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Every time you peel back another layer, you just end up figuring out that this thing is, again, a masterclass in mechanism design.

All right, everyone, welcome back to another episode of 0 X Research. The show was made possible thanks to our fantastic sponsor, the Atom Accelerator. It has literally never been easier or more attractive to build in the Cosmos ecosystem. So if you're a contributor looking for grants between $10, 000 and $1 million, check out atomaccelerator.com online or look at the show notes. Today is May 22nd.

And we have an awesome interview lined up with Stani, the founder of Aave and Lens. He is a true crypto OG, so getting his perspective on the current state of DeFi and where Aave and Lens are at was super exciting. But as always, before that, we are going to hop into a little hot seat, cool throne with Ren and Efreet Capitals from the Blockworks Research Team. Ren, who you got on the hot seat or cool throne?

I got Coinbase in the cool throne this week. I know I've sort of talked about them a few years episodes ago, but slightly different today. Last Thursday, Coinbase announced their new program. It's basically a subscription plan for $29.99 a month and with that subscription you get 0 trading fees, you get a lower staking take rate for Cardano, Atom, Solana, and XTZ. You get 24x7 dedicated account support.

You also get a discount for permissionless, so if you're going, maybe subscribe for Coinbase 1 for what I think is a 20% discount. Importantly, you also get a 10% off lemonade, which is kind of like an AI insurance underwriter, so to say. I think it's an interesting trend, right? So because if you're sort of seeing a progression of WebTubes, everything has eventually transitioned to a subscription model. YouTube, premium, Netflix, Spotify, Apple Music, everything trends to a subscription sooner or later.

And it'll be interesting to see whether that trend pays out, starting with Coinbase. And I think there's a few other interesting things that I'd like to talk about. The first is that there's probably a large amount of retail users which don't generate a huge amount of revenue for the exchange. So at a 40 bps maker rate, it would take roughly $8, 000 in monthly volume to generate $30 in fees for Coinbase. And I would guess the bottom of the pile like retail traders don't generate $8, 000 in monthly trading volume And that $29.99 Coinbase 1 subscription may generate a lot more revenue for Coinbase.

And I think another interesting thing is that they included Lemonade, which has nothing to do with crypto. It's just like a lifestyle insurance product. So is it possible that Coinbase is able to onboard more users into crypto by offering more sort of these lifestyle perks? I don't know. You get a monthly free DoorDash code, you get 20% off Uber, And maybe I'm sort of like giving the blue case here, but for example, Coinbase may work together with these companies that they're onboarding into Coinbase 1 subscriptions and get them to use Coinbase Commerce, which is their version of like PayPal or Visa, or sort of like their payment system that merchants can use.

And I just thought it's an interesting move, probably an opportune 1 given the current market conditions and how transaction fees and the trading volume haven't been the greatest and they don't look so great for Q2 so far. But we'd love to hear what you guys think of it.

I can already hear Effort Capital in the back of my head telling me how, not Amazon, but Coinbase rather is taking over the world. And it's funny that I accidentally said Amazon there. But yeah, it seems like an interesting model. I liked your comparisons to the kind of how the, uh, the web 2 world has become very subscription based and it's interesting to see the lifestyle edition there. I don't know.

Effort do you have a more interesting take on why they're kind of potentially moving into that lifestyle?

I mean, if you think about it, Coinbase fundamentally thinks that cryptocurrencies can transform the entire financial sector, create new financial products, and innovate on financial products that haven't seen innovation in decades, right? Like lemonade, it sounds silly. I actually really like the Coinbase commerce angle that you're going with, Ryan. I honestly didn't even really think about that. But I mean, insurance, we've seen DeFi protocols like Nexus Mutual, which I think gets shit on, and on crypto Twitter for really not being that good of a product, really not bailing out crypto protocols when they're needed as their insurance offering.

Fighting insurance is an area of finance in general that needs an overhaul. My mother actually is an insurance underwriter. It's terrible. It doesn't actually pay out users when there's floods. Flood insurance doesn't even work properly.

There's not proper risk frameworks, I think, that properly calculate risk or quantify risk. And maybe like eventually Coinbase decides to create like a lifestyle financial product. Could you imagine Coinbase insurance leveraging DeFi protocols and leveraging some type of decentralized identity solution on top of that? I think there's other product offerings that just by grabbing in the user, leveraging Coinbase 1 where it gets entire lifestyle package on top of the other use cases like their 0 fee trading or whatnot on their exchange platform. They're just trying to create a stickier ecosystem, kind of like what Apple did with their phone and their app store.

Once you kind of grab onto the customer, you're offering them other products and services to kind of keep them within this ecosystem. And arguably, Apple has the best ecosystem in all tech. You obviously say the same thing about like Amazon and Apple as well. I'm sorry, Amazon and Facebook as well are meta. But I think Coinbase is trying to figure out other ways to branch out their revenue stream and keep their customer base sticky, especially in a bear market when trading volumes are like the lowest we've seen in literally like 2019, since 2019 in some instance, I believe.

I like this move. I mean, it's more recurring revenue, it's decentralizing or distributing. There are different revenue streams out there. They're the Amazon of Web3. Good point, Dan.

Yeah. I like the point you made, Effort, in regards to just smoothing out the revenue. I think that's ultimately the story here. I think they just want more predictable MRR in the long run. Obviously, crypto is pretty volatile as is, so they probably want to smooth that out as best they can.

And to be honest, it makes a ton of sense for a ton of people. Like if you, if you do $15, 000 a volume on Coinbase, like for $30 a month and 0 fees, like you're probably out positive on that deal. And like, you would be sure to redirect your trading volume on Coinbase because you have that subscription. So ultimately it makes a stick your customer base. So I like to apply it for sure.

I think 1 thing that I find interesting is that it doesn't lower the take rate for ETH staking. I mean, Coinbase has the highest take rate for eavesdaking out of all staking service providers whether that's like a centralized exchange or a liquid staking protocol and it stands at 25% today. I'm not sure how sticky Coinbase thinks their eavesdaker customers are, but I would bet not that sticky, especially in the long term. And as these liquid staking protocols become like more battle tested, you wouldn't really settle for a 25% take rate when a 10% take rate exists out there. And if I'm not wrong, Binance also has a VIP program where if you're part of that VIP program, you have like an even lower take rate than what they're offering normally.

And that's kind of shown in the data, right? Ever since the Shepeta upgrade, the amount of ETH that's staked with Coinbase has decreased versus all the other liquid staking providers which have gone up by like

10, 20, 30%. I don't know, Ren. I might take the other side of this 1 because I agree with you. The data definitely shows exactly what you mentioned. But I think there's a very specific reason for that.

And the people in crypto right now are all tech savvy, rational investors that want to maximize their profit. But the next wave of users, I don't think will classify as that. And I very much so expect people to pile into the Coinbase app, mint CB ETH through the app and hold CB ETH and like fully thinking that they're earning the native staking yield. And even if they're aware there's a 25% fee, they'll be totally okay with that because of the ease of access of CBE. And so I think they're just going to see this separation of investor preferences between ease of access, which Coinbase absolutely dominates in, total fee revenue or fee maximization, which will be something like maybe a 2 token model like FraxEth or other smaller providers that you kind of have to go a little further out on the risk curve for, or decentralization like something like a RocketPool or quite frankly, even StakedEth.

So we see these, there's just going to be a distribution of preferences, but I really do think that the next wave of users are just going to favor the ease of access piece. So, kind of my 2 cents on the matter. Sam, who do you got in the hot seat or cool throne this week?

So mine might be a little bit controversial. I'm not sure, depending upon what people's opinion is on the matter. But I think everyone by now probably knows there was a Lido draft proposal on the forum, basically saying that we should return protocol revenue, or at least a portion of, I think it was 30% to 50% of the actual take rate to the Dow Treasury on the forum last week. And there was some suspicious timing with a couple of tweets from notable figures in the industry, 1 being Andrew Kang and the other being HowPress. Andrew actually tweeted about an LDO proposal an hour before there was any proposal live.

And then 4 or 5 minutes later, HowPress started tweeting about the proposal. So maybe he has forum post notifications on and just saw it really fast, or someone texted them and said, Hey, there's a new proposal up. And the account that made the post was created that day and it was only live for like 8 hours before making the proposal. So just some sketchy things going on in governance land feels like kind of an attempt to get a last little bit of exit liquidity to sell into for people with big bags of LDO looking to exit their position. So not saying that's exactly what happened, but it definitely doesn't look good.

And it was enough to warrant a hot seat in my view. So not sure if you guys have any opinions on that or if you guys have any thoughts in general about the proposal that we saw.

Yeah, it definitely seems like some peak bear market fuckery and no liquidity, quick forum post, get a pump, get out of the asset. I mean, I don't know. It's tough to say if that was actually what happened. To be fully transparent here, we all have governance trackers on. I get an email a second, there's a forum post in a series of different assets in their governance forum.

So it's possible. It's possible. Of course, tweeting before the thing happens that that, of course, isn't possible. So I don't know if maybe it was referencing a different proposal. Hard to say, but definitely a little sketchy.

You know, the better mentality to take in this space I've kind of found is if it can be manipulated, it will be manipulated. That's like kind of how I view a lot of the active address activity. We tend to see, you know, these crazy pumps and active addresses on super cheap chains, like, okay, so it's very easy to increase the number of daily active addresses. I don't know, just kind of like a general framework I have when assessing certain things in this space. And I think this kind of falls into that category.

I mean, maybe Alpress is using GovHub, our new governance aggregator, Blockers Research, a little silent chill right there. No, I think it's deservedly so to be on the hot seat. I don't think it's just a coincidence. It might not be the specific of the 2 people that you mentioned, Sam. We don't know exactly the exact actions that were taking place, but all we know is a random account went on the Lido forum that was created 7 hours before the proposal was even made.

So it wasn't even by someone that's known in the Lido community that actually has some clout, can actually get a proposal like that passed, just some random account posted this, how press just so happens to see it within 4 minutes, maybe using GovHub, that's great if he is, but our product is great. And we actually were talking about that Lido proposal like 3 minutes before, like the moment that it came in, I think, Ren, you saw it, like within a minute of the posting so I'm not exactly sure how you saw it, probably go up, but really cool that we were able to catch on and discuss it ourselves, but it's just nefarious activities however you see it. You could tell that the person that made the proposal doesn't actually really know much about Lido because they were saying that the DAO itself had 17 and a half years of runway, which took into account the native token in a treasury. It was just a really bad proposal overall. It doesn't make sense today for Lido to pass revenue back to their token holders.

It was a poor proposal overall and overall, the moment it got posted and got announced on Twitter, it was the talk of the market and the local eye and whoever posted it found their engineered exit liquidity.

I think 1 thing I think about is that when I first found out about the shenanigans, I was like, okay, yeah, that seems like kind of scammy, low key illegal, but then I thought about it a bit more like, how is this different from like 1 of those big trad 5 hedge funds that specialize in shorting stocks and then releasing like a hit piece about how like some companies books are completely messed up like, it feels kind of similar you know like, you accumulate a position whether that's long or short, and then you've released some information, obviously in the case of like a short fund with the intention of manipulating the stock price or having some effect on the stock price And then using that as exit equity. Chances are in like Catfight, they probably have like a slightly longer term outlook on like kind of short to stock rather than this title case where it just pumped and dumped in like 2 hours. But that was just an interesting comparison that I thought

of.

That is interesting. And I think that's a fair comparison to make. I guess just with the 1 caveat being the Lido 1 is actually trying to change fundamentally how the token accrues value, whereas the example of an equity research shop that's shorting, I guess they're kind of evaluating facts and not changing the actual structure of the company. But I think it's a fair comparison to make and something I hadn't thought about. But we did actually, Dan and I hopped on Bellcurve for a roundup this week.

So if you're more interested to hear about the whole LIDA situation in depth, you guys can check that 1 out on Apple or Spotify. But Efrat, I'll kick it over to you for your hot seat or cool turn.

Yeah, my hot seat today, I have Stepin, the sneaker NFT application that was pretty big heading into the end of this past bull cycle. So they announced this morning that they integrated Apple Pay into their app store application. And it said the users will not need a crypto wallet to purchase Stepin sneaker NFTs. Instead of needing a crypto wallet to, I guess, deposit USDC into to buy a sneaker NFT, you're actually able to use Apple Pay to buy something called Spark Credits and then 10 Spark Credits equals 1 USDC. And then I guess you use these Spark credits.

And I'm assuming you haven't used the app yet, to be fully honest, but I'm guessing you sign in using Google or some type of Web2 identification system, and you are able to buy your Sync or NFTs and it's attached to that Web2 account, which I think, in general, is a cool innovation. I'm not saying that it's not, but the reason why I thought they're on the hot seat today is because they use things like this in their Twitter thread. We thank Apple for their continued support for Stepin since their launch in 2021. They called it a monumental milestone. Stepin has like 40 daily active users.

Apple doesn't probably even know what Stepin is. All Stepin did was use their Apple Pay SDK and got a payment provider to actually accept that. So Apple didn't support Stepin. Apple Pay, nobody cares about Stepin's sneaker NFTs and their

40

active users.

This is literally a protocol in 2017, 2018. And as recently as Avalanche earlier this year, who I also put on the hot seat for a very similar reason, saying that they have AWS as their partner. It's like, no, just because AWS is running nodes or made it easy to do one-click node setup of your layer 1 blockchain, that doesn't mean AWS partnered with you. They're just providing a service because they're in the business of making money. Like, there's no way Stefan was supported by Apple.

Apple doesn't know who Stefan is. Like, I'm just sick of protocols, especially in a bear market. I'm just sick of protocols you're trying to use. Like again, engineered exit liquidity, because I guarantee you the moment this came out, some people that were in the know probably dumped their tokens. Yeah.

So that's why it's happens on the hot seat. Regardless of it. I think this is where crypto has to go to, though. It has to be like we got to abstract away the crypto wallet. I think applications will need to have built in wallets so you don't require someone to download an additional application like Coinbase or MetaMask.

I like where this is going, but I'm just over this space hyping things that aren't partnerships.

I echo that sentiment there on that last bit, but I'm curious, like what does this look like on the on-chain side? Does anybody know? So if you like log into the app and have some control based on your username and password over some assets that are on chain, I'm imagining that there's just like a wallet on chain that like holds all these assets and then some database off chain that kind of maps username and password to NFT. That's my guess. Does anybody know if that's how it works?

I'm actually not too sure how it works under the hood, but I'd imagine it's exactly that with the on-chain information actually serving as kind of like the escrow account for all of the users. And I'd imagine you'd be able to send these NFTs to a separate EOA that you actually control off or on chain. So that's how I guess, but I don't know. I strongly agree though, Effort, these partnerships are pretty exhausting and they're really not partnerships at all. So I was actually trying to think of some pros on this.

And I guess just at the end of the day, you need to make sure that there's people willing to spend more money in the app than people who expect to just extract money out. And that's not what we've seen from Steppin to date. And I find it hard to believe that people are going to want to spend thousands of dollars on a pair of sneakers just to extract a few dollars a day and then also reinvest all those profits into a new pair of digital sneakers. Like that seems a little farfetched. Like it feels more like the means of the end is to make money.

So not too bullish stepping, but also I think it's cool that they're trying to go mainstream with the Apple integration.

I think 1 for me, at least over the past few months, is that there's been a lot of developments in the mobile world for crypto, right? First, Uniswap got their wallet approved. And then I think Axie Infinity also got approved on the App Store and now StepVent. And I think there's like a decent amount of protocols for the next big upgrade. DYDX, for example, for v4, they're going to build out a full-fledged iOS and Android app.

And it seems like crypto is really trying to make that push into mobile, which at the end of the day is what I feel the majority of people will access or at least interact with crypto on, not like a laptop or a desktop. And I think another interesting thing about Stepvan, also a food disclaimer, I didn't partake in Stepvan in the blue market, but Stepvan, especially like buying that Spark credits seems very pay to win. And pay to win is like a huge category in traditional gaming that makes a lot of money, and is actually sustainable for the game developers rather than a play to earn which is kind of like what we saw during the boom market between Axie Infinity and all of these other games that just continuously issued all of their like native tokens and they got dumped into the ground once the market kind of died down. But pay to win is a lot more sustainable of a business model. And I would love to see more games or sort of more like protocols like Step-in integrate that into the app using new developments such as like integrating the Apple Pay or launching on mobile.

If you take the step in piece out of it, how do you guys feel about this like semi on chain reality that they're like augmenting for their users? You know, like you still have this web 2 feel, but in reality, like you are transacting on chain just through a proxy. Is that a good thing? I guess, is that a good thing? Is that bringing people on chain?

To me right now, this industry just needs to get people on chain when they don't even need to be on chain, or they don't know that they're on chain, I should say. So this Web 2.5 field, I think we're gradually going to get there. When there's better infrastructure, when there's better... When signing in with Ethereum, where everyone in the world has an ANS or something, We'll get there. It's going to probably take 5 to 10 years plus.

But I think this is a good thing. So I don't mean to put them on the hot seat. I do think there's some innovation here and I do think this is the right way this space needs to head in the short to midterm. So I like that. And I think that's really all that matters.

It's just getting more people on chain, interacting, feeling more comfortable with using a decentralized application, whether or not they know it's decentralized or not. Ultimately, us nerds care that it's decentralized. We care about this cool innovation in tech, but the average user, even in 10 years, even if crypto is mainstream and managing billions and trillions of dollars, most average people still won't even know. And that's beautiful though. They shouldn't have to know.

It should just work and feel the exact same way as Web

2.

Effort, do you happen to know if these spark credits are like more like fortnight's V bucks and that they're not like redeemable once you buy them or any RC 20 type token? Like like once you buy them with dollars like is that pretty much just that's what they are. You have to buy sneakers with them in order to redeem them? Or is there like a way out of those? Because that'd be interesting, because like I know gift card industries like make a shit ton of money just because people leave a couple dollars on every card and then you've got a million people with a card and it adds up pretty quick.

So that'd be kind of interesting.

Yeah, in their medium, I honestly don't know the answer to that. Like in their medium post, they don't say whether or not it's an ERC 20. They just keep calling them spark credits and that there's the smallest unit of spark credits is 1. So that just like thinking about it, like every other ERC 20 out there, pretty much you can go as like small denomination as possible and send that wallet wallet. The fact that they're saying like the smallest denominations 1, they're calling it credits are not saying it's related to ERC20, I'm assuming that it's not redeemable, or you can't transfer that to other users.

Yeah, that makes sense. That's what I would probably expect too. Anyways, Dan, who you got in the hot seat or cool throne?

Drum roll please. To no one's surprise, Curve. The LLAMA lending protocol and CRVUSD stablecoin is a masterclass in mechanism design. This thing is absolutely beautiful. I'm not prepared to say it's flawless because there are a ton of parameters that definitely need to be optimized as time goes on.

But the early testing looks pretty damn good. I mean, right now there's only 1 listed collateral. It's staked FraxEth and that's the yield accruing version of Frax's liquid staking token. And it launched with a $10 million debt ceiling. It's currently at just over 7 million in less than a week since launching.

So we've already seen an initial pretty good onslaught of demand. But the key innovation really with the lending protocol is around the liquidation mechanism. So if you think about MakerDAO, Compound, Aave, our largest DeFi lending protocols today, they all use what are called hard liquidations to protect the protocol's solvency. And what a hard liquidation is, is at a specific health factor, which is like a modified version of the loan to value ratio, the loan becomes under collateralized. At that point, The collateral is auctioned off or sold off for the debt asset and the debt is repaid on behalf of the borrower.

So the borrower actually loses their collateral. They're only left with the open loan that they have, but that is actually closed out by an arbitrageur or an MEV bot on their behalf. And what this results in is the protocol stays solvent and we've seen hard liquidations are very effective at doing this, but it leaves the borrower without their collateral. And so Curve kind of set out to improve this exact piece. And so they created what is called a soft liquidation method.

And basically what that does is instead of having that 1 critical number where your loan becomes under collateralized and you get hard liquidated, there's actually a range of liquidation. So it's like over this 1 period. So instead of, let's say, your loan was liquidated at an ETH price of $1, 600. Now, instead of hitting 1, 600 and being screwed, between 1, 650 and 1, 700, your collateral gets slowly shifted out of the collateral asset and into a stable coin. So therefore, when the price moves below the liquidation range, You're fully in stable coins and out of the volatile collateral asset.

And that debt, your debt is always less than the amount of stable coins that is now your collateral. So you're always, this design basically keeps you in that over collateralized state. And so there's a couple of key unlocks here. So first of all, as the price of collateral is falling, you're actually buying stable coins and selling yield, which is pretty contra, you know, the opposite of a traditional AMM, which would be the exact opposite of that scenario. And so it gives you this ability to protect borrower collateral.

And that's really the big unlock here is you can not have to worry about a sharp downswing in price completely wrecking you. But there are trade-offs, like there's no free lunch in DeFi. And the trade-off here is that, yes, you save collateral, but on the way back up, you actually regain your collateral. And as you're regaining collateral, instead of regaining 100%, you actually lose a little bit. That little bit of collateral is essentially paid to the arbitrageurs for arming off your transactions.

And so as the price recovers, you actually gain your collateral back. So not only does it protect you from being full liquidated, But if the price fully recovers above your original investment price or above the upper bound of your liquidation range, I should say, you get the ability to withdraw the entirety of your collateral minus a small portion. So that small portion today, We're still actively testing this in production and Protocol founder, Michael Egorov actually has a little over a million dollar loan out and he's been in took out an insanely D-Gen loan for the sake of testing the thing. So that's a very Chad move, I got to say, but it's an 89% LTV loan with a range of 10 bands. So a super long range, it's a maximum range length and a very, very high LTV loan.

So it's going to get liquidated very soon. And over about 4 to 5 days of being in soft liquidation, so like his loan actively being arbed between collateral and stablecoin, it only lost a little over 1% of his collateral. So that when it recovers, he would get 99% of his collateral back and never had to worry about hard liquidation. That is a huge unlock for DeFi. It's a little early to tell and get all excited about this, but it's hard not to think that this will be the new standard for how DeFi loans get taken out.

It just is a better user experience. And there's a couple, there's like a lot of different ways to take this. And I know the guys here are probably super tired about hearing me talk about this, considering we have a report launching on May 26th that goes over this. So I've been doing a deep dive on it for a little over a week and our morning calls have been polluted with Curve USD talk. But the stable coin is a whole nother piece.

A lot of very interesting mechanisms there. There's a couple of different ways the protocol generates revenue from this. I mean, all in, it's just a true masterclass in mechanism design. I think the interest rate curve is probably the most exciting thing. It takes like 1 equilibrium rate and modifies that rate by the current CRB USD price and the balance of debt in the system.

And that just like, we've never seen anything like that. It's similar to an Aave lending rate mechanism where at a certain point, the rate increases to protect the protocol. But instead of being based around a utilization rate, that's really based around the price of the stable coin, which is pretty interesting too. So some cool stability mechanisms there we probably don't have time to get into, but net net, I mean, it's really hard not to be bullish on Curve as a protocol right now.

Without diving in too deep into the mechanisms, I just wanted to ask 1 question, Dan. Does the mechanism of Lama kind of open the door for under collateralized lending in some form or not yet?

That's a great question. And I actually asked Stani about this in our interview, if like we could get to a place of under collateralized lending with using Lens as a decentralized identity solution. I'll let you guys hear the answer yourselves in the interview, but I don't know. I don't think so to be honest, because you still need The issue with under collateralized lending is there's no recourse against the borrower if they never pay back the loan. And so this doesn't really solve that.

It just gives you a better UX and you can really max out risk parameters. Aave doesn't let you borrow against staked fracs ETH at an 89% LTV because it's a risky asset and they need to worry about DEX liquidity to liquidate that into, which is a whole nother ballpark issue. But Yeah, it just really lets you beef out the risk parameters and not have to worry about that hard liquidation. Now, it could be, there are still scenarios where you do hit hard liquidation, but they're pretty hard to meet that criteria as of right now.

Dan, I'm not sure if this question makes sense, but does the time in soft liquidation compound your collateral erosion for when you get back into a non-soft liquidated state? Great question.

And like, yes, but there are multiple factors there. So like the band range, so the number of bands or the length of from upper bound and lower bound of the liquidation range impacts it as well. But yes, like every ARB transaction, if you are in liquidation range during an ARB transaction, you're getting your collateral converted between stablecoin and collateral either direction as well. And so again, that's when the erosion happens. But what's interesting is this is an AMM instead of just a pool holding assets.

And so it costs transaction fees to participate in swapping the assets in the pool for the arbitrageurs. And So the 100% of the swap fees flow to borrowers and only the borrowers in the active range. So if you're getting your collateral eroded, you're also the only people accruing swap fees. And so that's kind of how this nets out because the swap fees are quite high. It's 0.6%, which that is a very, very above average for DeFi.

But it's because of the pricing invariant used by the AMM that it's still profitable to be running these transactions as an arbitrageur. So the swap fee kind of acts as like this balancing mechanism of kind of slowing down the number of ARBs so that capital erosion while also still keeping the pool healthy and ensuring that like paying the borrowers for the erosion that's happening as well. So it's like this crazy balance mechanism. And like, every time you peel back another layer, you just end up figuring out that this thing is again, a masterclass in mechanism design. So 1 last serious question about Curve USD.

Who do you think is going to raise the debt ceiling first, Curve USD or the US government?

Oh my god, that's an incredible question. Let's go Curve now. Let's go Curve now. Spoken like a true token holder.

I feel like Curve really missed out on some good marketing material with all this talk of hard versus soft liquidations, to be completely honest. I feel like there's a good joke to be made in there. But Dan, what's new with the Atom Accelerator? Absolutely.

I got to give a shout out to our incredible sponsor. If you're a developer looking to kind of break into the industry or look for a new home in the industry, the Atom Economic Zone is for you. It's the premier place to build in crypto right now. It's offering interchain security that you can launch a chain without having to bootstrap your validator set. You're inheriting the economic security of the Atom token itself.

You got IBC, which gives you the flexibility of interoperability. And Neutron is a great example of why these things are important. They just launched and now you have this permissionless smart contract platform to go build anything on. This is likely to be like the DeFi hub of the Atom Economic Zone. And it's going to be exciting to see all the development there.

And that's on top of the fact that liquid staking is starting to take off, which inherently makes DeFi more exciting. Again, we've seen this across all of Ethereum DeFi as well. And lastly, 1 of the things that the Cosmos industry or the Cosmos ecosystem has needed for quite some time was a native stable coin that can be relied on. And USDC is actively in testing, minting through Noble, and that is going to be like this last piece. So you have liquid staking and a native stable coin, plus this permissionless place to build smart contracts.

I mean, I really do expect to see a DeFi summer level of activity out of the Cosmos ecosystem. And if you have an idea that you think deserves a grant from the Atom Accelerator, please do reach out. We'll be sure to put their link in the description. And they're currently giving grants from $10, 000 to $1 million. And that's on a rolling basis as well.

So a rolling monthly basis. So if you're a builder, again, this is the place for you to be checking out right now. So be sure to check out the link in the description. And now we'll jump over to the interview with Stani, the CEO and founder of Aave Companies. All right, everyone, we are joined today by Stani, the founder and CEO of Aave Companies.

Stani, it's really exciting to have you on. You've been around the space for what feels like forever. You've been building Aave since 2017. So that's over 6 years ago, which is about 3, 3 and a half lifetimes in crypto years. So we really appreciate you coming on to talk to us.

We got a pretty exciting conversation today around Lens and Aave, both have some pretty exciting developments going on in

their respective ecosystems. Before we jump into that, I'd love to kind of just dive into your thoughts on the state of crypto today. Can you just talk to a little bit about the evolution of the industry? How has it changed for the better over the last few years? And is there anything that you feel has changed for the worse?

Yeah, thanks Stan for the introduction as well. Definitely feeling old now. But I usually try to measure the progress of blockchain or crypto or Web3 or whatever anyone wants to call it by a way of trying to measure and understand the adoption compared to other technologies. And I think something very comparable recently is that there's been a lot of excitement around AI. And I had to bring AI very early into this discussion, but I think it's relevant because for example, AI has been a field where we've seen decades of work and maybe more recently, a decade and a half more intensively.

And when we look at the overall crypto space and the underlying blockchain technology and different use cases, we've existed roughly a bit more than 10 years, depending on how you calculate. I mean, Ethereum pretty much, if you look at, if Ethereum was founded in

2013,

That's pretty much 10 years going to be during this year. And then, you know, Bitcoin even a few years earlier. So it just showcases like how early we are in this space. But The newer the technology is, usually it has a faster adoption curve. And the reason for that is that a technology might rely upon something that it's anchoring into pre-existing technology.

So example is that some of these social media applications, they have a significant increase in growth and adoption because there's already underlying technologies. There's the internet, there's IG, there's mobile phones and bunch of bunch of other stuff. And the way blockchain is approaching is that it kind of provides a completely different kind of a mindset and a platform of how the future internet is going to be built and the future applications are going to build in a way where we kind of like read these. I use the concept of re-decentralization because internet was built in a very decentralized way, went into more centralized path to make it more user-friendlier, more adoption. And now we have this kind of like idea of re-decentralizing everything we have online.

So I think personally, because we're building everything pretty much from the scratch, and we're still dealing with scalability challenges. And I think there are challenges and more of scalability progress, because we started with how much security we need to actually secure a blockchain-based infrastructure. And now we're looking into, now that we have the base layer, how much security we need and how we apply scalability and inherit something like Ethereum in layer twos, build that path towards more wider user adoption. So like we're in the right path, but because everything starts from very much from the bottom on the whole stack, it's definitely slower progress than if you compare some other technologies. But still, we've been here for 15 or so years, comparing to some of the technologies that are getting a lot of traction, they've been around as a concept and continuous progress for a few decades.

So that's kind of where we are from a technological

perspective with crypto. Awesome. So you really highlight that scalability is like the challenge that the industry has to work around today. And you often hear people mention like, hey, crypto really hasn't found its killer application that onboarded that next wave of users. But it almost sounds to like, I don't put words in your mouth here, but it sounds like you're referencing, the reason that is, is because we haven't seen that scalability that you need in order to onboard those users in the first place.

So even if the app existed, it's almost like this chicken or the egg problem to some degree. If you look at DeFi today, do you think that we still need to see this? Where it's come over the last couple of years is huge, right? On-chain lending, on-chain liquidity was kind of born, which fueled the growth of DeFi lending. And then you saw these new primitives get formed around that.

Is DeFi still missing some of these newer applications or is scalability really the issue within DeFi as well? Well, interestingly, in the

first place, Bitcoin kind of tried to solve 1 part of financial transactioning with the use of blockchain, basically selling value between peers. And with Ethereum, we also got a kind of like a more programmable layer on a financial ledger, just to decentralize, which basically means that whatever program, financial transaction you can imagine, that could actually be built on a blockchain can actually now happen because of the concept of Ethereum virtual machine. And I think regarding kind of like the idea of where DeFi is at this point, I think we've been filling a lot of gaps over the past years. We figured out how to exchange value in a very efficient way and how to supply liquidity and create the market for many of these assets that are created and secured by the blockchain. And with the lending and borrowing stable coins, we even expand that usability for financial ecosystem.

And I do think DeFi works if you can build something. I usually say it in a way that if you build something that is better, faster, stronger finance, then it makes sense to use DeFi. So if because of these interest finance and many of these protocols that you're using, you're able to get liquidity or attract liquidity where you couldn't do before, or if you can do transactioning with counter parties that you couldn't do before and brings you new reach. That brings also access and that's better finance. And because it's transparent, you don't need to necessarily trust a single point or a centralized provider.

That creates confidence on transacting beyond your normal reach. And I think that's the whole point of blockchain, because it creates this kind of like a democratic platform for transaction. But I think about the killer app and what that could be, I think it's more of like that, for example, Ethereum or crypto as a general, I think is a platform. So it's kind of like a gaming console. Think about it as like a Nintendo or PlayStation.

So you have this machine that works well and you play as long as there's some interesting things happening or you have some sort of interesting upside to it. So when you look at the history of Ethereum and everything that is happening in crypto, you have this kind of like a social elements involved into it. And a lot of the use cases, they are quite limited in the sense that you might need that lower cost component and scalability, but there's a lot of social things happening in crypto. So people were chasing yield back in DeFi summer, people minting NFTs and buying monkey pictures during the NFT summer. And now people are chasing also meme coins.

So these are like social events and games that are happening on chain. And as you have more scalability, you have more scalable infrastructure, you can create different kinds of games. And by games, I mean, like, it's not just, like I use games and use cases as a synonym. And the reason I'm calling them games, because they do have this component of like exploration, discovery, satisfaction, and the social component as well. So that's like, there's a lot of things that has happened in the past years that brought people here.

But we could do much more if the infrastructure allows us to do. And for DeFi specifically, I think we're in a good state where a lot of these protocols that have been built over the years, they're actually starting to show resiliency. The beauty of DeFi and Web3 is that it's purely an open space, open design space. So you can come in and build something very fascinating with a relatively small team anywhere from the world and empower a lot of people who are interacting with these interest finance. But at the same time, to get more adoption, we need to build resilient protocols that actually can hold large amount of funds without actually getting compromised or having issues.

And that's the kind of like the hardest parts for DeFi is that whatever you're trading for to secure a hundred million over the long-term, you should be able to secure with the same design, maybe hundreds of billions as well. So that's the challenge that DeFi has. And I think for the future, What we have to think about is that now that we have this interesting, trustless execution environment on Decentrist Finance, what we can actually build on top that isn't necessarily existing traditional finance and could actually be very empowering because we have this system that we built with this invest finance.

Yeah, that all makes a lot of sense to me. And I love that analogy you used between blockchains and gaming consoles. That's not something I had thought of before and I feel like it's pretty perfect, honestly. But I did want to ask you a question, something that kind of got resurfaced last week when someone posted something to the Lido forums to share revenue with token stakers. But you know, there's 1 camp that's like, yes, that's great, gives yield utility to the token.

But then the other camp is like, well, we actually need to reinvest the protocol profits into maybe redeploying on other chains and insurance fund, offering new products, whatever it is. I wanted to get your take on whether or not various protocols should be sharing revenue with token stakers, or do you think that that money needs to be reinvested into growth?

Yeah, this points down to the question is that, what kind of functions a DAO should have? And it's a wide range topic, actually. So we've seen DAOs that have different kinds of units. Those units get allocations of capital and they're part of this whole bigger DAO. You have sub-DAOs.

Then you have a team which is basically part of that DAO and, and, you know, building for the protocol, building for having a growth measures for the protocol and a bunch of other things. So, So kind of like we see also DAOs that act like a company almost. I personally think that the layer of the DAOs should be very thin because end of the day, that's what we're building our public goods, meaning that you really want to mitigate all the potential risks that involves that protocol to operate without issues. And I think once we basically have protocols that are sufficiently working well, they're resilient, maybe their risk parameters are managed pretty well and can be automated down the line. 1 of the risks that still exist is the governance risk from the people itself.

So recently saw the incident with tornado cash with the DAO governance attack. But that's the kind of a surface that we have to limit ourselves from as well. So how to reduce that human risk out of the system and have a functional public good. And I think that's where having a thin layer, DAO layer, where you have a functional protocol and the DAO effectively allocates capital to maintain the protocol, have some fixes, pay for security contributors, some small measures. But effectively it should be kind of like a thin layer and everything else from that.

So if that public good actually is really beneficial, creates revenue. I mean, Avidao creates revenue annually from 25 to 50 million, depending on the fluctuations annually, Meaning that it's 1 of the rarest DAOs that are actually producing net positive profits after all the costs associated for paying for contributors. In that case, you could actually allow some sort of mechanisms where the token holders can maybe take additional risk, stake the assets and get part of that profit share by actively contributing with their assets into the protocol. Not necessarily passively because that's another story. So I believe that maybe in that case, you could have an interesting opportunity there.

So yeah, I come from a perspective where I think a DAO shouldn't do everything that it could. Maybe that's the case in the beginning, but down the line, you really follow a path where a protocol becomes a public good and the DAO kind of becomes like a trust from analogy there where it just allocates capital and have less and less governance votes down the line.

Really interesting perspective there, Stani. I think this is gonna be a conversation that stays in the limelight for the foreseeable future, honestly. But I wanna kind of drive the conversation a little more towards Lens. But before diving specifically into this 1 application, I want to get your views from a high level perspective around decentralized social media as a whole. How does it benefit the end users to use decentralized social media compared to maybe the web 2 alternatives?

Yeah, I think it goes back to the previous conversation that we started building an internet that is really decentralized so anyone can connect. Then you have this idea of you can self-host a server, connect into this big infrastructure of internet. Slowly, what we realized is that it's not really efficient to, or it's not actually even easy to get everyone online and share information. You could read it easily. So if you have a browser, You could easily browse the internet.

So as a read mode, it works pretty well. But once you want to express something and you want to create content, share ideas, that is where you have to figure out the way that how do you actually contribute to whatever that discussion might be online. And that's where actually bigger social media platforms and Web 2 was somehow built, where you had actually ways to create content, share information, and share links. They created Slashdote is a good example of that. And then other platforms and bigger social media platforms today have the very same pattern because they provide the usability in exchange for, I would say, more control over your social capital.

So your profile, your base, and what you actually see in the feed. And that's very little where you have actually control and benefit. So the way we approach, actually, social media and what we did with Lens is that we were looking into those different kinds of artifacts or features. What happens is like, what is happening in online networking? So typically you create a profile, then you might follow other profiles that are interesting for you.

And then you basically share whatever you find and amplify content to your own follower base, and then you create content. And then we took some of these social media primitives and turned them into protocol guarantees by using smart contracts and using the blockchain. So for example, when you create a profile on Lens, that profile is secured by the blockchain. And if you follow other users, that follower graph is also secured by the blockchain. And these are protocol guarantees.

So you can actually choose, make a normal database follow as well. But basically what we are wanna provide to users is that they actually have an access control into their online presence, however they want to do that. And then it's up to the applications that are building on top of the Lens Protocol to actually decide which bunch of these features, because the Lens Stack, it consists of that on-chain component, but there's also a significant off-chain component. For example, the recent kind of like an optimistic scaling solution that we launched, the Mocha, which actually creates blockchain transactions, but stores them on a data availability layer, which is verified by whoever wants to run a verifier. And then also other off-chain components, if you don't want to actually store any data on that data, whether the layer or on-chain.

So it's basically a full hybrid stack. And what's interesting here is that it's up to the applications and then users to choose what they actually want and need and reflect the user experience. But the biggest benefit for users is that now the kind of like Our dynamics change between the platforms to a bit more user-centric. And that means that if you as a user have oversight of your profile and your follower graph And it's not actually anymore stored in a platform, in a, let's say, owned by a social media company. What it actually means is that you have now the choice and portability to take your followers and go to another experience, or even use an alternative algorithm.

So because it's open, it also means that anyone can compute and create algorithms for discovery, finding content, finding peers to total in a more open way. So it democratizes the access to create these algorithms and also provide to the user as well. So it changes a lot of those dynamics that hopefully are helpful. And because you're tapping into the same user base, hopefully what we're thinking is that it's more easier to bootstrap a social media application because you could use the previous user base and kind of like attract without them needing to create a new account because you have that portability by default.

Yeah, that's super interesting. You gotta think that'll really push kind of the innovation at the front end side of social media to kind of the next level considering how easy it is to move your data from 1 to the next. So love to hear that. Before we get into Momoka, the DA solution that you guys unveiled recently, I did want to get just your quick thoughts on the hardships of building on Polygon, if any, that you've experienced by trying to scale social media on Web3 rails?

Yeah, I think Polygon is a great option for some of the artifacts that we have in the lens ecosystem and the protocol. So for example, storing a profile makes a lot of sense in terms of the security you want to apply. So whenever it comes to your blockchain, there's always a component of scale and the cost of scale and that security. So in terms of Polygon, there is a certain amount of transactions that you can actually submit into the POS chain. But our goal is to actually provide the user's choice.

So they should be able to choose in which networks they are using to secure their profile and also their namespace as well. So when it comes to actually transactions that are more frequent, and that's usually sharing content, which is basically amplification of content with the mirroring, the creation of the content, comments. Some of these applications, social media applications in Web 2, they experience at peak

20, 000, 25, 000

transactions per second. And we're talking about something where you might find a block time where you could actually fit all those transactions. But because of the amount is so great and blockchain, the way it works is that you have, let's say, block time is 2 seconds for the synchronization. You still have a lot of data that gets queued. And with something like Momoka, you can take that big amount of data and just dump it directly to a data availability layers.

And it's agnostic, so you can choose where, obviously, RV is the main 1 now, and verify that the data is submitted correctly. So it's actually like the way we describe building on Polygon and also in the Mocha and everything that we have in the stack is that It's about applying the right ingredients and tools to what problem you're trying to solve. And you have to be very resource conscious when you're actually working with a blockchain, especially when you're dealing with non-financial transactions, because that's where you have to think about, okay, so do I need a blockchain to secure, let's say, a profile? In most cases you do, for example. Do I need a blockchain to create a post or a comment?

In those cases, maybe data availability is enough as a solution. So those kinds of challenges come when you're building, when you have a strong on-chain component as well. Stig Brodersen Okay.

So 1 of the first thing that comes to my mind here is like the design decision between building in the Ethereum ecosystem, so through Polygon, or the leveraging a high throughput chain, something like Solana. We've seen a recent rise in the number of high throughput chains around Sui and Aptos as well. So I'm curious just to get your take on, do you think it would make sense to build out a decentralized social media platform on 1 of these high throughput blockchains?

I think where they might be very useful is securing some of the elements. So for example, the tokenization part. So I think it's very valuable for a lens user to be able to choose where they actually want to mint their NFT. So the beauty of MomoKite is that it really kind of creates the actual content that the creator or the user wants to create. But you can actually decide after that moment has happened and you have created the content where it could be minted.

So you could actually use similar like a lazy mint feature where, you know, whoever likes the content can actually bring it on chain and mint a copy of it. And then decide also on which chain that should happen. And I think that's where it plays a big part of the tokenization aspect. And I think all the NFTs, they don't need to really be minted on Ethereum. And there's going to be a moment at some point where we have a lot of Layer 2s settling on Ethereum.

They're going to take a lot of clock space. So at some point, even when the upgrades that are coming, even if the gas price is going down at some point that demand is getting refilled. So we have to think about where this actually more consumer-facing activity will go. And those chains will perfectly, the same as Polygon will provide that path, Ethereum will just become a bit unusable for the consumer perspective. But then you have those layer twos and, alternatively, other layer ones where you can actually have that organization.

So it's more about providing as much as possible flexibility for the user, not just for the user, but also for the developers, and letting them to choose. And whenever we build ads, we're trying to always think about how can we be less opinionated and how we can just leave the choice more for people who are going to use it in the future.

Gotcha. Yeah, that makes a lot of sense. I think it'd be super helpful if you could kind of describe to us, you know, what is a typical transaction look like for a user when they're using Lens today and posting all that data to Polygon versus what it'll actually look like once Mimoka is fully integrated throughout the stack. What is the trade-off in security assumptions, but what is the benefit in terms of performance and user experience going to be?

Yeah. So the on-chain transactioning when you are creating content on Polygon, you're simply creating a post. For example, you can say, GM 0x3 Search, we're going to interview someone tomorrow and it's going to be huge. So you create that post and you submit. So in the background, actually, none of the transactions have gas, neither you need to sign.

So that's done by a service called a dispatcher. So basically, you could submit your own transaction, pay your gas, sign in a very decent dressed fashion. But in most cases, it's not really needed because you're creating content. It's not a financial transaction. So you're using Dispatcher to have a better UX.

So once you paused, what happens in the user interfaces in many of these clients, like Lancer or Butterfly, what actually happens is that the content itself gets reflected to you right away. So as a user, you see the post there, so anyone can go and comment. So it's optimistically rendered to you, reflected on the clients. And then in the background, what's happening is that the transaction is put into the queue, And if there isn't any queue, it's submitted on chain, on Polygon. If there's a queue, so if there is a huge amount of transactions, I don't know, maybe something happens in the news and everyone is commenting some sort of event, you have a transaction spike and the block space isn't enough so the other transactions will be submitted on the next block.

So basically you have that transaction, once it's done, you actually have an on-chain pause, which means that anyone can go and collect. And as a user, there's built-in monetization in the Lens protocol. So monetization isn't the main thing about Lens, but it's something that happened organically and maybe because blockchain has this component of settling transactions, so if you can settle, if you can create content, you can also settle the actual payment transactions into Getter. And when you compare it actually to a Momoka transaction, so what happens there is that the process is very similar to create a transaction, and it's actually a blockchain transaction. So that's created by the user, but then assigned by the user and so-called submitters submit the transaction itself.

So what the submitter does, and currently there's only 1 submitter, but can be added more down the line as we have planned. The submitter simulates the transaction with a feature that is on the node network. So basically it's called eat call. It's simulated against the smart contract rules that are in the protocol. So for example, if there's a rule that's, and you're making a comment that only your follower can comment and someone creates a transaction and they're not following you, that transaction will fail basically.

The simulation will fail and the mobile card transaction will fail. But if it's true, what happens then is that the transaction is simulated by the submitter, and the submitter is submitting a true bundler. It's basically a service provider that helps you aggregate data into data availability layers, like RViv. And that transaction is stored in RV and reflected on the user interfaces. And verifiers verify that the data format that was created and simulated was correct and it's stored in data by the layer.

And also there is the verification proof that is stored there as well. So what actually happens here is a transaction that is reflected in less than a second. And you can use the same idea, So it's kind of like an optimistic data scaling solution. So you don't have execution, that's why the transaction cost is extremely low. So recently I was looking at the Momoka transactions.

So we have

112, 000

transactions and the total spend for all these transactions is

$45.

So it just tells you that the costs are similar to what you would be running AWS infrastructure. And that's the kind of like idea there because you don't need to use the execution that blockchain provides. You're basically using data availability for data scaling. And you can actually use that because these are social media transactions and non-financial transactions. And the same kind of model could apply to gaming as well.

You just need to change what kind of data you're submitting and what are those things that has to be verified on that data format. And that could be applicable there as well. I hope I didn't confuse too much, because I tried to explain every single process that happens. So there might be a lot of just data availability as

a whole is already a confusing topic. So adding in the twist of decentralized social media definitely makes it more exciting. But I pulled up the Momoka Explorer here at momoka.lens.xyz. Congratulations, First of all, on crossing the 100, 000 transactions mark, currently 112 transactions have been processed through Mimoka. And then there's this box here that says total spent $45.52, which equates to $0.0004 per transaction.

And so that like, so am I thinking it right that the users are therefore paying the transactions, obviously a very, very minimal fee, and that revenue, if you will, will flow to the submitter in this case?

Yeah, so this spend amount is actually what will be the cost for spending for the RV. So 1 of the data availability layers that is used. So, Momoka can use technically whatever DA layer is created. So that could be, I don't know, even IPFS is a data availability layer to some extent. So, but Arbeed has a pricing where if you want the data to be stored forever or long period of time, I think they calculate it for 100 years, you pay a small cost doing that.

So basically, that is the cost that is associated on storing on our VEVE and having that guarantee there. But in the future, because as you see, there's 1 submitter, but anyone can run a verifier. Even, you know, you can have a verifier that is running on runtime within the application of like Cluster or any of these clients, but in the future, you can create a network agreement between the verifiers. So once you have certain amount of verifiers, verify the same data, you can create some sort of incentive system there. And you can create some sort of incentive system on the submitter side.

So when you actually have more submitters, they will have to have some sort of incentive of submitting and also some way of actually slashing if those conditions, if they're submitting something that isn't really aligned with what they should have submitted. So it's an interesting kind of like a concept of network agreement that you can do outside of the blockchain on whatever data you want these nodes to agree upon. It's very lightweight as well. So you can run this on a mobile phone. Verifying.

Okay, awesome. Yeah, that adds up. I see the Celestia guys always tweeting out like, look where I'm, look at the crazy place I'm running a light node from now. So maybe we need

to get some pics out

of the Aave company's team from, look where I'm running a verifier from now. So I'm curious, you mentioned that there could in the end state be multiple submitters. What would be the incentive to come online and be a submitter, participate in this ecosystem? If I was spinning up my own decentralized

social media platform, would I want to run a submitter as well? Yeah, if you want to help to decentralize the world. But I think there could be actually financial incentives as well. The submitters are actually running a very important task of looking at whatever data is created and submitting that into our VEF. So I think both for the verifier and submitter, there needs to be some sort of incentive mechanism down the line.

I think now we can get a few people to run the submitters, but they also need some sort of penalties as well if they don't produce, if they don't submit the correct data. But that's pretty much a network agreement with some sort of a slashing model that we're thinking about down the line, once we know that this system works. Momoka has been working quite well so far. So It supports post and comments and mirroring. And now what we want to support in the future also is that if you create an on-chain post, you can also create a Momoka comment to have this kind of cross-composability down the line.

We've brought also a Rust client from Omeka, so that's something that is coming out as well, and it's gonna work faster. So yeah, there's definitely a lot of exciting things coming up.

Yeah, it definitely sounds like it. And I know a ton of people in this space are waiting for that kind of killer social media back-end application. And I feel like Lens definitely has the first mover advantage on that. So excited to keep following it. But I did want to steer the correction a little bit towards Aave as we only have about 10 minutes left.

Can't forget about the OG baby of your Astani. So I'm curious how Go is coming along. We just saw CurveUSD launch, obviously Dai and Frax have been around for a while. So I guess what's the differentiator for Go? What's the timeline?

And yeah, how are you feeling about the implementation?

Yeah, I'm actually quite happy that the decentralized stablecoin, especially on the over collateral side is getting more traction. In our case, with the Go, I think, I mean, it's there's quite a lot of things that has been already done on our side that really gets us into very near moment of progressing more. The code has been public for quite a while, so the infrastructure itself is ready. The governance process has been progressing. There's been a couple of votes regarding the interest rates that the governance wants to set and accepting a second facilitator.

So facilitator is essentially a bucket and a mandate to mint Go, which is also quite an interesting concept. So the first facilitator allows us to mint Go against your codelization at Aave protocol. And the second 1 is just a flash minter facilitator. So there's a certain bucket size of flash minting Go and doing all this stability stuff in E5. So basically the whole process is quite far.

And I think down the line, what's important for us is kind of like, the idea of Go is obviously it brings diversity into the stablecoins ecosystem, especially on the over collateral stable coin part. But the more kind of like a bigger vision is that we really want to push stable coins in DeFi as a more of a financial layer for the internet, meaning that with the layer twos, we might actually have a better chance of seeing more payment applications being built. And it's quite ironic because Bitcoin in the first place was there to solve payments between people. And with DeFi, we pretty much built a quite robust financial ecosystem with swapping, lending and borrowing and stablecoins. But no 1 in crypto actually uses stablecoins to settle their payments every day.

So there are some of course, but the scale is so small at this point. And it could bring a lot of transparency and accountability to interim payment transactions. So that's kind of our vision is that we're super excited that it goes live quite soon. But then what's more exciting is that how it could actually create impact and benefit people across globally, build better financial ecosystem, which is more transparent, more resilient, and has guaranteed execution with the smart contract. So that's something we're super excited about.

And also excited about that there's other folks in the market that are also working hard towards the same goal. So we're all on the same boat.

Yeah, I'm glad you mentioned that. There's also seemingly an increased overlap between MakerDAO and Aave to some degree. The MakerDAO team forked the Aave v3 front-end and contracts to build Spark, and of course, is paying a fee back to Aave for doing so. And they are able to use the DAI savings rate to kind of create this new lending market for Dai using Spark. And so I'm curious, like, how do you think that will influence the Aave's market for Dai lending?

No, I'm kind of glad they formed the Aave retreat because I personally believe what we build is, with our team and the support with the community, quite I think like a state of the art protocol that is very flexible so you can create markets where collaterals might not be borrowable and you can borrow against them, but the collateral itself is not blended and create similar markets that already exist in the Aave ecosystem. I personally think they low-ball the profit sharing, but that's up to the governance. And it's something I'm not really involved in. And I think probably down the line, we'll see more of this kind of synergies as well. And now having Go, that also helps to kind of like having some sort of like a cross liquidity between all of these markets.

So I'm happy that they went to this path as well because it was also a missing component for their ecosystem. And yeah, I think down the line, what we're following more is kind of like a bigger vision of how we get these stable coins or how we get DeFi more into wider adoption and keep experimenting. A lot of the exciting things that has happened in the Aave ecosystem and things that we build comes from some degree of experimentations as well. And I do think I've participated in the ETH Global's ETH Lease 1 Hackathon, and we're talking to hackers there about DeFi. And I think we're in a kind of like a state of DeFi where, you know, we can't really anymore look into finance and, you know, what exists there and fill gaps in DeFi.

We actually have to, we have to really think about like what kind of things we need to really build that could be better, create more impact, help the users and help adoption. So I actually will, they appreciate a lot, the DeFi builders that have existed and have built it and contributed for the past years. But I'm somewhat, somewhat even more excited about the DeFi builders that are here to build the future and, and kind of like tackling a bit more of those challenging parts of like how we get more, more, more kind of like a scale and adoption. So it's definitely going to be interesting next few years on the DeFi side.

Yeah, absolutely. Actually, I meant to ask this question when we were talking about Lens, but since you've said, we're hoping Go can actually be used in the real world in some capacity sometime in the future. Are you guys looking at any way to build out kind of like a mobile strategy? I know Uniswap with their mobile wallet. I'm just curious if Lens or Aave teams are thinking in the same vein.

Yeah, it's quite interesting. I really appreciated what Uniswap team did. And I kind of, I like that they have the, you know, it's wallet only to swap in Uniswap and I don't like having that mobile experience in their ecosystem. I personally want, like, the way I think about Web3 and building is that I want to build a very core infrastructure that really gives a lot of design space and experimentation space for a lot of the builders in the space and leaves them, leaves ability for them to build those applications that might bring them into mainstream. We do kind of understand what kind of things could be built and guide to the right direction.

But that's the beauty of decentralized ecosystem is that you really don't need to build everything. You can just focus on making and bringing 1 thing and ensuring it works well. And then all the things actually will build around. And a good example for that is that we launched Lens a year ago. By the way, it's 1 year anniversary for Lens on the main net.

So there's actually a main net post on Lens protocol that you can collect for 1 Matic that is kind of like a anniversary post. But anyway, so we launched the protocol without any front ends. And someone built a front end hackathon that is open source. Anyone can fork it. And suddenly, in 2 months of our range, we saw first front ends and clients being built on Lens.

And actually, they're very good now. They have very good music experience, video experience, and it just gets better down the line. So if there's really good margin and space left for builders, they usually come and build as well. And I'm kind of expecting a bit the same for the Aave ecosystem. 1 thing they need is basically a vision and a path and some more ideas.

And usually that's how we see a lot of innovation.

Yeah, definitely go check out that NFT here. Thanks for calling that 1 out there, Stani. And I want to ask 1 more closing question just because the lines between Aave and Lens are, I can see a world where they overlap in that if Lens can at some point be used as some sort of decentralized identity solution. And then theoretically, you could have a Go facilitator that was authorized to mint a certain amount of Go in some sort of under collateralized loan fashion. I think this is pretty far out on the timeline if ever possible, but I'm curious really quickly if you could just provide your insights around, do you think Lens could ever be some sort of decentralized identity protocol?

I think, I mean, I definitely see them working in a kind of like a separate ecosystem and ecosystem in the world, but I do see down the line value in actually, let's say that you're using Linux protocol and you have an audience and you're earning some sort of income and your income could be predicted out of it. So it's kind of interesting because we really don't earn anything on social, in most cases, online. The way the internet is built anyways today is that it's the companies that are making all the money and the users are just like consuming, contributing, you know, and we kind of are trying to make the internet more people powered, right? So if in the future you have a creators or users that are earning income and you can predict that income, I could see that could be like 1 step of, of, um, some sort of trust network of, for, for providing, um, liquidity and capital, um, down the line. But I think we're still far away from that.

I do think that the current credit markets aren't really fair, You know, especially if you are moving from 1 country to another, it's very hard to passport your credit ratings. You might start from 0. There's advantages of like blockchain-based data and utilizing that audience and revenue. That could be a first step. But we really built Lens from the perspective of how to make internet more people powered.

Taking away from businesses and giving to people can be the, the description there, but it's an interesting, interesting idea down the line for sure.

Awesome. Awesome. Well, Stani, this has been a fantastic conversation. I really appreciate you taking the time to come out and speak with us. Thanks again for coming on.

And if you want to leave the audience with somewhere to find you, learn more about what you're building and what your current thoughts are, maybe even show your lens handle. I saw you're closing in on the 90K mark. We'd love to help you get there.

Yeah, so I'm starting off Lens, and you can follow me across all the Lens applications. If you don't have a Lens profile yet, so Lens Protocol is still in beta. So We can give a profile if you're building something on Lens or you're curious about Web3 Social, excited what we are building, just send me a DM on Twitter and I can help

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