Everything EOS Interviews, 7 Apr 2020

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From YouTube: EOS DeFi, LiquidOracles, Stablecoins, Multi-Chain Collateral, Proxy APR, and more with Alex Melikhov

Description

Alex Melikhov, CEO of Equilibrium, joins Zack Gall (LiquidApps.io) to discuss a wide variety of topics including EOS DeFi, robust oracle systems, upcoming new features including multi-asset collateral for generating EOSDT, makerDAO's $6m loss, recent EOSDT proxy updates, regulation, and more!

Equilibrium
https://eosdt.com
https://t.me/equilibrium_eosdt_official
https://twitter.com/@eosdt

Everything EOS
https://www.EverythingEOS.io
https://youtube.com/c/Everything_EOS
http://t.me/Everything_EOS
https://anchor.fm/everythingeos
https://itunes.apple.com/us/podcast/everything-eos/id1434560651?mt=2

A

Welcome back to everything else, the longest-running yos podcast I'm here with my two-time guest Alex, make off coming from quarantine in a 14-day quarantine. Just entered the UK from Germany recently he's the co-founder of cryptocurrency exchange in jelly he's. Also, the CEO of POS DT, also known as equilibrium a collateral backed stable coin on z/os. How you doing today, Alex yeah.

B

Doing very well, thank you very much Zack for having me on your podcast yeah. So you you mentioned my currency and I'm already a for almost 11 days on guarantee an upside rights at London from Frankfurt, so my my beard actually is getting longer. However, you know overall kovat thing was not a didn't affect our daily operations who within our team, because we have yes, he probably now the remote teams in different distant locations in the world, some guys in the US, something guys in the UK some guys in China.

B

So overall, it's working like like, like like it's working regularly, that.

A

Seems to be the case with a lot of the crypto blockchain teams, a lot of them already we're working remote like I'm reading all of this news about zoom how there's all these people that are just discovering, zoom and I'm, just like man I've been using this for years now. It's nothing new and I learned that my lifestyle, the way I live. My life is actually called social distancing. Who would have known.

C

A

A little more strict, so we talked for a little bit before we started recording you said it for your quarantine, you're literally like locked indoors, you can't even go for a walk outside no.

B

I cannot I cannot, but you know, I think that this this coronavirus thing overall will change the behavior of regular people, because you know those of them who actually discovered the opportunity to work at home, probably will not get back to their offices anymore. As you know, it's a like you and me are always doing that, so we got used to that doing things at home, not-not-not attending office whatever, but for for regular people with something something you experience right.

A

I think it's part of what it's doing is its accelerating some trends that were already happening like remote work. Isn't anything new but I?

A

Think it's accelerating the pace, remote learning people are like in my state, my country, pretty much all the high schools are all remote now, so they're all learning how to do this distance learning and then there's a lot of companies that just were all like office based and they're learning that they're not actually depending on the type of company, obviously but they're, learning that they're not losing as much productivity as they may have thought by being remote.

A

So maybe, when things go back to normal, they'll have maybe like more flexible environment, maybe they'll be able to work from home one or two days a week. Well, we'll see it's also accelerating other trends like killing retail I. Don't I, don't think that the big retailers are gonna be able to come back like the I guess. The non big-box stores like right now, like Walmart and Target, and things like that are still open. But oh.

B

Oh, they just apply some changes to their business models, focusing more on delivery side, mmm-hmm on some remote things, yeah, because they're for export. For example, III know that fitness industry is changing tremendously, because a lot of people actually buying buying equipment for their for their houses and I'm, not sure that it will get back to to fitness centers anymore yeah.

A

They're they're actually paying for subscription apps. So it like you, know like a workout in, but it's like, live with your trainer on on the screen and you're just working out, and they could. They probably have a monitor in front of them. Seeing like 20 different students on bikes and they're, motivating.

C

Them so it's a it.

A

Looked at it's crazy a couple months ago, but this is the new normal you're right. People can't go to the gym that gyms are all closed. All the jimbros exactly.

B

Exactly I have attended by the way several yoga classes remotely. It's quite.

A

It looks like you're keeping up on your haircuts, though that's good I got one like right before they started. They all closed down. So I think I got another week or two in me that I'm gonna, my wife cut my hair, I guess I, don't know the women are gonna. Do you're gonna start seeing women like when we come out of hibernation here. We're gonna, see everyone's true hair, colors I. Think oh yeah.

B

Yeah I mean good for you that we do both actually can do that, because I cannot even cut my beard.

A

I have hair clip I'll, probably just go with the same length on the entire thing to make it easy. I, don't know, but yeah.

C

A

Of crazy stuff happening, I think everyone knows what's going on with the money, printing and the traditional finance system, but we're here to talk about defy today, which is a very hot topic. It's pretty much. The hot trend in crypto over the last year to collateral, backed stable coins, I think the most popular one, the most well known, one is maker Dow. A lot of people have heard of that from the etherium community and you actually have published an article kind of comparing the services that we'll get into what happened with that.

A

It was at March, 12th and 13th. When the market crashed she kind of will get into how maker Dow reacted to the market crash and how he has DT did. But why don't we kick this off in case people really haven't heard of you or EOS DT or equilibrium? Why don't you introduce like what equilibrium is at a high level, yeah.

B

In broad strokes, equilibrium is the framework for building defy applications and synthetic assets, and us DT is the first proof of concept of the technology. It's the first decentralized stable, going on use, which is backed by new script. Currency essentially, and every single use DT is getting into situation, threw over culturalization with with us Quattro. So, basically, users are generating this USD stable coins through depositing their use holdings into our smart contracts. So that actually is bringing quite a lot of advantages.

B

So, firstly, it's transparent, stable, going and at anytime you can be sure that there will be the certain amounts of collateral which is backing the this. This stable coin on another hands its risk-free custody, because everything is on smart contracts and definitely the the most differences are coming from the technical side of things and differences between between technical platforms on July maker, Dow and equilibrium service DT.

B

So, as I highlighted in in my in my in my article, obviously, the robust price fields make a lot of sense and definitely the overall overall blockchain capacity of use is way higher than the capacity of etherium Network. Specifically, with respect to the amount of transaction can be held by by by the blockchain network there, so we have launched just just getting back to the introduction of years T, so we have launched a UST into production in back in April last year. Since that time we got some traction.

B

Currently we have more than around ten million doors worth use sitting in our smart contract, which makes us one of the biggest Depp's in terms of parents. On the US blockchain around three million USD T generated by our users. We have launched the industry's first stability fonts, which is actually guaranteeing that users would get their fonts back and even in the case of some Black Swan events or ever extraordinary of thing happening on the market like the recent markets market crash, so we get listed on several prominent exchanges with.

B

Quite quite you know, proper liquidity, depth, graphs.

A

You guys for that, because that's one of the biggest issues with stable coins I mean I I work with the vigor DAC project and follow that project, and it's not there yet in production, it's on the test net, but once it goes into production, finding that liquidity on the exchanges is it's going to be everything you have to like when you generate a stable coin against your collateral. I have here as DT now, I have to be able to spend that es DT on something or else I'm, just quoting some token yeah.

B

Exactly exactly exactly but I think that even the bigger problem is getting back your USD T or whatever stable coin. You have generated it to be sure that at some point you can be able to bite it out from the secondary markets at the price of $1 and pay back your loan on the smart contract, because you know here's the risk, you're you're, looking some liquid assets on smart contracts, anticipating that at some point you will repay this loan and get back your collateral right. So that's the bigger use case.

B

So if it comes to yes- and maybe we wish it, we should go for for explaining the use cases for this type of stable points. Right, yeah, yeah,.

A

So also I think I. Think most people are gonna understand what this is, because this is not a new concept anymore, but you're essentially able to borrow stable coins and, in this case, euros DT against your crypto assets, which in this case is EOS. So so, like let's say, I have a hundred dollars of EOS. I could lock that into the stake and contract and I could borrow the.

B

Sixty year was it to you I think it's better to say that you have like 200 bucks of all years and you're officially boring like $100.

A

And that would be 200% collateral, which gives you some wiggle room, because once your collateral drops to a hundred and thirty percent, that's when you get liquidated and we'll get into all that fun stuff in a bit. Yes, writer just put out a blog article. Yesterday, you guys on April 1st, you guys have some interesting stuff coming up with with the fee modeling and the proxy I'm a big fan of passive income, and that's a big reason. I wanted to bring you on here. I also want to talk about the liquid Oracle's.

A

We get into that in a little bit, but passive income there's so many ways to earn income through not just cos and other crypto us it's like tezo's and things like that. But in this case with us and equilibrium, not only can you borrow against your ears, but you could actually earn income from the ear so that you're borrowing against through the the proxy when I kind of get into how that works. Yeah.

B

For sure, so, I think that staking is the overall trends on the markets and, yes, you reasonably mentioned. Definitely you can do that in in in multiple ecosystem, including taxes, you use and other other blockchain platforms.

B

Where actually you can, you can take the advantage of DPOs or POS systems, so we we are actually leveraging these opportunities for quite a long time, and now we have updated our system so that our users, who actually are putting their use into our smart contracts, are getting this passive income on that use that just they just simply deposit it on the smart contracts and not necessarily generated it was DT by the way right. So the we're. Actually, this income comes from. So basically, we have found the way how we could actually stake.

B

The whole use collateral for blog producers and do that in the riskless way right, because we can, you know quite immediately or instantly get to pull it back and get back to our users right so, and the these blog producers, for whom we're staking this. This collateral is select.

B

The list of these blog producers is actually selected by our so called, not not not talking holders right so they're voting for blog producers, speaking the list of 30 of them who were actually getting this this collateral from our system and these more producers are paying rewards for that right. So we have updated the system that the blog producers currently are paying ninety five percent of their daily reward. They get thanks to our proxy, and this.

B

This actually means that the the reward which is which is paid to collateral holders will reflect the proxy size fluctuations right and the this actually means that if you are staking just simply staking using two USD system, you will get it some expected and constant APR on the USU state.

B

So currently the numbers that we are anticipating is around two point: three percent coming from from block producers and the this funny thing goes the same time: you're you're, getting some other other other revenue streams right. So we are not getting just just look. Reducers rewards, yes, the.

C

A

Part so III wasn't aware of this, like I'm, more excited about it. After talking to you before we started recording so typically, whenever you staked or a reward proxy, which is the new norm anymore, like it's not really looked down upon block producers are paying for their votes. They're paying out, rewards to these proxies. So if I staked, like ia's nation or Colin, talked script, a reward proxy I'm earning those those vote, reward payments and that's great- it's like a 2% or sometimes a little bit below two percent.

A

But it's capped your cap to what the block producers are willing to pay, but with the equilibrium proxy. Now you actually get the extra fee model whenever there's liquidations whenever your collateral positional position goes below the threshold which, in the case of equilibrium, is 130 percent, so which.

B

Is which is lower than 150 percent so make it out by the way it.

A

Is if it goes below that, then basically, my position has to get unwound so I have a OS in the contract. That's basically backing the stable coins that I generated from it. It has to sell that EOS and there's also a fee involved with selling videos. What's the liquidation free charged to a stake right now,.

B

So basically, it's the thirteen percent of the value of law.

A

So if I got liquidated a hundred, yes all of them got sold, thirteen of them would go to words up a pool, a.

B

Little bit different, so, okay, so imagine that you have! You have 100% of us DT right.

C

B

Your collateral value is dropping below 130 percent, hmm so you basically have 130 percent of collateral. Let's say it's 130 dollars just to make it simple, easy, so yeah. So so, basically we have 130 $30 of collateral. You, you are getting back your excess collateral, which is 17 $17 and 113 dollars are going to the liquidation system, so in liquidation system.

B

$103 are sold for $100 worth USD T to some market players who are actually actually performing this liquidation thing and you get ten excess percent right and this $10. So basically, these ten dollars are divided into two parts. One part is nine dollars which is going back to the collateral pool and efficiently. This is where, where this kind of additional income coming from right and one one dollar is sold for not for not tokens and distributed to those guys who were actually deposited, not tokens to the governor's contract to select block producers, for example, mm-hmm.

A

So I think the simple version of this is that when positions get liquidated, people who are staked into the the state the EEO staking contract are earning fees there. So whenever someone gets liquidated there, there is a fee they're charged those fees get distributed between nut token holders and people staking their AOS and when you're staking your yes you're, already earning the block rewards from the block producers that they're paying into it you're already earning stick recs, whatever percent.

A

That is right now, but then additionally, you're gonna get what I don't have the percentage in front of me we talked earlier. Is it 9% I know.

B

I think it's something around 6 6 point something nah.

A

You mean I mean it's a lot of the leg out of the 13% liquidation fee. 9 percent goes towards the eerste kurz. So what that does is it raises the APR. So in the eos Reiter article that I read yesterday, it called out I think a 2.3 percent APR, that's just kind of like the floor on the home page of EOS DT. It's actually showing a 30 day, average of six point three five percent and that's because, as we all know, on March 12th, everyone got rekt. There is probably massive liquidations.

A

Everyone holding a position that wasn't grossly over collateralized, probably got hit, but this what this does? Is it incentivizes you to over collateralize your position? So you don't get liquidated because you can benefit from all of the less sophisticated, less smart people who are under collateralizing their positions and getting liquidated. So I. Think that's that's awesome. So, let's get back to the differences here. You want to kind of walk through what happened on maker Dow on March 12th and what caused everyone to get wrecked because of the Oracle lock up. Oh yeah,.

B

For sure it's it's interesting part, because you know they usually make it out or whatever, whatever analysts who actually were explaining this this issue, what happens on march 12 13th? They tried to explain it from from some economy perspective. Saying that hey there is the economy problem, whatever blah blah blah, but eventually it turned out that the problem was in overall architecture. So the guys who were actually were developing maker Dow and its technical side on the technical side.

B

They they didn't take into account the potential clog of the underlying blockchain platform, and when this clock happened, when eventually, when all the, if all the theory of network got stuck and literally, nobody could could normally transact on that, including Oracle's of maker Dow, who actually could not break through this kind of got a frozen, Network and push the transaction with with the actual price fit. The the prices of of maker Dow were deviating from from the the actual price of aetherium. Quite quite quite quite a lot. So there was the problem.

B

The the the price of of prior kind of great rates of aetherium on maker, dow smart contracts were way way above the the actual price of etherium on the market, and nobody wanted to liquidate the liquidated positions right, because you eventually would suppose to pay a kind of premium to the markets, which makes no sense, because, if you're liquidating, you want to get the assets at the discount right, but the instead of discount you, you had to pay some premium, which makes makes no sense, as I said so in this.

B

In these circumstances, all these kind of keepers who suppose to to do the liquidations they just gave up, but some of them just they try to push the transaction on chain with almost zero bits in the auction of maker Dow. And surprisingly, this transaction pass through. So basically the system maker Dow they they. They have no minimum threshold for bidding on in the auctions and you technically technically they were not bidding zero.

B

They were bidding just one basis points of the token of die which is actually 10 to to the degree of minus 8 18 or something so basically so technically, it's not zero. It's above zero, but you know in the real world nobody can win the auction bidding wine ten to the degree of minus 18 and the auction. The auction are in the amount of $6,000 right, so that's that makes no sense yeah. So this was happened and eventually this can adventurous Keepers.

B

They extracted over six million dollars worth a theorem from the conscious of maker Dow, which is heat, which is outrageous insane.

A

Insane so what happened from what I understand was that the gas fees were just so insane that it was roughly $30 to make an Oracle call or a transaction. At that point. So maker Dow is 14 like anonymous, where cools I think some of them are known like maker. They they do their own Oracle on their list of Oracle's is maker Dow themselves, which means that their own price Oracle was too cheap or too broken.

A

I guess to even update its own price feeds on its own, like that's, crazy and I, and then the people that are buying the the liquidated positions they were paying like $200 in gas to make sure that their their their buy orders would go through and it was kind of a game. But.

B

As a gamble that paid off significantly exactly, but the thing is that, when you initially suppose to to make this beat you you actually, if you're, even paying $200 for transactions 200 backs for gas, you you're not guaranteed that you will win this auction because somebody else could also be like onto 200 250 bucks, for example, or something so that's the that's a thing. I I remember at some point.

B

Somebody from the community was raising this kind of problem of maker, douse Oracle's I guess a year ago, or something asking somebody from the maked our steam who actually this Oracle or whatever price feeds were, and they told they responded that we can. We like something like we couldn't, cannot disclose the identity of these people due to security reasons.

A

You want that to be transparent, like.

C

A

Oracle's I'm sure, if we knew like they're most likely, people that are reputable at least so I think no unknown thing doesn't really make sense. Get into your Oracle is because you have a very robust, workable system. It's going to get even more robust here shortly, so use three Oracle sources, provable Delfy and soon the liquid Oracle system and you're also going to be running your DSP. So how? How do you a granade, your price feeds amongst like different Oracle types and how many different feeds are using so make heard.

A

I was using 14 unknown feeds. How many feeds are using currently.

B

Firstly, we when we approach the problem of our Kleist prices on the smart contract. We decided to go to take the approach of public and Nell and reputable Oracle systems. The first, the first Oracle system that we have integrated was the system of provable I know these guys for quite a long time.

B

They're there they're providing Oracle services since I believe 2016 for quite a long time, and they actually are reputable guys quite well known in the film community and recently they also rolled out their solution on use blockchain as well, and we we actually EOS DT was the first, the first application which utilized their price feeds yeah. So then we decided to diversify this Oracle systems by integral where integration of Delphi Oracle it was. It happens, I believe in August's last year, or something like that and now we are, we are.

B

We are preparing for launching the third price feed through liquid Oracle, so expectedly will be launched within coming weeks and yeah I mean we are. We are actually fetching the aggregated prices for quick the group to compare for now and we are building the median price among all the Oracle Systems. All the prices we get from from from different sources and if eventually I expect, will be we'll be building the system where we'll be fetching from multiple exchanges building the median on our end, however, I think the current.

B

The current setup is enough robust, and you know, I- think that that aggregated price from cripsy compare reflects the the current situation for sure on the market.

A

And and the crypto compare API is an aggregate of multiple exchanges, so even though you're pulling it from crypto compare on crypto comparison, they're pulling it from many different exchanges on that, like the ears price, essentially.

B

Exactly I think I think they're they're they're, pooling the prices from over 50 exchanges or something like that and.

A

As far as robustness, so all of your Oracle systems like it would almost be impossible for them to all go down at the same time, yeah yeah exactly so.

B

Through provable, where Patrick prices from from cryptic ampere, we expecting to fetch cryptic compared aggregated price, also for liquid Oracle as well. Delphi Oracle works a little bit different way because there are several ball producers actually pushing their prices on chain, I'm, not sure about the source of this price. By the way, however, if the the price is irrelevant, it would be mitigated, through this kind of midian ization, on our smart contract and.

A

Yeah and I think Adelphia I'm, pretty sure uses a debt I think it uses new decks for the prices I'm, not a hundred percent I. Don't want to be quoted on that and then the liquid Oracle's. You have already spun up your own DSP, it's already available for other people to stake for services if they want to, but you'll be using your own Oracle or using yo. Sphere I think is one of the other ones. Yeah.

B

We are using, you, sphere is the first DSP. The second DSP would be our own, and we also were talking to use nation robust.

A

Oracle's are one of the most important aspects to a defy project. We saw what happened with maker Dhawan Oracle's. Don't work the way they should. The other important thing is how the liquidations are conducted in whether or not the the defy protocol has an insurance pool. Earlier you mentioned the insurance pool, which I think is roughly ten million dollars.

A

So what happened with maker down with those liquidations? We talked about how people are getting liquidated. Typically, when you get liquidated, you lose a lot of money, but you still have some of your collateral left over. If I get liquidated on equilibrium, I still have a small percent of my original yose. It's a consolation prize, you're upset, you got liquidated, but you have something. What happened to a maker doubt was.

A

There were people that lost thousands and thousands of dollar millions in collectively, but individuals, many people lost everything, so that's something that would be impossible on equilibrium and the reason is that one, your Oracle system, I, think is so robust that there's always going to be someone feeding a price. You don't have to worry about transaction fees skyrocketing because you have millions of years staked and that you're probably well positioned for any type of congestion.

A

You always have a 30 day advance on rex, rentals, so you're never going to run out of computation because you're prepared for this, and then the transaction fees aren't going to go up, and we didn't mention this, but the maker Dow, where it goes and I think that kind of sucks about them. Is they only update every hour? How is that even safe to run a like a system like this, when you're Oracle's are running every hour? How? How frequently are your work was updating.

B

So currently we are, we are guaranteeing that the price are as fresh as one minutes update, so every every every minutes we're updating the prices on smart contracts compared to to one hour of maker Dow, it's a huge difference, I guess specifically in the circumstances of the market crash like we experienced weeks ago, so the the that's, definitely something that differentiates the approach of of equilibrium and maker Dow. And you know the thing is that you cannot.

B

You cannot afford so agile price feeds on the FIRREA. So that's basically the the issue with the theorem, specifically because every time when you're updating the price you should you should pay gas.

B

So meat honestly are not paying gas on on heels right, because there is no gas transactions are almost free and definitely that that actually opens new possibilities for building defy applications. On top of that, because you you can rely on your price feeds, you can always be sure that the prices are actual up to date. So and that's something different and definitely like you mentioned that that we have this ability for if you wish insurance policy. So that's that's a kind of different approach.

B

So, if you, if you remember what what maker doubt did to cover all these losses, they they had for this market thermo to turmoil, so they just simply issued bonds efficiently right. So it's something.

C

B

Exactly something like like saying every time something happens to the markets so.

C

B

We we actually, we took a different approach, so we took the responsibility with what we are doing and we establish this insurance insurance funds which actually ensures that every user will get their funds back, even in the case of some extraordinary markets, advance that would lead, steer the overall consideration of the system dropping below hundred percent right, so the system will be heavily under cultural ice.

B

So in this case, if we will be winning down our system, so every single user will get back their funds according to kind of 100% of the value of their they're stabilized. So.

A

It's like the collateral of last resort. Basically, the.

B

C

A

Up as it should never be tapped into so it's pretty low risk on your end, but but the funds are there, it's completely transparent. You could see it. You know that it exists, so it should give comfort and safety know knowing that you're never going to wake up one day and see that all of your collateral is completely wiped out, as happened on maker down the other week.

A

So I want to get it into some of the cool stuff that you have coming up and one of them you talked about before we started recording was a multi collateral system. What were you able to say about that? And is there any time frames we could look forward to and what's that gonna look like.

B

Yeah, so we have rolled out very, very important update for the system months ago he probably actually passed a little bit of notice in the community, but for us it actually has a huge impact because we have technically prepared for getting for embracing more collateral types within the system. So basically we can. We can launch any any collateral type within just one day or something. So what actually it means.

B

So the system is currently is comprised of separate segments and every of these segments will be responsible for the specific type of the collateral and these segments will be technically independent. So it means that if some collateral type would, for example, fail for some reason like I, don't know, some may be due to some price drop over ever and we will be forced to win down this specific segments of the system, and actually this will not affect the overall big picture.

B

So basically, we just switch off one segment and other segments will continue functioning and the system will be up and running so there's the fundamental fundamental difference to some other multicultural systems even to the systems which are presuming building kind of you know, busk itself collateral right. So if the basket fail, the system would fail. In our case, if some some, some cool type will fail, the overall system will not there. So the.

B

Also also like, on top of that, we can definitely build more sophisticated models, so we can build even some segments with the basket of collaterals. However, it's it's. It's quite a long story.

A

So if I had to guess like collateral types like, we probably expect Bitcoin aetherium big caps at first and then probably stick with those for a while test the system and then add more if there's demand for it but yeah exactly so.

B

Just for you to have the understanding of our main focus for this year in terms of the project developments, so the this year for us is the goal is to build the true cross chain, interoperable system which will embrace the the biggest the biggest assets in terms of market cap like Bitcoin and etherium, whatever other other assets, maybe Tron we're also looking at telegram open network if they make it to the markets eventually.

B

So the that's the kind of things that we're focused on right now, so the first, the first asset, if you wish the first additional collateral type that we will add to our system, will be the solution by our partners by provable they're launching betokens projects. Quite soon, and in terms of in terms of this project, they will be delivering the the system which will allow to log your bitcoins and to issue the rep tokens against these bitcoins on use, and these tokens actually will be accepted as a collateral in for for USD T.

B

However, you know I know that quite quite a lot of people are quite skeptical about this type of solutions about this crap tokens. Whatever and I, actually in some point it's it's in some parts, I actually agree with that in terms of thiers get up skepticism around that goes.

B

Definitely the the adoption of these assets very much depends on first liquidity and, secondly, how robust the Federation were. If you wish the partners worse than staying behind this, this kind of projects in terms of betokens I would say that they have quite prominence Federation, which is backing their specific rules, their solutions specifically I'm aware that BitFenix actually joined their Federation. They will be supporting them and I know that several other major exchanges will be also supporting their tokens and I.

B

Think in terms of that, in this sense, this these projects will will succeed compared to others mm-hmm.

A

Because you have to have liquid markets, because just because you have a pegged, Bitcoin doesn't mean anyone's to buy that pegged Bitcoin off of you, so I guess you'd have to unwrap it and then sell it as a regular Bitcoin to get liquidity, but you're, saying that the P tokens themselves you're pretty confident that they'll have liquidity because of partners like VIP, Phenix and other exchanges, potentially that there will always be a market for it. So, therefore, you can collateralizing generate the sdt exactly.

B

And you should be, you should be you should be. You should be confident that it's every time you can swap back your your reps bitcoins to the actual bitcoins on Bitcoin Bojack mm-hmm.

A

And that'll look kind of just like in exchange. Basically, if you want to generate a pegged Bitcoin or pegged aetherium you'd, send your real aetherium to a specific address, probably giving it your es wallet name and it just kind of good. Does the cross chain swap I? Think that's something I've heard of other systems doing it, but I've never seen.

B

A

Of them gain traction is the thing.

B

Exactly but the thing is the: what you're explaining is sounds quite difficult from any users perspective right.

B

Some cross chain may Jake whatever tokens, and how do you make it easy yeah exactly so our goal is to provide the users with seamless user experience, so they basically will be doing everything in one interface, I mean both sending bitcoins and generating stable coins, and they basically will require just two two transactions on Bitcoin blockchain and on us blockchain, just to redeem your stable coins, and that actually makes things waste way more simple than mmm they don't any other systems of this kind and.

A

They'll be able to do that all from the same front-end, so they'll be on the same website right on the SD T site, but it'll use the provable back-end or the P token back end like framework to generate everything, but they'll be doing it from just one front.

B

A

Done on the same interface right.

B

Right, so it basically will be will be integrated into the current user flow on the uset interface and by far II would not require you to go to some site services to do something on the backends for sure not you just you just you just get everything in one place: mm-hmm.

A

I think that's really important. It's the user experience is I mean in blockchain. It's been kind of the curse of it's been that's everything's too difficult and we're trying to bring those walls down trying to make things less friction.

A

Another thing I read about you guys is the that you're able to pay fees now just using the EOS DT, because I I had a position a while ago on equilibrium and I had to I, typically don't hold nut token, but I did have EOS DT and when I went to close my position, I had to pay a fee with nut token side to go to new decks and buy a little bit of nut. Token then send it to USD t.com. So now is this implemented today, yeah.

B

Exactly so we have, we have switched our of piece before that paid in knots into the to the face paid in USD T. So, basically, users will be not I mean the end. Users will be not forced to have not tokens in their portfolio, so overall it will be simplifying their use, the user experience because there will be simply generating USD T on this on the smart contract and then paying the same here as T, plus some accrued fees, also in USD, in order to get their collateral back.

B

However, it, but by all means it doesn't reduce the utility of not tokens girls. We we actually just shifted the the flow of not tokens from the user. The the end users flow to the users flow of more sophisticated professional market distance who are actually doing the liquidation things. So the approach we're currently taking is the approach of simplification of everything for M users. So basically it means that we're not just switching fees to USD T, but we're also launching quite soon the new web interface for the overall application.

B

That would look like, like the very nice Bank application that you have from your regular bank right. So it would be quite quite nice. We will be launching that in April. I can't.

A

Wait to see that so it sounds like since the last time you're on here, which, sometime this summer is off, like you went from Tula I think it was b1 June. Then he went to tulip in California and then you're on your way to New, York, I. Think and you made a pit stop in Pittsburgh and we recorded a podcast in-person with you and your general counsel, Josh good body, and you guys have a you're very knowledgeable on the global regulations, very, very meticulous with with how you guys are operating.

A

What's what's the latest with that, because I know, like a legal opinion, came out, I, don't know a couple months ago and I know with like we're talking about like not even using the term stable coin anymore like calling it a low-volatility token. Something like that. So what's the situation was stable coins right now, with with, as far as regulation, look.

B

It's very much depends on the middle of stable coins, so basically, in most proper jurisdiction like in the UK, for example, the stable coins they're, backed by physical cash and in banks, are actually considered as Emani. So basically, if you want to transact or be the server some service on top of that, you should obtain the FC license in the UK. For example, I guess the situation is quite similar in some other jurisdictions as well.

B

However, if it comes to the centralized stable coin, which are backed by cryptocurrencies, their legal status is currently I would say, it's not unclear, but it's a little bit under greater of of regulators and, however, like we in equilibrium, we got the legal opinion on both assets. We have on our framework on USD TN, not this legal opinion actually is considering both as utilities no way securities.

B

So another important thing that we worth mentioning here, that decentralized, stable coins are efficiently the loans against the collateral users deposited on smart contracts and in this, in this sense, this this particular operation I mean polarizing. Your your volatile assets on smart contract is not triggering the taxation. Events right, and so you actually can get the stable coins without doing some kind of exchange operations and get some cash against your your cryptic holdings right and then you you would not. You would not pay pay.

B

Taxes, I guess anywhere is neither in the US or nor in in the UK or somewhere somewhere.

A

Else so, let's just give a quick example, so people can understand that so let's say I want to buy something and I want to I'm gonna have to sell some crypto. We generate money against my crypto. Somehow to buy I, don't know, I, don't want to say, I want to buy.

B

A

Yeah yeah I want my arrest. I want to buy some of those really expensive hard to find that I shouldn't even be buying as medical professionals need them. N95, masks and they're really expensive, but I need the money if I sold my cryptocurrency for 4, USD or Ted, but USD coin, so I could sell it on coin. So I can take the coin base and withdraw out to my bank.

A

Account I have to report a taxable event for that, whether it's a gain or a loss when I sell my EOS or so my Bitcoin or my aetherium 2 USD coin from coinbase. That's a taxable event. I got a report that on my taxes, but if I generate my stable coins on a platform like equilibrium, I could generate like five hundred dollars off of a couple file. It has to be at least $1000 or I'm. So bad at this math I'm.

C

Over collateralized, in my position, if.

A

I want to generate five hundred dollars against the thousand dollars of es that'd, be good collateral position. I would not be paying taxes on that. That is not a taxable event because I'm just basically it's almost like a credit system you're, it's kind of like your house I, think a good comparison is your mortgage on your house. If you have a certain percentage of your house paid off, you could actually take out a loan against your house.

A

Essentially what these collateral blackstable coins do is you're, taking a loan against your crypto, but it's not a taxable event. It becomes a taxable event whenever you need to I, guess buy more. If you spend those EOS DT and then you eventually want to close your position, you either gotta sell EOS or do something to buy those EOS DT to put back into the contract. So that would be a taxable event, but you could time that up strategically.

A

Maybe you don't want to create that taxable event until next tax season, especially if it's like the end of the year, so I think that's very advantageous. I think it's up, you might know better than me, but I think that's a pretty big whale trick. The people that have like millions of dollars of crypto I think that's how they're able to buy nice things and spend their money without creating these giant taxable events totally agree and actually.

B

They're keeping up with their upside with the upside potential of their volatile assets right, so they are not forced to sell them off to to some stable coin and then regret when this scripture will go up in terms of this price. So that's that's only a good option.

B

The last thing I actually wanted to highlight on our side is actually the multi-sig with blood producers, because we are eventually going to to make these things happen and as soon as we get the the audit reports of smart contract, so it's coming sky is coming along quite soon.

A

That's just gonna add more security, how's, your so right now your smart contract. Is it just like a multi-sig of your own team? Essentially, it's not exactly.

C

A single key, but.

B

C

B

So it's it's! It's all the keys, although all the private keys are actually belonging to the team. It's by far, all the keys are safely stored on on cold storages. So by all means it's it's kind of safe and robust here, but we want to take a step towards more decentralization of the system. So you probably know that last year we have done the arrangements with 11 block producers who actually agreed to be on our multi-sig for for USD T.

B

At this point, we actually are waiting for the eventual audit report for the our smart contracts and as soon as it would be would be published. We will transfer first smart contracts of the system to this multisig. It would be the smart conscience for our tokens, so he initially they will. They will be the group of three block producers just to kick off to figure out how things working, how we encourage animating all the throated developments and deployments of smart contracts today to the network, and then we will.

B

We will get all the block producers on this or this multi sec. So we expect expectedly. We will. We will roll this out in April, actually call in call in talks crypto. He raised this problem multiple times, then hey, here's, the USD one of the biggest projects on Neil's, but still with not dead, the central their mission structure, and we eventually want to make these things happen. So.

A

Pretty much make it as secure as possible, make it as trustworthy as possible. We talked about a lot of the other trusts like what the insurance pulling things like that. But the one thing is still missing is: is the block producer multi, SiC and that'll be a significant step forward, but after all that, after all of this new development, we talk about how do we get more people using defy so right? Now we have ten million dollars locked up maker Dow has whatever it is: 100 million dollars locked up? How?

A

How do you get more people into the ecosystem and more people? Trusting? Do you find what's like the timeline, so we should.

B

Distinguish retail use cases from the use cases for more professional market players here and I? Think in terms of bigger market players and more kind of professional market participants, we should need just for more adoption, more institutional institutional players coming into the space and as soon as we see the bigger kind of banks- or you know, companies fonts coming into crypto, we will see the rise of of defy and the volume locked in to defy I would say.

B

The conference I was attending in Frankfurt was quite interesting despite the currency that I got from after that, so they were just banks just just professional and institutional guys. No, you know average cryptic route there. It was super interesting cuz. The guys were talking very serious stuff.

B

Like you know, institutional custody for crypto, then like insurance, insurance, things, techmuze, ation platforms, treasury management, solutions for institutional institutions, so that was extremely interesting and I got the feeling that everything like moving this this way, the the way of more kind of institutionalization of of overall crypto space I, am not sure, even that this kind of seven books of the current cryptic assets will remain here for sure some of them will stay in for long form for a long time, because it's used to the doctor, it's like Bitcoin, if the hopefully ills and some some some other things, but all the coins would definitely would be washed off from the markets.

B

So, but, but you know, the the there is another dimension of all this kind of crypto cryptic movements, the the the dimension of institutional market players, and probably there would be some other some alternative assets moving around. So let's see it's it's it's quite interesting how things going there and where everything going overall, so I think it's it's it's it's a kind of so in terms of in terms of kind of retail users and retail adoption. For sure.

B

It's very much depends on on the user experience the users get through this defy applications and defy projects right, so the use the frankly the user experience in different projects, but existing right now is quite quiet. You know, controversal I would say so it's it's quite difficult for retail users to understand how things working there and on another hands like the way how its it's done and etherion, for example.

B

With this you know quite quite quite quite how to say so so the the kind of the kind of the low speed of transactions and this potential clocks on the network, the undetermined price of gas. So there's, actually quite quite disgusting user experience- I mean so that's why we? Actually we were. We started building things on the US by the way, because we we we believe that immediate transactions like we have in use without without actual actual costs like almost free, then that actually represents very user experience than any other blockchains.

B

So in terms of in terms of user adoption and in terms of on boarding users like retail users for sure this type of freak assists make way more sense than any others. Mmm-Hmm.

A

One of the ways I have actually been onboarding people whenever I own boarded a couple friends earlier in the year. It was right after I start using crypto calm. They let you they it's it's CFI, it's definitely centralized, but they allow you to earn off of your stable coins. You can earn I think a six percent APR without any real lockup I think that's their flexible APR percentage. Just from holding stable coins. Are there any plans to have AOS DT integrated into someone else's lending platform where you could actually just hold stable coins?

A

No volatility risk. What you're able to earn yield on that.

B

Yeah, it's exactly one of the things I wanted to touch on. Actually, so we are currently working on the system which will be representing the saving pool for us DT. So, basically, the users would be able to stake their their usage of stable coins into smart contracts and gets APR on that, so that that would be the parts of the system integrated into our interface yeah, quite similar to the ice savings rates, but with a little bit different model of interest rates.

B

So the initial interest rates would be quite high, then it would be gradually decreasing until to some certain level, but eventually it would be one one of the products on top of equilibrium integrated sorry, so.

C

B

Yeah I mean they would be quite exciting, updated by the way. So in terms of other lending platforms, I mean on use currently they're, not that many lending platforms so far I believe is. There is a pl thing that we already listed there, however, not not that much liquidity.

B

But the good news here that we also will have will have P USD T talking on the theorem launched soon, and we expect this token to be integrated into some lending theorem based lending platforms. Yeah.

A

That's why? Because script is just so volatile, like I, don't want to introduce someone to crypto and then have if I did that this all happened back in like January, if I'd have told them to buy Bitcoin by yes buy anything, they would hate me right now. I wanted to take baby steps. I was like install this app deposit, some money, that's just sitting in your checking account and instead of it sitting in your checking account not earning you any money, you could earn 6% on and it's just all just digital dollars.

A

Essentially, and that's that's all it is so they didn't have anything relative risk. They're earning, APR and I. Think that has such major potential for, like just normal people. They don't have to worry about, be like no crypto, it's just you're holding dollars. Essentially it doesn't even matter what dollars you're holding on crypt that I'll bombing it hold true USD USD, see, there's a couple other ones, but I would love to see EOS DT added to all of these same platforms would be great because then I could earn.

A

My I could generate them for my es. So right in the magical scenario here, I have yo staked to equilibrium. I generate stable coins. Against that my ear set still staked is in this last month it earned over 6 percent APR and then I have all this other year's DT that I just generated I could have that in a lending platform. That's earning! Who knows what whatever percentage APR that is I'm just all about that passive income and I think there's a lot of different ways to play. This I mean with your system.

A

You can lever it up. If you want to take those est T's and buy more iou's stake Deus into the contract generate more USD tune. You can keep doing that. But you add risk I, don't want to necessarily add more risk in this market place, but but I do like opportunity and by generating those yes DT. If I could put those to work for me, I would love to have that opportunity. So I'm, looking forward to seeing this yeah.

B

Yeah, it's ok, I mean we we're in talks with little platforms like that so expectedly. If something will work out soon in terms of adding us.

A

To some landing platforms, looking forward to that so.

C

A

Think we should wrap up here. How could people find equilibrium with you which you have they find you on telegram Twitter website ears, DT, comm I know that off the top of my head and anything else you want to want to mention before we hop off here.

B

Yeah, hey. Thank you. Thank you very much for watching. You can definitely get your hands on experience of UST. Calm generate some USD go, try some eels and quite soon some other cryptocurrencies. You have your portfolios, so we're will be constantly improving our user experience, so expectedly you will enjoy that and if you have set any feedback, feel free to reach out to us. Share your feedback, and we also, we always always listen to what community tells us to tell their experience and how we can improve our.

A

Platform I would just like to plug you guys do these AMAs I did one a couple months ago. You're doing these AMAs regularly people could join your telegram group to find out about them. Pray. Follow you on twitter to know when they're coming up, you guys are actually paying out $100 any OS dt for the best question for all of these AMAs. So it's an easy way to make money. Just have a good question for the guest I know you had like I was on there.

A

You had Mac staff on I think a couple days ago you had a Nate from Bank or Eve.

B

Was on there? Well, you know. So, yes, they look Stokes a lot of a lot of guys yeah. You can find us on telegram. Our target group is equilibrium. You official feel free to join and ask your questions whatever you have there. Well we're so.

A

We always on these shows with the go iou's. This is everything, and this is everything yes, I. Don't have the camera me? Okay and.

C

A

Everything years.

A

C

Gotta, do it one two three Joey.

A

Yo yo yo, yo yo.

C

Yo yo, you smash the.

A

Thumbs up subscribe, see you next week.