The Secret Weapon of DeFi 2.0 | Zeus from Olympus DAO

Transcript

hey bankless nation welcome to another episode of state of the nation super excited to dig into this david i feel like you and i have been on a journey a journey to understanding what the hell defy 2.0 is zoomerfi some of the kids are calling it is this a new trend is this a new narrative is there something more substantive to it we talked to jay from rory capital last week and i think that has helped shape some of our thoughts on this new exciting area in d5 and he said really part of the secret weapon of everything that's going on this next generation of d5 is this thing called protocol owned liquidity this is protocol owned value and i think we're going to dive into that in today's discussion david but who do we have on

and who are we what are we going to talk about today yeah we have on zeus the pseudonominous founder of olympus dow which has really pioneered this new primitive which is unleashing defy 2.0 question mark that's what we're going to ask and find out all about today and ryan man i love nfts but man i am waiting for a resurgence in d5 because like it's been sleeping it's been sleeping and defy i know it feels feels like home for me personally so i'm definitely into the concept of defy 2.0 and so yeah we're going to ask the questions why are why is this a thing is this a real thing how does it work and why is it cool uh and so we are going to unpack all of those things here today

with zeus the pseudo-anonymous founder of olympus doubt yeah i think olympus dow is like a poster child for all of this stuff too so like even maybe more so than rari capital these new token mechanics um and it's just raw unbridled token mechanics that's what makes number go up so we're gonna dig into that and see what's going on there with protocol owned liquidity and then also talk about the the olympus dow story because this has been a mega story this year and part of the research guys but before we get into it some announcements for you first we had andrew yang on the podcast okay ha recorded last week the episode went public on monday i hope you had a chance to go listen to it maybe if you've listened to it once go listen to it a second time i've actually david i've

listened to this podcast like i think one and a half more times and i picked up more sometimes you know when you're having the conversation it's hard to like focus on the questions and the conversation and like absorb everything but this is a pretty meaty podcast and um i learned a lot through reading andrew's book and getting his thoughts on crypto uh so anyway you guys will love that any other comments on that david yeah we followed that podcast up with a market monday i wrote yesterday called the politicians are coming which is basically the pitch as to why a politician might want to adopt a crypt crypto friendly base a crypto friendly policy platform uh and andrew yang i think is the first politician of many to really figure out that like hey like crypto can

get me elected crypto can like supporting crypto can do good things for my campaign i think he is the first of many get me jobs get me money give me all sorts of things i think the politicians are definitely coming it's protocol incentives teaching them to learn crypto and learn defy also guys speaking of incentives to learn things we have the ultimate guide to airdrops that is coming on the bankless newsletter next week it's been under wraps we've been working on it for a while but if you are interested in that you know airdrops are an incentive way to learn about crypto subscribe to bankless i think we're putting that out on tuesday i believe and bankless premium members get the entire um unrestricted access to the ultimate guide to airdrop so make sure you check

that out too that's coming next week lastly gotta give a shout out to our friends at pool together david what is pooled together man pull together is a no loss lottery it's a lottery where you put up some capital like in the form of stable coins or some other tokens but if you lose the lottery you don't lose your capital you so this is really cool everyone pools all of their assets together those assets earn interest in defy and the winner earns the collective interest rather than everyone else's money so it's kind of like a gamified savings mechanism and pool together has done a fantastic job moving on to the layer twos while also keeping all of their liquidity and their their

collective prizes even though they're fractured across the many layers all one single price uh and so they've also introduced some new mechanisms to allow for you know better odds for small fries rather than big whales so there is some small fry optimizations going on and if you don't like gas fees because who does you can go and check this out on polygon so they are live on polygon where you can deposit uscc usdt on polygon and enter the prize pool there yeah it's super awesome just the the feeling of winning a lottery without actually like risking your upfront capital without actually spending money uh really cool and this new version four they've got some whale proofing as you're saying david the layer two is

essential they're also giving out a million dollars in prizes so again some more incentives to use this kind of thing if you want to check that out go to bankless.cc pool together thanks so much pull together for uh sponsoring this and getting the word out david gotta ask you the question i asked at the beginning of every single state of the nation and that is this what's the state of the nation today sir state of the nation is evolving we are evolving into defy 2.0 allegedly is what we're going to find out uh but it feels like pokemon it feels like we've uh started at the charmander and now we are at the charmeleon phase uh the leaving room leaving room for uh defy 3.0 hopefully in a couple years uh but right now we are evolving from d5 1.0 to 2.0 all

right what's after charmeleon pokemon expert david hoffman charizard who who doesn't know that yeah did you not know that ryan no i'm not i didn't pokemon you did not i just want to say that out loud that's turning into a meme immediately after the episode guys watch david flamey on twitter for not understanding what a charizard is the evolution of a specific pokemon oh it just it's really staying true to the boomer ryan meme anyway let's get to the sponsor shall we and then we'll come back with zeus where we're going to talk about protocol own liquidity and olympus dow but just a moment for our sponsors first thank you arbitrarium is an ethereum scaling

solution that is going to completely change how we use defy if you've been using ethereum for the past 12 months you've probably noticed the high gas fees and the slow confirmation times that have been plaguing d5 too many people want to use ethereum and it doesn't have enough capacity for all of us that's where arbitrarum comes in arbitrary is a layer two to ethereum which means arbitrary can increase ethereum's throughput by orders of magnitude at a fraction of the cost of what we are used to paying when interacting with arbitrary you can get the performance of a centralized exchange while tapping into ethereum's level of security and decentralization this is why people are calling this ethereum's broadband moment where we get to add performance onto decentralization and security if you're a developer and you want to save on gas costs and make

an overall better experience for your users go to developer.offchainlabs.com to get started building on arbitrom if you're a user keep an eye out for your favorite defy apps building on arbitrom arbitrary has been working with over 300 teams including ethereum's top infrastructure projects and will be opening up to all users shortly there are so many apps coming online to arbitrome so you may want to pack your bags in preparation for the great migration to the arbitrometer layer 2. to keep up to speed with arbitrary follow them on twitter at arbitrom and join their discord living a bankless life requires taking control over your own private keys not your keys not your crypto that's why so many in the bankless nation already have

their ledger hardware wallet which makes proper private key management a breeze but the ledger ecosystem is much more than just a secure hardware wallet ledger is the combination of the ledger hardware wallet and the ledger live app and if you're used to seeing all of your crypto services and favorite device apps all in one spot ledger live is where you want to be not only does ledger let you buy your crypto assets straight from the app but it also hooks into all of the defy apps and services that you're used to using ledger live you can stake your ethan lido swap on dexes like paraswap or display your nfts with rainbow you can also use wallet connect inside of ledger live to connect to all the other defy apps that keep coming online defy never stops growing and the ledger live app

grows alongside with it so click the link in the show notes to see all of the defy apps that ledger live has and stay tuned as more apps come online and if you don't have a ledger hardware wallet what are you even waiting for go to ledger.com grab a ledger download ledger live and get all of your defy apps all in one space all right guys we are back with zu zeus is the pseudo-anonymous founder of olympus dow that is the o h m coin it is fully backed algorithmic free-floating stable asset it's competing as a reserve store of value it's called ohm as i mentioned welcome to all the omis listening in today that is uh what they call members of the

olympus dow community zeus it is fantastic to have you on how are you doing today i'm doing well it's great to be here well it's an awesome day yeah you know what we want to start with like um this whole defy 2.0 thing i think because this is a narrative and you know with crypto narratives um it's hard to understand specifically if there's substance to them or if it's all just pure kind of hype and narrative and i think there are some people who kind of see defy 2.0 as is more hype uh and less actual substance but we want to dig into it and one of the most i think tangible things we've seen is um this product this concept of protocol owned liquidity right protocol controlled value and i think olympus dow

really pioneered that but before we talk about that i want to ask the question about um i guess liquidity mining in the past uh because we're gonna have a conversation about olympus dow pro and the new product you guys rolled out but what are the existing problems with you know what d5 calls liquidity mining like in traditional liquidity mining because i think a number of d5 2.0 product protocols are kind of saying like traditional liquidity mining sucks has a lot of disadvantages what are those disadvantages yeah i mean so the the obvious big one is just kind of cost so i think it really depends on a protocol to protocol basis so you have some

protocols like ave where maybe it's not that big of an issue for them because their cost of liquidity is very low um you know for usdc or die they have to pay four or five percent apy and of that you know two or two and a half percent is paid in ave um for them it might not be uh anything that's particularly broken although the the nominal cost of that is still very high because they're incentivizing billions of dollars in liquidity and it's just lower it's just lower zeus because ave is so big and so popular at this point in time yeah yeah so it's just kind of a issue of scale um where you know if you have 20 billion dollars and you need to give them two

percent a year you need to pay out 400 million dollars a year um and the question is are you accruing back more than 400 million dollars a year to make up for that and make it a profitable like endeavor for the protocol i think that the easier case though is you know protocols that have a higher cost of liquidity so you know in d5 we've seen really exciting products that you know really can change the way the finance functions but there are these crucial pieces to them that can be really expensive for the protocol um i think that like alchemix is a really good example of this so you know i think it is pretty indisputable that the service that alchemix or alcomix

provides is like super valuable this ability to unlock future yield um is really cool you know people have really like gravitated towards that the issue for them is that it's very intensive on their markets and liquidity sets so they have to pay you know high double digits low triple digits apy to depositors to provide them with liquidity which makes the entire system work so if they don't have that liquidity the whole thing doesn't work but it's this issue of if they are paying that in perpetuity you know it's very difficult for the the economics of the system to work um just because you have this high cost that doesn't really lead anywhere um so you're paying it today

and the system works today but tomorrow you have to keep paying it or also liquidity goes away and the the protocol doesn't work anymore so in those scenarios i think that it makes a lot more sense where this protocol that's already spending a lot on liquidity would just buy that liquidity um you know they need it for the protocol to function so without it you know this is crucial piece and so by purchasing that liquidity you pay a high up or a higher upfront cost but that is now accrued to the protocol owned by the protocol and will exist and provide value to the protocol in the future like in perpetuity um so you turn this like high burn perpetual cost into a one-time cost that then provides

value in perpetuity and you know facilitates the the protocol and also you know can accrue like you know fee value where where once you were paying now you are being paid so i kind of flip this model on its head i want to talk about that flipping at the model and dig into sort of the protocol owning the liquidity and in the protocol buying the liquidity um but you know before we do maybe just give us a quick history lesson david maybe you chime in here too in case i'm missing something but like you know in the beginning there was defy and we had some liquidity right but we had no liquidity incentives right so we had like a maker dow we had you know swap these things didn't have tokens

and then last year man it seems like five years ago but it was really just like a little over 12 months ago not not not too much longer may 2020 or so compound comes out and they say we're issuing a token called comp and the way you earn that token is by giving the protocol something it wants and the protocol wants liquidity so you put liquidity into you put b when we say value when we say liquidity we just mean like value like collateral you push money into the protocol and in exchange for doing that we'll give you an allocation of comp tokens and this kicked off defy summer 2020 which was very much a yield farm type summer right and then what we found is

like some of these yield farms persisted but some of them were were somewhat fleeting and then what do you call it the the roller coaster david the euthanasia roller coaster where you go kind of around and around and around and it gets worse and worse and worse and eventually like you die through all the spirals and so the farm seemed to get worse and worse and worse we started to see the the issues with uh yield farming uh and then there's been somewhat of a lull i think in d5 right and lots of maybe reasons for this but now what's resurfacing i think with the olympus downs from these d5 2.0 protocols is this new idea which is not liquidity farming like we're just shotguning and spraying uh tokens

everywhere but protocols will start to own their own liquidity this is this is kind of the trend that we're seeing new liquidity types of designs david i don't know if you'd add anything to that or if i you know missed anything in the history there yeah the whole concept of yield farming uh has it has many edges to a sword to a single sword for something like compound it really needed to find a way to distribute its token out to many many people and so yield farming was one of the ways that it would do that but there the needs of compounds are not the same needs of many other protocols and alchemix is a great example where alchemix doesn't necessarily need to distribute out his token as much as

compound does it needs liquidity for liquidity sake whereas compound really it was a distribution mechanism and a distribution mechanism when it comes to yield farm is like another way to say that is like just you know allowing people to sell it right a great like one of the main features that bitcoiners talk about bitcoin mining is that because bitcoin mining is intensive it forces miners to sell their tokens and allows for an equitable equitable distribution um so that's that's nice if that's what you want not all protocols want that some protocols just need liquidity and they want people who believe in their protocol to buy their token not not farm it and so when you were talking about that euthanasia roller coaster of just

farms forking farms forking farms a lot of them ultimately died because of what i like to call liquidity locus in that people with a bunch of capital see a bunch of eight high apy yield farms they come in and then they farm that thing to death and they aren't farming that uh system because they believe in it they are farming it because of the high apis and so they consistently sell that token because that they're they're taking the the risk of being the liquidity provider uh and then they're receiving the tokens as rewards uh zeus here calls that like renting liquidity because protocols are issuing a certain amount of their token per uh per time in order to incentivize liquidity to come

and so as soon as you stop incentivizing that liquidity to come the liquidity goes away uh and so you we are renting liquidity in in like deep 1.0 with liquidity mining uh and but it's not actually rewarding believers it's not actually rewarding people who want to own that token because they are just farming the thing to death uh and so the this concept of protocol owned liquidity is going from like a liquidity renting model to a liquidity owning model it's the difference between like renting your house for the rest of your life or just having a one-time upfront cost of purchasing your house and then you don't have to rent it anymore and in fact you can actually rent it out uh so it flips its model that's why zeus here says it flips the model on its head zeus did we

get that right and is there anything you want to add yeah no i think that's spot on uh one thing that i would add is just i think that like the the token distribution aspect is really important um the thing that i think liquidity mining like gets wrong in that aspect versus you know something like bitcoin which is a similar dynamic is that in liquidity farming like setups the depositor who's earning those rewards doesn't actually have to take any exposure to the asset that they're earning um so they can kind of live agnostically from the success of the protocol that they are deposited into you know there's this piece of you want the contracts to be secured so

the risk that you're really taking is you get rugged or there's a smart contract issue and you lose funds but especially in the case of like you know these spin-offs where you just have like a fork of whatever that everyone knows is secure you're not really taking any risk deposited into there and they're giving you their token in exchange um and so it's this kind of like extractive setup where you are not actually taking any of the downside but you're taking all of the upside of the network um so in the case of bitcoin mining you have miners who yes they they're earning these you know bitcoin block rewards and they're selling them to you know maintain their operations but they had to do all this upfront cost to

set up that operation and they're exposed to the bitcoin network as a result um in the case of like you know olympus or olympus pro um you are taking exposure to the asset that you you bonded for um you you've taken some of the risk of that network and so everyone's incentives are a lot more aligned you know you're not doing this activity just to predatorily you know farm and dump because you actually have to take exposure uh so maybe you are doing that but at least you're taking on some risk in the process versus just having like free loaders that earn all this token they take no risk they just dump on everyone else um and they don't really provide value beyond the time that they are deposited and doing so

so it's like in crypto there's this classic there's like there's mercenaries there's uh tourists and there's settlers right so you settlers being the holders the old style of liquidity mining we're just kind of spraying spraying this in a liquidity farm it's basically it's just mercenaries uh that like you're incenting mercenaries people just to come not hold they're not creating a home there they really care about your asset it could be any asset as long as you know they they can sell it and get high apys but i want to ask so i want to ask the question so i understand that this is more this this idea of protocol owned liquidity is rewarding holders and incenting holders rather than kind of the mercenaries so

the settlers not the mercenaries but what do you actually mean when you say protocol owned liquidity that part might not be clear for listeners like so how does the protocol actually own it what are the what's the underlying mechanism here yeah so it's essentially uh we brought this to market it is essentially a token swap with the protocol as your counterparty so instead of the protocol just distributing out tokens for free um and using that as like a token distribution mechanism because i think that's like super fair as like value in liquidity mining is that you distribute your token out but

rather than just give it away for free it takes in assets in exchange um you know it might provide a discount so you're incentivizing people to trade with the protocol instead of the market but you know instead of just handing these out it's taking out house or taking assets back in return that then strengthen the network um in whatever way you know is suitable to that network let's unpack that a little bit more and i want to i want you to zeus check my thinking as i go through this so just just to recap with traditional yield farming the yield farming that comp gave out you put in liquidity into the system and then you receive a regular distributions of the tokens with d5 2.0

instead what happens is that the users of the would-be yield farmers instead of in instead of providing liquidity into something like unit swap or sushi swap and then when you do that you get a token back your deposits your lp tokens then in traditionally in in typical yield farming you take those lp tokens you go to the protocol and you stake it and you're just basically showing the protocols hey i have deposited liquidity i have i'm showing you i've deposited liquidity by putting in your contracts these contracts then issue out dividends which is the renting liquidity model instead what you're saying is you can actually purchase uh purchase liquidity off of the of you can purchase the lp tokens or you can create them yourselves

again by just supplying liquidity to unit swap or sushi swap but then you go to the protocol and instead of depositing it into a smart contract to farm instead you sell it to the protocol and the incentives that the protocol are are for you to do that is that it gives you the protocol token at a discount uh and so if like you have having a thousand dollars of token xyz paired with a thousand dollars of eth you have a a position in sushi swapper uni swap that has two thousand dollars worth of net of net capital you can come to something like olympus olympus dow which does this program or something that uh taps into this primitive and olympus dow

will purchase that two thousand dollars worth of liquidity from you for something like nineteen hundred dollars or eighteen hundred dollars some sort of discount so there's the incentive there um and then and that is where this goes from uh kind of a one-way uh just farming to death system towards the actual protocol receiving lp tokens receiving its own liquidity and the protocol owning the liquidity that's where the the phrase protocol owned liquidity comes from is that all right yeah so you you end up with a pretty similar like end state in that there's liquidity and there was tokens that were distributed but the liquidity ends up owned by the protocol um and the

the depositors end up owning like the protocol token instead of half and half for liquidity so olympus uh when you guys do it you guys actually have a bonding mechanism so you get um you offer again these are random numbers that i'm making up you offer uh to give out somebody somebody who wants to sell you uh lp tokens they want to sell you two thousand dollars worth of their lp tokens and you will give them i might have messed this up earlier if you want to the user wants to sell two thousand dollars worth of lp tokens towards the protocol the protocol will offer two thousand one hundred dollars for those lp tokens but then the protocol asks for like a five seven day like lockup period so you don't get that arbitrage

immediately uh can you explain why that mechanism exists yeah so if you provided just a pure arbitrage immediately um you know you just have a race to the bottom so you need this time defer or time deferral so that you know these things can space out and you don't just have it run into the ground i guess i will note that the protocol doesn't know what it's selling you or like the price that it's really quoting or it doesn't have a price that it decides to quote so essentially the way that it works is that you start with some price and then it just ticks down until someone decides that they want to go and buy that bond um so

essentially like the protocol doesn't care it's all placed onto the market in terms of how it actually prices it um so let's say you know it's a thousand dollars worth of lp um it's offering uh a thousand fifty dollars for that lp maybe people don't wanna take that um you know that's not enough for them and so that price will continue to tick down until now it's offering 1100 and someone decides yes i want that um and so they decide to make that trade and as a result each time you do it will bring the the price back up um so you know it was previously quoting eleven hundred dollars for it now it's quoting 900 and then over time that'll decrease back to par and then back to 1050 and 1100 until someone decides to make that action or

action again so i think that there's also this really cool dynamic of price discovery um attached to that where you have the secondary market that is pricing the asset based on you know like market behaviors um but in a different form than like a traditional two-way amm um that you know i i think on that on its own brings value as well so correct me if i'm wrong but so if there's like a seven day lockup or ten day lockup it's really pricing in the loyalty of the user who's willing to take that um that unknown amount of price risk over that like seven days of time maybe maybe if it were like a two-day lock-up period where you don't get to pocket that arbitrage for two

days you're not really incentivizing that much loyalty only two days worth of loyalty but if you do it for seven or nine days or even longer you're really incentivizing loyalty because not only are you uh you know asking people to maintain exposure for at least nine days but the longer it goes really the more and more this mechanism really self selects for people that believe in the system in the first place would you say that's true yeah definitely um and in an efficient market yeah the the discount should just be whatever the market did or dictates as like the required illiquidity premium so what do i need to get paid to be a liquid for this amount of time nice so the net the net of this zeus is

that the the protocol literally its treasury its balance sheet literally becomes composed of all of these lp positions right like lp positions in sushi swap or lp positions in in uniswap like they become rather than owned by sort of these mercenaries temporarily they literally become owned by the protocol which is probably why we get the you know protocol controlled liquidity so first of all is that true and then what does that mean for i guess the balance sheet and the treasury of uh of some of these these types of this new mechanism is is this a good thing why is it a good thing for the protocol to own its own uh

liquidity so definitely true i would say that the benefit is in like the power of kind of compounding growth so in the case of liquidity mining or you know like i like to call it renting uh you have kind of like flat uh incentivized liquidity over some amount of time so if if what people demand in terms of incentives remains the same over time then if you are incentivizing the same amount like you know 10 000 a week you're gonna have the same amount of liquidity in perpetuity right if you are purchasing that liquidity as the protocol your liquidity is only growing you know whatever liquidity you already

had you have and whatever you're adding you're adding and so you have this growth rather than like a flat kind of renter model you have a growth you know ownership model um it's pretty much the same dynamic that you see in just like owning versus renting in general um so like you know houses are a good example like home equity um you know if you're a renter you don't see any of the benefit of you know the housing market appreciating if you're an owner you do uh it's a similar dynamic to that where you're the protocol is retaining the equity the liquidity that it's you know accumulating is there something to say here about re-aligned incentives when a protocol owns the liquidity rather than other

humans and famously there's always the meme of pool two there's pool two risk pool two is always the most risky pool you the if you are farming in pool two you're risking being dumped on by other humans there's a little bit of alignment there it kind of feels like a game of chicken like which pool 2 farmers are going to dump on other pool 2 farmers but david for pool 2 for people who aren't familiar with pool 2 what is that that is that's the traditional yield farming mechanism where you deposit usually ether plus a token xyz into a staking contract and so you are paid to provide liquidity which can have bad incentives if you are paid to provide liquidity there's if somebody if

we want to take the example of a malicious actor a malicious yield farm somebody comes in with a yield farm spins up a website spins up a yield farm and and then they intend to incentivize some insane apy for everyone to come and purchase the token so they can provide liquidity so that this malicious actor can can dump on all of these people that are now being paid for this person to basically allow them to sell them at token xyz for ether right he's just paying other people to incent in to provide liquidity to them so they can dump so that's because it's a human to human interaction and again we're trying to build trustless protocols so zeus is there something to talk about like where we see a protocol purchasing the liquidity and a protocol like if we can see the see what protocols do we can

verify the code we can see like is this protocol literally programmed to dump on me or is it not and if a program if a protocol is not programmed to dump on you which again like the community would find out pretty damn fast if it if it was do you think that actually reduces this whole like lp risk because it's the protocol that's the counterparty rather than another human yeah 100 too um i think it kind of comes down to like the the pool 2 model is inherently adversarial so you know just to kind of go over like how these structures work so you generally have a like a pool one which is you deposit usdc or ether something um the protocol needs you to do that so

they can offer fixed income product or whatever um then you have pool 2 which the protocol is incentivizing pool 1 with its token that token needs to have value to have any value as an incentive right you know you need to be able to pin this is worth this much and so that's why i want to do this activity someone needs to create that market for that token so that it has value so you have pool 2 which is you deposit this token plus ether generally uh we will incentivize you with more of that token to provide that liquidity the the issue in this structure is that you have an adversarial relationship between kind of three parties so you have the token holders um

they are you know reliant on the pool two uh you know providers to provide liquidity so their token has value they're also reliant on pool 1 and pool 2 that they don't just farm and dump all their rewards because that's going to depreciate the token you have pool 1 which is reliant on pool 2 to provide liquidity so their rewards are worth something and then you have pool 2 which is relying on kind of everyone to not dump um you also have this dynamic with pool 2 where you know if you are someone who's farming this or you're holding it um anytime that someone buys or sells they're buying or selling from the pool 2 providers so they are the ones who pay you when you sell that governance token

um they are the ones who sell to you as well when you buy that governance token um but you create this dynamic where you know pool 2 is the one paying everyone out and so pool 2 doesn't want to pay you out you know they want to get those rewards they want to sell those rewards themselves and they don't want you to sell them um so kind of these parties are all at odds you know their incentives are not aligned with each other they all have different goals and one of them achieving their goals generally is against the goals of the others versus so if you replace that pool 2 component with the protocol the protocol should be happy to pay people out you know its goal is to facilitate this market it's not really

to uh you know it doesn't care about when it gets to pull out its assets and you know how much of the the pool 2 incentives they get to dump on everyone else um where you know you get these situations with pool two and uh schemes where like one liquidity provider pulls and then that triggers someone else to pull because now they're like you know most liquidity and they don't want to provide they don't want to uphold this entire market you know uh one guy is not incentivized to uphold the entire market of a protocol the way that a protocol might be you know so the protocol protocol's only goal is to sustain its own like markets or whatever it's doing so it is happy to play that

role versus an independent third party might not be um it's kind of this level of like being willing to take like uh impermanent loss risk and like especially in the case of like not needing to be incentivized so that you know the protocol doesn't need to be incentivized to do what's best for the protocol um you know there's this like you know imagine if everyone just like uh kind of what's that what i'm looking for generously supported protocols just because they wanted to see them succeed um you know you don't ask for any money in return you you're willing to take on

downside just because you want to do well uh it's an unlikely like dynamic for any individual but for the protocol you know that's all it's there for you know it doesn't need to be paid to do that just because that's what it's important it's funny i mean the protocol already has all of that risk anyway right so yeah you know yeah okay so so here's my big question right so zeus you've made the case that this is uh this is a better mechanism right and i guess my question is so why doesn't everyone do it why don't literally all of the d5 protocols right now switch to this new mechanism right and any protocol that's offering a yield farm yeah any of them right so yield farm was a you know less good mechanism we've now

created this better mechanism that aligns the parties why doesn't every single d5 protocol out there go and implement this or do you think they actually should and they just haven't yet because this is new are there any downsides are there any trade-offs here that um we've left out yeah i mean so it's definitely just why does anyone ever rent anything because it's cheaper in the short term um you know when you buy something you have to pay more for it up front um and so that can be kind of a deterrent and it also creates like you know maybe in some situations uh it doesn't make sense for protocol to do this so like you know going back to avid uh you know if they're paying two percent a year for their assets probably doesn't make sense for them to buy them because you know

that's 50 years worth of incentives you know the the risk of reward there is probably not on their side so you know it doesn't make sense um can i can i just zone in on that really quick so again why is it more expensive right like why why why is it more expensive up front to buy this for the protocol mm-hmm yes yes fill me in on that let's say you're trying to incentivize a hundred million dollars in liquidity and the market is demanding that you provide fifty percent apr for that so over the course of the year you are going to pay 50 million dollars worth of your governance token or 50 million dollars worth of it today uh you know how much that's worth at the

end of the year and how much you actually have to pay is determined by you know how things develop over time uh so if you were to buy that 100 million dollars worth of liquidity you need to like utilize 100 million dollars worth of your token today versus in the the incentive model uh it'd be like a million dollars a week um so you know you're doing 100 million up front versus a million a week in perpetuity uh so you know you have this higher upfront cost that can make it difficult as a like i think that pool two and you know incentives remain this really good bootstrapping mechanism because you can go from zero to 100 million in the span of a weekend um you

know with with incentives that are enough to you know bring people into the door uh but especially you know if you're paying 50 100 apr you know some some farms do you know more than that like in our case we have to incentivize liquidity providers with like 500 um you know it definitely makes a lot more sense to just kind of bite the bullet over the short term uh to have this one convert into less cost because there's a point at which you now no longer need to incentivize anything and you can even stop purchasing it um and two you convert it into a productive asset um so liquidity is you know by far

some of the more or most productive assets in the space um you know most pools provide at minimum like 10 apy can get up to 30 40 50 percent um and that's all passive you know the protocol can just leave it in the lp and it makes money uh yeah so it really just comes down to that short-term cost um as why it kind of becomes difficult um i'll talk about this more later but i think that that's where you know olympus kind of steps in um and makes this model better for everyone so so do you think then and i know you guys have just released this olympus pro type product maybe to uh to release this as a primitive that could be used by other d5 protocols but do you think the

model right now is is skewed for d5 protocols far more towards like renting rather than rather than buying and do you think a lot of d5 protocols today would be far better off with this kind of protocol owned liquidity model and they should start to explore it they should start to adopt it you think there's a lot of room for growth here yeah i think that on the like industry level perspective like uh bonds and like protocol and liquidity make more sense than uh like the renting pool 2 model so it doesn't apply to everyone like the the blue chips i would say are the most immune um but on a larger scale i do

think that like most of them would be better off just accumulating their own liquidity and then owning it one thing that's pretty neat about this mechanism uh when a protocol owns its own lp shares is that protocols they all they all do something they all have a business model they generate revenue via that business model but now if they own a bunch of lp tokens a bunch of uh you know liquidity tokens they are also accruing revenue from fees from uniswapper or sushi swap so is there something to talk about there zeus about like how this might be an alternative fee generation mechanism for protocols and how might a protocol use this uh new source of revenue yeah so you're adding revenue which is

great like which is great so if you look at d5 protocols as businesses um which you know there's some pretty good case for uh you you kind of have to look at both sides of the of the balance sheet so you have revenues which you know what is this what is the productive activity accruing back towards the protocol and then you have expenses um generally that expense is the the incentives that you're paying out um i think that what this really addresses is that if you look at pretty much any protocol their expense side is way bigger than the revenue side um you know they're paying a dollar in incentives for 10 cents in revenue uh

and you know if it's a bootstrapping thing if this is you know like amazon is a great example you know they lost money for 10 years before they made a dime um and you know it worked out you know amazon is just goliath now and they make more money than they could you know do anything with um but they use that high burn as a bootstrapping mechanism to get an infrastructure in place that they own the stack and now they make a ton of money because they're like vertically and horizontally integrated into everything if you're not working towards anything then you just have this scenario where the protocol loses money and there's no like real path towards

profitability um it's kind of the uh you know it's not super surprising because that's like the tech model at this point is that you have these like vc-backed goliaths that don't make any money never will make any money and the only real point is that they ipo and are worth something in a in an equity sense but the actual equity on the balance sheet is negative uh you know we shouldn't be trying to build systems where the the system just loses money in perpetuity for kind of no reason and then how about when the token price of the relevant protocol like doubles or like is the protocol successful and then the price of the token goes up um now

the in this model the protocol owns a decent proportion of its own token and so when the token goes up in theory they are actually the protocol is actually pushing ether back into the liquidity and defy because of of impermanent loss right the token price goes up and so people are buying the token by no excuse me uh the protocol is absorbing more ether and it's distributing its token back into the into the ecosystem because of the dynamics of uh l ping inside of unit's top or sushi swap how does it change when a protocol owns its own stake in its own token have you thought about this yeah so you actually because the protocol is the one

facilitating the market when people are buying the protocol is accruing all of you know if it's eat that it's paired against it accrues all that eth that goes into the pool so it owns the pool there's now more heat in the pool the protocol now owns a more east um so the protocol is more capitalized so you have this you know situation where like you know what's good for the holders which is generally you know appreciation is also good for the protocol you know it's getting something out of that it owns more because of that um kind of everyone wins together and you have this like situation where everyone's incentives are really aligned towards the same goals instead of you know all kind of having their own independent goals that you know may or may not align with each other

so zeus can we talk about this because this is a product i believe that um you're rolling out um let me just share my screen here uh this is olympus dow pro right which is different than olympus dow but what you're basically taking is the uh the protocol owned liquidity model that olympus dow pioneered we'll talk more about olympus dow soon we're taking that and you're exposing it to other d5 protocols so they can they can use the same mechanism so what are we looking at on this dashboard here are these other d5 protocols that are are creating their own

you know protocol owned liquidity type markets and how does this work yeah so this is our first cohort for olympus pro um so you can see on the left that is the payment token so you know in the first case you would acquire foxy unilp then you would take that to this page um you would get you know that one is actually sold out so we'll use the frax wrapped slp it'll pay you back fxs for that liquidity um you have that roi there is the discount that it's providing so the market price is 576 and it'll sell it to you for 5 20 or 42. um you would you know click bond there uh you approve the lp to get transferred

and then uh basically you you repurchase fxs at that discounted price over the course of i think in their case it's two weeks uh your fxs will become available to you right when you create it the frax protocol now owns that liquidity um and you can see that they have purchased about a quarter million worth of liquidity so far and that's it that so is this open to basically any d5 protocol now to set this mechanism up or you said a first cohort um are you kind of selecting some projects yeah so we're kind of phasing it out um so right now we're doing cohorts uh we have cohort two i believe

quite soon in the next couple of weeks um with the goal of i think by end of year being permissionless and open um we're definitely like learning things as we deploy this for other protocols um that we want to kind of have in place before it's really just open to everyone and what is the benefit to olympus dow for you know you know creating olympus pro as a primitive is there is there any benefit are you guys providing this as a like a public service um so there's two main ones so one we take a fee uh that's paid in the governance token of the protocol um and we don't really have any intent of like selling that basically what we want to do is have upside in these projects in the line of our align our incentives

with them so when they win we win uh the second is that you know kind of going back to what is the drawback of this model you know that that higher upfront cost um you know what we want to push is that you can kind of see so every single one of these pools is paired against me uh and there's this question you know so they are driving demand for eth in this relationship um they are bringing eth off of the market they're paying for it to bring it into theirs um and there's this question of kind of what does eth give back to them for that relationship um so you know ether is a very large and capitalized asset you know it's very ingrained in this space but it the reality is that it doesn't do a lot for you as a protocol or an individual you

know the the the modus of responsibilities entirely on you to pay the cost of that um what we want to do is start getting these pools to be paired instead of against eth um against ohm or against gm which will be you know our governance uh on chain govern token um through that you know we on our end already are accumulating liquidity and you know assets and paying for it with home um they are doing the same now and if they're paying for it and sucking in home you know it kind of makes sense that we would do the same for them you know it's an activity that we're already engaged in and if that can be a mutually beneficial one

let's do it um so you know we we see it as kind of a way to expand the utility and use of ohm uh kind of on a protocol level where you know because we might be willing to offer bonds on like the frax geo pair um or actually we have a fraction pair that we we own you know 30 million dollars though um but because of that the cost of capital for these protocols diminishes um so instead of having to pay that entire cost we are now paying some of it too um and we're reducing what they have to pay and so it makes this entire proposition a lot easier because you know instead of having to pay x number of months or years worth of

incentives for this you know we cut that in half or we cut that you know to a third or something um doing an activity that we're already engaged in anyways so it's very much i see as a win-win seuss a lot of people in the youtube chat are asking about why some of these have a negative roi percentage can you explain why that dynamic exists yep um so these the protocol or the the bond mechanism does not look at the price of the actual market it has no idea what the what the asset actually trades for um it has an internal price that is separate from you know anything else it's like its own pricing

and basically what it does is you know for the alkex east pool maybe it starts at uh 360. and over time you know no one buys that it'll just keep decreasing the price so it's kind of like a dutch auction um price keeps going down until someone decides they want to buy that bond um at that point when it receives that it just takes the price off um you know there's math involved here and i won't like get into it but price raises now it's higher and then it just starts ticking down again and it ticks down until someone buys it back up um so when someone buys it it kicks that price up and you know generally what you'll see is it falls into a negative discount

where now that price that it's quoting is higher than the market price and basically all you have to do is just wait over time it'll decrease until it's a discount and then it's enough of a discount that someone buys and brings it into the negative territory again so at that spell which is clocking in at like negative five percent roi does that imply that somebody just like took a bought a bunch of that that bond and they are now uh and now that the spell roi is just negative five because somebody recently bought a bunch yup i would imagine if you looked at the chain yeah you would see that someone just bought a bond that was large enough to take the discount from positive to negative so zeus i'm curious as we kind of close

this section and we've got more questions to ask you on the other side of the olympus dow but like we we started this whole conversation um under the uh i guess the label of defy 2.0 and so is this what defy 2.0 is basically what you know what we're talking about um is it is it just protocols that start to this new generation of protocols that start to own their own liquidity is that that a core piece of it is that the only piece of it what do you make of this whole defy 2.0 moniker in general yeah so i think that the name kind of came out of nowhere and has really become pervasive very quickly um but yeah that's kind of how i see it is it's protocols that are

geared towards longevity and then get a baseline so focusing on things that accrue long-term value towards the protocol and less so on single point in time activities um and i i think it's a natural conclusion of just you know d5 you know you touched on at the beginning this you know e5 is pretty much only like a year old in a real sense um you know may last year was really the kick off of all this um and we we've had this kind of journey of you know incentives enabled all these products to be built um and you know become usable and we've realized in the past year that the structure under which that works doesn't work that well um

in terms of like capturing the upside of that protocol um so generally if you want to do that you're the farmer that's dumping on everyone uh so i see d5 2.0 is really geared towards aligning incentives between the facilitators and holders facilitators of the protocol holders of the protocol token towards long-term success that's great so guys we're going to have to cut for sponsors and we want to thank the sponsors that made this episode possible when we get back we will be talking about olympus dow i think it's a case study maybe an algorithmic stable coin that's trying to become a store of value trying to become a money that is

based on this protocol-owned liquidity incentive structure we've got a lot of questions about that including some hard ones on whether this is a ponzi scheme or something else possibly game ponzi games ponzi games yes on the game but before we do that we want to thank the sponsors that made this episode possible alchemix is one of the coolest new defy apps on the scene it introduces self-paying loans allowing you to spend and save at the same time deposit the die stable coin into the alchemics vault in order to get an advance on the interest it generates borrow up to 50 of the total amount of your deposited die in the form of al usd stablecoin here's the craziest part the loan pays itself back and you cannot be

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year like i don't know what it's uh marquee cap is right now it's like two and a half billion something like that from basically nothing um from you know from scratch and um this is described as kind of an algorithmic stable coin i know it's like partially backed it's also free-floating can you talk to us about why this is going to be successful where other algo stable coins have failed because zeus we have been scarred i think in d5 by failure after failure after failure of these types of monetary experiments they get to a certain point and they all eventually blow up some of them don't even launch but the ones that do launch they tend to like you know crumble away

and die in bank runs and all sorts of other things why is olympus dow different in your mind yeah so the first one is kind of easy so we're not trying to be a stable coin um we're trying to build a currency so the goal is that in the long term it is stable and low volatility but you know the goal is not to just trade at a one dollar peg um so that's one of the first issues with you know those uh previous models was that when you try to peg to one dollar you and you're reliant on you know market behavior to facilitate that uh

you create this dynamic where everyone's confidence in this is derived from it holding one dollar um so currency is all just a confidence game at the end of the day um you know whether people believe that this monetary asset has value dictates whether it has value and you know if you have the scenario where only when it is worth this amount does it have value then the second that you deviate from that you can very easily collapse and that's kind of what we've seen with every previous uh like experiment is that it works until there's one moment that it doesn't work and then in that one moment everyone decides that it's over and they need to get out and then it you know it becomes self-fulfilling

uh so it's hard for them to kind of recover from those situations so in our case you know we don't have a peg there is no correct price and so you remove that dynamic of deriving confidence from it trading at exactly this point that's the free floating aspect of this um the other one that i think you know we we have an advantage over um you know those previous models is that if you're relying on third-party behavior and like incentive structure which all these algo stable coins have been um you have to pay for that right so you need to pay third parties to go do something otherwise they're not going to do it because what's in it for them um that cost is a cost on the market

and there's kind of this question of like okay what are you accruing for that cost and the answer is kind of nothing you're you're accruing that holds this peg for this exact moment in time so you're just paying money to maintain like a steady state it's like running on a hamster wheel and you hit this point where you know there's not enough coming in to really sustain that anymore and so you flip to the other direction and because everyone is deriving their confidence from holding this one number once you know you flip in the other like from growing to shrinking you know you're you're at a very high risk of just full-on collapse as people realize that they're not going to make more money in this and so they they jump out and leave um and that kind of like

turns into a race at the bottom um you know in our case the protocol is accruing assets as a result of you know disincentivized behavior um so everything accrues value towards the protocol you are you are creating tangible value in the protocol that persists no matter like you know someone was participating yesterday and they're not today that doesn't matter that value's already there and it's not going anywhere um and so you're actually building towards something you're you know accruing something that has long lasting benefit um which you know i think definitely aligns people's incentives at least towards having longevity and building towards

you know a longer term vision than just trying to you know keep up with the treadmill deuce can you elaborate on the currency branding because i could see a a parallel universe where olympus tau is exactly the same but instead of having a currency branding maybe it has a fund branding because as i understand it olympus dow is a mechanism it's a system of smart contracts that incentivizes depositing collateral deposit depositing assets into the smart contracts and then it has this ohm token which is loosely valued based off of the total deposited collateral um and so it's kind of backed by the collateral but in the same way a

the value of a fund is backed by the value of what it has invested in so can you elaborate on like why the currency branding and do you think the fund or you know you know hedge fund or just like i think yeah hedge fund like why that branding isn't appropriate or perhaps is it yeah i mean i think it really comes down to like especially with the algo stable experiments like what is trying to be accomplished so you know the point of all those why you know a successful one be valuable is that this is this decentralized and censorship resistant currency for people to use in d5 um and you know conceivably beyond that um and

but it comes down to so what are you trying to create and it's like this mirror image of the dollar um the dollar is free-floating in value there's no peg for the dollar um so why are we trying to mimic the exact dollar when we could create a new dollar that that's kind of where it comes out like the the goal should be that we have our own native currency and not just that we have like a censorship resistant version of the trad um currency so sorry i'm kind of losing my train of thought i mean we're with you we're definitely with you right there right that's why we talk about like you know bitcoin being a non-sovereign money eth being a non-sovereign money

and you know that sort of thing i i do want to get back on that thread because there's more to to pull on there but like really quick another question i had in the design of this thing is so is ohm fully collateralized is it partially collateralized like what dictates the market price of an ohm and then how much of that market price rests on what's inside of either the lipostat treasury yeah so it is i guess in a real sense partially collateralized um essentially it's predicated on this mint requirement so the protocol can only create ohm if it has one unit of a stable coin or equivalent in its

treasury um so you create this floor where you know literally this token cannot exist unless that amount of value backs it um in reality we have you know 42 44 units per token um and so there's looks like surplus that allows us to new tokens and distribute them as rewards but those are all fully backed at that that one die kind of floor um you know in reality because we trade higher than you know 42 or 44 um it becomes partially collateralized the the difference there is monetary premium so you know if you look at each or bitcoin um or you know any monetary asset you know the entire value that they trade

above zero is monetary premium essentially you do have an argument of like you know uh transaction fees for ether bitcoin or like you know industrial use for gold but like the actual market there is much smaller than the market cap of those assets um you know the the values expanded with monetary premium which is essentially just you know we as you know monkeys uh decide that something is worth something even though it's not actually um and use that to facilitate like trading cooperation among ourselves um so you don't want to like have the actual like a barter kind of like kind exchange

economy is inefficient you don't want the actual value that you're exchanging to be equal on both sides and so you have like this monetary intermediary that's not actually worth anything it doesn't cost society anything but you can use it to transact between people so you kind of increase efficiency and like anything that's productive you're putting towards productive use um that's kind of where the the premium comes in and like the the idea of backing is that with these monetary assets um they're entirely predicated on that monetary premium continuing to exist um if it doesn't you're kind of hosed and if you have reserves that back it basically what that does is

today we are agreeing that there's a monetary premium for this asset but if tomorrow that agreement no longer exists we can pull in this other asset that agnostic of us we all agree has value and use that to imbue our market with value once again um so you have this outside source of value that you can use to support the value of your own market um and agreeing that om has value doesn't have anything to do with agreeing that eath or die has value you know they're completely separate and so you you kind of de-risk the market because the value is not just predicated on belief in the monetary premium of ohm but also the belief in the monetary premium of whatever back zone um

or you know not even monetary premium but you know we hold a lot of monies you know and this is pretty much the the currency model that has existed like past hundred years essentially um you know the fiat system is a little weirder because they don't have like a hard backing requirement um but you still do you know in fiat currencies today have central banks that hold assets they use those assets to facilitate the markets of their currencies um and you know kind of support uh the the market for their currency decreased volatility so it's easier to use you know within their economies um it's you know pretty much the same model so i would argue you know if you're going to call us a hedge fund then you

would call central bank's hedge fund as well you know maybe there is an argument for that but zeus all successful protocols generate haters some way one way or another and there's no doubt that uh that olympus dow has been extremely successful especially over the last six months or so uh and so uh i think if you ask the the omis this question they would call they would call you uh naive but i just want to address this question and i think you might have already answered i answered it in a roundabout way but for the haters out there that think that uh that olympus dow is just a ponzi game where there's it's just a game of chicken and at some point it's going to collapse what would you say to somebody that has that critique i mean i would just say

would you say the same thing about bitcoin or eth or any of these governance tokens or pretty much any asset you know it's the same argument um doesn't mean that there's no validity but just to be consistent about it so you either think that all markets are a ponzi or you think that none of them or you think that actual ponzi's are ponzi's you know there are very clear things that dictate like like it generally comes down to maliciousness and lack of transparency um you know being lied to about what is going on here um and usually an element of like you know whoever is maintaining it is just taking that money and buying yachts and jet skis and stuff but

i i think it really just comes down to like this is how markets work um you know you take something that you know is intrinsically less valuable and you imbue it with more value like that's the whole point of a market if you wanted everything to trade at the exact value that it was worth then you wouldn't have markets so i i i personally come down to the place where like i i believe like all money is basically a meme right and so if we do call these money systems ponzi's then i guess they're all ponzi's they're all you know some of them have greater degrees of transparency than others at least when it's on chain it does have some degree of um transparency but like they're ponzi's in that like it's all a

shared myth a shared belief that you know humans have that what is going to be the point system for um how we denominate things right that's like at the end of the day it's a collective choice right ryan and i were discussing at the start of this show that as soon as you perceive value as soon as the value starts to become perceived everything starts to be a ponzi game which is not which is meaningfully different than a ponzi scheme yeah it is it does have a negative connotation uh a lot of people aren't really willing to accept the term that ponzi game is actually just like kind of the way that the world works yeah i see i yeah i feel like if it had a different name it would be much more agreeable because like

it inherently is not a bad thing i don't think or you know the the point of markets is generally to like expand value and you know facilitate resources um that's what that is so i guess i guess my question though zeus is um why do you think that olympus dow and you know the omis have a shot against all of the competing other money monies in the world right so you could take fiat right we know all the problems with fiat but even take just let's take the world of of crypto so uh could it actually compete against a bitcoin could it actually compete against an eth does it need to compete against these things to have some sort of monetary premium or

is this not a like winner take all winner take most market what's your take on some of these things um so i don't think we need to compete at all i see it as very complementary so you have this dynamic of you know two things so you have money and you have currency and you know they're pretty generally conflated to be the same thing but they're not um so you know monies are generally hard assets and they generally are like purely monetary premium so you know ethan bitcoin don't need to be backed um you know because we're okay with them being volatile we're okay with like you know like that's the nature of a hard asset um a currency is something built on top of that which kind of harnesses the

value of those hard assets and those monies um but converts it into a more stable and risk mitigated format so you you have a similar dynamic then you have a monetary premium but that monetary premium is less instead of infinite premium it is something quantifiable um so do we have a better chance than bitcoin of replacing gold probably not um do we have a better chance of than bitcoin at replacing or at least like serving a role that like fiat currencies do i would say yes um and the biggest reason there being one you can mitigate risk in that you know there is an intrinsic

value to this network um and so you know you as a participant you know can quantify your downside even you know right now our premium is you know five or six x so that downside is still you know tangible but you know you you can quantify which is pretty big um you know i can't like literally just go to and sit at zero in the way that like you know in a real black swan like you know even bitcoin could uh although you know there's plenty of people that are like i will buy every bitcoin to have one dollar if it goes there um my first bitcoin at one dollar if it goes there really your first bitcoin i've owned bitcoin before but still um

the other is that you have an entity in the market that is incentivized to stabilize the asset um so this is one that you know time will kind of tell for these but for for bitcoin and eth which are you know like kind of the poster child biggest ones like i don't see any real incentive towards stabilizing these assets in to a degree that they can really be used in the same way that fiat currencies are you know you need like very low volatility and everyone is in bitcoin or eth for it to appreciate um so you know the incentives are misaligned uh where you know no one really wants that versus you know in the case of home like you know the protocol is willing to to fall on the

fallen knife or whatever to facilitate that you know even if it's not a profitable endeavor um you know it might lose money to provide spreads that decrease volatility or at least put itself at risk of losing money in a way that a third-party actor might not be um so you know this kind of comes back to like the the facilitating lp and everything you just have an entity that is willing to to make actions that a third party might not be you know an action that like you know a third party might be taking too much risk that they think that it's not worth it for them or they're not getting incentivized enough and so it's not worth it like the protocol will do that because the the token holders of the protocol you know it brings value to them and so they you know are willing to to kind of have the

protocol serve that role okay so your model your model of things right it's a high level is like we have the the physical world over here right and that world is based on like originally these hard money assets like gold and silver these sorts of things and then every time we had central banks that built on top of those things and created currencies they created sort of fiats on top of that now over here we have this digital crypto backed world and at the bottom you're saying are hard assets like bitcoin and eth and where you see olympus dow is sort of the the currency layer above those hard assets it's almost like competing as sort of a a decentralized dow driven federal reserve right and that's that's how these two

worlds are uh are modeled in your mind is that is that right and for the record the federal reserve has done a fantastic job on putting assets on the balance sheet yes i mean they're doing kind of the same thing zeus we don't have too much time but uh more time but i want to ask you about the omis so where does community come from i mean they're everywhere now what unites them why are they so energetic so excited and energetic yeah yeah i mean so it's definitely been incredible for me to witness um you know it's definitely beyond anyone uh

how this has come to form but i think it really just comes down to like this was the vision of crypto originally you know this is what crypto was meant to accomplish and as it's developed we've kind of seen that like it hasn't actually happened um you know you still have kind of the same dynamic where it's like you know like the whole industry used to be called like cryptocurrency for a reason like i i don't think that we actually have any cryptocurrencies um but you know the narrative i guess was always that oh in the future you know these things will be usable in the same way that you use like dollars or whatever currency today and now we're sitting at you know multi-trillion dollar total market cap

um you know a trillion dollars for bitcoin and it still kind of behaves the same way that it did several years ago um yes it's a little less volatile like it's getting there but you know i think that most people don't feel like satisfied with the actual progress made there and so i think that oma has been very captivating in that this is the model that has worked for the last century um it kind of makes sense to just replicate what works instead of trying to go go back to like a gold system you know like we're like having a gold standard instead of gold is kind of how i see it um you know there's a reason that we moved to

currency in the first place um i don't know i kind of just see ohm as like the first real attempt at that and i think that like there's a lot of demand to see something like that in the world and so it's very captivating for people that's kind of how i interpret it very cool zeus yeah it seems like you guys have captured a lot of latent energy in this space and occupied a lot of minds mindshare and uh you want to want to conclude with this question you know thank you for your time it's been been a blast talking about all of these things but we've been talking about this theme of d5 2.0 and david and i have been on kind of a journey of vision quest towards exploring d5 2.0 here recently who else should we talk to who are some

of the coolest defy 2.0 projects that you've come across recently yeah so uh i love what alchemix is doing um i think tokamak is really cool under the same vein uh or under the same vein as like us not really alchemics um who else uh i mean all of our olympus pro partners you know have kind of demonstrated that they see the vision here and they want to be a part of it uh yeah i would say like i don't know tokamak is one that like still hasn't launched yet the jury is still out um but i i i respect the

the angle that they're taking for you know a very similar problem um they is another one you know they're kind of tackling the same thing as tokamak where you know we're all kind of waking up to this fact that uh perpetual incentivizational liquidity is not something that's going to work in the long term at least on like a large scale and for everyone and you know we've got a couple of different contenders now trying to trying to solve that problem and i think that it's going to result in not a winner take all system but a lot of different options for protocols to secure liquidity and facilitate what they need to um depending on what works best for them that's great zeus thank you so much we've got faye tokamak olympus dow pro

you guys are all doing great work we're excited uh as you continue down this path thanks for spending some time with us thank you guys risk and disclaimers guys of course crypto is risky d5 is risky so is an algorithmic coin all of it's risky you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot hey we hope you enjoyed the video if you did head over to hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our daily newsletter podcast and community as a bankless premium subscriber to get the most out of your

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