Solutions for Real People's Problems w/ Thomas Mattimore (Reserve Protocol)

Transcript

[Music] thank you welcome back to the strangewater podcast thank you so much for joining us here's the awkward situation those of us in this industry have found ourselves in we unflinchingly believe in the power of crypto to change the world and yet we're forced to reckon with the reality that as of now there really are very few use cases for crypto other than speculating on its own future use but there's a world of difference between no and very few use cases let's run through some examples

I can send money to my family even if they live in a country that happens to be on the USA's naughty list or I can store my wealth in US Dollars even if my country wouldn't otherwise allow it or it can flee a deteriorating Society with real resources all while keep keeping my real resources in detectable unfortunately the vast majority of people that could benefit have no idea that this technology even exists but fortunately we have people like Thomas matamore who are betting their careers on solutions to bring it to them today you'll learn about Reserve an app that combines thousands of real world

users in Latin America with a protocol that deploys increasingly sophisticated on-chain strategies and a team that as I always put it are doing the Lord's work giving crypto use in the real world before we begin please do not take Financial advice from this or any other podcast ethereum and decentralized finance will change the world but you can easily lose all of your money in the process all right let's get started Thomas welcome to strange water podcast thank you so much for joining me yeah

thanks for having me on Rex so before we kind of get into this conversation would you mind giving myself and the audience a little bit about your background sure um let's see so 10 years ago I was a mechanical engineer and then realized I didn't like mechanical engineering uh and didn't want to do that for the rest of my life but um jumped into Tech and so I've been in product management in mostly fintech in the last 10 years um and you know in that time it was always building mostly building tools and products that gave people better access to different Financial Services whether that was um like wealth management Robo advisors or more efficient mortgages if anyone

that's listening has bought a house you know how terrible that process is uh and then uh but I joined reserve a year ago um to lead the protocol team as the head of platform where I focus on everything from product to growth uh to you know everything that comes along with leading a protocol team and building building in the untrain world um but you know what got me into crypto I actually bought Bitcoin for the first time in 2014. um and have managed to figure out how to lose money in crypto in every single cycle over the years but Kitty decided I've always been really interested in like what are the things that could be built with this

technology uh and then in 20 you know like I use the decks I think for the first time in like 2018 I don't even think it's around anymore um but uh the uh I in 2020 um or 2021 maybe I got a loan from maker Dow uh and it totally blew my mind uh it was the first time that I was like wait this thing that everyone's been talking about that's coming is here um you know in a couple clicks uh and a couple transactions all of a sudden you know I had myself a bunch of die and it was this like magical moment for me I was working in consumer lending at the

time um and you know it took us 30 days to close the loan and tens of thousands of people to do it uh and it was still really really painful and like he has uh over collateralized margin loan is a very different product than a mortgage um but the the fact that only a couple people had built that protocol and written the code for it and uh that I was able to do it a couple Clicks in a couple minutes it was just absolutely mind-bending to me and I you know they were doing more lending volume than we were as one of the largest mortgage providers in the country and so that that was like a like well this is an efficient thing um and so that then I went down the D5 Rabbit Hole um and you know went into

basically every different type of yield farming that is available every different type of Ponzi scheme that was available at the time um and but I really started to think about like okay it's here I want to I want to jump in how am I going to jump in What are the um uh like what are the things that I'm really looking for and I just started talking to as many different people as I could um and I found that um you know I really wanted to work on something that had the opportunity for a great product Market fit uh and something that was useful for people today um and then also I wanted to work on like a core protocol like I wanted to like you know build work on the technology that is like the actual right and not like I think on top and so

um you know I I got connected with Nevin uh the co-founder of Reserve um who leads the overall project and it was just like immediately a perfect fit it was um you know stable coins in Latin America where people actually need access to stable currency and don't have it uh and working on this like really interesting protocol that I think enables some fascinating uh and actually useful uh products for people around the world and so I I can go you know I'm sure I can go deeper Reserve yeah for sure let's talk about I cannot wait to like jump into reserve and like the things that at least excite me about it but before we get there

um my question I had loaded for you knowing that you're you came out of uh Tech was to like really pick apart like how you saw the world differently from the rest of like the tech cohort and um when you in my experience the people that are in Silicon Valley today are perhaps like the most anti-crypto um just and we can talk about why if you want but um after hearing your real story it makes so much sense to me that the guy who was already looking at Bitcoin in 2014 was working in like traditional Legacy finance that has the problems that we're trying to solve and then having this aha moment so your journey is very clear to me but um before we while we're still um

hovering around this subject do you just have any thoughts on um why your experience and your journey into crypto was like kind of so easy and so linear and why most people that are working in Tech and even in fintech seem to have like such a more difficult time to realize that there's any value here at all yeah I mean look Building Products that get to huge scale is really hard um and the let's see how do I distill this I think the uh at the end of the day people don't sell Tech they sell products and solutions and what crypto has done for the last 10 years is in many cases sell Tech

and it's like uh like Netflix for instance has never advertised we uh and they're kind of famous for this back in the day but like we build on AWS and uh it's this massively scalable infrastructure like that would be insane to put a marketing copy right like the advertise like we have a great selection of movies and it's fast streaming right uh what crypto's done forever is they're basically advertising these really slow databases uh and why would we care about that and so um and they're at the end of the day there hasn't been any breakout products like consumer products and so

um it's you know I think it's really easy from a tech perspective to look at you know the Facebooks and the Googles and the Ubers of the world with billions of users maybe Uber doesn't have billions but you know looking at these tech companies with hundreds millions and millions of users and say that uh like do these products have kind of won like wow to use the thing that has like uh you know hundreds or thousands or maybe tens of thousands of daily active users like this is just like crazy guys right and so uh that's a really easy way um for people to dismiss it and then the other thing is that you know candidly a huge percent of crypto has been scams and speculation

um you know they enabled like crypto enabled like the best online casino ever uh yeah which it did uh and you know that that's a thing um some people like that but a lot of people don't so I think that it's like easy to write off uh crypto and defy and ethereum in general um as scams and ponzis uh and speculation and so that's like generally My Vibe on it um there's no like uh there's no centralized PR agency uh they can do a good job of fixing that that story and so it's a bit of a challenging thing uh that like the general crypto

Community has to do um and at the end of the day I think it probably happens from great products getting built that get widespread adoption yeah man I totally hear you and I think that uh when I'm talking to people outside this industry who accuse this of like everything including ethereum as being a scam like I have a lot of sympathy for them and like I uh there's like real stuff here that's very important to protect but um like the reality is is that like we enable some very bad actors and that those Bad actors spill out into the real world and I don't care if you're like talking about like retail being dumped on or SPF trying to like change the

government so it screws like the little guy or whatever but um I do I think for as much as like we love to dump on like Gary Gensler and SEC and all this stuff it's just like man it is the wild west here in um the the Debbie downers like they're not wrong so um but let's let's get out of uh Debbie downerland and let's move on to like what like there is something interesting here and there is exciting stuff here and like I'm an ethereum maxi I'll own it I think like that is what we're building but what is cool about ethereum is it lets anybody build anything on top of it and like one of those things is reserve so let's let's jump into that why don't you

um give us just like the elevator pitch of what Reserve is and then um I'm like super excited to hear you describe it and what you emphasize because um well we'll spoil or like there's things about Reserve that I'm so excited about that make Reserve like just different from like what D5 is today so before I tell you what I think is awesome about your protocol I'd love for you to tell me sure um wow thanks for that uh pump up intro uh so our mission of Reserve is to help fight inflation and give people around the world access to stable currency um we have a two-pronged approach to it uh one is on the protocol side where we have a platform that allows anyone to launch a stable currency and the other

is uh we have an app and so there's actually an app called reserve and 18 countries in Latin America um that does it has done like 300 million dollars a month in monthly volume um but what's cool about it is it's all real economic activity um whereas you know a lot of crypto volume is all speculation right it's people trading dollars for Bitcoin back again um that is actually like the vast majority of crypto volume uh the um but in the reserve app it's actually people paying at the store people sending money to their friends getting paid by their company via payroll uh doing cross-border remittances all that thing they're actually very little speculation in it and so

it allows people to go Fiat to stable coins and back and do everything that you know in the us where we are uh used to very like pretty good Financial Services um it it expands that access around the world and so on the protocol side though uh we launched the platform uh in October finished all of our audits in February uh the platform uh what it really does it allows anyone to deploy a stable coin or anyone to deploy a yield bearing stablecoin or anyone to deploy a diversified basket of yield bearing assets uh and you know our vision is that over time uh experimentation in the market will help us discover what is the best way for people to store wealth over

the long term um and not only store it but preserve it and grow it yeah that's like the high level like what is the protocol actually uh so when someone deploys uh there's actually three that are um live now three different people and companies have deployed stable coins on the platform uh one is called the USD this is the first one um it's a diversified basket of things like usdc and tether deposited in Ave and compound the yield from those underlying positions uh all goes to an over collateralization pull where people can stake their rsr which is our governance token in exchange in exchange for the yield from the underlying they are the First Capital At Risk in the

case of a d-peg and so two weeks in to this thing being launched actually usdc depict which no one was expecting right and um what's really cool is in normal course of operations for the protocol it can it can sell off at collateral or defaulted collateral and then make up the difference with the rsr and the over collateralization pull all before bags open their uh doors on Monday um and so it's like a it's a pretty interesting thing and you know I think that people in crypto and in defy uh don't value diversification in the same way as the rest of the financial World um and I think that that will become a bigger thing but you know like traditional Finance like diversification

is King right it's like let's make sure that we can reverse buy like our downside um have Diversified exposure for like various different types of upside et cetera and you know crypto for a long time there's been so many you know we talked about this a bit there's been so many scams that diversifying was actually like a bad idea right like do I want to diversify my Holdings into the top 10 things on coin market cap but probably not right uh in terms of like a long-term investment thesis but you know for stable coins we've actually um we launched a beta in 2019 that was called to RSV and it was just usdc Pax dollar and true USD and then in six month period we actually had to change

that basket three times because of things that were going on in the market and so like people change companies change markets change and so the ability to update a basket over time uh and adjust it based on what's happening in the market is really interesting and I think people will start to Value it more in the future yeah so okay I as you have split up the um Reserve into protocol and platform let's split up the conversation as well so and sorry just to be clear though is it fair to um is the protocol basically everything that happens on chain and the platform is like the app in the real world use exactly yeah so the app um the app is separate uh we actually kind of operate as two independent

companies um and so the protocol team which is the side that I lead um is just focused on on chain and so the protocol uh is a platform that allows people to launch these currencies and then um you know we are trying to help the ecosystem grow so that I could be sustainable in the long term so is it fair to say that um the like the app and that platform is like about like building financial services and then the protocol and everything that happens on chain is about building Diversified like safe exposure to those assets and then both of them are like valid and like could stand on their own but like you're building them together to build like a a one plus one equals three uh experience

exactly and so um what's really cool about stable coins uh is anyone can help them uh and they're really easy to send around right um and it's like a dollar that anyone around the world can use um the the app it's an off chain app um and it you know gives people superpowers by in developing countries where their currency is devaluing you know seven percent a week instead of seven percent a year uh it allows them to use these stable coins to store their wealth um and then actually paid the store with them and immediately convert to local Fiat well and so how do people experience this

um outside of crypto world so like if I am let's say in Argentina or Columbia or wherever just picking countries that I now have inflation problems right and uh so I download the app um I download the app am I experiencing this as cryptocurrency am I experiencing this as like a just like new age Retail Bank like what am I what like my first question is as a user um am I understanding what I'm doing it in a positive connotation yeah no it's interesting uh people uh We've our the app team has spoken to a lot of users and some know it's crypto and some don't some don't know it's powered by crypto

they just give it as dollars um and you know at the end of the day like your money in your bank account is just there's dollars somewhere and there's different you know layers of code wrapped around it stable codes are just different code right and so it's a uh you know it's a novel way to expose these things and give people access to them but at the end of the day it's some type of Treasury product that's wrapped and shows numbers on the screen right and so uh yes different risks for sure and you know like our app users see all of that the agreements and things like that in the terms of services and warnings um but uh but yeah like from a product perspective at the end of the day like people just want dollars uh and so we help them get those

and and so again I'm not trying to um pick you apart or anything but just trying to understand the user experience like when I like uh Colombia right I just happened to be there recently and is one of the reasons I'm super excited to have this conversation because uh here's some Alpha for real world like if you go to Columbia every other store like literally every other store is a money changing store and like that's because you know I think right now it's approximately 5 000 Colombian pesos is equal to a dollar and like it wasn't always that way it's like inflation is happening so fast and um that you know people use these money

changing stores to uh like protect their wealth and they pay like exorbitant fees to do it um like these are you know it's like changing your money at the airport right and so like if you've been to South America or Latin America like you understand why there's a need here um I I just like I'm having so much trouble wrapping my head around like these like Colombian people that I saw that have no idea what ethereum or usdt is or how to evaluate usdt versus usdc or like I don't even know how I would explain to them like a collateralized basket of yield bearing stable coins like how how do you bridge the gap between like basically crypto Twitter

and um like the like goat or herder who like wants to protect his savings yeah no it's kind of interesting um so if you think about what's backing a savings account at a bank it's actually a diversified pool of assets and Loans uh that are paying back interest uh you know the bank has a book and at the end of the day like your Dollar's at a bank account are backed by a diversified book of loans um with the FED behind it right uh and that's whether the interest comes from and so there's a in many ways I think that these on-chain yield products are similar right like not everyone around the US understands

the intricacies of the banking problem or the banking situation and like we didn't sit down actually does right um although more people do now after Silicon Valley [Laughter] yeah I think they do it that way um but uh I think it's my you know Vision or view of how this probably evolves is that crypto defy Twitter Etc it is kind of like the people that actually understand how the bank works right and then the vast majority of people don't need to or want to understand that and they just want dollars uh that they can say with um or some kind of unit of account that helps them preserve their wealth and they don't really care what that thing

is or what the tech is or how the financial incentives work behind the scene they just they just want this thing that helps them preserve and grow their wealth and so that that's like generally how I think it works in the US in today's Financial system and likely how it works in the future is is the guy that you saw on the side of the road in Columbia going to be doing L1 ethereum transactions uh no definitely not I don't think I should be doing a whole lot of different transactions right like they're too expensive um but uh but that to me is like you know that's that's I don't know what the the right metaphor is for the traditional Finance World um but you know the the bank to bank interactions right like that's the kind of stuff that happens on health happens

out l1's and then people get access to it like in derivatives down the line um in safer more rap forms that is and so that one of the things that I actually think is cool about Reserve is with these yield variant stable coins it can be bridged to any L2 they could be held in a centralized exchange like our app uh or coinbase or wherever and that yield uh can kick it that will continue to appreciate there um and the over collateralization mechanism Works cross-chain cross app et cetera and so um that like that to me is like one of these really cool things and how you think about okay how do we build this thing that Taps into the deep liquidity of ethereum D5 compared to anything else um in crypto uh that is actually

exportable and usable by people on polygon or arbitrary more bass or wherever yeah and I think like I I think the the biggest takeaway that I'm taking from you when you're building when you're building in crypto for real people is that like you you need to just focus on the experience and like if if any of this is to be successful like no one actually gives a that there's like crypto or ethereum or any of this involved it just like needs to be like an app that like people want to use and like does stuff and this is exactly going back to what you were saying about like Netflix right literally no one

chose Netflix because they're using AWS and not like their own custom shoddy servers or right like they were using AWS and not like the Chinese servers or whatever like they used it because like they offered something that people wanted to pay for and wanted to use and I think like that um I I think like what's just so special about Reserve is like it's it's so easy to be like stuck in defy and feel like okay eventually we're gonna create technology that means something to somebody and until then like we're just here to gamble and speculate on the way but like like you guys found a way to take like just like the really basic stupid stuff that we can do on chain and

make it like relevant to people in the real world and I think like that's very cool it's actually it's funny it's like uh so the team that used a very traditional Tech approach of testing the hypothesis early and so like they did it by taking our beta you know our test version of the protocol which was just a stable coin with Diversified backing uh it didn't have all the fancy default protection or the yield or anything like that um and they took that and they went to see like okay people that have seven percent inflation a week in Venezuela they don't really care about two to seven percent a year in the US like that that would be that doesn't matter right

so like let's just go test out stable and see if those are some of the people of Latin America one right and so they validated that um in lots of 18 countries and they're trying to figure out uh you know like any growing fintech they're trying to figure out okay what's the next level of growth comes from um but uh it's uh yeah it's kind of it's it was fun to see and that was you know big thing that excited me when I joined Reserve was um that they care about actually helping people uh and solving their own problems and yeah and now listen like helping people is good and that's something that we should all like try to do and describe like hope for and blah blah blah all right but what what I just think it's

not about even helping people it's just about like creating products that people actually want and I think like especially in this like the most DJ in ecosystems that we're in like you know I'm not trying to throw too much shade but like once you get like past curve it like we are just so lost in creating products for other gamblers and like ourselves that it's just um you know that what reserves doing is is different and it's different because like it is using crypto to solve a real world problem and I think you know again I can I can like keep going down on like why that's cool but um uh you don't have to convince me

before we like kind of pivot into the the more protocol stuff and like I really want to talk to you about like how Reserve is using things like curve and the infrastructure we have to like supercharge the product um is there anything worth kind of discussing on the um like platform in the off chain side that we didn't cover here but yeah so uh last week actually two new folks deployed new products on our platform uh one is called the eth plus and it's a diversified LSD basket um with some slight over collateralization uh incentives for you know five percent of the stake in yield

I believe um goes to the over collateralization rsr pool and so what are those people doing and why are they getting paid five percent uh they are responsible for diversifying the basket over time and the goal of it is actually um it was launched by someone named iridian um who's uh who's super tied in with a lot of the different uh liquid staking platforms and you know he's working on a liquid staking overview project with the ethereum foundation and uh he's um you know he's really excited to make this ethereum aligned like not only should these things these things shouldn't be basket weighted by the size of the LSD they should be basket weighted by more about the yield actually and more it

should be flatter like a more um uh simple basket waiting I'm getting stuck here uh that uh makes it so that you know it's like in theory as it grows it can actually help diversify the validators over time um and so super excited about that one uh that just launched last week also High USD uh hyusd which stands for high yield USD that was launched by someone in our Discord that's been in our community for a long time named Tom um and it's this one's really cool it's backed by um the goal is to have a reasonably safe high yield in D5 where 80 of it goes back to the holders of the stable coin so it's a yield bearing

stable coin that appreciates over time uh hopefully soon it'll be worth two dollars instead of one dollar but uh the what it's backed by is actually flux finance usdc and die Flex Finance is a wrapper around tokenized treasuries and so it's it's an interesting way that you know the F tokens actually have near treasury rates on in D5 so it's like you know one of the biggest deepest liquid markets um that's been tokenized and now has this lending Market that kind of brings that yield on chain um so it's partially backed by that and it's partially backed by uh curved pools uh you know two of the highest yielding stable coin curve pools uh one is mim

and one is actually the eusd curve pool and so all of the rewards from these different yield assets are sold off periodically and distributed to mostly the r token holders and also partially to the rsr pull and it for the I think actually for that one uh the guy who deployed it um him and a team potentially as as they grow it uh are getting like three percent of the the yield that's generated so it's like it's really cool it's like a platform for entrepreneurs as well to test and experiment and uh you know see if they can build a sustainable business over time so staked rsr the the whole concept behind this is people that are like completely out like they don't

necessarily need to be holding the r tokens which are the basket of assets they just have this separate token called rsr and then they stake it against the specific baskets with the upside being that they get some sort of fees or value accrual and the downside being that if something happens to the basket where something breaks Peg and needs to be replenished the first place that that comes from is by selling off the staked rsr to that pool is that correct that's exactly right the rsr holders can choose which our token they want to stake on and then in exchange for uh being the first capital at risk deciding what the basket is and choosing to have a revenue is split they are the

first capital at risk and so or they get paid the underlying yield rather and so it's a it's uh yeah it's it's a really cool aligned incentive we believe where the people that are making the decisions are the ones that get head first um it's a key part of the protocol design uh and so you know in theory over time um you know like in stable coin worlds people talk a lot about endogenous versus exogenous capital and you know rsr is endogenous right it's not it's capital from the system right um as opposed to the rest of the earth open backing is uh fully exogenous right um Luna is famous for having only

endogenous Capital uh and um yeah um but the uh what's you know what we think is interesting about this is it's actually fully backed by exogenous Capital One to One uh and anyone can Mint or redeem for that backing and that could be like usdc Nave or whatever but then there's this over collateralization thing and over time as these things are more Diversified that that um rsr becomes stronger and stronger over collateralization ah because what you're saying is that the over collateralization creates a buffer that protects your first like the phrases the the first capital at risk or

whatever the yeah yeah no that's super interesting yeah we're excited for these to get bigger and bigger and hopefully uh the over collateralization will be stronger right and in the case of defaults uh it can be sold off at a more efficient manner um yeah okay so super cool so we just like kind of described how Reserve is this like kind of if you will meta protocol that has like each of these like different baskets and each of the baskets are like in some ways like kind of sovereign where they have their own Like rules and things that they can include and like quote unquote like controllers and so um can you talk a little bit about like the how like reserve um coordinates

between all these and and just like give you a little bit more um Direction like one of the things that's like very exciting to me about Reserve is that um it's like one of the few protocols that has figured out how to use the curve game for like a real purpose um and and so like there from the outside like I have this sense that um Reserve protocol like has some sort of um either directly VEC or V stick or VLC CRV stick and has some bribable assets and like definitely like wants to play these games to um help these like individual pools but I'm a little like trying to figure out how you

coordinate between like the reserve protocol and specific tools and like how all that stuff works out yeah it's uh so you're exactly right we do have a big stack of vlcvx um on convex and also uh sdcrv and vesdt and staked out um I've been getting all the different letters right um and yes a big part of our um you know at the end of the day it's a stablecoin platform um and in at the end of the day liquidity is very important for stable coins and so we're trying to figure out what are the most efficient ways to incentivize liquidity on curve where we think it's most easily and effectively

incentivized the curve um the curve tokenomics uh I think you know one of the like clever inventions of defy um that along with the amm right uh it's like one of the the amm was like a truly novel invention of D5 that didn't really exist before it's just really cool right like anyone can massively provide liquidity right and I think the curve tokenomics are similar um a lot of tokenomics are just like full on inflation curve is very inflationary uh but there's this like you know weird locking mechanism where the lock holders get these four different powers and uh one of those Powers is deciding where the rest of the inflation goes

um and so uh you know you've you mentioned the um vote bounties as I like to call them uh and uh and also the gauge the gauge uh the gauge voting every every week and every other week on convex and so yeah we we are planning for this game we see it as a big growth strategy to incentivize liquidity um as these things get bigger and bigger then they might be more useful in other ways um like the eusd uh the first stable coin that was launched um is already used by mobile coin which is actually the the group that launched it uh mobile coin is an L1 privacy focused blockchain and they bridged eusd

there in order to use it as digital private cache and they've got an app there that's actually it's kind of similar to our app except it can be used by anyone around the world privately um it's like worldwide venmo um and it's like a great experience the ux is so clean it's an amazing product actually um the uh uh and then the other big uses USD is held by arpa for the users and so the all the users throughout Latin American throughout Latin America on our app um are all it's all USD under the hood um and so besides those two it's all in the curve pool uh and so we're you know we're our our business model at the end

of the day is we're staking rsr and participating in these pools just like everyone else um and so you know the higher the higher the curve pool the more Revenue that occurs yeah well because it's super interesting like as a strategic asset uh just for brevity I will refer to all derivatives as vecrv power but um like you can look at that as two ways right you can look at that um as like this is really important liquidity support for uh stable coins that get issued or this is like a really high impact a very low cost way to increase yield on certain pools right and and maybe that's two sides of

the same coin or not but um how are you thinking about using your vecrv power to uh you know deploy it strategically based on like these two kind of like different needs yeah so we see the V the uh vcrv uh Power uh accrued in different ways um as one of the things that we can offer to people that Deploy on our platform uh as a way to help grow their products and so um you know like we don't need to deploy the curve pools but actually very similar to how frax incentivizes equally across all the different pools uh we're doing this we're incentivizing equally across all the different curve pools um that have our tokens or Reserve

ecosystem assets in it um we we have tested out the vote bounties a little bit um but it's kind of interesting it's like uh renting versus owning and at the end of the day you know when you when you put up a vote Bounty you're kind of uh that money goes away and um so unless there's like a sustained stream of Revenue there uh the business that doesn't just work for every business model um and so it's more efficient for us I think in the long term interesting for us to own it um and you know just like any asset you can buy it and use it and then sell it and that's what's pretty cool about it um and so it's like kind of like CAC but it's kind of an investment but it's kind of you know it's like strategic thing

um so yeah you put it you put it perfectly earlier that it's a bunch of different things all wrapped in one um from a strategic asset for a protocol tone there's like more reason like there's so many reasons why it makes sense for Reserve as a protocol to like go out and acquire this voting power and I think that there's like a lot of interesting questions of like once you have it like what are the interesting things to do with it and like I love kind of what you're saying which is um taking a page out of like the frax VP book which is like we're not really gonna be um you know like conscious and picking winners and losers or like letting rsr like do any playing real games with this

were just going to be simple like if you put TBL in curve we will give you proportionately that like amount of uh you know voting power and I think that I I'm I guess is is reserve working on building some like protocol owned liquidity so that um you got that Reserve is building a treasury as well through this process yeah we so we have deployed some treasury assets into USD [Music] will likely do the same in others um we uh it's kind of interesting we're still trying to figure out what is the optimal flywheel uh you know got some plans I won't share all the alpha on that front um but we you know we do have some plans

on how we're going to try to test some different things out and optimize this game but uh at the end of the day we do see convex and um curve as strategic and staked out um as uh strategic Partners as as we like to grow like you mentioned the revenue stream right uh interesting thing and our token could do that is launched uh is specify a percent of Revenue to go to a Smart contract that buys and locks CVX um and always votes on that poll right and so uh there's like that could just be the you know 10 of revenue from this R token buys and locks cvx's incentivizing to pull over time something that just popped into my head

is like when we're talking about actually like being able to create these pools um how like at what level of like technicality are you envisioning um this happening is this like okay me and my family want to create like Rex family coin and and like it's like a consumer level thing or is this like like really really deep behind the scenes infrastructure that like somebody like the the Investment Bank that Goldman hired on this Consulting project might use and then like no one would ever see it it's interesting uh we're trying to lower the barrier eventually um so actually go to register.app uh which is the main dap Explorer for our

protocol uh there's like a really easy deployment flow yeah register.app register your assets uh and um it'll uh it walks if you go to the deployment flow it walks you through like choosing a basket and you know you can select from a list and you know there's a lot of different parameters for sure uh but we try to put in defaults and help people make decisions on what they're going through and so you don't actually need to code uh if you want to deploy in our token um and in fact to the people that deployed them don't code uh and so um there is like a you know in order for a collateral to be an available thing

for the protocol and for the protocol to know how to interact with that collateral a collateral plug-in doesn't need to be written um but anyone can write those collateral plugins uh and so you know if you do want to launch something that's like a special thing that we don't support yet you can either talk to us and we'll try to write a collateral plugin for it or you can write it yourself and so um we hope over time that more people will create collateral plugins for their own protocols um because at the end of the day what you need to understand is how that protocol works and how it should be treated in a default scenario and the people that wrote the protocol know that the best but um right now we're knocking on doors and figuring out how these things work at a

deep level yeah and by the way like anything you integrate with today like probably won't be there tomorrow so like but um I I but I want to kind of like move on to um the lessons that you've taken from Latin America and building in the real world and that unique perspective at least compared to like the rest of the like American insular Builders and and so I would love to talk to you about that but um while we're still on this subject how do you think about like fragmentation and and you know it's very cool to say that anyone can create their own stable coin but um as we're talking about in curve

or anywhere else like that has like serious implications on liquidity and on um you know the experience of everyone is worse if every coin can't be traded and so how do you like balance this permissionless nature with um just like the realities of how like Economics work yeah it though that's a it's a super good point I I think there's um we've talked about this a lot uh and you know one of the things that we've talked about a lot internally and actually externally is we don't know what the best way to save your money is we don't know what the ideal basket is right in the future it might be like real estate stocks bonds some kind of hedging

strategies whatever and as more and more things get tokenized over time like people can test out those different types of assets um but in the same way I think in the same way that we saw um thousands and thousands of ETFs get launched in the last 30 years you know that this will likely be something similar and we're trying to lower the barrier of Entry so that that experimentation can happen uh in the D5 world as well um and so of course there will be winners right like the you know the um the Spy ETF is much bigger than all the other ones right uh there's gonna be power law winners for sure but at the same time it enables

people to build assets um and launch assets and you know have these things that are used maybe in their app you know like a crazy example would be Starbucks launching a stable coin or the yield from the underlying um right uh and you know you can imagine these like um branded stable coins basically uh kind of like what binance did right with paxo right like there's a lot of interesting you know kind of like smaller use case things um that could be interesting plays and so I I don't know exactly what's gonna happen I've got some guesses but then in terms of the liquidity thing like curve uh is becoming it could be like the ultimate Forex exchange

um right and we're making it so that you can swap between all these different pools as long as they're linked together in some way you can make a trade from one low liquidity asset to another low liquidity asset as long as it goes through a bigger pool and um like they're releasing the lower gas version of try crypto and try to make these things more and more efficient uh that I think are really exciting um so yeah maybe like the combination of like this technology that we have in curve and I'm not even talking about like the emissions or the like the ecrv any of that stuff just like this like what stable swap is and like the fact that what our tokens are are not

like these things that have like this um intrinsic value that's like hard that needs to be found in price Discovery but really are just basket of assets that have like real world value that like maybe this is a problem that kind of solves itself um and like like I I actually the the world Works in such funny ways right because like the usdc dpag turned like literally sounds like the worst thing that could happen to our industry possible and yet like every single conversation I've had about it is with someone who is like you know what it actually we got really lucky because like we were able to use this event to like show that our protocol works or

that it doesn't work or that like we had testing and you know all is well that ends well like that's really the the true takeaway from usdc is that there wasn't a problem right but um I think it's just like really cool that um yeah I guess I guess I kind of took us on the tangent here but um you got to like it's cool that you're um your protocol was active and like really out there when this happened and we could actually see like okay what are the implications of this happening and what does it mean um what does it mean and so um I don't know I I don't know if you have any thoughts that you want to share from the usdc event that um that you want to share

look it was very stressful uh yeah uh you know I mentioned we were like I think our Mark the market cap of eosd was it 10 million um and the way that like our protocol trades is with auctions and so we don't um like we don't have control over it we can participate in the auctions like anyone else can um but at the end of the day we're like really hope this thing works and you know we'd obviously done like extensive testing and had five Audits and uh but you know there was just like a lot of nail biting like holy smokes usdc depeg we gotta make sure that like these options have to work and so it was

really exciting to see the auctions all work um the uh and you know over time the protocol was able to reclateralize and so it was exciting to say um but you know we learned some stuff we learned about what uh the realities of auctions on chain and uh the reality of you know what it's like to participate in these things and um what it's like to build in a decentralized world where you're relying on third-party tools that may or may not have great front ends uh like gnosis auctions yeah no and I mean it's pretty CR it like something that's like super cool but like very scary about crypto is like we our whole industry and our whole

technology is built on like you throw something out there with economic incentives and like just pray that it happens and like it normally does because like there's normally Mev Bots that are trying to get this like Arbitrage and like it's fine but I mean especially like when push comes to shove and like you Thomas your name was on the line like I get it man I get it it was definitely stressful um but it well it was also just so cool to watch like the protocol go through the steps because we're you know at the end of the day we can't control it it's actually fully permissionless and censorship resistant there's no master multi-sig that controls everything it's controlled by governance and governance can make changes and but it has to go

through an eight day cycle um and so yeah there's a there's like a scary but freeing aspect of that uh like we've we've tried to do decentralization from the get-go um and it's really it's hard to build that way it's slower uh you have to think a lot harder uh you have to plan a lot more um and uh things just take more time because of governance votes and so you know we're now on the stage of like if we want things to get upgraded or changed we need to kind of go ask the community hey we think this should happen what do you think you know what do you think but anyone else can also put those proposals in and so I I actually think um I've always admired the way the curve does this I think that

compound also does a great job I've seen people ask Robert Robert leschner and uh Discord like when are you guys gonna do this and he's like I don't know but in a governance proposal we'll see if people decide to do it um and yeah I think like this is a path I won't let us go down because I would really love to have um a whole conversation about like governance and like what what real governance is and like um you know there's some protocols that will say that exact same thing and it's like just total BS where it's like oh posted on the Snapchat and we'll see and it's just like I'm not you know none of this is real and so I think there's like there's a whole conversation we can have about that that

um we won't uh because we're running out of time so before I let you go like the the biggest like thing I want to know is like or the biggest thing I want to talk to you about is like in America like crypto is a like a technology that exists a week and financially speculate on it right like everything that is cool about crypto is uh it's becoming more relevant but it's not relevant to the American Experience right whether that's like inflation protection or um you know like a a very politicized and vindictive government or um you know export controls or like whatever like these are problems that Americans don't have these are like things that are like

academically and intellectually there for us but like we don't the American Experience is like so unique and it's so unique to crypto um and so like with with our final time I'd love to ask you Thomas like you're building products for people that like crypto is actually meant for that like when Satoshi made this it was for like the people in Latin America who are at the whims of like these old guys in Washington who like at the end of the day like they're gonna protect guys like you and me and so um I two-part question one like what is your biggest takeaway for building for like these kinds of people and in these kinds of societies but two

um like what do you think the the biggest things that like Builders should learn from those spaces that like people that haven't had this kind of experience and haven't been exposed to those kinds of problems like just totally missed yeah um so it is uh it is interesting and it sounds like super simple uh but I I think that the big thing is just solve people's problems um and don't get distracted on the tech and you know I'm kind of repeating myself right uh but it you know you mentioned all the things of like America versus the rest of the world um I do think that crypto has been solving people's problems in the US just in a much smaller way right like people have bought homes with maker right uh

you know there's there's like uh same thing with uh alchemics which is like a pretty interesting you know unliquidable free pay loan self repayment loan like that that's like um that's like a cool thing that people are able to do only because of these things um but in uh but yes uh focusing on like realistically solving the ux problems to accessing these products is I think the big thing and so like at Reserve four years or three years ago when the app was launched uh there was a big decision do we make this on chain or off chain and they chose off chain because the reality of paying for something in a country where it might not be that safe

for people to know how much money you have is that on-chain Solutions at the time just weren't there right and so like do you got do you want the cash register the person behind the cash registered and know how much money we have in your account uh probably not do you want the guy looking in the window back the door to know probably not and so like we made the trade-off decision uh we're gonna build this app off chain [Music] um so that's like that's one example of like just fix the ux and don't necessarily do the Visionary attack at the same time though don't take shortcuts that make it so that you can't ever get to the decentralized thing like our one of our core things is that

um currency is stable uh if it's not controllable by these centralized parties right and so like from day one it's permissionless and censorship resistant we can't touch the protocol we can adjust it we can upgrade it we can release a new version um we can propose governance changes but people should be able to have a say in how it works and so that's another big thing is like don't you know don't shoot yourself in the foot with some short-term decisions that you can't roll back um yeah the other thing is uh because all of the front ends like are for on the protocol side one of our core

users in the beginning is defy users right and all of the front ends are so spread out whether it's D5 Llama Or coin gecko or zapper or the bank or all these different things like honestly building a network is really useful and so like I can re you know being able to reach out to the team that's ever and ask some questions about how do we get our thing listed uh really useful and so um you know we were joking a bit before we started recording on you know like hanging out in the Discord talking to random people like that could actually be really useful uh yeah you know it I'm stuck for sure but building some connections that you can uh that you can

you know build a relationship and reach out to someone and get some help on something is really valuable in a decentralized ecosystem um so I think those are you know if I'm going to put on the advice hat yeah that I think I think that that's so important in this space and in life it's just like the the world's so small and like all you have is like your reputation you know you're born into this world naked you'll go out naked like all you have is like the things that you do and the people that like see you do it and like want to be around you and you know at the end of the day um like what else are we doing here other than like that that is what building is is always like about people and not about things and so um

yeah man that's why I love Reserve it's because it's like it's real people that have real problems and um like they need your tech and and like I'm just so proud of you and excited for you that um someone's doing real work thank you I really appreciate hearing that before we wrap this up um any uh plugs or any where can we find you on Twitter anything that you want to shout out yeah sure uh so I mentioned our dap which is register.app um you can go and check out and deploy your own stable coin there or see the ones that have been deployed um you can you know follow me on Twitter mattamost m-a-t-t-i-m-o-s-t it's like matamora but a little bit more uh and uh then um yeah check out uh if you know if curve

fans are listening to this uh check out some of the uh eusd High USD or Eve plus uh curve pulls that'll probably be around in a couple weeks cool all right man thank you so much I really appreciate the time and uh I'll talk to you soon sounds good see your ex foreign