Bankless - DeFi 2.0 Summit | Rari, Olympus, Tokemak, TracerDAO, Alchemix

Episode Date: November 11, 2021

Among these five protocols is over $8 Billion total value locked. But what is DeFi 2.0? What primitives are changing, and where do we go from here? From liquidity to self-paying loans to permissionless borrowing/lending, these projects intertwine and work to align incentives between protocols and users. ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ DHARMA | From Dollars to DeFi! https://bankless.cc/dharma  ------ BANKLESS SPONSOR TOOLS: GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini​  LIDO | DECENTRALIZED STAKING https://bankless.cc/Lido  AAVE | LEND & BORROW ASSETS https://bankless.cc/aave  UNISWAP | DECENTRALIZED FUNDING https://bankless.cc/UniGrants  ------ Guests: Jai Bhavnani https://twitter.com/jai_bhavnani?s=20  Rari Capital https://rari.capital/  Pat McNab https://twitter.com/pat_mcnab?s=20  TracerDAO https://tracer.finance/  Scoopy Truples https://twitter.com/scupytrooples?s=20  Alchemix https://alchemix.fi/  Carson Cook https://twitter.com/LiquidityWizard?s=20  Tokemak https://www.tokemak.xyz/  Zeus https://twitter.com/ohmzeus?s=20  Olympus DAO https://www.olympusdao.finance/  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures 

Hey, Bankless Nation, welcome to the first of its kind. This is not a Defy 2.0 panel. This is a Defy 2.0 Summit. David, what's the difference, man? Panel versus Summit. What's different about this one? It's a simple math game, Ryan. Panels have three people. Summits have five. Yeah, we have brought on five of the biggest minds out from the space of these next generation of Defi apps. These defy apps that have really caught a lot of the energy, caught a lot of the excitement, and notably are not part of the D. which is why my DPI bottom call has not done so well because if these tokens were in the DPI it would be a different story.

That's the D5 Pulse Index. It's a D5 Pulse Index. It's supposed to track, which tracks like the top 15 or 20 or so DFI projects. But this new cohort is not part of those. Because they're brand new. Yeah, it's a new cohort. New cohort. And time is not linear.

Time goes in cycles. Time goes in generations. And this is kind of the gist that we're getting from this new cohort. cohort of Defi apps. It's a new generation. There's a certain kind of disposition. There's a certain kind of construct. And so we're going to unpack what all of those things are with all five of these different members from these different Defi teams. So many of these people have come on to the bankless show before. Actually, I'm pretty sure every single person has been on bankless before. We've got Jay, uh, Jay from, from Rari Capital. We got Pat from Tracer. We got Scoopy

Trooples from Alchemics, Carson from Tokermak, and of course Zeus from Olympus Dow. So again, perhaps the most stacked panel that Bankless has ever come up with. Sorry, not panel, sir. This is a summit, summit, not a panel. Pardon me, pardon me. Absolutely. And this is like, I'm really excited to dive into this because I want to hear what the panelists, with the summators, what the summators think of this entire term and how to define it

because it has been in Zika as like Defi 2.0 is this just a new cohort? I mean, Scoopy Triple put out a thread and said there are some patterns that are emerging around like token incentives. It's been a theme we've been talking about on bank lists for I guess the past few weeks into months. I feel like this is kind of the culmination of the topic where we're assembling all of the Avengers to talk about it together. So that's what we're about to do. David, before we get started, we have to let bankless listeners know about something cool that's going on. And that is, Dharma has moved to Polygon. Okay, so Dharma is one of my favorite smart contract wallets. These guys make it super easy to go from bank account to bankless.

Right. So, you know, the process of getting into crypto can be long and arduous, right? You connect your bank to go to Coinbase or Gemini and then you somehow get the funds to Metamask and then there's gas fees involved and you're like, you're in defy, seven, eight steps later. Darma makes it super easy, particularly with Polygon, their new Polygon integration. So you can go from bank account straight to token, straight to Polygon. in like less than 10 minutes. Like that's how easy this experience is. And also, as a little cherry on top here,

Dharma is offering bankless listeners of which you are won. $50 in Eath when you try this out. Heath, that's my favorite. Yeah, that's your favorite money, David. That's my favorite money. There are rewards for using DFI guys, right? If you don't know, now you know, airdrops, rewards like this come all the time.

So check this out. Click the link in the show notes that will get you the code that you'll need to use to get this bankless deal on Dharma, set that up on your mobile wallet as well as just a simple app. You're good to go. Ten minutes. Give it a try. Ten minutes or less. It's a wormhole from your bank account into Defi. All right, Ryan, I think we're ready to go ahead and get right into the show. And I've come up with a name for who these people are. If you're, if you're on a summit, you are a mountaineer. So we are going to get into these five mountaineers who are exploring the frontier of Defi 2.0 in just a moment after we talk about some of these

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Check them out at Gemini.com slash go bankless. All right, guys, we are back with our mountaineers of Defi 2.0. We got Jay on the left, Jay from Rari. We got Carson in the center, Carson from Tokomak. We got Scoopy on the right, Scoopy from Alchemics. We got Patrick in the top right corner, clocking in from Tracer Dow. And at last but not least, we got Zeus from Olympus Dow here on the bottom of the screen.

Guys, thank you for all showing up for this fantastic Defi 2.0 summit. Thanks to you all for being here. We are spanning the globe. We have the globe surrounded. And we also have Defi surrounded as well. So thank you guys for all showing up. All right, guys, let's start with Jay. Jay, since I named you first, Jay, what the hell is Defy 2.0 in your own words?

Yeah, that's a good question. I feel like we see so many different definitions floating around. But I think to me, what Defy 2.0 really represents is a movement beyond the traditional, right? I feel like Defy 1.0 was about replicating what we saw in traditional finance, putting that into Defi. And Defy 2.0 is about shaping these products, even taking the 1.0s, and thinking about them from a defy perspective. And what does that mean and what are the innovations we see? it's thinking about liquidity differently, thinking about things like PCV and reserves in a totally different way. It's about thinking about all of these like tokenomics themselves, thinking about

defy and all these products from first principles perspectives with defy notions in mind. Thank you for that. Jay, Jay, and then turning into Patrick from Tracer, Patrick, what do you, what do you think about Defi 2.0? What does Defi 2.0 mean to you? Well, it's certainly not 1.0 and not quite yet 3.0. So somewhere in between the two. I think one signal of what DFI 2.0 is sort of evolved into is the fact that five of us are here on the call who are each different contributors to different projects. There's an incredible social layer that's forming between different Dow communities and treasury interactions particularly as well. You've got sort of hundreds and millions of dollars within these Dow treasuries,

and you're now seeing incredible tools being produced by protocol developers that are within this call that allow treasuries to utilize these funds and earn yields and interoperate amongst one another. But as well as that, I suppose your 1.0, you had some pure primitives that were built with respect to lending, with respect to exchange, a few derivative primitives. And I think Defy 2.0, you're seeing native applications that are built plugging into some of those core primitives that allow users to do really particular things. And I think Alchemics is an incredible example of something like that as well as Tokomax. So yeah, I think that's probably a decent classification of what 2.0 could mean to me. Is what you're saying that DeFi 2.0 is just generally a lot more collaborative than the applications that we've seen previously?

I think so, yeah. And I think there's also this element of permissionlessness as well with respect to like market creation. Something that the defy is going to usher in is this Cambrian explosion of new markets driven by like Oracle infrastructure as well as just innovative new algorithmic stable coins or any type of function that you can encode within these smart contracts. I think there's that element where developers can come in and leverage existing code bases to be creative. and create new financial tools that produce value for the economy and ecosystem that large. Fantastic. Scoopy, turning to you next. What does Defi 2.0 mean to you? Anything you want to add on to what Patrick and Jay had to say? Just going to be piggybacking on to them a little bit here. So I think to me it represents three things. One is sort of like building on the previous layer of applications and having like

increased composability and capital efficiency as a result of it. you know, like alchemics, how our deposits aren't doing anything, or they're not just, you know, sitting there. They're going into urine and making yield, things like that. You know, abracadabra does that as well. And I think you're seeing more and more like treasuries do this with their assets as well, is that they're not leaving them idle. So another thing, I think, is the liquidity dynamics for protocols instead of relying solely on yield farming. There are now, like, you know, alternative ways to source liquidity for your protocol, whether that's through, like, Olympus Pro and, you know, like an ownership model of liquidity

or something more like a tokenac where it's a much more, like, efficient, like, market-driven, like, rental of liquidity. I think those are some pretty big innovations as far as the D5-2.0 stack. And then the other thing is, like, sort of like Dow treasuries becoming, like, firms in and of themselves where they're not just like, you know, just sitting there, they're doing things. Like you see a lot of them are now tapping into the power of like rare refuse and they're starting their own markets for their coins and they're kind of doing some really cool and innovative things as a result of that. And it's not just limited to that, but, you know,

there's lots of different things. Like if you look at fracks, like they have these algorithmic market operators and they mint and burn the supply of frax and put it into various markets. And then with that extra supply of fracks and the liquidity tokens, they go out and then they're farming with those and making more money for the protocol. And I think it's like just a really cool way to see, you know, like Dow's evolve and becoming like active market participants and investors. I think that's pretty cool. Soos, with everything that's been said so far, anything that these people have missed,

anything you want to add on to the conversation of what defy 2.0 is. Yeah, I mean, obviously everyone's really like, you know, covered all the good stuff. But, you know, I think that like, you know, the 1.0 is these like crucial infrastructural primitives that got built. And then, you know, this new wave is kind of leveraging those kind of with this focus on like strong communities, building strong protocols, in my opinion. So it's a little bit less focused entirely on the user side of things. And how do we get, like, you know, people to come in here and use this and, you know,

LP for it and whatever, and more on, you know, how do we build a strong protocol that has longevity and is going to, like, you know, persist along with us. One other thing that I think it kind of symbolizes the shift towards is, you know, along with that, this shift from like B to C models to B to B models where you're, I think that we're going to see a lot more protocol to protocol activity, whereas previously it was very constrained, I think, you know, on the most part for protocol to end user. Fantastic, Zeus. And Carson, last but not least, the hardest, hardest role of all to take coming in

last after everything's already been said. But Carson, what do you think about Defy 2.0? Anything that these fellow members of the summit has missed? Yeah, so I think everyone got it totally right. I would agree with everything that said so far. Not surprising, given who the cohort is within the summit. But maybe just a couple of things to layer on. So I think of Defi 2.0 and not necessarily as something.

something that is defined or not necessarily as a thing, but more a moment in time. And I think then within that zeit guys, there's certain sort of themes that you can come up with. And I would agree with everything that that's been said so far. A few things to lay around would be, I consider DFI 2.0 at the moment sort of being the protocols that extend value or increase utility of other DAO's. So there's a sort of shift in mindset from how do we maximize the value internally just for my DAO into how do we unlock the most utility and value for other DAO's. And then indirect or as a corollary from that, increase the value of our own. I think a lot of these things take DFI 1.0 primitives and build on top of them.

And I think there's this strong kind of focus on getting to sustainability. So really focusing on the DAO as this living, breathing entity and how you can get to sort of a self-sustaining Dow moment. Some of us call it the singularity. But again, a lot of this goes into a shift from, hey, it's not just thinking about TVL or basically rented liquidity into a platform. but rather what are your protocol controlled assets or protocol controlled value look like. Maybe two more things to say on this.

I think Defi 1.0 was largely for users. I think Defi 2.0 is largely for DAWS, not at the expense of the users, but DAWS are a significant user of Defi 2.0. And I also think just the common theme here, the community was brought up that's very strong. It's really all about collaboration and building bridges between protocols between DAO's. And I think we're going to see that only get more and more so as we go forward. Wow, Carson, rising to the challenge of taking the hardest spot with a fantastic answer. I really like everything you guys have said.

And the gist I've gotten so far is that it's all about collaboration. And where Defy 1.0 didn't have a layer of Defy to build upon, Defy 2.0 does. And so Defy 1.0 had to go after the users. That was the only thing. But Defy 2.0 doesn't have to go after users. It now has Defy 1.0 to actually go. after. And in this era of collaboration, it's also worth noting that a lot of the projects that each of you represent are integrated with other people's projects. And so I think there's just the

collaboration is evidenced by just the collaboration that we see on here on this summit. So now I'm going to throw to Ryan to take the next question. Yeah. So I guess maybe, and we'll start with Carson this time because I think that's only fair. But actually, Carson, this might be a trickier question because I want to take the other side of this and ask this question, right? From somebody's a bit skeptical about Defi 2.0, I really loved how you defined it as like, hey, maybe this is a moment of time. Maybe this is just about a generation of Defi builders and kind of what they're doing at this point in time. But anytime we have a new generation of builders that are doing things differently, sometimes the previous generations raise some eyebrows, right? And they start to question

because I think part of what Defy 2.0 is doing is it's kind of questioning, or at least it is building with different assumptions than some of the blue chip, Defy 1.0 assumptions have built on. One of the charges or one of the criticisms to defy2.0 is like, guys, you guys are playing with fire. Some risk. Look, doing perpetuals in what Patrick and Tracer doing in Defy, that's kind of risky business. And we're talking, you're talking, Scoopy, about like, collaboration and capital efficiency and using all of the other primitives. But doesn't that build compounding risk, right? Smart contract risk stacked on top of smart contract risk. And Jay, talking about, like, permissionlessness, that sounds fantastic. But like Avey and Maker, right, there's a reason

governance exists. And that that reason is kind of a check and balance to make sure that, assets aren't getting deposited into these contracts that are, that are, you know, too risky, right? Or the entire system can collapse. So, you know, I haven't even addressed, you know, so the other panelists, but let's talk about some of these, but I could, yes. Let's talk about some of these, maybe these criticisms or even call them sort of tradeoffs or some of these things warranted. What's your take, Carson?

is like, you know, some people might go even as far as to say, hey, you know, DFI 2.O is not really a thing. It's just this new set of, set of protocols that are taking, you know, new risks. And I, it's just an extension of defy. What are your take about, what's your take on all of those things? We'll start with Carson. Yeah, I can jump in. So, and I agree, this is a good question and a tough question. So I think, I think it's sort of a natural evolution. Like, I don't think there's anything, if you've been playing through the defy ecosystem over the last year or two, I don't think there's too much that's being built here that's overly surprising.

Maybe the first time you hear it, but then I think kind of in retrospect, probably, you know, all five of the great projects that are represented on this summit, like, it just seems sort of obvious, like, okay, yeah, that's smart. Now, that doesn't mean that it doesn't introduce risk to your point. I think the thing you have to weigh here is sort of what you unlock. And I'll maybe just talk for one second on Tokomac only because that's the one of course I'm most familiar at. But I sort of think at Defi 2.0 as a lot of these things, not in every case, this is again, it's sort of undefinable. But in most of these cases, it's something that couldn't exist without the previous set of DeFi protocols.

So in the case of Tokomac, if we are not in exchange, we don't want to be in exchange, there's always the underlying AMM. So at launch, it's sushi swap, uniswap, zero X balancer and we'll be adding more over time. So you can really think of like a natural evolution of this was great. have a decentralized coin base, right, which was uniswap, sushi swap. How do we have a decentralized jump trading? How do we have the decentralized liquidity provider and market maker sort of the thing that controls the flow and is sort of the puppeteer of liquidity into those venues? And so if you think about it like that, certainly this introduces sort of risk up at that higher level, but you unlock a ton by sort of evolving beyond just being reliant on centralized

trading firms and market makers. And interestingly, they can still plug into this in a way that actually can help their business as well, which is too detailed for this discussion, I'm sure. But the point is, there's going to be risks at these higher levels. You still have the inherent risks of the underlying ones. And in some cases, you have what I'll call it, emergent phenomena risk or like integration risk with some of these things. But I actually think in general, that's not where most of the risk comes from. It's really trying to understand the inputs, outputs of each of these protocols, whether it's at the Defi 1.0 layer or 2.0 layer, and just trying to mitigate those things. And absolutely, I think we probably need to get

into a more advanced sort of system-based approach probably to audit and risk assessment that isn't just limited to a single protocol, but rather how it sort of interacts with other protocols. So let's talk about that a bit more. And maybe I'll direct this to Scoopy, since you kind of brought up the idea of Defy 2.0 being all about composability. I remember back in the day, like a couple years ago, any time that David and I tried to talk about Money Legos and D5 and everything was so early, right, inevitably you'd see a maximalist meme of some sort saying,

not money Legos, money janga, right? And they depict everything sort of falling down and tumbling in on itself. But talk about this risk, because we have, talked about smart contract, you know, the compounding risk of smart contracts stacked up on top of smart contracts. So Scoopy, what's your take on that? Are we adding a whole bunch of risk into D5 systemically by building on top of all of these additional protocols? Well, I think that whole money Lego versus money changa like comparison is very fair. And I think, you know, out there in DFI, there are some money Lego.

that are very solid and secure, and there are some money jingas, which might not be good things to build on top of. And as far as, like, alchemics goes, like, the reason we were with urine, why we chose urine is because they have a very good reputation. They have an amazing dev team and DevOps team, and they're there to support you and all sorts of stuff like that. And we could have gone with the different yield aggregator, but we chose urine because, you know, we wanted to make sure that, you know,

the underlying stuff in alchemics didn't break. And AlchemicsV2, we're going to be adding different strategies, different yield providers and stuff like that. But for every single strategy that we are going to be including, it's going to have to go through a very rigorous audit. I know that if you incorporate, you know, yield-bearing tokens from another protocol and you don't catch, you know,

some little tiny detail in their code, then it could lead to some, you know, disastrous consequences. So as a result, we have to take a very, very security-first, you know, approach when it comes to a building with these Lego blocks. So we can ensure that we build it intelligently so we don't have this, you know, this tower fall over and collapse on us. But yeah, I mean, there's no getting around it. Like even with every single precaution and, you know, you know, like putting in safeguards

in your dab to mitigate any kind of, you know, risk or disastrous effect, there is still going to be an increase of risk the higher you go up the stack. You know, that's just a matter of fact. You know, if, you know, since we're building on die and then building on yearn and stuff like that, so like if something happens to die, like we're, you know, that's bad for us. If something happens to urine, that's bad for us. So, you know, it's about choosing the best protocols to build with at that point to make sure that you're not, you know, going to, you know, make a money jenga tower. Jay, our summators, our mountaineers so far have kind of talked about the risks and definitely

acknowledged the risks. But I think what they're also saying is the rewards exceed the risk, the rewards of this innovation, what we might find on the other side once we unlock these things. What's your take on that? Do you think the rewards exceed the risk? Give us the pitch for these new methods. Yeah. I agree with everything that has been said so far.

I think it's the cost of innovation, right? It's like defy 2.0 is moving at light speed compared to defy 1.0 for a variety of different reasons. A part of it is risk tolerance, right? We're able to ship contracts much faster. We're able to move much faster than a lot of these older projects. And yes, that means there is smart contractor. Yes, that means that there is market risk, that there's risk of all sorts of factors. At the end of the day, it's what's going to need to happen if we want to innovate.

in this industry, right? Somebody's going to need to be pushing the bounds, be pushing into these risky areas. And yes, people will lose money. And that's going to be extremely unfortunate. We need to do our best to educate users on the risks of these protocols. But at the end of the day, it's going to be a small, a small blip in history compared to the innovation that's about to happen. Zeus, what would you add to all of this that's been said so far about kind of the risk reward of defy2.0? Yeah, I mean, I really just think it's in the nature of innovation that you know, inherently, you know, with innovation and, you know, the reward that comes with that, you have risks attached to it. I think a really important thing is just insulating as much of that

risk as possible. So it's not generally the best case scenario that you can have is something fails, but it doesn't affect anything else. If that's the case, then you as a depositor or a user of that, you know, you're hit, but you should have known the risk that you were taking on being involved in that. And no one else kind of gets hurt. I think that one of the actually like the really good things about Defi is the fact that things can be very insulated. So not always and generally, or definitely like, you know, die is one of them that, you know, is pretty entrenched kind of everywhere. But for, for a large part, you know, things stay pretty separate. I also think that it's just kind of a matter of time when it comes to like these becoming new, you know,

building blocks is that, you know, we as an industry generally do take time to just wait. and see, okay, is this thing going to fail? I don't want to build on that as my own project if I think that it's going to fail or there's some high risk that it does because then I'm also hurt. And so, you know, this is the reason that we can look at a lot of these like 1.0 primitives

and like, you know, they're safe or we have a collective belief that they are safe, just because they've been around for a long time, they haven't failed, and that inspires confidence. I think that that's generally the best way to mitigate risk is just to take it one step at a time and not rush into things, you know, let things kind of arise, observe them, make sure that they're safe and solid,

and then you can start to utilize them and, you know, build up the stack. Patrick, I want you to weigh in on this too. Obviously, perpetuals are much more complicated, you know, protocol and project than many that we've built in kind of the D5.1.0 world. Does that complexity weigh on you, or why is now the time to kind of lean into these more complex financial instruments in DFI? Yeah, look, I think it's always been a fundamentally risk-taking space since its inception. Like the early Ethereum developers developing the first smart contracts,

you saw what happened with the Dow and everything in between now and then. There's continually been risk that's existed within DFI or Ethereum and the blockchain industry more generally. But alongside that, you've seen incredible security auditing companies emerge alongside the growth of TVL. You've seen insurance protocols emerge to provide ERC 20 credit default swaps, like risk harbour, incredible protocol. Shout out to them who was supporting Tracea out at the moment. And with those further steps and more energy and more attention within the space, To me, at least, it doesn't feel like it's taking more risk than the first Dow smart contract developers we're taking. It's continually just building upon what we've got in terms of the foundation.

And of course, there's going to be some shoddier parts of the foundation that crumble as more pressures put on them, but continually over time. And this is why we're here, this movement will become more fundamental. And the foundations will continue to build to provide financial transaction support into the future. One of the favorite quotes that I believe, Amin Soleimani, one of my heroes in this space, said about smart contracts risk is it's kind of like the steam engine. It blows up a bunch of times. And then at some point we figure it out and it just works. And overall, Defi has been blowing up less and less and less over time. And we've kind of been figuring out this whole smart contract thing.

And maybe hopefully in five, ten years from now, we're just looking back on like, oh yeah, remember when we didn't know about how to do smart contracts? That was a fun time when everything blew up along the way. So I want to move into our next question here. And framing this question under Jeff Bezos's quote, Your margin is my opportunity. What about Defi 1.0 has been left on the table that the project that you guys all represent has been able to grab? What did Defi 1.0 not do that gives you room for you to build your Defi 2.0 app?

And we'll go in reverse this time and start with Patrick from Tracer. Patrick, how is Tracer, what did Tracer grab that was on the table that DeFi 1.0 left. Yeah, so we're probably an interesting hybrid between what you might consider a 1.0 primitive and 2.0 trace it out right now with our perpetual pool contracts. We're simply just leveraging chain link Oracle infrastructure and not interoperating with any other smart contract at the base layer right now. So I think for us, the opportunity and the opportunity that we've seized is in providing

leverage tokens for the defy. economy. So we've got non-liquidatable leverage tokens and perpetual pools enable you to not have to set up a margin account. It's a very simple experience for people that understand the concept of leverage, but don't want to go through the complexity of trading a perpetual swap contract can mint a token and then utilize it within uniswap, utilize it within other, other defy primitives to trade these ERC20s. So this is this is where we've ventured into with Tracer to start off. and it's something we're continually excited about growing. Jay, let's turn to you.

People often talk about Rari as a supersets of compound in AVE where it doesn't actually formalize specific assets that lets you do all of them. Is that what Rari has really taken from the table of DFI? Or what else is, in addition to that, what else is there to say? Yeah, that's exactly it. I think that the big thing is, before you had these token holders telling you what you can and can't borrow,

which is just like the new version of banking regulation or whatever you want to call it permitting collateral, right? You have to go lobby to the token holders in the same way. They have to go lobby to whoever it is in traditional finance. And we said that's not fair. Let's enable any token as collateral. And you can pick who you want to govern your pool, right? If you want the omis to govern your pool, you can have them govern your pool. If you trust Tetranod more, you can have him govern your pool and enable not only just the lending and borrowing of really any asset,

but the administrative controls to anybody who are comfortable with. That's a pretty spicy take, Jay. I want to maybe dig into that for a second year. But you were equating kind of like token holders, basically, and governance forms as another form of gatekeeping for assets, right? And you think it's a more open world to not have those gatekeepers in between, just let the market decide. That's what you're saying, right?

Yeah, I mean, like how I'd like to think about it is, before uniswap, right? I feel like a lot of new entries have come into crypto. There was radar relay and Idex, right? And radar relay had a permissioned listing of assets. And it was completely taken over by uniswap because it was more efficient. You could have any assets you wanted. And I think we're seeing the same thing happen with fuses, is compound and all they're the radar relay, right? They're going to continue trying to iterate in the ways that they can. But it's inevitable for the liquidity to migrate over to a product like fuse. Do you think that's a That's a trend in general. Do you think that permissionless will always outcompete, you know,

permissioned versions of the same thing? Or do you think it's going to happen more on the long tail? I think it will always win. The one exception being how institutions and regulation plays a role into it. And I think that's something that we're still seeing play out. Obviously, like Avey has their institutional product compound has theirs. Once we start seeing usage, if we start seeing usage, then we'll know what the play there is. But until then, why bother will focus on defy natives, the DGens, and everybody in between. And then we can worry about those guys. I know you didn't mean this, but I think this is hilarious that you called like a

bigillion people inside of DFI as the next bankers because they're getting the token holders, they're gatekeeping the permissions. It's a great take. And I think it's one of those really nice takes that it's jarring, right? And it actually makes people rethink about what that means to actually build a DFI app. Great take. Carson, let's go to you. What about Defi 1.0 was left on the table that token Mac was able to capture?

Yep. So what I'll say that DeFi 1.0 left on the table, they didn't have a choice in leaving it on the table. So the beautiful thing about Defy 2.0 is we're past the bootstrapping phase. And what I mean by that is DeFi 1.0 was really bootstrapping users and bootstrapping capital. And all these different protocols that chose to use a token essentially separated users from their product with a token, which meant they lived and died by liquidity. What that meant was they needed to secure liquidity because our sort of thesis is that in Web 3,

value flow is replacing the data flow in Web 2, and therefore liquidity is in the bandwidth of the system. So they needed to pay for that liquidity, and of course that came via inflation. So these liquidity mining emissions is really the thing that we're tapping into with Tokomac. We realize that protocols need liquidity. It's not just about liquidity is not about traders

and investors like it is in traditional finance. It's about users and protocols since different tokens of value need to be swapped for others. And therefore, that was really the signal that we went after with Tokomak was how do we both increase liquidity within the ecosystem while at the same time reducing the cost to DOS for securing that liquidity and in fact, even getting to an inversion of economics so that DOS can actually earn while securing liquidity, really profit from their own liquidity as opposed to always be paying for. This is something I want to jump in on what you said, Carson, because I think this is also a paradigm shift for people, right? You said liquidity is bandwidth, which is super interesting. So most people, when they think about, like, crypto bandwidth, they're talking about maybe transactions per second or something like this. But like, we on bankless have talked a bit more about like something called economic bandwidth, right? And this fits this idea of liquidity as bandwidth. And so what you're doing at Toka,

Tokomac, are you basically a bandwidth provider? Are you some sort of an ISP, I suppose? Web 3 bandwidth? Yeah. Yes, that's exactly, it's a great way to put it, and that's exactly how we think about it. We think of this as infrastructure and really a liquidity utility. So if liquidity is the new bandwidth,

then what Tokomac is trying to usher in is the broadband moment for Defi and really all of Web 3 for that liquidity bandwidth. Put another way, we sort of think of multiple layers to the infrastructure to go a little deeper on this. You've got electricity, you've got the internet running on top of that. You have blockchains including Ethereum running on top of that. And then on top of that, you need liquidity.

And that, of course, doesn't just mean from Tokomak. Liquidity is a more generalized concept, but Tokomac is sort of one example of a broadband access to that liquidity. And the reason we think of all those as infrastructure is, just like on this call, if any of us drop, if the battery in our laptop dies, or if any of us drop internet access, we drop from the call. Similarly, nothing works in defy with zero liquidity. And so that's why we think of it as infrastructure.

It's a great take. I'm loving the metaphors, big fan of the metaphors. All right, let's take this one to Zeus. Zeus, what about Defi 1.0 left cool stuff on the table that Olympus was able to capture? Yeah, so just real quick, I want to tag on to Carson's thing there. Absolutely, go ahead. Because I'm super strongly agree. My own saying is, like, I think of it as liquidity rails of the new railroads.

You know, so this kind of crucial trainer, or, uh, What's the where I'm looking for? Transportational system that, you know, is kind of required for this commerce within DFI. In terms of what 1.0 left behind, I think it's that they go for very high volume, low margin businesses. So these are, you know, kind of at least when we're thinking about the blue chips, it's, you know, very high capital, like startup requirement. There's an actual phrase there that I'm blanking on. And kind of these low margin businesses, like if you look at uniswap, they don't even take a fee. Sushi swap, you know, it's basis points, you know, pretty much across the board.

Same because of the lending protocols. And, you know, 2.40 is kind of the shift into, you know, push into these more niche things that you can build on top of that where you can take higher margins and kind of, you know, accrue more value because you don't need to build up and incentivize billions in liquidity or, you know, service. other users of your protocol that you know that have low margins as well and so they can't really afford if you're taking a higher fee. So yeah, it seems like important products but you know, they don't accrue a crazy amount of value back to the protocol that facilitates them. Do you think that's going to be a trend moving forward where what we are building in defied trends towards higher and higher margin, just products? I mean, I see it as kind of what.

innovation brings in. So I feel like over like the the natural courses that margins trend towards zero or towards some minimum viable margin at which point, you know, the protocol can't really sustain itself anymore and the activity dies off. But that, you know, existing products and ideas will mark or kind of, you know, merge towards that minimum viable margin. And then, you know, innovation will always create higher margin businesses that then do the same. Fantastic. All right, Scoopy, you've been patiently waiting. Scoopy, what about Defy one point O left money on the table that DeFi 2.0 was able to grab? For alchemics, we just saw this opportunity because we saw all this yield being generated and

we're like, hey, what can we do with, you know, yield as a derivative? And, you know, what we came up with was basically a way for you to save your money and spend it at the same time with Alchemics. So you can just keep all your principal tokens like earning yield and then you can borrow off of that and then have your yield pay off your debt. And that that's something that we would need these 1.0 primitives to make in order for Alchemics to work. And we were surprised, like before Alchemics launched in the months running up to it, we were like, oh man, is somebody going to do this?

Is somebody going to do this? Is this Andre's credit, Y credit thing? You know, is it this, is it that? And we were, that's why we were in stealth mode and in such a hurry to launch because we thought somebody else would run with this idea before we did. So I think it's just, you know, we just saw, you know, the cool things that we could build from the people, you know, all the Defi 1.0 stuff. And then we took it and we ran with it. And we needed, you know, an AMM like sushi stuff. We also need another AMM like Kerr for our stable assets.

And then we also needed a yield aggregator. So we just had to, you know, kind of combine and compose, you know, what was out there in order to build what we wanted to build. Guys, this, this summit has already been super mind expanding, mind blowing for me. A couple takeaways. Talking about defy2.O primarily servicing other DAWS is super interesting to me. Defy2.0 is being just a moment in time. This idea that liquidity is bandwidth.

So much good insight is being dropped right now. And if you are listening right now, make sure you hit subscribe on your notifications so that you can get more of these live streams in your inbox. You know about them first. So hit subscribe on YouTube right now. Guys, we are not done with this summit, though. When we come back, we're going to be talking about defy 2.0 even a bit more broadly. In fact, the question of what's next, is there a defy 3.0 in store? Is that what's next?

And what generally is the bull case for defy? what's all of this going to culminate in and what's it going to mean? So stay tuned for that. But for now, we want to thank the sponsors that made this episode possible. Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous. code on Ethereum. Input the token you want to sell and receive the token you want to buy.

Something brand new in the Uniswop ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. Dow's have money and they are in need of labor. If you think that you have something to contribute to the Uniswap Dow, apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap Dow? No matter how big or small your idea is, you can apply for a UniGrant at Unigrants.org and help steer Uniswap in the direction that you think it should go.

That's exactly what we did to get Uniswap to be a sponsor for Bankless, and you can do the same for your project. Thank you, Uniswap for sponsoring bankless. The AVE protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply and borrow certain crypto assets. AVE version 2 has a ton of cool features that makes using the AVE protocol even more powerful. With AVE, you can leverage the full power of defy money legos, yield, and composability all in one application. On AVE, there are a ton of assets that you can supply to the protocol in order to gain yield, and all of those same assets can also be borrowed from the protocol if you have supplied collateral. Here, you can see me borrowing 200 USDC against my

portfolio of a number of different defy tokens in ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock in that interest rate in permanently. V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on un-swap, and then deposit them back into AVE. With AVEA, users can do this in one seamless transaction, saving you time and gas costs. Check out the power of Avey at Avey.com. That's aavee.com. Hey, guys, we are back with our defy 2.0 summit.

This has already been an extraordinary conversation with our five panelists. We're going to get right to the meat of this discussion, starting with this question. I've been super curious about how this defy 2.0 trajectory we're on is going to shape the course of defy in the future. And also the question of what's next? Is there like a defy 3.0 in store? where are we moving into and what are we evolving and what's coming down the the pike want to start this question with maybe zeus get get some of your insights i know with uh olympus pro you guys are have lots of conversations open with many different protocols um what is happening

in the defy 2.0 world how is it changing the trajectory and what's next is there a defy 3.0 that we should be looking forward to you that's coming on the horizon yeah uh uh So first, kind of touching the last thing there, like, I do just want to throw out that I'm not a big fan of the name. I think that it means that we've kind of learned something from Apple maybe when it comes to, like, you know, branding and stuff. But I don't really see this as, you know, I feel like that inherently kind of points to a fork or some kind of separation between, you know, this new cohort and the old one. Really, you know, we're standing on the shoulder to giants. you know, we are leveraging our predecessors and, you know, using them for what they're meant to be. You know, it just kind of bumps me out in that I don't want to, you know, feel like we're just kicking them to the curve and like, you know, y'all are irrelevant now.

No, it's like you're still very relevant. Can I just pause and ask the other panelists if they feel that way too? So it's like we didn't actually ask the question about like, do you like the name, DFI? Because I'm not convinced that that I like it yet either. But with memes, it's not always the meme that. you want to win. It's just the meme that that sticks, right? Who, like, who on the panel likes the term defy 2.0 and who actually has some qualms with it? So Zeus said he had some qualms. Anyone else with some qualms on the term defy2.0? Patrick, you look like you want to speak.

I just think there's, there's no clear place where DeFi 1.0 has stopped and Defi 2.0 has begun. Carson's characterization of a moment in times, probably somewhat apt. But I think there's characteristics in there that that we're seeing that weren't experienced a couple of years ago in the defy economy particularly around around those ideas that we've discussed of dows and and social communities that are forming so I think there's some benefit to it although there's no sort of end and start that you can say this is when we cross the barrier in my view any other thoughts on this panelists some yeah I mean I made the thread was a number of ago about DFI 2.O and I think that that started the meme or at least the branding of it.

And I just kind of arbitrarily said that, you know, before I was calling this gen 2. And just in that post, I just said DFI 2.0 and it kind of stuck. And I never wanted it to be like this dividing line between, you know, the OG protocols and, you know, the ones that came out in 2021. You know, I just, like it kind of took me a surprise that some people took offense to that. like as if we were trying to like, you know, you know, you know, kind of throw the, the OGs to the side. But that wasn't it. I think it's, you know, it's as much, it's as meaningful as saying something as a blue chip.

It's just like a name that people subscribe to it. And that's it. You have to actually look at each protocol like, you know, as an individual thing and not just try to lump it all together as, you know, blue chip or DFI 2.0 or whatever. Yeah. I can quick, yeah, chime in as well because I'm probably. I really see both sides to this. Again, I mentioned before that I think of it as a moment in time or a meme here. And I think titles, whether rightly or wrongly acquired, can just be helpful to help people

try to wrap their head around what's going on and categorize things. So I think insofar as it does that, it can be helpful. But I think, you know, myself and other people on here said earlier, and I agree with some of Zeus's sentiment as well, where like none of this was meant in an irreverent way to the giants that were standing on, the shoulders that were standing on of those. giants because as I mentioned early on like a lot of this stuff really isn't possible had those people not those those those innovators basically not built those and those are just as critical a piece of the stack now it's really just we have layer two of defy now right being built on top of layer one

and you still need those things just as much so I think that's exactly right I think the right mental model is generations right I know people that are born officially in the zoomer generation that identifies millennials and also vice versa and going back to to what Pat was said and saying there is no clean line. It's just like there's a bit of a vibe over here. There's a bit of a vibe over here. They're a little bit different. And then also exactly what Carson just said, one vibe was actually explicitly built because of the first vibe. But everything is a little bit loose. Everything's a little bit nebulous. But we do need these names to actually talk about the things that we're trying to talk about, hence why we have landed on DFI 2.0. But I think everyone here is an agreement

that it's not, it's not one coming to delete the other. It's one building on top of the other. We all going to make it. We're all going to make it. It's definitely not tribal. And I'm not hearing that from any of the people, you know, in this summit that one is, one is better than the other. And who knows how long this defy 2.0 meme will actually last, right? It'll be useful for a time. And I think it's been super useful as a mental model, just even to frame this conversation about what's new and what's unique about this new generation of protocols. But will we still be talking about DFI 2.0 in six months or or a year? Or are we going to just be talking about something entirely new and all of this

DFI stuff just smushes together? I guess it remains to be seen. Anyway, Zeus, we got a little sidetrack there. Thank you, though. That was a really interesting. Yeah. So tell us more about I guess how this changes the trajectory of things. And then like what's next? Yeah. Um, you know, so one of the really cool things that I think can come of this is, you know, with a shift to more B-to-B activity. You know, one of the things that I see in Defi is that, you know, since we're so early in this, you know, no like cliche intended, you know, it's still very just financial activity for the sake of financial activity, you know, and constructing markets with not a lot of

real world things going on behind it. You know, it is interesting to see like NFTs in that NFTs are this like virtual real world commodity type of activity or like virtual real world world good, if that makes sense. But I think that with this shift towards more B to B activity, we kind of enable real world funds to come into the defy economy, start to leverage the capital efficiency or, you know, innovations that, you know, can benefit their business and start to utilize these for things that maybe don't have anything to really do with finance itself, you know, and start to utilize capital markets for what they're meant to be used for, which is generally agnostic

to the market functionality itself. You know, if you look at TradFi, you know, it's, you have a lot of financial activity in this massive financial industry, but it's built around things that don't exist within that financial industry. You know, I see that as, you know, one crucial to the long-term success of DFI, but also probably the most exciting thing that we can look forward to as that proliferation start to occur. Jay, how does DFI shape the trajectory of DFI? What does it unlock for us? What does it change? Yeah, I feel like we could talk about like mechanisms specifically in a lot of depth, right? Stuff like PCV, stuff like new tokenomics that's been explored. But at the end of the day, I think what the biggest thing about Defi 2.0 is, and I think Zeus is the one that

brought this up in the beginning of the call, is community driven, right? It's like, you are one with your community. And what that means is it's so much more exciting, right? Innovation is not only moving faster, but you're going to, you're going to have products that are superior in every single way. So what does that mean for Defi means a lot of different things. It means that, one, this is going to be a really fun place to be working because you're just going to be working with a bunch of people that you like to hang out with. Two, because of that, you're going to have better products and better platforms for other people to build on top of and better platforms for even the trad fibros to come in and start

using one day. So I wouldn't look at it from necessarily a product point of view, but almost from like a, like a community point of view and a prospective point of view and the fact that defy 2.0 is here to excite things and to change things up and do go even a step. further than DFI in many ways. Carson, what's your take? What's going to be the long-term impact here? What would you add?

Yeah, I think it's interesting because even though, you know, we talked about the pros and cons of DFI 2.0, just again to be, to use it for its benefit, I'm going to talk about DFI 3.0 and 4.0 here for a second of just talking about what the next evolution of these are. I think that we will see a couple more cycles of this stuff that goes more down to Dow level and sort of seems to be retreating further into DFI. in a sense to outside users where like the power, the power users, the power builders understand what this is unlocking on like a D-to-D, like Dow to Dow or protocol to protocol level.

But, you know, Main Street is still like, if they even hear about this, they'd be like, what's going on? Ultimately, this is because right now we're laying, laying the foundations for, and I don't mean this in a bad way, but laying the foundations for the new Wall Street and the new Silicon Valley in one. and what really is exciting is the next phase is after that, which is, if you think about Wall Street and Silicon Valley right now, right, there's a whole economy that is sort of built up around that. That's much bigger than that actually, but that's enabled by that. We're building those layers right now. And the really exciting thing is the moment that we sort of come up for air from this sort of protocol to protocol moment and then go out to the world, basically. So once with what I call the deconautonomy, the decentralized economy is there. And you're starting to see glimmer. of this with NFTs and the metaverse gaming and GameFi. But any of these things now where you're actually building on top of what Defi 1.0, Defi 2.0 and the next few layers are. Eventually, users are going to have no idea what's happening under the scene. In fact, a lot of the builders aren't going to even know what's happening sort of under the covers. It's going to be

protocol to protocol that's using these things. And instead, the interactions back with humans are going to be at this much higher consumer level. If you guys are able to build out this protocol to protocol infrastructure, this kind of this additional bandwidth, this liquidity, everything that you're building, it just kind of hits me that, man, our DAOs are going to be badass. Yeah. Right? Like I'm just saying like if you're trying to start a corporation versus starting a Dow, how are you really going to have a chance? This I think is what you're talking about in terms of getting ready for mainstream. It's like by the time this is right now it's Dow to Dow, but it's mostly like Defy Dow to Defy Dow, right? But by the time this infrastructure is

built out, there's going to be a massive competitive advantage to launching your capital pool, your entity, your business, whatever you're launching on Defi rather than in the traditional world. Is that a world we're moving to? Scoopy, any thoughts on this? Scoopy, you're muted. Scoopy might have taken a break. Sorry, I was muted. I agree totally with what you just said there. I think our Dow's are going to be badass going forward. We have different ways of, you know,

Dow's can raise funds now and become powerful entities. I mean, you look at, you know, Olympus Dow and, you know, what they've been able to accomplish and not even a year. And, you know, we're seeing also new waves and waves and waves of, Olympus likes that are that are, you know, spawning. And it's just like a giant moment of capital formation. And I think what's going to make the Dow's like supercharged compared to the corporations is that they're going to have like really awesome financial tools at their fingertips that they

can use, you know, to manage their firms a lot better than they could with the Tratify markets. Like for example, like in Alchemics v2, we're, you know, shameless plug here. we're going to be a lot more composable right now. V1, we lock down smart contracts from interacting with it, but V2, we're not going to have that restriction. And then we definitely see, like, other DAOs as big customers for alchemics. You know, if they have, like, you know, a few million stable coins sitting around in their treasury, they could put them in alchemics and then take out a loan, right?

And then they can use that, you know, they can spend, you know, from their treasury while still saving, you know, stuff like that. And I think that's really cool. That'll just be one tool that DAWs can. use going forward. And I think, you know, everything that we're building now in the Dow to Dow services, business services are going to make it just that much more attractive to have a Dow in the future. Patrick, round this out for us then. So we've been talking about how DFI changes the trajectory. And I don't know if you have any insights on that. And also any insights on what's next? Like,

what is the next cohort of builders? What are they going to build? I know of all the panelists, I believe you guys are probably furthest along on like layer two. I don't know if that's part of the story. Give us your thoughts here. Yeah, sure. So I think the trajectory of DeFi generally, whether it's 1.02.03.0 is somewhat inevitable in terms of just providing the foundations for future financial transactions.

How DeFi 2.0 is contributing to that. It's probably accelerating that. There's extensibility with respect to the value that DeFi 2.0 is bringing to its users by enabling them to do just different things at 1.0, I suppose, didn't allow. But I think one thing that hasn't been touched on is around Oracle infrastructure generally and how that will seep into what we now know and understand as DEFI. I think the transaction costs required for the creation of new markets within the DEFI environment are so low that experimentation and so many new markets can emerge just simply based off

something like an Oracle price fee. So something we're particularly excited for with Tracer and excited to see Defi get into is providing real world markets for people that operate within the economy on a day-to-day basis. So like we imagine a world where an Uber application, for example, has a hedge price of fuel button now that's powered by a decentralized finance smart contract and you've got an Oracle that's providing the price of fuel so that this Uber driver, they can budget on a monthly basis for their consumption of fuel.

Particularly as well, I think Klima Dow has taken a really awesome step towards providing climate market infrastructure around carbon. Markets that have traditionally been extremely expensive to create, there's a lot of bureaucracy involved, there's a lot of plurilateral like multinational agreements that need to be formed to create standard environmental markets. But now with secure Oracle infrastructure and reliable smart contract, technology, if there's demand, these markets can be created and facilitated around things like water, around things like air, markets that we haven't been able to properly define because property

rights haven't really existed and the informational Oracle architecture hasn't been there. So I think that's the part that we're really excited about. And I think that's the big bull case for DFI is when it really starts hitting the world and we interact with it within our smartphone applications on a day-to-day basis. It's a fantastic reminder, Patrick, about why we are all here in Defi. Sometimes we get caught up in the meme coins and the JPEGs and kind of forget that, like, oh, yeah, we are actually here to change the world and make the world a better place. So thank you for grounding us back into reality.

And I want to tie off this conversation with a little bit of a lightning round for everyone, both taking off the 2.0 hat, putting on the generalized DeFi hat at large, but also getting more granular into your specific projects as well. So this lightning round question will have two parts because the question is, what are you excited about? But I want you to each one of you guys to answer it twice. What are you excited about generalized defy? And then what are you excited about your specific project?

So each of you gets to answer the question twice. One, you get to answer about your own project. One, you have to say something about the rest of defy. So let's go in reverse order. So Patrick, let's start with you. And you kind of actually just did this, but I'm going to give you a second chance to do this. again. Patrick, what about Tracer Dow excites you? And then also, what about generalize

DFI also excites you in moving forward into the 20s? Yeah, I think I didn't touch on the metaverse piece too much. But I think there's what's getting built right now within DFI, a lot around the property rights and the financial market contracts that are being created are going to be applicable to metaverse circumstances. So it's something we like to imagine and and think about within Tracer is how can risk management infrastructure be applied to something like the Metaverse. I played a bit of Roonscape when I was growing up and remember like buying things such as Godswords and having like pretty fluctuating prices in the Roomscape in game economy. We like to imagine that we can provide risk management infrastructure for people that want to hedge their in game item risk and and provide those types of tools that that sort of haven't previously existed that, app developers that are creating these games can plug in to provide unique services to their users

that it's just they're plugging in code, they're plugging in markets for people to interact with on a daily basis. So the metaverse component is something we're particularly excited about seeing that bridge between what's currently getting built within Defi and how users are now interacting with these metaverse in-game economies. Very elegantly answering the question two birds with one stone there. Nice job. Scoopie, what are you excited about? for the future of Alchemics and also what are you excited about for greater defy? Yeah, I mean, our version two is in audit right now. So I'm super pumped about getting our version two out, which is going to enable multi-collateral and multi-strategy, Al-Assets, Al-Ust, L-Eath.

We're going to have LBTC and then some, a couple more surprises along the way. So building that out, you know, like whenever we're able to launch that and then building it out throughout. next year is something that's really exciting to me and my team. And also other things we want to build on top of Alcomics along with it. And then what's exciting me in the DeFi space, in the crypto space overall, the thing that at least, like, you know, tickles my imagination the most is kind of like game-fi gaming economies and things like that. So like, you know, just as Patrick was talking about like Runecape, yeah, I really want

you know, a dungeon crawler. I want an MMO like, you know, that's built, you know, the blockchain back end. And I want to have, you know, my sword and, you know, like that I earned, you know, in the game and then be able to sell it if I want to, you know, or buy someone else's sword. And I want that so much, you know,

and be, you know, built on blockchain rails. So looking forward to seeing games who are, you know, and companies who are pushing in that direction. You know, I know, a lot of, you know, respect to AXE and what they've been able to build. You know, hugely respectful to them. Excited for Alluvium as well.

So it's sort of like a Pokemon game that's going to be coming out. So, you know, I think that sector is probably, you know, one of the most exciting ones just because of the potential of it in like, you know, I guess a metaverse context or just a play to earn context. I think it's just really cool. And Scooby, do you think defy's like the banking layer of all of that, all of these in-game economies? Well, I definitely think that, like, you know, if we do have like a proper MMO game, you know,

it's built on the blockchain, then you're going to have like banking services inside of it. Like you'll go to like an Ave kiosk inside of, you know, you know, the game or something like that. And I think that that would be really cool, you know, so you can have like, you know, player banks. I guess rarefews would be better because you could actually make, you know, like markets for, you know, swords as collateral and things like that. So, you know, I think that would be really cool. Jay, let's turn to you. What about the future of Rari?

It really, really excites you. And then also, what about the future of DFI is also gets you going? Yeah. Ferrari specifically, I think it's this, like, idea of pursuing the maximum capital efficiency, which will take various different forms over the next few months, whether it be in onboarding new collateral types and really bringing this idea of superfluid collateral, whether it is like setting limit orders for interest rates throughout fuse or even something as simple as a fuse 2.0, which has greater capital efficiency, all these things just like in pursuit of building the most like the most efficient system.

That's that's what excites me. As for as for defy and zooming out from like from just Rari and zooming out to like what are we actually doing here. I think what's exciting is like I like just see new stuff. right and what i'm like not just like boring new stuff like new stuff that's a defy and crypto native right i feel like everybody's still rebuilding the same stuff forking the same stuff there are very few projects that really catch my eye as something that's defy native the first one in fact was auger right and it's like now that we've built this way to transfer value let's let's see what else we can let's see what we can do with it that's not just like boring lending and borrowing right i think oom is another great

example of this. And there's so many, right? And it's just like, what's some Defy native crazy shit that we can do? Well, it's great because Scoopy mentioned Rari and then you mentioned Ome. So I'll just go ahead and turn to Zeus here. Zeus, what are you excited about with the future of Olympus? And then also what are you excited about with the future of Defi? Yeah. So, you know, we have this migration that is rapidly approaching. We're finally, you know, it's something not to take lightly. And so we've spent a while, you know, planning it and we're finally, you know, getting close to wrapping up the audit and getting going on it, which has, you know, admittedly prevent or like posed as a bottleneck for some activities. So I'm super excited for that to clear up because I think that you can expect to see a lot

come out of that. So, you know, including like, you know, moving cross chain at long last, that will be nice. You know, we have these new bonds. And with those, you know, enable like secondary markets for those bonds. I'm so excited to explore that. So, you know, liquid markets on those, you know, things like isolated, more strategic, you know, bond accumulation of assets. So I know it's just

proposed that we started accumulating CVX. You know, stuff kind of involved in how do we imbue Olympus with, you know, this influence, you know, to more effectively, you know, tackle its goals. And then

with that kind of like see this is yet to be seen but you know what i want to see because if you're not familiar we've had like i think 70 forks in the past a couple of weeks some ridiculous number and you know i kind of always expected that um you know that if we do well um we're going to get forked what i really want to see come out of that is this industry of okay you're going to hear here first uh i call them decentralized backed. Decentralized backed. I'm forgetting my analogy or my.

Your metaphor. Yeah. Okay. Decentralized backed digital currencies, aka DPDC's. With this kind of idea that, you know, all of these forks call themselves a reserve currency. I think that they're conflating reserve to be has reserves, whereas reserve means,

is reserve. So a reserve currency is something that's a reserve currency for other central banks and institutions. You know, so obviously not everyone can be a reserve currency. Otherwise, no one is a reserve currency. But with that, we can kind of form this new like 4x market of, you know, these DBDCs, you know, that exist in defy and kind of can construct, you know, a much more similar to, you know, fiat currency system where, you know, they against each other are low volatility and low, or like high stability. And through that, even if, you know, measured against USD, there's still not stable, you know, stability inward, you know, projects into the stability outward.

That's my expectation. So I'm excited to see that play out. Maybe it doesn't happen. Maybe it does. But if it does, I think it should be cool. Well, so there's DBCDs versus the CBDCs, right? That just rolled right off the tongue. Zeus, you'll be happy to know that the YouTube comments just blew up in forking jokes.

Ooh, I'm forking! All right, Carson, take us home, man. King of the metaphor so far on this summit, what are you excited about with the future of Tokomac and what are you excited about with the future of Defi? Yeah, sounds good. I'll jump in. I don't know if I have metaphors here, but I think I've got some cool things to say. So just building off, Zeus, one thing I'm pretty excited about is linking together Olympus Pro

Bonds as a service with Tokomac General. I think there's some really interesting things we can unlock by pairing those things together. And in fact, Zeus and I have had some discussions on that topic. So I'm excited to see what comes with that. Other few things, I'll just go rapid fire on this. We're excited to evolve Tokomak into what I call an any to any protocol, meaning we will take tokens as liquidity on any L2 or supported chain. And then the liquidity directors, the holders of Toka token can direct that liquidity to any venue on any chain. So we want to quickly sort of extend to any to any. Third is one that I won't say much on this call because we've been tight-lipped, but a lot's coming out shortly about the membrane project.

You'll be hearing a lot more about that in a few months here. And then last thing with regard to token MAC is one way to think about tokenac is really something that transforms tokens into liquidity or idle tokens into liquidity. We are going to be in the near future expanding that to where we actually take ideas into liquidity and not start at the token. We want to go actually before something is even tokenized, which sounds. probably crazy, but we actually have mechanics to do this where you would actually take ideas into liquidity. So we're excited to evolve there. Pulling back into sort of the space, I'm super bullish on GameFi and Metaverse, whether you love or hate that term, and sort of everything that's going to evolve within that economy and liquidity integration from Tokomac and more broadly

Defi into that space. And I think just getting into what gets me excited about Defi, I think we actually have a really interesting branding or rebranding opportunity in front of us in defy. We've of course been calling defy decentralized finance. I think we should actually start adopting the term democratized finance. I think that that is ultimately what makes this really exciting. As I think about what this will enable for individuals, as this goes beyond sort of the few and goes out to the many, we can start unlocking scale economics and exciting opportunities that were never accessible to the individual. Now that's going to be available for everyone. And I think one of my bold predictions here is that in 25 years, DOWs will replace companies because companies cannot

compete and also don't want to compete with DAUs. Wow, fantastic. What a load of insights to end with democratized finance indeed. That is another virtue and definition of DFI and what we're all building towards panelists. I felt the collaboration. You guys talked about D52.O as being collaborated in the way you handed off to one another, talked about building on each other's projects. I feel like I saw the collaboration in real time.

The collaborator. Yeah. We're not going to overuse that. Yeah, not at all. We never ever. So anyway, we appreciate you guys being with us and everything that you're building in the space. So thank you. I was about to call you panelists again.

Summators, thank you for joining us on the first ever DFI summit on bankless. We appreciate it. And thanks for having me. Thank you. Thank you so much. I appreciate it. Bankless listeners, if you're still hanging with us, make sure you hit like and subscribe.

If you're on YouTube, you're watching this. Subscribe, like, so you get the notifications in the future. Of course, got to end with risks and disclaimers. All the protocols we talked about have some degree of risk. Eat is risky. Defi is risky. There is no free lunch, folks. You could lose what you put in.

But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot. Thank you.