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Cardano – ADA Liqwid – Lend and Borrow on Cardano Welcome everyone to just crypto my name is Vanessa and we have a fabulous show with you today uh for just crypto we’ve got the folks from uh liquid Labs here talking about the Just Launch liquid Finance on cardano so if you’re interested in this please you know hit The like button do the Subscribe do all the YouTube things uh we’ve got a wonderful conversation uh coming up um so let me get straight to it and introduce the two special guests that we have today first of all I’d like to introduce Florian Florence the co-founder of liquid uh liquid Finance He is also a former growth and Equity Management Consultant and an audit professional uh welcome to the show Florian thank you Vanessa thank you for having us hi everyone um and also like to introduce Dwayne Dwayne’s the CEO of liquid Labs he’s also a co-founder and a former Management Consultant welcome Dwayne hey Vanessa thanks for having us yeah great to have you here uh you know as as always as you’ve probably seen a thousand times when you watch anything with crypto none of this is financial advice um you know we are not here in capacity as financial advisors this is just for Education and entertainment please do your own research before you uh make any investment decisions um with this the show we like to engage folks who do happen to pop into the live chat so if you are here listening live we’ll we’ll have some questions we’ll have an opportunity to engage with these folks Um and yeah say hi let us know who’s here gonna say you know first up let’s go gaming uh great to have you here yes absolutely I’m looking forward to the conversation as well um and Brandon great to see you again as well hello Um so let’s get stuck in uh you know one of the things that we like to do here is give people an opportunity to know you just a little bit better um so maybe Dwayne started with you um if you could share a little bit of your journey into crypto how did you Find the space how did you find cardano yeah absolutely um so I think it was about uh the middle um probably late part of Q3 2017.um I was actually just starting business school in England around that time um I had heard about you know crypto and Ethereum and some of the early projects on ethereum earlier that summer um kind of dismissed it as I was just like you know focusing on finance and tradify world and what I was trying to transition into at the time was like you know Consulting Finance track um from my uh you know previous Undergrad studies in medicine um so really it was just kind of heads down on that and didn’t think too much about crypto until I got to England and really saw how fascinated some of my other business school you know students um who were taking the same classes as Me but really at home trading and learning about these different cryptos it was just an exciting time to be in the space cardano had its you know initial launch around that same time in September of 2017 um you know the famous Charles Whiteboard video was really um I think What ended up red pilling me the most out of anything but since then it’s really been just me trying to be a part of this ecosystem build educate folks um you know there’s been a lot of obviously misinformation flood spread on on our project you know since its Inception Basically and I think a lot of the times if you engage with people and just show them like the human aspect of who the builders are behind this who the software developers are what’s actually you know coming to Market and what’s now on market and you know live on Main net On cardano like these things are exciting for people who are not just a part of the uh sorry initial code on a wave of 2017 you know um folks it was Rick McCracken myself and a few others back then on Twitter and it wasn’t really much else now we Have this whole you know beautiful ecosystem of uh State Cooperators developers Builders end users so it’s really exciting time should have definitely come a long way was cardana the first crypto that you jumped into or did you have you know Bitcoin is the entry point kind of Curious there yeah I think I would say ethereum was my entry point actually I was fascinated by ethereum just the whole smart contract Paradigm um I was you know like I said studying Finance I thought I was going to go be a banker I ended up being a Management Consultant for a few years after but um always was fascinated by the concept of smart contracts and even seeing some of the things that like some of the top tier consulting firms like Accenture and you know PWC were building on top of ethereum at the time you know privacy solutions for corporate transactions Um it was just really an interesting time to kind of see what was being built out on that side and yeah I’d say shortly after ethereum cardano was just like you know it was glaringly obvious uh that this was going to be the future so yeah great how about you’ve learned how did You step into this world yeah so I’m uh I think a pure product of the Swiss banking award let’s say like this so um I started my career as an auditor and then I moved to management consulting for banks and at some point I ended up building uh or designing I.T Systems for banks this is around like 2014 2015 when I heard the first time of ethereum and I remember I wanted to to to buy a token uh Bitcoin but then you had this paper wallet and I was thinking for myself how is this kind of paper wallet System will revolutionize the world or even replace the traditional Finance system so uh and then I I moved away let’s say like this I was not so convinced but I um I was always attracted by some kind of different way of thinking or alternative let’s say IDs for finance And then in 2017 I joined gross Equity Venture Capital funds that were invested in digital health and this is also where I realized the power of of data or the power of blockchain and uh this was also let’s say my my first moment when I I could see the Future of where blockchain would bring us and then this is uh where I started to to to to dig in this Rabbit Hole first to learn a little a lot about uh Bitcoin ethereum cardano also um yeah I was involved with many ecosystem alcohol and Cosmos or um polka dots And then at some point in time I decided because of my background in finance I always thought yeah I can bring some ideas uh and this is where actually the story of liquid started um we I published an ID in Catalyst for the this kind of liquidity pool and then The moderator talked to me and say Hey There is a team with a similar idea that at yours it’s uh have you are you working together say no but then I send an email and it was Dewayne that answered me and here we are two years then and a half after that That’s a great story a great story of finding each other now you were in like a lot of different ecosystems why did cardano appeal to you above all the other ones um first of all I was always skeptical of the high gas fee on ethereum and uh I understood you know there is This blockchain trilemma if you are not able to achieve this scalability uh it will not work and I really truly believe that back in the time I researched many different uh protocol and yeah as the win or many of us found the video of Charles of concerns that was explaining This blockchain trilemma all this kind of very important technology components and this is where I I foresee that yeah cardano may have one of the best technology and this is why I decided to change this ecosystem awesome Grace so let’s jump into into liquid you know where did the the Genesis of the idea come from what is liquid so you know for folks it may be not as familiar with the space yeah absolutely uh liquid’s a liquidity Market protocol for lenders and borrowers for Cardinal native Assets in Ada for the Ada Market specifically liquid offers liquid staking Um for the qata holders so these are the Ada suppliers who are in the liquidata market who have supplied and deposited assets into the market once they’ve minted in our system the interest bearing Q tokens um they’re basically earning interest from the borrower repayments on loans as Well as liquid staking rewards this is to our knowledge the first time that like a single money market has composed both staking rewards and interest rewards into a single token a single fungible asset again this applies only to the Ada Market as Ada is cardano’s native token an asset rather that gets Staked and delegated to all these State Cooperators and that’s the first Market that we have now on mainnet and we launched with that last um it was February 2nd it don’t be you know made it public but actually really early in the morning of February 1st is When it was deployed to mainnet on cardano but in general liquid enables lending and borrowing of cardano native assets that’s fantastic well congratulations on the launch I mean and I’m sure it’s been a wild ride the last few days with everything going on thank you for taking the time to be here Um when I talk to folks in the corona Community uh one of the things that people often say is that you know Cardona has liquid sticking built into the platform um why do we need another liquid sticking derivative if that’s the case yeah that’s a great question Vanessa uh So while cardano does certainly enable liquid staking um at the uh out of the box you could say at the blockchain level uh you have to build these uh properties into your smart contracts it’s not just something that any D5 protocol has and I’ll give you a perfect example when you look at Ethereum you have systems like Lido and then you have a system like Ave so you know on its um You Know cover and on the face liquid looks a lot like Ave it’s lending and over collateralized borrowing of the Native assets of that blockchain whether it be Avan ethereum Or liquid and cardano right but in the case of Lido you have ethereum that is not stay but wants to be staked and also using the defy ecosystem money theorem at the same exact time so you need Lido which has you know now grown to be the Largest D5 protocol by tvl you need Lido to unlock your ethereum for actual uh dual usage of staking yield but then also usage in this whole defy ecosystem where now staked is like you know the prominent kind of pristine collateral that protocols like ethereum I uh sorry Ave I think Ave has 1.5 billion or so of steak to eat provided and of course once you provide State into Ave you meant you know the Ave staked basically you hold that token in your wallet and just like holding qata in your wallet you’re essentially earning both the staking Rewards from you know basically ethereum block producers as well as the borrower interest repayments on that state so that’s what you have to kind of keep in mind here it’s two different systems and cardano while it does have a native ability to support liquid staking these D5 protocols don’t come out of the box with them Dow protocols any dapple and cardano you actually have to build we call it stake validators or stake scripts and you know developers from liquid and mlabs have written an open source kind of articles about how to do This into your dap if you’re working on a developer and I recommend looking at the Pluto Nomicon article and I can send it to you so you can link it in the notes but a really awesome developer our lead Dev actually wrote a really cool article on how to work with stake Validators Implement them in your dap specifically for liquid we were able to basically stake our Ada market supply to 16 different cardano state Pro operators and we specifically chose single stick operators because it helps decentralize the network and these are you know stake properties who are committed to just Running a single pool basically and for various you know technical reasons this actually does help with decentralization Speed and Performance of the network and Security in some aspects as well so yeah we it’s really cool because in real time you can see the stake in the delegation For these certain pools adding up and it’s actually just like an awesome way to like you know while liquid is going to grow and more Ada will be supplied because you know soon like we just announced a governance proposal to listen to gen Market you know soon You’ll be able to take your Ada that you supplied and use the escalateral to borrow stable coins like the Jed in our system um and then you know a host of other cardano defy tokens and Sample coins that will list in the coming weeks and months Um you know as that you know demand for supplying Ada to do these exciting things with it and earn yield on that ADA um grows you’re going to see basically a growing level of decentralization also at the delegation level because you know we’ll have new single Sig Pro operators Voted in by the community and you know we’ll rotate you know every few months the stake similar to like the strategy that Cortana Foundation has implemented where you genu uh generally over time you’re you’re helping decentralize the total qurano stake pool while still you know managing your sizable stake in a Responsible way basically there is just so much to to unpack there and I love that you touched on this the idea of decentralization because you know one of the concerns that’s come up in the ethereum world is with Lido having such a large share like they essentially control you know how Decentralized or not the network is um how does governance work on liquid you mentioned people would be voting in like who proposes governance proposals how does the the sort of stake for voting work yeah great question uh so liquid has implemented a or is implementing is in the process of Um a governance module that’s similar to The Compound Governor Alpha system it’s basically an on-chained voting and execution uh governance protocol um we built and audited the system um we completed the audit by vacuum Labs I want to say late November and it’s all open source we also built Agora Pro Which is has some Advanced properties on Agora again these are things that we’re implementing within the next weeks and hope to have live for you know liquid Dow on-chain voting and basically proposal executions to start by the end of this month we launched with just a community multi-sig simply due to Testing of some of the final things in Agora there’s proposal effects there’s a UI that we built out for the governance portal in the liquid app um so a few is just the final work streams for tying up Agora and going to get shipped on mainnet is the reason why We didn’t launch kind of with it out the gate but you know shortly in the next coming weeks all of the proposals that get passed through liquid will be done so basically through an on-chain vote and anyone who holds lq basically can submit a proposal even if you do not Hold a lot of lq you can still submit a draft proposal and then other users can delegate their lq Holdings to your proposal if they think it’s a good idea that adds value to the ecosystem you know we’ll do this with some of our liquid Labs Holdings you know I’m sure Many of the community members will do this it’s it’s commonly seen in other you know mature G5 governance ecosystems like Ave and uniswap and makerdout where you have actual proposal delegates and delegates basically who are receiving um basically you know some governance delegation and voting power basically From other users and it empowers them to submit really strong ideas it empowers them to kind of you know work for the Dow if you will um and yeah we’re looking forward to that because that’s going to like spur really awesome ideas that our core team didn’t even think about but have come You know strictly from the community basically or some flooring I saw you um unmuted for a second did you have anything you’d like to add thank you yeah so I think the Agora system will really be something fun we are already proud of so as this wine said everything is already Built by ourselves there is already also other teams that are building on top of Agora we have done this it is now open source so the process will be that everyone can submit a proposal there will be a grow home to be rich with some thresholds that are defined you can also Upvote uh proposals that somebody else has done once you reach the Chrome you go to a voting phase there you have also a different threshold of time during when it is open and then when the majority um vote of course yes and knows and you have a result you can also Define a Minimum threshold of voting like 10 of the total Supply this is also another parameter tribe and then it’s executed so our governance system Agora is really customizable and also in the future we will be also able to develop special features like to link with the wallet of the treasury to perform also some Actions and we may also see in the future that potentially we could even sell some of our Algoa module and special function to other doubts that that’s very interesting so so right now you have the on-chain uh kind of voting aspect to it and you’re looking to build different kind of unchain Execution parameters as well like yes you know selling into the treasury um it’s fascinating because I’ve been very involved in you know Cosmos and the kajero ecosystem and those are places where a lot of this is just just native and it’s exciting that you’re bringing some of that to cardano as well yeah Just to clarify not selling into the treasury but selling actually parts of the Agora contract code base like some of the um more advanced uh pieces of Agora and protocols like the um Insurance Pool and kind of like safety model that we built into it safety module rather Um those parts are part of Agora Pro and not the Agora open source that we’ve put out so I’ll be foreign speaking to potentially licensing out parts of that code base of Agora um and maybe even selling it to another Dow if they wanted to use that code base for a specific Product they’re building but to your point Vanessa there are really exciting things like um you know summon is building a protocol on top of Agora that allows like Florian mentioned you can easily mint a dow Treasury and a dow basically based on a governance token to have certain Quorum and voting thresholds and Parameters but then you can also have summon as a protocol that allows your Dow treasury to just access D5 protocols so say your you know Dow treasury holds Ada and you want to earn some yield on it okay well something will allow you to supply that data into a protocol like Liquid and maybe your gallery wants to take on some leverage okay now you can maybe take out a loan and borrow some Cardona stable coins against your you know Dallas Ada Holdings basically just using summon composed with Agora and liquid into like a single product that The summon team offers and like a really nice app UI so yeah we’re really excited for them great devs great team behind that project and yeah other teams like Clarity Sunday swap multiple other teams are you know experimenting and building products on top of Agora so yeah we’re Really excited to see that whole ecosystem take off we just opened some rest of the Agora FX registry this morning so you know things like um basically updating proposal parameters you know change even voting parameters for Agora staking basically any type of not staking rather but any type of Actual execution of a proposal whether it’s updating a parameter for a smart contract that’s controlled by Agora um you know switching Agora itself into like an updated version of the governance contract all these things can be basically executed through these effects and we have a set of them that We’ve tested and built and open source ourselves but we look forward to you know developers from these other teams as well as other cardano Dow devs adding other effects that they see you know fit for their protocol this is fantastic I think one thing that Cardona has suffered from is perhaps That the level of maturity and unchain governance that other chains can can benefit from um just want to shout out to folks who popped in to to chat early macaroni take care for the knowledge uh welcome uh nams yes excited as well looking forward to to hearing and learning more Um and Adrian popped in to say hi uh you’ve also got a huge fan just you know holy macaroni saying you all did something great and that you know I definitely agree I’ve seen slowly the corona ecosystem growing so you know you all should be proud of that Um let’s dive in a little bit to you know as you’re mentioning there’s going to be different lending and borrowing markets so today you can um you can stake to to borrow um sorry to to lend your Ada and then you other people can borrow it I’m Guessing there’s not much reason to have an over collateralized uh borrowing of ADA when that’s the only thing you can bring but tell us a bit more about your plans of course yeah um Florian do you want to go first yeah so obviously Ada will not stay the only Markets that we will offer so obviously there will be the possibility to lift to list sorry different assets as collateral and as um as to be borrowed as depth we also have already created a kind of risk framework to assess in a consistent way all the assets first to Decide if they are eligible or not with different criteria and then once they are eligible okay what kind of parameters like total loan to value we want to give them through different criteria that are based on market like volatility volume of the market on the technology since how many days is a Protocol live has it been audited Etc and also the centralization risk of comfort party risk who is a team behind it as they release some documents either the Dao Etc so in the future we will um step by step increase the number of assets that uh that users can supply and Borrow on liquid and this will come through a consistent and transparent process fantastic what happens when you know how does liquidation work so if I bring some Ada and say I’m borrowing some some Jade um yeah absolutely so Florian mentioned there’s a loan to value there’s a Max Loan to value for each of the collateral assets that are supplied so for example uh the Ada main net Market has a collateral factor of 75 meaning users for every one dollar of ADA borrowed of supplied can borrow 75 cents of any other asset in the protocol as you Mentioned Vanessa right now it’s only Ada that’s going to quickly change we’re going to let’s go down our stable coins cardano D5 you know protocol tokens all of the you know type of assets you see listed on a Ave or a compound type protocol you’ll eventually see listed on A liquid once things like um you know oracle support improves and on-chain liquidity frankly for some of these tokens improves also um but yeah basically the max loan to value or collateral factor in our system determines the maximum borrow power that each of the users has to use their Collateral assets as basically leverage uh to Mint you know debt in our system so basically like a stable coin could have a collateral factor of like 80 percent meaning you know for every one dollar of the shed that I supply to the liquid Market I can borrow basically 80 Cents of any other asset in the protocol be it you know like Jed Shen another you know stable coin on cardano another D5 token you name it um based on how much liquidity exists in that market uh and if you go over that bar that Max borrow power basically you’re risking Liquidation in our system we’ve built it so that you don’t immediately get liquidated once you reach your maximum borrow power we’ve built a small kind of liquidity buffer into the system we call this the liquidation threshold so it’s another parameter that’s kind of built on top of the max LTV the collateral Factor and it’s usually around five percent or so higher to give the users that liquidity buffer of around five percent to say yes you’ve reached your max borrow limit you’re not going to immediately get your collateral liquidated you have a small window of time assuming you know prices are going To continue going down give a small window of time to repay or to add collateral to your loan basically either of those things will basically increase your collateral ratio to get you based basically into a healthier loan position we’ve also built into the UI something called the health Factor so users can Easily see how healthy their borrow positions are right now and how close they are to liquidation based on you know how much collateral they have backing the loan and the value of that collateral any given time um so yeah that’s kind of how the system works there’s a liquidation contract and A liquidation bot which are actually going to open source um you know probably today or sometime tomorrow if not today it’s all complete documentation is ready and it’s been packaged up for anyone to run basically a liquidation bot that queries all the outstanding loans in liquid and basically searches for any loan that’s Basically reached that liquidation threshold and is able to have a part of it liquidated um one sorry to cut you before I just finished one more uh important parameter when you get liquidated in liquid uh there’s a parameter that determines how much of your loan can be how much your Collateral uh can be liquidated at once basically how much your loan can be repaid essentially um right now we’ve set that for the Ada Market to initially 75 of the position can be repaid and then if you’re um basically if you’re max if you’re if you’re loan to value ratio doesn’t Improve and gets even worse then a hundred percent of it can be repaid we do this so that initially not all of your loan is repaid or you still have some of your you know collateral um but if you do not improve that loan balance basically then you’re forcing Another liquidation event to happen where the system just closes out that entire position because you’ve reached such a high level of um you know risk in terms of like close to not being under collateralized anymore and just turning into actually bad debt so we try to do everything we can basically to slowly Um one give the borrower time to repay their loan or add collateral to not liquidate the entire position at once if we have to liquidate and three liquidate only once the borrow position is getting way too close from becoming under collateralized to turning into actual just like one-to-one collateral and then You know after that eventually bad debt so yeah trying to just take risk parameters that make sense for borrowers but also keep the protocol safe awesome flooring you were going to add some as well yes I just want to say that one of the incentives for person or for Anyone to run this liquidation boat is actually the liquidation discount so for example um I make an example you borrow a token a for 80 and your supply token B for hundred dollar let’s say at eighty percent loan to Collateral liquidate it so the protocol will cease let’s say We’ll if the so your wallet is eligible it’s a defaulting wallet so someone can come and liquidate it so somebody use a boat the boat will go to trigger this liquidation so the protocol will receive uh these assets B 400 the other person will repay your loan Um and for the price of the token he gets is 10 lower this is a discount which is again an incentive for people to liquidate this so actually Liquidators are earning the liquidation discount and this is how it works we one of the ideas for example Um so yeah anyone can run these boats and we are talking for example with some decks to to run for themselves this kind of boat because they have the liquidity they have all the different token buckets and it’s a perfect let’s say additional source of income for them if They run this kind of liquidation boats yeah that’s interesting that was going to be my next question is where do you get the buyers for the liquidation because I imagine the the depth of liquidity for this is different depending on the token yeah uh for starters it’s good that we launched with Just the Ada market for this reason I mean again when you had Vanessa to your point there’s very low uh price risks when you have Ada loans um backed against Ada collateral right they move in the same exact Direction the real risk is only interest rate risk And that takes a very long time for a borrower’s interest to accrue to a point where they get liquidated because you know they have Ada collateral backing eight alone so essentially that that risk is very low right now but once we start adding other not Corona stable Coins per se but um you know other cardano D5 protocol governance tokens uh then the risk becomes very real um and you do worry about Unchained liquidity as you just mentioned um you know the hope is that we find more ways to continue strong incentivizing the good collateral like The Ada and the Cardinal stable coins and we find ways to parametize and limit the risk of I’m not going to call it back long tail risk assets on cardano with low liquidity right so yeah yeah I think that that’s a great way of of saying it you know Adrian had a question Around collateral like what what is your ideal collateral and I remember the imagine there’s a number of different parameters that go into what what’s ideal actually it’s not the you have to differentiate the the ideal collateral for the protocol or for the user so everyone has a different risk appetite So I guess everyone has to choose uh what they want to have as a character also ideally a collateral is something that I’ve um low volatility or um in the future you expect that the price of the collateral will rise in order you have a bigger collateral uh Low volatility or sorry to cut you floating but I would say high liquidity so I would say I mean I consider myself now like the you know me and Florida right now Risk Managers of the protocol if you will of the Dow really um trying to like you know submit proposals with Parameters that make sense and are reasonable um to keep the protocol safe but I would say actually when you have Ada as your you know native asset of the chain that is earning 2x yield for suppliers that is the pristine collateral and liquid um and and here’s why right Um when I’m a liquidator and I see a position that is going that’s collateralized against Ada um I have no questions as you know I should liquidate this position now I don’t even worry so much about the volatility of ADA here’s why there’s many venues and it has a top five you Know uh crypto itself if you remove stable coins um by market cap so there’s many different venues I can access liquidity at off chain for my Ada I don’t even need to worry about the on-chain levels of liquidity for this whereas for these other markets disable coins included uh Most of the venues are 100 um you know on chain I’ve looked at the off chain venues and you know um it’s it’s kind of sparse right now in these early days for even those things um so yeah that’s kind of my uh take as a risk manager yeah and it’s interesting How the these Arbitrage opportunities that pop up actually create a more stable uh situation for everyone because it encourages people to do the action that you like them to take yes absolutely absolutely yeah yeah and it works the same way in Ave and compound to be honest actually after if people Remember black Thursday the event in 2020 were like you know Market’s kind of Tanked and uh I think it was like mid-march or so and uh um you know maker Dow had the event with the die selloff during the liquidations but after that actually I’ve been compound actually kind of stood up Pretty strong and it’s because you know they just have the liquidation discount and it’s less of a bidding process and more of a this is just a swap that any you know arbitrager can do and just understand that there’s a fixed you know 10 or 8 discount on the collateral value That you’re going to earn um if anything I think compound might have had some bad debt because they had too low of a uh of a incentive for the Liquidators I think it was like five percent or something for the eat market and they just it’s a governance configurable parameter so you just Increase that to 10 and then all of a sudden you know you’ve doubled the incentive now as an Arbitrage as a liquidator to step in uh and repay default loans in that system so yeah it works pretty nicely in the fact that it’s governance configurable is like you Can ideally tune it to the optimal setting but if you need to go higher like compound had to in that moment of like you know just like real Market stress you can do so pretty quickly through like an Agora Unchained governance vote basically and every parameter is different for Every different market so every Market has its own interest slopes its own liquidation threshold or collateral Factor Etc so and everythings can be updated in at any point in time through an agorado voting yeah no that’s fantastic and you know this this kind of operations worked under extreme stress as you said the Kind of the um the market time that happened we do have perhaps kind of a more feature level question here which is around the liquidation ratio like whether that’s something that could be adjusted perhaps with compensation of a smaller APR on the borrower side yeah absolutely I’m not sure about the Second part of the 50 collateral for small I think you’re saying collateral factor in that case yes that’s exactly what we’re going to do the same way Ave will list like um I’ll take example like um they list a lot of D5 project tokens like I can’t just think of one but they List many of them some of them lower liquidity than others and what they do is they just make the collateral Factor less for that like they’ll make it you know 40 or 50 for the collateral Factor meanwhile the eth collateral Factor will be like 75 or 80 and the stable coins Sometimes are as high as 90 in Ave right so that’s kind of the main risk parameter like floating was just mentioning the risk parameters right we mentioned them as the Max LTD the collateral Factor the liquidation threshold um those are like your main in the liquidation discount those are the main Risk parameters that you have in a system basically to determine like how much collateral can my asset Supply be used as and if I get liquidated how much of my collateral is going to be basically um given back as a discount the Liquidator so yeah that’s how the system Works basically yeah Florida and I were talking uh just before the show about about real fight and this to me seems like one of the potential perfect ways to to get into realfire which is currently today as far as I can tell the borrow rates on on chain are a lot lower Than the borrower borrower rates kind of off chain if you go to the bank for something and I’m curious if you have any plans or thoughts on kind of digging into real fire and Suite of tools offering there so yeah we have many ideas and um if if You follow me I just want also to to paint a bit the big pictures if you think about the traditional Finance it’s built on the let’s say five building blocks you need to have an identity you need to have someone performing compliance tasks you know qic anti-money Laundering you need to have like a currency and you need to have a place where you have liquidity and a place when you can exchange assets ecosystem or generally in blockchain we are close from different chain a different level are close to combine these five Lego blocks together so I identity someone Performing compliance stable coins liquidity like boring lending and decks for uh exchange once you connect these five let’s say you can replicate any project or any product of the traditional Finance on the blockchain um this is and this is really close and we at liquid for example we foreseen the Future that through different identity Solutions if it’s the one from cardano atala or other like like IMX that exists we will be able then to to go to this next level and and offer this kind of real Finance products uh we we really look forward to other stable coins let’s say a fiat-backed Civil coins that will come in cardano and this will allow also us to to attract maybe new um companies or or users uh on the blockchain and um yeah I don’t know if you have other question about specific product you want or where I expand If I can just jump in um we did launch liquid on the day that the feds hiked interest rates by 25 basis points so we definitely think about the you know real world Arbitrage opportunity when it comes to interest rates like Vanessa to your initial question like you know Rates are so low on chain right now but they’re you know so much higher what’s happening in the octane environment so what happens then is you know you know for for for lenders and suppliers you know I can just you know go host some treasury bills and that’s probably going To yield me much higher than what I’m yielding in like something like a stable coin on chain right now um but that environment is not constant as we know obviously you know the feds hike and cut all the time and Plateau sometimes in the middle um but in the Type of volatility we see right now um you know I I do think the bigger play here is going to be um two things one having a suite of um just like corporate tailored lending products that are built directly on top of liquid let’s call it liquid Pro you See things like aves has their institutional product same as compound treasury where they basically allow the smart contracts in Ave and compound to be accessible by a kyc group of um you know corporate um you know corporate borrowers and lenders and and liquidity providers who are holding stable coins or holding eth And these type of assets that they allow um we’re going to see similar interests in certain type of products like that um from you know cardano specific financial institutions and you know crypto startups fintech’s working specifically with support for cardano’s chain but for right now we’re just Focused on you know making liquid V1 uh you know one of the best um lending and broadening experience in all of crypto that we can make it and attracting so many more D5 users into the cardano space while doing so that’s kind of our main goal right now but There is certainly like you said a bigger player to be had of just the uh the interest rate Arbitrage on my second Point like just the global interest rate Arbitrage opportunities when Capital floods on chain and says okay wow I can earn more yield on my treasury bills you Know off chain in the real world or you know maybe someone collateralizes them and tokenizes them Unchained and then you know you have a market for basically you know Unchained T bills that you can lend and borrow as well so there’s really fascinating things that happen I Think it’s much more going to be a series of like I said corporate products built on top of liquid as well as like just Global fintech um you know institutions Traders liquidity providers who aren’t really playing in crypto right now but will once things like interest rate swaps mature once things Like the liquidity and some of these credit markets like liquid and Ave and compound you know grow even more than they are today and also once obviously we get regulatory Clarity and a lot of these things like stable coins but yeah I think that stuff is coming really Quickly so yeah yeah I mean it’s tremendously exciting to me that we can bring the transparency of blockchain the predictableness of blockchain and really start to see like you know Finance moving in that direction and it’ll move because of the Arbitrage opportunity because someone can make money from it It’s not just going to do it because they like blockchain oh yeah I mean I I heard this crazy quote this is when we first started liquid you know and this is kind of like one thing that was like okay I know I’m you know building the right solution here someone said you Know if Global Banks can save three to four basis points by executing their transactions on chain instead of going through the whole you know Clearinghouse um you know basically you know basically all the middlemen that have to and be involved between counterparty transactions in the real world Um when it comes to you know bond trading fixed income these things you know clearing house is being one of several players that touched the transaction of the exchange itself many other you know insurance companies providers you name it that touch these transactions before they finally settle If three to four basis points alone can be saved all of traditional finance will move on chain all of it right and we know that with the overhead alone savings just the employee account alone I mean you know basically eight developers built liquid V1 and are going To you know continue building V2 and shipping products on top of it but that’s it you know we’re talking about like thousands of folks who are employed at Banks to basically do the exact same thing when it comes voted Banks do lending and borrowing and payments right Like that’s what they do so it really is an interesting kind of like this whole like I think smart contract Paradigm that we’ve entered now but specifically when you build D5 products on top of it um it really does make you question where we’re heading in terms of the Convergence of traditional finance and just defy on-chain activity yeah and uh Vanessa we share with you there is actually a study that was published by JP Morgan and Oliver Wyman as I stated that in five to ten years the world traditional Finance um uh back end will be on blockchain and I think one of the main trigger will be once we or there is a solution to tokenize like shares to tokenize any other assets and once they come on the blockchain because as Dewayne said it’s very easy to to make the settlement if you make to if You want to transfer like a tokenized share of April it’s uh it’s seconds today’s it takes some days you know if you want to do that between the different custodian and Banks so um for me now you know knowing what is the current status of the the Swiss banking System I.T from the perspective I have no doubt that blockchain will revolutionize and and will comments it was also even one of the main reason why at some point I say I go all in in crypto because I know I I know the problem of the traditional finance and Yeah the solution is a blockchain I have no doubt now yeah I mean just seriously like consider that three to four basis points when you’re removing entire thousands of employees middlemen that you have to work with and pay a fees two to get your transactions to work for Your business to even run you know critical path type stuff for a business to pay these type of fees just to make transactions happen as a bank on top of the you know enormous salary costs they have just to function right remove that and you’re talking about you know way More than obviously three to four basis points in fees and profits um you know realized and saved but that is all it’s going to take to transition all of traditional Finance onto on chain overtime of course regulatory Clarity has to come truly has to come wallet Tooling has to improve a lot but it’s happening in like real time you know so it’s exciting I think our job now is to you know um you know make sure that cardano’s support for a lot of these things happens we’re working you know with certain folks unnamed Um but you know these institutions they use fire blocks you know they use like the institutional custody services that different folks provide um you know we’re lucky that coinbase has really good support for kadana Ada now that helps a ton in terms of talking to some Of the folks who use that but you know there’s a lot out there like fire blocks and a lot of the analytics that some of these institutions still use today that don’t support cardano so I think you know um our job as you know good stewards and developers building on top Of the chain as well as you know folks who want to see the the continued growth and decentralization of cardano it’s on us to like help push for like these Integrations and you know these type of composability um you know opportunities to actually Thrive and take place and yeah a lot of It is business to business dealings at this time but it’s it’s the exciting part of you know product Innovation on top of liquid yeah and it’s just you know I’m absorbing your three to four basis points and just how much is waiting to come in once we can shave them off and You know that’s billions and billions of dollars yeah no I love it so so I want to jump back a little bit as we’re talking a bit about liquidations and how all of that works uh where do you get the oracles from and and how do you ensure that the Oracles themselves can’t be manipulated to force liquidate someone yeah absolutely uh right now we have an internal uh price feed that we’re running for oracles um and it sources you know prices basically for multiple different exchanges centralized exchanges like coinbase and binance and Kraken that have apis that they used to publish Their price feeds um it basically takes the cardano Ada price feed from one of these aggregator sources um but you know we’ve had we have you know an oracle contract that we’ve deployed to mainnet we have an oracle bot that we use to continuously update the price feed every 15 or so minutes Um and essentially right now that that’s being run for for multiple reasons um you know one it’s the most secure way to launch a protocol like liquid that has just so many different moving pieces and aspects to it um if there was just a direct chain link native integration and cardano like There is on ethereum and other chains but chain link just natively supports we would of course just use the chain link price feeds but right now there doesn’t exist that on cardano um all there actually is is really just like really early rudimentary or Oracle support Solutions none of them that have Been like battle tested and kind of hardened in the wild yet so to say so we really feel like from a safety perspective and a security standpoint it made a lot more sense um to kind of build and run our own internal one of course this has been Audited as all of the liquid V1 contracts and you know system components were an important thing to note that you know even Ave compound maker Dao yes while they all use chain link price feeds like because chain link just basically sources off-chain information from like multiple you know off-chain Data providers there is still like a real risk to like using chain link beads the way they’re set up and they too themselves are kind of still like a centralization factor to the a point where like Ave maker down compounds still run their own internal Oracle price feeds for like all of their Markets um I think compound might be the only one that instead of running their own internal feed they use a uh they use uniswap V2 prices as a sanity check meaning if any of the chain link fed price feeds come back from chain link oracles that are outside of some range Of validity that they use the uniswot V2 price feed to check against they’ll fall back and use the uniswot V2 price instead of using the chain link fed Oracle price feed so important to note that like while cardano still has you know basically you know rounds to zero In terms of supports for oracles use that scale and D5 protocols today um even you know the largest of D5 protocol is in existence still run their own internal oracles right even the ones with samely get everything that’s natively supported on their chain they still run their own Oracle price feeds For basically all the assets that they have with collateral um and to you know price when that collateral can be liquidated yeah that’s fantastic context and I think you know many people don’t know that chain link has a multi-sig and is that multi-sig gets compromised could be a really Really bad deal for everyone in D5 so yeah important that you’re keeping it safe from that perspective we don’t have a question pop into chat that talks a little bit about uncollateralized loans so curious if there’s any thoughts or thinkings on on that and then how you would validate that someone’s good for The loan so both basically by law if you want to give uncolateralized loan you need to be regulated so uh it’s not everyone that can offer that as a financial product uh we already know that for example micro credit uh Institute or financial services they are really looking into blockchain because If you think about someone who want to give a 300 dollar loan from a U.S Bank to someone I don’t know in each area there is like 50 to 60 dollar fee it takes days and in blockchain you can do that instantly so as part of liquid products or liquid Pro We could imagine even like some white label our platform like on top you have one supplier which is a regulated entity and they decide from the borrowers who can enter in the pool and they will use the liquid technology so this is for example some kind of future realified Product that we could offer but liquid itself we will not give for us we will do it because we need to be regulated so I think at some point there is like entities that can do it that will use a liquid platform or like a modified liquid platform for these purposes yeah There’s another exciting point to that question about um you know just credit history and and you know lending and borrowing history in liquid and that’s an exciting point that I think is going to be a huge piece of cardano in the coming you know months to years where you have this whole data Economy building up that might not have been possible on a scale a chain that doesn’t scale as much like ethereum to Florence Point earlier um where you know the metadata properties that you have and the ability to query the chain and kind of like save this information for borrowers and Lenders and liquid to be used in a in a you know specific protocol might not even be liquid in the future that could be really exciting and it’s something that I think you know maybe our team personally won’t explore but I do hope that you know others explore and we’ll Try to like you know incentivize that by doing grants and things like that because I really I think it’s exciting it’s not only the birth of like true identity on chain because you’re talking about like FICO credit scores aren’t too far away from there but you’re talking about just the aggregation of financial Data and I’ll on um at that point you’re giving like all of these users agency over that data to go use it in financial and you know cardano D5 protocols whether that be you know real world kind of um you know atala prism connected financial apps that aren’t so much D5 But are built on top of something like Geronimo which is cardano’s kind of like hyper Ledger equivalent um or whether these are true G5 apps that just say hey actually we’ve checked in this liquid data that they’re generating this way is valid enough for Us to be able to use in our protocol as like a composability play so there’s that as well another Point Abe has credit delegation which means that it’s like a peer-to-peer model of under collateralized loans it doesn’t really scale too much kind of like you know peer-to-peer lending itself like youth Lend or you know any of the traditional you know peer-to-peer lending protocols but what it does enable is a decentralized way way to delegate basically your ability to lend credit to another user so I can basically if I know who Florian is basically and I built some trust with Him in the real world I can basically um delegate some of my own credit to Florian it’s basically backed it’s a loan that’s backed against my own assets and My Own Credit um but it’s basically a under collateralized loan to Florian there is actually a uh a legal recourse process They built into it I think it has open law even um tied into it I’m not exactly sure on the specifics but there is like a uh um a kind of uh a default process that’s built into that system but again it doesn’t scale it’s not a meaningful Percentage of the borrows on Ave by any measure or the lending activity in Ave um but it is cool because you do introduce undercoateralized lending you just do it in a way where it has to be super decentralized and almost too much to the point where it doesn’t scale Outside a local community where I directly know the individual who I’m lending to yeah another thought is as you’re you’re coming is uh you know over time we’ve got uh some types of collateral which would be take a bit longer to get on chain things like real estate for example Um and so you can have intermediaries that kind of bridge those two worlds and you know effectively are over collateralized just with an asset that’s not on chain yeah yeah definitely real world assets is definitely an exciting I play I think stable coins is just to start overall assets I think like you Said you know real estate and you know I think Global bonds fixed income to my point earlier in treasury bills coming on chain I think you know we’re going to see you know on-chain activity eat up all of those real world assets in a tokenized regulated way I think we’re Probably just seeing the first wave of that right now we and we definitely like I said it’s just stable coins and circle and uscc specifically has kind of like in terms of combining both at scale usage and just like regulatory Clarity for the institutions who want to use This I think circle is not the best but we’re going to see the same thing for Real Estate you know we’re going to see the same thing for gold for bonds you name it if it’s an asset it’ll be tokenized yeah oh go ahead foreign sorry before we get there No no I saw this question of uh Matthews the one you wanted to show so I wanted to say so uh liquid is Lido and AF so you can do liquid sticking and uh cardano through liquid so this is like a big big features um also Um in the future we will expand with multi-assets and then as someone who will integrate obviously um the digital ID we can also foresee that once we can integrate with Dex we can for example borrow an asset and short it so currently you only can if you borrow an asset you’re long Basically on the collateral and you could short it this is also possible you could also have a leverage trading for example um and what is totally new I think also something I foresee in cardano is um because of all these interoperability that there is with the project with almost no gas Fee just some fee for the smart contract you can really have some kind of assets management style tabs for example you you put your money in a pool and then you can have a script that say I want to have for this pool like a kind of phone Strategy I want to have asset A B C D and I can rebalance you can even have someone on top or even a dow that vote and manage how the asset allocation in this wallet is done like like in a fund and all of this will will become very Soon and yeah I really look forward so actually I don’t think if we can reinvent the wheel in liquid but actually what will be different is the composability of all of this project together and the modularity that will have through the eutex from our model yeah very very much getting the sense Even as you’re talking about things like liquidation markets and we talked about real file like composable allowing other people to participate in the ecosystem that you’re creating um join you had a thought no I think Florence summed it up perfectly there’s nothing to add to that awesome let’s Let’s jump into the uh the lq token and farming and if you could talk a little bit about how that works the role of the token within the ecosystem how people can earn it um yeah absolutely great question I we just kind of had a governance vote um in our Governance Forum just talking about this lq token emissions and the start of it and what the plan tokenomic schedule was a year ago and what was put in place and kind of discussing the governance Forum versus what the community is um you know now I think realizing which Is like you know the lq token um with the czi and with the Dex liquidity incentives um starting at mainnet would have increased a lot of the token Supply kind of initially to maybe not enough lpers in terms of the um you know the Dex lpers or the lq80 pools on various dexes But specifically on mint swaps decks um so we had a vote to basically say should we pause this czi index liquidity incentives you know return this lq to the Dow Treasury and you know wait basically until a more Community consensus proposal passes uh through unchain governance you know at this Point once that’s deployed I think that you know that’s proposal has passed and I think the community has basically really said you know listen we want to move forward with the protocol incentives the lq staking basically user is using liquid to earn lq and not so Much the focus of the minswap czi or the Dex liquidity incentives um basically I think the the consensus of the community is um you know inflation too high you know they they basically are want deflation um and you know that’s that’s fine we can do that and we can you know just Make lq something where using the protocol as a lender or borrower um is the main kind of source of lq released onto the market I think that is basically the consensus building around the community that this is you know the way the tokens should be used as an incentive more so than anything Um and you know I don’t completely disagree I think the canonical route taken was to try to like you know build protocol owned liquidity um you know have a dow treasury that basically has some LP tokens earning fees for it and those fees can then be used to you know Fund different projects and Community initiatives um but if the you know Community prefers to have an lq emissions that’s kind of really tailored towards usage of the protocol lq staking in the safety pool and voting on proposals and protocol incentives for lenders and borrowers we’re just going to build a system that Caters towards that that’s exactly what we’re doing here so yeah um there’s a there’s a basically a half of the lq token Supply is set aside for these protocol incentives so similar to when compound launched on mainnet the comp token in summer of 2020 um you know and started their yield Farming program basically all of the lenders and borrowers in each market will earn some amount of lq tokens based on the interest accrued and the interest repaid in terms of you know borrower repayments for that specific Market there’s also a multiplier effect tied to this so there’s like a governance Configurable multiplier that allows us to you know maybe incentivize a stable coin supplying over a you know supplying of like a cardano governance token basically um put on a D5 protocols governance tokens so that’s kind of how we’re building the user distribution and protocol incentive system yeah Florin Did you want to uh yeah so as Dwayne said um 75 of the token will be distributed through different usage of the platform the utility of the token is once it is stacked in the stability pool which is our kind of entrance layer you can vote in addition you receive a staking reward You can also use your token as a collateral within liquid without leaving this stability pool this safety pulsory and earning this uh return or incentive and also in the future through a governance vote we can activate that a percentage of the interest paid by the Borrowers is allocated as an additional Sticking reward for the lq stick in the safety pool so these are the different utilities there is for the lq token and also um uh yeah we for us because I I read also some of your questions in your chat some people ask what have we learned What are the next steps so for us obviously the next step is to have uh multi-assets that will come shortly and all of these features and utility for the lq token here we are talking about weeks so it’s really around the corner and once we are live uh I think liquid Will really be a beast and what we have learned I guess especially for our Dev team because sometimes it’s it’s hard to understand how complicated is it to to develop on Cardinals obviously this is one of the main barrier to entry I’d say for anyone but for our Dev team you know Most of the things we have built no one has done it until now and like the liquids taking within the Boeing market and actually I think now we know we knew already but our team is really a world-class Dev team and uh we know we have the IDS we have the talents and Yeah we will continue to innovate awesome awesome there was uh you know one thing you were talking about the the safety pool and I’m wondering if you go just a little bit deeper for folks like how does the safety pool work what are the risks involved in staking with the Safety pull yeah absolutely so again Ave has something called the safety module the safety pool is modeled directly after that it’s essentially the insurance layer of the protocol so lq is the um you know the reserve asset of liquid as its native asset it’s used as the reserve asset meaning when users stake Lq in the safety pool this is also how voting power is unlocked in the liquid Dow so you can vote on proposals um you can introduce proposals and kind of submit them but you have to have lq kind of stake in the state people to do That the reason we call it the safety pool and why Ave calls it the safety module if the protocol ever experienced a shortfall event this is when liquidity providers experience any type of deficit in the system so I mentioned above when you asked about liquidations you know How that system works but if we ever get into a case where the protocol incurs bad debt because liquidations never happened in a timely manner right and that situation that would be called a shortfall event essentially liquidity providers so your suppliers in a specific Market have have experienced Some type of deficit basically and that event essentially the safety pool could be used as a mitigation tool as like a lost compensation tool to repay some of the impacted users so essentially how it works is users who are having lq staked in the safety pool if the protocol was To ever experience a shortfall event this lq would be actually locked in the in the safety pool and a vote would be had basically a proposal would be submitted and users would vote on you know the proposed plan in terms of the compensation how much needs to be Slashed to compensate users will it be you know 100 compensation at full face value will it be some sense on the dollar what will that specific number be these type of things will be all discussed kind of at that point but the safety pool actually means that lq Stakers do take on some risk and to take on that risk they’re compensated by a fixed five percent apy that’s you know interest paid out in lq that every one staking lq in the safety pool everyone who’s basically a part of the liquid dial voting on proposals taking on that You know risk of the shortfall event um and a potential slashing is earning some yield to do that as well as the potential fee switch which is what Florian mentioned above alluded to earlier basically the few switch saying a portion of the total interest repaid On the protocol could be paid out to lq stakers as a dividend of sorts for taking on the real risk that they take on um for for being a part of of that set of stakers so it’s a five percent apy fix and then on top of that a fee switch Could be turned on in the future through an on-chain vote which would then enable basically a fixed amount of the total interest paid out in the protocol to be basically distributed to the lq stakers um and to be clear Ave has never used the short the uh the uh safety pull the Safety module has never been a shortfall event in Ave that necessitated using the safety pool there have been shortfall events they’ve been small they’re just a recent one the other day with curve if folks remember um Avi Eisenberg is like a crypto Trader who tried to like Um you know basically short curve and do some crazy things in the market of Ave in the curb Market um and there there was the protocol stood strong and is you know secure and works perfectly as you know um as built and has implemented but There was a little bit of bad debt and credit I believe it was around 1 million or so um just due to again how fast Liquidators were able to come in and close out that position it was a relatively large one um but yeah at the end of the day still The safety module was not used for Ave it was it was small enough dead amount that just the normal interest repayments in that market over the next you know month or two was enough and I believe that plus the Market Reserves had already been rebuilt up Market Reserves another important parameter that we Built into liquid um for you know protecting that system having a liquidity buffer for the liquidity providers the pliers in that system those two things enough were plenty to cover the debt basically and yet this is like a worst case scenario that’s why it’s called like an insurance Layer for the protocol but we do feel like a any type of system that’s extending credit you know that has like liquidity providers in it who are you know basically taking on real default risk it’s prudent to have something like a safety pool implemented yeah it makes A lot of sense in you know modeling it after folks that have been in the market and been battle tested uh seems to be wise there was something that that you you mentioned I forget it was ufr and you mentioned that once you’re staking the lq that you’ll have the ability to Provide that as collateral to to Min something else um and some hairs on the back of my neck stood up because I’ve been involved in the lunar ecosystem and it feels like that could be the recipe for a death spiral so wondering if you could comment A bit on that yeah just to clarify uh you you can’t um talk to the devs about this this morning you won’t be able to do both at the same time so you won’t be able able to both stake the lq in the safety pool and earn that yield plus the potential fee Switch yield and used as Colorado at the same time you’ll have to choose to do one or the other and keep in mind like you know this isn’t anything like Luna for example Luna is an algorithmic stable client it’s a whole different world of you know systems this is Nothing like that in fact even on compound and Ave today like I can take my comp governance tokens I can take my Ave governance tokens and I can supply them and borrow against them um so it’s a very like you know when done with the right risk parameters I’ll Denote that you know you see the opposite with the uh I forget the name of the Solana Market um where things kind of um the mango markets basically attack also obvi yeah where you know the tokens use this collateral but that’s when the tokens uses collateral and the risk parameters Are like you know wildly you know risky essentially and nothing you know conservative um about them so using a conservative have set up the same way that Ave and compound work today and even actually our system will probably be more secure like Ave system is more secure than Compound because in Ava you can’t actually borrow the Ave token it’s like isolated collateral you can only Supply it and use it as collateral and compound you can actually borrow the token and there was like a uh there’s actually a governance exploit where Justin Sun collateralized a huge position against Tether and borrowed a lot of comp tokens and then like tried to pass governance proposals that like he submitted basically on compound so yeah it was a whole it was a whole thing and like you know it kind of opened up the real risk to like having your governance so it can Be used as collateral that’s the real risk actually more than anything especially when the liquidity is sufficient to handle like you know some type of liquidations but in our system two things to denote like Ave it won’t be able to be borrowed it will only be Able to be used as collateral so like this isolated collateral mode number two it’ll have very you know reasonable risk parameters like loan to value liquidation Factor these type of things the thresholds are liquidation threshing and the liquidation discount these will be very reasonable for you know what we Consider a longer tail asset like lq also important to keep in mind um this this um the lq asset basically won’t allow other users to borrow stable coins um only a select number of specific stable coins will be able to be Borrowed by the L key no other asset on cardano Like Ada or a D5 project token and that’s going to reduce the number of the level of price risk that’s involved here so like a user won’t be able to just take the lq and borrow any of the assets that have been supplied to liquid they will specifically only be able to borrow A subset of stable coins and it’s a collateral parameter that we have that says hey your lq can essentially only be used as collateral in these very specific markets it might not even be all stable codes it might just be the most battle tested or disabled coins That we have on the protocol so that’s another point to keep in mind and the last one is actually in some cases um you know the Dow might be able to actually step in and you know liquidate some positions that are backed by lq if need be Um so there’s that as well so it won’t the Dow will have the ability to kind of step in as the kind of Liquidator of Last Resort in addition to any of the actual liquidation bot Runners and just natural arbitrages and Liquidators who want to earn and of course the Liquidation discount will be a bit deeper than 10 it’ll be probably closer to 15 to 20 percent to uh you know compensate for any of the liquid the liquidity risks that a liquidator takes on at that point similar to the parameters that Ave sets their own borrow land market to essentially the Same for compound yeah it makes a lot of sense Florian um did you have a comment um no I think it’s fine um I saw someone was asking about the UI ux uh and there is a lesson strong so obviously you are ux you know user experience uh it’s a constant Um improving process so for us now the let’s say the main goal is to ship all of these different features and then obviously next month we will review the whole user what we can improve collect all the feedback and and improve it so I mean it’s a it’s a constant Evolution process And we are going just step by step and to be clear the devs have made a lot the front-enders specifically they’ve made a lot of updates based on the community’s feedback and just you know user feedback that we receive on Discord on Twitter um we’ve opened up a channel in our Discord now it’s called app issues reporting so you can go there and take a screenshot of any error that you experience or any just UI issue that you have and you know our community managers will note it but also our devs are going through there every morning and kind of Reviewing those as they tackle just you know General issues and tasks on their list so yes the UI and the ux is going to improve a lot it’s going to be a rapid iteration to Florence Point um and it’s something that you know we’re going to constantly work on and Try to make perfect again building liquid is a series of things it’s building a smart contract that’s you know secure and can do things like you know build liquid staking into the repayment of Interest into a single Ada market and it’s powerful enough to have you know multi-asset collateral for a Single loan but also it’s about building out the product side and the UI ux of things right obviously we you know really we over you know put our resources into the the first piece of this and making sure that our smart contract was Secure audited tested well and hardened and that our off-chain Infrastructure that supports that smart contract and the the you know batching system that we have was set up the right way um that’s not to say we didn’t focus on the apps UI and ux but it is to say that we knew that post launch we can’t change The smart contracts and the setup that we have for liquid staking for interest accruals the interest rate algorithm the actual deployed market and batching system we can’t change that stuff those are smart contracts deployed now in cardano what we can continuously update over time is our app UI and the app user Experience and we will okay so it’s one of those things where you have to prioritize things when you’re trying to launch at a certain time and you know decisions had to be made that said we’re hiring for a full-time typescript Dev if you are or you know you know a Typescript Dev who’s you know got some good full stack experience and wants to work on an exciting project like liquid you know we offer competitive salary and please you know just send over a resume but yeah this is kind of where we’re at right now this is a Beta release this is The initial app version um you know I can just think about like even Sunday Swap and mint swap you know their app uis look beautiful now but you know and I’m not saying they didn’t look great when they launched but I’m just saying the iteration that they’ve made Over time to get to the beautiful experience that they have now you know you’ve got to recognize it just takes some time to get there and we will so yeah it’s it’s really not much more to say yeah completely fair I remember waiting uh two weeks to get into Liquidity pool on Sunday swap when they launched which is probably not the appropriate response time that they were planning for that might be utxo contention there’s a lot of that too that’s kind of being mass as UI ux issues but it really is just like you know contention of many users trying to Uh spend the same utxo at once and again transaction queuing and stuff in the off chain will improve that experience as well um but yeah I I remember those early days yep definitely yeah I know that you know at least if I recall correctly that there was a you know some concern about Liquidations going through in a timely manner and I I believe there was a conversation about that was one of the reasons originally that you kind of pushed out the launch of of liquid finance and I’m curious if you have any thoughts on you know is cardano the the Protocol at a place where you can rely on liquidations being timely um and you know having events where there are very volatile and large price movements to have the throughput necessary for it yeah you’re spot on correct I think you know pretty vasel we were talking about That and I think a lot of the CDP protocols kind of felt that pressure just uh simulating the contract size alone and realizing okay if I have to fit multiple potentially liquidation transactions in a single block like you said the throughput is going to become a concern really quickly and it’s not you Know when markets are flat or when they’re up obviously but it’s when you know markets are down and it’s a really volatile moment that you need to be able to like have those timely liquidations so that your default positions don’t turn into bad debt in the system again You know you you have parameters that you set for this you know you have things that you try to do to incentivize Liquidators to step in really quickly but at the end of the day a lot of it does come down to like the the Chain’s ability to kind of process these rather Sometimes large transactions and sometimes multiple of them in a block pretty quickly uh cardano is now you know moving really quickly I don’t know if any of you guys have done transactions lately but it’s it’s pretty Snappy compared to where it was at least pre-vezal and certainly you know um you Know months before that they’ve made a ton of improvements and are continuing to do that I think there’s another hard Fort coming up pretty soon actually that’s going to have a lot of performance improvements but um as far as like our system you know liquidations go through we can fit multiple Liquidations in a block um you know we’re able to kind of have all the performance that we need at the base chain layer to efficiently handle all both the liquidation the liquidation bot running everything that’s managed as part of that um you know liquidation piece is kind of works nicely right now On Cabana also another that’s fantastic to hear we do have a win question I think you mentioned weeks but I’m wondering if you have kind of more specific dates you’re able to share for when certain kinds of tokens are going to be added yeah uh we actually just submitted a governance Proposal um not too long before this call started um we’re planning to launch the job markets sometime this week potentially um it’s also for you yeah there’s a little Alpha leak um we are in kind of final testing right now for the devs have done a lot of the leg work in terms Of the technical components to get the Gen Market set up um the front end Dash are now completing some of the things in the app UI to get it kind of like you know working and easily able to kind of see the digit market and complete Market actions based On that but yeah we’re looking to launch it um hopefully by the end of this week you know fingers crossed if not at some point early next week but um yeah and that’s you know once we launched the Gen Market again it’ll be a race to launch You know many other cardano stable coins D5 tokens um you know you name it um assets that can be listed I saw the other day so someone’s trying to list nfts on Ave as collateral yeah they just if it can be financialized and you know monetize People are going to to do it so we’ll see what kind of exciting proposals people try to submit and you know we’ll see if liquid can support it and we will try to you know support all of them because like someone asked earlier what differentiates us from Ave and compound It’s these type of things you know like Ave and compound might be slower to you know support these type of things even though they’re infrastructure and their smart contracts set up can allow them to so um if you know we test these things and you know we think that we have Conservative parameters for them it’d be cool to try to like you know push the edge of what can be done more so than what maybe these more established D5 ecosystems and players are willing to do yeah as you’re talking about proposals we had a question from Amsterdam load And thank you Amsterdam node for all the great questions that that you’ve been uh popping into chat if you are in chat and you have more questions uh feel free to ask that the folks have been very very generous in answering the questions um but what CRPS are you most excited For are you pushing for to see Improvement on the protocol level actually the ones that just got pushed are the ones I’m most excited about um mostly because we make such good use of them in liquid you know reference scripts reference inputs um you know inline datums like we use All of these things heavily throughout the liquid you know on-chain off chain code base so yeah I would say actually the the sips that just got through the vasal hard Forks are certainly the ones I’m the most excited about you know cardano Community is an Amsterdam no great question thank you for that Cardona Community is really exciting because you have all of these spos that form just this incredible technical layer um and they’re you know they push iohk to make choices that decentralize the network in a responsible way and realizing where we are today and where we want to be that’s You know I think from both the performance and scalability standpoint but also the recent like visual related hard Fork updates like really saying hey we need to make the smart contract development and you know just transaction user experience much more smooth on cardano and we can you know Here’s a set of things to do that there’s many more that are planned in the pipeline just for that you know smart contracts and just general Network performance that will be rolled out over time uh but yeah I’m really just hyped because like you know our developers Were able to take all of these really good things that came with bazel and like you said make our liquidations you know happen basically by using a lot less transaction um you know basically memory resources and usage on the Chain than we would have had to in terms of CPU and actual Transaction cost to even run the liquidation contract um because of things like reference inputs and reference scripts we’re able to like make these things much smaller and more compact than we were like pre-vezal basically with with the um kind of building up of these landing and borrowing markets is There any concern that you’re opening the door to meva tax um Mev attacks against the system uh you know for people trying to force liquidations or trying to get ahead of the queue with with various different transactions yeah that’s a great question um so I think for Mev to exist you need Like a global um fee Market basically cardano doesn’t have that right now it has like a a local mempool and like a first in first out model um and there is no fee Market at all yet I know that there are plans and talks about implementing like a dual fee model Where you keep the current transaction ordering model where it’s just first in first out you kind of get in line um and then you add like a priority kind of checklist if you will where you can pay a higher fee to like skip to the front and the queue and then you’re you Know you’re going to probably have some type of MAV emerge based on that but as it stands right now like you know I know there are like definitely there’s probably some type of map happening in cardano but it’s very low stakes right now it’s not like it’s not like Institutionalized like you know like it’s not like flashbots and like the things that we see happening right now like scale on ethereum by any stretch of the imagination and why is that because Quran doesn’t have a global fee market yet once it does adopt a global fee Market things will get a lot more exciting you will have Med introduced but uh I’m I’m not uh I’m not against Mev I think you can democratize Meb and you can make it fair you know and I think Mev is an emergent property on chains like ethereum and that have a Global Feed Market and it will be so too in cardano um and I think for D5 to really evolve and kind of Thrive you need not Med but you need a global fee Market therefore you will have Mev right so it’s a matter of how you handle it in a responsible Way at the at the protocol layer I think what ethereum has done with flashbots and you know everyone runs Geth uh MAV or whatever it’s called Med boost right like that’s a great product like that allows Mev to be democratized in a pretty cool way across the entire Um you know validator set I think cardano’s going to have something similar as it matures and evolves but right now we’re a bit early to be talking about like Mev or things like even flash loans um so yeah it’s it’s just early days in cardano but it’s definitely coming and Uh yeah we’ll have to find solutions to you know manage it and make sure the protocol is safe when those things do emerge but yeah for now it’s just kind of observing and seeing how other folks like Ave and compound manage these things on ethereum kind of taking Lessons from that yeah yeah awesome so we we’ve had a fantastic conversation we’re almost pushing up against an hour and a half uh before we close is there anything else that you’d like to share with folks or any other you know pieces of alpha that you want to drop or uh yeah So I I have the impression that you know because currently we only have one market people are always saying oh liquid it’s nice but you just have one market you know I know for some people it’s really hard to to let’s say imagine this kind of abstract uh protocol with All the things we will be able to do but for us really it’s just a matter of few weeks before we have a version that match let’s say I have version 2 or compound version 2 plus the liquid sticking and you have to see liquid as a Kind of Leverage on the wall Equity Cardinal ecosystem so if you believe that Canada ecosystem will grow definitely a liquid will explode and as I said the team is really motivated talented and we are just started so it can sound like for some people it’s the End of the chapter but for us it’s really the start of doing cool things new things after so many times and we are really looking forward to developing this ecosystem and protocol yeah and I would just say you know I mean I come from like an athletic background I played college football and I always give this analogy like where we are in the crypto space you know call it first second inning early in a baseball game type of deal but I mean for me as like you know when you’re a football player you go through warm-up and then the game starts and all these things We’re stretching and cardano Deep by right now we haven’t even started warming up yet I might be kidding so it’s like this is like you know the pre-game stretch before warm-ups actually begin and then we’re gonna start playing the game at some point but you know when you just look at the Levels of volume of tvl of user growth of individual users of just protocols that are deployed of infrastructure level tooling you name it from any metric and that’s not to say that the cardano developer ecosystem isn’t booming its growth is incredible um it’s it’s on the backs of spos it’s On the backs of the amazing work that the Catalyst folks are doing getting people developers not in cardano excited about building things on cardano and all the growth of tooling and infrastructure thing things that are built in non-haskical languages that allow other devs to easily access the chain and Build on top of it those things are all incredible and happening but the reality is we are in like the the stretching phase of the real game that we’re going to play here and liquid’s excited to you know finally start stretching with everybody else but we can’t wait to warm Up and start playing because that’s when we really get to really Flex the things that we built and the things that are coming um but yeah you know right now it’s just taking it slow and steady and trying to educate our community as we go along yeah and it’s important to stretch so When you play the game you don’t pull a muscle I think ethereum has done a couple times and billions of dollars go out the door Dwayne Florian thank you so much for for taking the time if you are interested in liquid I’ve got links to their Twitter Down below I’ve got links to the website um so please you know follow along I get more involved if any of this is interesting if you enjoyed this conversation please like subscribe share with friends um this is a great place to learn a bit more about what’s going on within the Crypto ecosystem and have conversations like this with Founders who are pushing the space forward um thank you both for being here and I’ll see you all again soon this is great thank you Vanessa bye bye Liqwid is the first protocol on Cardano that allows users to liquid stake, lend and borrow ADA.Come learn more with Founders Dewayne and Co-founder Florian as they introduce us to Liqwid and why it’s a critical part of DeFi on Cardano.#Cardano #ADA Liqwid 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