Mini DeFi School | Intro to DeFi & Morpho

Transcript

in the case here Lio is um um so liquid staking provider for the ethereum blockchain um so you can secure if and earn a yield by secur securing the the network uh Landing is a very big uh and large use cases where you can see a which is a competitor of mofo mofo is a blue and a is like 30 billions of total deposit which is massive um and you have uh so bridge to uh Bridge assess from one chain to another and obiously dexes I skip the other one um dexes like I think like everyone knows about Unis swap it's one of the

it's the largest um Tex over there uh to trade um crypto in a decentralized fashion all right um by the way I I don't see an equation so uh so feel free to tell me yeah sure okay okay okay um perfect so um what about um um so defy what we can compar defy about like um the early internet and um internet protocols like a TCP IP um so those are the protocol that are the foundation of the what what you see like

websites uh all the process uh like anytime you do request um search on Google it's sending an HTTP um request which is B based on open source and share the protocol and this enable the the internet of today um so all LinkedIn Instagram uh messenger everything is based on um no and immutable layer which are like internet protocols mofo is kind of this uh the same thing but but for unchain loans uh and uh it's not relying on um I mean like product can be buil on top of mofo

which is um the same way as uh HTTP and tcpip or Internet Protocol pouring uh pouring website and internet that as we know uh mofo is kind of borrowing uh onchain loans loans for products that can be can be built on top um so Moro you can see Moro as a sort of infrastructure um where every every liquidity can be deposited if you want to earn interest and anyone that wants to draw a loan to finance whatever uh can do it on top of mofo and because it's like a fully mutable and uh open and accessible uh infrastructure anyone

can build on top and there's no restriction and you can build whatever you want uh we'll see a few example but you can see any fex building saving account for instance on top of mofo or uh allow them their users to borrow against that you can see also black rock that can tokenize t builds um so like um um treasury bills from the from the US uh that are tokenized on chain and then you can borrow against that um borrow cash and like do the loop or do whatever you want with that and you have also calization building uh product like saving account uh B uh bing product and of course tii

um with spark uh spark using Mor for as infrastructure to earn yield on their treasury um so any of those actors can build and do stuff with with Mor so why on chain and why Mor um so first why onchain is because basically um so previously I was talking about trf where everything is like you have silos and uh the liquidity is fragmented uh anyone is rebuilding the same kind of infrastructures uh with their few Partners uh the liquidity is not open not anyone can tap into that while on a

protocol deployed on chain on a public uh blockchain anyone can access it um and the more liquidity you have uh the more efficiency you get uh because the pool is bigger uh than that means like for the same size of a loan you have like a less impact on the rates for instance so overall like just the rates and the the execution price Etc are better also it's it's running um like 24 hours over 24 seven days a week uh it's not shut down on weekends um you don't need someone else uh to agree on like your transactions to happen Etc everything every ver verification is done on chain instant the settlement is

like just a few seconds so it's very very powerful compared to like the one day settlement or even seven days in in some cases and um if you compare look I I don't have the price but if you do um um so uh country to Country transfer uh it can go to up to 10 20 $30 uh minimum to to enable that transfer while you can pay just a few cents on the um ethereum L2 sponsors um also like because you need just one one one protocol One Financial infrastructures as back end and you can build like many many uh product on top uh pointing to the same instance you get uh reduction of cost because not

everyone needs to create their own back end they don't need to run their own servers uh to have their own infrastructure and security teams internally uh they can just like reuse what's already existing and and the the cost is is ised by everyone um mofo is like fully mutable it has been auditing multiple times and uh what what that does me uh immutable is like the the logic cannot change over the time so nobody like when you inter interacting with Moro you know how it will be behave and uh how it will like your transaction will be executed so you don't fear about like a third party

going rug or whatever like you just need to tr the trust the the blockchain technology itself and and that's it and also I mean every the competition is happening in the open so every trades are open everything is uh uh you can see onchain who who is dep presenting what what's the TV of the the protocol uh which brings a lot of transparency versus the the try counterparts um so right now the state is that m is one of the leading dis uh protocol uh it's a second largest standing protocol with close to five

billions of deposited assets and um m laabs The Entity that has built the the um the mor particle we've raised like 70 m in total uh with top investors like Ribbit capital and Andre which are like one of one of the best investors um the first in in the fintech world and the second is in the tech uh tech industry so a bit uh a bit of history about more for so uh we stting in 2021 um so we were students at uh we were at University when we raised uh the first million um and and then we started uh building uh building

Moro uh that uh those funds allow us to pay for audits which is super critical uh because basically right right now for instance the current instance of mofo is just 600 lights of code but there's five billions of dollars on it and because it's fully open source fully transparent anyone in the world can uh have a view and and check the code and try to find some vulnerabilities so I'm pretty sure that you have seen um some announcement on like uh protocols being hacked or whatever um so uh security is like the top priority for any protocol uh in the space um in 2020 2 we did a second round with a16z and variant uh um we a few

months after we launched the first version of mofo which was called Optimizer I pass on how on the technical details but uh during bur Market we reached like two billions of deposits uh which is a m massive growth because the the whole Market was just uh priting and and M was uh uh getting traction so which was like very powerful and in 2024 we secured the third one round of 50 m led by repeat capital and now Moro is over five billions uh and we are on two networks so mainly etherum and Bas and we have recently deployed on a dozen um but they they have not been integrated

in the moro font yet um so here's a little chart of the growth of the latest version of mofo so yeah as you can see we nearing the five billion I'm not sure it's up to date but you can um find all uh all those data on the Goro dashboard so if you if you tap uh type Goro Dune dashboard you should find it up so um a few example of what uh what is like to to use more for so as I said you can ear yeld um that's one side and there's the other side which is the Bor side so let's start with the the earn side so

one way to access uh this Yi is just to Simply deposit through the the interface uh so right now on mofo you can like just go to the platform uh select which asset you want to deposit into more for and earn yield on top uh so you have like many many asset like usdc d usds usdt if wbtc whatever uh you should find like the the right asset you want to deposit uh it's very simple um you have BS on which you deposit your asset so I'll come back to to this it's a fully non custodio that means that you're only trusting immutable stack you can withdraw at any moment you're not locked um you own your coin which is

kind of the the defy atos and and and like cryptocurrency atos uh I can say I have a question for you um y like just if you can explain to the audience uh what is the over collateral is for the and under yeah yeah yes um PR the the B side um so Moro is over collateralized uh what does it mean is uh right now there's no notion of credit score what is a credit score it's like usually what is used for a bank uh to give you a loan um but when it gives you a loan usually you don't like uh you don't give assets

uh against like you just go to the bank and you say hey I want uh 30k to fund uh the purchase of my car and usually what they do is like uh they have a credit score and they will say okay it's um here the money and it here will be the rate it's fre person uh in the defi word it's quite difficult to have credit core it's not there yet uh some people are building this but you need a way to make sure that the people uh to which you you giving uh money will repay at some point right uh and and you want them to have this incentive to to repay you because then uh if if it was not the case nobody

would uh would lend lend money in that space so the the solution that has been found is to have over collateralized loans and what that does it mean is uh if you want to borrow let's say 100K you need to deposit let's say uh one order at 50k this can seem um a bit dump because like okay so I I need to lock 150k to borrow 100K why not just like not lock my my fund and and I won't be paying a loan or whatever uh the reason is maybe you bullish BTC or if or whatever you don't want to sell your your asset but still you want to have cash to do like I don't know purchase your coffee or

whatever uh so what you can do is instead of uh selling this e for Bitcoin you just deposit them as collateral on Moro and then you borrow against that um and we say over collateralized because the collateral that you're depositing is must be higher than what you you boring and in case um in case your collateral value goes uh below a a certain threshold then it triggers like what we call a liquidation event and what is a liquidation event is someone will repay your loan to protect lenders to make sure that they will be fine and that they will get back their their uh their fund but um so the Liquidator repay your

loan but they will take the collateral plus a bonus so let's say they repay the 100K what uh they will see is 100k of the collateral plus a bonus which is 5K why are there um do we give them a bonus uh this makes sure that there's a economic incentive for them to do that job which is B basically making sure that the market stay healthy um for every par is involved um and and usually this threshold will be like I don't know um maybe it will be if you have a loan of 100K the the the threshold will be 120k so if your collateral value goes below that that threshold then you'll be

liquidated if it's above then you're fine does it answer the the question s yes totally thanks for this great explanation uh someone asking a question like if you are working with the Spectra Finance te uh yes yes um so I I talk about those volts and and then I come back to the Spectra integration for instance uh because it's great question and uh we'll see like it would be clear like how can we work with them for instance um so how it works on Moro is Moro is you have this lending primitive on which uh you can create many markets those markets are isolated and what is a market on

Moro Market is a bunch of parameters so you have the collateral asset that you deposit to be able to borrow you have the loan asset that lenders will deposit so that borers can borrow uh an oracle which is used to price the collateral in the loan asset uh an interest rate model so an interest rate model is a an algorithm that allows to compute how much um interest borers should pay to lenders and there's a collateral Factor which is like the threshold I was talking about which determines like how much you can borrow against uh a given value of collateral uh so that's the different R parameters of a market and but you can have like many markets so as a lender

you may Wonder okay but let's say I want to deposit usdc on which Market should I do do it like I I don't know I'm not a risk manager Etc so on on top of mofo you have BS that can be deployed and created and managed by uh what we call risk Creator those risk Creator or teams of usually it's like Risk Managers uh that are used to do that and they will run the Vault and uh root liquidity so users lender will deposit liquidity into a vault like you can see on the right and what they do is uh they will root the that liquidity into different markets uh and those markets can have like different risk um usually the

higher the risk uh the better the yield so there is a trade-off here and what what a risk Creator can do is it can create a vault that is tored to specific risk profile so for instance you'll have BS that are super risky but like yielding a lot of um of interest to lenders and um and overall that are like a very um um like a very safe uh depositing liquidity into Market that are just like um against like a blue CH Market uh Blue Chip assets very safe uh they're doing the risk management so for from A lender perspective it's just like I deposit my liquidity and I forget it and the risk creators are doing the risk

management and then you earn yield um from Bowers that are like boring on on those different markets so here you have example uh those Market the lender is depositing if into uh at the end of the day W as if if Market s if Etc um on the Spectra Spectra is doing a fix uh fix rate uh lending and boring I think uh no not sure boring um I I may May mix with another protocol but anyway um they're offering fixed rate for uh the users and usually how it works is they use existing V that are earning variable rates and um and uh and that's why like a Spectra is using Moro is they are they

are uh using Mor b as a viable rate source and which then can be um transformed into like a fixed rate thanks to their protocal I won't go into the detail because I'm not a professional uh on their um on their own on their protocol but this is basically how they use use Moro as a yield source and yeah okay there's the earn demo maybe I can do the demo at the end if we have time but let's uh let's keep uh uh for now um so here we are on the on the Bor

side so uh the Bor as I say more for you have like many uh many isolated markets on which you can borrow um you can create an infinite number of markets and this is fine because because they are all isolated it does not increase uh the overall risk of the platform which is a bit different from other platform like a or compound where everything is mixed together it's like very it's like Landing pools so each time you add a new asset you basically expose everyone to that risk um so the more asset you list into the platform uh the more the riskier it becomes while on Moro you can like as I say create an

infinite number of markets and and it's all fine um having isolated markets also allows you to borrow at the lower cost C uh because as I say you don't uh face that uh that increased risk so you have like a better rates you can also uh leverage and borrow more for the same um uh same amount of collateral uh the rates is per Market which so it adapts to that specific risk profile that market and uh there's no fee that is Tak on the on the the rate uh how does it works um so first you need to provide collateral uh so

this is the overall collateralization side of thing where you need to provide the collateral asset um so if I take my example uh let's say I want to deposit RAC if to borrow usdc uh maybe I deposit 150k um I will be able to uh borrow 100K I could go until that the max threshold but then if there's a slight price V variation of rapest if maybe I'd be liquidated so I prefer to keep that buer and not be liquidated and then I can uh uh once I've deposited my assets I can borrow liquidity and uh then I like usually um the borrower side needs more active management because uh in case

like your collateral is volatile you need to um to check your positions and uh yeah watch out for liquidations and you can repay your debt at any moment um so it's like if there's no term on moo you can just borrow repay uh at any time all right so same I I ski the demo but uh we can uh come back later on so one case study of what you can build on top of Moro which is not on scope to defy but here is um an integration that is at the limit of the fintech word and uh defy so this uh this R case is a recent announcement that you may have

seen I don't know uh which is Mor for BTC loans on coinbase so coinbase recently has has um released their new product which is onchain loans through the main coin uh coinbase app uh for now it's only available in the US so sorry like uh if you in Europe in in the South America you can't access it yet but that will come um and it's in the the main coinbase app where you can like I mean um trade tokens and and cryptocurrencies in general um in the cash section now you can borrow usdc against Bitcoin uh through moru uh Deploy on base um so this is what we call the D5 M which is a

meme uh where with someone with a a mullet and what uh why the mullet is because it's p in the front so very nice U uh UI super simple ux um which is a bit different from defined General where it's a bit more complicated uh still you usually it's like many Nerds that are using defi uh because it's not as convenient as like the revolute of the word and and they're a super nice ux interface here you have more uh the biggest and first uh large scale integration of a defi protocol and uh

um um an exchange but a that is used by people that are not into the defi word and um and so they are trusting moru uh to do this and how how does it work is uh there's a lot of things that coinbase has uh developed to make this uh the ux super seamless so BTC obviously is not on on on ethereum chain right usually it lies um when you a coinbase user it lies on coinbase account so what they've built is a way to seamlessly uh move BTC from uh the like the centralized Co base account on Shain um on base which is uh it's a an asset that is called CBBC which is some sort

of a coinbase wrapper and there is a market CBBC usdc on Moro on which people can borrow uh from and so in one click it's using pasy uh from um and the and the smart wallet uh from coinbase and in just one click it's doing um deposit of CBBC on the Chain deposit as collateral borrow usdc and then the user uh is U receiving usdc not only on Shain but also in the the coinbase account so that if you have the based credit card like people can pay coffee with their usdc so it's really bringing um real world access and real word usage uh of defi

into the uh into the real work so which is super powerful more than powerful yes congrats and and so right now I mean it's coinbase uh which is a major step and it's opening the door for like many such product on top of mofo with other s exchange but also uh fex so you may have seen those logos like re revolute Robin Hood uh a bit earlier and um there's a lot of of things to do with these actors because what we think at at Mor for is you really need want to create that immutable governance minimized

permissionless infrastru es but obviously not everyone wants to be uh in a self custody mode or whatever and so if we really want to scale defy uh to the billions of users that exist into the planet then you need to integrate um fintech to the defi word and Moro is kind of like a pioneering that and we pushing very hard uh to do that so that's uh here I don't know maybe I can put that in the chat um but uh this is a demo of uh yes and this is a more of the I think I I can't um someone uh asks uh if we can share

the slide after the presentation yeah yeah sure uh and here are the yeah yeah I can send send them totally and you the socials so M apps account and my Twitter account so Ms and um right so if maybe I can try to share the video of the demo just stopping to share is there any questions uh yes one for um is landing and sing the same uh no it's it's not the same so um St uh staking you're not lending to your asset to someone else you're

putting your asset you're depositing them into like a protocol or I mean in a place where it won't move and usually is taking it's in the name you're putting your asset set at stakes and um usually to secure a network so on ethereum for instance you will deposit your if and you'll run a node um that is securing the network and making sure that all the transactions are done perform well um but if uh for instance like um you are not behaving the the right way then you'll be liquidated uh you sorry you you'll get slashed and this is why we say it's at stake because it's at stake and you may

lose it if you don't uh behave uh behave well while lending lending is you have you have some assets you don't need them um so you'll lend them to another party in exchange for interest and this party like will do like whatever it wants with that liquidity uh until it repays back the loan plus the interest is that clear oh thank you perfect I think so probably on could you do like a demo about more so I have video I think it's better uh yeah yeah so if we can pass the video else I need to up

let me share my screen again s right uh okay and then give me a few seconds more up can can you see it uh not yet uh

no you can sit um no and now oh yes okay all good okay nice uh so I skip this part and we'll see like I start with here up so here's um it's a landing page so it's connecting to to the page so here you can see has a position actually uh okay $5 it's not a big position so here is like um uh if you want to see your pnl or like I mean

profit and loss uh you can see everything from the dashboard and here uh usually once you have like a depos earn position you can see the the native AP y so what you're earning and also the rewards uh that you can earn so sometimes like we have projects uh that are like uh uh creating Rewards program on top of Moro um and um so like we're just buting moreo on our side but uh there also like a moonwell for instance is um like sending well rewards here on the bottom you can see the list of bols uh that exist and uh and here you can see the Creator uh so as I said boths are

managed by risk creators that are doing the the risk management and uh making sure that they are depositing liquidity into safe markets and reallocating that liquidity depending on market conditions uh so usually they are will try to optimize the rates um and and uh yeah and so here like here you have the Vault page so if you click on the Vault you you'll see the the VA page so how much total Deposit they have what is the uh interest rates Etc and on the right we can you can like select how much you want to

deposit um so here you have JJ so JJ is doing the video is playing with the different thing like uh that you can do to uh have like a Ser history of rates of a week a month or three month and for the transaction so here you can see the the market allocation so when users will deposit their liquidity it's depositing uh that liquidity into those market and uh this is why we call this Market allocation it's because the funds are allocated to all those markets you can see that most of the the liquidity here is deposited into the CBBC usdc

Market which is the one by the way that is used by conbase and you have like many more analytics thing that you can see uh so some people don't bother about that they just want to deposit and that's it but some are really care about those statistics because I don't know it it creates um like they want to see how how much they can trust the the risk creators how they have operated in the past um so for instance here JJ is like depositing $1 and uh you can see that uh what will be the effect on your position uh what will be the the the the balance update Etc so you have an

overview here and you can deposit into different volts into the same transaction so this is what he has done here now is is using rabby [Music] um so he's signing the transaction okay I think yes rejected the transaction I thought it in this video was doing doing the okay so that quest for the up uh I can share the other

one and here it's on the Bor side let me share my screen again I cut my camera because um I'm in coing space but I'm afraid that have okay so here the on the bro side let me so again we have that uh that rewards Etc um I think think so on the B side when you click on the on B on the interface you have a list of all the markets uh with some filters so for instance as collateral you can select if

BTC Stables uh as loan you can do the same you can also like you have some some sort of a search bar on which you can like select your Market there are now there are like dozens or even hundreds of markets depending on which network you you are and when you click on the market you can have like a basic information again um like on the Vault and earn side uh you can see this is the CBBC usdc Market um you can borrow up to 86% of your collateral so um if you deposit 100K as collateral you can borrow 86 um uh K of usdc and here you can see all the volts

that are depositing into that uh that market and let's move a little bit um so here you can see the instantaneous rates I was talking about the interest rate model earlier uh early on so the interest rate model is basically you have a uh the utilization of the market uh what what is the utilization is for instance if there's onek of liquidity and those onek are all borrowed that means that uh the utilization is at 100% if it's uh the utilization is 0% that means like nobody's boring on that market uh usually the target is

90% uh with computed that with like it's I mean the protocol team that did the math um and usually when the utilization changes over uh over time the rates also adapt so here is is sliding for instance at 90% maybe the rate is at 6% but at 0% the rate will be like 1.5 um so the rate is usually reflecting what's the actual uh Supply Demand on a given market and then you have like basic analytics like who who are suppliers on that market Etc now when you yeah no no that I will

ask you after okay okay um and and then the process uh is to First Supply collateral then uh borrow uh oops is like yeah so if you want uh to to borrow you need to deposit some collateral so here is putting like a one one 100 of one if and boring five USC and you can play with your position and you can see how far are you from being liquidated and once you're fine with your position what you can do is like just click on the review button and uh and then you will be a

trigger to execute that transaction on on Moro um so this is the same process like then after you review this into your wallet and you send the transaction yep uh what was your question sen uh there is already some question on the chat will has Reas what happened if I were used and deposit BTC if BTC price go down um so um this is uh coming back to the the over collateral um over collateralize side of thing where usually the you should have like a have a buffer to take into account

those kind those price drop in the market so you'll need let's say um let's take my very first example Le where um if you want to borrow 100K you need at least 120k and this is the threshold below which you'll get liquid liquidated so obviously you won't deposit 121k of uh Bitcoin because it's too risky maybe you'll get liquidity just because tomorrow the Bitcoin does like minus 5% which can be can happen at any moment so what you'll do maybe is dep was it 150k 180k something like that to make sure that uh even if there's a price drop of of I don't know 30% 40% you still

safe uh so usually people take um a margin to make sure they don't get liquidated or others don't won't put such margin but they will actively manage their position and maybe like repay their loan and and I mean CL their position in case uh the the the Bitcoin price like decreases too much um does Mor get a commissioning refund or borrow amount uh no no no no or how does it make money um so there's a way is um there's a fe a fee that can be activated at the market level uh by the um by governance

right now it's not activated um and um there's no no real plan to activated because mofo is mostly focused on growth right now but uh and if it takes the fee it should be very low uh because in fact right now the the M protocol is under business Titans that means that uh you can't really like for the code and deploy the mor protocol uh you need to to get the license but if the Dow switches on the fee then the the license becomes fully open source and anyone will be able to uh deploy new instance of mofo uh this is something that we've decided at the

very beginning um so all that to say that it's not activated yet but it can be okay thank you uh so yes my question was more related to governance because I think it's something really important in thei protocol uh so basically which kind of uh decision can be vot um with the mor for governance as a users right um so the fee switch that we were talking about is ex exactly something that could be uh discussed and and and voted uh by token holders um also token holders can decide like recently we had what we call M grants

which were a way to fund projects um uh and builders on top of mofu uh with M tokens so M token holders could decide on where to send the money and which project to fund uh so that's another po it's basically like treasury some sort of like treasury management uh also at the mor protocol level what they the the governance can do is list new type of interest rate model uh new close factors um and and also uh if the Fe switch get activated who is receiving those uh that fee so this is another thing that the users uh the token holders can do here um and this last question more

about what's next for M what's the road map actually for the six six next months so some are confidential so I won't be able to to tell you but um some of us are uh we we we are expanding on two new networks so at the very beginning we were only on ethereum and this is just like last year that we deployed on Bay and recently we deployed on a dozen of Networks of L tools on top of mofo and the goal is to uh deploy and uh give access to uh any users on any Al TOS to uh the mor for instance and unchain unchain loans right uh so we're working on on this um there are also many front-end providers

like building interface on top of mofo to to let users access to mofo uh which is a super cool thing because we don't need like on our side to support uh it's costed to support a network so they will do the work uh for um instead of us and uh so that's one thing and also another thing is um as I say like pushing for more integration and and fintech integration of the defi space in general and then and especially like with Moro uh we're working hard on on that front uh where we want to uh let users um from the uh I mean real word users get access to uh Defi and uh in a more efficient way of accessing Financial

products thank you for that really like the concept of going to the fintech side and not staying especially just uh in crypto side def space and uh yeah thank you very much for for your presentation today uh about moru itself how does it work and so on and so tomorrow yes we're GNA more explore um the building stuff uh integration side and also uh the ground side uh so probably I think it's it's something cool um and feel free feel free to prepare any question uh you may ask for tomorrow and so on uh don't hesitate

like I mention m is a for that so yeah yeah yeah uh it's great if you can um like yeah feel free to ask any questions nice so let's say tomorrow or all good on your side yeah perfect thanks uh thanks Solen and thanks everyone for joining us today um have a great day bye bye