NFTs & DeFi: Aave Founder & DeFi OG Stani Kuchelov Explains

Transcript

[Music] d5 slate team [Music] what's up y'all real quick if you like the d5 state content on twitter and youtube and sub stack please please give us a like and a subscribe on this video on youtube and join our channel join the community we'd really appreciate it we're pumping this stuff out for you all as much as we can and we really enjoy the support and the community that we've built thank you very much enjoy holy cow buckle your seat belts ladies and gents probably mostly gents listening to this one because oh my gosh we are on the downfall of the roller coaster today robbie's face is already red as hell

because we are down and out but feeling better than ever we got today the ceo of abe stani here with me and rob i believe rob is in a classroom like it's total scholar i'm here in my basement with my hoodie on and my two gets cold uh but the markets are hot the d5 is hotter than ever be bsc and solana and ethereum and twitter fights and oh my goodness all sorts of stuff going on so what we're gonna do today is a bit of a ecosystem tour of d5 kind of what's going on um and just talk about all all the applications that we can um composability l2 l1s all these narratives and thesis i'll give it over to robbie

let us know how he's doing and then we'll hear from stani yeah yeah man i mean markets are down but it's another beautiful day outside as you can see i'm very studious today up early grinding there's so much to do the f killer narrative is in full force rampant we're gonna talk about that and so much more um we like you said we got the founder and uh not well founder ceo uh the main the head honcho with us today so i'm super stoked uh to hear from stani and all of his insights uh from around d5 so i'll make that my intro quick uh and i'll pass it over to stani

and uh i'm you know how are you doing today man pretty good but it gets quite excited so uh my my kind of like daily job doesn't look into markets and also that's why i'm kind of spared but uh yeah i mean it's uh it's it's been a bit cold so so what did your day look like today like [Music] you woke up you got to it actually no one has even asked that before but uh yeah i wake up uh i put some coffee you know do my morning stuff you know brush my teeth but then uh you know i stopped working you know and i started to first thing i i definitely look at uh

you know the protocol uh different values there you know metrics uh collateralization ratios uh so that all the data is quite important every day so so this is something i do uh in the morning and evening and during even middle day so when you were running something like a decent transporter protocol diva vehicle that is very early in its years you know the version one is three months old even though it's like audited five different uh auditors and and also there's formal verification and the the previous protocol like was roughly a year old all of the articles are still like kind of like normal things so

you need to keep on eye all the time and also kind of like i read the stuff that is going on in in in in governance and what people are talking about there and trying to kind of like figure out what's what's important what's not and of course like a lot of time goes into uh just brainstorming with our team uh with the technical theme operations uh different stuff that we can build so that's like that's like uh and i do have like a very big boring part in my my daily job related to management and so forth which is which kind of sucks you know if you want to be a product founder and you have to deal with uh you know that kind of uh operations that might not be

directly into your product and might be just because of some other requirements uh they're definitely not it's not my cup of tea and uh the more i can work on a product that's uh the more happier i am and yeah but yeah mostly on product now every day yeah i remember we were speaking with chao wang quite a few months back and he was explaining the difference between speculators and founders and how effectively there's speculators who basically get to spend all of their time exploring all these different new things and new ventures and new projects and such and then there's founders who stick to a vision and just grind it out for months and years and years and you know as you said like there's going to be ups and downs

and things that you don't like and and do like um but i mean hey that is what being a founder is and i'm sure in there somewhere you're on tinder getting some more females into d5 but we won't go too deep into that part yeah yeah we usually we use this app called hinged here in united states no but actually let's say uh that's it that's one thing like you know you basically d5 for morning to evening you know especially like times like you know the the comedy and everything actually i even think about it you know maybe it's you know one of the reasons that why you know there's more people coming into crypto space and and you know it might be that there's more time to actually explore it's probably the these opportunities

but uh one one interesting thing you said about the like uh the having a vision and then you know ups and downs sometimes and narrative changes quite a lot so it's very difficult to quantify you know like you can't plan easily let's say here's my roadmap for the next 12 months and uh or the next 24 months and we're going to build this and exactly this particular way because it might be that the narrative shifts and it shifts like a weekly daily monthly basis to something uh whatever wherever the network effects are are going or someone makes an innovative progression and in that sense like uh it limits your ability to maybe uh build things like like on a longer

vision but i i would say like you always have the vision but you will need to adjust as you go you know you might want to you know empower people get get more people involved into a transparent markets like like of it and you know have global savings accounts what we're doing with the uh a tokens you know by holding them uh and and you have this objectives but then again like what you do product features and so forth you might have to uh you know align a bit or you might even have to create a new product because you need to fill a gap in the market as well so you need to have to have this flexibility all the time yeah that that sounds like a great segue

into some of the composability uh functions of ethereum and now some of the these competitors that are coming up um because you mentioned you know ave in particular but just generally around d5 these products have to adjust as the network effects and the narratives change and that might affect your product it might make you build a completely new product um so there's plenty of composability in ethereum and that integration is really where it seems like the most adjustments happen you know taking new uh forms of collateral and offering yield on top of those what are some of the narratives that you see right now that are the most impactful to the existing projects and

any adjustments that you that you kind of see on the horizon at a mass scale yeah i think like quite a lot of like the narrative is focusing now i'm getting liquidity into d5 so i i don't blame because you know uh it's a good thing like the space needs liquid it's liquidity you know the currently like if you deposit your other you basically get like uh above 10 apy which is incredible compared to what you will get in the usd deposit account in traditional finance and uh what's kind of uh fascinating here is that uh you know as as even more interesting like developments

could be happening in how to get liquidity out of the efi and potentially in a non-collateralized way so how how you can take that liquidity you know have some sort of trust network and and get that liquidity into even traditional finance to for example businesses that uh otherwise will not be able to get uh liquidity in scale and and use deep file kind of as their competitive advantage you know and and scale their business models and we're trying to achieve that at the same time which is kind of tricky because when you know high deficit rates mean also high borrowing costs but over the time as more liquidity will come the next thing to solve this is

practically like how we get more consumption and we're trying to build this kind of bridge to under collateralized uh credit with this credit delegation functionality which is practically a way of uh uh of the depositor who deposits into the protocol to earn interest they could actually delegate their credit line to someone else who would borrow on their behalf uh and and that's like 70 of the depositors they are they're not borrowing at the moment so it could allow you to delegate to a financial institution to a friend or or to a wall that basically smart contract wall that just does some particular strategy and

and there isn't risk of even credit there but i'm interested in actually creating this this great network not myself at all but basically support those projects that are trying to solve this issue directly yeah andy and i actually have a common friend um who introduced me to d5 early on um he works over at maker dao um the make it out foundation and one of my biggest hesitations to uh just opening my mind to the d5 concept was the lack of under collateralized loans you know in my mind i i didn't really see a strong use case for over collateralized loans now you know seeing the inner workings of

of uh the transfer of liquidity you know obviously there's a use case there but it sounds like credit delegation is that next step in order to supply businesses people in traditional finance with undercollateralized loans from the crypto ecosystem yeah most definitely and i mean if you think about the loans that exist in the world currently like in terms of student loans or mortgages or you know any sort of bank loan they're pretty much always under collateralize like nobody really goes to the bank with a hundred grand and says hey can you hold this for me while i take 50 like that doesn't really work or that doesn't happen right you know because you have the money um but you know some people use credit

cards and such and i mean speaking of these narratives and composability uh i'm gonna pop open our screen here um and we're gonna hit on one of the biggest narratives of the absolute week which i mean these things change every other week but that is nft so like no other we've got avagachi now we kind of moved from undercollateralized loans here to nfts quickly so standing if you have any more comments on the credit delegation or um the nft or or the undercloudized loans please i i would love to explore more ariganchi yeah me too okay so let me just be honest i i i haven't really used avigachi here before so what am i looking at here stone i'm look at the dashboards we've got the ghost token the vouchers the raffles yes so what's interesting here is that

uh i mean the idea of avogadro like in essence like they they're practically building a game like avigachi is an ecosystem project within within within so what they're doing is that they're they're they're allowing you to buy this uh ghost token which is a governance token but at the same time you can use it as a currency to buy portfolios now portals are more or less uh a way to buy those collectibles avogadro is it's kind of like resembles like tamagotchis so they're like uh living collectibles uh on chain and they have this like ecosystem of wearables consumables and and whatnot and

one of the things like uh what you do with the ghost token is is you buy the portal and then in this portal you have various avocados based on the rarity factors and then uh you actually don't get those collectibles right away but you actually get them as you deposit your funds into of it and the more you save the quicker uh you unlock those uh collectibles the other watches and no way yeah this is what's what's cool about here is that uh the other questions are practically uh that they're connecting nfps defy and also with a certain behavior which which is helping people to save more and this is like this is very cool

and the way they structured everything they they practically did uh they actually have this like a bonding curve for the ghost token and you can buy and sell back from the bonding course and you don't actually really understand that they have even that and it's this is probably the first like successful guy called like which is basically uh uh a model that with alex withering uh actually proposed where you connect you combine uh icos with uh dowels which is you you you sell a token against uh uh and you get against it for example dietary and whatnot and you give instant governance power to the token holders

and at the same time uh you also uh give them the power for the treasury and then the treasury the governance has this kind of attack mechanism that opens certain portions of uh of the treasury to the team to continue building and so forth so like actually like this like daikon model i i'm talking a bit a lot about it because it actually is one of the least utilized uh ways to create communities yeah and and govern the communities and cover the treasuries and and that's actual real fair launch because here you can allocate some of the uh some of the governance power to the founding team or or not even have

anything but you give direct governance to the uh uh community and governance of the treasury which is which is amazing and people should do more but in terms of like the collectibles this is this is pretty cool stuff uh what yeah what's happening here real quick what you're saying about avagachi shows basically the thought process behind creating a real value uh proposition to ghost holders to ave users and to all the community members alike um you know and and that and that gets us into these collectibles like you know what value does uh these collectibles have like you know where does it come from like if we just pop over to open c

right um you know like who's whose job is it to be able to come on here and explain to us or um you know price these out for us right like like what are these really worth um you know i'm curious to kind of see how you tie that in with abegachi and just like kind of the nft art craze itself yeah i mean as it goes with nfts you basically own the neta data right so you that's that's the ownership there that represents something so it could be the same thing as you look at a piece of art or let's say a skin in uh fortnite so fourth is a good example because important

you know when you play the game uh if fortnite closes someday if you buy skins and fortnite decides to close down you know you lose your skin you lose all the value that you actually purchase them and skins might cost something you know they aren't free always in most of the cases you know and with with the nft's ecosystem what you can actually do is that you you can you can take you know uh that ownership and give it to the the ones who are actually paying for that so that's uh that's a big thing that you can actually achieve and this is possible because it's the an ft ecosystem and you can also port your skin so imagine like uh imagine that you buy skins on fortnite and could actually go to another game

that doesn't have any relationships fortnite but some developer just created a a awesome game there you know and you can bring human discs closer together so that's pretty pretty cool then yeah yeah that's a that's a super cool analogy um i can't say that i play too much fortnite or or like the common multiplayer games but the concept that you're able to essentially virtualize your character you know bring your uniqueness into a virtual character and then um composability between those games right like uh there could be a andy or stani character in fortnite

and you know you might be decked out with some outfit and a crazy hat and a cape or something and uh those skins could translate to some other game that runs on you know maybe the same blockchain so i i like the essence of composability that we're already seeing between liquidity protocols and how that can transfer to games and uh composability of unique characters yeah and i mean it's it's obvious exactly probably to us but the uh i'm waiting for this to load but it had a tagline um and it's you know per own one of one of x so this this idea uh oh

am i losing connection here uh oh think i think you're back you you cut off for one second okay um but yeah this idea of owning so much data data in it so basically it's it it consumes your bandwidth completely when you're when you're looking at open open c yeah wow holy hell is right i'm just gonna i'll just gonna pop off here back to abugachi um yeah no but that concept of the digital scarcity being real in the world is i mean i i mean that's huge that's kind of why bitcoin is that's i think one of the huge huge narratives of bitcoin is this idea of 21

million um you know and similar to this nft this ability to have one of one of x you know even if it's literally a black screen but if there's only one of them in the world you know there might be somebody out there in sort of a sense of a greater fools theory that is willing to also own that one of one and purchase from you um so i mean i guess like the last thing on on nft's robby unless you have more is stannie my question is do you think there's um some serious merit here to be had or do you think we're seeing a bit more of just kind of like the greater fool theory uh can you repeat that yeah um do you think that we are seeing some serious uh an

actual value and merit being created uh when it comes to nfts or is it just kind of a series of the greater fool theory playing out well the thing is that nft can represent anything that's the thing anything fun like non-planetable so let me ask this way if a if erc20 which is quantitable token which is ft not nft so if ft can actually represent a value of one dollar that is somewhere in the bank account uh why wouldn't let's say an nfd represents some other real world value and why wouldn't it if he can represent

value from the real world why wouldn't it could be representing value that is in digital form you know so that's the thing kind of like if you look at even like i i think like what's interesting about nfd is now is that you know it's empowering the creator community so like the early adopters now that are actually uh you know in in in in very highlighted at the moment in nfd space is definitely like the creators which just practically be crypto artists and and which is amazing because finally they can be empowered and and and incentivized and secondly it's a way to onboard into the ethereum ecosystem without actually having fiat the same is get going what they're doing so kind of

like uh my question here is that like if it's possible why not and also like if you think about something like uh we value you know we value some artists that are playing songs we value songs we value art you know like there's art that costs millions of dollars and it has it has a basically value you know and quite quickly the value comes very quickly when people are you see that someone else is like you know attracted to it this is crazy i don't know how much you guys are bidding on on let's say an open source and i'm one of those guys when i saw some see something uh and i like what i like

i open an auction you know so let's say the the auction starts and you know a bit and end of the day i'm always losing all of the bits because like all of the auctions because like i get busy on doing something else and you know i might do three rounds of bidding or four and then i don't have any more times a bit and i noticed that you know when someone comes and shows that attraction like then you know you have this circle of like more people get interested and there's something something there that's very social you know it's how we humans are if you like if you like something other people like if your friend likes you have this foam oh thing and it goes the same thing in anything we do even like actual like

you know normal financial instruments so it's all because other people are valuing if you're valuing it then someone kick-starts the whole process you know i thought a lot about about um you know making sure that the girls know that i have a digital art collection you know i've thought deeply about that hey ladies check out my digital art i'm just kidding i'm just kidding but yeah no i mean i like it i mean it's it's it's that concept of the collectibles and the and and just kind of what what is like what is the value that is created well it's what the people assigned to it it's what people agree upon it's what you know what we can collectively agree and i think out of everything the idea that garyvee is tweeting about nfts

i mean just like the popularity for ethereum uh as a whole is just blossoming um yeah rob let's wrap it up on the nft's any any closing thoughts i i think stanley summed it up really accurately like you know we talked about how these uh nfts could translate to skins and you can use them in some use cases you know that that might give these nfts some merit but the valuations we're seeing there's clearly um more to it than just the use case that's available right now and i think stanis summed it up really well that you know at the end of the day it's um

someone else stimulating that value for you and i i guess that's the greater fool theory in a nutshell right you know someone someone gives that asset value and it not only um makes it valuable to the rest of the community it's more of a perceived value where oh stani he really knows what he's talking about when it comes to d5 and crypto that must mean that this is worth something same thing with garyvee he really knows what he's doing in in marketing and uh digital sales there's got to be some merit to this um so yeah if that's a greater fools theory um it seems like that that is the case

where there's some sort of perceived value that is continuing to rise based on um the value that really is stimulated from the from the limited use cases yeah what's interesting here is like i i definitely agree like let's say uh bidding on something and having some sort of expertise will definitely have a uh some sort of like uh interest there and i'm usually bidding from from a a kind of like an account where you know it's it's can't see that it's me you know there is no association you know and and kind of try to do it as private manner as possible and still you

know still with even like having a wallet address with just you know if you eat there and and being able to bid things and people like some of the stuff that i bait has been there for a long long period of time let's say in somewhere like in in in a meeting platform that there are many of these and and just like when you fix or something it just starts to go so yeah i totally agree like there is there's always like value people value each other and also kind of like want to follow you know sometimes you just the reason why i'm dating is because i like something there's some sort of message that makes me like uh excited and that's why i'm doing that

and i yeah it's i don't think i will stop it you know i will be bidding quite a long and i i think it's just uh i mean i i bought like crypto punks but it was like that was probably one of the first stops i i even like interacted with and that's just shows like kind of like you know if i was was doing back then and other people and you're doing it now it's just like now those those protocols get more exposed you know to to wider audience so yeah yeah the the crypto punk growth was crazy that's that's kind of funny that

that was one of the first ones that you've uh they've interacted with i just remember the cryptokitties clogging up the ethereum chain that was i think we were speaking on that earlier um all right guys let's shift gears here to to the money talk let's go into the future of france and um let's get to the we'll get back to cuenta by the way can you guys see each other's faces or just the screen uh i see the screen yeah okay cool um all right so the first concept that i want to talk about uh stanley and then rob it's all you to take over after this one is on a broad scale sushi swab versus uniswap what the heck has happened from your kind of view as a founder in

the ecosystem obviously engaging with both um using i'm sure both every every day or every week right um you know having sushi now as collateral uh on ave obviously uni's been there a while right using both seeing the liquidity grow seeing onsen just all these things happening um yeah i guess the question is on a broad scale what the heck just happened with sushi swap and uni swap and then i guess on the tail end of that kind of what do you see uh over the next few months and years with amms in particular yeah i mean the challenge for unislop was that you know their philosophy was

was pretty much on you know uh building uh building products in a way that you know they have a company behind maybe there's some way to get fees later i don't know what what what was their concrete plan besides the the idea of adding fees later but clearly what's what's what's interesting in vidify is that actually you know communities are stronger where they have something in common you know besides using the products being stakeholder like community governor stakeholder that element was missing in uni swap and

useful always been a kind of high uh project where especially like in doing 2018 19 very not favorable for tokens and so just basically worked unislop and added a token and was able to bring community together and that definitely uh changed the narrative uh quite substantially and that just showed enforced actually unicef to do that token i'm not sure if they had a plan to do that but they they didn't have any other choice i mean otherwise like the network effect would have been

working against them but i think what's what happened is very good now you have to get protocols with uh community governance what else you want you will you basically didn't get just one thing you got like two things and and also like you could argue that you know social swap copy the code and you know work then you know there's nothing new to that i thought like in that respect because it was kind of like a torque but what's more important is like how things evolve from now like how how unisoft will evolve their protocol how sushi swap will evolve their product and how how the communities will look that's that's that

will be fascinating yeah yeah robbie there there's certainly a strong community around both tokens but it it seems like there's a more um just a more committed community around sushi swap um and like you said it's you know almost an identical product in the sense that one is a fork of another um but and i haven't used sushi swap too much and the only reason i say that the community seems a little bit more committed is because they they really rally around the governance proposals and i think um when sbf

took over sushi swap and really kind of revitalized the whole project um it added a sense of like power and that you know there are uh opportunities for other amms to compete with uniswap and siphon off some of their um volume so you know i i don't really know if there's ever going to be a winner of like an amm that wins out because they're each you know really uh good and beneficial for the ecosystem in their own regard unit swap was a little bit behind the pace when it comes to implementing governance so i think that's going to serve sushi swap pretty well um in the sense that they have a committed

team behind spf the team at fdx and the the community and their governance platform is just um you know it's been there from the start whereas uniswap started off centralized and then had to decentralize it over time with their uni token right yeah also i mean i would i would object slightly on the governance honestly just like i think governance is is important i mean it's it's a clear it's a clear defined winner in this scenario you're totally right because uniswap uh basically has never reached quorum on their governance which you know might be by design you know that very well could be by design um

we will we'll never know until we you know have quorum um you know and sushi does but like i think the main thing that kind of hits me is just onsen and this kind of ability to have constant rewards right like if you think about the way the system's set up it's like we've got simps and we've got like simps so we've got one group of sims which is like and bear with me here we've got the people that are you know the speculators the d5 users the d5 the gens right what what are they after they're after the highest yield right they're after getting money getting sushi tokens getting farms getting yields making money um and then you've kind of got the other group of sims which is the sushi swaps and the unit swaps and

uh no offense but the aves and the badgers and the d hedges right and kind of what what what are these protocols after because what did stani say is like the biggest narrative liquidity right so you've got these two groups of parties that you know each one has to satisfy each one to attract each other um and so i think i would have to agree with you in a sense that sushi has been has done that from like a community sense um you know but the only objection that that i have was i i think it's probably because of the emissions in onsen and in their permanent farms and kind of less so on the governance however obviously the governance of uni is what kept it from having any more emissions um you know but to each to each and

their own um yeah i mean that's kind of my broad-based view yeah also like what's what's interesting actually it's not like it's not the forking part i i'm more interested in like what we can build you know uh we for example we built everything on all of ourselves uh and and and but we we started with very proof of concept over like years ago even and now we're still building a completely new version of like the next next iteration and and kind of what's interesting is like how you can build because end of the day like the liquidity goes where where actually the innovation is

and uh where the efficiency is and the brand is at the same time and to get there you have to have a good even constant constant innovation because you know there's no competitive modes in d5 you you you pretty much uh you know you you you need to innovate all the time it's it's endless and things are moving super fast and it just gets even crazier and crazier over time um until we have enough talent there that we can uh you know handle this this this amount of innovation cycles and have more people in every theme i mean if you look at linux there's uh two and a half thousand

uh developers on each linux release and uh we don't have that many in in d5 like which we need to have and this is where we are aiming how can we bring in more developers whether they're fresh out of high school fresh out of college and you know kind of new to the ecosystem or if they're in an existing ecosystem that isn't interacting with crypto and bringing them you know across the border um have you seen any narrative in particular that really is appealing to um developers and the people that can actually you know effect change on this ecosystem um yeah i guess that's the question is

there any thing in particular or or something that you would push uh to the developer community at a large to you know bring more people into our family here yeah i mean i've been thinking this quite a lot one of the things um i would say like we need more education that's the thing like educate people like not just like using things but but to build things better tooling uh lower threshold and we're doing very well like i mean we we're getting more developers uh our challenge at our base that like

we just don't have that much of like kind of like lower level stuff to do like we're looking for more experienced developers because end of the day what you're building is storing like billions of billions of for the value at some point maybe trillion so you need to build like with very much diligence but the cool thing is that we're going to that direction once we get more the more beginners we have the more we will have experience folks later so we're going to the right direction but it's all about education and all about showing like what you could do and this is why hackathons are good and this is why you know people should just get more involved in the governance of various

protocols and get grants and and that that's how you get started yeah also the biggest one of all in my opinion is the price like the number go up meme is like a meme but it it that that brings people that brings attention and that's i mean we'll see i mean i'm sure you've seen already sunny just an immense amount more over the last few months just interest in helping ave being a part of the team or um doing such um just based off the number go up and i mean it's it's it's it's crucial i mean what we're trying to do is be that educating force as well rob and i i mean as much as we are literally just learning every little thing it's like sometimes we don't even feel like we should be doing what we're doing

because like we're just here learning like what a flash loan is but like you know somebody's got to be able to get out there and try and do it and that goes with um you know any sort of developers or traders or farmers everything even product founders so um yeah i mean speaking of founders and kind of get more people into d5 we spoke earlier about when you hop on ave you know you kind of look at the numbers so let's have a look at the numbers um and i kind of love to see what you kind of look at and think when you hop on so i assume you come here and you kind of look at the market sizes and the rates and such so just kind of kind of walk us through what you think about as you're scrolling on uh on ave

well i see like crazy crazy deposit rates yeah at the moment but yeah interesting here is this like there's multiple markets of it so now now we of course like a we we have the version two but yeah the interesting part is that uh in the future there will be like various markets that you could just select and partake into so the the new market we're working is practically an amm market where we have uh units of albitus as a collateral we already did that for version one years of shares like a year ago uh but also you will have uh sushi swap uh balancer and kuipers like the uh dynamic market maker uh shares

as a collateral and what was the cool thing uh most likely is that that market is not only governed by it's it's basically on the market but it's a uh another market but it will be uh governed not just by the other token but also those tokens such as uni sushi uh knc and baal will have also a bit of governance uh voting power there as well because you know their communities know as well they're they're kind of like a uh uh you know they're they're they're they're community uh assets but the interesting here is that

you know this will be kind of like one of those rare moments where multiple protocols are participating together to govern something and i think it's going to be very cool it's very inclusive it's because it goes with the other ethos of being friendly being impressive and just like uh you know being more decent wise not what's more decentralized than allowing other communities to participate in your product governance that's that's amazing you know stanie before we started recording um we were talking about the lack of central lack of decentralization in binance smart chain and some of the other l1 can you describe really why that's such

a problem and how that could be a threat to uh the existing applications on ethereum or um kind of the liquidity that is running across all these blockchains um you know why is it so much more important to have that decentralization on ethereum rather than uh moving to something like finance smart chain where there isn't as much gas fees but you're sacrificing that with centralization yeah i mean the whole layer two is kind of interesting uh a lot of people are betting on layer two right

and it makes sense because transacting on ethereum is is expensive at the moment and i think we're just like i mean certain type of a transaction should go to layer two i definitely agree or to some centralized environment maybe i will save a layer too because it's way better than or sidechain because you know you get a bit of decentralization there and community governance like i don't like if you look at the centralized exchanges i don't think the issue is that they're centralized the the the bigger issue is that they're governed by like like legacy governance which is like a company or uh you know kind of like uh i don't know some other

but end of the day like something that actually like doesn't look into into the uh users and and what's the best benefit for them and and also kind of like a what's what's what they're trying to achieve and what when you look at what's happening in ethereum and and and also like d5 protocols like they have to work for whatever is best for the protocol in the ecosystem and the very end users and and they uh stakeholders because like otherwise if if you don't go to that road and you give let's say even like they give a like attention to the minority even like then uh there's always a risk that that protocol gets forked

even like you can afford side chains as well imagine there's some crazy stuff happening in sidechain you could just fork the whole thing and create a new thigh chain and you know and start from zero and not even from zero you you basically just continue a different kind of narrative so so that's the thing uh and and i believe like there is place for layer twos definitely but we need to understand that the ethereum network is is like the security that you're using is end of the day that secures those transactions like when you roll them up and i think it's a uh it's probably a way to go as well but also i want to just kind of like

cool down the layer to this question because people think that like lower transaction fees means like equally high security which is not the case yeah there's definitely the downfall and plus also a little bit less composability if um you know certain protocols are on different roll-ups or on different um blockchains or even on yeah like it was on different side chain all that but yeah i mean i i think at the end of the day what you said is the security uh for ethereum as as you know is just huge i mean there's no there's no there's no arguing that i mean there's backed by chain link backed by ethereum you've got you know obviously you know tens of billions of dollars that are securing an ecosystem and you know

you can't see the same um elsewhere on different chains but also i think that the idea of bringing on different chains different l1 i mean in specific is great it is this wouldn't be d5 if it was all in one chain there wouldn't be any decentralization if it was decentralized one chain there's multiple chains just ends up creating more options and what what what's the whole point of crypto in my opinion it's having the option to go elsewhere with your money and so you know those chains um they kind of give you the option to be elsewhere as as well um you know and and that's super crucial speaking of kind of other chains and other protocols i'm gonna pull up defy llama here um and uh just kind of walk through some of these uh top top protocols and uh standing or rob if

if you all have a few words to say about any of these would love to just kind of hear like you know just what you think so let me just pull this up and we'll go through some of the top d5 protocols and uh run them through all right so wrapped bitcoin that's a huge one um run bitcoin or rap bitcoin and why standing which do you prefer or do you have an answer i i don't have an event like a preference i i hope it's like equally people use kind of somehow like distributed way i guess rap bitcoin has been uh for a good period of time uh and it's it's there's sort of institutional players there as well backing it but i don't have opinion in my opinion like the more diverse ecosystem is

that the the better and the main thing is that the system is to be secure in sound yep maker dao is gets a lot of psyops on twitter but it's top two in tbl yeah yeah definitely but i would even like not keep uh wbtc here here because it's abrupt asset it's like yeah you can otherwise like rap eat will be probably yeah right yeah that that's kind of a weird one um then you got ave ave is up here number three baby number two i know i i know i know that yeah i know that project nice cool yeah yeah oh look at this right on your ass standing right on your ass little compound

yeah i mean it doesn't i mean this is this is fun like practically like like these protocols that are that are on top those are like i mean definitely like the the they are kind of like the the base layer protocols of efi like that actually like many of other d5 verticals are consuming or supplying liquidity to you know aggregators and so forth and uh those are the most critical protocols in the terms of security as well so it's uh interesting you know when uh well i'm sure a lot of our uh you know previous friends and acquaintances have been contacting us with the recent price surge

but one of the most compelling narratives that i've heard from uh these quote unquote normies or no coiners um is that they you know they're upset with their bank for not earning interest on their money um to me that is the most compelling and impactful narrative that d5 provides um yeah the openness and um you know the the ability to uh have a have you know almost more privacy around your money that is compelling but uh it seems like the the interest is really where people are upset and they have a pain

point in their existing solution and that that is what can bring you know the masses not talking about the subset of the masses in particular with developers but just the masses in general over to d5 um and you know it's a sticking point and i think um if banks in particular aren't receptive to implementing some of the d5 protocols that already exist then it could be more of a a takeover rather than a merger between d5 and centralized finance i like the sound of that we should see yeah um it's real good

looking at the uh at the tvl change here it's um it's really interesting to see like uh like you can see the narratives of price with like the narratives of tbo like dodo um pancake swap phantom right all these coins have gone up exponentially over the past few months i think weeks um you know and it's interesting to see how the tvl lines up but um yeah this is this is a really good resource i i like this one more than uh more than a d5 pulse um it seems to be a bit more accurate and just a little less biased but 65 billion dollars locked guys i'm going to close the screen share there for this one um standard do you remember what the uh tvl was in d5 when you started

um yeah there was a d5 pulse i mean there wasn't there was only one decent first exchange so when i started like there was actually discussion uh it was after the the dow got uh exploded and uh what happened is that there was one decentralized exchange called etherdelta and you know they had some silly orders you know like people were actually thinking why it isn't getting any uh moth there's actually that kind of threat if you google like either delta y is is not getting any love and that's like the long long discussion and people are speculating why not and no one was using still you put a uh

order there it takes a week to to get a fail and uh but after that like we we came with evelyn a few months after awards like i think like itadala came on august or something and uh we came right uh january into covenant maintenance a minute later i think was uh may 2017 but and then when fiber came out in banker and whatnot then you know you started to get liquidity and then i i think actually like fiber kickstart everything like little delta was a good in the sense that there's like decks but fighter made it like very seamless to to swap swap like would it be so that was interesting bunker didn't do that well

because they had the model of bnt pairs yeah and and they should like i love the idea because but you need to do it differently in the way that the bnt is popped up token of all the transactions then you have like big champion people that all the everything is through so so actual pairing very fascinating like uh everything kick started so it's been a very big growth to be honest to to kind of build on that um that really method that kyber network used it seems like synthetics um kind of piggybacked off of that model where they have the sns snx token

underscoring a lot of the synthetic assets that are out there um and it allows them to trade with no slippage essentially infinite liquidity but they do it in a way where they're not only offering uh synthetic asses assets versus snx pairs um so i wonder if that was adopted from the bancor model or if it was really just um you know kind of a novel idea which they implemented differently seems similar for sure yeah and kyber and big they've been they've called synthetics the ogs of yield farming it's interesting it's it's interesting the concept how all this started and how ava used to be

lend in 2017 and you look at the price chart which i mean it's just funny it's just it's like land and then it's just like like it was almost like it was nothingness and then old stunning came along with it with the boys and the gals and brought it back to life and honestly that about wraps us up guys i am uh i'm thrilled to have have had you on sonic it was a pleasure it's a little late over there in europe so i hope you get some some good sleep tonight thanks for coming on and rob great job starting a great job as as as well it was solid thank you stony yeah we really appreciate that's awesome we really appreciate you coming on and uh yeah having ave as a as a friend that we can call in the uh industry um and yeah i mean this is

super to uh get the insights from a from a true og and uh someone who's making impacts every single day on the d5 ecosystem it's awesome thank you so much for having me here and uh yeah it's going to be fun and keep up the good work as well great peace