On The Brink with Castle Island - Corn (Yearn Finance) on the Evolution of DeFi Protocols (EP. 691)

Episode Date: December 17, 2025

Henry sits down with Corn, head of business development at Yearn Finance, for a conversation about the evolution and current state of defi. In this episode:  The history of defi from 2020 to today, and how the TerraLuna crash impacted the market How incentive mechanisms in defi have changed in 2025 What caused the collapse of xUSD and Stream Finance? What is the role of risk curators in defi? The state of onchain cybersecurity and recent hacks What is the appetite for defi from non-crypto users and institutions, and will a declining fed funds rate help? How do defi protocols drive value to their native tokens? How "decentralized" is defi today?  

Welcome to On the Brink. My name is Henry Harris, and I'm an investor with Castle Island Ventures. Today on the show, I'm joined by Korn from YerN Finance. Yerin Finance has been building DFI infrastructure and providing verifiable risk-adjusted yield strategies since 2020. Corn and I discussed how DFI has evolved since the collapse of Terra Luna in 2022 and how recent volatility in the market once again highlighted the need for proper risk management and transparency in D.R.N. Defi. We also touched on the state of cybersecurity for on-chain products, as well as what it's going to take to get non-crypto-native institutions comfortable interacting with Defi. Without further ado,

here's my conversation with Korn from Uran Finance. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them where the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guest and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated.

The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. the bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry, we have something called the Bitcoin.

Well, Corne, welcome on the podcast. Appreciate you coming on. Thank you for inviting me. This is Pulpi Taco's favorite podcast, so I could not miss it. I only attend the really high signal stuff. This is why we do it for Pulpy and all the other listeners out there. What we want to get into today is a state of the union on decentralized finance on defy and maybe just a level set, your background, just how you got into crypto and defy, and we can go from there.

I have been in crypto full time since November of 2021. So if you remember back then, that was the top of the top in the past four years. I had been following crypto for a long time. and I was working with Cisco Network's largest partner for 10 years in the data center space, building networks and data centers for hospitals. Someone from Yerne was in a telegram chat with me, and they knew that I did a lot of technical selling. The IT space was starting to slow down because, especially in healthcare,

every time someone deployed Epic for their medical record system, they had to go and buy a ton of hardware. upgrading to Epic was definitely their biggest capital expense like a hospital ever goes through. Epic made the transition to be a web app. The customers don't need to buy storage area networks. They don't need to buy all new Cisco switching and stuff like that. So I saw that space starting to slow down. And getting involved with Yarn back then, we had over $6 billion of deposits.

We were in the top five for our DFI projects. and we had 125 contributors, I think, back then. It was a big project, and there was no way that I was going to say no to that opportunity. So I took it, and I'm still doing BD for a urine today. I'm responsible for all of the customer experiences that we have. We have a B2B approach still. We want to get people to build on top of urine vaults and consume, the tokenized strategies that we have.

And if people are not getting answers really fast, they feel unsupported. They'll go to one of the other 9 million vault projects out there. So my responsibility is to make sure that they're happy, make sure they're coming in the door. We get a lot of inbound requests for strategies to be made still because they know that if they get a urine strategy made, someone from the urine security team is going to have to do due diligence on it. They're going to have to do at least something of like a light audit. it on the code base and make sure that it's safe, it's my job to also qualify those opportunities

because there are a lot of them, and I can't bring every single one of them to the curation or security team to vet. I have to make sure that they've gone through my filter before I pass it on to them. Those come in all the time for strategies, for collaterals, for our curation arm. It's always been busy ever since I joined four years ago. Even if we're not churning out all these strategies, we're definitely evaluating them. Customer support is something of an unsolved problem within the crypto world. Who do you call when you're dealing with a decentralized protocol? So it's good to know that you're on the other end picking up the phone.

In terms of the history of urine, you mentioned starting back in 2021, it was, to my knowledge, was around even before then. What's kind of like the history of defy protocols and how they've evolved through 2021 and all the craziness? and then maybe all the way up to today in your experience? Back when I started and we had 120 contributors, we had this mantra that YERN was very open and anyone could join. And to be honest, we still have that same culture today.

One of the people who actually went on to build YerNValtz V3, Schlagg, we came across him in a hackathon, I think it was. He submitted a strategy that he created, and we thought that he was like a former yearn contributor. It was so perfect. And we had 50 other people who had made strategies, and every single one of them was very low quality. And the truth is today,

like if you build something on yarn and we think it's really good, we will seriously consider hiring you. But we had to be more selective about who we're onboarding as time went on. The bar kept getting higher and higher, and that's a really good thing. We started out that way back then. And when I first joined, we had all this money. We were making $100 million in profits in 2021, I think it was.

And then the first thing that happened was UST. The yields were 20%. Everyone was like, you got to make a strategy for a UST or you're going to lose deposits. And guess what? We started losing a ton of deposits and we refused to make a strategy for it because it was not a structurally sound project. We knew that something was going to happen. We knew that it was like a bit of a Ponzi. How did you sort of figure that out? Just for context, UST, Teraluna collapse, ended up losing tens of billions of dollars. Doe Kwan was the CEO. But how did you guys

in the moment see through that? Anytime a stable is backed by a governance token, it's not going to end well. It's impossible. The governance token is going to go to zero at some point. And whether the market likes it or not, there was no way of avoiding it. And we saw that happen. happening, it just was best for us to not play a part in that and just see our vaults just leak value to go to other places. And at the same time, that is also when the risk-free rate, when treasury rates started to go up. There was a pending bear market. It was definitely on the way. We saw that defy yields started to go down. The way that we get most of our yields is from supplying to lending markets, and when people are not borrowing, the yields are going to go down.

What happened was we started to lose even more TVL for people going and wanting to get that risk-free rate. It's understandable, 100%. Yerne, however, was not going to bend in our culture, in our values, and we were not going to start onboarding risky RWA yields, and we need to have everything on chain and that's how it is for us. We need everything to be like verifiable. This was also a significant headwind coming into 2022 for us. Maybe taking a step back when we talk about strategies and vaults and people were clamoring for UST vaults. Essentially what people are asking for here is they have a stable coin or maybe they have Ethereum on chain. They want to put it to work somehow and they want to

turn that into a yield-bearing asset. And what URN does is almost like a portfolio manager, so to speak, curates these strategies that involve other DFI protocols, maybe infrastructure that urine's built, maybe infrastructure that AVE or Morpho or other lending protocols have built, and kind of in a risk-manage way, derive a structured product on chain. Maybe you could say that gives the end user a yield for their stable coin that they started with. Is that the right way to think about it. Exactly. There are a list of prerequisites that we need to make sure are checked before we go and build a strategy for something. But yes, the idea is that we have a multi-strategy vault. Say we have a vault for USDC. We go and deposit that USC into a bunch of different

lending markets today like fluid and morpho and Ave and wherever else. And we rebalance all of those strategies every hour depending on where the best APY is. Terra collapses 2022. We entered a bear market both with respect to token prices and just general value that's locked in DFI protocols. We start to come out of that into late 2023, 2024 into this year. Take me maybe up to date to the current state of DFI vaults within them. Then we can start to talk about the events of about a month ago, October 10th, there was this mass liquidation event across crypto.

And in the past week or two, some bodies have started to float to shore within Defi on the higher risk end of the spectrum when it comes to vault management and tokenization. Back a couple of years ago, like you said, in 2023, 2024, was like the depths of the bear market. It was very quiet. A lot of the developers that we were working on in crypto, some of them left. Some of them went on to go back to doing what they were doing or start other new projects. I think it was a talent drain. As I was trying to get people to build on top of urine vaults, I was getting the feedback that what you built, Urn Vault 3 is clunky, hard to use, difficult to understand.

But truth be told, it is because everything that we were doing. doing is programmatic and on-chain, and you have to be a pretty good developer to bring something to market that's not going to get hacked. Some folks decided to make an easy button for vaults, and that easy button is turning your vault into a multi-sig. And basically, you have this product where all of this capital flows into, and you have a bunch of different people who can decide to build transactions, to send your money, wherever they want, whenever they want. This is bank but worse, basically. That's our perspective on it, because this gives people the opportunity to still be anonymous, but to also have full control over your funds, and for you to have no

visibility into the decisions that are going on, or even where your funds are going to be going to, if they're going to deposit those into a black box, like a centralized exchange or something like that. There's a lot of structural issues with those multi-sig-five projects, even more so, they were able to align stakeholders better than we were. Originally, when Yerne took off, everybody knows about Wifi Token. That's Andre's baby. Yerne was the first fair launch project. What that meant was people could farm Wifi Token.

I was working on this project. Now it's called Katana Chain, Polygon brought to market along with us. Last year in 2024, I was going around and talking about. talking to a lot of VCs and Liquid Funds about coming on board Katana with us. And it was like a really good experience for me to jog my memory and just see how many people were involved in YERN. Way back then, these VCs, a lot of them still say, we got into crypto because of YerN. YerN was one of the projects that we invested our time and focused in way back then. That meant that they had Wi-Fi token. They had

stake in our success. And when the bear market came, token prices went down, they dumped their bags, and YerN does not have a token print. We have a finite amount of tokens. Those are the incentives that these new multi-sig projects started to bring to the table and started doing raises, and now you have these liquid funds and VCs more aligned with the success of those products compared to using YERN. This is headwind number three that started. started to hit us, and we're still experiencing that right now. It's hard to think about this problem because is someone going to come to market with a new competitor every single time and reload the incentives? The mercenary money is just going to float into that new project.

Is this going to be the cycle forever? There's kind of this finite amount of capital within DFI. If my option as an allocator is, okay, I can get 8% maybe from this, you're involved with no token rewards on top of it, or I can get 12% from these riskier strategies on this newer vault. And on top of that, maybe an additional 5% to 10% of APY from this token that they're a newer protocol, so they have a newer token and they're giving it out to people as sort of incentives. That's not necessarily a Web3 native idea. Every time I open my Lyft app, There's some new reason why they're going to pay me $5 to use Lyft instead of go to Uber, but it's just more invasive.

It feels like within crypto. That's sort of what is happening here. And you have these things that are somewhere between what you say, sort of opaque banking opportunities and unregulated hedge funds, really, where people were depositing their stable coins into sort of a black box for a group of three people that were claiming to be a defy protocol to just go and loop into risky strategies. And the way those strategies would be represented on the market is in a token. So let's use one of these tokens that has recently blown up in the last couple weeks, XUSD. And one of the problems with a lot of these is that the value of them gets pegged to a dollar and they sort of

rebased the yield on top of it. So if it's a 20% APY strategy, it'll start at a dollar and the value of that token will grow as the yield accrues to it. Even if these protocols aren't calling their product to stable coins, so to speak, just by including the letters, U.S.D in the name, or pegging it to a dollar, I think sometimes it gives users probably a false sense of security that what they're putting their money into is not volatile or not risky. And really under the hood, there are risky things happening. What we saw with XUSD, I guess, you'll have better info on this than me is that the value of the token completely collapsed once people realize that the curators or the managers of this protocol had lost a lot

of the money. So what kind of happened there? This all started for us back in May. There were a bunch of people shilling this new project. We took a look at it. We had actually talked to them previously the year before about doing some real-world asset strategies with them and it didn't end up working out. And then we saw that they had this vault. And we found their d-bank, and we looked at the TVL that I had versus the TVL that they were displaying on their site. We saw that it did not match up. We asked them why. And they said at the time that they were depositing into hyperliquid some sort of carry trade strategy. At that point, we would definitely not touch it. It is a black box. And we said to them, this is super risky. You can't just have

people trusting that there is backing to this when you cannot prove it at all. They ended up copying and pasting those private messages and posting them in their discord and dunking on me over and over back in May. I did not appreciate that. But you're not better. Let the record show that you're not better about it. I kind of forgot about it until a few months ago when they they started to get even more deposits. I realized that they had tapped into the yields and more discord, which is like a farming group. It's been around for a number of years. After all of those liquidations happened on 10-10, Schlag and the rest of the Yarn security team found on chain that a lot of these projects and funds had some losses. To us, there was no way that everyone

from stream finance, got out of those strategies without taking losses. We knew that there was a hole there. There just had to be. Schleg started digging more into the on-chain data, found all of this daisy chain

of looping, recursive lending, and curators offering up liquidity from user deposits in order to fuel all of this. We found that even though they had grown from like $160 million of deposits into $500 million. There were really no net new deposits coming in.

This was just a scheme going on on the back end. And when we asked them about it, there was no proof of anything. Like, nothing that they were doing was verifiable. And it's just a huge red flag. Truth be told, if this all did not happen on 10-10, if this ball didn't get started rolling, they would still be looping more right now.

They would still be accepting user deposits it's right now, knowing that they had a hole, they had to have known on the back end, and it would have just kept on getting bigger and bigger and bigger. I'm glad that things shook out the way they did. It was not an easy few weeks to deal with all of this stuff, but here we are. And what ends up happening is that you have this tokenized strategy, XUSD, that gets involved in other vaults. XUSD itself is sort of a tokenized vault, so to speak, that's investing in DFI protocols to get the yield.

But then that representation of DFI yield gets placed into another vault, a sort of vaults of vaults. So those vaults then lose value because they have invested in XUSD, which is D-Pagged and lost its value. And so we've talked about curators a little bit here. Maybe if you could unpack that term, what's the role of a risk curator in DFI? You have the people depositing. On one side, you have the DeFi protocols on the other side where the actual lending and borrowing happens. And then in the middle, there's these actors that are putting together these vaults. They also live directly on some of these protocols like Euler and Morpho and set the parameters of,

you want to borrow against this asset. We deem this ask get to be risk-averse enough that you can borrow at a 95% LTV instead of an 85% LTV. And so what's the role in maybe the faults of the risk curators in some of these scenarios? There are a lot of curators these days, and there are a lot of all projects these days. I don't really know why, because none of us are making any money. I just want that to be clear. This is not a great business.

You have to have billions of dollars in deposits to generate the amount of revenue Avae is making or any of these other really big projects right now. So being a curator is not a terribly good business. And right now, for a lot of stuff that we do, we even have fees turned off because it just doesn't matter. We want to have competitive rates. And the profits that we bring in the door are just really small. It's our job as a curator to make sure that we're using sound collateral that matches the risk that people assume is going on in that vault. We also need to make sure that we have good automation, that things are being replenished when they need to.

If there's borrowers who have a big appetite, we need to make sure that there's liquidity in that vault for them to borrow. We need to understand the interest rate curves. We need to make sure that we're being reactive to everything in the market. So there is a lot of work that has to be done. We also have to meet the needs of demand for people offering of new collaterals or wanting to borrow in the first place. We need to make sure that there's enough deposits. What urine is doing right now is we have this parent-level vault, and this goes into deposits into all of these different lending markets. So even as a curator, we can pull money from like YVUSDC and throw it into something that we're curating on Morpho if it needs liquidity. We have a multi-tiered business where not every curator has that open to them right now.

We want to discourage degenerate recursive looping. We want to make sure that everything that we're doing is really safe. To us, reputation is everything, and we're completely blind to accepting short-term incentives. We don't do any side deals or anything like that. Whenever people ask us to build products that just farm points, we usually say no. Because we know that the amount of work that goes into building and supporting strategies is probably not going to be worth the effort in fees or deposits. So there's a lot of stuff that we say no to.

And I think it just makes our ability to make it through tough economic conditions that much more strong. Survival is everything. It's pretty clear to us now that some curators are going to take big risks and they're going to damage their reputation and we'll be here to survive and to be strong and safe and get those deposits when people eventually come back into defy because they will. In the long run, usually good risk management pays off. It's not just in defy where people blow themselves chasing higher returns everywhere in finance. Switching gears a little bit. Curious as someone who's building in Defi, from your perspective, what's sort of the state of on-chain cybersecurity right now? Recently, Balancer, which is sort of a decentralized swapping exchange, similar to Uniswap, was just hacked for over $100 million

GMX earlier this year, a decentralized perpetual perpetuals protocol, similar to hyperliquid. Both have been around since 2020, probably before, I think, was also hacked for, a significant amount. I think those two especially caught people off guard of no one's safe. There's this idea in cryptoness of lindiness where, okay, something's been around for four, five, six years. I feel safe putting my money in this protocol. And Bouncer and GMX broke that model a little bit. A lot of these protocols, they tout their audits that they've done. They tout the security partners that they're working with. Our code is safe. But are those tools enough? What else needs to exist to stop another balancer from happening?

I don't want to spook people, but the reality is low-risk defy is not here yet. Low-risk defy and the Talix vision of that is great. I have no doubt that time in the market will get us there. Is the five years of defy's whole lifetime enough for that to happen so far? Apparently it's not. The best that we can do today is verifiable. defile, being able to see everything that's going on on chain and verify it, to know that it's real. So one of the things I did with YR and also is I started an audit company. It's called Electosec

right now, formerly Y Audit and Y Academy. We're actually changing the name back to Y Audit pretty soon. But from this experience, I can say that code quality has definitely gone up. No question. The amount of safety that teams are taking into account right now is not slowing down. I think we've done 17 engagements with the Euler. They're not taking their foot off the gas for security. They're always going to be auditing their code bases. This is a time in the market thing. For code that is immutable, where you don't really know where the dangers could be,

People need to just build their code as simply as possible, leave out tons of complexity where they can, and that's going to help reduce the amount of vulnerabilities, but also security as a journey. Just because you launch your code base does not mean that there are no vulnerabilities in it. Just because you've been in the market for a year, it doesn't mean that there's anything wrong with it. Do contests have big, meaningful bug bounties? urine has paid out bug bounties before for stuff that people have caught. It's worked out well. Participating in bug bounties works. So do it. I think the combination of all these things and like a layered security approach, along with time in the market, we'll get us the safety that we need for low risk defy. But it's going to take constant improvement for a long time.

So a sort of Swiss cheese approach, I guess, multiple layers that cover up the holes. What are the implications of all of this on not only the traditional finance world's appetite for investing in exploring DFI, but just kind of a everyday non-crypto-native person that says, well, I could get three and a half, four percent right now from my savings account, or I could get maybe seven, eight, ten percent of safe, quote unquote, crypto-native defy yield, but given this risk of unregulated blackbacks hedge funds out there acting as tokens, given this risk of a hack to the protocol, is that increase from the risk-free government treasury rate enough to make defy interesting to people outside of crypto?

I was in New York City last week to meet with a bunch of traditional finance companies and to be very honest, they're spooked about it. The difference between 3.5% and 5% is not enough for them to come into Defi. It's going to take some time to build back the reputation and make sure that things are safe again. I was very surprised that some of the people who I met with are new to crypto. They're representing their companies push for Defi products. They don't understand the difference between MultisigFi and M. programmatic vaults. It's something that I've had to explain to them. I'm totally happy to do it.

I want to do it more, but I need to convince them that there is a big difference. And just because you can manipulate your vault share price, that is not a good thing in many cases. Having full control over that also brings in additional risk into the equation. It's really good that talent and attention is coming into crypto from that side of the fence. I don't think that's going to stop, but they're very hesitant to use true, verifiable defy for sure. Do you think there's any inverse correlation of demand for defy products as the government treasury rate comes down?

Rates are starting to come down. You mentioned that Terra, Luna collapse, happened to line up with rates rocketing up to 5%. Is that bullish for defy? or will yields come down in defy the same way that they're going to come down outside of crypto? If the risk-free rate comes down, it is unquestionably bullish for defy. Deposits will come back in the door. If the risk-free rate is one or two percent and we're doing six, seven, or eight percent, they will come into defy. I have no doubt in my mind about that.

Shout out Jerome Powell, if you're listening. How do you think all this impacts a crypto investor, a retail investor, is willingness to invest in the native tokens of these DFI protocols. You mentioned urine has a token. All of these newer multisig-fi protocols even have tokens too. How should people think about valuing those, especially once they're in their post-incentive phase of their life cycle? And how do you guys think about driving value to people that want to hold the urine token?

There are two ways of building value into governance tokens these days, aside from just having it to vote in your favor for things that you want to see happen, buy and burn or distributing profits through your token. Those are the two paths that people can take. Yerne does not see the value in just buying and burning tokens. What we're choosing to do is rebuild Wi-Fi as a still locking it to get a distribution of profits, but doing like a more short-term lock. So that's what we're going to be doing right now.

think it's like a one-month lock period, and then you get a share of all the profits that we are going to be distributing. This is the time that YerN has to go and turn the fee switch on, too. So we're more focused on generating profits than we once were. That's good to hear. I mean, generating profits for a long time didn't seem to be the focus for many people in crypto. In the last year, there's definitely been in this newer SEC environment, while not everything is clear, we're still kind of in a pre-clarity era, so to speak, for which of these things are securities and which of them are, but you still have to give people reasons to hold these tokens for the long term,

rather not to just think of them as points or air miles that you can receive and spend right away. The meta recently has been for vaults projects to be pre-deposit volts for like new L-Thus and stuff that are launching. And that is a really short-term thing. You get the money in the door, but then within a few months, might not be there. Profits that are generated from those events are not going to be as significant as getting user adoption for people who want to use your strategy as long-term as a high-quality source of yield. We worked for a long time on the Katana L2. Polygon was not the only group who was evaluating using yarn vaults as predeposit

vaults. They were the only group to pick yarn as their predeposit fault, though. And the reason why is because David Silverman and Mark Boyron over at Polygon fully understood the risk of using a multi-sig where price per share could be manipulated. And they wanted to do stuff that was fully on chain. And I love them for that. And we ended up doubling our TBL this year because of that. YerN vaults are deeply embedded into Katana chain. And it's just been a real pleasure to work with people in Defi who really align with our own values of safety and being verifiable. A lot of this is going to come down to education to a certain extent, especially kind of going back to your conversation with those finance folks in New York of like, hey, here's why

this matters. Here's why you want these assets to be verifiably on chain, not just in some black box, even if you might get 100, 200 bips, lower yield. You're paying for that on a risk-reward spectrum. You're right. People don't understand that. Here's a good example. If you're in just a staked ETH position or like an LRT and your earning yield that slightly outperforms our own Weth1 Vault, first of all, as the price of ETH goes up, the withdrawal queue is not going to go down. It's only going to get longer. If you're also faced to exit your position at a time when those pools are unbalanced, you could wipe out six months or a year of your yield instantly.

And if you're using a urine vault, it's always liquid all the time, and it's a cash equivalent product. So even though your yield will be slightly less, you will get to keep it. People don't seem to really understand that yet. But part of my discovery in New York last week talking to some of these traditional finance firms and hedge funds is that there is an audience for a cash equivalent yield-bearing product. It is the director of a treasury. They could be the director of treasury of like a hospital or a university, a pension, but they need to earn yield on their deposits, but also have them be liquid all the time. They might have their CFO ask them, you need to liquidate this because we need to

go and make a payment for something by a building. If they can exit that position that they were earning yield on without losing that yield or without taking on additional risk and being able to do it whenever they want, if your time in the vault is unpredictable, you're involved to the product that you should be using. You should be using something that is cash equivalent. I got my hands on this huge database of all these treasury managers, and I'm going to give it a shot of going down

and seeing who has an appetite to at least learn about what verifiable defy is and what we are bringing to the table, I'm not expecting to get a huge amount of yeses, but even getting a few and making those connections is where we need to start. Knocking on doors, spreading the good word, someone's got to do it. Exactly. It's not going to be easy.

Another kind of thing underlying a lot of this conversation is everything sort of exists in crypto on a spectrum of centralized to decentralized. And defy centralized finance, even within defy, A lot of these things, certainly I wouldn't call them to be decentralized. It's kind of decentralized and name only, especially when we talk about these multi-sig-5 products, these on-chain, off-chain hedge funds, where it's just a couple of guys yoloing your positions into high-risk yield. Where do you think we are today on this spectrum of centralization to decentralization

within defy and crypto? And are we headed into the right direction, especially as more tradified people come on chains, more payments move to stablecoins. A lot of people, DeFi purists, even will stick their noses up at stablecoins sometimes as USDC may be on Ethereum, on a decentralized blockchain, but you're still trusting, circle the company to mint you, the USDC, and buy and custody the treasury asset that's underlying it and redeem it when you ask for it. There's still a level of trust involved there. So where are we on that spectrum? Are we headed in the right direction, in your opinion?

There's a good mix of signals in there, to be honest. But if you zoom at, I think we are trending in the right direction. The reason why I say that is just because I've seen TVL start to leave some of these projects that are in defy, but are reliant on these centralized exchanges or parties or whatever, reducing counterparty risk and relying on maybe something that is just a smart contract, getting the human element out of decision making will become more popular over time in certain circles. There's always going to be people who will prefer the USDC because it is backed by the government of somewhere, or the bank is backed by the government. I think that that product will always be out there for a good reason, too.

At least for Ethereum's vision, low-risk defy is a great North Star, and that does not involve these centralized entities in that equation at all. It just establishes a base rate of yield. Even these centralized parties will sometimes fall back on that. For instance, I think at the peak TVL of Athena, only 30% of their funds were in the carry trade strategy going on between all these centralized exchanges. The rest of it went into AVE to get the AVE yield, which is exactly what we do. You need a base rate of yield. And if it's there and it's robust, can like take giant deposits,

then people are definitely going to use it. That's good. We're moving in the right direction. People are learning. We're educating people. Maybe that's a good place to leave it. Korn, thanks so much for coming on. Appreciate the time. We should do it again soon. Yeah, we should. Thank you for having me. Let me know if you ever have any questions, anybody listening.

I'm always around. Thanks for listening to another episode of On the Brink with Castle Island. To learn more about Castle Island, visit castle island. And to listen to all of our podcast episodes, please visit castle island.vc slash podcast or just click on the tab on our website. Thanks for listening.