Alessio Delmonti: PieDAO – The Asset Manager for Tokenized Portfolios #414

Transcript

hi welcome to epicenter the podcast where we interview crypto founders builders and thought leaders i'm sebastian cruz and i'm here with my co-host brian fabian crane today we're speaking with alessio del monte who is the founder of pai dao and before we talk to alessio let me tell you about our sponsor this week gnosis safe is a smart contract wallet for securely managing digital assets what makes notices so safe different is that it allows you to define customized access permissions digital assets on web3 are usually controlled by a single private key which poses a challenge because privacy can get lost or compromised on top of that users are forced to trust individuals holding single private keys to govern highly valuable assets and protocols notice safe enables users to control digital assets with much more granular

permissions involving multiple private keys a subset of which is required for executing transactions and these keys can be stored on different hardware or software wallets and even shared across multiple people gnosis safe's extra layer of security and personalization makes it the most trusted web 3 asset management solution for individuals teams and dows which we'll be talking about today maybe they're using goes to safe we'll find out who already use it to store more than 80 billion in usd today on top of that uh gnosis safe provides opportunities for developers to plug into the platform and build their own dapps and permission modules this is gnosis dash safe to learn more and to get started with your own safe uh alessio thanks for joining us today

hi sebastian hi brian thanks for having me uh thanks for joining us um are you using noises safe is does the pie die used nurses safe we actually do yeah we do have a bunch of different safes like right now paid out does use a combination of an argon dao together with a couple of different saves for managing ops and also some um yeah treasury operations so you know great product shout out to stifan and the entire yeah team said you were also using aragon and i i wanted to ask you about like how i mean i i have never used that product but i've always been like really interested in it uh just from like a product perspective like and i'm curious like how um

how easy it is to like manage a dao with aragon maybe something this is something we can talk about later um but first you know tell us a bit about your background and how you got involved in crypto yeah of course like i well i've been a developer most of my life uh soft soft engineer uh you know started in web 2.0 um i've been involved in a variety of different web 2.0 startups like from you know advertising logistics and a couple of other things and then eventually stumbled into crypto um while i was working on a mesh networking uh project um actually pretty early like at least uh i read the paper of bitcoin i think it was like 2013 and i was tweeting about it a little bit uh but never got into the building uh until some point

2017 so since then uh i've been really focusing on building uh different things uh mostly uh retail rented products from wallet solution and payment processors and eventually got into solidity development um and then i ended up you know building pydow like what what attracted you to crypto and then uh what was sort of you know like why why pie though like why start that i think that's a great question um i think besides having well like a pretty a little bit of an attitude against authority like and a

bunch of other things uh which are definitely relatable to a lot of crypto people uh so i'm not gonna get into that too much uh but it's definitely a component uh most recently well most importantly like along the way i kind of realized uh a massive wealth redistribution was happening within the crypto space like and that was potentially like a one life changing opportunity not only for myself but like for you know maybe the vast majority of people like we are in the in the business right now of creating a new economy effectively like we can impact uh potentially billions of people and uh and i always thought okay you know what if this time is is different right like you know what is going to happen having

this kind of global perspective like and then when everybody joins um are things gonna be different and i think i think they are like uh i've been you know for years lurking in other internet communities like even in the gaming communities and see you know 11 years old being like you know 10 20 x times better than anybody else like doing what they do right and those are pretty complex systems so what happens when you open the gate like and everybody can build whatever they want so i think i think that's extremely fascinating and you know building that idea um we eventually ended up with with part of an existing community like which was around uh thinking how can we facilitate the

process uh how can we boost accessibility and most important focus on you know wealth creation uh for everyone and more importantly automated wealth creation so you so you said you you guys ended up or you ended up with like a community you know did you sort of like develop the original idea of pydar and then your community formed or was it sort of like a community first that then came up with this uh like vision or like can you tell us a bit about the genesis yeah so so so there was like at the very

beginning when compound v1 came out right there was like a little bit of a community encrypted twitter um trying to figure out how much you can push this passive income meme forward right like how much can you end up paying with those interest from compound and other sort of different protocols eventually that formed into a telegram group which was called earn dao which was initially arbitraging between defy interest rate uh through a smaller dial but basically manually through the dow right like then eventually some protocol came out into like you know yield optimizers and idle finance and all these kind of things right uh but then um as we have been working on that like from that smaller though

which was called erndau eventually uh yeah a subset of those people uh started thinking okay what's really missing in the space right now and we started thinking in terms of what if we create uh an asset allocation now like you know sort of a group of people which uh it's strongly focused on finding different asset allocation which are trying to answer different things uh and you know design basically took a nice portfolio to some degree uh which answered yeah uh have different benefit from different people and uh that's how it all started uh that eventually came out into together into a forum post uh which i read yeah i brought like one year ago i think one year and one week ago at this point

so we are yeah we can celebrate the birthday as well and uh and that's how pydal started wanted to ask you because i i noticed in your website that you talk about like financial inclusion um and i wonder if this is something that because it's a term that gets used a lot in crypto and you know what does it mean to you and how do you define financial inclusion right i think that's well that's a great question like i'm definitely pro the idea that people have to uh well first educate themselves like and you know put out the effort but i would also argue that a lot of the operation that people do like which are a little bit more financially savvy can potentially be automated right and if they can be

automated uh it also means that you know you can create products uh which are designed for you know for the busy people or for the ones who don't need to know exactly all the nitty gritty of uh that specific strategy or like all those assets the way they work right at the end of the day people you know just go to the kitchen and open the fridge like they don't understand how the fridge works right uh so can you do that for financial operation or or more generally speaking for asset management and that's really what we're focusing here okay so in your view it's more of a of a no a question about like knowledgeability about financial instruments

than it is necessarily about like having access to those services that's that's definitely one component the second component is can we build tools uh that facilitate that like uh you know in terms of lowering the cost or making more convenient to people and that's you know for instance where the oven came out like the entire idea of the oven uh within the pydow ecosystem and uh serves the the purpose of you know lowering the barter for people to maintain price and you know we can talk about that if you like yeah well so let's let's talk about pydow i'm curious like where all this uh uh kind of branding around pies and baking came came about yeah the branding uh uh well it comes

down it boils down to the fact that as i said like we eventually spent a lot of time as a community thinking about asset allocation and we were using a lot of pie charts like to represent those so eventually uh this entire uh you know this entire thing turned out into a meme is like okay uh you know we're building pies like you know we it's the bakery like and then um was adopted by the community uh pretty well we right now we actually have like almost a uh sort of a secret group for stakers which is called the kitchen right and our newsletter is called inside the bakery and we have been following along those lines uh since the beginning yeah it's definitely like a pretty cool meme and i think like

memes memes help communities stay together and like it sort of gives them i mean like you should think about you know anthropologically speaking you know like how like religion sort of like has all these memes that kind of keep keeps communities together and i think like a lot of good crypto projects um have sort of taken uh taken on this approach you know knowingly or unknowingly but um it definitely works uh so you know what like describe what what is pi dow like it's sort of in a nutshell like how does it um what's the vision for for pi down so if i have to condense it into a sentence i'm gonna say we are a dao that serves as a you know decentralized asset manager for tokenized portfolio uh with

a mission to bring automated wealth creation to everyone uh who has an internet connection like i think that's a way a good way to represent that um in what that means is that pydow offers a variety of different products at this point uh mostly took a nice portfolio which gives you access to uh you know curated basket of asset you might think sometimes more you know about those things like etf to some degree but like on on steroids right because like this is crypto like we are using d5 protocols so like you can combine not only the assets but also create you know intrinsic productivity uh and you know re-leverage all the different opportunities that dfi has to offer from you know landing to staking to generate

yield and even be a proxy for participating in governance uh into other dows right one thing i'm curious about like there are there are some other protocols right like for example set protocol they've had their um there is some sort of like token that's um like this defy index token i think right where they're like is how is it similar or how is it different from python yeah like so um from a protocol perspective there are definitely like some similarities uh since the set protocol is also sort of a

basket making protocol in that sense and and i think like one of the things that we are trying really to achieve here like from a community perspective is one not limit necessarily the scope to baskets so like that's one thing uh we have been starting by making those allocations and it's been working out well for us but we're also more a lot more interested in uh other type of tokenized portfolio like you know either that being you know single asset or even sort of more complex things like you know options portfolios or or what not like uh can we build like different type of funds which perform different kind of things within the tao and uh um from my understanding like uh

uh that's uh one key difference that that is really sort of putting these two things apart like they they made up like a protocol which is open for everyone to use uh but they don't have that vision necessarily uh they are trying to be more of a like a black rock of crypto if that makes sense which is uh you know very large uh indexes uh not super maybe innovative just because of the nature of those indexes so there is a difference in there like i also think like black rock is great but like it's also pretty evil right so like hopefully we are not going there with crypto so what are the different components of

pydow so like you know maybe just kind of to break things up a little bit here so you get the dow and then there's the smart pools the vaults and then the oven and i think there's probably some other components so can you kind of like you know break this down like this if we go if you go to the web the pi the pi dot website there's like a great chart there of you know all the different components kind of working together and um i wonder it's kind of hard to do this without the visual but maybe kind of explain how all these components work together and who are the different participants involved of course so yeah like at the very beginning there is obviously the dao and the community like uh which makes and govern all these different products uh for the current

line of product we are managing there are basically two categories one is our so-called smart pools and the other one are pi volts smart pool was the very first line of product which we implemented as a custom implementation of the balancer smartpools so we were basically using this idea of doing lp lp like lp tokens or like a liquidity pools uh in the form of of basically index funds which will be autorebalancing through trading and generating yield in the form of exchange fees between the assets so that's been one of the first implementation that we pushed like and uh we still have a couple of those bcp is a good example

so bcpl for instance is an allocation which gives you equal balance between ethereum bitcoin and d5 coins and at the same time it's automatically generating three layers of fees from from basically the trading happening within the pool either between you know btc and if or if mb and d5 but also because uh d5 plus plus which is our d file location is also composed of two sub indexes so like we've been always focusing on this composibility aspect so that we can create this kind of structure uh which means you know bcp is earning uh that layer of fee but also the the fees of trading between the two sub indexes the five

process and dividend cell so be between that temples there is a fundamental different difference pi volts are there is no active trading happening within the pool uh but you gave up that for in exchange for a couple of more things which is intrinsic productivity of assets so those assets can be used within a landing protocol can be used within native staking for instance we do stake you know sushi we do stake wi-fi we can use wire and bolts within and what not and they can also yield bounce between uh you know the most interesting opportunities uh over there so if one single token within the pool is you know gaining

more yield within another sort of another gending protocol or sort of another viables like the the pool will automatically bounce to that so it's kind of bridging together like this yield bouncing concept together with index funds if that makes sense the pi vaults are i guess analogous to a sort of etf um where you know where basically you you know multiple tokens when you buy one of these uh indices you you are essentially buying into the performance of multiple tokens so you know looking here at the website um there's like the the d5 large cap which is like the larger d5 protocols

then you have the smaller cap um there's a usd uh pool uh which or vault which has like all the usd stable coins and then interestingly there's also like an nft um metaverse uh index which uh you know has holds like several nft projects what are some of the and then there's like strategy so what are the strategies that are being deployed here for each of these indices so i've noticed for example that you know if i take the d5 large cap i'll see that okay there's 20 allocation and link and that strategy you know it's appears to be like landed on ave and then uni you know has like 15 and it's

landed on compound and some of them don't have so are all of these tokens then just you know being um you know staked and either or or put as capital in lending pools like and then how is that being managed whenever that is possible the answer is yes so like some of these tokens will uh you know it's possible to land them mostly either in landing protocols or in to reduce uh quite a bit for generating yield uh in that sense we don't do liquidity pools directly since that will give pretty much like exposure to something else which we don't want necessarily in the index and um yeah so like you know whatever responsibility loss for example or come again like like in permanent loss for example

yeah yeah and like you will also need to like you know sell those assets a little bit in order to you know gain whatever is the other asset in the pair so anything which is considered to be sort of uh almost risk-free uh in terms of landing then we we are gonna do um some of the strategies are also whitelisted including a tokenized staking that's the case for sushi for instance anik sushi and a couple of others so so far we have been focusing really on only white listing tokenized strategies right and the reason for that is that you want to create the situation where the index is always fully collateralized and then in the worst case scenario you can always exit in the tokenized version of that token

uh moving forward uh we are actually gonna probably go through the route of having also non-tokenized allocation and having a slightly more complex redeeming mechanism but that will enable so much opportunities right and uh so i think it's it's well worth it okay because like all of these pools are fully backed by the uh by the tokens that are allocated is that that is correct it's a 100 percent and non-custodial from a user perspective so like any time anyone can you know go and either mint or redeem uh their pie for the underlying assets uh anytime they want you mentioned that they're in the future looking at perhaps um having uncollateralized indices uh no i wouldn't say uncollateralized and just

not not untokenized indexes so like you know some of the staking opportunities or some other defy opportunities are not necessarily in the form of a token so in order to leverage those uh you will need to have some sort of support that will enable for instance to i know stake on convex finance or something like that right even if they don't give you a token back and so so you but if you if you guys through staking for example in a particular portfolio and let's say there's some on bonding period or other thing then like how does this redemption work like for the underlying asset

right like we are not doing any staking which does have an uh sort of a buffer time like at this point if we do like what is going to happen is probably there are going to be either windows of redemption so that uh you know that can be done for sure within a specific window of time right or we are going to only deploy let's say 80 of the pool like and keep 20 for sort of a buffer pool right so that people can enter an exit through the buffer uh up to some limits and that's like a very similar concept to the utilization rate for instance in landing pools uh more generally speaking so it would be everybody can basically exit at any time up to 20 for instance and then after that

goes through like you know you need to wait until the next rebalance event you know next week that's interesting eh but like for example also you wouldn't have what about nfts can you have like portfolios of uh nfts that is actually a very very interesting question because like there are right now two discussion happening within the community one uh for having a uh floor uh floor nft found in place which is called pfp so like you could uh leverage the nftx vault mechanism uh to basically create an index found of you know apes and punks and all the popular nfds uh using their floor found

uh i'm actually designing like something slightly different which is more of accurate than ft uh found because i think the issue with the current design of nifty founds is that they are naturally made to not hold valuable nfds right like they are only made to old floor price tokens which are great like and you know what's a floor place token um so like when you see like a collection of nfds um with the well the definition of floor price is basically what is the lowest price anybody would pay for for an nft in that collection right so like if you uh you know look at you

know cool cats or something like that right there are cool cats which are worth tens of if right but under the floor price is around 10 if because the lowest nft which is currently being sold is priced at the leaf so there are some phones which basically enable to you know bring together into a basket all the different floor uh floor price nfds and then put them together like uh we nftx is doing that pretty pretty well like we've been working with them also for the play allocation which you were looking at before uh sebastian and then fdx is also like a talk and listening there so we actually do have some of these fonts within play like and you can get exposure to punks for instance and

and some others but the issue with that is that like those are floor tokens right like they are only the lowest price of an ft you can get from that collection but i think we actually want to get to a place where you get exposure to you know very valuable nfts like the one you know they will you know go up in price significantly because they are very rare so in this in this play vault are you guys actually holding these nfts uh we are holding the floor found which is holding the nfts okay right okay got it so you're not actually holding me after you're holding a tokenized version for price okay i see so it's like an nft

derivative one thing i'm like here so you know you gave the analogy like of etfs right and of course etfs are like i think you've pointed out in your website as well like super widely used super popular uh you know many benefits to etfs right i guess the main ones being there's a lot of diversification and uh and low costs right i think compared to like uh actively managed funds now in the case of an etf you know i guess there's still some sort of manager right that like does this rebalancing and and of course also with etfs right i

think you have uh you know you have some kind of like range of you know maybe there are some things where it's like you know purely formulaic and you know it's just about applying that formula and then i think there may be other things where it's a bit more you know there's more degrees of subjectivity and there's there's still a bit of a role of like you know some kind of fund manager and then of course you can you can go to other funds right like more actively managed fund where there's maybe more of a reliance on you know somebody making some decisions like can you explain a little bit like how how does the decision making around

you know what one of these portfolios invests in when there are changes made to it like how does that process work well i'm going to say oh the entire process looks like this right we are a community based project as such like the entire community is basically responsible to one define a methodology that whatever the allocation we are talking about let's say is play is going to follow through over the months and update that accordingly if you know things change like that methodology can include a variety of different input values like uh you know you can have constraints related to market cap or like liquid markets uh you can make sure uh you know if we are

in the slippage for a determined like amount of 100k for instance is minus one percent which is like all rules for instance we implement in some of the products we have including play and then uh you know you can uh also include all sort of things in terms of you know number of older so i can really create a methodology uh which defines the product uh within uh you know their unique characteristics uh but as a community-based project like the entire sort of due diligence assessment right once the methodology is set is basically externalized through the community through contributors and it's a you know a pre-independent process right uh whoever proposes a new

allocation like we are all you know instant device to go in there look into it we're gonna have an acceptance criteria uh sheet uh which gets updated frequently and uh that determines you know whatever tokens are making the pass or not ultimately uh each decision is up to the community right and even if as much as structure it can be like there is always a final vote saying okay we have been analyzing like these new ten candidates for like a month these are the reports of all these analysis uh let's have like a one final stamp of approval uh for which one is to be included or not and that's how the process looks like yeah i mean i'm i mean if we again go

sort of to the etf analogy right in in the etf example i guess you have like uh like different you know different entities different like fund managers like determining different etfs i mean here you know speaking about like different portfolios that are quite different right probably have different types of expertise and different people would be better but this is it like one governance of the entire daw that kind of manages all the different portfolios that are part of paid out or did you imagine that like because it doesn't sound very scalable to me well the thing is like you can have working groups within the

dao right like and then you can have a specialized team taking care of a specific index but that doesn't mean they are outside of the umbrella of the dao and i think uh that actually uh is the way to go because like at the general dao you we need to go like a little bit deeper into why you know the tao is important and why like voting is important like because uh you are correct there are like some sort of specialized expertise which will be needed for specific product and more in general like it doesn't make sense for everybody to make decision and that's why you have sort of verticals and i think a good example of that has been happening within the nft space where we are actually engaging with a

different community only to take care of a single allocation for nfd projects right and that's because we didn't have uh internal expertise to do that on our own so that makes the process a little bit more scalable but it also creates the condition for them to behave and act within the dao under the ultimate control of of the token holders which basically act as a sort of a subjective article if they made a good you know a good job or not and uh and in general we also like implement ways to incentivize that behavior through this thing that we you know we are using which are called uh kpi options which are basically related to the performance of those indexes so that

you know verticalized group can you know are actually rewarded for what they are cheap to answer your question uh everything happens within the umbrella of the dao there are sort of independent single working groups taking care of single products and there are incentive structure for those single working groups uh based on performance of those products yeah so then i mean there were there was a post written about the the methodology for how pies are built and you know maybe that's a good segue into you know the governance aspect here which i think is fairly interesting and perhaps like one of the most novel things about this project um you know at a high level walk us through you know how

um how pies are built like through these working groups and maybe you know from there how the government governance plays into that process you know particularly through the doe and veto tokens yeah sure absolutely like i think um well in terms of the the construction of new products like it all starts within the governance forum of the dao like uh either a group of people or someone comes out with an idea uh for an allocation which uh is formalized into what we call a pip our pi improvement proposal uh which is basically like a formal proposal for the for the allocation we uh different allocation can have different methodology we have sort of a general rule of thumb for

anyone who wants to uh you know gets into a market weighted allocation so like we're gonna look at a couple of things uh that's exactly what's described within uh that forum post which is not only related to market cap but also underlying liquidity and that's necessary because we want to make sure that uh if large capital enters the space or enters the pi like slippage is under control so we look at all these things like and once the models are sort of run out and the discussion has been going through we try to achieve what you know we like to think about us off chain let's call it uh off chain rough consensus within the community so like the discussion will be uh going for a couple of weeks sometimes a month or two uh we will be

looking at the product if it does make sense or not we'll be looking at a different candidate we will make the matrix of inclusion like you know whoever makes the cut or not and then we're gonna do a final vote um to make sure that uh you know comes to reality and then after that uh if the specific allocation does um [Music] sort of include specific trigger for rebalancing then that's where the rebalancing will happen so some allocations will uh basically say something like okay if you uh you know if a single token is over 30 then that triggers a balancing immediately right and uh this needs to up and uh yeah there are

like a number of rules it depends on the allocation uh but there are like a couple of different rules um which which can trigger the rebalancing and this entire governance process like happens mostly of train but then eventually it gets notarized either on chain or like through the snapshot platform uh through voting by token holders and most recently that you know went through a big upgrade like as we've been transforming the entire way the governance system work through the introduction of vito yeah the entire concept about vedo is actually uh very simple like we have been thinking a lot since the beginning of the dao how can we make sure we balance uh short-term interest with long-term interest for token

holders and that's one of the key questions which i think every community is asking themselves and how to create that kind of long-term horizon in decision-making and the reason why you want to do that is like you know they are simple to understand but like they basically create uh you know the groundwork to have a mentality which is focused on impact which is make making sure that you are investing on the right thing uh including you know innovation which is eventually what is going to lead to success over time right the capacity to sort of reinvent yourself as an organization and make sure that you know you don't stagnate taking all these things into the consideration uh we've been rolling out the new

governance systems which uh does require token holders to basically you know declare their commitment to the dao and then and then say okay i um you know i'm going to take like my tokens from time span which is of at least six months uh to a maximum of three years and uh and by doing that i don't only take but that's the only way i can participate into governance uh we believe that gives you know elders a strong reason to take responsibility for achieving the mission of the dao and also pretty much act as an owner instead of instead of a passive uh you know actor within the ecosystem and then uh

tokens so it's like some kind of inflation is given out to the governance participants to incentivize that uh not all not also it's actually not inflation so the thing is like we are going to redistribute um so there are like a couple of components components number one is the commitment part which happens through the staking and gives you access to governance power and then once you have governance power right you need to exercise that and then we like to call this concept as governance mining and the basic idea is that uh you know the dow over time will accrue a bunch of fees and they will accrue a bunch of different revenues uh only also coming through a totally

different working group which is the treasury group which does active farming with the assets within the dao and uh that's actually pretty substantial like uh so we want to make sure those revenues are redistributed to the people who you know who work to make that happen like and then uh that's how we define the idea of participation so active participants will receive like a slice of the of the rewards either coming from the pie or the treasury farming uh in their in the form of a basket of tokens what that means is that the rewards are not actually given within the doll token itself and they are not related to the price of dough are instead a collection of different fees uh made of different tokens so like the

very first distribution next month uh which is the very first distribution of slice will be comprised of a variety different token including you know baal and crv and cvx and all the different things that the treasury has been actively producing through treasury management i actually think that is the probably the first time i could people are rewarded for participating in governance uh not within the talking with the same token of the governance itself and i think that's pretty noble yeah and practically speaking what have been the effects of this so like i'm i'm curious actually like you know and a broader question is like how how big is the community and you know

what kind of governance participation are you seeing uh like what's the percentage of you know token holders or like of tokens that are that are actively participating in governance so like this entire program has been starting this month so like uh we are now 13 days actually no nine days in because we started on the fourth and we have seen uh over 26 percent of the circulating supply being staked uh roughly like a 5 million a little bit more 5.7 million actually i need to check like it's it's going pretty fast and uh so so far we count uh 140 different token holders like within the new governance system as the world is spreading like this is uh sort of

getting bigger especially as people realize like sort of the order of magnitude of the payout which is obviously like a big incentive to get in quick right because we are actually now uh like the entire distribution will be uh related to everything which is in the treasury accumulated so far so i think it's a across like next to 1.5 1.4 million right now uh within within token orders and uh in terms of the impact we have been seeing um it's actually quite interesting because like since we have been rolling out this this new system uh we have been well seeing like the entire community come alive you know once more in a completely different way

they're all shifting mentality like in this idea okay how do we make sure uh by the way the vast majority of the tokens are now stated for three years so it's a pretty long commitment and that's generating like a variety of different uh initiative on now we can make sure like that uh you know after those three years like the entire value of the dow will be way larger so yeah like we are going to actually do the very first uh the very first governance vote uh next week after monday 18th with the new system so i'm pretty excited to see like sort of the participation rate i expect that to be close to 100 so i i guess we will see i'd like to go deeper into kpi options

and the role that they play in you know determining for example like allocations in a in a vault right so the kpi does not have anything like related to the allocation itself so like let me briefly explain what a kpi is first right so it's basically this idea pioneered by the uma team of creating tokens which are following a key performance indicator and that can be pretty much anything in our specific case we are using those like in either two ways uh one which is we're gonna incentivize liquidity which is staked within a single product and then the number of

tbl within that product uh it's what's used by the oracle uh of the uma kpi option to basically do the settlement or uh more specifically as for today we are doing a kpi option which incentivize people uh to find new stakers like and expand the community and that specifically is actually running out also this month and the way it's gonna work is um you know we're gonna have six months of time and then we're gonna look at the total amount of tokens take and then it depends on the outcome like that kpi option will convert up to five million doll token which is the token of the governance uh we are using uh in april is a magical way which means that

there are steps in the middle like and obviously uh within the three steps like the large the last one is the largest one so like if we can manage to to get to that one like everybody gets like an another big additional payout and that's a similar way we're doing for pies as we engage with different groups or like with specific working groups we want to make sure those people are incentivized you know to do a good job in accruing well in collecting you know value for the product right so you can design a program which is which is basically saying okay you're gonna release this we're gonna release the epicenter product right like and you guys are going to manage our location you guys are ahead of the cure if you know what we are doing and the way we're going to incentivize that is

once that come out like if that product gets 1 million tbl then you're gonna get you know this much like 100 token or 100 000 token let's say right but if he gets like 5 million tpl then you're gonna get you know three times that and so on and so forth so you can create sort of a step function uh to make sure people are only paid for results if that makes sense yeah i mean yeah we could we could start a an epicenter vault that has all the projects that we have on the podcast see how that plays out bullish i'll buy it but i think that's actually quite interesting a sort of compounding mechanism to just uh governance per se right and that

comes out to what you just said before brian like sometimes uh you know you cannot let everybody decide for everything right like you will need to have specialized expertise uh to make sure to make sure things function and i think you know you can you can even think about that in terms of you know the prices low right like and then if you look at the prices low they say like that 50 of the work is done by the square root of the total number of people who participate in the work which basically means 10 of the people have 50 of the result so like you want to create incentives which are targeting those ten percent of the people right and uh and and make sure they are yeah they are basically incentivized based on the results

yeah yeah i mean every bullish on kpi options i think they're going to be great yeah no totally i mean i think in the end right what you're having here is um you know you're trying to do something like trying to produce like create products trying to create you know get users build something you know in a decentralized way right so of course you have to have people who then uh contribute to it and get rewarded somehow and i mean that's like a challenge in a centralized uh traditional company it's not easy to sort of say oh who contributed how much and compensate people fairly and now if you have it in a

decentralized context of course it gets yeah i mean it's probably even trickier at this point at least right because we don't have a lot of the tools um so yeah i think the kpi you know that makes a lot of sense i think as a sort of yeah a way of incentivizing and rewarding uh people of course tricky too right because often maybe you should maybe the kpi can be slightly off and then sort of you know then well if you have a kpi option right people are going to try to like optimize around that kpi and if that really matches right what you're trying to accomplish great right but if it's like slightly off then you're

correct like people will definitely optimize for that kpi and that opens like a also an interesting question which is like within a decentralized organization which has it's you know leaderless like you have to make decision you know almost based on on on the advice process instead of the chain of command right like token holders are not like uh you know they're not going to decide where to go like it's more like you know you have a community of people uh want to implement uh different things right and you need to have systems to make sure those people have that opportunity first like you can still like it's it's important that there is like a governance layer on top because otherwise you don't have any good point of intervention before things get too

far like and they're going you know badly right uh but that's that's pretty important because like that opens like an a wide opportunity for people to experiment and also create a whole lot of different things i think you know you were mentioning sort of traditionally etf before and i think one of the main difference that we're gonna see between traditional products and non-chain products is that the cost of production is you know extremely minimal when you see a don't chain products right like rolling out a regulated etf uh will take millions of dollars only in compliance right without even talking about uh you know licenses and and all these kind of things but own chain

uh that takes minutes right like and peanuts from a cost perspective uh what what that means though is that like you might end up with a bunch of different products which are not really working out great and that's why you need to optimize for specific you know performance indicator so in that sense i think that works it's going to work out pretty well but i do expect to see a lot of experimentation uh in that sense i think we are just so early on uh to see what what is going to happen so let's talk about the oven a little bit because this i think is a really interesting piece of this product uh describe what what the oven does and how people are using it right now the oven is um

it's basically this comes like we have been looking uh at how people were using pies like and eventually we realized that uh minting price might not be accessible to anyone uh just because the cost of of the gas is going to be so expensive right like ethereum right now the the block space within the ethereum blockchain is in very high demand as such like a gas price will spike pretty often now since uh these products contain like a basically a large amount of different tokens like that will become a little bit costly over time as such we have been pretty much designing a batching mechanism and you can think about that as a you know as using your own car versus

getting into a bus right like it's a it's going to be just cheaper like if we get 10 20 people into a single bus and then you know make sure they all go to the same place that's what the oven does you deposit your riff into it uh when some threshold is is basically crossed then uh the oven will bake and then by baking we'll create the pie for everyone and then give it to to the people it's a similar concept about roll-ups work or sort of other l2 to some degree okay so so essentially you know by by by having you use the oven though there's there's a time sensitivity uh you you can't be time sensitive like you have to be prepared to wait you have to be

dispatching will happen and like how often does this patching happen uh it actually happens based on trigger so like there is a minimum requirement of 10 if within the oven to to start baking like and then the gas will be subsidized uh by the dow which means that the users only pay the gas to deposit into the oven to withdraw if they want to but like the entire baking is subsidized by the dao it depends on the yeah it depends on the moment right like sometimes you would be baking happens within hours sometimes it can take a couple of days but in any sense like i think we are estimating right now that if you do bake through the oven you have up to 72 70 80 depends on number of tokens uh gas savings in doing that

wow that's like pretty impressive so you know before before we get to you know talking a little bit about the future of um of pydow like i i'd like to maybe take it to a more practical side like so you know someone who's holding east today you know can choose to hold eth and just gain from like the um increase increasing price in heath you know what are some you know strategies for uh you know optimizing the returns that you can get on that eath and like if someone say just you know very plainly like someone had a hundred eighth what would you recommend as you know like low medium or high risk strategies

uh with regard like as far as pie data is concerned right so like it i think you can look at it from a perspective like i was mentioning before uh that we do pretty intense work in treasury management right right now uh pydow like is sort of managing uh is on treasury which is uh i think close to 18 million or something and that's where the yield comes from and we do employ a variety of different strategies uh within sort of the if exposure uh we consider to be sort of based like a risk-free exposure um sort of staking for if 2.0 either through tokenized platform like lido or something like that we consider that to be sort of the base benchmark

and and then we do employ you know a couple of other uh strategies into that so like you could besides like just putting that stuff in lido you can participate into the equity pools and then have that on cure for instance and even stake those position uh into something like convex finance which will yield you an additional layer of fees or additional layer of tokens through the cbx incentive program uh that's already like kind of in the medium risk strategy like but it will yield a little bit more uh and that's a pretty interesting one uh otherwise you get to even you know more complex stuff like uh studying portfolio of options or which is something which we also do

within the python treasury working group so like the good thing about all this stuff is that you know you have 100d flag and then you have you have to decide all these different sort of risk profile you know which allocation put in each one of the risk profile and then there is a lot of research involved right so we kind of we kind of abstract this entire process for dough holders to some degree because like when they get into the dough staking program like they get the benefit of all of this right because we manage the treasury we do the research like the community does the research employs the different strategies and then people just get the payout uh which i think it's it's quite interesting like you can even think about that as almost

getting a carry from from a fund uh to some degree by by working on it where it usually happens only for the gp like this happens for each one within the the group so different strategies on if uh you know you can low risk just like yeah yeah very cool yeah one thing i'm curious about i mean pie so far we've always talked about like ethereum uh do you guys have plans to extend paid out to like other blockchains or like you know kind of include acids like non-ethereum assets right like non-interior mosfets are

well first of all like we need we have to have them bridged into ethereum somehow like for that to happen and uh and that would be like one of the first thing but it's definitely something we are interested into like and it can up in a variety of different way either through synthetic asset or dropped version right like and that's like i said we already used wbtc after all like in a couple of different locations so that's definitely possible uh there are uh there is a lot of talking within the community of going into a variety of different l2 and i think that's something which is gonna happen pretty soon um um yeah the moment like we we find out what is sort of the best uh formula for doing that because i could

what i find particularly interesting about pydow in l2 is that you can provide to l2 users like a layer of additional fees that they would be getting on l1 which they cannot right so you're kind of double yielding right you get uh you get the pi which is already yielding like 10 apr because it's using so many strategies and then you bridge that into an l2 like and then uh you don't only give the exposure but you can use that in a variety of different protocols over there so i think that's the direction we're gonna uh we're gonna go uh for all yeah for all that regards like l2 and different chains so what's the um what's the future here i notice you've you've got a roadmap sort of roadmap for

the next few quarters uh post uh up on the medium uh walk us through so so things that are uh coming up in pi dao right so yeah like the very first uh uh focus right now is to well we want to get to a very large percentage of the network stacked i think that's like potentially one of the most important thing uh that we are all working as a community towards to uh because it's incentivized but also because it's good for the community itself there are a couple of different products which are gonna be pretty exciting one give gives basically full vertical exposure to all the different l2 solutions and it's called scale and it will give you stuff like optimism like or you know polygon and whatnot so

like you can make a vertical bat on all the different uh scaling solutions without having to pick one um same uh nft found something we've been you know thinking quite a lot and we're looking forward to have them uh you know making into a reality um by the way shout out to the winter beer community because like their art club is is being very helpful in defining that that allocation as well and more generally speaking uh i'm looking forward to see uh tokenization of some of the strategies that uh the treasury working group has been working on uh within the couple of you know the last few months like they have been extremely effective in generating yield and then they outperform the benchmarks

by you know by a lot so like i'm very excited to see that uh being tokenized into their own set up their own strategies and uh and that's definitely uh happening very soon uh from an organizational perspective we have been working on yeah pretty much creating like all the different structures which uh will enable the organization to scale and have you know more and more full-time token holders get on board like and and make sure they can make their best work so i'm quite excited about that uh it's been a long process like it's now working pretty smoothly um and also like i wanna shout out to adrian for like leading most of these

efforts and uh yeah so like a lot more products coming out a lot more related to you know benefit to the video stickers which is uh uh you know they they will see very soon and uh yeah and a couple of new price online and uh where should people go to uh find out more about pydow and perhaps get involved like what what are some of your calls to the community here that you you know people to uh to check out yeah so like for first thing first like you know definitely go and check it out our discord like it's a pretty uh um active discord you can find it in paidow.org like just uh going to the footer area like you would find a link to discord

and regarding getting involved like we recently rolled out a completely new bounty program which is enabling you to earn uh somewhere though and then participate actively into the community uh that's uh like probably the the fastest and more interesting way uh to go deeper uh into the community and get you know into an actionable stage uh earn your way through the dow like earn a reputation so definitely go and check out like the bounty board like there are a number of tasks which are both you know for technical people and non-technical people so feel free to to just jump in like and participate within the community for all the rest uh there is a governance forum which is a forum.torque

when you're gonna see all the governance happening for the vast majority and uh and what decisions are made and i think otherwise like hit me up on twitter like and then you know i will guide you through cool cool thank you we'll link to uh all those resources and uh definitely the dough and your twitter thanks for joining us today alex thank you very much guys like it's been a pleasure like uh good job on the podcast i'm a fan uh off to speak up soon again yeah thanks so much alex looking forward to it cheers