Sommelier: On Chain Asset Management - TOKEN2049 Dubai 2024

[Applause] all right so what is similer is my size working there we go all right fixing there we go all right similia similia is an on onchain asset manager so what is an onchain asset manager why do you need an onchain asset manager uh we'll cover a little bit in the stock and like sort of the theme of this talk is similia has been running for a while uh it's been managing a significant amount of money it provides a significant amount of liquidity for assets that you love for assets that you use um for defi protocols that are hot um but very few people seem to know about similer uh I'm somewhat famous for other things um so why did we build simila um we built simier because def5 protocols were getting more and more complicated um this started in 2021 uh things like Unis swap V3 launched defi became a lot less accessible everybody loved defi summer uh when you know you could just you know join a protocol earn farming rewards uh didn't have to think too much uh but now protocols have become really complex um so what has similia become similia has become a very accessible easy uh use it like you know just one click and then forget about it uh way to access defi uh way to access uh sustainable yields without having to uh manage your defi positions and for defi to be your full-time job um so what are the cool things about similia um similia is the uh is one of the uh is like the largest liquidity for rap stake eth um so you know if you are tra uh uh trading in and out of a rap stake e position you probably using uh uniswap V3 liquidity powered by Sima um we are one of the largest users of of moro's borrowing protocol we power an enormous amount of uh leverage staking through Moro um we've been a great user of their protocol um similia has a has a strategy that has been generating 6.8% yield Bitcoin denominated yield on wbtc um for more than a year and we have our Flagship strategy does 15% e yield also been running for more than a year most all of these things manage tens of millions of dollars um we have 23 strategies running across op arbitrum and eth um and we have 70 million in tvl um and basically I expect as soon as the igen layer uh eth Black Hole uh finally uh turns into a token emission uh we will can see see a substantial amount of growth um and we are like sort of expanding pretty heavily into real world assets uh liquid reaking tokens other l2s uh all of the these things have been you know continuing to build um so similia was founded by myself and my co-founder Christie um and Christy comes from a trafi background um and basically what we wanted to do again is the other thing that we've seen right is these yield platforms have all existed like hey come here there's been blockfi there's been Celsius there have been all kinds of things that blew up and lost everyone's money how do we build a protocol that can't rug um that's always been the goal so we right now we run sort of the best yield Optimizer for eth on in the market running the like uh uh like sort of most effective strategy one of the cool things about real yield eth is if we launch another strategy on the platform that's actually earning more e denominated yield than the current real yield e strategy real yield e can just allocate into it so it's again it's been an incredibly popular uh product for both you know small players and big players um because of this fact that like you don't have to manage it um it has been battle tested through you know multiple growth and and collapses um and it is a extremely battle tested uh platform at this point and you have you know you can withdraw any time there's no withdrawal fees um and all of these fees are all of these yields are net of uh of uh uh net of of the platform and strategist fees so again Best in Class yields so the other thing that's cool you know so ethereum co-processors are pretty hot right now um similia has been an ethereum co-processor in production for basically a year um so how does similer work similia has a a layer one Cosmos blockchain but if you're a user you never see this you interact with with similer from ethereum from arbitrum from optimism and an ever expanding set of layer twos what similia does is we use the cosmos chain to valid every update that a strategist wants to do so strategists have so in order to achieve these best-in-class yields you do need active management but how do you have active management that doesn't recreate trafi how do you have active management that is decentralized where the protection of the user is built into the protocol so for instance um you know so anytime a strategist wants to do anything take a new position uh use a new asset they have to go through the similia blockchain and similia validator set um and this provides an enormous degree of protection for the user um so for instance like so every validator kind of gets a say in uh and is is running this reference application that we call Steward that checks uh uh any trade that a validate that the strategist wants to do we also have this uh uh this thing where uh s token holders vote in governance anytime a strategist wants to add a new asset add a new position so let's say uh real yield eth suddenly wants to like hold uh a new stable uh new liquid staking token like divas launching that all would have to go through sili governance it gives adequate notice to anyone who's participating in the strategy giving them the opportunity to exit and like a lot of like ongoing protection the other thing that's nice about this is again if if the strategist disappears what like let's say strategist goes out business uh you know there's a boating accident juv floods who knows right what will happen is uh the validator set can actually uh uh step in move the uh uh the entire strategy into a liquid safe low-risk position and then people can withdraw uh uh at their Leisure um and this model has worked you know people have lots have had many there's been a lot of skepticism before this thing was alive about whether or not this work would it get me to death would we be uh able to competitive instead we've been you know using this model uh one of the most effective LPS in a lot of high value assets we've been very competitive uh from yields we haven't been Meed out of existence um it's there's been large sustainable arbitrages that we've been able to capture so similia vaults super easy they do all of this behind the scenes they predict the strategist runs offchain code there is offchain Alpha powering all of these strategies um they react to Market changes so you know we've been through all kinds of wa Swan events from the usdc dpeg um to you know like curve almost getting liquidated all of these things um our our strategies have all been able to react in a very timely manner uh to changing Market condition conditions and risk um and we do incredibly sophisticated optimizations through this offchain computation that can be then executed onchain allowing us to be a very effective liquidity provider um the reality of why this should exist is the whole point of defi was to like com was to change the nature of asset management but I think so many so much of what happens in defi now is a traditional fund structure where you have you know people raising hedge funds Etc and traditional structures participating in defi there was no point in building defi in my mind to just rearrange the deck chairs on the Titanic instead what we want to do is bring all of asset management on chain and I think what we've demonstrated over the last year with you know the million ions and millions of dollars of yields that we've generated for our users is that similia can actually be a very compell like this strategy of of fully onchain Asset Management can like take advantage of yield opportunities that are that exist throughout the sort of defi ecosystem um and continue to adapt to changing market conditions so I imagine that there is a future where like the large a large section of the entire Asset Management space has moved on chain um yeah so best-in-class yields great value proposition position for our users this is why our Capital has been incredibly sticky um and while you know there will be always kind of short-term fads uh uh in the farming Market I think similia is a very sustainable strategy that you know many people will continue to allocate into um another thing that has been like a big thing for us is that uh we recently integrated Axel um into so similia launched we had our own bridge design that we uh had like brought to production that bridge design uh only got us to eth main net we integrated Axel recently um and axel allows us to now have strategies across everywhere the axr goes um so we are sort of scaling out to all of the Ethel 2s through axr another cool thing about s s is uh there's actually strong value alignment between the token and the the Vault user so again as I was saying um there are uh there there are as I was saying there are lots of opport there are uh you know lots of people who use the Vault don't need to know about the cosmos chain but there are also you know thousands and thousands of people who are saking s um when they stake s what happens is that there it's fixed Supply token C circulating supply is about 288 million um you use it for gas fees you use it for governance you stake it to secure the Sal blockchain um but like one of the coolest features is the fee auction um the fee auction is uh is so about 20 Ethan fees every month um flows back into the protocol and every month we auction those 20 eth for PSAL um and that Psalm then go goes to power staking rewards so s has about a 12% apy and about half of that is coming from staking rewards and half of it is coming from a grant from the community pool it's very unique in the cosmos ecosystem I think it's very unique in the sort of app chain world but like one of the cool things about app chains is that you can use that infrastructure to distribute rewards to you know tens of thousands of people so what's next for similia um so we are continuing to evolve um as a as a as a protocol um we are becoming an ianw AVS in partnership with ethos so maybe I could expand a little bit on what that means so I think like one of the biggest challenges similia has had is that when we launched there was no way of building something like this in an eth native ecosystem the only way to do it is sort of this Fusion of Cosmos and ethereum um that we've been sort of operating for a while but as a result s mostly trades on osmosis um people feel the S like the S asset sort of feels like a cosmos asset even though the S user base is primarily an eth user base um in many ways igen weer feels like the missing piece that we've been looking for for many years um an eth native way um to connect the P protocol and the S validator set and the essential functions for user safety that those people that those uh uh pieces provide with the ethereum community the main users of our assets uh and like frankly we are a huge provider for um we are a huge provider of sort of uh sort of defi bootstrapping capabilities for uh a wide variety of e like liquid staking tokens liquid reaking tokens Etc so that model of how do we get the um uh is sort of unlocked by becoming by working on becoming an igono AVS um so we'll move from a model where s is stake uh to secured the chain where instead we are taking restak eth um and eth validators are securing the chain um and we're we're partnering with ethos um to uh to sort of make that happen and extremely exciting another thing that we're seeing is actually one of the cool things about having a crypto native asset manager is that the model of what crypto adata of asset management can be actually is bigger than like traditional asset managers so like cos you know we have these uh yield tokens that we've had for a long time um there's some utility there's a few lending markets etc for things like real yield eth but one of the things that's nice is or one of the things that's very exciting is like so we've seen blast right Blast has pioneered this idea of of uh sort of native Yi y right where rather than like go buy a Yi go get a yield bearing token from urine Etc uh urine s Etc you can have native yield just come into the uh you get native yield just by bridging into the protocol this idea is actually very extensible and can be easily powered by simier um we're working with teams like hyperlane to sort of enable this as like an outof the-box experience if you're building a rollup um but what what it would mean is we move from a model where it's like you come to app. similia finance um and you like State and like you pick a strategy to engage with to a rollup can say hey we just want all of the usdc or stable coins that are flowing through into our protocol to immediately be become yield bearing and so when people Bridge any stable coin can immediately go into one of our stable coin strategies when people Bridge eth into the rollup it can immediately go into one of our eth build and when people withdraw they immediately are claiming back uh the crude yield so again this idea of being able to like participate in rollups and this is to me like this is the what is the most exciting for um uh one of the most exciting pieces for all of for like the idea of Crypton native digital Asset Management again you can do things that are completely sort of inconceivable in the trafi world um where you are just natively earning yield while using an you know sets of applications buying nfts Etc I think the other thing that's uh been really cool about the evolution of simier is that most of the like as we like sort of go into this uh world of new asset issuance that's happening most new assets that are issued are actually starting to start thinking about similia strategies from the beginning so if you're issuing a liquid reaking token if you're issuing a real world asset having a similia strategy is a natural way to both give better yields to your sort of uh non-expert users and it is is a way of uh bootstrapping a defi EOS system because simier will immediately start doing lending borrowing Mark like lping on dexes Etc with the assets that are deposited into the strategy so this these two areas or like all of these areas of future expansion are actually really exciting um we have a long way to go we've been building for many you know we've been building similia since 2021 um and I'm very excited for what the future brings so thank you very much