Hyung Lee: Crescent Network – The Hybrid AMM/Orderbook Decentralized Exchange #462

Transcript

welcome to episode and show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Brian Crain and I'm here today with my co-host Felix luch and today we're going to speak with Yong Lee he's the founder of Crescent Network Crescent is uh decentralized exchange amm order Book Exchange on Cosmos a very Innovative project so really excited to speak with him about that now before we get into a crescent we just wanted to briefly talk about a sponsor this week so our sponsor is Omni Omni is you know your new favorite multichai in Mobile Wallet that puts the power of web3 at your

fingertips you know in just three Taps you can stake and manage your assets and over 22 built-in protocols including all the EVMS all the major EVMS l2s and also non-evm chains like Cosmo Solana near and more Omni abstracts away the complexity but retains you know that it's fully self-custodial and makes it really easy for you to get yield on your crypto uh they also have multi-chain nft support so you can view all your nfts in one place and you can show your nicest nft as app background so and and in they have an explore section in the app where

you can you know see new apps uh new yield opportunities and news and uh yeah so if you want to check it out uh you can get it on iOS or Android just look for Omni wallets that's Omni wallet or you can go to the website omni.fi and yeah with that Jung thanks so much for coming on yeah thank you for inviting me uh it is great to be here yeah so we've we've known Jung for for quite a while uh and I I guess the thing I remember especially was that in that was I guess

2019 there was the middle conference in South Korea and there was the the cosmos hackathon there and you know with course one we were participating there and we were actually working together with Jung and uh and his colleague and we were working on some Cosmos liquids taking stuff for their hackathon so I think that was very fun to work together so we've known young since then spend a bunch of time there we were very impressed with his um especially understanding of defy and of sort of liquidity markets incentives uh financial instruments so

it's yeah it's great to finally come an app center and talk a bit about some of the work you've done since then yes oh yeah uh happy to be finally be in this epicenter uh talking about things so yeah uh especially from myself like personally like meeting this uh like OG people way back in like 2018 and 19 it feels really good and and and it feels like family so I'm very happy to uh touch with you guys again and and hopefully we can see each other soon in customer versus

so maybe you can just talk a little bit about your background how did you get into crypto and how did you get into the cosmos ecosystem in particular yeah so uh I majored in mathematics in undergraduate and then I studied some global financing and in master and I worked as a market maker and Arbitrage Trader in Investment Bank in Korea and for about 10 years and then I I I'm trying to uh have another chance to participate in this like new move of Technology including like Ai and blockchain and other uh stuff because

for my nature we I was like finding something more Innovative and more uh transparent and more decentralized technology with a lot of new philosophy like uh not very conservative so uh from my uh older job that was like very conservative environment with very power and money game within and it was quite boring and I wanted to have another chance to bring this again in my life to like get another energy to move

on and and the block changes caught my eyes so like At first like 2018 I was like deep into the ethereum ecosystem trying to build some financial application from it and I was trying that like for three months and then finally I I had made a transaction that costing like millions of dollars and I thought that it was impossible so I tried to find another uh projects and that was like Cosmos and I I just like caught up with this like uh big Vision millions of blockchain and connected each other and I just believed it in one side and then just like keep doing this

for more than four years as now so uh that was like my history how to get into uh Cosmos uh ecosystem yeah super interesting and then I think you started out basically as a validator as many in the cosmos ecosystem maybe you can talk a little bit about how how you made that choice to start there and then how you kind of move to to the to the decks space or what you're what you're building today yeah yeah so uh at that time like POS is even not very uh Universal in in the space like everything was ethereum uh and

erc20 and smart contract so uh it was very new in the blockchain area so like I I was trying to understand and uh get some experience and knowledge on this like the POS uh environment uh and also uh studying deeply more about Cosmos SDK and tender mint uh consensus layer so that we can fully understand and utilize this for a new application layer so like we started with validator or participating in testnet for about I think it was about like nine months until Mainland launch in 2019 and then started our validator business with

participating in different projects while that we were like one of the validator who are like deeply reading the blockchain core code basis like including like kava or Terra or other uh earlier projects in Cosmos or even we were participating in several uh projects with wood as an auditor so we write wrote some like report on this financial applications uh so from this like uh knowledge and experience we studied to build our own capability to understand and innovate this device

space so we started to participate in other activities like working with tendermint cooperation and also ICF to build some modules and features for tender mid and Cosmos SDK so one of the results was uh gravity decks operated on Cosmos Hub with amm and order book at the same time so this is like one of the information who people doesn't know uh is that a big because the the UI was um Emirates and the Americas that didn't provide audible UI but actually the in the code base uh other book is already

there in 2021 uh that was like hybrid text from beginning original design was hybrid text so uh but we didn't allow we enabled it because it is too experimental for Cosmos up so that was our start to build this uh one of the defy application which is like decks with amm and audible at the same time so that was our first big move into this device space I think there's definitely a lot we want to go into there with this like order book amms but maybe just talking a little bit more about the so you know gravity was

was on the cosmos off can you talk a bit like you know what happened and like how did it evolve or result in you know you then launching Crescent on its own chain yeah so uh as a like a big time uh believer in Cosmos and Adam we we were trying to appreciate the community to uh have uh decks in Cosmos up and incentivized from atom inflation uh so that was our purpose to uh appreciate the community with this uh because uh for any decks or especially with amm

formation uh liquidity incentive is the core part of the uh functionality so we believe that there should be some incentive coming from cosmosov and that was uh Adam because uh the community doesn't allow to meet another token in Cosmos up so that was only atom is the only option so we were trying to appreciate the inner community in Cosmos of trying to appreciate to use this atom inflation for this important utility but there were some uh objection with like uh Hub minimalism and supporting this like new

projects in in Cosmos ecosystem not by interfering this business with from this Cosmos Hub uh like uh taking all the market share so uh we we thought all about it and we also discussed out about it with a lot of people and we decided uh not to pursue that because uh eventually without without the decks in Cosmos up there will be lots of decks in Cosmos which is already happening right now so that would be more resilient future for the cosmos ecosystem having a lot of dexes with different

characteristics and advantages so we decided not to have this incentive for Gravity decks and finally we decided to migrate this gravity decks into our own chain so that we can proceed with all the Innovation and features we want to build upon so that was the history for the decision making awesome yeah I think before we get into like the features and what you're working on with crescent maybe one thing that would be interesting we we just earlier looked a little bit in the UI

looked at the governance proposals and the very first one is about the Crescent ethos which which I found very cool that you make like a voting to to kind of um approve the the ethos you guys have and and um maybe that would be interesting if you could tell us a little bit you know what's the what's the vision uh what are you trying to achieve with crescent yeah so uh I think uh decentralized governance is hard problem there's no like absolute answer to this uh because we we don't see any uh future yet uh there will be like lots of different approaches to have this like uh robust

uh decentralized community and uh decision making process so uh we believe that there should be some uh balanced approach for this governance there should be some uh strong leadership from this uh project uh Builders and then there will be another uh decentralization factor from community and token holders so I think there should be a great balance between these decentralization and Leadership so uh that is why we uh push this uh ethos because uh we we want to have some amount of leadership from our team but

also I want we wanted to uh one did for the community to understand our Direction and our vision uh which it will be very important for all these governance decision making process so that is why we write this as a own chain governance so that everyone can transparently see how we think about the future of crescent and can be a reasoning uh background for all these other detail governance proposal we are making so uh what we have in plan is that we are going to write several uh ethos uh in coming months so that we can

write in detail about all the different topics and also write about all the changes in environment and changes in our vision and roadmap and directions so that we can like keep communicating with the community and write down all of this evidence in own chain so that we can make a better trust from this community um but but maybe looking looking at it a little bit differently or more generally like if you think sort of in the long run you know if Crescent really succeeds what do you think the role of Crescent

would be you know in in the crypto ecosystem like what what does it look like you know a crescent in like you know 10 years when it has like worked out amazingly well so I think there should be uh several roles we hope to take in Cosmos ecosystem but like more most imminent uh role will be uh liquidity formation for new projects so uh currently there are lots of new projects coming into Cosmos like within a year I expect there will be like 50 to 100 uh new project will come to Cosmos ecosystem and they all need uh liquidity for their tokens and

other tokens or they are creating such as stable coins and Lucas taking tokens and other stuff so uh we believe that it is very hard job for us to have all of this liquidity in the ecosystem and there should be a better way smart way and efficient way to provide this liquidity formation uh with uh with sustainable methodology energy so we believe that Crescent is one of the team who can do this role at best so we are do our best to take this role for Christmas ecosystem

when you say liquidity information do you have do you have in mind you know like crowdfunding so basically a project wants to raise money and you know sell some token to the market or like just that there's like you know liquid markets for uh for these tokens so that you know people can sell them and buy them well you mean I guess uh mix it both or what do you think is the most important aspect to liquidity formation so I think uh fundraising uh and leakage deformation is a little bit different topic which can be a little bit related

but I think our role will be more on this liquidity formation but still uh from this process of liquidity formation there can be like uh additional token sale approach uh so which is called like Ido so I think uh that can be another role Crescent can take but it in more like a connection to the liquid deformation process so liquidity formation is more like an ongoing liquidity so that or any token holders can buy or sell this token at any time or this is completely different from fundraising because fundraising only

allows you to buy this token within specific time period so liquidity will be more like a continuous liquidity for users to trade or anytime they want all right cool I I think that leads us into the meat of the discussion where I think you already mentioned a bit that gravity decks and I think also Crescent basically has this hybrid amm order book approach maybe for the listeners or also because it would be great to hear you talk about it can you compare kind of what's what is the difference maybe also between amm and order book and what what are the

advantages or the disadvantages of of either of them and and how how you chose to combine them in the end to to create a better product yes uh so we saw all this Innovation coming in in 2020 uh with uh uni Swap and other taxes to come like call finance and balancer uh and we believe that there is some area uh where uh amm was popular in ethereum ecosystem with very certain reasons uh including like um listing was uh like a power game within uh centralized exchange and also like gas fee is too expensive for uh Dex

Texas to provide audible utility so that was like uh more centralized other book decks was there before that but it was not very successful because it was too centralized and gaspee doesn't allow ethereum ecosystem to build uh uh audiobook tags so uh there was some reason for a amm and there was some reason why other book text was not successful in ethereum and I saw all of this like story of uh evolving this text uh feature and or utility and we we saw that uh actually in Cosmos there's no reason to uh ignore this uh great

utility which is audible tax but still amm provides a great way to form initial liquidity uh because like market makers will have a lot of hard time on making this Market because of this huge risk of uh inventory management for this unhatchable tokens so I think there will be like some uh equilibrium point where in some circumstances amm can do better and in some circumstances audible can do better so why not take all of this advantage in One Marketplace so that was like very obvious uh uh conclusion from

our team to build this firm start so when we build this gravity decks most uh easiest solution will be just building this amm like copying unisa version 2 that was like easy uh conclusion but we didn't do that because we so obviously audible will be the better approach in Cosmos so we did instead of building a basic amm we built a hybrid text from start so now we are doing our best to uh take disadvantages from these two different features at the same time so I

think like utility is not the old for our project to success because uh we need like uh accompanied business effort uh partnership and Market maker incentive and LP incentive plans and strategy all these things come together to make the project successful so we are trying to do that right now or doing more business and doing more partnership so that we can bring more users and partners and tokens uh within the Crescent text so can you explain like how how do you

combine how do you make a hybrid text uh like how do those two um sort of interact with each other so this is uh more like how you see amm so if you see amm as a standalone Innovation uh from nowhere then it is very difficult to understand amm in a concept of uh audiobook but if you see everything within audible perspective and amm you can you can see that amm is restricted version of other book with

very restricted freedom for market makers and Traders so Traders cannot do limit orders only Market orders and market makers can provide liquidity only following this constant product model formula so this is like a very small subset of audiobook this is uh so uh when you see this space uh of freedom for this design for the decks then uh it is very uh clear to understand that amm is a subset of water book so uh when you see this uh way then combining these two is much easier because you can see amm

as other book and Order of a feature and then we built everything based on Audible and then we place this amm on udovic base ground uh so what we did is uh to describe this amm liquidity into multiple limit orders on order book so that we can calculate each amount in each tick of the orders which is uh completely perfectly following the constant proton model then we can derive exact number of amounts for each tick or so we just place all of them within the audible and every orders

coming from users and liquidity pools they are matching each other without any proper prioritization or special treatment they just act as another limit order and they just meet each other with the order book matching system another special thing about Crescent X is that we use batch execution which uh prevent Mev from start so this batch execution is matching this order each other without any time prioritization within a block so uh if there's a multiple orders in one block with different sorting but

still there's no prioritization of order matching within what block so it doesn't matter at all so like uh like skip protocol is doing and maybe solution like providing ways for Traders to lobbying the validator to make their transaction at table d block but still either your transaction at the top or bottom the region will be exactly the same so there's no need for Mev at all because there is no difference so this is another characteristic we have in our decks

so um I guess yeah we definitely want to go a bit into that since that seems to be a very important feature obviously of uh of Crescent I think um when you when you say it like that basically there is one within a block there's one clearing price then for the different orders and you would have maybe you know you have three orders and and they would all get the average price in the end is that how it works am I understand correctly oh actually we have two ways to uh match each other with batch execution still in batch execution there can be like multiple uh shop price within the batching and and and in our first design

in gravity Decks that was we used our Universal shop price uh model which is uh what we did you described um we have only one shop price for every matched pair of orders but now we upgraded our decks to have a more matching uh within a block uh we need to allow multiple sub price matching uh price or for each uh block so now we have uh like multiple uh batching price within a block but still we don't have any time prioritization only price

prioritizes so we we pursue more optimization uh but still we keep our fairness of trading uh for this uh like sorting of orders within a block so with the amms right I guess also there there's been a lot of you know movement how this works right because the the traditional model that probably you know the significant number of listeners are familiar with is you know you have some pool maybe it's I don't know if to die and then uh as a as a liquidity provider I

can just put in if and die you know in equal proportions into this pool and then you know I get some trading fees based on you know the people trading and and then when the price changes right then kind of uh sort of it it will sell you know maybe even by die or the other way around so you have this impermanent loss to deal with uh but but of course the nice thing is as a user as a liquidity provider I don't have to think about I mean the decision is very easy right I just put money in there everybody puts money in there it doesn't really make a difference uh you know there's no uh maybe where the sophistication does come

in is understanding the risk you're taking understanding the impermanent loss and how to deal with that because that's not so simple and that I think is very confusing for people as well but of course we already have with unit swap V3 uh basically you know a big change where I think I can be like okay I'm gonna put money into this pool but now I'm gonna specify that you know I'm concentrating this liquidity on a certain price range and of course that already [Music] goes a little bit in this hybrid Direction no because uh it's it's now all of a sudden that decision is an

important decision you know where do you concentrate this liquidity if you know you concentrate it in the wrong place maybe your liquidity doesn't get used and you just don't earn any fees uh or maybe otherwise you take more risk so already is something that I think as a normal user you don't really know how to deal with this stuff right that's normal liquidity provider um so what how do you see amms in the future like how do you think that will evolve oh yeah I just want to like share some uh uh situation in ethereum first

because like uh obviously like device in ethereum is like heading uh uh to the Future uh so we can expect the future of Cosmos by like researching this ethereum ecosystem so uh like one year ago uh UNICEF version 3 launched and now if you can see this liquidity the version 2 liquidity is almost uh like done right now there is no much liquidity left and all the liquidities uh coming from version three and if you see this liquidity formation within uh all these pairs uh you can see that this liquidity

is like very dynamically moving uh so this is more like a very sophisticated strategy for liquidity provider to provide is liquidity with very frequent rebalancing of the position and like more more proactive liquidity providing methodology so um I think that uh even within this situation we also heard that uh Social Service launching also same thing which is called Trident which will be coming uh very soon and I think like in sushi sub also like this like new feature will

dominate all the liquidity because obviously it is more Capital efficient but like difficulties is not the reason for avoidance uh even all the difficult Solutions can be utilized by smart people and this can be better solution if it is more Capital efficient but uh exactly uh directly the retail users cannot use it or if you use it and then it will be very difficult to manage so that is also another fact so uh what what would be the solution and and just just briefly you say so when you say

Capital efficient what you mean is basically that uh let's say somebody wants to go and they want to trade then uh you know one one way to measure it I get is sort of the slippage of like you know how much does your trade does your price move uh away from the current market price you know a certain amount of money let's say you're trading ten thousand dollars worth would you define like the capital efficiency that you know Unison P3 you will need a much smaller amount of capital in this pool to basically provide the same kind of you know price

for somebody trading ten thousand dollars then in like unit swap V3 uh V2 something like that so I think we should Define the the word liquidity so the liquidity is not tvl that's for sure so uh that was like one of the biggest misunderstanding in uh device space and Dex area everyone is watching for tvl in D5 llama or like D5 plus and other uh uh dashboards uh having like tvl 1 billion great uh but it doesn't like prove all this utility because the liquidity and tvl is completely different within this

like modern D5 world so uh like uh this is liquidity should be defined as like uh when you when you want to trade a token without moving the price more than one percent or two percent and then how much amount you can trade so that is like uh in coin market cap you can see a liquidity plus minus two percent so this is like very basic approach to measure this liquidity uh because it uh it calculates all the amount of liquidity you can consume uh

immediately within this price range so this should be more like a measurement for the liquidity uh so uh from this point uh having same liquidity from smaller tvl means Capital efficiency so we talked a lot about like liquidity provisioning now um we also mentioned market makers can you maybe kind of detail what is the difference between a market maker and a liquidity provider and maybe what's the role of the market maker is in in Crescent yeah so uh because we are hybrid text

with amm and udobook at the same time we we it is very important for us to make a Synergy with these two different approaches so uh amm provides uh most uh robust liquidity uh uh also in a micro sense or a liquidity pool provides better liquidity in a very narrow price range which is like narrower than 0.2 percent or something so if you are swapping very small amounts then it will be very efficient to use this liquidity from amm because like amm is providing

liquidity exactly from current price uh to uh very near near the current price but this older book a market maker will provide liquidity are not very near the current price it will be a distanced uh from current price for about like 0.1 percent to 0.5 percent for the more volatile token it will be like one percent so uh there are some different aspects of liquidity provided within this micro liquidity area uh different uh distribution of liquidity and these different characteristic also so when you trade in uh amm if you trade one

time and then the price will move and then it will not come back until arbitrator trade back so if you trade again the and the price will be worse because you already moved the price so uh this is like inefficiency of amm but for the Autobook Market maker the market maker will provide the price and then if you consume it and they will replace the order again within with it at this exactly the same price again you can consume it again so I I call this rechargeable liquidity uh this is not the case in LP but the market maker can do this because they can hatch in other

market so uh this these are like very different characteristics for these two different liquidity and there should be a good way for our community and governance to decide and calculate the uh contribution of liquidity coming from different methodology and and measure this uh support of liquidity from different methodology and we need to like distribute our incentive wisely so that we can create this like very healthy competition between LP and audible market makers so that we can optimize this uh Capital efficient or

liquidity providing uh incentives it's probably a good amount of listeners you know have actually provided a liquidity before you know whether that was an uni swap curve Sushi swap or you know like osmosis very popular also in question right like so there's like many different places where people you know have kind of your normal people who are like okay I can provide liquidity what's you know what's going to happen with that is is there a future where you know normal token holder can still uh you know provide liquidity on these exchanges or do you think this will all be replaced by you know professional

sophisticated market makers that you know can just uh play this play this new game that's arising so I think great thing about blockchain ecosystem is that everything every different protocols can be connected each other without any trust assumption or uh verification assumption so uh everything can be connected uh very well uh with this code base only so uh if we can trust this algorithm then everything can be connected very well so I believe that even though the the management of

capital will be much more difficult in range liquidity uh concentrated liquidity world still there will be like professional fund manager participating in this uh Capital Management and like providing capital from retail investor for this fund so which is called we are calling this a managed LP so a managed LP is a fund operated by professional fund manager but invested by all this like my retail investors so uh within this uh minimal trust within this uh fund manager we can trust this manager to manage this uh Capital with

very restricted uh functionality within this decentralized uh tokenized fund so I think uh the future will be more like a ranged LP fund or operated by professionals but invested by retails so one of the example is called arakis in ethereum which is providing uh this platform for users so this fund manager has very restricted Freedom about how to manage this fund so it is quite safe for users to invest into because they don't allow any send find out all these assets within the fund only they can do is like

a minimal amount of swap or like uh changing the range of the lp that is the all the things our manager can do so I think um more of this uh functionality will be available in the ecosystem so I think uh retail investors can participate but the actual operation can be more uh delegated to professionals all right that's cool so we can remain being LPS in the future too it's good um so we wanted to I guess maybe switch topics a bit now we talked a lot about kind of liquidity in the context of this

stacks of the single Network now obviously the cosmos ecosystem as you mentioned already potentially will have like thousands of of networks and already has a lot of different taxes and um yeah maybe it would be interesting to to hear your thoughts how like you can aggregate liquidity across these different ecosystems and maybe add the role that Crescent plays in this story yes I think uh tax aggregator is one of the uh uh interesting topics to discuss also uh so uh I think in ethereum uh it is a transitional uh phase right now or like one inch users are trading maybe

more than uni sub front-end users right now uh so it's like uh this is like a golden cross of web 2 uh uh evolving to web3 so like web to web3 the definition is that when you uh when the Traders are locked into one front end which is uni swap then they cannot use utilize other liquidity coming from balancer or switches up or other uh products so you you are you're jailed into one website so that your backend is also jailed too so this is web 2 in our definition but when you use one inch then you can reach

out to all these taxes even like very early one because you don't need any Trust on this if if your shop is successful then any decks you can use because you believe in results not the that the service provider so uh one inch is more like a web 3 service provider who are connecting all these existing back-end uh service by one front end so uh this is like uh the change of service within web3 environments and unfortunately in Cosmos we are in web 2 like uh most of the users are locked in in certain decks and

they're they they are jailed there uh until now so we want to free them so when we want to free them there should be like a great Gator for Cosmos right and there are like several uh projects uh coming in like such as like Wrangle exchange but I'm looking uh deeply into a solution called uh Squid from axilla so uh the problem within this customer's ecosystem is that all these environment is asynchronous uh compared to ethereal uh ethereum is everything is synchronous but in customer speakers all these application is in different blockchain

uh this asynchronous or create problem of delay and uh latency of like uh trade execution so uh like uh especially like IBC transfer is really slow and unstable so we need to wait like one minute or more for this one execution of or trade uh with IBC transfer in it so if you use like Van Gogh exchange then sometimes it takes like more than a minute to complete a trade so this is not the good ux for users to experience so uh actual screen is more like skipping all these

this IBC transfer layer by utilizing liquidity layer so liquidity layer will do all this job uh full DPF of the users and then get this reward back from the users after the shop is completed so uh in this model they can erase all these like latency caused by interchange communication but only like if if there's a block confirmation coming in once in one second in Crescent and like another block confirmation in two seconds in osmosis then you can you do

this like interchange swap or within two seconds uh like a routing present and osmosis at the same time this is practically not possible right now because of this uh transfer between blockchain IBC transfer will take at least like several tens of seconds but if you remove this and this is like like matter of seconds so I think this solution can bring more practical sense of interchange uh text or creator uh because it removes all the unnecessary uh Delay from this so I think like IBC transfer is not a

dependent variable for a liquidity relayer and interchange swap functionality so like uh this uh we want to like work with them we are communicate with them uh so that we can provide uh this option for for the users our users does not know the benefit of this uh aggregator so we want to like promote this and marketing this so that users can use more of this aggregator or for themselves because of your sub price will be much better than use only one Dex front-end so uh within this environment ecosystem can be more

healthier because uh the competition will be not about marketing or business or uh front-end login but more like a more efficient liquidity more uh more uh cheaper trading costs and stuff so it is always good for users to have this like better healthier your competition rather than like spending a lot of money for marketing and the community locked in to one platform so we believe this like web3 world will open all these new environment for all these new taxes

like kucera uh say all these taxes are new but it is very difficult for them to attract uh new users but this aggregator will allow them to attract users or without marketing effort so this will be better for all this ecosystem so one question on this um and you maybe kind of touched on it but the you know one of the things that if you in in the cosmos ecosystem or in general right if you have things that are like cross chain is that you know you can't make these Atomic transactions that in ethereum

right like where you have some some transaction that you know like automatically does different things on different uh different you know using different smart contracts and you know everything works at once so how do you think this is like an issue when it comes to this cross chain Dex aggregation or like how is this what are the implications of this yes uh uh there should be some issues uh so uh relative sense um ethereum uh ecosystem is better at aggregating everything because this is synchronous and Asic synchronous

environment will prevent some optimization for users but still uh it is better than aggregating nothing so uh it is more like uh uh relative sense if you can do 90 and then still 90 can be quite good so everything is like very statistical so if you trade like 100 times and your trade is uh most optimal for 90 times and that is good utility already so I think like asynchronous environment can result in a non-optimal uh uh shopping route but still when you

achieve this uh for most of the time then the text of great gator makes a lot of sense cool does does it change anything so you mentioned that Crescent basically gets rid of frontrunning or Mev in the sense of like on the decks with the batch batches if we're talking about this aggregator interchain world does that change the equation somehow do you or like I guess how do you generally see Mev in The Interchange world on a high level Maybe uh so uh like uh there was some data coming from uh skip protocol about the

Meb uh situation within osmosis so uh uh they they had about like six million of profit from uh Mev trading uh so I think um it is quite uh large and when when our ecosystem grow uh the Mev problem will be increased over time with more amount of cap money uh extracted uh by all these like smart Traders but still I think um um um most update profit coming from osmosis right now is uh with uh this ustc uh which is like a older version of

OST uh from Luna so it is very like a restricted area of uh Mev execution uh because like most other pairs does not have significant Mev problem right now that is the uh what data is telling us right now so or maybe Mev problem is like overstated uh especially in Cosmos ecosystem uh where like uh gas prices much cheaper and uh uh like the D5 is much smaller than ethereum right now so I think uh it is a little bit overstated

uh and in interchange word still Mev can uh be a tool for extracting value but still I I don't think it is uh like preventing any core functionality or uh creating significant economic uh problem uh yet but I think uh it is it is very sensitive within uh very narrow range of applications such as like auction and trading venues like taxes so uh if uh in those uh application I think it is

better for our architect to build this application or in a way that we can prevent this uh from start so that we don't create a solid problem which does not need to exist so I think that is uh one of my uh philosophy okay yeah um definitely thanks for expanding that it makes sense to me I think maybe um I guess you kind of touched upon it um where you you talked about a little bit about uh UST uh just now that a lot of the Mev came from this now obviously that was

a big um event in the cosmos wider ecosystem the lunar collapse and as far as I understand also Crescent had like a Luna assets listed um you know maybe can you talk a little bit about how that impacted the crescent and and maybe also the lesson lessons you learned from that for Crescent as Dex but also yeah maybe the cosmos SDK or in general the ecosystem yeah so uh we we had a great lesson from this Luna crash uh one of the biggest lesson is that uh it is very dangerous for us to uh decide any

um canonical solution for any text related uh liquidity or tokens or Bridges or other Solutions because I think uh in Cosmos especially it is about variety and like robustness or resilience of the ecosystem it means that a minor project should be respected enough to provide this all this uh connection for the users so our philosophy has been strengthened from this uh in uh experience because even though the Luna was Tara was the one of

the biggest ecosystem system in Cosmos it just vaporized within one one week that is like how blockchain evolved and even for current status a very small project can rule the cosmos within six months that is also true so we we are more humble right now uh we don't believe in uh decision making like all these like uh centralized into one solution and stuff that is why we are providing incentive for both Bridges axillary and gravity Bridge because we are not sure anymore uh everything is humble but still small projects should

be respected within this like a variety of uh ecosystem uh especially in Cosmos that is the philosophy so we believe that there should be lots of different stable coins lots of different Bridges lots of different liquid staking in in one decks so like variety of choice will be our philosophy for crescent and we are going to pursue this philosophy to provide better uh more option to users but I guess the the downside of that being that I mean what's the argument the other argument would be that now you're you're fragmenting the liquidity and the users um maybe are confused and don't really

know what to use um do you do you see that problem too or uh on and if yes I guess how do you address that yeah so that is very interesting problem to solve uh so uh like for example if you have like a different kinds of stable coins then obviously the liquidity will be separated uh within one decks but still the liquidity is connected each other uh if you have like uh IST versus usdc from gravity and or usdc from axillary and then die from Gravity uh those like all of these like stable coins pairs are connected each

other so if we have this like multi-hope swap within feature so which is coming very soon in Crescent uh we the liquidity is connected each other so there will be like multiple routes you can take to have this best sub price so every liquidity is connected with these smart features so if we can you utilize these smart features or within the decks then or we can connect all this liquidity so that users can utilize this liquidity let me have one example so if you want to trade or a through to the token and you have like pairs with a

with b and a with c and then a b with d and c with d then you have two routes uh A2 b2d and F A to c2d and then you can utilize a routing through b or c to uh be result in D so actually you are utilizing boost liquidity so if you're uh if you're swapping large amount of liquidity then you will separate this um amount of swap into two route or ABD and ACD then it is uh just like a swapping uh a from from a to uh B plus C combined

to D that is like uh exactly same result so if the liquidity is connected each other very well then uh the separation is not the correlation one other thing we wanted to touch on I guess this ties into what we talked about uh you know in in the beginning uh you know that the hackathon within career together right which was around liquid staking uh I think back then there was like you know different different liquid staking ideas you know we had been working on this kind of Delegation voucher idea uh that you know we sort of also built on in Korea but you had another sort of other design for liquid staking and and of course liquid

staking is actually also one of the things that's you know built natively into Crescent I'm actually not sure if anyone else is built uh liquid staking you know into the kind of Base protocol like the way you guys have done so can you talk a bit about like you know how does liquid staking work in Crescent yeah so uh first of all uh way back in like 2019 uh I really enjoyed uh like brainstorming with you guys uh talking about different uh uh ways to build this liquid sticking problem uh and uh it was great uh motivation for us to study

further about this liquid staking area so we were researching uh different kinds of uh Solutions but in our uh Crescent the solution is not very Universal this is a restricted solution with some assumption which is uh called Lucas taking validator so we assume that there there is a white list validators who are participating in liquid sticking activity and they will separate the delegation power evenly each other so in this assumption Ricky's taking is much easier

we just distribute this all this power and then when you underregate then you you will just on delegate all this same power from all these validators and give it back to you so this is like very basic stuff and also when you have enough staking rewards accumulated then automatically in the end block uh the module will just re uh withdrew this reward and restake so this is a quite basic stuff but from this uh Innovation we we have more interesting to come which is called liquid farming so liquid farming is not very uh

Universal word right now uh there's no much uh application using these words or using this concept for D5 but it is increasingly uh important within this current Cosmos ecosystem right now so there are lots of capital locked inside uh LPS so uh like we um so users are are trying to reutilize this Capital but it is impossible for them to reutilize this capital for other purposes so for example uh if there's a pool with Adam versus a q atom which is

coming from Quicksilver and there will be like farming rewards coming from Quicksilver and Crescent so the APR are we required 30 like maybe or 30 or 40 percent and then the the reserved tokens are just Adam and and Q atom right and these are all atom actually so uh if you want to use it for like collateralized Landing then or you can receive all this farming and use it as a collateral to lend some uh stable coins uh but if you use a collateral for Q atom then uh the the sticking reverse is all you got uh

like farming Rivers will be much higher so uh this will be a good solution for users to utilize uh this like pull token as a liquid uh liquid farming solution so this is will be like a minted token coming from LP position but Auto compounding this farming rewards so liquid staking liquid farming similar concept with different uh purpose or Target to liquid liquify so liquid farming is liquefying the lp position so um this is another concept we are building I think like there's uh like

like next month we are going to launch this Okay cool so just so I understand that the liquidity position because you just have um there's not the range liquidity in in Crescent so basically you you every liquidity provider is the same there is no the as long as you provide liquidity they are fungible between each other and then you you were able to use that and um is that actually a stable pool or how do you like I guess is it using the constant Market the function is do you have different functions actually I guess we didn't ask this in the thing but do you

use is it possible to kind of utilize different um Curves in in Crescent for let's say stable coins versus you know just a constant product Market the one yeah so the ranged LP feature is uh just like Universe unisa version 3 uh utilizing constant product model so this constant product or formula will be used for shopping uh those two tokens or within uh predefined price range so our calculation is that when you provide liquidity within 10 percent range price

range then the leverage of liquidity will be 40 times so about so if you provide like um 1 million liquidity for Q item versus atom then it is equivalent to 40 million liquidity in osmosis so this is a 40 times a capital efficient uh so uh yeah that is how we uh form this arranged LP which is completely different from the approach coming from curved Finance curve Finance is using a different curve but range step LP is providing LP with the same

formula used in unisa version 2. okay so you predefined this range for this specific pool that's done by the team essentially and uh that's how you achieve the fungibility I guess but I guess maybe that goes a bit into detail but I I'm wondering because I guess the Q atom might accrue rewards as far as I understand do you have to change the the mid price there or the liquidity and and how would you do that yeah so like uh it should be manual uh right now so uh like uh we are going to provide like this is 10 percent

is like very practical range or Price uh because uh it uh Qatar means occurred emulating about like uh Max 20 percent of APR right now so in quarter it'll be like five percent so ten percent is like uh wider enough uh uh range for this pair so we create this uh pair and then after one quarter we uh create another pair and then we distribute farming to this new pair so uh people will migrate this liquidity into this pool and we are going to provide a front-end uh so that uh with with just one click they can

just migrate this liquidity to new pool so this is like a manual process right now but I now there are new approaches from this like um core Finance uh that uh the the price can be automatically uh the price range can be like automatically rearranged uh from this Oracle or like sub price uh past surprises so uh we are currently researching uh ways how to mitigate this so that we don't need to like uh constantly like uh like migrating this liquidity to New Pools so that is like one of our roadmap

um yeah I mean maybe talking a bit about roadmap in general yeah tell us like what what are the main you know the main Milestones that are coming up for you know questions in the next you know two years so uh um uh imminently uh like next month we are going to launch a farming version two with uh this uh liquid farming feature so uh in farming version two we allow uh farming distribution uh within uh token pair not token pools so uh because we have ranged pool uh with one token pair like like Adam versus B3 we will have

multiple pools already we have multiple pools but right now we are uh we are Distributing the incentive uh targeted to each pool right now uh but after farming version two we're going to distribute this incentive into this token pair Atom versus B3 and then uh from this uh liquidity contribution from each pool is calculated it automatically so that we can distribute these rewards in a very fair computation so that we don't need to decide uh a farming rewards for each pool but only for each

pair then each pool will compete each other for uh for the their liquidity providing so that is how uh unisa is doing right now uh so UNICEF if you see UNICEF there's like two pool kind of pools ethereum versus die with like 0.3 percent commission fee and then 0.05 percent commission fee and uh uh based on circumstances the trade is executed Within These two pools and they are these two pools are competing each other to provide uh optimized liquidity for the users so this is like same thing in farming version two so now farming

version 2 will allow pools to compete each other for the best liquidity they can provide so this is uh like imminent feature and we are going to launch also after swap after batch swap which allows multi-hope swap so like if you want to sub a uh routing to BC and then 2D then this will be allow allowed in our next upgrade so this is also in plan yeah we have uh several more um but that is I think like most imminent upgrade uh right now

um we are going to also launch like managed LP within I think like five months so uh managed LP will allow users to invest into uh LP fund so that they don't need to manage their position but delegate these to a professional fund manager so this will be also launched only next year cool very nice well uh thanks so much human for coming on it was really a pleasure to speak with you about you know Crescent and about amms and markets in crypto in general I mean this is obviously an area of

you know enormous Innovation enormous speed of development so I'm really excited to speak a few about it I think is also becoming an area of great complexity right that's like getting hot I guess like so many things in crypto right that's getting uh harder to like wrap your head around it for sort of the you know the normal crypto person so hopefully this was helpful also for a few listeners to like understand a little bit like where is this all going uh and you know how can people still participate you know so I'm excited that there's going to be this managed liquidity coming so that you know normal people can still uh still participate in all of this and so yeah thanks so much I'm excited

to see where Crescent goes and where it goes next and you know hopefully we can have it on again at some point in the future to you know get an update about how things are going yeah thank you for inviting me and looking forward to see you guys in Cosmos thank you see you soon and thanks so much for listeners for tuning in if you want to support the show make sure to leave us an action interview let us know on Twitter what you think of the episode share it and thanks so much and we look forward to being back next week