On The Brink with Castle Island - Justin and Hannah (Asymmetry Finance) on Stablecoins, Yield, & Risk in DeFi (EP.619)

Episode Date: May 5, 2025

Wyatt sits down with Justin and Hannah of Asymmetry Finance. In this episode, we cover:  The evolution of yield in DeFi Primitives users want Crypto risk assessment Learn more about Asymmetry

Wyatt from Castle Island here, and this episode marked the second in our series on Stable Coins in Defy. Today, I was joined by Hannah and Justin founders of Asymmetry Finance, which builds unique stable coin offerings in Defi. Without further ado, I hope you enjoy our conversation. Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests 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 and 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. of 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 a Bitcoin. Justin Hanna from Asymmetry Finance, thanks for joining our podcast. We're going to talk about stable coins and defy today, which I'm excited for, but would love to get some personal introductions if you don't mind before we get started. I'm Hannah Jojo and I come from a traditional background actually in finance and risk analysis. I started out my career as an actuary. Actuaries create risk models and try to find and moderate different risk in systems. I did that for a while. I was there for a few years working at pension funds, health insurance companies, et cetera, and realized I was just maximizing

profits for these massive industries. I didn't want to keep doing that forever. And I had always been doing crypto and defy on the side, learning about it as I was studying math. And, And it was just fascinating. It was really starting to take off. And we were starting to see derivatives products in crypto. All these things that I was classically trained in up here in crypto and on blockchains. When that really started to boom, I jumped over, started working in crypto full time. And I've worked at a nonprofit in crypto as well as some defy startups and the largest name, Genesis Global Trading, where I was working on their defy portfolio to deploy it to,

actually things like exactly what we've built at asymmetry, more risk off ways of getting higher yield on your assets, which we can get into. But that's my background. My background, I started off as a software engineer right out of school, did it for AT&T for a Fortune 10 company, and then COVID hit, and everyone got sent home. And the game really changed quickly after that. I went and helped build a cybersecurity startup in Colorado. that was acquired and then went to go work full-time in crypto, went to go work for ShapeShift, and Eric Borges helped transition them from a centralized company into a Dow and really learn what the process looks like to try and create a flat organization that is managed on Discord,

which is, as you can imagine, comes with some growing pains. I left Shapeshift, served as head of product for silo finance, building isolated lending markets, learned a lot about obviously go-to-market and how to build. frankly good lending markets there. They've had a lot of success, especially recently on Sonic, which is super stoked to see, and then had an idea for asymmetry. And Hannah and I put our heads together, and the rest is history that leads us here. And that was almost two, three years ago now. And it has been a roller coaster, a windy road to get to where we are and really excited to kind of dig into some of it and chat further. It's been fun.

You guys are a flagship case of came from traditional finance, from traditional software, and saw the appeal of crypto and took the pill. I'm excited to hear about asymmetry. Hannah, I'm curious before we hop into that, how you look at the migration of assessing risk and looking at risk in traditional finance to crypto. There's obviously a lot when it comes to the intersection of crypto and risk. And curious for any views you have or experiences there. The reason why I migrated over to crypto, I feel like, is there weren't a lot of actuaries

here and there is so much risk to measure, we know it's not a riskless space. There's plenty of it, which is why yield is so high because those are inversely correlated. Higher yield, higher risk, lower yield, lower risk, et cetera. So coming into crypto and seeing some of the insane yields, obviously a lot of those carry a lot of risk, which many people have found out the hard way, but I do think we actually need more professionals like actuaries in the space. So Genesis, when they hired me, they were looking for someone who had that risk background because they had about a billion dollars that they were looking to deploy into different I-yield products. I yield, not meaning the 10,000% APY that some of us are familiar with in the good old days,

but rather things like what we've built at asymmetry, which is a stable coin yields somewhere between 10 and 20% APY. Before I had joined their team, they deployed a few hundred million dollars to anchor protocol in UST. I began working there, submitted a risk report saying, guys, you got to pull this. It's not safe. It is not the same as getting 20% on, say, S-Di or something, S-di with a lending op, something like that.

And they were going to deploy a few hundred million more to UST. I actually got them to unwind that, so save them quite a bit there because all of this happened a few weeks before the big collapse, just things like that, where sometimes we see these yield numbers and they're very tempting, but you do need someone to actually understand the risks, explain them to the public or private. In that case, it was private, but we need people in this space who are making these risks known. At asymmetry, we said, let's build high yield products, but we're not going to shoot for the highest yields, no crazy yield of a few thousand percent or anything like that, no yield that purely comes from our governance token boosting it up. Let's build products

that have sustainable yield without the risk of a death spiral. And luckily, it was a hard lesson to learn, but a lot of the market now understands more of those risks after seeing UST really unwind. And there is still a huge need for products like that. So that's what we're working on. Your journey into crypto where you came from a risk background and saw a lack of risk analysis at the time reminds me of some of the high frequency traders and market makers early on who might have been philosophically aligned with crypto, but they really really did. mostly saw just an industry that was sorely lacking these systems in inefficient markets and plug that hole. You dove into it a little bit, but tell us more about asymmetry finance

and the products that you guys are offering today and what your inspirations are. If you think of asymmetry, the products we're building are these higher yield products. People in crypto do want yield. There's no secret there. People want yield. We have a few products in the convex ecosystem. If you have convex, you know, we're the best place to wrap it, where it can be most liquid and highest yield, which is a really fun problem to solve. These normally you have to choose one. But the products coming out in the future, I would say, are more our flagship, and they're high-yield synthetic dollars.

We eliminate that downside price pressure risk mostly by having it be a stable coin. And then you can mint this stable coin against assets that are pretty safe. Assets most people know. So you can look at S-Di already that has some yield baked in. and then you can lend or borrow against it and increase your yield there. Also, wrapped Bitcoin, some other Bitcoin assets. And really, we're just trying to keep it to the safest assets. You can get more information on all of them on our site.

But we're building these high yield products that people can basically hold as passively as possible and not see their wealth eroded over time. Because we've seen this in parts of the world with hyperinflation, Argentina, Turkey. It's a huge issue if people are holding their life savings. And they did nothing wrong. And they watched it eroded in a year or two because of some bad at government decisions that are completely out of their control. So we're trying to build passive assets.

And Justin will say this, but we also try to make them so easy that your mom can use it. Really easy interface to use. I yield relatively risk off assets is what we build. You guys are building yield products around, say, cornerstone assets, things like convex and curve and some larger defy assets, as well as these stable coins that you guys are creating from a functional perspective. Yeah, we've had a long road. So we started a few years ago, and our first product was actually an index fund for different

state beef products, which would have been really cool, but we built it too early. Why did you build that in the first place? That was another risk play. It was earlier days, so some of these contracts weren't as proven, and so much money was flowing into ETH-Saking. And Lido almost had voting majority of ETH. And we said, that's a huge risk to the ecosystem. And what if their code's bad? So we said, we'll offer people a basket of all these assets. And we took the six largest staking products for ETH, and then people could, in one-click, get access to all of them. And we were just like, a little bit too early. So that's where we started though, two and a half years ago with really

the same 14. And so I'd say in those two and a half years, we really just learned more easily how to reach the markets they were trying to work with and attract. And then we've built better and better products that do appeal to the masses, especially with these high yield stable coins, which I think almost everyone would appreciate access to if it was easy enough to them. I'm bouncing around a little bit. But in that vein, do you think, you get a basket of stable coins, which becomes the preferred stable coin, and then maybe a basket of basket of stable coins? Do we create traditional fund structures here?

I think we could. I think especially when you look at huge whales, treasuries, et cetera, if you are a startup and you have a treasury, you want that to be as safe as possible. Or if you're a large institution and you have a treasury, you lose your treasury, you lose everything. So putting it all into one stable coin or one asset, probably doesn't. doesn't make a lot of sense. We've seen catastrophic events happen. The USDA, USDC, USDT, deepeg a few years ago was just terrifying. It was the two largest stable coins, really. And they were depegging and no one knew where the floor would be. And UST was a stable coin. And that completely crashed. So I think, one, it's best to understand them, but two, it is best

to diversify a little bit. And also include some decentralized stable coins in your portfolio. like die, s die, because those have performed the best in historical DPEG events. Yeah, it's a crazy thing, but it's completely true. My colleague Nick's recently has been talking a bit about Silvergate and the banking crisis, and you get these periods of traditional finance contagion. At that point, it can be better to own at least some of these decentralized stable coins to your point. From your guys' experience, if someone comes to asymmetry and they have convex,

they're using the protocol to earn yield on their convex or they have USDC, they're using it to earn interest on their USC. Does the convex user want yield in convex? And does the USDC person want yield in USC? Is the yield denominated as the same in the underlying in all these scenarios? Or how do these products function and what do people want? There's two avenues here. On the convex side, as Hannah said, it's called AFCVX, but we consider it to be the best convex wrapper, most liquid wrapper, as well as the highest yielding. People in the convex ecosystem, it's a really, really powerful ecosystem. And convex throughout the entire bear has paid 20, 25 or so percent APY on convex denominated

in convex through this whole incentive emission, but really bribe an incentive mechanism that they have there. It's been really, really powerful and proven over a number of years to work really well. Those users who own the convex, they want yield denominated in more convex. I think there are probably some that harvest their yield on a biweekly basis, sell it into dollars, and use that to stay alive, pay the rent expenses, whatever. And that's really meant for a more specific ecosystem power users who are deep in this curve convex space. And then on the other side, there's USDAF and the stables that we're building,

which are really more designed for a user who is seeking to borrow against and use assets they already own in a more capital-efficient way, yet still fully decentralized. So you take your S-Dai, you take your RAP Bitcoin, you bring it to the protocol, you're able to borrow against it, set your own interest rates completely permissionlessly. So they'll be able to move with market dynamics up and down, high interest rate, low interest rate environment, doesn't matter. The system can adjust to it because it's completely market set, completely up to the user, borrow against it, whatever rate you want, fixed rate into perpetuity, and then set your LTV. And boom, you're kind of off the races. And of course, there's a staked version of the stable coins that will allow users to

have a yield-bearing option as well. I think those will be pretty popular. And then there's a bunch of vault infrastructure and other pieces building on top of it. But I'll leave it there. There's a couple different layers as we think of it. And looking at those products, people who use crypto often, I would say, those who don't aside, are probably familiar with USDA and you have resolve and you have usual and you have USDM and you have all these different product offerings. What's the message you guys are trying to convey with USDAAF and how would you orient that among the landscape of offerings in Defi? One thing that's really missing at this moment in time is fixed rate borrowing into perpetuity.

A lot of these stable coins that currently exist, you can mint them out of other assets or you have to just go maybe purchase them or the minted by a centralized entity and you buy them from a decks or something like that. But there's nowhere out there at the moment that allows users to bring some of the largest assets in DFI, bring them to a protocol and borrow against them with a fixed rate into perpetuity without any slippage, without any caveats involved in that process. And I think that's a really big game-changing moment. We're building on top of Liquid E2, which asymmetry has a license to do, they built awesome tech and candidly think that this is going to kind of shake up the lending environment a little bit. The other piece to that is that a lot of

these stable coins are not fully immutable, fully permissionless, fully decentralized, and have 100% independent oracles. USDAF has all of them. So all of oracles are fully independent built with chain link. And then the protocol itself is completely immutable, completely permission, the team has no ability to change it. When talking to larger institutional players, oracles are 100% independent, there's no risk of having to trust a small team that you don't know not to upgrade the code

and essentially steal the money, which is inherently a risk, unfortunately, in this space. Is it likely? I don't think so. I'm not saying that about other teams at all. But if there's not even a possibility of that happening, if it literally cannot happen physically impossible, it adds another kind of checkmark to that when we talk to some larger institutions or whales

and they say, well, look, then I feel really comfortable allocating into this because I know that even in a worst case scenario, no one can take hold of this thing and turn into being used for something it wasn't meant to be. So to recap, fixed rate lending on user set interest rates, and then this fully permissionless DFI first wave that I think is gone by the wayside a little bit with some of these C-Fi-D-Fi

plays really strongly principal values of defy coming back and then using the best assets to borrow against there. There are a lot of reasons why the value might be obvious, but in your view, why is that fixed rate lending piece valuable or meaningful in the backdrop of crypto today? One thing we've heard repeatedly from larger users is that if they're going to structure a trade, they need to have a fixed cost of capital. They need to know that right off their bat. And so when you allocate into one of the current lending protocols, ABE, compound, whatever,

you are subject to a variable interest rate. Can you give a specific use case here? We were talking with a fund, and they were saying that they're trying to essentially arb and play this game of taking advantage of borrowing in USC and then going and purchasing treasuries. Just a very simple arb. And what's their collateral? Dollars, I guess, to start, but then they're pulling it over.

They're basically just purchasing bonds on one end. At least, Justin, from when we heard that, it wasn't clear if they were borrowing against something to get those dollars, but they were just buying, say, T-Bills, bonds, comparing that to kind of on chain yield. And in bear markets, you find that to pick on AVE, because they're the biggest, the rate that you get on supplying USDA, for example, is under your T-Bell rate. At least it has been this last year. But you're taking on smart contract risk and custody risk and everything in order to

that where you could go get, I'll call it totally risk-free yield with T-bills. There's an arbitrage there, I would say, on the flip side, in a bull market, if you're supplying USDC, great, like, you might get massive yield, but someone's borrowing it on the other side to pay that yield. They deposited, and they're like, all, we're going to borrow at 4% or something, and now in a bull market, it's 17%. And you're like, okay, well, whatever trade I was doing, I went and go paid off a house, it doesn't matter anymore. It's not profitable. I'm underwater, and that fixed cost of capital. a big deal. Yeah, it's efficient markets. To me is what it seems like. If you're a Bitcoin

or a retailer and you can go borrow some USDC and then earn yield on it, that is above your rate, then you might as well do that and it's positive for the market broadly. What user profiles you guys going after with that in mind? Is this your everyday, your small fish or whale type defy users or institutions or how do you look at your audience? We're trying to attract everyone. I think many people might say that about their product. I'm sure any food company is like we're trying to attract to everyone. But at the end of the day, everyone uses money and everyone probably wants to earn yield on the money they're not using. It is pretty simple.

So in the first few years here, though, definitely it's on-chain yield. So we're attracting a lot of the power users of Defi as well as people that are dabbling. We put a lot of work into making our front end as easy as possible. so easy your mom could use it. And in the future, we want things to be so easy. Your grandma can use it without knowing she's even using it. So that's where the integrations come with traditional payment system companies. If you have a high-yield synthetic dollar, it does make sense for PayPal or Visa to use that on the back end and give users some of those rewards. If you're on chain, you get all those rewards. I think this is actually something that if built well and it's proven

that it lasts and it hits a certain size upon which the risk is deemed minimal, then it really can be used on the back end of financial systems. I think we will see high-yield synthetic dollars there. Definitely what we're trying to do at asymmetry is poised this to have one of the best chances of being there eventually. Obviously, those would be the most risk-off versions of the asset. So probably collateralized by stable coins like dye and S-di rather than backed by Bitcoin. for the really big backing payment systems piece, but that is the end goal.

So right now, trying to attract everyone, whales, minnows, anyone who has money that they want to yield on, which it turns out is most of the world. It's a fascinating point you made towards the end there, which is you hit a certain scale and then continue to attract more users. I think especially in the context of Define, maybe even crypto today, where people are trying really hard to get a certain amount of deposits or TVL. and then it's almost like there's an escape velocity and people say, oh, well, there are $50 million deposits.

I can put my money in now. There's an irony to that in what is supposed to be a trustless system first off. I would make the point. How do you look at that dynamic? Is that something that you guys think about often of, oh, if we can just get to this amount of deposits, then more people will come, or this is a number that we need to get to and then something else will happen. Or do you think it's overblown or how do you look at that?

You can count on humans being irrational. And so as irrational as it is, there are. are these different psychological barriers. And if you're under a certain barrier, a group of people are not comfortable with the asset. And if you're over it, a new group unlocks. So it really is a snowball rolling down a hill. But I think the psychological barriers tend to be at 10 million in TVL, and then 100 million and then a billion. Once you get into the billions, people start to lose track. Once you're there, I'd say that's true escape velocity, once you pass the one billion mark in TVL. I think the psychological barriers are irrational because if you're at 900 million in TVL,

I don't think people give you a proportional credit if you earn 10% more, attract 10% more. But they are rational in that the larger something is, the bigger of a, you know, essentially hacker bounty that is, where if someone is able to find a loophole in that code and exploit it, that money starts to drain. And so the more money, it's the larger bounty that people haven't been able to. to break into. So it does give security in that sense. But I would say if I could hack very large codebases, 100 million would be about the same as a billion to me. No one can offer that much money. So I think anything beyond, say, 50 or 100 million in TVL, that's still quite a big feat

to not have your code hacked or broken into. So I think it is rational that we assess some amount of value, but probably not rational how much we assess. But it is a snowball rolling down the hill because once you pass that one bill in TBL barrier, that is a parameter in people's mind and in some people's risk models. So the larger you grow, the more investors you attract because you're unlocking these next groups of risk tolerance. The larger you get now, you're less risky and you can attract more of those people. And I think it just kind of keeps going. You walk past a restaurant on the street and there's no one eating in it, you keep walking, whereas you go to the next restaurant and it's packed, you're like, yeah, this place has to be

good if this many people are eating here. It's the same concept. It doesn't always play out that restaurant. Could be wrong, though. That restaurant could be bad. You could be eating at Tara restaurant and you get the $20 billion or whatever it is and you check the box, but it doesn't really make a difference. So size is not everything. I guess that's all I'll say about that. Speaking of restaurants that a lot of people go to, I wanted to ask you guys about Ethereum, switching gears a little bit, which I think has been the hot button topic for a lot of people in crypto. I think we're seeing this dynamic where you still have the overwhelming amount of usage that's occurring on a given venue. And we're also seeing a just dynamic where there

are probably protocols which have a lot of usage and their token performance don't quite align, but that can create certain sentiment in the market. So with that in mind, I'm curious for your perspective on whether Ethereum remains and will remain the core place to build out products and where crypto transacts and exists, or if there will be a migration there. Wherever the liquidity is, is where I think the majority of large-scale transactions will take place. Like, liquidity is a moat, for sure. And if you have the most liquidity in one place, then the largest actors will continue to transact there because there is the most liquidity, and it's a self-fulfilling prophecy.

Can that change, or is that set? That might change. It certainly has a hell of a head start and a lead on it, but I think that could change. We think about it, and we're very bullish on this concept of the fat app thesis, that a lot of this L1 premium across the board will start to disappear,

and that it really is more so about the apps that exist across multiple chains rather than the chain itself. Apps must go multi-chain and find users across them. And then it's really more so true long-term adoption, looks like a Venmo-style app or whatever, where people are using crypto-rails,

but they don't really know it. And it doesn't matter what chain they're on. They're just using the asymmetry app, whether it's EF-based or whatever else-based, it doesn't really matter to them because it's all about the app and the distribution at the end of the day. But liquidity is a moat from a structural perspective.

But to your point, I think it could change. We'll see. but just kind of depends on, I mean, you've seen obviously ETH's performance against BTC since the merge. It's then pretty poor. So maybe there's something there of, in hindsight, we look back in Roman Empire. We say, oh, that was the day where it kind of all started to fall apart, but everyone still told themselves, oh, we're still the greatest empire for the 20 years. Yeah, hundreds of years later.

Maybe that was the moment. Maybe it's not. I don't know. We still build on ETH. I'm a big believer that ETH is an incredible ecosystem. and of course, wherever the liquidity is, is a massive driver of building at its core beyond all else. I personally have a view that Bitcoin probably won't transact on Bitcoin's main chain

eventually in the sense that it will sit and just be denominated elsewhere, almost like a safe in a bank. The money stays there while people trade claims to it. And I wonder if we go a similar direction with Ethereum, which is to say that most of the liquidity in TVL is on Ethereum, but as these cross-chain settlement and liquidity systems get better, that you just have representation of these assets moving across other chains or dare I say even saying moving off-chain with claims to on-chain assets. It's an interesting concept, especially claims to on-chain assets. You look at the blowups

that have happened, DFI performed before C-Fi did. You had to repay your maker loans before you could go haggle with whoever these funds got loans from in the C-Fi world. So from a transparency perspective, I think that works really well. And it works really well, I'll say for high-ield stable coins. This is how we can onboard the next group of people that don't even know how to use these blockchain systems, but they can benefit from the technology that's being built, put a portion of savings in it. I think it is a logical next step for the industry, and it would really unlock a lot for it as well.

Did you guys see the galaxy data recently? Speaking of lending, that showed how much defy lending, has surged in C-Fi lending as a fraction of what it was. I'm asking Hannah, who worked at Genesis, this question, I guess I realize as I speak, but it was fascinating data. It's fascinating and going to Justin's point. It makes sense. On-chain lending, it can't fail because the code will execute and there's certain parameters as an actuary. It's amazing to have programmable money with parameters that you can count on because when I worked at Genesis and as a FTCX collapsed and we were undergoing a lot of counterparty risk.

Basically, it was a bit shocking to me that I found out that most of the traditional finance world, if someone defaults on their loan, you call them. In your meeting, you're like, yeah, they're on vacation right now, but they say they're good for it. So, you know, we'll give them a few days. I didn't really realize that. I was a little bit shocked because I was actually first exposed to loans in DFI before I kind of saw the back end of CFI loans.

And it was pretty shocking that it was really a vouching system and very verbally based what people said and not just did they pay or not. And so I think that on-chain loans are definitely an innovation that will begin to take precedence in finance because now we do have programmable money that can execute on these things with zero human interaction, which is a really big step for things like loans. The other day I was looking at some of the asset attestations, particularly before you had some these meltdowns where you would just get a letter from a fund or an exchange that says, we have this much Bitcoin period signed. It's incredible. And then the other day I also saw, have you guys seen what AI can do with these receipts? You can probably have GPT to this, but you can create a crumpled receipt with the name of a restaurant

and expenses and looks so incredibly real. It reminds you why having money on chain, you can see every step of the transaction is so valuable. I remember actually, Justin, this was back around the time that we met, which for other people was about four or five years ago. Justin and I both wrote pieces for our family and friends explaining crypto concepts and macroecon and how crypto was involved. We were just trying to pill everyone. I remember I was doing a deep dive on all the stable coins. I found out that USDAC and USDT, they were audited, but the auditing companies back then said, we give this, what was the terminology?

I don't remember the exact words, but it was basically like we're mildly sure about this. And then they give the report. The first sentence was, we're not really that sure, but here's what we're saying, to kind of express that it was not certainly. And after USDA underwent a lot of scrutiny, their auditing has gotten much better in the recent years. But that just goes to show these paper attestations are quite funny. We will definitely find better ways of validating data than paper, especially in the age of AI. And I think people are going to have to move faster on that than they realize. So that is a really good point why it.

Yeah, and a funny way it'll probably be the exploits, which drive people to move faster as it always is. To this point about a lot of the transitions we're seeing, what is the world that you guys hope to see and maybe that asymmetry falls in line with when it comes. comes to future finance, direction of defy, crypto. What do you hope to see and what are your predictions? One of the large reasons why I got into crypto, I mentioned I worked at a nonprofit. And that was actually my first job I took in the space. And it was Giveeth, which is a nonprofit focused on basically charity payments. So they would let people donate or raise money permissionlessly and then send the money and pay the gas. So it was actually like a free way of fundraising.

go fund me, which takes crazy fees. What a lot of people started using this for was actually cross-border payments for like migrant workers or people sending money back home. And that was always a use case that I thought was fascinating, because if you look at Western Union, if you're sending money to Syria, you actually lose more than 50% of the value through Western Union by the time it arrives. Argentina, you lose about 10 to 15%, depending how much you're sending. These are criminal rates. If you work hard and earn money in a country and you're sending it to your family, that should not be a 50% reduction in value to an intermediary that doesn't do that much. Sorry, Western Union. But I think that there's two basic human rights and it's sending your

money securely and also storing it and not seeing the value a road over time. So I really think that in the future, one of the biggest things that crypto can bring to the world is, actually a safe storage of value that doesn't erode and is inflation resistant and outpaces inflation, hopefully, but at the very least protects against it. And then also people should be able to send money across borders without permission and for close to free. So the products we're building are in line with both of those things, which is why we're here. I don't think you can build something for multiple years that you're not passionate about. That's why these are great assets that I think much of the world can benefit from. Maybe we're not the best, but someone will be. And so I hope

we're the best. We're definitely trying, doing everything we can to get there. But at the end of the day, we are contributing to this ecosystem with fixed rate lending, bringing a big innovation to it that might appeal to the next group of masses. And those steps need to be made so that these products can reach everyone globally. Yeah, I mean, Hannah said it really well there. I really think that on-chain assets will eat the world and all or at least vast majority of stuff will come on chain at some point. And I think that's a beautiful thing for eliminating a lot of the friction that exists with current financial systems across a bunch of different asset classes, honestly, not just dollars or bonds or whatever, but even talking about real estate and going further

and can you tokenize and bring this stuff on chain in a transparent manner? And just reduce friction, I think, is the biggest use case for it. And I think you've seen that throughout history of a new technology comes in. People are pretty skeptical at first. And then they realize, wow, this is actually going to make my life way easier and or I can make more money. Sure enough, everything starts to transition. People thought the internet was a fad. There were plenty of people who thought Bitcoin was a fad.

I think we're to the point now where we're pretty damn sure it's not a fad and that this trend is going to accelerate. I saw that stable coins is part of that Alex Thorne's galaxy research. I think they're doing more volume than Visa or something. along those lines. That's an incredible number that I think went under the radar and what feels like a little bit of a bare, weird uncertainty time. A couple years ago, that would have been unfathomable. And that would have been headline news screaming across MSNBC sending to my parents and everything. I'm like, look, stable coins are real. This is actually happening. And now it's just like stable coins are doing more volume than Visa, whatever. That is a huge deal. And I think this trend only continues

and it then becomes a question of what assets do people want to allocate you to, what assets do they want to borrow against? And can you give them a service that they haven't necessarily had before, which is where this fixed rate lending impetus and push from the asymmetry side really comes in is I'm shocked that it's taken this long to have fixed rate lending into perpetuity in defy? I think it's going to be a massive wave. And I think that one day we'll look back and we'll go, wow, I can't believe it even took this long. course we needed fixed rate lending because no one in DRAD5 borrows floating rates. They just don't. How have we not have this in DFI yet? And I think we'll look back and say, wow, I can't believe it took that long, but glad it's here. And that's really the wave that I think we'll be a big piece of. Justin, I'm just going to throw this out there. That Visa chart was a Castle Island chart at first,

but I'll forgive you for it. We'll give credit what credit is due. I know you were out there crunching the numbers. So I take it back. It was Wyatt. No, I'll credit Nick Carter for that. one. Last thing I wanted to touch on when I have someone here who assesses risk and someone who looks at the code, what keeps you up at night? And what are your concerns, if any? I think for me, I'll start in the present moment and then kind of go broader. But in the present moment, my biggest fear is just we are losing interested market participants because everything is too difficult to use. And it's something that often gets very overlooked because you, me, Justin, we've put in the time, we know how to use wallets, we know how to use bridges. I have definitely

onboarded a lot of friends to crypto and through their eyes I've seen it is still really bad of an onboarding process. And it's scary because if you make a mistake, you lose your money. Yeah, it's that white knuckle experience. I think that in the near term, that is the number one thing we need to work on, even though most of the builders in the space, Justin and I included, are so obsessed with the tech. But more than the near term, that is the number of the new. Builders in the space need to focus on actual experience and make it as easy as possible. And that's something that we have really prioritized. So people, when they're within our DAP, everything's one or two click access.

We explain the risks and people can make informed decisions. In kind of the longer term, gosh, at this point, honestly, most of my worry centers around the like meme coin ecosystem. I think it will die a little bit. But I think that it does a lot of negative for our industry in terms of reputation in terms of being considered an online casino. With time, I think that's something that will go away. But it does lack a lot of checks and balances. And there's just a lot of speculation, which is fine if you acknowledge that it's an online casino. But if it's people are bringing their hard-earned

money and they're taking it to meme coins rather than something like USDAF, which is a stable coin that earns high yield and it's relatively safe compared to meme coins, but they're bringing harder money, they might not have that much of it, and then they're losing it in a meme coin pump and dump. I think that's really unfortunate, and we'll see a lot of people burned that way because they're told that they have to buy this coin. That just comes down to people being informed again about really what they're getting into. I encourage all other protocols to be very transparent about the risks of the protocol with users. They can make informed decisions because some people will think the risk is worth it and others won't, but that's what we're doing at ASM, making everything

as clear as possible, answering all the questions from the community, when I encourage other protocols to do that too, so that we can really scale. The only thing that really scares me at this point is some weird black swan that we don't even know about, an FTX 2.0, something along those lens. I think DFI has gotten a lot better post-teriluna. Things are transparent, and I think there's a lot less death spiral risk than there was then. A lot more of these mechanics have been fleshed out, and that's part of a growing ecosystem, like you have these growing pains. Any birth of a new financial market is going to have everyone from legitimate builders to scammers and everyone in between. It's kind of speed running

this capital formation process, which is both headline grabbing at times and not great, but also long term really, really healthy. You have to kind of flush a lot of this crap out in order to find what sticks around long term. My fear is that there's another black swan lurking around the corner in some way, shape, or form that we just don't know about yet. We haven't seen it yet. And that puts a big dent in things, but you can't worry about something that you don't know that it even exists. So for us, it's keep our heads down, build, try and build the right way as transparent as possible and be as close to the community as possible, build in accordance with our principles and

try and carry, I think, that torch of the decentralization, the immutability, trying to do things in the right way to make sure that we can sleep at night. So I think that's a big piece of the dose that we try to build with. And then it's just go to market, try and get these. products in the hand of people that want to use them, need to use them, and everyone in between. Well, we'll leave it there. For anyone listening, go check out Asymmetry Finance. Hannah and Justin, thanks for coming on. Hopefully we can do it again at some point. Thanks, Wyatt. Thank you so much, Wyatt. Thanks for having us.

Thanks for listening to another episode of On the Brink with Castle Island. To find out more about Castle Island, visit castle island.vc. To listen to all of our podcast episodes, please go to On the Brink-podcast.com or just click on the tab in our website. Thanks for listening.