars each and again 100 of the money goes to youth hiv and aids awareness yeah i'm going to be participating definitely because this is a good cause the art is by keith haring by the way so to get more details on that click the link in the show notes it's bankless dot cc slash mac david let me ask you the question before these episodes i start with what is the state of the nation today ryan the state of the nation is yielding we are yielding our crops are yielding uh not only like

i said the element is bringing to the table some brand new technology for all dows to be able to use regardless of plug again to element or not a brand new governance primitive that's going to allow us to have our cake and eat it too we're going to talk all about that some new tooling in the discord space allowing discord users to discreetly and privately claim tokens without doxing themselves that's also coming so all these technologies that element is bringing is being yielded by the rest of the dow ecosystem because of the nature of open source protocol when somebody builds something we all benefit but of course ryan is also we are yielding from the merge which element is also going to help us with look man uh three words cake uh yield and merge all right and they

all go really well together we'll all unpack all of those things in this episode really excited to get to it before we do we want to thank the sponsors that made this episode possible arbitram is an ethereum layer 2 scaling solution that's going to completely change how we use device and nfts over 300 projects have already deployed to arbitram and the d5 and nft ecosystems are growing rapidly some of the coolest and newest nft collections have chosen arbitrarily as their home all the wild d-fire protocols continue to see increased usage and liquidity using arbitrary has never been easier especially with the ability to deposit directly into arbitrary through all the exchanges including binance ftx hobie and crypto.com once inside you'll notice arbitrary increases ethereum speed by orders of magnitude for a fraction of the cost of the average gas feed if

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assets are bridged and available for use almost instantaneously across bridges are powered by uma's optimistic oracle to securely transfer tokens from layer 2 back to ethereum a token proposal is being deliberated as we speak in the across forum where community members will decide on the token distribution you can have your part of across the story by joining the discord and becoming a co-founder and helping to design the fair fair launch of a cross if you want to bridge your assets quickly and securely go to across.to to bridge your assets between ethereum optimism arbitram or boba networks maker dow is the og d5 protocol the maker dao produces dye the industry's most battle tested and resilient stable coin using maker you don't need to sell

your collateral if you need liquidity instead you can spin up a maker vault and use your collateral to mint dye directly with maker the power to mint new money is in your hands the maker protocol is extremely hardened and operated by one of the most experienced dows in existence they've been here since the beginning they've seen it all and so you can mint die with the assurance that your collateral is safe soon maker will be present on all chains and l2s so minting dye can take place on oasis.app xerion zapper or any other d5 protocol that you use follow maker on twitter at maker dow and learn from the oldest and most resilient down existence hey guys we are back on the podcast with will villanueva and johnny ray super excited the ceo

and cto of element respectively i think they both did some time i make it sound like a jail sentence they both worked at consensus previously uh will on ethereum sharding which is pretty cool and uh johnny on the ethereum client so both like protocol layer devs that moved up the stack into d5 that's a conversation in and of itself but will and johnny we are here to talk about element how are you guys doing today welcome to bank list and welcome back will yeah thanks for thanks for having us really excited to be here really excited to jam out and talk about uh everything and uh yeah always fun to be here well let's check it out let's talk about everything guys thanks for having us i'm hungry with all this talk of cake

we're gonna get to the cake all right but first we gotta eat our veggies as we do on bankless and uh give us the quick speed run the 101 of element for people who haven't caught up on uh what element actually is we talked about yield uh we talked about cake of course uh but tell us about yield what is the 101 on element what does the protocol do yeah so element's pretty simple um at the most like fundamental layer so what we do is our set of contracts basically allow you to put go for any yield position in the market currently we're wrapping the positions on yearn and it lets you split that position that yield position into two uh basic components so there's the principle and

there's interest so to give you like a really really simple example um if i put down a million dollars on the usdc vault in urine and let's say it's going for 10 apy the principle is 1 million dollars at the end of a year the interest that i can redeem for is a hundred thousand dollars that 10 and so what we do is we create a market around both um both those components the principal side and the uh yield side and allows for some really interesting things and particularly the one that's really interesting um is the uh the markets around principal tokens so uh we use something called yield space shout out to allen over yield protocol

it's a constant power product uh invariant and uh essentially what we uh what we do in this case is it's sort of this concept of i give you 90 cents for a dollar so ryan i'm gonna give you a dollar how much is it worth it to you but you can't use it for a year so you might say okay i'll give you 90 cents for that because i sort of you know miss out on the opportunity costs of money right i i'm not able to stake it on different different positions in the space and this is sort of what creates that market which sort of tracks the uh going variable yield rates in the space and so when you make that deal um it's it's safe it's conservative you know exactly what you're going to get up front and it's sort of fueled by people

who are going long and variable interest and using our platform to do that and sort of de-gen a little bit as well and well this is this is super common right in the traditional finance world what is this subset of assets called and like what happens in traditional finance yeah so uh there's this there's this pretty like you know basic concept um you know of the opportunity cost of money if you give someone you know a certain amount of funds and it's locked for a certain period of time um that sort of accrues that differential interest one way you can see it is the person who's buying these principal tokens or getting that fixed rate you can almost see it as a really really high interest rate cd that they're locking in um but those rates are you know

significantly higher than what you see in traditional finance um also yeah the splitting of variable interest from from the principal is also a pretty common thing in that space as well so this allows somebody who is particularly bullish on an asset to be able that and that asset has a yield associated with it it allows people to buy that asset at a discount so like if ether is like 3 500 and it's got a certain amount of yield i could buy it for like 3 200 at a discount but the only thing is i just seem locked up for a certain amount of time but if you're already bullish you're and you're already gonna hold it anyways you could buy it today at a discount uh and that's like probably like the most basic way to uh leverage element but then things can get really a

lot more creative the splitting of a yield bearing asset into a principle and its interest into two different tokens the principal token and the interest token allows for a lot more of expressivity a lot more creativity and that's where we're going to get into the section later on in the show about how one can gain exposure to the merge um anything to add on that or should we get into some of the the dow launch subjects as well yeah let's get into the dell launch okay cool uh because of course like we said gotta eat the veggies before we uh eat the cake and so veggies first uh congratulations guys on the launch of element dow and the any element uh token airdrop uh let's go a little bit into the details about the the dynamics

behind the the airdrop and the dow launch um the snapshot was taken march 1st so anyone that has interacted with a with the element protocol since then sorry you're out of luck but if you're before then you probably got some of the airdrop how did you guys determine how much of the airdrop to give out and who of the element protocol users actually got the airdrop yeah so i'll actually let like johnny i think johnny can you know describe uh a lot of this in in more depth as well but basically we sort of broke it out into a few few components so one we wanted to reward the users of the protocol these are people who um traded principal tokens um these are locked in a fixed rate these are people who lp'd in the

protocol we also wanted to reward active community so this these were people who were active and actually had engaging discussions in our discord and then also we were you know pretty passionate about rewarding both ecosystem developers so these are core ethereum developers um you know there's a number of reasons why i think johnny can articulate that really well we're both you know really passionate about that but also other sister protocols so we also rewarded um people basically protocols we built on and then other protocols that we felt were like good for the space good for the defy ecosystem that we that we really appreciated and the way we did that right is we actually had scripts that analyzed github contributions and

based on your github contributions that you know allows for your eligibility on you know some of those repos but i'll go ahead and pass like this one off to johnny i know he has a lot to say or yeah yeah johnny help us uh just understand this a little bit more what what are the unique elements of the element airdrop that is uh that isn't really found in other airdrops or other dow launches yeah i would say just like high level like the main takeaways like you know on the user side like we provide like uh you know like three and a half percent liquidity providers you know three and a half percent to traders and then like half a percent to mentors and and really what we did is we decided early on to do it in a proportional manner um which is like you know it's

good and bad like uh proportional is nice because it's basically like um you know the amount that an individual has like interacted with the protocol is going to like directly be proportional to like how many votes they're awarded um right that was probably the most complicated you know you know part of the of the process but really our goal was to keep it simple um you know like i think when we were looking at the data initially you could see that like there was a lot of people that were like trying to take advantage of like hopefully the fact that we would have some sort of like blanket distribution for anyone you know like sort of you saw with like the uniswap just you know airdrop that they did like anyone who'd

made a trade gotten a certain amount of ud right away well since then that ship has sailed people have kind of got savvy to that and so rather than try to come up with some really complicated logic we figured hey let's just do it proportional um you know if if people are sprinkling you know little like two cent buys or sells here or there or just lping a very small amount well you know they'll they'll uh that's the slice of cake they get right um and if they did more well it essentially takes all the all the subjective kind of like decisions like out of our hands so so that was one thing um it was also interesting sort of looking at the data and noticing like how many people had

figured out some of the interesting art opportunities there are on element um with minting and swapping in in yield token compounding which which i think will explain a little bit more but um but yeah that's that's basically the tldr with the distribution and how it worked from the user point of view and uh will brought this up and i want to dive into it you guys have also allocated i believe one and a quarter percent of tokens to a cohort of people that typically are not included in airdrops being the ecosystem contributors and uh and developers can you johnny can you just uh unpack that decision and who are these people that are receiving this share of the tokens yeah yeah so this was like when when will and i first started element this

was like the one thing we couldn't wait um you know to incorporate we didn't know how we were gonna do it we didn't know exactly what form or how it would manifest but it was something that we were really passionate about was basically kind of like bridging the gap between you know the core protocol layer and the application layer um and so like uh you know one thing to one thing to mention is that like the the people who get this um yeah like like will mentioned our people we built on so that's core protocol devs even you know even um core like defy legos like maker or like yield space like we love and respect dan robinson and alan and and all the work they did on unyield space

um you know we adopted that um so so people like that all took advantage of it they all got included in the airdrop there's gonna be people we missed out on um but but one thing that's kind of interesting about the way it was implemented um you know was this was this zk claim um uh you know air drop process that that we've kind of like pioneered here yeah the zk oh sorry go for it no keep going if you're going to keep on going that's where i was going to go yeah so the zk claim process is pretty dope so um we you know worked with sam on this um and he sort of you know worked on on the contracts we gave a call out and you know the write-up that we did the distribution write-up um but essentially what it what it lets people

do is if you're going to reward people by their github id or by their discord um id um you want to do it in a way where they can still keep their privacy right you don't want to be able to connect their ethereum address to uh to their identity and so the zk claim was sort of a cool innovation because it basically enables what we're doing that you can claim by your github id and then you don't need to be doxxed and so this is sort of why we have this one week period if you go if you qualified on the discord side of the github site you go through this really cool dashboard you generate a public id a key a public key a private key you you know generate randomness by moving your mouse around it's a really fun process and then essentially

a week and a half later once everyone's posted their public ids on the github issue thread or in the discord you know channel that we have we use that to be able to build a merkle tree where then they can claim and when they claim you can't you can't track it to um to the identity of the github id that's being claimed so it's it's sort of a necessary part in doing it this way and it's it's pretty cool i'm like excited to see others sort of follow follow suite so i want to just recap and make sure i understand you guys in when you guys started element and and again you guys came from consensus one of you guys worked on charting one of you guys worked on an ethereum client so

app developers that are really close to the ethereum protocol and also just you know open source values and and something that really a lot of the core people around ethereum really embody and so you guys came and you guys started element with the intention of when it came time to have a token or what however you guys intended on generating liquidity when you first started element you're like okay we're going to give back the protocols that element is built on top of and the the uh the shoulders upon which element uh lies on the shoulders of giants you guys are going to give a a share of the tokens back towards you know uh the maker dow protocol i think is one when you listed but also the other the people that have contributed provably via get github um

and so you guys have in the body of this ethos of giving back to the platforms that you guys have been building upon right giving back to open source which is uh very honorable and very true to the nature of ethereum the issue with that is that if you want to give away tokens you would also inherently be doxing the contributors and so you guys have made this zk claim technology that allows the elements that the elements of the element is built upon to be able to have their share of the tokens but not also doxxing themselves on ethereum at the same time is that is that the full story here yeah you nailed it yeah 100 and and and will mentioned it but shout out to sam ragsdale who we were just like

riffing me will and i were just riffing with him um about it and he brought up uh this idea for for a zk claim process and we were like dude i think that would be a sweet way to do uh to do what we're kind of like looking you know looking to do for our our distribution so well i know i just we just talked about how we can remove the ability to be doxxed with the zk claim tech but who is who is receiving all these tokens like how is that part of the distribution been allocated is that public knowledge yeah yeah we have a we have a gist that basically lists um it's a it's a bunch of um ethereum like so basically like all the client um all the client repos so geth

you know teku lighthouse um you know baesu um nethermine you know all all of the all of the client teams all of the you know even the even uh protocol labs and lib p2p right so like you know the ethereum uh you know ethereum and protocol labs like work together to to kind of be like the first big protocol to like really integrate like live p2p into their networking stacks so we included them um you know also like uh you know additionally like like we mentioned like the maker dows uh you know the compounds the aves um we missed a big one like in uniswap like uni swap like

i mean we knew this was going to be like we knew we would like kind of like that would be a you know sort of a risk you know like trying to remember every single repo or every single thing and and honestly like that you know really the takeaway is here is like we hope people like take our approach build on it give us feedback and then the next the next team that comes around does it maybe they can they can make improvements on it donnie did you guys give any to that uh that vitalik guy i've heard he's uh he did something he he does have a distribution yes yes because of his contributions to get to github yeah because of his contribution so pretty much all the core eth2 researchers have um have a uh claim amount that they can go for

and this wasn't you guys just manually saying like oh they deserve this amount or they deserve this amount this is uh just an out like an algorithm of sorts programmatically going through the github repos saying oh these guys contributed these these people contributed this system contributed and so you guys are leaving like it's like a retroactive airdrop but for protocols that came before your elements time and so it's literally like again building on the shoulders of giants but doing a retroactive airdrop to the open source uh like all the open source contributions that has been contributed to ethereum at large yeah yeah that's right and we tried to keep it simple it's like we could have again like we could have gone into like you know judging quality

of commits and and stuff like that but instead what we tried to do is like uh basically said if you have a commit that's merged in domain whether it's a comment or um or whatever like everyone gets you know the same amount for that you know for that uh for that particular repo so um just sweet any kind of questions there keep it simple yeah yeah we want to keep it objective so we just basically picked a list of the organizations um and then from there the script looked at all the merged uh merged commits so that's a really cool precedent to set i think um one other thing over on the subject of the token my understanding is the token is non-transferable right now is that correct

yeah so the current setup and we can go into this in a bit um so we have the council governance protocol this is a new governance primitive new protocol overall it's not a fork of governor bravo um but essentially um it introduces these things called voting vaults and i think we'll talk about this in a bit as well um and the way that we have it set up is when you claim um your your drop you're put into a locking vault um and this is to encourage people you know from the start to actually play a part in governance to delegate in governance so um in the current in the current setup uh the locking vault keeps you keeps you into the governance system so what um what are kind of the reasons

for for the lockup like why did you guys or the um non-transferability why did you guys want to uh start with that yeah i think it's good to sort of you know bring bring everyone who's contributed to the protocol and who's excited and start everything off uh with everyone being involved in governance and having a having a say in that and then from there right like the governance system voting vaults everything is upgradable by the community so they can sort of situate uh changes if they want it they want to but the idea here is we wanted everyone to be like playing a role being a part in governance from the start will the community have to vote their vote in transferability into the token or is the token unlocked to be transferable at a certain point in time

um so if they wanted to make changes um you know you can always upgrade the governance system or upgrade you know the set of voting vaults um but that's sort of up to governance and you know i think we're we're focused on you know trying to keep keep people using this to vote and being a part of that dynamic so i think that's interesting i guess like not being distracted by like price and all of that too i mean with many air drops the minute it starts trading everyone's like when moon you know what's the price going to be and you guys don't have that dynamic here it's just like okay there's an allocation of supply and now the next step is not uh go look at it on coingecko the next step is like go go vote go plug into governance in some way but honestly it's

it's really like the way we wanted to approach it is like i mean this is an experiment in radical decentralization and i don't mean that like um you know it's it's total chaos but it's like we wanted to do this in a way like everything is up to the community it's out of our hands like every decision is going to be completely up to the community um you know these are valueless um uh you know like we didn't want to make any decision you know without the community being involved and so um you know some of that is uh you know the very first step was basically just launching you know the governance protocol launching a way to distribute some initial votes um you know kind of getting the

governance system getting the you know like the basically like the you know the community you know the culture you know like the vibe kind of in place um it just like you said it like you know price and all that stuff like i don't care what it does like we're here to like just try weird we just want to experiment you know let the community take it where it wants to you know and um you know we'll see what happens so so that's that's really what we're looking to do it's out of our hands i love the theme of experimentation and trying things um and i think we'll talk about this later but we even launched like an nft project um they're these like really cool kind of badass pixelated elves

and uh this is part of this is part of the whole thing where basically we're um incentivizing people to delegate right away the first you know and number of delegates got whitelisted to mint these um and this sort of like it's really cool i i did a whole tweet thread on this i believe that uh nfts are now going to be a core part of um of dow governance because nft sort of build community better than any primitive we've seen in the space so you combine the community of the nft world with the community around daos and this you know sense of belonging and then you sort of integrate them and you find ways that these these nfts can play a part in governance you sort of supercharge things and so this this is

you know johnny put it really well we like to do weird things we like to experiment we like to throw things out there and see what happens this is just like one of one of those examples so yeah so we'll go we'll get into it here since we're already on on the subject uh we had just had came out of a podcast with olaf carson we that podcast will come out on monday and he talked about how uh there's just this natural fit between d5 applications and dows like d5 applications are awesome dows are awesome but defy applications need governance and daos can offer governance so it makes sense just to smash these things together but you so you guys are doing that with the launch of element dow but you guys are also doing the nft thing as well so you have a dow that's

not only about a defy app but now it's also about like an nft ecosystem can you just go into the uh the angle on that like why split your attention like now you guys are doing two things or or do you think that this is actually going to be a worthwhile uh uh endeavor to help just the defy outside of of element how does how does the nft project actually end up helping the defy app yeah so again i did like a a really long thread on this um and i i sort of come with the hypothesis that nfts are now going to be an integral part of dao's from the future from this point on i think people are going to start experimenting with it more i think it's just going to be it's a natural fit

um dao's represent you know community right like uh the the voting share you have in the dao you feel connected to that dow it's mission what it's doing the research it's doing the things it's launching it's treasury that it owns um so you combine that with you know an nft project which also you know sort of builds a natural and organic community in general and you can sort of see like what what it can do and um you know there's a number of things that we can play with right um so not just using nfts as like a community aspect or like getting certain you know channels or discussions or events with it but you could also have like nf the nft world be a part of governance so

you do certain things in the application you you know try certain behaviors you put a proposal forward you vote on something you're active maybe you can level up that nft with you know external set of potions that you can show in your profile uh you know there's there's a lot of experimentation here there's a lot of a lot of cool things and so um this is sort of what we're playing with johnny you have anything to add to that yeah i was gonna say that like um you know in addition to to all of the you know all the things will said like i mean honestly like if nothing else like the project was like a great design exercise you know it was like we have we have awesome like incredible designers

and artists and we wanted to also give them a chance to spread their wings and experiment um we like to experiment too and so like this seemed like a great way for them to express their creativity kind of really really find the soul of the project you know which is like it's more you know defy like ethereum all this stuff is you know it's more than just like you know uh you know magic internet money right like we really really think it's important to like kind of you know figure out like what is the soul of this project and in art you know is like a really good way you know to express that and to reach people and so you know from like a more philosophical point of view

that's why i think it was like a powerful thing to do as well johnny just for people uh what's the alpha here uh like how do i get elf these things look amazing how do i get an elf yeah so it's basically the first so what we did the first 2000 to white list uh sorry to delegate on the governance app uh would get whitelisted but but but um we're going to open that up again very soon in the next few days because there's a total 5000 in supply so 2000 have been whitelisted we're going to whitelist another two put up another 2 000 for white listing here very shortly um particularly geared towards the discord

um and the github contributors community as well so they have a shot at getting these so that's that's coming soon we'll make an official announcement i may have released too much alpha you can't remember too much [Laughter] there will be more soon yeah i do want to say there's no minting fee you just pay gas too so that's also important recognize magic is this yeah yeah free nfts i thought you have to okay but it's not free because you have to participate david okay so like yeah we're just a bunch of hippies really you know all right delegate discord we get free nft love i love it also check out the meme version of our

lore you know if you don't have to do it now yes that's definitely some i saw and i saw this all right so read this text carefully is what i'm hearing i don't know yeah read this text carefully oh there we go yeah yeah and see if you can it might be important later i don't know the more we camp on this though david the more alpha they're sure that they're going to share please change change the topic asap of course they're they're elves of course because the token is called e-l-f-i uh so just uh for those that don't know why they're elves or elves because that's what the token name is also

because elves are awesome yeah oh yeah they're cutting they're cool they're like yeah i love elves yeah okay so i want to get into the last two bits of uh uh alpha before we get into the actual yield markets and ethereum merge subjects uh there's two governance innovations that you guys are bringing to the table one is an alternative form of how the element dow governance structure works and then also one is the voting vault and that's the have your cake and need it too so we'll talk about that one second first one is council governance can you guys explain this new dow governance model that you guys are pioneering what is council governance and why is it better yeah so we uh we launched a new protocol called the council protocol it's a new governance protocol um most uh most

teams in the space when they're launching a dao are sort of forking off of governor bravo um and is that that's the compound the original compound yeah yeah so there's a number of different you know directions those forks have gone in and that people are you know playing off of and so what we decided you know from the start i charles st louis he came from maker he helped roon build you know the original uh setup over at maker one of the things we talked about from the start is let's innovate let's push the space forward on governance it's super important uh setting a dial framework is like the right thing to do for the space that element we want to innovate and experiment in everything and so that's sort of that's sort of the result of that conversation the council protocol

and so council protocol has a couple um a couple major you know innovations one it's from the ground up so that sort of you know brings the learnings that we've seen from dowsing governance systems before um a couple things that it comes with is a governance steering council so this is built-in delegation where the governance steering council can have certain privileges within the system to push essentially um proposals forward um in an expedited manner to be able to spend you know a certain allocation of treasury for events and other things and they're sort of voted in real time and they can be removed in real time based on a minimum quorum of votes um then we have the um and we actually already have like seven uh gsc members

that have been elected which is cool so the government steering council it's it's working and that's you know been happening in real time the second thing this is what i'm like most uh excited and passionate about i did like a awesome you know fun thread on this at one point um is voting vaults and voting vaults we'll go into this i won't you know go too deep yet but voting vaults are essentially um uh what i call governance lego pieces they're a new primitive um and they let you redefine what constitutes the vote so i'll just leave it at that so far well i actually think we want to go into that we'll we'll leave that one because that's the havoc have your cake and eat it too uh is the

is the council governance is this just like another form of like representative democracy where just like you know if every single person in america all had to like come to consensus about every single issue we would just be bogged down in snapshot votes basically is this basically just we are electing council member members who will steer the element dow on our behalf uh and then we can choose to remove or add our voting weight to different council members as we see is that basically the story yeah that's essentially what it is it's pretty cool and it's done in a liquid way right it can be removed and added based on you know how people delegate and if they remove or change their delegation we even saw people like sort of do campaigns on twitter it was fun

and we saw a lot of people in the discord sort of campaign we sort of left it left it open for people to you know make it make it uh their own but yeah we sort of make that code and everything really simple and build that into the protocol i think this is funny this is uh kind of what happens when you move uh protocol devs uh into the app layers is they they end up going to the protocol layer of the app layer so now we have a new like governance framework and i'm curious if you guys see that you know this might take um like will daos that are on the bravo governance framework for for example will they be able to like port over to this do you see this um being used by a lot more dows moving

forward like do you think this is a a improvement a big improvement from previous dow governance uh structures that have been in place previously yeah so i think um so the the council part is really cool governance steering council i think the lego pieces this is the huge one um voting vault so basically you know if someone wants to launch a new dow right if they want to do one with compound voting integration a vesting ball a locking vault let's say uniswap integration they can just pick all the components they want boom launch new dow they have all these things that the situat have been situated that the open source um world has already built you know in

these voting vaults um and so i sort of see it as a huge huge innovation a huge evolution it's gonna be cool what everyone does with these voting vaults they're you know in my opinion they're like life-changing world-changing um dao's are on basically uh can you know exponential you know increase at this point with this um yeah well can we talk about that then the voting vaults johnny you were talking about the cake man so this is your moment to talk about the cake here because this is this is the cake why is this why are voting vaults can you explain what they are why they're so important and why they're as well will said potentially world changing yeah i can i can give uh like a quick explanation so

one nice thing about it is like um it basically allows you to you know if if you you know if if you're let's say like you know some new protocol like wants to use the council government system like by all means come and steal the code you know or contribute to it whatever fork the code like you absolutely encourage that want people to do that say they come in and say it's food out right and they have a food token and um and they want to um you know one of the nice things about the voting vaults is is that like a lot of people want to um there's things you can do with the food maybe you want to provide liquidity on municipal pools um

maybe you want to um you know add it as uh you know so people can you know add as a you know collateral on compound whatever what we can do is is create these voting vaults that that will mention that basically allows you to um you know deposit those you know those whatever the lp shares or um you know the collateral on compound and what they'll do is they'll inspect and figure out like how many votes they you know that that corresponds to so like the the actual council protocol will query these voting vaults and figure out what the associated voting power is so you know with that so you can

you can participate in governance and you can still like participate in d5 you don't have to choose one or the other so so that's that's sort of this is this is super important because that's been missing so far right it's like and and i would argue that the people who are actually doing something with the governance token inside of a dow are actually like dow super users because they're doing things like providing liquidity for the underlying token or like lending it out um so but the problem right now in the current state of dao's is once you do that once you take that token and start to use it in d5 say you're providing liquidity or something then generally you lose the ability to participate in governance and that's not what we want in in these structures so you're

saying if i'm understanding you correctly johnny it's like i don't lose that ability as i'm providing liquidity as i'm lending out my dow native tokens i still have the full ability to participate in a vote a snapshot vote uh for instance and so i get to maintain my my voting rights while doing all of those things is that correct you nailed it yeah yeah so we actually one of my favorite podcasts in the ba and that we've ever done was uh uh with joel monegro from placeholder and we titled it capital and governance and it was an exploration as to what capital actually is uh and his definition was well capital is the ability to influence the world so governance and capital are actually two sides of the same coin but in d5 and the current state of defy they're not

because because you can't vote and also like yield form with your token at the same time you actually have to choose between using your token as capital or choosing it to use it as governance uh and you can't really have both and most people end up just using the capital route because that is what ends up getting them more more money at the end of the day but with voting vaults again you get to have your cake and eat it too you get to have the capital you get to use your token in d5 you get to lend it out you get to yield farm with it you get to do your degen stuff but with a voting vault you also get to vote on stuff at the same time and uh will johnny we were talking yesterday and you guys were walking me through some of

these use cases this is going to become really really important for so many dows that exists on the ethereum layer one but when the tokens exist on layer two because not only can you yield farm and defy with it you can also send tokens onto layer two and also still have your governance powers uh and so when you guys told me about this i was like oh well this was obviously the way that every single defy application is going to do this going forward because it's necessary obviously yeah it's like it's a disservice to their users to force them to not uh yield farm and defy while also being governors it's basically going to become table stakes in my mind would you guys agree yeah definitely and i mean you nailed it right other use cases so people can now

hold the you know the token on l2 um they can vote so you could have an l one l two bridge voting vault where you pass the local route in and the vote is counted on basically the l2 that they're on or or the other chain that they're on as well um so yeah it sort of opens up this whole world and this is what i was talking about earlier now that we have contacts if you're launching a new dow you can now say you know i want the l2 l1 bridge i want the uh the compound integration i want the uniswap integration i want the locking you know system um you know deploy and and this sort of creates this new uh new like amazing ecosystem right right and and the cool thing about this for listeners who like mental models

which i hope you do because we're really good at making them here on bank list uh it's like yearn strategies where like somebody will write up a urine strategy and then urine governance will accept it into the new strategy it's a little bit like that in the sense that anyone can write a pathway so like here you got you got the element governance token um and then it's going to be lping between eth and element governance token inside of uni unit swap lp tokens but then that lp token can go inside of like maker dow right and so you can write a strategy that is like a uniswap lp token as collateral in maker dow write that for code for the voting vault but then as soon as somebody writes that one piece of that recipe that recipe becomes known to the whole rest of the

open source community so anyone can like go into the voting vault you know candy store pull it off the shelves and plug it into their voting vault for their doubt and anytime anyone writes a strategy we can get even crazier right like el uniswop governance token eth lp deployed onto the optimism layer two uh and then also being lent out in ave so it's an optimism a lp uniswap token but it's also functioning as governance on the ethereum layer one and as soon as one person writes that it becomes usable for every other single dow that uses a voting vault structure so it's only progress you can't you can't lose progress you can only add more and more optionality as to how these dows can

leverage their capital while also enabling their users to have governance no questions any comments that's exactly it yeah i'll leave with like uh like a really funny funny one that we talked about it's the vampire vault so you give people voting powers by uh getting you know the token of let's say a competitor protocol and then they burn it they send it to you know the zero address and they then they gain votes in your protocol based on that behavior wait so you don't even need your own governance token you can determine governance voting power based off of interactions with your non-native tokens

you could do that yeah so um you could do even uh dow mergers there's some cool things that could happen here and it's sort of up to governance to to you know discreetly wait bill what's that what's that vampire vote thing so you're saying like i would have to show a proof that i should have opened this kind of work no no please continue please continue so you're saying that uh i would have to show proof that i burnt a another protocols token in order to be eligible for voting rights yeah you could get basically additional voting rights for burning the other uh the other protocols token as an example so uh the governance system would query that voting vault the voting vault would

respond and say okay these people burn this amount they get this certain allocation in the next vote that's gonna happen but if we were being super malicious you wouldn't want to burn their token because people associate burning with number go up i think i think maybe you could like yeah that's true maybe you could you could uh have like a short position on diy dx for like if you have a competitor you can like provably short there and then and then you have governance powers based on how significant your short is proof of short yeah i didn't know my co-host was so evil gosh i'm sorry stop the broadcast i think that the point lands though it is maximally expressive governance um

and so it's really allowing like perhaps touring completeness to be coming to go to the governance layer which i think is a a huge unlock to dow governance guys that is a really cool feature again like thank you for building that for all of d5 because all of d5 is going to use this this is not something that you have to tap into the element uh protocol to use this is open source software which element is innovating on and now has given to the rest of the world for thank you for your contributions we want to get into details around the element protocol especially as we get into the merge we want to learn about how element is kind of integrating itself into the ethereum protocol more than the typical app um there are a certain cohort of apps out there that are more related to

the ethereum protocol itself than other applications like rocketpool and lido come to mind and element finds itself shoulder to shoulder amongst some of these apps and then all of course where we get to the candy as to how users can actually gain exposure to the merge as ethereum finally merge so we are going to get into all those subjects right after we talk about some of these fantastic sponsors that make the show possible if you're trying to grow and preserve your crypto wealth optimizing your taxes is just as lucrative as trying to find the next hidden gem alto ira can help you invest in crypto in tax advantage ways to help you preserve your hard earned money also crypto ira lets you invest in more than 150 coins and tokens with all the same tax advantages of an ira they make it easy to fund your

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a hundred thousand dow members are all robbing about at governance.avey.com all right guys we are back and here is where we get into the ethereum yield markets the coming merge and how element is embedding itself straight into the actual protocol level of ethereum not formally with code but more informally with economics and so with the launch of element dow element is now becoming more and more embedded into what ryan and i call the protocol sync getting deeper and deeper into the structure of d5 and because element is a yield and interest yield money market it is very very relevant to the native east stake rate on ethereum as eth turns

into a capital asset that has a native yield to it all of a sudden element turns into a financialization layer around the next generation of the bond market if you guys were you guys read the the monday opening note that we wrote yesterday on bank list it's all about how ethereum will be the next bond market for the digital age at least that's the plan uh which makes element and what element does extremely relevant as a financialization layer on top of the native e-stake rate and so this is where and this these are i'm stealing these words from will who i was talking to yesterday efi is now responsible for ethereum security uh and so um johnny i want to throw this one to you can you can you

just elaborate on this aspect of element as it relates to ethereum and how it's impacted some of the design choices that you guys have at element yeah just like i mean at a high level really like you know like our you know from a mechanism point of view like we we put a lot of effort ensuring that the core protocols just saw do like analysis simulation audits all of that stuff we definitely want to be like embedded in the stack like you mentioned like this is another primitive for people to build on you're already seeing it uh you know there's a there's a tool that component phi released for yield token compounding which allows you to basically go long on um or sorry start to basically lever up on you know on a

on a variable rate and so they make it really easy to yield token compound essentially um and so since we actually wrap assets like state death um you know this is another you know this is another example of uh you know how we're getting more embedded and really all of d5 is getting more embedded into the security of the network um that's that's one of the great things about proof of stake right is the internet bond it's also something that we have to use responsibly as well um that's another reason why we actually wanted to give voting power to cordovs is to enable that two-way communication um so can i ask basically you're doing the same uh the same trick that that

will outline that at the very beginning of the episode when he was talking about um what element actually does is which is separating like uh principle and interest so is there is there the ability uh to basically lock in my eat staking rate because uh with element that that's the core functionality so of course you know eat staking right now might be five percent uh post-merge maybe one day it's eight percent maybe another day it's 12 percent maybe another day it's 15 hard to know it all depends on kind of the market supply demand dynamics all sorts of things go into that but what element allows you to do is basically turn this into a fixed

staking rate for yourself like like a fixed bond essentially whereas eath staking would be variable every single day it could be something right different yeah it's market driven yes so driven yeah so basically like we'll mention before it's like if you want to sell for 90 cents a dollar so it's basically think about like i want to sell you a steak eath for you know 0.9 right so whatever the market rate is at that moment um that's what you lock it in at and through the magic of uh you know yield space um by that you know that whatever you buy it at it's gonna mature to one to one with the base asset um you

know at the end of the term so so whatever you buy it out at the market rate that locks in your fixed rate and that's the magic of how the fixed rate side works where it becomes more interesting is is when you actually can yield token compound and and and sort of speculate on what's going to happen with variable rates yeah and i want to get into that but even just the ability to kind of lock in a fixed rate um we are starting we've talked about this last few weeks on bank list uh we're starting to actually see tradify understanding the eth narrative ether as a an internet bond right turning into this capital asset productive asset and what you're doing is you're unlocking a whole new

group of institutional buyers who are just like yeah and i also want a fixed rate on that staking guild do you think that this unlocks a a whole new cohort of institutions buyers does yeah and in the in the beautiful thing is so like you're gonna get like from the institutional side yeah they'll see like uh they'll see a juicy rate you know unlike staking for example on like steak teeth and they'll want to lock it in well what happens when you when you because like i said you're buying right so they see a juicy rate they want to lock in well the more they buy the higher the actual price goes up so the lower the yield you know actually becomes right so

so so there's a you know the so that you have that side and then you have the more degen side the side that's going to come into the protocol and they want to mint principle and yield tokens right and then they meant that principle and yield token and they go take a look at the fixed rate market side they're like oh huh i can sell my principal token right now you know like for a one percent discount or one and a half percent discount and they can exit out of their position quickly while keeping their exposure to the variable side and so this really comes into play when you start doing that recursively the more if you do that recursively as you sell into the fixed rate side the actual price is going to

go down right so the rates go up so as you sell into that uh you actually go you basically you basically end up um uh as you sell into it you basically end up kind of balancing the two sides of the market out that way this is cool and so what we're basically doing is we're financializing uh uh ether the the internet bond here and making it accessible to more people and like one other point to note of course element is not doing the staking itself for something like eth would you work with other liquid staking protocols like a lido or a rocket pool is that yeah that's right we don't have any of the infrastructure it's literally just wrapped yield positions we so that's what the protocol is it's completely

agnostic to what the yield source is and in fact it's permissionless in that fact as well anyone can go and wrap a yield source write an adapter for it we don't you know we anyone can use the protocol that way there's there's nothing preventing them from doing that and we are at the very beginning stages of the conversation is how to get exposure to the merge but not yet not yet still still gotta wait still gotta wait that's coming again towards the end which we're almost there but will i wanna unpack a line that you said yesterday that stuck with me i mean you said uh d5 is now responsible for the security of ethereum how is element now related to the ethereum to the security of ethereum yeah so essentially once we have you know these taking derivatives things like lido

rocket pool um what they end up doing is they end up bringing um you know tokenizing those actual stake position onto the core defy layer so now right these light oh you know lighto tokens the staked eth you know can trade on you know curve it can be used as collateral people can leverage long on it they can you know short they can do all these different things and all these behaviors within d5 which then extends to the actual behavior um and security on you know that core layer so you have sort of this two two-way road um of how they're affecting each other now um and this is sort of what's what's happened with this um with this inclusion of the staking derivative so with the unlocking of fixed yield

interest rates which is where institutions are going to feel more comfy do you think that will just add to the total security of ethereum because it'll add more demand towards staked eth through element as an element we'll be bridging the wants and desires of institutions to more ether being staked at the l1 do you think that that's gonna happen yeah i think so so it locks up more of those positions i think it brings a you know strong sort of calculable accountable um you know asset that you have and so i do i do think um it does bring uh you know additional security and liquidity into that that aspect as well you're ready to throw it in a pension fund now it's a fixed yield

exactly all right one last question before we get into how to get exposure to the merge uh johnny your x consensus you worked at the pegasus client back in uh 2018 to 2020. uh will you're also x consensus you worked on sharding research in 2019 to 2020. application devs don't usually have this much exposure to the protocol level this has been a theme so far in this in this podcast even talking with the the actual distribution of the element token towards people that aren't working on element but we're working on the things that made element possible you know the protocol devs other defy apps how has this shaped what you're building at element and also we can just we can just zoom out and reframe this conversation into the world of open

source in the world of development like why why is this link between the ethereum l1 protocol and the d5 application layer important yeah yeah so i have an answer that actually kind of goes back to to my um you know my working with will back in you know on ethereum research back in the day um it was interesting like being a developer core dev researcher like in consensus like you know like on a personal level like we all have a good relationship you know and so um but the struggle was always like alignment right so like you know initially like i had to rely heavily on personal relationships you know with individuals just to ensure you

know like there's constant communication um you know that we're working on you know whatever we're working on remains relevant to the roadmap um and if this was informal um it was efficient as long as i was um you know as long as i was diligent about it well what struck me immediately about will like is he came in you know to the to the east research scene starts quilt immediately sets up the steering committee um you know that was basically comprised with a bunch of people you know from the ef um key researchers uh from the ef um that were contributing to the road map of e2 so he he formalized that had immediate impact you know to make sure that quilts

resources you know like were directed on whatever is the most relevant thing like it's basically like i mean the whole point of it is like how can we help the ef right and so i saw firsthand because i would go on side bus with will i would like join their stand-ups any excuse to collab with them and and so like i saw this and i saw how effective it was and so i i took and applied the same model back to you know txrx the research team that um that i was on and and it was really effective and so i say this it's really a long way of saying that like that lesson right there um really resonated with me one it speaks to just like the leadership

ability and just kind of like the dynamic personality that will is um but also just like it spoke to me in the way that like that's a way to kind of like get core developers and the application side working you know we we build as on the application side on these key technologies um and so we need a way to formalize this feedlot feedback loop so giving them votes and governance systems that are like directly you know tied in um just really only makes sense it just strengthens that feedback loop so yeah and another thing i'm i'm actually really excited about so i loved when i was um you know researcher on eth2 i loved logging into eth research the

forums and really just like the community that had been built there the community of research experimentation discussion having really deep sophisticated conversations um and and that was that was so much fun and so one of the things that i want to experiment with and play with and i'm super passionate about is how do we recreate some of that atmosphere into our own commonwealth forums the forums and governance discussions that we're having element and then how do we take that and you know connect that to the core um the core layer as well and the things that we talked about the security and the core layer and make sure that that's an open part of the conversation and so part of that is one including you know the right people this is the reason

another reason we gave voting power and drops to um people that have contributed something towards a space they're more likely to be involved in sophisticated and research-based conversations and then the second is basically fostering and cultivating that ecosystem so uh you know getting key people is part of element and others to contribute in that and making the place where like people are excited to log into like the element commonwealth forums and governance discussions because that's where a lot of the innovation in the d5 space is happening right so that's like that is my vision that's my goal i want to create that as part of element and and the dow and everything that's happening there and i want to foster

that that um you know that juice and recreate what we had that's really cool guys all right so let's uh let's talk about the last thing on our agenda that we've been talking about that we're promising this entire episode so that is upside exposure uh to the staking rate post merge so it's it's hard to know whether eth bright what youth price is going to do going to the merge up down like who knows right we all have our sort of ideas on on what'll happen what's likely to happen um but one thing that seems super obvious if anyone runs the numbers is that staking yield is going to increase right it's going to increase uh maybe right now it's like 4.8 some people are forecasting as high as

10 12 15 even higher is there a way to speculate on that and get upside exposure to to that bet going into the merge with element and uh if so how do we do it tell us how to do it well do you want to take that yeah yeah i'll take this cool so um i actually did a talk at youth denver you should watch it i went into like the background of xerox sifu the wonderland ecosystem uh that whole scandal and like connected all these things if you're you know into like a fun really interesting deep conversation look at it um and it connects to a lot of these things as well so one of the things i'll give like a quick background story when we first launched element we were in sort of a market load the

yields the yield rates had gone down and we were actually pleasantly surprised because all the fixed rates were actually higher on our launch than the variable rates and this actually caused a lot of confusion to people at first but what ended up happening is people were actually predicting that yield rates in the market were going to increase and so they were leveraging into the variable rate bringing the fixed rate up and so let's say usdc right was at you know five percent but it ended up averaging to twenty percent they're okay to bringing it up to ten percent um because it's you know the market's going to go up and it's going to reach that higher apy and so what we saw was a ton of people actually profited um in the beginning by bringing the fixed rate

higher and leveraging into that into that yield rate so how does this work um so like if and by the way i want to you know mention and give a disclaimer you know i can't predict anything in the market or where it's going to go but if you do believe that yield rates are going to go up on uh staked heath then this could be a really cool strategy for you and so how does this work so currently you'll see that our on our platform there's like three and five percent uh fixed-rate apy on state death so um if you assume that that's going to on the variable side reach 15 um what you do is you mint principal and the old tokens into that state deep position

um and then you sell your principal tokens right so if i put a hundred thousand dollars in i get a hundred thousand yield tokens i get a hundred thousand principal tokens i sell my hundred thousand principal tokens uh at five percent right um and then i get 950 000 dollars in liquidity immediately um then i use that 950 000 to mint again and now i have uh a hund now i have basically 200 000 of yield tokens um i sell the principal tokens again i do this multiple times and so what happens is if the fixed rate is at five percent and i believe the variable rate is going to hit 15

that's a 10 spread so each time i do this minting selling cycle i basically multiply my 10 increase that i have so if i do this 10 times i leverage in 10 times i can get 10x leverage into the stakeheath exposure the variable exposure and i could on that 10 spread essentially achieve around 100 apy um and there's a tool that does this for you does all the calculations does it all in one step um component build it built it i believe it's ytc dot component type dot phi dot fi and that sort of lets you do that and so uh another thing that this you know requires is like a deeply you know

liquid market so you can you know put push more and more um capital into it um and we in about 10 days are our staked eath term uh is going to come to expiration i think there's about 60 million 70 million dollars of ethan there it's deeply liquid and i would expect that that will roll over into this next term which expires six months from now and so we're going to have like a pretty deeply liquid playground that you can you can do this speculation and um you know you can take 15 variable yield and you can change that into 100 if you believe that it's going to hit 15 and so you also have to speculate on the

actual timing of the merge in order to get the strategy done correct this is correct so you'd have to take a speculation on when uh when the merge would actually happen and um you know all these aspects which is why there's some risk involved and you know this is just a suggestion on how you could play and but we've seen a lot of people uh do very well through these strategies okay that is super cool we will guys we'll include links to these things in the show notes as well i'm wondering if the market is going to tell us when the merge is going to happen through uh through tools and mechanisms like this uh david you look like you're going to say something yeah is this ytc component is that just an application that's on top of element as in like this is a ui

for doing uh is this a just a ui layer or is this also its own kind of default app that's hooked into element it's just a ui layer so it just basically recursively strings um this this uh process together and actually like a really cool way to make this even more efficient so let's say i do 10 10x leverage and let's say after the 10 iterations it leaves me with about five hundred thousand you know dollars and i put a million dollars in just to make for an easy example you could actually just flash lower that uh that initial 500. um so that's i believe a uh iteration they're going to do as well which makes it even more capital efficient and actually once you have that in place then it's 20x exposure versus you know 10x

i think the other cool thing they do is they also simulate what's going to happen as well so so so it provides a lot of useful information um when you actually use the tool yeah i would imagine i i have a hard time wrapping my head around like the holding in my brain how element really works in the background just because uh you know psych major here not a finance major uh and so having these these ui layers on top of things like element really is really really helpful and i think listeners can start to get a gist as to how big the ethereum bond market is going to become especially when it's aided by financialization layers like elements and that's not even to mention just the actual

uh innovations going on in the other aspects of the ethereum bond market like the shared secret validator innovations and the staking network innovations the ethereum bond market is going to be absolutely huge and element is one of those tools to harness into that power of the bond market so guys thank you for building element and also thank you for handing over power to the community with the launch of the dow in the launch of the token and congratulations for making it uh thus far what's next what's next in the element story what do you guys have on the the three six months time frame and then also what is like the 10-year timeframe for element two yeah so major things um so we have an amazing team um really uh really really solid really really smart people we're really

proud of them so a lot of it is research towards a v2 on the amm that we're doing making that more efficient auto rollovers so people basically can get perpetual exposure to the fixed rates and to these lp positions this sort of also locks in liquidity for years and makes makes the markets a lot better to be built on so we're sort of finishing some of the work there um also a revamp of the current ui and current system making it easier to come in through other assets instead of having to get obscure like curve-based assets things like that so a lot of things like that were even like we have some research on a new uh liquidity like mining primitive as well

um and uh it would be interesting to see if you know later down the road the community you know takes that into account i believe it's a lot uh better than the curve model i believe it's a huge iteration on that so stay tuned so just a lot of innovation also continuing to build out the council protocol um things like that so you know i would say additionally like also like you know will and i came you know we were we were protocol devs um so so also you know continuing to kind of keep an eye and help out at the core level um you know where we can and also like efforts like the you know the protocol guild that's kind of being um proposed by state full works and trent van ups it's that's kind of an

interesting way to kind of iterate or really more formalized sort of like the the the idea of kind of sharing you know the you know the stake in some of these application layer protocols with the core devs um that's a whole interesting conversation as well um and something that i think probably even deserves a whole whole episode on on bank list but but it's really cool y'all should y'all should reach out to trent and check that out this is yeah a lot of the legwork from what we had to do this is this is awesome i'm i'm so glad i there has been in the past in ethereum and i know you guys will test this like it's felt like at times there's some division between like what the protocol devs are doing and like what the the d5

builders and the users are doing so it's really cool to see um builders like you starting on the critical side then moving to the app player so you have a way to bridge both of these both of these communities and find some shared alignment between them i think that's really good for the overall ecosystem so i would still love to see some um some app layer devs move to the protocol side i think that would be uh that would be pretty fun to see too um but then again i'd love to see more protocol devs up the app stack i wonder what vitalik what kind of app vitalik would build if he was a defy developer um yeah he would i bet it would involve public goods uh will

and johnny thank you so much for joining us on bank list this has been a blast awesome thanks for having us yeah this is really awesome and really appreciate the time for all the listeners out there who are looking to the resources there are a number of links in the show notes the first episode that we had will on uh the state of the nation that is in there as well as well as bankless's guide to element the how to actually use element for yield those are in your show notes as well and of course please like and subscribe because that's how we bring you the alpha all the time uh so if you're on youtube please subscribe uh and then also if you are listening on a podcast uh give us those five star reviews wherever you are listening to that podcast so bank lists can start to take

over the world vs disclaimers guys as always none of this has been financial advice of course eth is risky so is defy you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your bank list experience you'll get access to our market analysis our alpha leaks and exclusive content and even the bankless

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