The internet of money is being built with blockchain technology and without banks. We call it DeFi, short for Decentralized Finance, and this is where you can hear the builders and users of this cutting edge world tell their stories first hand. Hosted by Camila Russo.
Where to listen
Anyone Can Create Their Own ETF and Get Paid for It; This Wasn't Possible Before
This week’s interview is with Sergey Nazarov, the cofounder of oracle provider Chainlink. The way blockchain applications get their data has proven to be crucial, as failures in those systems have been at the core of many of the latest attacks in decentralized finance. He says developers are currently underestimating the complexities of building data aggregators and oracle systems and says, the only reason these dangerous patterns are not as discussed is because the losses have not been Mt. Gox level. In this conversation Nazarov makes the case on why the Chainlink platform is meant to help avoid those risks. We also talk about the main trends he’s seeing in the space, Chainlink’s plans for the coming months, and his vision for a more decentralized future.
This week’s interview is with Fernando Martinelli, co-founder and CEO of Balancer Labs. Balancer Labs is an AMM with a twist. Instead of liquidity providers having to deposit tokens in a pool at a pre-determined ratio together with a more liquid token (usually ETH), Balancer enables users to create token pools that have any ratio they want between their tokens. They can use any combination of tokens, and can even exclude ETH. The pools automatically rebalance when tokens’ price change, so that the same ratio is maintained. This way, liquidity providers are effectively creating something like a tokenized index fund, or ETF, in which anyone can invest. On the other side of the protocols are the liquidity takers, or traders, who can exchange tokens from these pools, or “ETFs.”
Traders pay a small fee, determined by liquidity providers, which means that unlike in traditional finance, where you have to pay ETF providers to trade index funds, you can create your own fund and get paid for it.
Fernando explains how Balancer works, and gives the scoop on what’s coming up next, which includes, an interface for non-technical users to create their own token pools, a Balancer token to be launched in V2, liquidity provider rewards using this new protocol token, and plans for decentralized governance. He also talks about Balancer’s business model, the steps it took to ensure the protocol is safe and the level of control the team has over the protocol —which he says is basically zero.
Emin Gun Sirer is a Cornell University computer science professor who has been deeply involved in the Bitcoin and Ethereum communities from the very early days. We talk about how he got started in the field, building a cryptocurrency long before Bitcoin. Gun, as friends call him, then turned his attention to Ethereum, notably catching the bug in The DAO, but failing to alert the community about it.
After years scrutinizing existing blockchains, he’s back at making one himself with AVA, whose testnet launched two weeks ago. He explains the inner workings of this network, the first built over the Avalanche protocol, and how it can process several thousands of transactions per second at latencies of under one second.
He also talks about his plans to release a subnetwork called Athereum shortly after the AVA mainnet launches in July. Athereum will be almost identical to Ethereum; it will replicate its smart contracts and assets, and ETH holders will hold the equivalent amount of ATH. Sirer says the intention is for Athereum to serve as a safety net in case something goes wrong with ETH 2.0. If this sounds like Ethereum’s old friend wants to bring on some serious competition to the second-biggest chain, that’s because he is. Still, he’s quick to highlight he wants Ethereum to succeed and that he’s not after Ethereum dollars, but rather after money flows that are outside of Ethereum.
Hello Defiers! This week’s interview is with MyEtherWallet founder and CEO Kosala Hemachandra. As the head of one of the most popular Ethereum interfaces, Kosala has a unique perspective on how the global pandemic has impacted activity. He also shared how coronavirus has disrupted his own life, and talks about what it’s like to run a company from his bedroom at his family’s home in Sri Lanka, on opposite timezones as the rest of his team. He also talks about how crypto was built for crises, about the importance of building a decentralized product —if it’s custodial, it’s not worth it— and what he believes the future of digital wallets will look like. Lastly, he told me about MEW’s next big projects: a DEX.
In this week’s episode we talk with Daniel Wang, CEO and founder of the Loopring protocol. The exchange built on the protocol launched a little over a month ago, with the goal of providing a non-custodial platform, meaning it allows users to keep control of their funds, with similar performance in throughput and cost as centralized exchanges. There’s mind boggling technology with funny names behind this protocol —zero-knowledge proofs, Snarks, Starks,— which Wang demystifies and explains.
We talked about how scalability is a relative and not an absolute measure. To him that means Ethereum 2.0, an upgrade meant to increase the tractions per second on the network, won’t magically solve all scalability issues and Layer 2 solutions, which take part of applications’ data and computation off chain, will still be needed. To him though, users’ security is the wholly grail, and Ethereum is the best place to get it.
Wang also lamented lack of accessibility to Ethereum dapps and dexes in China, and talked about Loopring’s plans to launch a smart wallet geared for the Chinese market which will hopefully help solve this problem.
These are some of the key topics we discussed:
Loopring origins and having to give back most ICO funds
The team’s decision to go all-in on zero-knowledge proofs
The protocol’s tradeoffs: more centralization for faster and cheaper transactions
Why users should use non-custodial exchanges instead of centralized trading platforms
Lack of access to Ethereum dapps in China and smart wallets as the gateway to mass adoption
Ethereum dapps scalability issues and Layer 2 solutions with Eth 2.0
In this week’s episode we speak with Rune Christensen, the founder of MakerDAO, the largest lending platform by assets in decentralized finance and the issuer of the Dai stablecoin. Rune has been in crypto since 2011 and is no stranger to volatility and crazy market conditions. Still, last month was the most shocking for him yet. On March 12th, MakerDAO’s mechanism to heal loans that become under-collateralized broke down amid the market crash, allowing one trader to run off with more than $4 million in free ether. He calls it Maker’s toughest test yet, and he believes the protocol passed it.
Key things we talked about:
MakerDAO’s plan to hand control to its community and dissolve the Maker Foundation
MKR auction and token whales
The decision to add centralized collateral to back Dai
Whether Maker will add Bitcoin as collateral and create a euro-pegged Dai
Collateral holders who lost 100% of their funds in the March 12 crash
Rune’s long-term vision for DeFi and Maker, as an enabler for financial inclusion