Layer 1 Stage | It's Honest Work: How DeFi Is Growing Up

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1. 0:02

   it's wonderful to be here good morning well good almost noon time um I'm here today with some Stellar panelists so I love to introduce them but I think first why don't you each have youself introduce yourself because I think that's you probably do a better job than me but here I have Arin from orderly Network correct Mike from Labs Marco from ref Finance as well as Sid from Electric Capital so why don't we start with Sid um you're the closest to me here and why don't you give an introduction of yourself and uh your

2. 0:42

   fund cool thanks Joyce appreciate it um hey guys I'm Sid I work at Electric Capital I've been there for about a year and a half uh spent a lot of time thinking about defi liquidity provisioning um tokenomics governance and I'm excited to talk about defi with all you guys awesome marco yeah hello uh I'm Marco the C of dra Finance you may know C uh dra Finance is a top one Define platform on near but you may not know uh we have

3. 1:13

   a professional and efficient team behind it yeah beside front end back end we have dedicated and excellent uiux designers we have QA we have testing we have uh data analysis we have product uh designer and researchers so with the support of powerful team we are keeping evolving graph yeah thank you Mike Mike kahill the CEO of Doro Labs dor Labs is building the pith Network pith network is the largest first-party Oracle

4. 1:46

   Network and just announced deployment on near yesterday um so excited to be here hi everyone aun coo at orderly network uh orderly Network aims to be the ultimate defi trading Lego we are an infrastructure and liquidity network with an aut book uh aiming to allow uh multiple daps to be able to tap in and integrate with us and create a wide range of different Financial products thank you all for the introduction I think let's start off early uh kind of simple questions and then maybe we'll get to some of the

5. 2:17

   announcements that's been discussed in the last couple of days uh that's super exciting um why don't we start off with you uh for Electric Capital how are you guys thinking about the current landscape for Defi and you know within near I think we'd love to learn more about that yeah absolutely so I mean we've been really early adopters of defy I know beyond just investing in protocols we spent a lot of time providing liquidity whether it be on amms or lending protocols um on the near side you know spent a lot of time

6. 2:48

   looking at ref burrow um you know orderly as well and I think the technology that near provides allows you know a higher Fidelity of services on the decentralized finite side um and I think we're excited to see what other features can be enabled I think you know with D5 1.0 we saw the basics of amms the basics of lending but what does the next stage look like is it going to be

7. 3:11

   rwas our institutions going to be participating um those are kind of the things that we're looking at yeah awesome I love to D dive more into that later yeah and for Marco Mike and arjin uh for you guys as Founders what are you guys most excited about in defi right now Marco why don't you go first uh yeah actually at the first I Ste into this defy field because I believed that defi

8. 3:34

   could actually help startup teams uh as well as regular users the most exciting thing is uh of course it's still true it's still true the but furthermore uh I realize that Defy is driving um many innov Innovations now you know for example uh who benefits most from Cross CH Bridge yes several years ago we only need to move a set uh among chance and it seems you know all good at that moment but you know now as the defi

9. 4:12

   product become uh more and more complex we not pursue more for you know message passing Bridges we not even uh we not only need our assess to flow among CH but those business logic details to be delivered among products yeah so I think Define is actually you know uh pushing those new technologies forward in uh you know this uh critical area that's the most exciting part I in my opinion gotcha Mike I'm I'm probably the most excited about um the stuff that

10. 4:52

    arin's building um easy to pass it down um but I think that we're at a critical point now where we should start to see kind of overnight success of onchain Perpetual markets starting to eat market share away from centralized Perpetual markets um the infrastructure is probably up to Snuff now um when you start looking at the kind of feature parody of like roundtrip times the amount of Leverage you can get listing times onchain derivatives are

11. 5:23

    pretty much there um pith is powering a lot of them um and so we've seen this kind of firsthand um but the only element of it that I think is still missing that we haven't yet used to kind of grow um and like to frame that we're at about sub 2% market share relative to binance perss on chain um my prediction is that in a year we'll be over 10% um and I think it's all just ux I think now you can you can get away

12. 5:57

    with having all these features and then just improve the ux and I think that ruthless Improvement um on that front which is sufficiently easier from a technological perspective still hard work um is is going to happen and making it fully abstracted the defi experience um is what I'd hope to expect when we start to see people um enter in an environment that looks and feels a little bit like binance perss um and I think that's where we're going to get the the biggest leg and it's going to be it's going to come to surprise for as a

13. 6:28

    surprise to everyone um and I I love that about Innovations where there's a whole lot of work that goes into the infrastructure and everyone kind of complains that nothing's happening for a really long time and then when there's that overnight success everyone had forgotten about all that work that had gone in and I think that we're really ready for that thank you Arin yeah I think Mike kind of teed me up for what for what I'm most excited

14. 6:52

    about um and that's Perpetual Futures on an A A on on on an onchain aut book um we're working really closely with Partners like pith we're working really closely with Partners like ref um ref have both a spot and Perpetual Futures order book built on top of orderly and what I'm excited about is teams coming together to really bring a true onboarding experience to the user um whether it's us orderly focusing on centralized exchange style infrastructure and experience

15. 7:23

    centralized exchange style liquidity um Oracle latency at p UI and ux like ref Finance all coming together to really bring that true user experience uh to the user mic reference like chain abstraction wallet abstraction um we have fast or on near now we have BOS there's such a large multitude that can you know it's a build it and they will come star mentality and I'm really excited about the future of

16. 7:50

    D5 because we really are going to on board a large piece and I think we're such at the tip of the iceberg like you said what we're 2% of per volumes onchain per volume on on finance um I'm excited over the next 12 18 24 months when we that can be 10 15 20 yeah that was my follow-up question primarily on the timeline here I think we've seen so much progress in the last couple of years in Defi and now what you guys all have addressed is pushing defi into the next tier of trying to take

17. 8:20

    over market share from centralized exchanges right build bridging and build and bringing derivatives on chain and perpetuals on chain um how should we think about mainstream adoption taking it Beyond you know just within crypto what are you guys thinking about there if anything at all or is it right now just primarily focused on really taking on the competition uh maybe arjent you

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    could take that first so I think with like we are really at the very very start of what I believe defi is and a lot of us are always focused on bare markets B markets different Cycles over the next 12 18 months we're at the very very start of multi- deade long Financial change in my opinion um so when we're talking about what are we doing to to bring users a large part of that especially in

19. 9:06

    emerging Technologies is letting time take its time yeah right um technology is advancing more Builders coming in uh more people learning more people failing most importantly to build the right type of products and protocols for users and I think over time that's going to evolve and change and I think that's all that we really need is continued focus in what we're doing continued focus in building continued focus in learning and

20. 9:30

    adopting and adapting to what the customers need customers needs and that will happen over time yeah Mike any thoughts there yeah very similar um you know I think that mainstream adoption will most likely come in the crypto markets in something like trading because that is the primary kind of use case today that we see and it's offchain and so it's kind of like if users can't eat their own dog food um on

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    defi natively then you know there's no real hope for the rest of it um there's obviously a whole burgeoning nft Market that could potentially do things differently um because I come from a finance background I tend to focus a little bit more on the dii um so so I agree I think that um those are the Lego bricks that are most likely set up to migrate and there's a lot there right

22. 10:24

    the the number of people that have crypto exposure is in like the hundreds of Millions but the number of people that have an active crypto wallet is in the at best single digit Millions um and um you know bridging that Gap I think is going to give us a whole lot of um uh kind of Tailwinds yep yep for sure Marco any thoughts yeah actually I think it's a a little tricky question it depends on how we Define mainstream adoption if we mean

23. 10:55

    that most of user to use our Define product then I think maybe the most problem is uh user on boarding apparently but if we mean uh to have most of capital in our Define then I vote for regulation yeah yeah yes regulation not security because security is like we tell our user our big clients that our product is safe right you we are own well master your own money but maybe a couple days later a couple

24. 11:27

    months later there is a incident you make yourself like a idiot you know it's awkward so regulation is totally another story you tell your client that even if there is an incident happens you have the ability to reclaim uh at least part of your assets back so this risk is the those big investors they can you know predict they can evaluate and they are familiar with so that's the regulation but actually Reg regulation

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    is not my territory so I will assume that we are talking about you know most of user to use it so um definitely use abounding use the unbonding isues yeah yeah sit is just nodding his head nonstop a lot of thoughts I agree with I think there are kind of three points like the first is user experience as Mike mentioned there are a ton of people that hold crypto very few people who are

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    willing to use it in defi you know multiple of my friends or Bitcoin ethereum various other crypto assets but convincing them to you know get metamask you know type in a new RPC connect to a new chain goes like Way Beyond their heads even for people who are bought into the idea of cryptocurrencies and blockchain so really making uh a huge difference in terms of the user experience like laying it like making it very very simple for them so that they

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    can understand what's going on very aware of the risks and like why we believe in crypto and why it's better that these um kind of products and EXP experiences are much better relative to our traditional Finance counterparts um the second part is you know also actually security um I think there probably are there probably needs to be better standards around you know who is doing audits you know what are the

28. 13:13

    expectations around Audits and you know sometimes there's the technical security but given that we are building Financial applications from the ground up there are a lot of things that need to be considered in terms of financial exploits um that a lot of people in trafi consider but maybe not as much within the D World um so expanding the quality of audits what's expected you know when D5 first came to the scene it

29. 13:37

    was probably understandable that people were just launching protocols without much thought for it but four years later um it's time that we step back and actually look and understand what's at stake here and then point three totally um agreeing with um Marco here is regulation right I think until there is regulatory clarity in terms of what is allowed what isn't allowed it's going to

30. 14:01

    really be an inhibitor to uh development and innovation in the space and I think once regulatory Clarity is here both security and user experience are likely going to take a huge jump from there you touched on some really great topics of Regulation and security to name the two I think to just start off with regulation I'd love to just pick your each of your brains a bit more because you're also building on a very global scale right so Sid um I assume

31. 14:29

    you're in the US if correct me if I'm wrong but I love to get your take on where you're seeing in terms of regulations in the US and to give the context for folks who are here um and Marco and Mike and Argent love to hear about where you you guys are based and how kind of you know geographically the regulations there are affecting how you're building right yeah yeah so I mean not to get too much into politics

32. 14:53

    and whatnot but if you look at like the current is all about politics yeah you can't really step away from that or hide from it but if you look at like currently who's in charge with Gary gendler it seems like they have a very clear agenda that regardless of what the benefits to crypto are they're going to be pointing a pretty bad picture of what actually is happening um you know they're going after smaller projects while they've let like SP SPF and FTX

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    completely grow and blow up in kind of front of their face um so it's pretty clear that they don't have like the the economy and Innovation um as an importance for them um but regard list there are a lot of individuals within Congress within the white house within other regulatory bodies like the cftc that are putting in a significant amount of time to understand these things you

34. 15:38

    know they may be hesitant at first but that's not stopping them from trying to understand more and pushing back against Gary Gensler and the White House's agenda um and working to kind of establish clear ground rules so that people who are looking to participate in the space um don't have to like leave the us and that Innovation is happening within the us and that we're supporting the people that are helping build the next generation of financial

35. 16:02

    infrastructure yeah Marco yeah uh I'm from Shanghai China and uh as I said the ter regulation is not my territory so uh I'm not also not the political man yeah so but I can share some uh thoughts about this uh regulation SC that I think the first step towards that direction would be unchain identity unchain identity yeah like idos on near they do like SBT you know this uh NEP standards

36. 16:32

    yeah to identify people the real people behind the the uh unction activity would be the first thing to do yeah gotcha like so Doral Labs is based in Portugal in the Doro Valley in Porto um and I'm an American um um it wasn't that we moved I wasn't that we moved to Portugal because it wasn't a great environment I was already living here um but I do think that there are certain headwinds in operating within a project contributing

37. 17:10

    to a network and being based in the US um I agree with everything that Sid said um there's there's hope um there's there's a there's a lot of cobwebs you have to get through first so when you're when you're building you're a Founder um you have to evaluate those all very seriously um um running a foul of any regulatory regime is going to be very difficult um the US tends to view the world as its um as its jurisdiction and so I think making sure that the things

38. 17:42

    that you do are going to be taken within consideration of what they may be worried about um that's how we approached things um and then just making sure that you know the the network that we're contributing to you know is decentralized is getting more decentralized our primary contributions are towards the pth network which is a um a swiss-based organization similar to to near the foundation um so there are certain things that are kind of like the

39. 18:11

    tried true tested Pathways for Success um you can see projects that take the more high-risk approaches um and oftentimes those things don't work out well for them um so as long as you're kind of staying within the crowd um I think that's the best that you can do given the lack of clar from a regulatory standpoint today I um I Echo a lot of what you say there um doing the best that you can do in a very uncertain or Misty world is

40. 18:42

    one of the most important pieces overall orderly we are 40 to 45 plus people across 10 plus countries so battling different GEOS uh different regulatory um um licenses and regulation is very tricky for us the overall goal and vision for us at is to democratize finance right um we want a completely permissionless protocol we want a dow with a full governance structure y that is the end goal for us and we understand at the at the beginning or where we are right now that isn't quite quite how to do it we have

41. 19:15

    to operate as a as an entity if you will um but the overall goal is to get towards that so being in uh ensuring that we can work with our different partners such as ref such as pith or whoever the different Brokers that tap into orderly and provide them with as much detail and information on regulation is important to us um which countries they should offer certain protocols to uh which countries that

42. 19:39

    they shouldn't is very very key and we want to be able to provide that information um but overall for us being a very complete permissionless protocol in the future and democratizing finance is the end goal this is super helpful and I think it's just really helpful to learn about what your each VI are based and like how are you guys are thinking because everyone has such different opinions but overall it sounds like unfortunately us is what we're looking at a lot of and of course Asia is just

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    own animal right and and you have a huge Market there to tackle um Argent I'd love to start with you kind of talk about where are you most excited about when it comes to maybe top one or two uh kind of missing holes that projects are looking to fill in the space right now to really help accelerate right especially in defi especially in the near ecosystem where are you looking for when it comes to missing tools and

44. 20:29

    projects that are looking to build and fill those gaps right yeah it's a good question I actually wouldn't say there's anything directly missing but there are key points that I think that are getting worked on and need to be worked on a lot more to bring defi to let's say mainstream adoption right if you will um I think onboarding is one of the most important if not the most important piece uh the user experience has to be

45. 20:52

    so seamless um chain abstraction it has to feel like we I think we very continually talk especially in defi about this web 2 versus web 3 Battle right and I just don't think it's a battle at all I think there's a a convergence of both of them it doesn't have to be web 2 versus web 3 it can be web 3 that feels like web two right um I think the onboarding experience has to feel like you can sign in with an email uh like I mentioned earlier fast or that n has is a is a great tool um different

46. 21:23

    wallets that are now looking at account abstraction is like the next step towards that and again even like near BOS is a is a great place in terms of an operating system that that looks and feels like an app store and that will drive def adoption without the the feeling of what chain you're on uh are you are you which Bridge you're using are you using wrapped assets all of those pieces so I don't think it directly answers your question in terms

47. 21:45

    of what's missing but these pieces in terms of the overall onboarding complex of what needs to be continued to work on I think are critical yeah Mike yeah I I mean I I I fully agree with everything Arin said um in the in the fact that those are the things that the most exciting and they're going to have the highest impact in the short term um and so there there's really no getting around um that being the primary focus of what we should work on kind of in in the short

48. 22:14

    term in terms of things that are like missing just generally from like the suite of defi um one thing that hasn't yet been cracked has been um identity um in particular the ability for identity to allow for um non-fully collateralized loans I think that's like something that even when we have defi as like full trading and full lending um but it's fully collateralized we're still going to be missing a big component of it so until we can get to that you know partially collateralized um set of of defi

49. 22:48

    Primitives um we're going to still be a little bit be um be behind and the way that you do that is through identity when you have some recourse on like social security number or something like that you can have some form of credit because right now you can just throw away your wallet and create a new one it's impossible to sort of track you um so that's something that I think will get done I don't think it's around the corner though I don't think it's going to be happening in necessarily the next six months um but it is something that I'd like to see a lot of people working

50. 23:11

    on and you know there are approaches obviously World coins got their their approach I was just thinking about them yeah yeah um and but then there's you know a variety of others um who who are doing this through kind of more traditional means using kind of government issued IDs and and kind of creating um a a um a tethered um identity to that so I I think that's a very exciting area um for all

51. 23:33

    blockchains uh to kind of to work on for sure Marco yeah I wouldn't say uh Missing part but I would say uh there's actually some weakness in weakness part in the defy yeah I agree with Arun uh us oning yeah definitely is a weak weakness for defy and uh you know um but for this field us on boarding on near actually we have some tools to mitigate this issue like AR mention the fastos right so uh uh basically we have two ways to do

52. 24:11

    that one is to have our users try our products first yeah and then uh handle those wallet issues later if they are willing to stay right so another way is to uh have our users to access our product with a TOS they are familiar with yeah that means for um you know for for evm users right they can access our products using metam mask MH that would be good right yeah uh they took all my answers but uh

53. 24:47

    kind of jumping on what like Mike said I definitely think you know when it comes to Capital efficiency that's going to be a huge unlock for Defi and one piece of the puzzle definitely is identity and being able to have recourse uh Beyond an anonymous address onchain um and I think another part of it is the type of assets right now all the assets that are integrated in defi are very volatile and liquid so by Nature you have to have

54. 25:11

    over collateralization um very like strong kind of risk standards across all these applications uh but when you bring in traditional assets whether it' be equities treasuries um or anything that exists in the traditional Finance World um they're likely to be more stable and also significantly more liquid so figuring out a way to bring those assets on chain in a regulatory compliant way making sure the infrastructure and

55. 25:35

    plumbing for that exists would also enable us to do under collateralized lending in a way that doesn't exist in defi today and I think that would be a huge unlock that you know the infrastructure exists whether it be lending and amms or um derivatives protocols but right now they completely operate within the scope of crypto assets which is amazing but if we really want to get it to the next stage um it needs to kind of figure out a way to

56. 25:59

    integrate traditional Finance assets within that as well that makes a lot of sense we unfortunately only have one more uh question of time so I love to just ask each of you to get some advice for Founders who are building in the near ecosystem and defi in general right um I think defi you guys have all started out in defi for for quite some time now and the defi landscape has obviously evolved a lot but what kind of

57. 26:24

    advice maybe top two advice that you would give to the we're building today in the defi ecosystem um you know navigating right just when they're coming from a finance background like Mike or someone who's a engineer maybe sit if you don't mind starting sharing some advice for them yeah absolutely I think one uh as an entrepreneur you probably want to be aware of market conditions but at the same time you don't want to be like too drawn into it

58. 26:49

    you know even though we are in a bare market and you know everyone talks about prices being down if you look at the energy of the space and the fact that you know all of us are here there are tons of people that are continuously building to really rally around that energy and continue to try to build um you know don't be afraid of the fact that it's challenging and that you know there are a lot of unknowns in this space that we're really but we're really pushing the frontier here with def5

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    projects you know everything Beyond crypto as well um so can really take that energy and continue to push um and we'll we'll get there sooner than later yeah for sure Marco yeah uh I would say when you start to building something uh don't pivot away easily unless you think it through that there's some some something uh in your call Design call logic something wrong yeah um try to

60. 27:44

    keep up with the market change yeah um by upgrading your product or iterating because in that way you will accumulating uh ecosystem confidence on your product on your team and even on yourself yeah yeah advice for Founders I would say um stubborn optimism um is is probably Paramount um and then um incremental uh growth um having too large of an expectation will cause gaps and that'll you know kind of reflectively hurt your optimism um being able to talk to people about your idea

61. 28:22

    um talk to potential projects that could integrate that you can work with um is so valuable and it just creates this network effect and given how you know what stage we're at in kind of crypto growth everyone's working to try and make each other better it's not yet the Zero Sum you know world of web 2 um there's no giant Behemoth gorillas they're all sort of being um kind of nurtured right now and so everyone's very willing to help one another so you

62. 28:49

    know finding a project to start with iterating staying open-minded um and um you know just being optimistic yeah I think you you hit the nail on the head with some of those Mike like being curious I would say is probably one of the most important pieces uh sometimes we can be far far far too dialed into what we're doing um that we don't see what's going on around us um collaborating with each other especially quote unquote competitors let's say um we are at the very very

63. 29:19

    early stages like I said of this like multi decade long Financial shift the chance that you're right with your idea is Slim To None um you need to be talking to as many people as possible as many like-minded people as many differently minded people um understanding how your idea can evolve as the technology evolves and as the market evolves your product will be completely different over 2 three four 5

64. 29:44

    year period and product Market fit is going to take a lot of time as well so being as curious as you can and talking to as many people as possible is probably my biggest advice there that's super helpful and lastly how do do the audience here connect with you guys what's the best way to learn more about your project or reach out to you if they have questions um arjent maybe could start um check out our website it's

65. 30:08

    orderly. Network check out our documentation docs. orderly. Network and our Twitter is Twitter orderly Network so lots of updates lots of exciting things um and lots of partnership and collaborations coming up awesome um pi. Network for the uh the website for pith um and then on all the socials yeah uh by the end of this year uh ref will have the margin trading on the spot Market yeah and then we have uh a merge

66. 30:38

    with Dex and a landing protocol to allow our uh LP liquidity provider to has their LP tokens take as a collateral to Bor assess out and then maybe next year we will release a stable Co on year okay very exciting good yeah check us out uh Electric electric capital.com uh the team is working really hard to get the next developer report out we put together a pretty comprehensive report every year um on the state of developers across ecosystems across Geographic um

67. 31:09

    areas so we're getting ready to launch the next edition of that um and I'll be at the proximity Terrace if anyone wants to chat awesome well thank you everyone for being here and giving us the advice uh let's give it a round of applause for our speakers again thank you thank you everyone all right