DIVERSIFIED YIELDS with Valentin Pletnev of Quasar

Transcript

foreign welcome to the interop my guest today is Valentin platniff's co-founder at Quasar in today's conversation we'll discuss quasar's concentrated liquidity and liquid sticking vaults we'll talk about how Quasar works with osmosis we'll talk about Vault creators on the platform that provides strategies so you can earn yield we'll also dive into the tech how it all works under the hood and we'll talk about Cosmos D5 I'm also dying to find out why he thinks the growing amount of Cosmos chains is currently a bearish direction for the ecosystem before we get started make sure to hit the like button hit notification Bell And subscribe to get notified when I go live every week and be sure to remember

that not what we discuss here is investment advice and if you enjoy this content please consider staking with us we're validating on fmos Quicksilver osmosis Judo and nolas just look for interrupt in the active set my guest Valentine is coming up next right here on the interrupt thank you gem yeah man how you doing good I'm great how are you I I uh I guess you're already in uh Istanbul for Cosmo verse yep are you excited I'm so hyped uh the

entire team is here we're having an offside uh it's true pure Eastern Bull Energy honestly uh it's super great to be back we've had our last offset here as well and uh you know I like this area of the world a lot and it's it's honestly just very bullish having seeing the entire team together everyone sitting together grinding out stuff working out stuff especially now with the traction picking up rapidly it's it's a good time to be alive you know I'm not complaining great yeah well I I'm coming in a couple days really looking forward to it it's gonna be interesting to see like I don't know what to expect right because we're like I think last year we were still you know not in like such deep uh bear Market territory and

um and you know Etc and nebular I think uh like the conferences I have all the conferences I have in Paris it was like you know we didn't really know how to sort of like position ourselves like is it the bear Market is the bull market like people are super excited but all at the same time like markets are down teams are having a hard time raising so I'm I'm kind of curious uh how it's going to be like what the turnout will be like like if I I don't think they've sold out um but uh I think they just announced a thousand five hundred tickets sold which is okay all right yeah no I think like we have to honestly just give massive props to the C2 team and the friends Valley yeah yeah team because

they are carrying a lot of hype for Cosmos and those turnarounds are phenomenal I mean even right like Colombia has a lot of crypto adoption but most people have never been there and the fact that people flew in just for the conference even having to change flights because there's almost no direct flights to million like that was impressive so I'm not I'm I'm pleasantly not surprised that they've already sold this many tickets and it's gonna be massive the venue is very beautiful too I've seen it before uh I'm stoked honestly the builders are hyped you know obviously as you said kind of sad undertone because there is struggle everywhere like let's not ignore that but I also feel unrelentless optimism to be a good way to fight that yeah of course yeah and I'm also like

very much looking forward to going to Istanbul I'm only going for three days so I I won't get to see the city very much but uh for four days I guess but then probably we'll go again for devconnect uh for for a little bit longer and hopefully we'll get to see the city a bit much then it's very exciting it's very it's massive it's busy as hell it's like so much huge yeah yeah I think 20 million people 21 million I think and it's like uh you know infrastructure the roads did not scale to the amount so it's completely made everywhere but it's it's you know once you lean into it it's exciting it's fun yeah cool well yeah I mean so we we met I guess for the first time at nebular and we we haven't interacted very much but I'm not

yeah curious about your background and like what made you want to build quasar yeah gladly so yeah I've been in crypto since I'm around 16 uh so pre-2017 will run effectively um what rumor to crypto back then was you know I I was raised by parents that are from extrovert Union in eastern you know socialist republic so not growing up with capitalism and then having to basically relearn that system as we relocated to Europe um and kind of seeing how much Financial education is lacking how much stuff is not being explained how many things that when we grow up in the system we find so natural that you just don't pick up the people that didn't grow up in this um I was always fascinated by money as a concept you know it's we live in a world

where you know people are starving and other people have a printer right they can just print money and I was always just fascinated what is this what is happening here how does money work and on top of that I was always a nerd because I used to play Counter-Strike professionally uh competitively in Germany so build my own computers you know like every you know most people in crypto can do that but I was always a nerd so for me when I found out about crypto I was like wait a minute this combines Tech money philosophy this is great this is what I want to do um it's been a long journey it took a long time to kind of get in especially if you're so young and you don't have connections and there's not really a big crypto space in Germany Beyond Berlin it wasn't easy to get in but you know step

by step got it more and more was kind of the first employee of one of the first nft startups though the nft implementation was for supply chain tracking so not pfps uh went to drape University in the Bay Area which is Tim Draper's private university Tim Draper should be known by most bought the Silk Road Bitcoins hyper bullish on bitcoin keeps making ludicrous statements of by what time what price it reaches and generally a pretty awesome we see who has been seed run investor in so many startups that we all know including SpaceX and Tesla yada yada so you know that's kind of where I got my entrance into crypto and the spirit to do something entrepreneurial and Quasar was launched when we started it November 2021 it feels like an

eternity at this point honestly basically the month the last month of the bull market um however at that point we weren't really riding kind of the bull market high it was really like okay you know defies a thing this is working this is happening however we have so many issues on the user experience side with some of the issues on on the side of kind of connecting people to benefiting from defy because when markets mature it gets harder and harder to get good yield it gets hard and hard to like understand what is happening and the more Market matures the more you have data providers quants experts that know what's happening and people that don't have the time to deal with what's happening and what the missionary quiz has always been is I want my mom and my dad to be able to

download an app from the App Store log in have a bank account add-on like Robinhood and be able to invest into D5 in a sensible way where it's not just a passive position in a you know LP position that loses on IL every day but actually actually participating and riding on the back of Professionals of people that know what they're doing that deposit Capital efficiency um and yeah it's been a long time in the building we launched the app chain March this year and with the launch of Cl in osmosis we've had an explosion in TBR from 500k to almost 3 million right now um so yeah it's it's been a long freaking Journey with a lot of passion and also a lot of reason why we're doing this I I rarely ask myself why I'm doing

what I'm doing and what the purpose of this is but you you said something that a friend kind of interesting right where I think in in previous in the sort of previous bull cycles like D5 summer Etc like we were all figuring out like how to uh leverage amms and and lending protocols to to generate uh to generate yield right to generate fees on um well primarily you know our our Bitcoin eth and maybe usdc and maybe a handful of other uh currencies but a lot a lot of Blue Chip tokens then uh a bunch of other platforms came around new tokens that came into existence

liquidity flowed into those those platforms sort of like grew the pie generally and there was a lot of this kind of like yield farming I mean that was I think the one of the major narratives of uh of uh you know the 2021 um 2020 2021 cycles and and so what what you're um I think what Quasar um um uh the sort of progression of that is like a professionalization of the allocation of capital uh in a way that um users no longer have to sort of like figure out like where should they be allocating my Capital you have uh strategists that are effectively your professionals understanding the markets

understanding where liquidity needs are and allocating that capital on behalf of users do you see this as a a broader Trend in defy where the stratification of capital deployment is uh becoming more prevalent and do you think that more and more Capital will be deployed in these sort of you know uh Asset Management platforms rather than directly on the protocols themselves yeah great question I mean first thing to kind of just to really clarify is it's non-custodial products right so the management word as a management is always a bit tricky in the D5 space because it's not what you would expect giving a hedge fund half a million dollars and then getting a report from

them every three months and then if you want to exit to write them a nice email and you hope that they wire you the money it's not that but yeah in essence you know having your cabinet be guided by by strategists and experts yeah I think undoubtedly the answer to your question is yes I think as markets mature it gets harder and harder to capture any return and the returns that are vast and easy to grab in the beginning start consolidating to a very few group of people that understand the market that we have seen this countless of times across the world this is a given rule of the Natural Evolution of the market Gold Rush the first few months just got everywhere everyone's making money five years into it not gold and everywhere anymore you need to know

the most efficient way to use your Pan the best spots to find the gold the best equipment it gets harder and harder to do it and Wall Street the same early days of stock market everyone was just excited that their stocks now start trading them stuff goes up the Great Depression hits people realize it's not just up only which was our you know their D5 summer moment I would defy summer moment and then you realize okay you need Asset Management um one of the most interesting statistics in my opinion is entratify or actually and just generally the globe the world a third of all assets in the entire world are managed from someone by someone in in crypto the number is that number

seems surprisingly low I I I thought well it's 40 trillion dollars it's two times the the national GDP of the US you know yeah a third of all assets I find the number pretty pretty large for one market to capture right and that's all assets they're tangible are intangible and if you look at crypto that number is around two and a half percent and I am absolutely not surprised because crypto is a young Market which means it's hard to build traction and how to build a portfolio of trust right if you have a hedge fund in New York that's been doing great returns since the 80s there's a trust level you can acquire in D5 one Trader can make 200 in a day and lose it all tomorrow right you just don't know if this is

consistency or non-consistency so data driven approaches are super important especially as the amount of data that you have for trading is getting better and the amount of uh ability to capture out the last yield gets also improved with access such as for example or vault and so the number being three percent I think is inevitably going to jump in crypto to at least also a third of all crypto D5 liquidity to be managed by someone for someone simply because it's gonna get harder to get yield everywhere and people don't want to keep checking every day if they're still in range and even if they do that they might not outperform someone that runs a professional strategy that is updating much faster than you in much tighter ranges

um and I'm excited for that shift because the ability to democratize access to Asset Management right we are a damn protocol I always say damn cool as a joke but Dam decentralized Asset Management um is incredibly exciting because it allows The Average Joe's and anyone in the world to have exposure to expert driven Capital deployment which is something that we consider normal in crypto right now but it's literally impossible in traffic you cannot go to a hedge fund with ten dollars just not it doesn't exist um and so yeah I think the trend is very clear yes to growth cool I mean I mean it's um you know I think I think even for somewhat sophisticated users you know uh this is a this is a positive trend like

I mean I I I have the technical ability to like deploy my Capital on uniswap or you know in like a supercharged liquidity pools on osmosis but if I can pay you know like 10 of my returns to someone who's going to do it a lot better and with a lot more capital and potentially like much better returns like why why wouldn't I do that right like I barely have time to manage my own portfolio uh you know so so leveraging something like this I think it makes a lot of sense um you know one thing one thing you said which I think is really interesting and sort of I think is a tension that um

um it's sort of like a tension that we um we all feel in crypto is like this this kind of like um concentration of of liquidity like you you mentioned in all markets liquidity conscience rates to a very few right and I think in the ethos of crypto a lot a lot of uh a lot of the narratives are around uh Distributing power Distributing ownership like how do you um how do you uh juxtapose that with uh the narratives of community governance Community ownership permissionless Etc yeah yeah how do those two things kind of coexist super gladly so I think that the thing that needs to be really clear is we are not trying to just put hedge

funds on the blockchain right because that would imply custodial products that would imply lack of transparency that would apply gatekeeping of depositors um the entire the entire ethos of damn at least you know proper Dam protocols is we need to have the lowest trust assumptions possible with the ability to have Capital be guided by experts like that's the one sentence kind of what do we need to make sure it happens here um part of the ways that that's possible is for instance our vault contracts have different addresses and multi-sixes are allowed to do different actions so for instance a strategist or a data provider can only change ranges in the specific pool they cannot pull liquidity out of the Vault for instance right so you

create these very clear limits of access basically permission levels to ensure that it is a non-custodial product and you can pull your liquidity whenever you want and someone that is the strategies of the Vault cannot just simply take your entire liquidity and I think that it's a it's hard to pull off technically but it's a spigot worth doing it's split in English regardless to General it's split worth doing um because we are effectively trying to improve threat fire things that work in Triad file in the D5 ethos and the only way to do that is permissionless non-custodial globally accessible decentralized now when it comes to kind of the management of assets um I think one of the realizations crypto just has

to accept whether we like to or not is some people know a lot about something and some don't right and the goal with decentralization is to democratize access to information so anyone can become part of the group of knowledgeable but I don't think that our ethos is to make everyone uh like to make everyone have a an expert level driven approach because for some people that's not the right approach some people just want to they could select their assets not vote in governance proposals and that's fine right we're building for everybody we're not just trying to build for for a subgroup and in that ethos including governance into vaults and generally into the Quasar platform is

something that is incredibly vital to our future world map simply because the purpose of the chain the purpose of Quasar is to become uh in the future a completely self-sustainable ecosystem that is completely unrelated to any Dev team whatsoever and for that to happen we need to build infrastructure where some strategists can come in and start managing a position for other people without the ability to Rack there needs to be the ability for anyone to bridge their assets in with IBC and deposit into any Vault independent of you know if they are yeah we don't have to add Grant permission for that and so I think dam is actually incredibly crucial and core to the ethos of crypto because one of the most gate kept areas in traffic

is asset management because returns are high because the the accessibility is low and because it's just you know people helping each other out if you look at Millennium fund Millennium fund is is a hedge fund in New York that is I think the best performing hedge fund ever the average return is like 30 a year it's ludicrous completely incredible and they have locked any well no one else can deposit into them they just manage their own Capital at this point because of how much they're making they don't want to manage for anyone else they managing their own Capital only and so by the crypto info status as anti-thesis as possible right so what we have to do is break down the barriers and allow depositing for people and let the free market decide which APR works

for it which API works for it interesting um so what are some of the um you know earlier generations of yield optimizing products or vaults you know I'm thinking of like urine for instance now what are some what are some of the products that have inspired Quasar and how does Quasar improve on some of those early uh earlier ideas absolutely so your aggregation has been around since D5 has been around right you did aggregation meaning one thing basketball funds doing the same thing right that's yield aggregation um and it's been aggregation has

effectively been as complicated or changed the world for advanced as underlying defy has been so in the early days of D5 when you had just full range Capital employment in unit swap then the only thing a wall provider can do is deposit full range for you maybe into two or three pools right because there was nothing else that you could do then when Landing markets came out suddenly you can do an improvement so instead of someone having to just Loop their assets by themselves you know borrow lens borrow land and and increase their leverage evolved can do that for you right so leveraged walls were like kind of one of the rudimentary first versions and then as you have next Generations of D5 products you have unib3 custom ranges

you have custom fees you have just everything starts becoming floating and customizable so do vaults get more advanced um one of the things that we are advancing on is we are a weird aggregation app chain uh IBC enabled and that's kind of the core right because the thesis that we are setting up is Quasar is causes as narrative has faced some backlash sometimes right because what is cosmos we are kind of a big dysfunctional family as Django would say right but one thing that's Undisputed throughout all of Cosmos that we're all writing behind is IBC because it's our Arc Reactor our gift to the entire crypto space a lowest trust assumption you can't quite say trustless but like lowest trust assumption bridge in all of

crypto being IBC is a undisputable public good for the entire space how many Bridge acts have been there how many millions have been lost in bridges how often do people give up everything that D5 is about just for a bit of convenience to bridge their assets not realizing that for the entire time the holding bridged assets their underlying is at risk right way too many times and so if we look at IBC we look at the base layer of the future communication standard for all of crypto and if we want to continue the ethos of breaking down barriers what we need to do is to allow Capital to not be discriminated against what we mean by that is why should you be able to only deploy pause it into a single chain what if you want to move your camera somewhere else what if there's a different opportunity what

if there's a different asset you want and if the only way to do this Bridges it's massively risky and not a pleasant experience versus in the future where any chain becomes IBC enabled we have Union working on ethiacy composable on pocket on IBC uh near is coming I think binance chain like there's a lot of projects that are working integrating IPC we suddenly have a cohesive user experience that combines IBC into a like users will just be able to interact with different chains not realizing they're doing that which is the same as the internet is currently built do you know which server stream yard is currently running on set do you know if it's Azure or Google cloud or you don't and you don't care you don't have to all you care about is

the site work is it loading is it giving you what I want and the same thing is going to happen to crypto we're always going to have the Nerds that also exists in the cloud world that keep debating and fighting if AWS is better than Azure or Google Cloud but end users just want the best product and IBC is a facilitator for that in us so IBC driven year aggregation is really important because once we have that we need to be able to consolidate opportunity of the new interconnected blockchain web 3 world into a singular user interface into a singular app into a singular position maybe we can pick and choose what they want to invest into independently of the underlying chain that's what makes this unique and also as I've mentioned before the safety mechanisms around on our walls and how

we've structure them to be non-custodial so before we get into to the product uh I wanted to also ask you like so one of the other products I think that's very similar to Quasar is sommelier um how is crazy like how do you differentiate Quasar from sommelier uh how yeah what's the what's the main differentiator exactly so if we look architecturally just you know neutrally not judging just architecturally Psalm is an app chain request is an app chain some uses a fog of gravity bridge to send signals from the from the sum chain to execute strategies on ethereum so all all soundboards are ethereum balls so they're they're on ethereum they have

access to ethereum liquidity that's what they're doing um quasar is an app chain that has IBC capabilities and that is using IBC or Outpost model vaults so contracts on osmosis soon on other chains as well to manage security in the cosmos so the first Verity differentiator is ethereum and Cosmos that's number one number two is also um kind of I think I don't want to speak for somebody because I don't know the plans but um has to do with kind of how permissionless do you want to make Vault creation right which there is no fault I think there's just different philosophies on that because both paths have very own issues and kind of things to look out for but what we are trying

over here is to get to a point where uh a data provider a strategist deploying a strategy only needs to know python which is the language for strategies Python scripts and that's it and doesn't need to talk to any team or any smart content developer and they just have a dashboard to deploy their strategies pick the pool pick the destination pick whatever chain it is and there you go done so right um it's it's a bit of a different approach um however we are good friends with somebody because the damn Market is like gonna grow 100x or more from now because sd5 also grows there's a leverage of dam growing on top of the defect growth simply because we had three percent and which I think we should end up with 33 of all assets being in their protocols

and so if anything we both share the same vision of trying to get the same User Group to to use a similar product and spread the gospel of kind of how important this is because what we do as protocols is increase Capital efficiency which is better for swappers for Traders for LPS for strategies it's better for everyone cap efficiency is really what D5 strives for um and also you know we're getting closer to the team um when is this going to release tomorrow basically well then I would say watch my speech on Monday uh as well on customer service but we have our first collaboration coming up with Familia which is going to be really exciting but it's going to prove again to you know thankfully we don't get this question

anymore actually we used to get it much more it's people starting to understand the differences but I think this is going to put the nail on the coffin of uh trying to make us fight each other I mean one of the last memes about that is me and Zaki fighting in osmocon right which was like they thought it was funny you know we kind of said like sure I I wasn't initially supposed to fight someone else that person chickened out and they thought let's just make the world people fight like okay sure but in reality I had a great chat with him the day before I had a great chat with him the day after um and I think that the differences are vast enough that we are both our own standing protocols that don't need to be stained by well what about X right yeah

yeah no no I I think also like at least currently it seems like you're going after a very different user base and like so many in its current in its current iteration is is essentially like is it really well constructed I mean it it's sort of like an orchestrator for liquidity on on ethereum and uh you know that that works really well and I mean like you can deploy uh capital and ethereum and like earn yield there whereas like your approach has been very much to align yourself with Cosmos and um and cater to Cosmos users those that are using uh the you know people who have Adam who have uh osmo who have you know

with that because that's necessary if if a if a D5 Market of non-etherium doesn't mature then that ecosystem is dead that's been if you look at any ecosystem that's been on downfall it's because the diva hasn't matured so it's vastly important for us to do that yeah take note EOS [Laughter] oh my God I haven't thought about that for a long time oh my God honestly the best thing that did was just not sell their Eve it's incredible that worked yeah so many protocols just are just like sitting on hundreds of millions of dollars um anyways uh let's talk about the

product because we've been kind of going off on all sorts of philosophical high-level stuff here so what is a quasar Vault like how how does it work uh what's happening in the background like I so I just did this for the first time actually a while I was prepping for this I was like I'm gonna like deposit some money in Quasar and uh and then you guys had some kind of like maintenance thing going on so I don't know if there's some new features or something but Yeah so basically I I uh oh okay the dashboard right ah cool I'll have to look at this but yeah basically uh I I did my first deposit I've already already made a couple of well Pennies on the dollar I guess uh for the small deposit but the experience was pretty cool um but yeah what's happening in the

background um yes where where is my money and like how am I interacting with it through Quasar yeah exactly so we currently have two designs in production uh one of them we're going to slow development on until some of the underlying infrastructures improve but one of the designs we have is our ICA I secure implementation which is our old vaults which photos came up for anybody we do not further recommend depositing to those because they are on Old osmosis pools with cl we recommend people to move their funds to CL um but that infrastructure is effectively the first in production interchain or cross-chain smart contract in all of D5 period not even just Cosmos um the smart contracts for these vaults

sit on the Quasar chain and execute actions wait which ones are these sorry which one atom Pro are the ones that are not recommended for deposit anymore as they are on basically osmosis univ2 version for small so full range amm only right okay so that's the lp strategy yes uh okay so for some reason I thought those were liquid staking uh poodles but those are actually just um on concentrated liquidity pools into three different pools so effectively without having just 50 exposure to the asset name So osmo Pro not only like 15. it's 66 to 75 which makes your exposure to not that asset lower

um and also yeah the ability to basically deposit to multiple pools that I use for that ass at the same time so it's just yeah that was what back then before CL launched was the kind of best deployment version for that and now let's sell this live uh it's it's an old version product effectively but got it what we did technically there like on a technical level is flex pretty hard to be honest uh because it was the first in production ICA and I secure implementation ICA being interchange accounts and icqb imaging queries what that means and non-nured talk is our smart contract sits on quasar can query the osmosis chain so querying is asking it for information can analyze that information and can do an action for the user on osmosis

without being deployed on osmosis and that's the first time ever in in D5 that you've had a cross-chain smart contract this contract doing stuff on a chain it's not on because that's like you know I don't think I need to explain it that's that's a crazy feat however and that's where I'm gonna be honest with everyone and like not lie and people that have been with us for a long time notice it's not the most stable infrastructure not the most stable doesn't mean that we ever lost any funds but it means that sometimes deposits didn't work sometimes withdrawals didn't work reason for that is I see IBC by itself is another technology and I secure I see on top of that are incredibly experimental and new so you're basically building on multiple new Stacks that have not been battle tested on every corner and we have done

the equivalent of basically asking those those uh effectively if there were a post office been sending letters we came to them we're like hey what if you send a plane can you please set a plane through the post right and that's effectively what like I think when we actually launched the Vault it took one and a half seconds for the relayers to die because the amount of transaction and data went through that was never just never conceived for that so we had to be immediately upgraded to a huge problems to strange stuff but yeah so that's the old infrastructure the new infrastructure which is what I think is the most interesting for most people is a so-called Outpost model so our currency albums sit on osmosis that's

why the experience you said the experience was so pleasant it is contracts around osmosis you've deployed contracts there yes and the reason that the experience video was so smooth is because we we see osmosis balance and you can immediately deposit from osmosis okay so so that that's that's interesting because I think there's I mean it is is is the jury out then on whether the [Music] um uh on whether the right way to architect these sorts of cross chain applications is to do ICS EQ but maybe like with some better relayer technology and like upgraded sort of systems there or is it the Outpost model which yeah but but which which requires uh smart

contract deployment and management and orchestration across like tons of different chains and a lot more overhead and just you know complexities well arguably less because it depends obviously it depends on how much overhead is on the on the IBC implementation and yeah so um I think the jury is not fully out yet on that um I think that we kind of guinea pig ourselves uh with Isaiah and Isaac here we kind of like shot ourselves so far into this rabbit hole for the ecosystem to show is this if usable infrastructure layer for Vault and that turns out you know not right now uh we came back with battle wounds um versus The Outpost model which obviously means it's not as interoperable as icicq but in effect it is better simply because ICA and icq are

just not mature enough on a lot of aspects um so what we currently deem to be the preferred version kind of future uh deployment of IBC enabled smart contracts is going to be hybrid between deploying local smart contracts on the destination chains so The Outpost model but interconnecting them through IBC using the Quasar chain to be able to interact with the other locally deployed smart contracts what is that what that going what's that what what is going to be easy around that is you have the execution logic and the action logic of the vaults local in the destination of the yield or of the deposits which severely reduces complexity and most

almost all issues we've had with the Legacy design was because of the IBC messaging not the underlying smart contract um and then having them be able to call and interact with the other locally deployed smart contracts on other chains using IBC was going to allow to interconnect products to different IBC chains as well which is inevitably one of the final Visions for Quasar as I've mentioned before in IBC interconnectability abstracting away the chains and just offering better products on top of that so the strategy logic would lie on the on the Quasar chain and then the execution logic would lie then no the the the the smart contracts which Encompass both effectively would be on

the local chains but then these contracts in the future version what we're going to work on you know I would say next year probably are going to be able to interact with other Quasar vaults on different chains so that for example we could have actions like uh You LP into USD uscc you get the wall chair you take the wall chair to Mars so our contract of Osmosis sends oh okay Mars is a bad example because also osmosis but let's you me just for the sake of explaining what we're talking about sending it to you me and depositing it is collateral loaning against it and looping it so you are effectively 3x leveraged so now suddenly have an action of different contracts and different chains but the logic of what is happening is not being sent from

one change to another it's actions being sent okay this this kind of I guess answers my one of the other questions that I had was why build an app chain and why not just build on osmosis in the case of levana or Mars yeah and I guess the answer is there because the long-term vision is for uh Quasar to also interface with other app chains absolutely uh the the interoperability aspect is core to our ethers and look osmosis is our home it's going to be a home for a long time and it is the prime yield situation in all of Cosmos so undoubtedly the right place for us to be and we have very good relationships with

the with the guys over there but for a better user experience there's always going to be stuff that needs to accommodate the osmosis use experience even just Nirvana and Mars is already add-ons to this most experience and there's going to be a future once we have eat IBC where suddenly you're looking at this and you have two baskets of different D5 products ethereum High liquidity low yield and you have Cosmos low liquidity high yield and you're going to be asking yourself wait a minute we can start meshing this we can start doing stuff around this and once we do that the chain is going to be a vital part of this because it's going to be orchestrated of the IBC messages also it is a massive Improvement when it comes

to also um the legal standing of a protocol right we have an entire we have valid or said it's independent we have tokenomics that are independent governance that is completely independent so we're not reliant on another token for governance which means wall development deployment is governance based um free structures governance based distribution is governance based everything becomes properly decentralized in an app chain um so there's quite a lot of reasons for this yeah well I guess uh I I I'm going to take this opportunity to ask you about your your hot take which was uh the growing amount of Cosmos change is currently a bearish direction for the ecosystem that seems to contradict everything you just said yes yes walk us through this hot take gladly so one of

the things to consider if you are a yield aggregator such as us to kind of talk about the contradiction is that we are a neutral player the goal is right if we say we don't want to uh to have Capital be discriminated against that also means that if there is now let's say a hub war or a DEX war or a lending War whatsoever the goal for us radically is to offer the users the best experience and the highest API so we are not picking political sites by Design so if we were deployed locally on osmosis we can see this right now with there's a lot of protocols where you kind of assign to see this Rift between are you Neutron focused or are osmosis Focus we don't want to have any part of that that's

that that would immediately lower the user experience quality in my in our opinion so an independent app chain secures us for this however and this is where the difference comes in the bear market now is so deep and so rough that the luxuries of building out this infrastructure for the benefits that we currently see many teams don't have that anymore because of funding mounds of the you know how how much they can raise what the current market is saying and we have they have to be much more radical in what they're spending funds on and in this current market the one thing that kills everything else in importance is product Market fit and currently with the amount of different app chains in

all of Cosmos you are going to find an app chain that covers what you need to explore if you have product Market fit and you can always move to an app chain after that once the bull market comes back and you have the luxury to be able to to use funding and resources on that so I think that would you the last point to consider with my contradict with my statement there is liquidity hasn't increased in Cosmos and one of the worst things that keep happening in carlsbos and if someone for some reason has our seed Round Pitch deck from January 2022 we're mentioning this there fragmentation of capital is killing ecosystems uh if the same amount of money is being distributed to

more and more modest Nations all of them become less interesting I see sometimes people being uh you know as for some reason happy that usable liquidity is going down right and being like Oh yeah you know small is not good it's good it's going somewhere else but inevitably causes need osmosis it needs deep liquidity it needs efficient swaps it needs efficient writing um and so if you have this reality for the time being where our total liquidity is not increasing increasing the amount of destinations is incredibly bearish we don't do that because all our liquidity is using underlying D5 products of other chains and protocols right we're not our own thing all our

liquidities and osmosis and it's going to be on all the other new destinations that we're going to have and so if you're a team right now wanting to enter into Cosmos start as a smart contract pick the right chain for you if you have product Market fit and you start having growth you can always move to the app chain um we had the luxury to do that before so now we can bear the fruits but the equation in this current market infrastructure is not the same as it was one and a half or two years ago yeah I think that that makes a lot of sense and you know I I talk to a lot of people about this and I think that increasingly it's going to become harder and harder for chains to be app chains um that will be reserved to to a few

chains that have sufficient usage and uh to be able to generate like enough Revenue to to sustain themselves and um and some chains will like uh downgrade but like not downgrade it's not like it's not a detrimental term but like downgrade in terms of sovereignty to become a roll-up like as well become more lean and less expensive and and so um yeah um so I I I I I was told I was talking to someone yesterday who was on a spaces where like Sunny was talking for three hours about osmosis merging with the cosmos Hub uh it was the first time that I talked I heard about it did you

hear about this or it was yeah yeah this information yeah I mean it's public yeah I know it's public but like I I hadn't um I wasn't on the spaces and I I haven't heard him talk about that uh what's the here yeah oh what's the idea generally uh from my understanding the idea is that Cosmos needs a unified Center we need less fragmentation right we've been talking about this for a couple minutes now already I think the entire space knows this we need consolidation on efforts uh on to underlying assets if you have 15 deaf teams working in 15 assets versus 15 def teams working three assets chance to hide those assets become more attractive right one of the

biggest modes of ethereum is how many freaking teams working on small are on ethereum right and so I think the goal here is to strengthen Cosmos and make it undeniably Center of future D5 um and yeah so I I I generally there's been space of me talking about this before this was like you know any knowledge I had any idea um there's there's been public uh talk and generally comments for me as well um I mean I've done you as well but also before that consolidation and Acquisitions and mergers are always a trend in Bear markets because everyone has to revisit and re-ask themselves attractiveness on all fronts

um and so I think this is a bullish sentence because it improves user experience it improves the effort into singular assets that is being put in it improves Direction and it also aligns incentives which is one of the most crucial things that we can always do anywhere in any Market is if incentives are aligned your success if incentives are not aligned you don't have success any politician in history ever whatever country whatever political party I don't care that's been called Bad by vast amount of people chances are 100 that it's because this person did not have the same incentives aligned as the people that voted for that person chances are also 100 that whatever politician will work for whatever party for whatever that's been praised as a good person that's been praised to

someone doing good stuff had their incentives aligned with the population and then if alignment is crucial to the ecosystem and I think this is a bullish sentiment for us and we should rally behind it so I want to come back to like the original thing I was asking you about because we've kind of veered away from it is like what's going on in the background when so like earlier when I when I deposited osmo and Adam into this game let's go exactly through that what what is happening uh to the tokens what are the IBC transfers that are happening like what's the flow of transactions between contracts and then importantly also when I unstake when I start like when I withdraw the capital yeah what happens and what are

the uh say like lock up periods that might exist or these sort of things absolutely so first of all no Locker periods everybody be happy now uh also secondly the APR we're showing is after performance fees what you are seeing is what you're getting there's no more fees from the number we're showing so what is happening the smart product on osmosis would get your deposit so you are doing an action on our front end that tells the smart contract I would like to deposit funds depending on where the range is depending on the assets the percentages are different obviously we are improving that user experience there's a lot of work and right now we're waiting on osmosis on something so there's some dependencies but the goal is that you can just have a singular asset deposit as well or even different asset deposit and we do the swapping for

you so the deposits go into the Vault the smart compact they don't leave the osmosis chain the contract takes the deposit calculates the amount of wall chairs so this is in in a new and a token effectively that you are getting in the background that is assigned to you and tells you how much of the Vault position you own the Vault now takes the liquidity and deposits it into its current range I'm going to get back to range in a second so now your liquidity is deposited in the range of the Vault if the Vault changes its range your liquidity moves with it and you are curing the rewards based on what the entire world is getting calculating down to your share of it so effectively how much you put into it if you want to withdraw The Vault takes the vultures calculates the underlying assets gives

you back the underlying assets it rewards are distributed I think currently every hour or so I mean it also always depends on how busy osmosis is but I mean they're cured all the time but they're given to people to be withdrawable at least a couple times a day so it's not like you have to wait for every Epoch or like every or like once a week um and you can withdraw your assets which means they show up on your osmosis front end so if you go to osmosis asset page that's where your rewards occur and so the rewards are occurring uh in say osmo right like if you're if you're okay okay so that's a good question so it depends on the pool that the vault is in because effectively the pool there's there's multiple ranges of pools in osmosis there is incentivized Pools by

osmosis which means osmo rewards there's incentivized Pools incentivized by two parties so that is osmosis plus a partner so in instance our University to do a cc vault is getting Kava and osmo rewards and then there is a third one which is only swap fees and obviously swap fees also go into first and second version of pool so yeah the composition of your rewards depends on the underlying pool and on osmosis and the underlying assets as well so some of them are going to get majority incentive some of them are going to get majority um the trading fees someone are going to get a mix so and are these positions so like when you're interacting with osmosis and uh basically doing this tick optimization

uh are you are you bonding are those positions also bonded for no they're not there's no there's no more bonding in CL thankfully so that means there's no control you don't have to wait you can withdraw your money all the time like right obviously sometimes those Moses down the nodes are down but like there's no lookup to it so you can withdraw your funds which also the way that osmosis reward distribution rewards are happening now in Seattle vault is based on how Capital officials your deployment is so it it preferences tighter ranges which means you have to change ranges quicker to answer about the range changes how that works so the data provider is not the asset manager you don't have a hedge fund that is managing your money but it's taking it saying

thank you or doing the actions and you ask them for your money back so what that contract that address can do is it can adjust the ranges and that's all I can do will kind of pull the liquidity it's going to upgrade the smart contract those are different addresses belonging to either a crazy Association or crazy Community or Quasar Labs so those are there's a split in responsibilities and permissions permissions which makes the world much more secure and the data provider can propose the new Range it's approved in a middle step where we make sure that like the range is not faulty and if it goes through the Vault adjusts swaps into the new Range now right now the vaults have single range support which means a vault has one range we're currently developing multi-range I don't

want to give a timeline but I think within a month is like targeted which means a single Vault can have multiple ranges why is that important IT addresses the biggest uh mishap device and happiness of users right now which is why is our vault capped well our vault is capped because we have 70 to 75 of the entire liquidity of that pool which is great but it makes us literally meme insert DJ Khaled Suffering From Success because if the Vault has to rebalance it means it pulls like crazy out and swaps into the new range it does that against the liquidity that is not in the vault so if the Vault were to have 90 of the pool equality and it would have to

do a swap against 10 of the pool equality slippage would be high really really high so that means that currently we have to cap how much of a pool a vault can own without risking too much slippage on Range changes once we have multi-range the Vault trades against its own liquidity so instead of having one big change of the entire liquidity moving you have maybe the tight range moving against our medium range and then maybe later the media range moving against our wide range which means at that point the Vault can be the entire CL pool and not in cure a massive slippage um and once we have that we don't have we don't need to have caps anymore okay interesting yeah and so let's talk about the so the Strat I mean obviously there's like two types of users of

Quasar as I understand it you have the liquidity providers like people were depositing liquidity into these faults and then you have um strategists right like people who create vaults and uh deploy strategies yeah I think the the user side is fairly obvious how that how that works how how does the how do strategists or vault creators whatever I don't know exactly how you call them uh how do they interact with the platform yes um is there like a governance system that allows them to create these faults and yeah can you just control that but the answer to this is going to severely change every single week for the next

eight weeks because we are working hard on that effectively so what I can tell you is here's the the kind of the goal that we want to get it to as soon as possible as soon as possible we want a strategist who usually knows python that's what strategies are written in hedge funds and quants is python when someone that knows Python and nothing else to be able to click on deploy vault pick their pool and the chain that the pool is on so like osmosis or Neutron and then the pool click on deploy get their multi-stick range access effectively where they compose the ranges and then we're gonna we have a front end it already we have an alpha like Alpha version of this internally

but we're going to have it obviously publicly for those strategy soon where you have you see your different Vault positions and you can literally add in the ranges and click adjust at which point the entire world adjusts the range so at that point you don't need to know the crazy Labs team you don't need to know anyone it is a truly permissionless deployment of that um okay so that's number one number two is the road to this involves obviously improving how much depth hours these strategies need uh right now cause wasn't devs are rare so the less cause it wasn't is necessary the better uh there is some design proposals we have around that where requires Association in effect the Quasar Community governance which the association is a

legal Swiss Association that is legally required to enact uh on chain uh votes so not like arbitrum but like actually required to enact unchain votes is going to update and maintain All Balls uh but just the Vault codes so not the liquidity in the vaults just the actual multiple so for instance once we have multi-range the chain can vote in to update the vaults to multi-range and then we would update them to multi-range and anyone who deploy the world would suddenly have a new feature um similarly the deployment of vaults is going to be permissionless however there's obviously a front-end question which is something that osmosis for example has been looking at long which is why they had Frontier which is permissionless and now they've merged it

into one right so there's a lot to unravel on the legal side and there's a lot of considerations to do on the legal side because as ABC funded project with the Swiss entity no we would not like to be Cowboys that are not caring about any law that needs to be monitored how we're going to do that moving forward and how that changes but in essence uh the goal is that the front end only shows kind of whitelisted validated vaults um simply because just because you can't hold liquidity from a vault just because you can't rug evolve doesn't mean that the strategist knows what they're doing or there's any quality standards so there's going to have to still be as always and try to find a level of who is

this person who is this team do they know what they're doing are they doxed which for example with our first strategist partner dll all of those are checked people know who dll is they're public they've been doing this for a long time they have a track record their their legit they do a lot of data science for Somalia they're all they're partially the team behind real eth and BTC so there there's this trust factor and any strategies coming in uh it's not our job right crazy Labs is strictly a development company in uh enacted by the Quasar chain to work on the Quasar chain um it is not our job but these strategies don't have to show to the community why they're trustworthy and why you should let them adjust your

ranges and I think that the talent pool there is big enough that we're going to have a couple strategies and different strategies with different expertise levels some stable pools some liquid stake pools some leveraged stuff some CL there's going to be a vast different set of strategists doing different things in the future so yeah talk a little bit about like dll and what kind of work they're doing and I'm I'm curious like how they interact with the chain and to what extent they have to or like dll or any other strategists like uh to what extent they have to reason with governance and like what are the

types of things where they require sort of community Vote or governance vote and where do they have you know let more just uh where they can just interact with the strategy perhaps or change values so the goal is to use governance efficiency right because I think there is kind of a middle ground between what do you use governance form what you don't use it for um any wallet deployed by the crazy protocol Man by any strategist or data provider is going to have a performance fee for the crazy protocol right currently the Quasar protocol is making money on every single odd every single CL Vault so there's a performance fee that the equation chain gets so the crazy chain is hopefully it depends on governance obviously interested in

approving future strategists and also potentially giving them grants you know dealing I've got a grant so there needs to be improved by governance um to be able to deploy these walls and to be able to be aligned with crazy token in the mission um the range updates are not subject to governance um but there is again an admin kind of a safety blog to make sure that it rain for example if a world provider were to update a range that's already out of range uh we're working automated systems around that so there's no you know not even a human going through that that's going to be like no you can't do that you know because that would be a bad trade if you move your range completely out of range it means the slippage is going to be really bad and it's just not a good trade

um similarly if you have independent strategists again it's up to them to reason with the develop like the deployers of the Vault there's been something that we've talked about for a long time that requires gigantic deaf hours and maybe someone else is going to pick it up in Cosmos hopefully or we have some time to do it soon but vault-based governance so effectively a module for multi-token governance which means that only the people in the specific Vault can improve specific changes to that vault that's going to allow basically only the people to have skin in the game to be the ones that have say in the game um however it's by the design of the Vault impossible for wall provider to change what a vault is doing without governance

approval so for instance if a Vaude currently is on a singular pool and only can update ranges in a pool and the stratus wants to move the pool it has to be approved by governance because the association has to update the contract for this so there's no way for Vault create to be like ah you know today I told you you're investing in USD to UCC but actually moving your funds now to to uh you know uh whatever Juno osmo right um that's not possible that's subject to governance okay and um yeah I mean looking forward here you guys are currently I mean all all of the all of the vaults on Quasar are

concentrated liquidity pools or some sort of like liquid sinking pool on osmosis um what are your plans to expand to other amms have other types of strategies whether that's like astroport or uh like injective Etc and more I think one thing I'm really curious about is you know when do we start seeing like Bitcoin liquidity and ethereum liquidity um pools because you know as you mentioned earlier like one of the most important things I think for Cosmos right now is bringing liquidity to the space uh Bitcoin and ethereum are like the two biggest sources of liquidity uh yeah yeah so um

always been our goal and continues to be our goal to expand as much as possible but there needs to be a realistic Factor about where is the yield and where is volume and right now it's clearly osmosis which doesn't mean we're already we're not already looking at you know what else to expand to and also honest Moses says levana at Mars right so there's more stuff to do in osmosis actually today like we are on our company offsite here uh in in Istanbul so everyone's here right now and we've had an ungodly five six hour non-stop meeting no like there's no lights in this room there's no windows discussing every single potential opportunity roadmap item how much product Market fit how much of a facilitator for existing products what's the attractiveness level what's the user demand what's the dev

hours it takes we've been going through that a lot today so this is a very fitting question Tyler advice for me because we've just discussed this so so much but I can tell you that we have a very clear super power all the alpha right here oh I mean okay I can tell you this so skip API which is going to allow us to let you deposit any asset on any IBC enabled chain into any vault is the Pinnacle of user experience I think in Cosmos yeah if you have Juno on Cosmos Hub you can one click or two click deposit into our osmo atom LP pool LCL pool right that's coming up

um more strategists mobiles more CL it depends on what it yield is right I think like there's so many cool products in Cosmos but at the end of the day the waste Quasar as a protocol works is it's dependent on volume it's dependent on intend it's dependent on liquidity to some degree simply because there's so much interest in what we can work on and how what we're being pinged on that we need to be very picky to get you know the best lowest hanging fruit um I think there's gonna be more clarity on this in causal verse but I gave you I gave a little scoop I gave a little scoop and what about leveraged uh faults yeah I saw that in one of your blog posts what is the leverage default a leveraged Vault would be at for example 2x or 3x

LP position so effectively you let's say ulp into usdt uscc so you get x amount of liquidity x amount of incentives um if you do a leveraged wall you would go minus so you would subtract the the funding rate that you're exposed to right for borrowing you have to pay for borrowing and you would add the rate of APR of the underlying pool so for example a 3X your city uscc pool would have three times the rewards minus the borrowing rate that you pay for which is going to allow you to get more yield and and be even more Capital efficient um yeah that's a plan you know obviously again like timeline wise if people were sitting in a room with us today they'd

be like Jesus we it would be nice to have 100 developers right now um but yeah it's it's clearly a very interesting product that I would be to use I mean it's you know you know your product Market fit if you ask the team going from multi-year defy native to you know first D5 job you ask them would you use this all hands go up yeah kind of you can kind of assume product Market fit so yeah leverage world's super interesting cool yeah I guess um well maybe one question we didn't address here and I know we're sort of going along here on time but you know what what is the what is the risk that users need to reason about when using Quasar I mean they're with any as with any platform right there's some risk right there's like if you're

using stable coin there might be DPAC risk if you're using there might be smart contract risk or uh Bridge risk so yeah walk us through that like that so clearly as with anything D5 yeah smart contract risk uh we get our smart contracts audited by hellborn once a month we have an entire audit um we're gonna start publishing those audits but all our code is open source so anyone that is you know very techy can judge the risk for themselves but we don't take shortcuts we get all the time we don't deploy without audits yeah there you go what's my Hundred risk they're not always the case um the bridging risk is completely relate it can be dependent on the underlying assets if underlying assets are defy IBC native and causal

native you don't have bridging risk if you're investing into a pool with underlying assets and outrage you're exposed to bridging risk that's something that we don't control that's what the underlying pools the underlying assets are um apart from that the strategist uh needs to know what they're doing right so you're potentially exposed to bad Capital deployment but I can already tell you that that is highly unlikely because the strategist has a performance fee they want the highest performance we talked about set of alignment incentive could not be clear or aligned as strategist wants as much Leo as possible because they get a cut from it um yeah I would say those are those are the mystery exposed to yeah yeah I think I think that uh probably the the lar the the biggest

risk here is the Smart contrast smart contract risk I mean it sounds like you guys are mitigating that uh to the best uh I'll do this nothing alive is guaranteed and D5 is a crazy space but if I look at how many hacks happen to unordered protocols like the amount of protocols that have never been altered that are getting hacked my name is dox I'm public I live for crypto I'm not leaving the space soon you know I don't need to be rich next year I have time my life's long I'm trying to build something here that lasts and if I would if I if I can do what I can to decrease the pack risk I'm doing it like imagine I'm spending three years of some of the you

know best years of my life highest energies of my life the early 20s mid-20s on something just to have it evaporate the next day because I've did some shortcuts on security would be hard to sleep after that obviously knock on wood that never happens but we are doing everything we can to decrease that risk because our yeah if you go to the team page on Quasar I don't think a lot of crypto teams do that that's maybe something interesting to point out you see faces you see names you see backgrounds yeah cool um yeah what do you know I mean what are you most excited about in Cosmos D5 and what do you think is the biggest challenge ahead for The Interchange in terms of yeah I mean yeah liquidity adoption yeah yeah absolutely

um I think Consolidated vision is going to be a challenge but we're working on it not to say we're not you know the atom Osmond merger that's interesting hopefully it'll all be resolved after next week we'll figure this all out three days yeah um next weekend we're all aligned everybody knows what's going on I'll go home and that's freaking the same yeah um yeah liquidity is obviously the big and obvious ones we just need more liquidity which is also tackled ethibc native UCC by Noble it's coming um professionalism needs to increase which is also increasing a lot of teams coming into into causals that are very professional skip dydx osmosis as always

many other teams uh yeah really really good there uh what's the most exciting on Cosmos D5 I think expanding IBC capabilities to leverage multiple protocols on multiple chains under a singular product so basically once you can have yeah leveraged walls using Umi or Mars or having uh avoid deposit between ethereum products and causals products or looping between those are arbitraging like anything that involves D5 as a facilitator for more complex products technically and easier products for users I'm hyper bullish on that same hell yeah yeah uh Valentine thanks so much for coming on it's been a really

fascinating conversation I've learned a lot and uh certainly like I've had a couple of D5 protocols on lately and It's Made Me Wanna uh pay a little bit more attention to my own portfolio you know as as a fund you know we like we we spend a lot of time trying to manage our LPS portfolio but unfortunately our portfolio kind of falls to the Wayside but uh like the I think I think there's like really interesting stuff happening in Cosmos D5 and uh and that's really exciting and yeah really really pleased that you guys are working on this thanks thanks again see you next week thank you thank you very much and hopefully you'll see a lot of listeners next week uh I don't know how many people listen to this but uh

let me know if you do I want to see when you see me at Cosmo verse come say hi Cheers Cheers