Kinetiq Deep Dive: Liquid Staking, HIP-3 and the Launch Model | Greenz & Omnia

Transcript

Our thing isn't creating social LSTs where like block works comes in and launches a blockworks LST again hypothetically like that's more like a sanctum offering whereas like for us it's for real businesses to be created on top of uh very successful protocol distribution right it's like kinetic proves it can pull in stake and be trustworthy with regards to it building infrastructure that the exchange deployers can come and then use to build their own exchanges from a stake crowdfunding and delegation perspective and then the exchange deployer handles all of the nitty-gritty like market deployment, market curation, and management.

>> A quick shout out to today's sponsor, Katana. We'll hear more about Katana and their ongoing pre-eposit campaign later today, but for now, let's get into the episode. Nothing said on Zox Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan, and our guests may hold positions in the company's funds or projects discussed. What's up, guys? Welcome back to another episode of Xerx Research. I have not done a interview episode in a really long time, but today I'm very excited to have on Omnian Greens from Kinetic. Um, thanks for coming on, guys.

>> Thanks for having us. Thanks for having us man. >> Uh before we dive into it, which one of you wants to give a introduction of what you guys do over at Kinetic? >> I'll kick it off. We're two of the three co-founders, so we all wear pretty different hats, no pun intended, but yeah, we are we are two out of three. Our third is geographically in a very different time zone. So yeah, we get we get the benefits of 24-hour coverage, but yeah, um you know, there is some cons with timing sometimes with regards to all being at the same place at the same time.

>> Yeah. What what do you um what does kinetic do? I know it's an liquid staking, but do you guys want to dive a bit into that? >> Sure. Yeah. Uh so kinetic effectively is uh the liquid staking protocol built natively on the hyperlquid network. Uh the idea around kinetic is effectively roughly a year old around uh essentially like building a product that all of us wanted to to see and use ourselves but didn't see being done. And even to this day, I mean, Kinetic is essentially the culmination of something that all of us as, you know, nerds for DeFi have effectively wanted to use for a very long time, even prior to hype being announced as a token. Um, so yeah, this

this it's pretty much it a high level. Um, there's a few technical cool things that that we do over at Kinetic, but I'll let Greens touch on those. Yeah, I think that we're um just trying to position ourselves to capitalize on all new features at Hyperlquid ships that are related to staking. Um so just trying to be the most general purpose LST and to put ourselves in a picture uh position to capture value uh from these new features. >> That makes sense. What is um from what I understand there are some quirks with hyperlquid um because it's two L1s um that are connected to each other. What are some

of these quirks that you guys have had to work with and that makes I guess kinetic unique? >> Yeah, building kinetic is a very interesting challenge that we've been excited about for quite some time. And I guess like the earlier challenges were around when will core rider which was this very famous upgrade uh when was that going live and nobody had timelines on that. So we were effectively around initial ETAs for kinetic pretty much just licking our finger and putting it in the air because we can build as much as we can. But um it was this weird um tease because effectively the entire codebase was ready for quite some time.

But this one final switch needed to be flipped that would allow for kinetic the smart contract itself to handle all of the uh stake uh ingestion and then delegation on the hyper core side in a completely trustless and onchain manner. uh be done which was core rider. So uh that's what allowed us to then put out a day staking uh notice or like launch notice if you will allow people to get their stake ready and then we launched on July 15th so as of today 3 weeks ago now almost to the hour. Wow. So yeah um the unique challenges around that is that you know Hyperlid as an exchange first and this kind of purpose-built blockchain/ecosystem for the exchange itself the application that powers all of Hyperlid's kind of

unique uh I guess you say features as like a revenue generating powerhouse etc. Um make it so that you know we had to build the LST around this uh kind of challenge if you will. um no other ecosystem essentially offers the same type of uniqueness with regards to how you have to structure uh liquid staking. So yeah, that was a challenge in and of itself. Therefore, it you know, it wasn't like you could take code from really any other ecosystem and do the same thing, right? It was very unique in terms of how it was structured. So hope that helps overall. >> It does. Um, one question I've had is that I remember, so it was kind of a meme. Omnia, last time you came on, I asked you when are like the pre-ompiles so you guys can go live. Um, write

pre-ompiled that you guys could go live. But prior to you guys, there were, I think, one or two LSTs that did go live. I assume they weren't dealing with the Hyper EVM. They were mostly focused on hyper core or like what does the back end of that look like versus what you guys are doing? just so I can get my feelings right. >> Yeah. So, the Felix team actually highlighted something really interesting. Uh for those that don't know, Felix essentially is a money market protocol on HyperVm. They have a really great licensed fork of liquidity as one of their products as well as uh Morpho. So, yeah, very cool product.

They do USDHL as well, hyperlquid native stable coins, like bunch of cool stuff. So um these guys highlighted the difference between something like kinetic and uh anything prior to uh kinetic as well where they called it EOA LSTs versus uh corriter LSTs. So an EO LST effectively is uh you know everyone should know an EOA is externally owned account uh effectively like guess you could think of it as like a hot wallet right uh where you're depositing the uh the tokens into a smart contract and then one single account effectively has control over this stake so it's completely permissioned uh offchain and of course a very trusted experience with regards to liquid staking. It's very

much a um yeah an interesting experience especially when coming from other ecosystems where staking is mostly done onchain and that's kind of the expectation. So on hyperlquid uh you know we wanted to build kinetic to be the exact same way that you would expect you know liquid staking on say ethereum or salana or other ecosystems to be completely verifiable completely permissionless completely transparent you could monitor the stake at all times see what it's doing etc. And then taking it a step further, go into validator selection. That's not handled by any contributor to kinetic. It's more so handled by a performance-based algorithm that effectively factors in quite a few different things that compute a score for each validator. And then based on this score, so currently it's top seven validators by score including the

foundation validators. It will allocate stake equally between all of them. So not even on a curve, right? So it just barely spreads the stake. And then over time the algorithm will essentially include more and more validators. So 7 to 11 15 20 and just grow with the hyper liquid network. So um that is kind of what you call like in this case a a core rider LST meaning that all of the functionality with regards to the management of the stake from delegation to the stake ingestion and like moving it over to hyper core moving it back to hyper EVM for the for the user in the event somebody unstakes or um yeah anything of that nature it's all done completely on chain leveraging this core rider uh technology from hyperlid um it for people that don't understand like why this is even

relevant a very high level and quick timer is that you can think of hyperlid from an ecosystem perspective as this one foundational bedrock consensus mechanism called hyperbft in which two accounts are built on top of it or like you said earlier like two L1's I guess you could say um it's all really the L1 it all shares the same state which is kind of what's crazy about it uh so uh the hyper core environment or account if you will effectively is what houses all of the per and spot order books so this is running 200,000 transactions per second all of the crazy exchange activity that's happening is is hosted here. But what's funny is that staking is also hosted on hyper core. So hyper core which doesn't allow for smart contracts to be created. That's the

purpose of EVM which is the other account if you can think of it that way essentially is where kinetic is deployed. That's where our smart contracts live. Then the the protocol ingests hype and then somehow like you know you need to move the stake over to the other side to hyper core and stake it right like that is the purpose of building the whole thing on chain. So anything prior to kinetic essentially was completely uh offchained trusted by what would be considered like an EOA or maybe even in some cases potentially a multisig whereas in this case it's the contract handling everything. So I know it's a little bit of a um extended answer but hopefully this does help give some color for those that didn't really understand the significance.

>> No, no, that was perfect. Greens, do you have anything you want to add? >> No, I think uh I covered it. >> This episode is sponsored by Katana. If your assets are sitting idly, they're dead. Katana is built from the ground up to bring your bags back to life. Get started with Katana by joining their pre-eposit campaign before mainet launches at the end of this month. Follow the links in today's show notes to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. >> I also wanted to ask about so one thing about Hyperlid that is good but I think like kind of different to traditional blockchains is that emissions are quite low. um like on FTV as well as on circulating like on circulating supply

it's like 2% I think and I think on the uh total supply it's like.7 or point8 or something um don't fact check me on that please um but emissions are quite low and I think uh I I don't think the team has any plans on increasing them um I'm curious how you think of an LST in that context as in like are you guys looking to offer additional yield somehow how through other means so that it's more enticing or do you think it's um just the fact that you can integrate into it into DeFi and play around with it enough?

>> Yeah, it's quite a few things. I mean, we've chatted with pretty much every type of staker, right? Um from the most retail of retail to most institutional of institutional and yeah, the needs all kind of have a common thread, but they all end up at different places sometimes. So some people just care for the DeFi utilization. Some people just want to ensure that they don't really care to do anything in DeFi really, but just want to be liquid as opposed to have like this lock up for 7 days in the event that you do want to unstake. Um a common thing that people run into in hyperlquid is um you can unstake, but then you need to initiate the transfer between the staking balance and the spot balance. That is something people forget to do a lot. So they expect their tokens on the seventh day and they're like, "Oh

like I didn't um you know do the I didn't initiate the transfer." So, um, yeah, that is an example of some of the reasons people are keen on liquid staking. And yes, like you said, like the yield is actually very very low. Um, so two 2.2% is is really nothing to write home about. But the point being that um that's what's interesting about the fact that Kinetic has pulled in quite a lot of TV already. People do have this pretty much unquenchable thirst for DeFi on Hyperlid, which is very much in its early uh booming stages. Um and yeah like uh kinetic is built essentially to be this kind of critical infrastructure for DeFi and you know an LST by itself like this is something we we chat about quite often

internally and like um you know just general calls that we take is like an LST by itself is cool but uh you know especially one that's not utilized is especially boring to us and honestly quite uninspiring. So for us seeing things like over 70% of KHype being used already out of the 900 million KH 900 million worth of Kype that's been minted a little bit over 600 million of it is already being utilized like 620 last I checked earlier and um so that is for me like um and overall for the team has been like one of the craziest things to see like it's being used in many places from money markets to yield trading platforms like Pendle um AMMs all over on Hyperlid um at Kinetic we have purchased the Khype ticker already as

well. So we did this last October uh so a while ago now and uh you know when hype coding becomes available you will have the kype listing directly on hyperlquid as well but we don't care for it to be paired against USDC right now. So that's an example of some of the integrations that we already see. But the point being like there's a lot of different needs that have been met by KHP going live and um even institutional ones for example with iHype that we announced recently which will be going live in the coming days um with several of the positives lined up that again you have institutions who uh want to get access to hype want to stake that hype once they get access to it that haven't had the opportunity to do so before because of the lack of custodial support and some other infrastructure. So IH is

is an example of kind of us identifying many different needs and then you know packaging it all into a couple of different offerings for very specific individuals. And yeah to answer your point like this is foreshadowing of course but Khype is like kinetic in general is much more than just an LST is the best way to to put it. So we can talk on that for sure as to what lies ahead but very different product suite than the typical LST. I would just I would just add briefly that um I think as you mentioned because the staking yield on um hyper core is so low it people are eager to do other things with their with their hype and so having a stake solution that is liquid that they can use on the EVM um becomes

a lot more interesting when the native staking rate is so low. >> That makes sense. I want to talk about IHype a bit. Omnia, what is the I mean I know you gave a bit of a rundown of it, but have you guys seen a lot of interest? Um, >> we have. >> Yeah, we have. It's been pretty wild actually. Um, of course people see posts every so often about institutions. Um, and that's for example like picking up hype bags or including them into their I guess you could say offering. But um we have been in many many conversations with several institutions about uh basically leveraging IHIP. For those that don't know what Iype is, it's essentially kinetic state hype for institutions. So it leverages all of the

security and architectural benefits that we've created with KHY. Uh quadruple audited code already which will continue to be audited and further battle tested. Um and this effectively like full-on integration suite. Maybe not as much as KHype because of compliance purposes, but >> more so like getting the iHype token on OTC desks uh or institutional protocols for example that you know institutions can then take their staked hype and then actually do things with it right like this is of the utmost importance for us not just shipping it right so um this is kind of I hype in a nutshell and yeah it's there's been a lot of interest from various types of entities on this and you know you will see this very very soon uh But the point being that yeah,

it's been very interesting to roll out and pretty wild that there was such hunger for it. >> Um, with with regard to I guess like the popularity, do you think a lot of it comes from the treasury? >> Um, I guess the treasury company demand or do you see like it mostly being cryptonative funds or do you see it mostly funds? Where is that going to come from in your opinion? >> Yeah, so far it's mostly cryptonative funds. Yes, there have been interesting you know that's that I guess expressed interest in that. Uh for those that uh aren't yet familiar with what we have announced recently we have partnered with Hyperion DeFi which is one of those uh you know DATs uh as one of the launch customers for iHype. So yeah, very

exciting times for that ultimately. But yeah, believe it or not, the least interest of the total pie has come from TAS. So far, it's really been cryptonative funds. Uh even some tribe funds that have a crypto allocation who have been very interested in working with us on on iHype. So what's interesting about it though is that it's a completely isolated stake pool. So like I said, it just leverages all of the security benefits and architectural benefits. But the idea is for compliance purposes, for those that are familiar or even not familiar with how institutions work in terms of how they can come on chain and interact with protocols, there has to be complete isolation from a risk perspective and just generally like a a user perspective like uh an institution cannot come in and then stake alongside you know Boach or Omnia on chain right

like uh it's just yeah it's very very different when it comes to those institutional compliance type of uh games right so Yeah. >> Yeah. Effectively all depositors and validators which are handpicked by depositors need to be KYB or KYC in order to interact with this. And that that's the point, right? It is an institutionally focused product. So, you know, Balk and I can't go in and and have like Hype instances for ourselves, right? Um it'll be institutions that will come in and do that. Yeah. >> You don't know my compliance needs.

>> Oh, yeah. All right. Yeah, that's a that's a fair point. So, but um >> your size >> I think uh I mean this was one of the things I don't know how much you guys saw this on your end or if you but um one of the things with Hyperlid when it first launched was that most funds wanted to get some form of exposure but it was very difficult because it wasn't supported by a lot of custodians. Um and I feel like that's a very important point to kind of hammer down is that institutions have very different especially US institutions they have very different compliance requirements.

um think crypto native funds can kind of get around it. >> Um but even then I mean if you're seeing a interest clearly there's >> strong demand for it. Yeah, it's still difficult like you said, right? Like that's the crazy part. And um >> you know, even today still it's like TGE, yes, it was still difficult, but even today it's still difficult. Believe it or not, there are not even a handful, not even like half a handful of uh custodians that support at least like T1 custodians that support >> uh the hyperlid ecosystem, let alone hyper core. So like, okay, say you get some hype, you may need to do it on EVM because these are systems that typical infrastructure is familiar with. This is like the easy part. But then Hyper Core is a completely bespoke integration. For those that don't know or you know may

maybe some are very familiar with this, but the Hyper Foundation takes an extremely hands-off approach with regards to paying for integrations. Typically ecosystems are are putting multi-million dollar uh bills for this type of infrastructure to come to the to the chain. So really people don't understand the weight of uh businesses needing to make strategic decisions to support hyperl because they understand kind of what's at stake right and uh the fact that their depositors want it. So even today I mean I think the only largest um uh custodian today on Hyperlid is Fireblocks and then many are days away or weeks away. So yeah.

>> Yeah. I think Hyperlquid is probably the only case where I've seen build it and they'll come. Um, that has actually worked within crypto. I feel like typically when devs attempt to do that, it doesn't work out. And >> exactly. >> Yeah, some of these. Anyway, um I don't want to talk about tools and how much they charge, but >> um it's a lot. Um yeah, >> let's let's do so Khype is for DeFi integrations. Um >> I saw uh Volantis um launch a KI hype AMM specifically. Is that something that was in the works for quite some time?

>> It it was. Yeah. So it was pretty crazy. So like when things started to get very funny for us was when we started to see um again like I mentioned like the code was ready for quite some time. So people were able to start building integrations pretty early even prior to launch. >> Um and this is what we focused on right. focused on making sure that integrations were just crazy and um ready to go from day one, which is what allowed the KHY, you know, I guess you could say adoption to kick off in a really crazy way. Somebody posted something that we didn't even realize, which was funny that Kinetic had the the largest ever oneweek inflows ever for an LST. Uh second only to Binance at like 135 million worth of their Binance staked ETH and Canada

closed at like 550 million the first week. So that was pretty interesting. Yes. Yeah. So like we had not even known, right? So one week TVL growth was just wild. >> Yeah. You guys are at 862 mil TVL. That's insane. >> Yeah. So it it's been interesting to say the least where like over 2.2% of the total supply sits in kinetic and well over 6.3 or 6.4% of circulating supply sits in kinetic within the first 3 weeks. So yeah, obviously been very humbling, very inspiring to see the adoption that's kicked off. But again, the point being like, yeah, it looks quick, but we spent nearly a year getting this integrated everywhere that you already see it. Um, many of which were like, okay, go live first and then

we'll we'll build the integration though. uh many were caught on the back foot which was um interesting but the point being that all the integrations have been really really great and yeah I mean nothing but fun and so far like you know we we have a ridiculous amount of emotional investment into making sure that uh people have the best possible integrations and we just found out like literally just before we started this that today Khype was the highest traded volume pool on all of Pendle today you know out of a platform with like almost 7 billion in TVL. You know, the most volume was done on Khypo, which is just super wild. So, yeah, super super crazy.

>> Yeah. Um, I was going to ask a bit about So, Pendle is a nonhype native protocol obviously. Um, what's it been like with hyper EVM native protocols? Like I imagine um you have very very close relationships with Felix and Hyperland guys and Valanthis team and is that the reason I'm bringing this up is because on Salana we saw these like very clear relationships develop between some of the teams and I imagine like >> um you guys are also working on interesting integrations. Is that something that's safe to say?

>> Yeah, for sure. I mean it couldn't be like it legit was not possible without coordinating with every type of team. There were many exogenous teams and then many native teams to HyperVm that we coordinated this with. And again um it was just really crazy to see the outpour of support as soon as we had either just announced or um actually went live where protocols rush integrations um or had been working on them for some time already audited them. Uh yeah, so it's just been really great to see the initial support, but yeah, more important to us is making sure that these integrations further deepen and uh you know, obviously become really critical and foundational for general

hyperlid DeFi. >> Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR. Katana is launching with a notable ecosystem of primitives, assets, and partners like Morpho, Chainlink, and more. Be early to Katana by joining the pre-eposit campaign before mainet opens at the end of this month. Follow the links in today's show notes to get started. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research.

>> So, you mentioned that you guys have a different product suite um and are not just an LSD um provider. I'm curious what you guys are planning on building over the next year or so. Like what are some um goals that you guys have apart from LSDs or I guess including LSTs that you guys are focusing on? >> Yeah. So, uh funny enough, Jeff has done some cool um other Blockworks shows where he talks about uh ME on Hyperrid, how that's mitigated on hyper core. We do believe that there is a potential strong uh case to be made for MEV on HyperVM. But funny enough like MEV is

just truly uh seasonal as we've seen like Solana has become like this powerhouse for MEV related activity based on like this kind of uh you know the the peaks and troughs of meme season and it's been incredible what's been uh developed there. for us on Hyperlquid, you know, just generally teams have this really really cool opportunity to do uh pretty insane stuff given the fact that it's an insane exchange that is very much eating into centralized exchange market share. So we recently put out an article uh covering very high level details of a product that we announced called Launch. And after speaking with tens of teams quite literally over the last few months about their plans and aspirations for HIPP3 which is probably the most talked about thing about

Hyperlid these days outside of just day-to-day stuff. Um but I think is very misunderstood in terms of the actual functionality. So we took this as a really cool opportunity to debut what we've been working on for quite some time now where effectively is like a stopify/pickstarter for HIPP3 where >> people can come to the platform we call it launch currently and effectively coordinate a crowdfund and have ready set infrastructure to leverage the existing kite LSC architecture to create what we call XLSTs. So say Bach wants to come in and launch his own HFP3based sub exchange and he could create BO hype, right? And Bach wants to raise 2 million

hype. You could do that and issue Bach hype to all the people who contribute this hype to your exchange. And the crazy part is with HIPP3, you know, per exchange to our understanding is that you have one collateral type that you can select. So if exchanges want to have several collateral types offered within their kind of suite of exchanges uh that's just all aggregated from one user interface then you can go and conduct multiple raises right like you can do 2 million hype for BTC as collateral 2 million hype for USDT as collateral uh 2 million hype for Khype as collateral for example so yeah it is uh obviously a lot of hyperfired but the point being I think it was designed this way we've built this product understanding that

hyperlid very values quality control. So the idea being that the community is very uh good at sniffing out uh BS to say the least. So you know really we believe the strongest teams here will have to basically come in and create a compelling enough offering and design their economics around this offering too. So this could look like uh a portion of the protocol going to stakers, exchange related benefits for stakers, um a generous enough cut of the fees that the exchange generates, right?

So it really is like so much more than just an investment. It's almost like a JV with the or for those that don't know like a joint venture with whoever is deploying this exchange and it lowers the barrier to entry by quite a lot but still keeps the quality filter pretty high. So that's a high level overview of launch that we recently announced. But this being something that is complimentary to kinetic and funny enough does not put the primary stake pool at risk. So kinetic like we've been asked quite a lot like will you take all this hype and then lease it? Well that would be pretty stupid.

>> Yeah. >> Um you know why would you risk the ki backing for you know very exotic exchanges that have slashing risk etc. >> So we're very much disinterested in that. Uh so the real question that we had been focusing on since the announcement of HIPP3 is how do we develop something that's compelling enough for teams that would actually come in and use this day one uh or stakers who would want to back as many or as little exchanges that they as they want while not putting KC and Khip backing at any sort of risk and this is the answer to that. So I know it's a little bit of an extended answer but >> it's it's good. I um I think the only other sense that I can think of this was on Sanctum. I don't know how familiar you guys are with Sanctum.

>> Yeah. Yeah. Yeah. Very very much so. Yeah. >> They have um they have a similar thing where they do bespoke LSTs, but I mean you can't take that to launch exchanges. So >> yeah, exactly. >> Um >> so it's a it's a good frame of reference I think in terms of like what it could look like. Whereas like our thing isn't creating social LSTs where like block works comes in and launches a blockworks LST again hypothetically like that's more like a sanctum offering whereas like for us it's for real businesses to be created on top of uh very successful protocol distribution right it's like kinetic proves it can pull in stake and be trustworthy with regards to it building infrastructure that the

exchange deployers can come and then use to build their own exchanges from a stake crowdfunding and delegation perspective and then the exchange deployer handles all of the nitty-gritty like market deployment market curation and management um front-end operation you know so for those that don't know HP3 is not going to have their whatever markets or exchanges that are launched on it featured on the hyper liquid front end so all the exchange deployers will need to figure out whatever front ends they'd want to offer so we don't even care to do that ourselves like actually so connect will not do front end operation for these it's just going to help with the actual crowd uh crowd sourcing of the stake and then also the um issuance of the LSTs permissionlessly on behalf of those that stake for each

exchange. So very much selling shovels if that makes sense and making it easier for deployers. >> I have two questions with regard to HIPP3. First of all, if it's primarily used to not launch assets that are related to um those that are already on Hyperlquid, right? Like this would be more exotic assets. I I think Am I am I mistaken here? >> Yeah, I think it could be a mixture, right? So, there are deployers who want to do things like for example, ventuals has been one that's been quite public and in the eye recently where they want to do preipo trading like that's an insane offering, right? Like quite

fantastic. People are really interested in stuff like this. And then there are other exchange deployers that we've chatted with who want to do bonds rates commodities FX um you know other more niche stuff things without oracles permission uh like what is it prediction markets so yeah there's been a really diverse quite broad range in terms of the assets that people want to enable trading for but it's not just niche stock it's things like really high leverage on crypto assets or really high leverage on equities um you know forex X has been a big one like that's been like one thing that people have always related to as like pretty adjacent to crypto but you know kind of still a really big line in the sand where they

don't have much crossover. So uh yeah I I hope that helps in terms of what the landscape has looked like. It's not just equities you know people are like oh I just want to trade equities on chain. Well there's a lot more people are working on. Yeah, I I think the main reason that I wanted to ask is that because to me there's a diff I'm I'm curious why people would launch HIP free when they can do a lot with builder codes, but I guess with builder you can really only launch you can really only like trade the hyperlquid native assets.

>> Exactly. Exactly. We have some theories as to the like how far builder codes extend, by the way, but yeah, that's probably for another time. >> This episode is brought to you by Marinade. Marinade is focused on developing staking technology that strengthens the Salana network and connects soulholders with the best staking rates available. With solutions for both DeFi and Trady, including liquid and native staking, as well as direct enterprise integrations, Marinade's high performance staking delegation platform brings billions in liquidity and security to the sole market. To learn more, follow the link in today's show notes. And thanks again to Marinade for sponsoring today's episode. Algoit 3.0 includes all the tools and open source resources you need to unleash the power and performance of the Algrand blockchain. Access a

resilient network with instant finality, consistently high throughput and low fees, and layer 1 features like atomic swaps and native assets. No smart contracts required. Whether you're building D5 protocols, enterprise solutions, or nextG dabs, Algo Kit has all the tools you'll need to build faster, safer, and smarter. Start building with Algoit today by following the link in today's show notes. As always, investments in blockchain technology involve risk. Terms and conditions apply. Do your own research. >> And in terms of the HIP free, like the launch product, I it's not live yet. It's still on test net.

>> No, no, no. Yeah, very much still on on test net. Well, in development, spec out. Yeah. and have finalized the first few curated launches for the platform. Yeah. >> Okay. That's what I was going to ask. So, you have interest on the launch side as well. >> There there's tens of teams who are ready to do this pretty much immediately and have been working with us to kind of fulfill their needs. Um, put together economics for what they would offer the public in exchange for their stake. Um, and again, it's not a trade, right? Like you're not selling your stake. You're just staking it on behalf of this exchange. So yeah, that's that is well in place and well underway.

>> Are you guys going to do um quality control in the sense that if I'm trying to launch Pocachio Markets and I'm offering like X% of fees and Y% of token um is that if if people don't return that to stakers, do you >> will you just say okay? >> Yeah. Like what happens? Yeah. So the good the good news is like here's the best way to think about this like launch is structured to be I guess you could say again like the trady or like how do I say web two equivalents like propify or kickstarter but maybe the web 3 equivalent would be maybe a mix of like pump echo where effectively deployers

could come in uh and configure the entire thing to their liking. So if they want to offer 50% of the fees that they take as like something that the stakers would essentially split parata they could do that and the smart contract enforces this. So there's no way that deployer can hold back the fees essentially or hold back >> really anything outside of like a future token I suppose because it doesn't exist unless they commit it to the smart contract then the smart contract distributed accordingly but the token would need to exist already. So yeah, uh the idea being from a quality control perspective, the way we look at launch being rolled out would be a first a few curated launches and then eventually making it permissionless where anybody could come in and theoretically raise

whatever amount of hype they would want. There are some other more nuance things to this because this I'm sure brings up a lot of questions for people like uh the hype staked is technically infinite, right? Like if the exchange exists forever, right? Hood just be staked forever. how do you get your hype out? Um, you know, so we have built really interesting solutions for this as well. So allows people to kind of navigate this pretty daunting kind of situation of like, oh, does my hype get stuck at this exchange forever? So we built some really cool things around making sure that this doesn't become the case. Um, the other question is like XL LST is like where does Boach hype get to be used, right? Uh, there is a bunch of hype backing it. The yield profile for it could be insanely dynamic and way

more attractive than just regular liquid staking. So people may want to hold these or hold a basket of them like where do you get to use these? So these are a lot of things that are like the leg work is is very much being done in the background as well. um you know it's not just going to be long and be like hey all right enjoy it right it's uh you know it will be fully integrated essentially >> that makes sense and in terms of I have one more questions but one more question we forgot today HIPP3 um is it going to be distributor based on stakehub or is there is this also going to be like IHype where you're connecting both the curator um not the curator both the curated company and like the person

that they pick. >> Yeah, good question. So again, it comes down to the the deployers configuration. So we will provide them an option to basically use stakehub and just kind of like be uh I guess you could think of it as like set and forget where kinetic will basically employ the algorithm and handle the delegation that way or they will be able to select whatever split amongst validators that they choose direct 100% of it to you know b validator or split you know 25 25 or 10 10 10 you know so they will have the configurability to be able to do things like this. Um, we'll allow for things like minimums that allow the exchange to quote unquote bond. We'll allow for things like caps to make it somewhat

exclusive but allow exchange deployers to have enough firepower to purchase listings. I mean there like we could do a whole episode on this thing, you know, as it as it arrives. But the point being like a lot of really cool stuff being done for deployers here. >> Yeah, it sounds like it. Um, last last uh actually no more questions on HIPP. I want to talk um I I wanted to bring this up before but um we kind of brushed over it because we got really excited about the other DeFi integrations but with Volantis specifically is there a reason that you guys were like we needed dedicated KH high hype AMM or >> what was the reasoning behind that? So, it's not that it was needed per se, but

the Valantis team has built something really cool with their sex model. And um yeah, for those that don't know, it's effectively found a way to basically optimize for as little slippage as possible with regards to u heged asset trading like kype to hype for example and then also find ways to generate more yield on idle AMM deposits. So they take a portion of the deposits and you can see it in real time like where it's allocating and it'll lend it out on hyperlend and generate some lending yield on the hype that's not being utilized and then be able to call back those assets whenever and then also facilitate say a huge swap. So today um Bantis' KHY AMM boasts like well over 55

million in liquidity and then total liquidity for Khive on HyperVM already exceeds like $70 million. Again, this doesn't even include a hyper core listing that will come at some point as well that we've secured already almost a year ago. So, yeah. Uh, >> did you guys get it when the prices weren't ridiculously high, the auction prices? >> Yeah, we bought it when it was still USDC. So, okay, >> it was it wasn't too bad. Low five figures. People could see it on chain as well when we bought it. Yeah. So, that was pretty interesting. Um, so yeah. Uh, it wasn't like needed per se, but it was a really really fantastic integration.

We had spent a long time talking to them about it. They were very excited about it and yeah, I mean it's quickly become I think within the first like two or three days it became their highest TVL pool by far. Uh so yeah um could not be more excited really. >> I had Ali on the pod and I also saw him when I went to Dubai and he I didn't know he I didn't know he had joined Valance. Yeah, he's fantastic. He's very smart guy. >> Um I love him and Cedto their podcast Exit Liquidity. I don't know if you know it or if you >> It's so good. Yeah, I did it a while ago. Yeah.

>> So much better than this one. But I genuinely like I think I really like their chemistry. Um >> Yeah. Yeah. >> Enough enough with um glazing Ali though. But um >> um do you is there anything that I didn't bring up that you guys really really wanted to talk about? Sometimes I this happens towards the end where I'm just like asking about Volantis and there's something that you wanted to talk about that I didn't bring up. >> Dreams, what do you think? Like anything that think Boxman Chad hosts >> as usual?

>> I think we've covered all the really exciting things. I mean for me I think I'm most excited about HIPP3 obviously um and designing this over the next um months and uh I think we also have a lot of very exciting things coming on the institutional side um but we covered all the the the the highle product. >> Yeah. >> Yeah. >> Very good. Um, okay. So then before we end it, do you guys want to give a kind of a shill sesh where where people where can people find more about you, Kinetic? Um, and like what should they look forward to over the next month or so?

>> Yeah. Yeah. Our handles are the names effectively on here on the pod and then kinetic on on uh Twitter or X kinetic_xyz. But uh obviously we have some pretty active community channels as well where we're all in there vibing and talking to people about the product and you know doing uh doing community stuff. So we're all very much like I guess like um one thing that's been nice to see is uh you know we're community members just like everyone else. We just, you know, this larger group of us now effectively banded together um well over a year ago to start thinking about how to do this really and then close to a year in terms of when we actually started building it.

And yeah, two years well a little over two years now since we found Hyperlid. So yeah, we're community members just like anybody else. I think this is a thing that, you know, new entrance to the ecosystem may or may not see or understand. But the point being that we've built this from the POV of, you know, what would we do? what would we want to use ourselves? Um, yeah, like that's I think something noteworthy to touch on because yeah, it's usually the the conversation is very different, right? Usually it's like um you know founders or teams in general will kind of identify an opportunity and then build around said opportunity but not build it from the natural need of like oh like we need to do this ourselves because we want to we want to

use it, right? And then you look at the landscape, you see it's not being built and you kind of go and do it as a as a squad, right? So that's I think something noteworthy that maybe people may or may not understand about uh kinetic and just the the grassroots approach behind this and yeah, how everything's been structured and that's like the ideology that we take into pretty much all of the products that we build. So yeah, these are the main things. I mean, huge credit to other ecosystems. we've had the opportunity to really study what a lot of LLC's have done elsewhere uh you know where they've made mistakes where they've strived and build this really cool product and I think like maybe one final thing to

touch on is uh kinetic is unique in the sense that as an LST we've incorporated a DeFi element uh natively within the platform where we collaborate with Veta on something called the earn vault it's basically this one vault where people can just access all of Hyperlid's DeFi opportun unities in one place. Obviously, they have to be vetted. Um, so VA goes through a stringent process of making sure the platforms are audited and they have proper security protocols, but that has amassed close to $180 million in TVL, which became quickly the the largest fault on Hyperlid by USD and hype terms. So, it just shows that the demand for things like this has been pretty much through the roof. And yeah, I mean that was one thing I think worth

touching on that a lot of people may or may not understand yet about kinetic about how integrative of a platform it is from the product perspective initially like like right when you come to the the website to stake um and then beyond that as well like we've really thought a lot about the user journey and experience with regards to liquid staking and yeah overall I hope that helps give people a better picture as to like where we're coming from about this and yeah what it'll what it'll look like in the future. with further businesses to be built on hyperlink good. >> It does. I think that was a great great way to end it. Um I am looking forward to potentially having you guys on as well. Um maybe so we can do a entire episode on HIPP3. I think there's a lot of stuff that not just that I don't

understand that I think a lot of other people also don't understand and haven't thought about. Um but yeah, sure. >> Omni agrees. Thank you guys for coming on. This was fantastic. >> Thank you as always. It's good being on. [Music]