How to Get Exposure to DeFi Compliantly and Securely - TOKEN2049 London 2022

hi everyone so today we're going to talk a little bit about how to get exposure to D5 and um some of the newer Asset Management opportunities that are popping up for those of you who don't know me my name is Mona Elisa I'm founder of the first decentralized Asset Management protocol we were founded in 2016 we've been Engineering in D5 ever since more recently since we decentralized the protocol in February 2019 we've built avant-garde Finance which is a core contributor to the enzyme protocol but also building an asset management business on top of the protocol for those of you who are not familiar with the D5 Asset Management stack it's based on the settlement layer of ethereum ethereum is where the transactions settle on top of that we have the asset layer where all the assets uh tokenized assets erc20 tokens nfts Etc are the assets people trade on chain and then more recently in the last couple of years we've seen the D5 layer emerge this is basically uh everything from Trading to lending borrowing Etc and uh in D5 we also like to emphasize the custody not we like to educate people on the non-custodial aspects as well enzyme handles the operational risk Administration administrative risk management and operational layer um today we're going to talk to you about a little bit on the investment opportunities in D5 and I'm going to focus on two in particular one of them is about earning yields on Eve if you are a long eth and not earning yield on each you're missing out I have to tell you and we need to talk you're leaving potentially up to 10 yield on the table for someone else to take and there are ways that we can enhance that in D5 so one example that we like to look at many of you will know what staking is lots of different ways to stake on ethereum we will typically look at pool staking because it's more liquid it's on chain and it's also more composable with the rest of defy so what we would typically do if we were looking after if one example is you can exchange if for stake Eve on a protocol called Lido and that immediately enhances your yield to 5.4 percent but then what's interesting is that beyond that you can Leverage The composability of D5 to enhance that even further so you can leverage a protocol called Curve for example where you are providing liquidity so that you can supply liquidity to people who want to curve trade eth against staked eth and that automatically enhances your yield by an additional nearly three percent this is made possible because you're being incentivized by both the curve token and the Lido token to enhance those yields and then you're getting close to nine percent yield if you want to further enhance that you can deposit into something called a convex protocol and convex is basically paying you for the right to have uh Leverage The governance of your LP token in curve and they'll pay you an additional per cent or so this is just a very simple example of how we can get to closer to 10 yield on each which you would typically just be holding in custody there are many other permutations many other ways to achieve that yield profile but this is kind of one of the exciting things about the composability of D5 and all the different building blocks another example of yield you can earn in D5 is a quantitative way we've been looking at um much more recently there's a a natural effect because of the transparency of blockchain technology that you can see all the transactions under the hood and you can imagine that that gives you a lot of data there are a lot of data providers who collect that data catalog those transactions and index that data to make them queryable and what we've been doing is using that data to kind of identify smart wallets and track those smart wallets the kind of things that we would look for are things like change it change of the smart money USD balance in a particular wallet against the different specific token we'd also look at things like changing the number of smart money addresses holding a particular token we would also be interested in things like change in percentage holding of one token versus another or the percentage of stable coins in a portfolio which might indicate Market sentiment and yeah this week for example I'm sure you would have seen a big rise in stable coins in wallets we clean all the data that data is all clean for inflows and outflows on layer one there are two Bridges so you get like quite a lot of information and from all of that data and and more we've built a proprietary model to back test that data and see what kind of results it would have given us and what's interesting is that if you would have applied that data since invested in this strategy since January 2020 you would have outperformed the market substantially in USD terms something like 18x and USD terms and 60x at the peak of that blue line and what's also interesting is that the strategy consistently performed in each terms throughout the entirety of that period so these are some of the examples we're looking at there's also other interesting angles in D5 like indexes where you can enhance the yield with composability you can also get stable coin yield although that's a little bit less in flavor right now because of increasing interest rates in Trad five so it's harder to compete there but we're we're looking at a lot of the opportunities we're actively researching them and we'd love to talk to you about that research if anyone is interested last but not least it's just worth noting that for anyone who isn't Trad fire and interested in learning more about D5 we've just published our Q3 report which talks about harnessing the power of defy in Asset Management you can scan the code to download the reports and feel free to reach out to us if you have any questions or want to learn more about the topic we're more than happy to help very fast yeah sorry that was very fast big round of applause for mono um I'm really interested to kind of get your take because I know um how knowledgeable you are of traditional markets uh counterparty risk um and also um you've been operating in crypto at a very high level for many years um what do you think has gone on in the last 48 hours with regards to FTX and binance and what's your view on it and how do you navigate something like this from your own personal perspective but also on a on the business aspect um what do I think has gone on I wish I could tell you I mean I've seen a lot of rumors around Twitter what's the best rumor you see um I don't want to speculate but I think you know every there's a there's a million and one different theories and a lot of uh you know um unfactually based opinions out there so it's very hard to say with certainty what happens and how it happened um but I think you know that if if I may like you know jump back into the deep I think that's one of the beauties of defy the D5 you don't have to guess you don't have to question everything is completely transparent it's Unchained uh and you know it exposes Bad actors much quicker than some something opaque that you have in traditional Finance centralized Finance so I think how do we think about it in our business we're building for a more transparent future we're building for a simpler future and we're building for a future that exposes Bad actors much quicker than uh traditional finance and you know Regulators have good intentions regulations have good intentions but ultimately they're only as good as the information they have and they don't have information so you know we're uh you break up a very good point and uh it's something that we spoke about previous today um when you look at what's happened in the last 48 hours but also when we look back at the whole Terra lunar Celsius three hours Capital debaracle um and the volatility in the markets that we saw back then actually defy did exactly what D5 should have done as opposed to the smart contract defy maker compound aves they all did exactly what they should have done and anything pertaining to the smart contract that should have got liquidated was anything that was and wasn't so it's amazing to see these difficult times in somewhat CFI issue has been been occurring whether that be down to human error our lack of understanding our poor oversight um and we won't know and I think that's that's a fair reply we won't notice we have more details but when you look at what happened with traditional defy it operated exactly like it should have so we've almost kind of battle tested it in some ways absolutely yeah I mean that that is I mean D5 will get paid back in the liquidation before anyone else um and it's a lot more robust and a lot more secure when it comes to things like this yeah were you surprised just how quickly things have happened in the last 48 hours absolutely I mean you and I have been in finance for a long time not just crypto blockchain but I think this might be the fastest collapse that has ever hit a financial industry in history so yeah um I I just I'm I'm surprised at just how quickly everything happened like we were around when the likes of bear Stern and lemur Brothers went under and it really felt like you know looking back at that and certain looking at the charts of bear Stearns and Lehman's like it was almost like a slow you know death of a Thousand Cuts you know it was almost like watching something in slow motion it didn't feel slow back then um but can you compare it to crypto now it's just instantaneously happening and I suppose the thing with crypto is that everything is almost early stages right projects um still trying to find product Market fit are a theoretical idea but everything has a 24 7 ticker tape with it so it's almost like an early early stage company which has already gone public yeah and that drives the price Drives By emotion and fear and I think we've seen a lot of fear in the market yeah absolutely and there's a a lot more politics at stake I think politics and definitely like you know crypto Twitter feels a lot of speculation doesn't it and that can it does it does I don't remember a lot of Twitter stuff on when Lehman was happening but I think that no um it's funny I suppose we go towards crypto Twitter as a source of information whether it be right or wrong it's an opinion based but it can be very informative but no you're absolutely right I think I was probably looking at CNBC or reading the Ft um Mona it's been great talking to you and I'm really familiar with what you're doing at enzyme one of the smartest girls I know in this space it's great to see you present like you did so a big round of applause for mono from enzyme please thank you very much