DeFi & Beyond: This Is Not Financial Advice Ether Knight | Chris Bradbury - Summer.fi, Maria Magenes

Transcript

So for this panel we have Maxim from Draper. No, he's not here. She's not here. Maria. Me. Yes. And we have Chris from Summerfi. And we're going to talk about everything DeFi and beyond DeFi. Okay, so this Thank you, Chris. So this was supposed to be a panel, but now it's a conversation. And funny enough, I was I used to work with with Chris and he was my boss. And now I'm I switched I moved to an agency, a marketing agency role, but I was involved a lot of years in DeFi. So this is

what we are talking about today. So the first question for you is Chris Actually, no. I I want to I want to you to like present yourself and Summer and what what you do. Uh yeah. So yeah. Hi, I'm Chris. Uh yeah, I'm CEO and founder of Summerfi. Um just give me a recently I uh DeFi aggregation uh still funding. No, please don't. Uh we'll just Okay.

Yeah. Uh we'll just change. Yeah, there's another one next to Okay. So hi. Yeah, so I'm I'm Chris uh the CEO of of Summerfi. Um we we've been around since 2019 uh as a DeFi aggregation uh platform. Originally oasis.app. We spun out of Maker um in 2021. We were the original uh front end for Maker the Maker protocol. Um the last couple of weeks we've just launched our second generation yield aggregation platform. Um hopefully to be able to take like DeFi beyond as we heard us talk about uh and so on and to like a whole new group of users um in the future and so on.

Okay. Next question. Is DeFi still a thing? Meaning meaning Are we like the the purpose as I said of Summer Fi and I hope for some uh applications and and projects that are arising now is to onboard the new people, but my impression from a bit of an outsider now is that like DeFi projects are always like talking to the same users or competing on the same users and and then like looping the same liquidity over and over again. So, what's like what what are you what's your take on

how how can we onboard actually new users? Yeah, so I think I think we've we're kind of reaching like close to the cap. There's obviously still new users coming into DeFi and so on, but I think we're still stuck in this mindset where all new DeFi users have to come and use DeFi front ends. So, whether they're protocol front ends or different like aggregation front ends and so on. Um like that's that concept I think is is coming towards the end now that we're going to be we're never going to onboard the next 100 million users into DeFi interfaces using wallets like MetaMask or whatever. Like we we just heard them talk about like wallet abstraction a little bit and so on, but I think in reality DeFi still has a huge future.

DeFi is still a thing, but to onboard the next kind of 100 million users into into DeFi means integrating the DeFi protocols into the apps and the services users use already today in a kind of web 2 world. So, like fintech apps and savings apps and so on like allow and expose DeFi to those users in that way. Okay. So, but do you think we need to like Do you think So, who in the audience is not using DeFi right now? All of you are using DeFi. Okay, we are in a in a good crowd here.

But now imagine you're talking with I don't know. I don't want to say my mom because it's way too much, but maybe I don't know. My my dad is an engineer, so it's pretty skilled, you know, like but but he how like do you think you can be now it could be a user or now or in like 3 years could be a user at the five user. so right now I think he he can be this this like what what we've done with some of our like industries like email sign up and social sign up you can you can see on ramps have been around for a year. So you can buy crypto with an app.

You can abstract away that. You can abstract away the gas fees and so on using using L2s. Yeah that's and so on. So so yes, they they may be able to use it, but the big issue at the moment is it's very it's still very jog in the end so on. Now hopefully in like a year or two's time they might be able to use it without even knowing they're using D5. So if we can plug in some of the D5 rails and so on into the existing products they're already using, you can offer them a savings rate maybe of like 7 8 9 10% or whatever that you can you can comfortably get now in D5 for fairly fairly low risk strategies and so on.

Then they may be able to be using it and so on or they may use it through through other ways of other people investing their money, fund managers and so on investing their money into into D5 and into liquidity pools that way. So I don't think the users necessarily have to know they're using D5 in order for them to be using D5, but yeah, today it's maybe like 25% better. Like there's probably a one in four chance that he would understand how to how to get in and how to use it, but hopefully in 2 years time he'll use it without even realizing he's using it. Another question.

So I'm now skipping the the question that I had in mind because it's again challenging, so I will do it later, but now I want to ask you do you think uh Ethereum is still the best chain for DeFi because we are seeing now a lot of like other L2 uh sorry L1 um um and and a lot of chains and like DeFi on Solana, DeFi even DeFi on Bitcoin. Uh so what what do you think and how do you think it works because there is a lot of fragmentation and as I said before like the liquidity is still the same but we have we are spreading all over chains and and this is the question. And why do

you think Ethereum is still the best if you think so? So yeah, so I still think Ethereum is is like the the hub of DeFi is where the majority of liquidity and stuff still is. But I also think when we talk about L2s particularly L2s that like EVM based and come from Ethereum and so on. Like they're still within the Ethereum ecosystem and so on. They're still relying on the underlying like uh like Ethereum blockchain for security and kind of and and all the accounting ultimately. That's the Ethereum there is still the source of proof which is which allows DeFi to operate on the L2s and so on. I do agree that like there's a lot of kind of fragmentation of liquidity. Not so much users. I think most users probably a lot of the people in here would

probably have balances across multiple chains at any one time um and so on. But yeah, I think that's that's the that's the next major challenge which is kind of abstracting away that that chain having having the DeFi protocols and DeFi products effectively available across chains but without users knowing and needing to be on different chains and so on. So being able to deposit on one chain let's say base if you are happen to be on Arbitrum on another app being able to withdraw on Arbitrum and so on but just seeing one single balance that's aggregated across all of them. So underneath the hood like you don't you don't see everything kind of going on.

And I think that's the next stage for for DeFi ultimately. Yeah, because I think that also from like from a marketing point of view as I am a marketer, it's very difficult to um explain user how to like use, you know, the some some kind of of of projects. So, for example, I noticed that in the new UI that you launched, it's way simpler than I was used to to to to to see when I work at summer because you can now connect with the with the with the email. There are a lot of like stuff. It's very like easy to

So, I think that in general, one of the barriers to onboard is the UX, okay? So, it's the the the fragmentation, a lot of chains, bad UIs. Devs are way more like focused on how fancy is the smart contracts and the like the the thing that I'm building versus maybe focus a bit more energy on improving actually the UX sometimes. So, this is what I noticed. So, next question is um DeFi when I joined 7 years ago

was super like the purpose, the goal was to create like a new financial system, open, trustless, free, etc. without middlemen to onboard the unbanked people, you know? Now, what I see is we are talking about staking, we are talking about you know, APY, we are talking about making rich people richer. So, how do you comment on this? Do you think is like there is still this like idea of DeFi as a um

world-saving thing or is something just for people who want to earn money. Yeah, so I think I mean even if you want to unbank bank the unbanked or whatever it is the phrase. It feels like such a long time ago we used that. But it still has to be a reason for them to to to use it and want to use it and so on. And ultimately that is that is going to be like it gives it gives them something and in most cases it isn't just giving them a wallet where they can transfer money and so on like that that is maybe like part of a use case and so on.

But there's there's other ways and things like that now that they can do that in a very easy way without necessarily using blockchain and stuff and so on. But you have to give them something like all users use a product because it makes them feel better or makes them feel like they're winning at something. So like and in and in the case of here when it's like yields like oh they can earn on US dollars they can hold US dollars. If they're going to hold US dollars they might as well earn on the US dollars. But if they can earn on their like US dollars and USDC or USDT or or USDS or whatever then so can the people with lots of money as well. So I think it's it's it is difficult to build a system that is going to like like bring the unbanked kind of online

without without kind of it being kind of taking it over by by people with money and people with things. So yeah it's it's really tough but I think we can we can build products and I think all the products that are available are available to them. But again you talk about the UX you talk about the availability the accessibility and so on. The original visions of trustless and so on everyone still needs to use like a user interface and so on. So you are we we haven't like that the trustless thing was maybe like a 0.1% of user base that could interact with a blockchain without any user interfaces and so on. So we've still got user interfaces you talked about like the UX experience and so on and getting a little bit better. I still think we've got a long long way to go

with that. I tried to onboard my best friend onto onto the product and he literally was like what what what's D5 and what's API? So like D5 is still full of jargon. It's still full of like terminology that insiders know. We all know like what it means, how to use it and so on. But you show someone from the outside and say hey like try this for me and like I'll pay you back if like you tell me what it's like and he literally got stuck on the home page cuz he was like like I I don't even know what API means. So like yeah. Yeah, I think it's a a nice exercise for everyone here or also outside in in this conference to try to onboard a friend who is not on chain.

It's it's kind of interesting because like I heard a lot of what is this uh you're talking about nothing. Are you sure? You know, like you realize what and and these are educated people. I mean we're we're not talking again about I don't know my my grandma, you know. Uh so we need to be to all of us uh need to to make an effort to like try to explain better, build better, like more comprehensible things etc. Uh speaking of the of which um how I want to learn your like idea about how AI is actually uh could help in

this. And because I saw that with Summer you are using AI and I think I believe that AI could be a great help in improving not just like the the project but also the UX, you know. So I want to to to know how you use it and what your yeah, what your idea. So yeah, we're So we're using AI um like keeper agents uh within the Summer protocol um to perform the rebalances. So the Summer protocol like I said is a yield aggregation uh protocol that automatically rebalances user funds to the highest the highest performing protocols within supported markets. The rebalances yeah, work they work via via AI agents. How that how that works at

the moment is effectively have five AI agents each operating on a different AI model plugged into a multi-sig. And if at least three of the agents propose the same rebalancing strategy, then the then the rebalance like then it will execute doing that. So, that's that's pretty cool because there's a lot of like we could we could just code it up could just put a single like one developer's piece of code in and do that, but instead now we have these individual agents that are kind of like fact-checking each other in a way. So, and we and we have seen in the logs and so on that sometimes a single agent or sometimes two agents will propose different strategies to the rest. So, like that's that's how we're using like AI to kind of improve the user experience a little bit, particularly for users that are manually rebalancing

a lot of the time. You don't have to just rely on a single piece of code anymore to do that that could make a mistake could move money where it shouldn't be moved to and so on. It also won't make a huge issue if it is moved to somewhere else it would just lower the yields, but this way it kind of almost guarantees that it is going to the highest yielding platform up to the risk caps at any one time and so on. So, yeah, I think AI has a big place to play in in in trying to do it, particularly with AI agents helping users maybe get in and get them on board it and so on because we can probably remove away a lot of the a lot of the steps at that point, but um Yeah, I again, I still think we're a

long way away, but we're making steps every single yeah, which is the the best the best way. So, we I mean we know each other since forever. There's like what do you think has changed in the DeFi space scenario? How how did we actually evolve from 2018 when we joined we both joined the space? So, it's 7 years now. Do you think like I want your Yeah, I mean the one thing from like 2018 is the the original Maker Dai dashboard. I don't know how many of you've ever used the original Dai dashboard at Maker, but

it was like seven or eight transactions in order to to deposit your ETH and mint and mint Dai. Like you had to wrap your ETH. You then had to convert your WETH to PETH. You then had to approve the PETH. You then had to like deposit the PETH and then withdraw the Dai. And it was an absolute kind of nightmare. So, we've made obviously huge steps in there. It's now pretty much like maximum of two transactions at any one point to do that like with multi-cool contracts and so on now. You can do so many multiple steps inside in one transaction in there as well.

The other thing though is just is just like kind of wallet connections and stuff as well. The way wallets are managed within apps is obviously come along a huge way since 2018. And one thing that's kind of like kind of gone up and then back down again is obviously the cost of transactions and so on. So, in in 2018 like and if if gas price was above one one gray then like it was an expensive day to trade on Ethereum and and so on. And it was like well, it's like one and a half gray to trade. Like they were like like crazy days like in 2019, 2020 when that started. And then we had COVID and then we had the DeFi summer and kind of 2020 when yield farming started kicking off. And and gas prices hit like eight or 900 gray. And like it

was it was a killer and we lost we lost a lot of ordering retail users in Ethereum cuz this was this was the days before L2s and so on. And transferring a stablecoin would cost like 30 or 40 dollars at times to send to send 10 dollars of of Dai. So, that So, when we talk about like kind of banking the unbanked or whatever and bringing those on like 20 2020, 2021 was a was a killer for that for that age because it suddenly cost more to send the amount that you were sending and so on. Now now with L2s, with Base, Arbitrum, Optimism, the Superchain and and some of the other ones and so on and all that. Gas prices are back down to like three, four, five great most days um at the moment. You can use L2s to transfer like stable coins for less than

a cent. And that's been the the huge huge thing. But I mean in some ways it's like gone back to the 2018 days where that's how much it cost in the early days when there was only probably a couple of thousand people using maybe Ethereum or ten a couple of tens of thousands of people. Now we have millions of people trading on chain. And uh we've managed to bring the gas prices back down with the scalability of multi-chains um and so on. Um last I think question. Uh I agree. I mean I remember when I joined the Eat Land it was uh the previous uh previous Ave thing. It was terrible terrible like they they the UI was not like not even I I it's true like but I think that it

we didn't uh evolve uh yet uh we haven't uh yet evolved uh um enough uh especially from a like a UI perspective. It's still too complex in my opinion sometimes to to to get what what you need to do. Also for for already on chain people imagine from non on chain in DeFi. So it's uh yeah. Uh last question that I want to I forgot about it now. One second. No, okay. I have it. So I I recently especially recently I'm always hearing like DeFi project DeFi best DeFi project etc. etc. And and sometimes

I like look into it and it's not decentralized like it's not decentralized. So I want to like um for you and the audience to explain what does actually decentralized finance mean because sometimes we especially normies like uh when you they hear crypto they they immediately say, "Okay, it's DeFi." No. So, please, as an expert I just want to get into that too far. But, um yeah, I mean, it wasn't that like Celsius and stuff kind of ruined the image of DeFi a little bit uh back in that '21 and '22 and so on. But, I mean, DeFi is a DeFi DeFi uh it's effectively all about kind of non-custodial ability and self-custody of your funds. So, if you

are if you're in control of your funds at all times, meaning you can deposit and you can withdraw whenever you like, that's a that's a decentralized finance app. I'm losing I'm losing my voice. Um but, uh yeah, so uh and ultimately it means if if there isn't a centralized control behind the scenes as well. Crikey. Um so, yeah, like so if it's a if it's governance-controlled, if it's we we have multiple DeFi projects that are multi-siggers and so on. Uh they are still like, yeah, semi semi semi-trusted, but you you are trusting the people with the multi-sig to execute maybe the will of the governance and and so on. But, true true decentralized finance is that kind of trustless trustless protocols operating in a decentralized kind of governance model.

So, token holders voting for everything on chain. You could go all the way where like the products are deployed that are completely immutable. So, like liquidity and things like that. Um and so on. So, their markets are are fully immutable. You can't even upgrade them and so on. They're fully non-custodial. So, you you are in control of your assets at all time. The second you give your assets over to somebody else and they are in control of your assets and they can block access to your account, that is that's where the DeFi stops um and so on. Okay, we have 4 seconds, 3, 2, 1. Guys, start using DeFi and onboard your friends into Summer Fi or into any DeFi project.

Thank you.