Podcast Summary
Revolutionizing Decentralized Finance with RARI Capital: RARI Capital, a modular lending market nearing $1B TVL, lets anyone open their own pool and act as a lending platform, similar to Aave. Founded by teenagers, it's a remarkable story in DeFi's next generation.
RARI Capital, often referred to as the "Uniswap of lending," is revolutionizing the decentralized finance (DeFi) world with its modular lending market. This innovative platform, which is currently nearing $1 billion in Total Value Locked (TVL), allows anyone to open their own pool and act as their own lending platform, similar to Aave. The founders of RARI Capital, who started when they were teenagers, have seen exponential growth in just a few months. As we speak, the TVL is approaching a monumental milestone. This is a remarkable story in DeFi, showcasing the potential of the next generation of protocols. Additionally, Zerion, a sponsor of the Bankless show, is now offering NFT features in their mobile app, allowing users to track both their DeFi portfolio and NFTs in one place. Upcoming episodes of the Bankless podcast include interviews with Andrew Yang, who is exploring solutions to societal problems through reform, and a discussion on how crypto could offer alternative solutions.
Exploring the Ethereum Community's New Waves of Innovation: The Ethereum community stays connected and learns from new entrants in DeFi and NFT spaces, supported by autonomous tools and initiatives like Uniswap, and values authenticity and exploration of technology's cultural and personal aspects.
The Ethereum community is constantly evolving, with new generations of innovators and projects emerging in the DeFi and NFT spaces. For example, RARI Capital is making waves in the DeFi world, and it's important for established members of the community to stay connected and learn from these new entrants. Additionally, the Ethereum ecosystem is supported by various autonomous tools and initiatives, such as Uniswap and its grants program, which provide opportunities for new ideas and labor. Overall, the Ethereum community values authenticity, as exemplified by figures like Andrew Yang and Peter Pan, and is dedicated to exploring the cultural and personal aspects of the technology, not just the protocols and tech.
From Proof of Work to Proof of Stake: A More Efficient and Decentralized Alternative: Proof of stake systems like Ethereum, Terra, and Solana offer a more energy-efficient and decentralized alternative to proof of work systems. Platforms like Lido make staking in these systems accessible to all, while the success stories of RARI Capital demonstrate the potential for individuals to make a significant impact in the crypto industry.
Proof of stake systems, represented by Ethereum, Terra, and Solana, are a more energy-efficient and decentralized alternative to proof of work systems. Lido is a platform that makes staking in these systems accessible to everyone, regardless of the amount of crypto they hold. The story of RARI Capital, a successful DeFi protocol now worth over $1 billion, began with its founder's frustration with the complexity of trading crypto in its early days. He started work on a mobile wallet that made interacting with decentralized exchanges easier, eventually leading to the creation of RARI Capital with the help of Jack Lipstone and David Lucid. Their journey illustrates the potential for individuals to make a significant impact in the crypto industry.
From yield aggregator to value-added DeFi service provider: A successful DeFi app requires balance and a long-term vision to differentiate and outlast competitors. Pivoting from a yield aggregator to a value-added service provider helped Rory stand out in a crowded market.
Building a successful DeFi app, even as a college student, requires balance and a long-term vision to avoid burnout and outlast competitors. Rory, a yield aggregator and money market founded by a college student, started as a way to earn yield on their cash. They built the product with the help of a crypto industry veteran and reached $10,000 TVL within a month. However, after a liquidity mining campaign, they realized they were just another yield aggregator in a crowded market. To differentiate, they pivoted to become more than just a yield aggregator, focusing on providing value-added services and building a community. The team's commitment to balance and long-term vision is key to their success and longevity in the rapidly evolving DeFi space.
Creating a Decentralized Lending and Borrowing Solution - Fuze: Fuze is a decentralized lending and borrowing protocol that enables individuals to create their markets for any asset, providing greater control and freedom in the DeFi space.
The team behind RARI set out to create something unique in the DeFi space by controlling the entire stack from the wallet to the yield aggregator, leading to the creation of Fuze. This isolated lending and borrowing protocol was designed to enable individuals to borrow and lend any asset in a permissionless way, making it the "Uniswap of lending." Unlike traditional lending platforms like Aave or Compound, Fuze allows anyone to create a lending and borrowing market for their tokens. The team's vision is to enable individuals to have complete control over their assets without any external interference. This decentralized approach to lending and borrowing could potentially serve the long tail of assets better than traditional platforms, which may focus on popular assets like ETH and WBTC. Fuze's creation marks a shift from centralized lending platforms to more decentralized solutions, providing greater freedom and control for users in the DeFi space.
Fuse: A Decentralized Lending and Borrowing Platform with More Flexibility and Efficiency: Fuse is a decentralized platform offering more control and flexibility to pool creators compared to Compound and Aave, allowing for a wider range of risk and reward options for users.
Fuse is a decentralized lending and borrowing platform that aims to offer more flexibility and efficiency than existing platforms like Compound and Aave. While users currently may not see a significant difference in using Fuse versus Compound, as Fuse can replicate Compound's parameters, Fuse's future upgrades aim to make it more capital efficient. The key difference between Fuse and Compound lies in the level of control and risk that pool creators have. Compound is considered more risk-averse, while Fuse allows for more freedom and creativity. Critics argue that this freedom could lead to dangerous pools, but Fuse's creators believe that the market should decide which pools succeed or fail. The idea is to let a thousand pools bloom, with the market pricing in the risk and reward accordingly. Some pools may offer extremely high interest rates, but they also come with higher risk. Fuse's website even allows users to assess pools based on their verification status. Overall, Fuse offers a more open and flexible platform for lending and borrowing, giving pool creators the freedom to decide where they fall on the risk spectrum.
Understanding Risk Assessment on Rari Capital: Risk assessment on Rari Capital is determined by an algorithm based on various factors including token amount and impact on liquidity. Low safety scores indicate high risk and should be considered when making DeFi decisions.
While anyone can create and deposit in pools on Rari Capital, the risk assessment given to each pool is publicly available and important for assessing the potential risks involved. The risk assessment is determined by an algorithm and is based on various factors, including the amount of specific tokens in the pool and their impact on overall liquidity. A low safety score, such as TetraNone's F score, indicates a high risk due to an excessive amount of a certain token, in this case, Ohm, which could potentially wipe out all liquidity on SushiSwap if there is a cascading liquidation. It's important to note that these risk scores are just a placeholder on Rari Capital's front end and don't affect the on-chain interactions. However, they serve as a valuable tool for users to make informed decisions about which pools to engage with based on their risk tolerance. Despite Rari Capital not being a risk protocol, it's crucial for DeFi users to consider the risk side of the equation when making decisions to ensure they're getting a reasonable risk-adjusted reward.
RARI's high interest rates driven by internal FUSE pools: RARI's internal FUSE pools drive high interest rates, no external protocol interaction minimizes technical risk, and upcoming Vault factory contract offers highest yields for multiple assets.
The high interest rates in the RARI platform are primarily driven by the internal FUSE pools, as RARI does not interact with external protocols to source interest. This internal focus aims to minimize technical risk and keep control over the platform's operations. The recent exponential growth in total locked value inside RARI, from $180 million to the brink of $1 billion in just 45 days, can be attributed to several factors. One is the absence of liquidity incentives, meaning RARI does not pay depositors or borrowers. Another factor is the upcoming Vault factory contract, which will enable users to deposit various assets and automatically redirect between different yield sources, offering not only the highest interest rates but a vault for every single asset. Lastly, the surge in liquidity could be due to the overall growth and adoption of DeFi, with users seeking higher yields and diversifying their investments across various platforms.
Expanding product offerings and enhancing user experience: Fuse is working on adding long-tail assets, permissionless pools, and using Uniswap v3 LP positions as collateral to offer more flexibility and power to users, particularly in the NFT space, and differentiate from other DeFi platforms.
Fuse is actively working on expanding its product offerings and creating new features to enhance the user experience, with a focus on onboarding various long-tail assets, permissionless pools, and the use of Uniswap v3 LP positions as collateral. These initiatives aim to provide more flexibility and power to users, particularly those in the NFT space, and differentiate Fuse from other DeFi platforms. The ultimate goal is to achieve product-market fit and cater to the unique needs of the decentralized finance community. Additionally, Fuse has plans for layer 2 solutions and multi-chain strategies, as well as collaborations with other protocols, but specific details were not discussed during the conversation.
Fuse expands to Ethereum Layer 2 solutions and introduces plug-ins for interconnected pools: Fuse, a decentralized lending protocol, is expanding to Ethereum Layer 2 solutions and introducing plug-ins to enable unallocated capital transfer between pools, improving product-market fit and attracting lenders.
Fuse, a decentralized lending protocol, is expanding its presence on various Ethereum Layer 2 solutions, including Polygon, Arbitrum, and Optimism. They aim to improve product-market fit on Ethereum L1 before deploying liquidity incentives across all platforms. A new feature called "plug-ins" will enable unallocated capital from one Fuse pool to be sent to another, creating a connection between different pools and attracting lenders. Fuse is also working on a new redesign and exploring partnerships with other DeFi projects. This dynamic approach to decentralized finance is representative of the emerging class of 2021 DeFi protocols, which includes Ohm, Olympus DAO, Alchemix, and Abracadabra. These projects share common traits and offer valuable insights for investors and followers of the DeFi space.
Decentralized Finance Platforms: Matcha and Gemini: Matcha offers limit orders and fiat on-ramps, while Gemini provides interest on crypto assets and a crypto back credit card. Newer DeFi apps, or DeFi 2.0, focus on improving tokenomics and creating incentive loops, attracting younger generations.
Matcha, a decentralized finance (DeFi) platform, offers limit orders and integrated fiat on-ramps, allowing users to make trades automatically and purchase crypto directly with fiat currency. Gemini, a trusted cryptocurrency exchange, also offers interest on crypto assets through their Earn program and a crypto back credit card. The crypto industry is seeing a new wave of DeFi apps, or DeFi 2.0, which focuses on improving tokenomics and creating interesting incentive loops. Younger generations, including those entering crypto more recently, are particularly drawn to these new protocols. DeFi 1.0 didn't fully crack tokenomics, and DeFi 2.0 aims to build on that foundation with innovative incentives. Overall, these platforms and trends reflect the unique capabilities of crypto and DeFi to enable new financial models and incentives.
Decentralized Finance Innovation: New Token Economics Models with Perpetual Call Control Value: New DeFi projects like Zoomer Fire and DeFi 2.0 introduce innovative token economics through Perpetual Call Control Value, allowing projects to control their liquidity pools and value, leading to the rise of unique token models. Sustainability and regulatory compliance are crucial for their success.
The new wave of decentralized finance (DeFi) projects, such as Zoomer Fire and DeFi 2.0, is bringing significant innovation through new token economics models. A key development is the introduction of Perpetual Call Control Value (PCV), which allows projects to accumulate their own liquidity pools and control their value. This, combined with the flexibility of being a decentralized, anonymous team, has led to the rise of innovative token models. Rory Capital, for instance, has taken a more cautious approach with token economics, but acknowledges the importance of having a clear long-term vision and team incentives. The success of these new projects depends on their sustainability from a regulatory perspective and how they adapt to the rapidly evolving DeFi landscape.
Building a better financial system with ZoomerFi: The ZoomerFi team is dedicated to creating a permissionless lending and borrowing system, collaborating with other projects, and taking on risks to innovate in the DeFi 2.0 space, despite concerns about potential risks. They aim to create something even better than the current financial system.
The team behind ZoomerFi is focused on the long-term vision of creating a permissionless lending and borrowing system, and they're committed to the project for reasons beyond just financial gain. They're collaborating with other projects and taking on more risk to innovate in the DeFi 2.0 space. While there are concerns about the risks involved, the team believes that the potential rewards outweigh the risks and that the faster they build, the more innovation they'll see. However, they also acknowledge the importance of ensuring the stability and security of their protocols, learning from past experiences like the Rari hack. Ultimately, they're striving to create something even better than the current financial system.
Response to challenges in DeFi world: The DeFi community responds to challenges by prioritizing security and innovation, demonstrated by Rari's $1B in DeFi and focus on composability, supporting more assets, and exploring new possibilities.
The world of DeFi apps, including Rari, comes with inherent risks. However, the community's response to challenges, like the hack on Rory, shows the importance of security and the power of coming together. Rari, a riskier DeFi app, is taking steps to ensure security, such as regular audits and retainer agreements with auditors. The success of Rari, as shown by its $1 billion locked in DeFi, demonstrates the potential of riskier ventures in the DeFi space. The focus now is on composability, supporting more assets, and exploring new possibilities. Despite the risks, the DeFi community continues to innovate and grow.
Bringing DeFi into the mainstream and navigating regulatory challenges: The Fuze team is dedicated to making DeFi accessible to the mainstream audience, integrating real-world assets, and shaping regulatory narrative for the community, with a focus on user-friendly solutions for the growing user base and entry of new markets.
The team behind Fuze is dedicated to bringing DeFi into the mainstream and eventually integrating real-world assets, while navigating regulatory challenges head-on. Jake, a team member, emphasizes that DeFi has become a significant part of his life and he's committed to shaping the regulatory narrative for the community. He also notes that the younger generation, specifically Gen Z, is increasingly interested in crypto and DeFi, despite some challenges in explaining complex concepts. The team is optimistic about the mainstream adoption of crypto and the entry of new markets, which will only increase the user base and the need for user-friendly solutions like Fuze.
Exploring the Future of DeFi: Innovative Approaches and Real-Life Impact: Speakers expressed excitement about the potential of 2nd gen DeFi projects, like OlympusDAO, Ommies, Alka, and Abracadabra, to expand DeFi's reach, move beyond speculation, and make a real-world impact, aiming to 'bank the unbanked'.
There's a strong belief in the potential of the second generation of DeFi and projects like ZoomerFi, with their innovative approaches and energy, and a desire to expand DeFi's reach beyond the current point 1% user base to make a real-world impact. Speakers expressed excitement about projects like OlympusDAO, Ommies, Alka, and Abracadabra, and the potential for DeFi to move beyond being a speculative game and into the realm of real-life applications. The future vision is to "bank the unbanked" and make a significant difference in people's lives. It's important to remember that DeFi and cryptocurrencies carry risks, and none of the discussion should be taken as financial advice.
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