Exploring Fixed Yields in DeFi with Element Finance

okay um see i think i need to screen okay uh thanks everyone for uh joining us today this is our june 2021 uh fkl community meetup today we'll be focusing on uh fixed income in d5 with our guest winrar which is growth and strategy in element finance uh but before we go through all of that uh there are the usual monthly roundup stuff that we'll go through first and then uh introduction to a local platform uh by isha from contest.io so before that uh some announcements for those of you who were here last month uh we said we will be doing this crypto do it writer um kind of experiment so uh we started out with a hundred ringgit uh in if as reward for ten different tasks uh since we started that a few weeks ago we've had more donations from people so now it's almost 500 it's 478.8 ringgit in ether so uh all you have to do is do some simple tasks i most of them are creating guides on the on the items some of them just contributing ideas and one of them just creating uh one nft art so we have time until the 12th of june for people to make their submissions and at that point we will choose the best submission and the person with the best mission will get that reward which may be 478.8 or it may go up even more uh yeah and uh related to that there's actually an even simpler task uh that i put out there uh but i i don't think it's even close to maxing out yet uh what i said was the first 50 people to do a quote tweet of the original uh thread and if they uh tag three friends and just like pick one task that they would like to see done uh they would get 10 ringgit uh in crypto and a top 10 crypto not some random uh sort of unheard of coin um that's still available right now i think it's we're not close to 50 ringgit yet sorry 50 people yet so if anyone's interested i will share the link later in our telegram group and all you have to do is literally just quote tweet and and tag people and select separately we also have let me see um a bunch of people requested for a workshop on understanding ethereum transactions mostly people were saying understanding event logs or omitted events um so me and um another member of the community will be working on like a proper syllabus uh for it uh we think we can do a series of workshops um not just event logs but like decoding input data converting between method and function hex and integer data types and eventually even exploring uh execution trace and and more on internal transactions which to be honest i don't know enough about but hopefully we can plan out enough content for that uh yeah so that will be coming i expect probably we can arrange one for next weekend so keep an eye out for that in our telegram group and on meetup and some monthly roundup stuff uh so if uh all of these links will be shared later but uh there was uh someone did a kind of uh a fundamental analysis of ethereum uh comparing their q1 uh earnings for this year versus last year and yeah i mean the summary of it is uh all the numbers like shot up like crazy uh you can see that for example transaction volume went up by two thousand percent um and and crazy numbers so if you were to value ethereum the way you'd value uh kind of tech companies like uh let's say aws or amazon or other companies then it's showing good metrics for you another big news is sort of we've had two optimistic roll-ups that kind of launched this or last month uh it's it's launched with an asterisk because it's not fully launched i think in both cases they are requiring white listed projects only um abitrum announced they're going full launch um and essentially my understanding is anyone can uh can can create a project they have a white list but it's just to stop like from uh random people like spamming the blockchain with useless projects and optimistic is a bit more conservative they have a white list that's a lot more restricted but on the other hand they do have an explorer up uh already with is which is not out there yet there's also a cool twitter thread comparing between the two uh the similarities and differences which i will uh link more i will link uh later uh some stuff on eip1559 for those of you who've been following uh it's going to be up in july uh supposed to be targeted 40th of july but i think there's a at least a two week delay uh they found some some issues so it's at least right now it's probably targeted for end of july although that might be delayed a little bit i think the latest is still going to have to be august regardless because there is a difficulty bomb that needs to be defused i won't go into that you can google that later uh difficulty bomb ice age or if there are people who want to explain more in the chat um but yeah so as people are getting ready uh there's some sort of complaints and so on because even though eip1559 makes transactions more predictable on ethereum uh some sort of infrastructure providers such as wallets have uh said that it's not actually that straightforward for them even if it's more stateful for the user it's a bit more complicated for them so there are some discussions going on around that and um there's also a couple wallets have shared their sort of mock-ups of what their wallets will look like so on the right side here you can see this is metamask and how they plan to show their ui for eip1459 then another cool uh interesting story that's uh happened is that uh so vitalik co-founder of ethereum uh was uh kind of air-dropped uh like billions of dollars worth of meme tokens uh i think um there was shiba akita elon tokens and controversially i guess depending on how you look at it he donated uh pretty much all of it well he burned a bunch of it and he donated the rest to a bunch of different uh charity or public good projects so generally i think if you don't have these tokens if you're not a back holder you probably say it's a good idea kind of donating it off if you are a back holder then quite likely you'll be complaining that he is unfairly manipulating the market so depending on how you look at it but it's uh interesting stuff anyway and then on some local news um so phantom which is another evm blockchain um they've uh interestingly sponsored the petronas uh sapong racing team or the italian gp um so that's a kind of a cool story to share and uh luno partnered with if you guys know this uh social media account uh bro don't like that love bro uh who uh have done a lot of kind of popular comics so they've kind of partnered to come up with this comic about bitcoin and cryptocurrencies which i will also share the link later okay so without further ado uh we will invite uh ershad from pontas let me allow you to share screen quick uh oh because nobody i didn't use the share screen i just use my streaming okay uh let me see yeah i can change it to speaker view so everybody should be able to see yeah um your screen okay thank you for the opportunity uh our own okay uh i will talk about that i will explain what we are doing what is automatic uh but i won't talk about what is energy because i believe this circle is most of us is uh we are tech savvy uh that's why we are here so to cut it short um okay how do we ourselves marketplace the key word is multi-chain energy marketplace why we use multichain i will explain later all right uh again i won't touch this document okay see does this block the screen alright anything blocking the screen okay uh again i won't touch details on what is nfp but the key factors that i would like to take from here is actually we are established by a group of fashion malaysians so we our team is 100 and even our future expansion is part of our target is a need to bring in more developers from malaysia to build talent to build local talent for international adoption and at the same time since i mentioned earlier we are teaching our target is to make people's life easy means when they come to confess as single as single click multi-chain accessibility you don't need to how to save if you want to mean something i need to decide which is ethereum network i need to choose hazel i need to choose whatever so you don't need to make the decision just come to contact everything is here one click multi-chain accessibility so uh a bit of a quick fact about nfp because when we start to uh build the idea into actual product because we dig in some figures some numbers uh as of today nfp market cap is about 17 billion this is maybe some people say maybe some people say it's not huge but in terms of dominance the percentage the nft market cap is only one percent it's only one percent so which means because of this people we see there is super super huge potential where empty space can grow bigger double people or whatever and based on the growth itself uh back in quarter 1 20 21 we see the growth is roughly about 2 000 so again the market check is only one percent and there's the uh the growth is 2 000 and also another fact that we managed to pull out is the trading volume 24 hours trading volume for energy uh nft for today is roughly about 1.3 billion so in total roughly estimated but there's about 50 50 plus marketplace so you may see that 50 plus marketplace sharing this huge pie again we as a local companies which is we have a huge ambition we want to penetrate global adoption we see there's a huge potential for us to capture this this spine so that's how uh that's how we see the potential that we need to be inside crypto space and at the same time we need to be inside empty space okay and uh there are some points there are some factors that if people ask hey what do dopant tasks offer a part of it is very common like common marketplace they will offer buy and sell but there are some key components that what we do is actually is a one of the novel approach since beginning i emphasize almost the same thing we provide a multi-chain solution we purchase and collect energy in a multi-chain option you don't need again you don't need to uh to root or to vote or key into any networks because as of now there are some certain position that we are not sure which network is is a true region it can be ethereum it can be some other network but in order for a marketplace in order for for a product to be on top or to be rooted into only one market only one network why not all why not why not you provide a solution where you are some sort like index service which means your solution your product your platform has access easy access to whatever network that we are going to be integrating so that's why this is again this is the thing that i like to emphasize i like to always say okay what is again multi-chain uh nft marketplace so that is a process of nfp meeting meeting our demo after this and after the demo i i really hope that you guys can find try yourself how how you can meet and so on uh we also have a bidding option uh this is not again uh this is not super rare features for nfc marketplace but yes we have uh part of our roadmap is i need to include bidding and auction and we do have uh token rewards um i will elaborate this later and i think why we came up with this not only a game when people are part of contrast if they are an artist on boarding on contrast not only those people can earn but we need to ensure people stay right so very interesting rewards policy so this is part of the things that that we offer okay and when people ask hey how do you address what do you say how do you pitch yourself and we for me i really love to use these words we are awesome we are also i think for some people who love to watch how i met your mother uh this is quite a famous tv series so so again sometimes why are we awesome uh there are many features [Music] one of the components that we infuse in our marketplace is daily feeds so for those who are familiar with tick-tock there's the terms called fpp for you page so for you page is where we are some of artists they they when they mean like some of these maybe they they have a huge followers maybe they have uh then they have a marketing channel where they can broadcast okay this is my arts this is available on contest but at the same time we implement something in pentax which is uh is underpinned where we observe the behavior of people liking and arts viewing and arts all of these measurements we incorporate it into creating some sort of curated content so if again for those who are familiar with fyb page we understand the global uh we understand big data reaction on certain content for example okay i like this art i move it right in this kind of part but us know what type of content you learn so from that we are curating curating on the feeds so why does this why does this important for artists this is one of the way that they can be discovered right those are the things that that will help to expose the artist to to bigger audience so this is part of the features that we impose in context at the same time we also have we we say we incorporate a social concept social concept which is uh the way i put it here is like ig instagram so uh back to previous life how do we measure reaction how do we measure uh trends exactly by having this sort of our framework so people artists they can build followers they can they can have a huge fan their friend can have a collection of something people can interact so from there easily by having this sort of framework it will help these feeds so those are the two key component that we have right and also we have analytical features okay which is uh for the actual there is a back end where they can view they can understand what or who is their most uh let's say demographic of a user that mostly bought their content or view their content so when artists they want to come up with their on their next release so those analytics is very important maybe they know okay most of the collectors uh high breeding collectors high beat collectors maybe they come from asia so artists can create something that suits this demographic and again to have the analytical features it goes back to those fantastic pts open which is i will explain in the future why at the end we one of our objectives we need to make sure the artist stays in contact at the same time we also need to make sure collectors buyers will come to contacts not only if we provide multi-chain accessibility it is super easy access it is rewarding it is uh how to say it is comprehensive combining all factors so uh yeah this is the thing that i mentioned earlier so we are awesome we combine all blockchain into one okay during mvp we start with binance marching and we we are currently doing a close collaboration with some other networks uh but during the because our our launch uh our target is on this month end of this month so we will start with this machine and along the way we will expand into some other chain which is pokhara tezos and maybe ethereum version 2 or maybe evolution one so it is part of our objective and ideology and also roadmap that at the end of the day our target is support multiple chip so we are fair to everyone because part of us that we understand we are not sure who is a clear winner of a blockchain space so we are one stop solution and i think i mentioned earlier about roadmap uh during the early early stage of i think our discussion i mentioned about incorporation in quarter one we did incorporate ssdm right uh we did some wallet integration and some now we support metamask and we are currently on bgp seven to one so on binance marching be seven to one and along the way we will launch 155 so not only a single collection but multiple collection and another key important factors that i would like to highlight here is actually since i mentioned earlier about contest open we are going to launch our contest open expected by uh quarter 2 next year 2022 because we we are not going to rush anything we need to make sure not only we launch the marketplace to go live we need to make sure that there's no exploit there is a the contract is secure and stable we have multiple checks already supported at the same that time then we can incorporate all those tokens so these are part of the important factors that i love to highlight so this is uh the things that i mentioned earlier so the part of features that that we are going to release key factors or component that we have yes definitely there will be a contrast open and how do we reward how do we do what how do we make sure people stay in tune fast can be awarded based on transaction for those who buy uh buy and sell or bid in pentax they can collect fantastic another thing is uh in previous slide i did mention about analytical features for example some artists they have access to these analytical features so in order for user it can be a normal user it can be an artist to access special perks or contacts then they need to hold certain xml not understood because at the end of the day we helps both parties we help the artists we help the collectors and buyers we helps everyone so we also can use that interest option as a governance as a governance means for example um there is a piece of demand or featured artist so by by following the contest open it's easier for you to be featured based on uh rules and regulations based on governance voting voting so those are that those are the things that we have implant uh but yet uh token is not going to launch as soon uh because i think in the rock map we did mention about will be available by 42 2022 so it's still a long way ahead but what we need to go into what we are going to achieve today is i need to make sure the marketplace is go live we need to make sure it is functioning and working we need to support at least two networks and we will evaluate the performance stability and we scale up from there once everything is scaled up then we talk about contrast so we i think this is part of the information so the name is pts and it's based on p20 and token supply is 100 million so i think this is part of it uh um sorry sorry um we're kind of like uh going over time a little bit can you end it in the next couple of sentences so again uh other than our products people behind us is actually uh there are five of these me which is under one which is the guy in code and we have i think the animation here we have a few other people and i think this slide i will share it in in our telegram or a few of our channel so this is what we are doing right now and as of uh today our main communication channel is on twitter so you guys can go to twitter you guys can go to telegram from there you can get the latest information from us and since here most of us is a developer i think most of us is here is tech savvy you as of now you you can go to test.

net to pass the io right you can start me into so you can just drive me you can view the marketplace you can say you can check what's the component that you have me and yeah uh i'm strongly advised people for those who are here go to testnet opentask test it experience it if you guys have any feedback you can come to our main telegram channel communicate with me get inside me so that we can further improve we can put the info at the same time we can further flourish the economics of this marketplace so again thank you for the opportunity hopefully this is useful and if you guys have any other questions i'm more than happy to answer um thanks thanks richard uh we'll kind of if there's any questions feel free to ask in the chat or we can like stay back after the meetup ends um and then we can kind of just like leap up and and and and have more uh discussions there um but in the meantime i would like to welcome windra so uh windra can you share your screen with can you enter the graph just in case okay there you go ah yes uh let me unmute you hello okay hey yeah um howard thanks for having me yeah just shared my screen here um yeah i'll you know kind of just briefly go into what element is and a little background about the project uh thanks like i said thanks for having me um i think this uh talking about big shields in general and talking about d5 as an intro course and and as a gateway to uh kind of like the unbanked system of kind of like the future is really important um uh i would say elements started i would right after the summer of last year we've been working on this project for about nine months now um it's mostly e2 core devs we have a few guys from maker uh front-end guys from san francisco and then you know a few guys from texas as well but essentially what we're bringing to the market is you know it's a high high rate fixed yields uh in the form of discounted assets so essentially we're trying to uh give users the ability to buy you know ethereum bitcoin usdc or you know initially die as well at a discount so yeah i'll just go ahead and kind of go into it um if anybody here is familiar with how d5 works um let me just go into this uh currently there are lending protocols and yield aggregators uh yearn is a really good example of a yield aggregator that's fairly popular you could deposit your you know your base assets such as the ethereum into urine and you essentially get this interest bearing receipt token which is called yeast when you redeem that yeast you essentially get your ethereum back and you also get the interest that you you've earned from the aggregator so um this is one example of a yield aggregator and this is one example of a lending platform so you can bring your uscc into compound you know you get this cusdc which is an interest bearing receipt token and then like i said if you redeem it you get the usdc back and you get the interest that you've earned so far from from the protocol so what we do differently is that you know we allow users to deposit via element the protocol we wrap we wrap a yield aggregator such as urine but we split the token into two so you know you get your principal token you get your yield token and the the principal token is redeemable for your base deposit which is uh in this in this specific use case or scenario it's 100 b and then the yield token is redeemable for the just interest that you burn though um over that period of time so in this situation an example this user chooses a three-month term so as you can see here at the end of three months if you just have the principles open and you redeem it you get your 100 dates back which is your principal deposit and if you redeem just the yield token you get that 20 apy which is you know if you divide that by four because it's you know three over four you get uh 5e so you know why this is important you know it's it's similar to the traditional finance versions of an interest only kind of split between your principal and and your yield and this is where the fixed rates come from so you know typically if you're a user and you've deposited your ethernet to you know a six month term uh your your assets are being put to work in the yield aggregator for the next six months however if you want your ethereum right now you would have to kind of sell that principal token into the amm or into the market at a discount so you know one principle token of each currently if it's trading at a discount it you know it's trading at a discount because it's not redeemable for one uh at this current moment it's currently being put to work so the opportunity cost market is what creates a discount for for the users you know so you know i think the biggest question is you know what is kind of like the new tech that we're kind of bringing into the market and we're kind of bringing this convergence curve into the amm it's essentially a customizable trading curve um so initially when a an asset is put into the amm it's currently trading at a discount but then as it approaches maturity it starts to gravitate towards a one for one value to its underlying asset so you know uh for example usdc if a usdc principal token is currently trading at a five percent discount every single day it starts to kind of gravitate towards a one-for-one value to usdc so at the end of at maturity one principle token usdc is actually worth one usdc so um to move on so this is how users get fixed rates so if i have 10 eth and i see that the current principal token is trading at a 10 discount i could buy 11 principles so i can eat and then when i redeemed that in one year it's uh redeemable for 11 so like i said it's it's very similar to like a zero coupon bond that like you know like the treasury issues if you're buying a zero coupon bond that's redeemable in 20 years you could buy it for like 80 you know and then of course that eighty dollars is worth a hundred dollars um you know in that 20 years of course so we're trying to kind of make that into smudge smaller time frame uh in order for users to be able to uh not have to speculate for you know significant amount of time for yielding so um this is one of the questions we get the most uh why why would you want to sell your assets at a discount right so if i 100 ethan i've deposited into element for six months you know why would i want to sell my 100d before at a discount and this is one of the mechanisms that we've enabled users to be able to do uh we call it yield token compounding so yeah you know in this example i'll go ahead and guide you through it johnny deposits 10e into a one-year lock-up at the element wall he mins his principal token and his yield tokens so he gets you know 10 of each and then he sells his principal tokens at a discount so you know let's just assume that the discount is slightly over ten percent so he gets nine eats back so if you look at down here in the bottom right and you know after he's he sold his his uh principal tokens he said he's ending up with 90 and he still has his interest uh tokens that accrues that 20 apy for his initial penny deposit what he ends up doing afterwards is that he redeposits his his um naive back into the into the protocol and mints more variable interest tokens and and you know means his nine principles over eat so at the end of this entire one layer of processing he actually ends up with 19 of variable interest uh and his 90th back you know at the end maturity so what he's effectively done is he's he's created a fixed rate market but he's also leveraged and you know been able to almost 2x increases exposure to variable interest without having to use a lending protocol and without having any risk of liquidations because essentially you just give up a small percentage of your principle in order to increase exposure so so we've kind of done a little bit of math and simulation behind this so if you kind of look at the the end result here of nine principle token 8th and 19th you can see how the math kind of breaks down if you do this you know this layering of yield token compounding over and over again after nine layers of yield token compounding his principle actually goes from 10 to 3.87 but if the if the variable interest stays consistent he's actually increases yield exposure to 65e so he's now getting 20 of that 65e so at the end of you know redemption after six months he ends up with 16.9 which is a net gain of 4.9 so he's earning 4.9 more e because of utopian compounding then rather than had he not so his total adjusted epy went from 20 to 69 from you know multiple recursion of this process so this is one of the things that we've enabled uh users to be able to do in order to kind of create that selling pressure uh for for fixed rates in the market and essentially what what users are doing in this process is they're shorting fixed rates in order to long variable interest because they're kind of like bullish on the variable interest market and of course your users that are buying the fixed trade market you know the profits of principal tokens are trading at discount they're more so along the fixed rates and you know they don't really want to speculate on variable interest or they're a little bit more risk-averse so you know these are some of the use cases that users thought are a little bit more risk-averse could kind of kind of do you know if you're not really into taking a lot of risk you don't really want to speculate on variable interest because you could be 20 today and 10 tomorrow what you as a user can do is you could buy a discounted asset such as btc um you could stake that into our amm and essentially provide this this trading part where you know rap btc and the principal token btc and at redemption you can collect your your fees and you've corrected you know you've collected your fixed rates right because you know you're eventually your fixed rates i mean your your discounted btc goes to one btc and then you also get all the trading fees that you collected in that period of time and what's really really cool here is that you know as i've shown you in the convergence curve because eventually the discount goes away even if you have you know you if you provide a a trading pair of graph vtc and principal token btc at 50 50 like let's say five and five and then at the end of this process you know you end up with either 10 rap ptc and zero principal token bbc or the other way around you have 10 principles on btc and zero the front pc it's all worth the same thing because everything is worth one for one in value which means that you don't actually suffer from any impermanent loss so it's a really uh safe way for users to be able to just gain yields on amm fees which is providing a level of service and earning fixed rates so you know this is one one type of user this is the different type of user that wants to kind of take advantage of the primitives that we offer you know when you deposit into element you know you get these yield tokens and the principal tokens they're both liquid so you can stake both of them into the amm into different markets and the yield tokens kind of create this interest rate you know trading market where users can kind of you know either a take take future yields from some of their you know initial deposits or they can kind of just swap between uh different forms of interest rates that are out there in the market uh and you can also like i said you can also take your principal tokens into um the amms and earn fees from essentially both primitives that are trading in the market so yeah this is you know one one user that can kind of take full advantage of the the primitives and then this is like you know one of the things that we enable for users to do is to be able to speculate on you know a variable interest of one asset while still being able to maintain exposure to another aspect like for example you know currently in in compound or in a lending protocol or any other yield aggregators if you want to be able to you know earn yield on uscc you have to be holding usdc right you have to deposit uscc into the into the vault and then you essentially get this interest-bearing usdc position and what we allow you to do is essentially create this process where even if you don't want to hold die you can still earn die interest rates and kind of go back into your you know your major asset you're essentially really uh i would say bullish on so in this specific specific example you know assuming if price is two thousand dollars uh johnny sells 158 for three thousand three hundred thousand dime he deposits that into the die vault because he wants to speculate on the and earn the variable interest from guy for the next three months he mints the principal token and the yield token for die and then after he gets those two um minted tokens he sells his principal token guy at a discount so he creates a fixed rate market for somebody else and he gets back you know 148.

58 because that's the four percent discount so at the end of all of this he actually goes back to his eighth position he and and he still holds his three hundred thousand dollars worth of variable interest and dies so he effectively he paid one point five each to be able to hold you know three hundred thousand dollars worth of you know variable interest that's earning him die so if you look at the the die market or the dive strategy currently in europe it's earning about 10 so you know you know if you do the math around all of this he could be earning you know somewhere around 8 000 worth of you know variable interest in the next three months while still being able to kind of see the upside of ethereum because that's what he wants to hold so so that's what you know we enable users to do essentially it's it's the ultimate form of capital flexibility because you're able to really control what you want to do with your principle and you really get to control which variable interest you want to be able to speculate on so um i think that's yeah that's i thought i thought my presentation was only 15 minutes so i didn't want to go over i wanted to leave a lot of room for questions and i just want to be able to kind of explain to everybody what what element is uh and kind of like how it works um but yeah i think there's a lot of different use cases here and i'm open to any questions that you guys want to have someone asked a question okay thanks uh thanks indra um so for those of you who are familiar uh feel free to ask questions in the chat or if you want let me allow people to unmute uh but before we get to the uh kind of audience questions i always like to uh kind of ask the um our guest uh ex kind of expand a little bit more about your backstory like how did you join crypto or ethereum and maybe uh explain a little a bit more to the listeners here like um where you've been for the last few years uh yeah so i've i've been in crypto and blockchain for maybe about six five to six years now i initially started uh in project analysis and research uh back then 2016 i think it was barely starting out and it was something that i was really interested in because it was new technology and you know i've been in southeast asia and kind of like going around singapore and malaysia for the past four or five years and that's kind of like how i've got to know eric and the rest of the community but yeah i'm mostly focused on the token economics side just economics and political engineering uh around how incentive modules work and you know i kind of just stayed into that i thought finance made the most sense for deepai and for blockchain so when when the whole thing emerged in 2019 i i really thought it was promising and i just chose to pursue it so that was a little bit about my background prior to that i was mostly doing operations in manufacturing around southeast asia but yeah for the most part for the majority of the past six years i've been kind of like doing research around blockchain technology so yeah that's a little bit about about my background um there were some questions in chat would you like me to answer those harris uh you sure you can uh would you just repeat the question before you answer so that people who watch the recording later uh no other questions yeah so so there's a question from when sq it's saying you know so basically it's like leverage marketing well we enable users to be able to increase our exposure to variable interests um it does they don't necessarily have to do it but basically we allow users to be able to quote unquote increase our leverage to variable interest but in order to do so they would have to create that big market so we we thought about leverage in a way where we tried to alleviate the risk as much as possible and what we alleviate alleviate in terms of risk here is that we eliminate the risk of getting liquidated because there's no forms of lending at all you basically just pay a small price of your principal in the form of a discount uh you create that market somebody gives you their assets in exchange for that fixed rate and then you can use that to repurpose your capital to you know read the into element or you can even go to a different learning protocol different uh aggregator and essentially you re you reutilize your capital elsewhere so that's that's to answer that question um marish asked mind sharing how do you get 20 apy the 20 apy in that example is just uh like i said it's just an example of what the numbers look like you know in the event that it is 20 apy um it could be 15 it could be 10 but essentially you know we've modeled this out all the way down to like five percent if you want you know if you're if you're for example the variable is five percent and the fixed rate market is 2.5 you could actually earn a 2.5 fixed rate but use the principal token that you purchased to stake into the amm to further get get and earn amen fees so we modeled out you know some of the the fees and what they would look like you know if you the trading volume for like a 90 day term period is averaging about 1.5 million dollars a day you earn it into roughly an additional 12 apy so even if you're only earning a 2.5 fixed rate you can get maybe around ten to twelve percent additional apy from the amfvs and what what's really interesting is that you know we've seen the market kind of crash in the past couple of weeks um and what happens to the lending rates on compounded ave is that they've drastically gone down from like nine percent to two or three percent but you can see that on uni swap and on curve you know the the trading fees are still really really high people are earning like 1.

5 million dollars worth of you know distributor distributed trading fees over that one week period so we know that you know in the event that there's a bear market you know trading still happens and users can still be able to earn fees so where we've kind of tailored and designed a lot of our protocols are on being essentially market resistant so that users can kind of essentially still earn yield regardless of market condition so that's to answer that question um we have another question from johnson is the convergence curve implemented with bonding amn it's not it's so the convergent curve is a it's a customizable trading curve that we've implemented on balancer v2 currently balancer v2 is the only uh amm that currently supports uh these type of trading curves i think um curved yield.is is currently creating uh a matter factory for for that as well but currently only balancer v2 supports it and it's not it's not a it's not a bombing curve it's not implemented with the bonding curve um when sq asked you know what is the main difference between element compared to pendle and epying so kendall pendle's principle token site is not tradable you know we've actually had a discussion before with them uh they're entirely focused on the variable interest market trading side uh and they essentially use a different type of a trading card they use a decay trading card for their variable interest so it's still kind of the case towards state beta but we mostly focus on the fixed rate side you know and we kind of enable users to be able to add additional usability for for their principal tokens that they purchase or their tokens because um you know you could essentially we've seen all these other derivative markets and interest markets uh kind of play out and you know in the space but people are always looking for additional usability for whatever they purchase whatever they sell so for us you know we've always been asking ourselves okay if somebody buys a principal token and somebody buys fixed rates what can they do with it you know should they just hold it and earn five percent or seven percent is that even attractive to people you know we want to be able to enable those different functionalities so that they still stay attractive so even like i said you know even if you're purchasing a five percent fixed rate you could still use those assets to stake it into the a m not suffer any permanent loss and uh earn trading fees and in that case you know that your apy goes up so that's uh the difference between us and pendle and like i said ap1 is mostly focused on future yields so they're mostly also focusing on the the yield token site i said when you split the assets they want to focus on you being able to sell your variable interest upfront and earning you know you know initial capital before you know not having to speculate on future variable interest somebody else can take that position so that's the difference between us and them we mostly focus on the the deposit side you're just your base principle and and basically creating an incentive for users to want to sell their principal tokens to create that big straight market for everybody so um yeah that's to answer that question are you looking at any other interest bearing products other than urine so we we are i mean we're always considering we've we've been recommended to look at the curve you know compounded obvi is something that we've also been looking into as well uh currently we're working at urine because they they provide in in terms of risk to reward we think that they're you know fairly safe and and they take up a lot of different precautions towards you know risk and security um they're a great aggregator and they're able to kind of create those high yields so we think that those high variable interest rates like i said if you are able to capitalize on high variable interest rates you can also drive high fixed rate markets high fixed yield to the fixed rate markets so that's essentially why we chose to use yearn at the beginning but like i said we're always open to other suggestions and i guess you know in the event that the community would like a different strategy as well um we can also look into that so um the next question is from muhammad rafiq he asked you know will this product will go will this product go multi-chain well so we currently function as a middle layer between two different protocols we wrap urine and we utilize balancer as an amm so you know if urine goes multi-chain to be able to aggregate different fields then we can definitely rob and follow but additionally to be able to kind of provide the market for fixed rates and for variable interest rates we would need to have balance here also go multi chain or even just go on an l2 to kind of be able to facilitate trades at a much cheaper cost than it currently is although balancer v2s trading fees are relatively cheaper at the moment um they've been able to subsidize a lot of your trading costs and and um the gas cost overall is just a lot cheaper as well so yeah that's i think that's another question oh so how about a token okay so uh as far as you know how about a token how would that add value to the project so one of the things that we've learned and this is something that our team has kind of gone through multiple times some more than others one of the things that we've learned from the last bear market is that you relying on on a specific native token to generate a yield is not sustainable when everything takes a downturn so we've essentially designed our protocol economics are on a way to generate organic yield even without uh the necessity of the native tokens so if you look at some of the most successful protocols out there like uni swap and and even um yearn and abe none of them actually rely on their native token to be able to attract users or generate yields right so we essentially want to design our protocol the same way you know in a sense that you know you're able to just earn fixed yield right away you're able to leverage your variable interests right away and you're able to kind of take those specific primitive assets and put them into a mems and learn additional pieces earn an additional organic yield without the reliance of a native token so that you know users you know in the event of a bear market when although you know everyone's all coins are minus 90 you know we're still being able to we're still able to earn organic yield for our users we're still able to earn trading fees we're still able to earn big strengths for our users so yeah that's that's you know those are those are all great questions we get those questions all the time you know i think there's a lot of different ideas and products that users can build on top of our platform you know people that want to focus on just the interest side they can people that want to focus on the big straight side we can as well but you know we we launched our test net about a month ago uh so far it's been going really well we've been uh iterating on it for the past you know a month or so we're releasing our mainnet in about three weeks if you want to try it out i do recommend it is a fairly complex product we do we will be releasing two different interfaces one that says save which allows users to just you know easy one click to buy fixed rates and then we have like a more advanced uh i would say platform for users to be able to trade and to kind of leverage and to speculate and variable interest and so forth so yeah um that's yeah okay thanks thank you uh you don't get to uh get away so soon uh there's a bunch more questions no worries um so uh since you mentioned token um the natural question uh when we talk about tokens is how does the project itself earn like how do you guys make revenue for yourself so did you have any ideas for that yet yeah so so yearn actually offers a really generous referral program so they do a profit share because they they take fees they take performance fees and they split that with with uh any of their referral partners so we're one of their partners so that's one way that we're able to earn fees but also additionally we take a percentage of the trading fees that happen on the am side so in regards to whether or not we're taking uh any performance fees from our specific users i don't think that's something that we want to do initially uh if we do create our own vaults we do create our own strategies and products we might but initially i think from from the year in affiliate fees and from the trading fees that's how we initially will we'll bootstrap uh our revenue on the protocol and uh you mentioned uh the community can kind of like indicate what kind of vaults uh that should be supported and so on so would there be any space for like a governance token well so we we've been thinking about governance a lot and and our ceo charles he actually came from maker dow he was head of government's architect architecture there and he's been focusing on governance for for design for arsenal as well uh we you know we've seen and he's seen a lot of different you know pain points in terms of what he's learned from what works and what doesn't from governance and and he's trying to create an architect uh one that he thinks is ideal for the current market and also going forward so in regards to how that governance structure is going to work it's you know we'll be able to kind of give a little bit more information about that when the time comes but you know i think one of the things that we looked into and thought about a lot is you know we want governance to be you know a voting right for all users not you know that participate on the protocol as opposed to just the ones that have capital because some of the more valuable users might be the ones that dedicate a lot of time you know you know submit a lot of proposals you know are really active in the community so we want to be able to get everybody you know really involved into in that form of governance and that's something that we're thinking about a lot okay cool uh interestingly uh ribbon uh who our guests last month uh uh launched the token almost right after her meetup uh and they made it uh like not tradable so kind of i think uh that leads with what you were saying um okay i'll let you answer uh win excuse question first yeah i wouldn't ask you you had a question she said in the previous examples if you deposit technique you can redeem it later for a level is it only guaranteed if the epy maintains 10 no so the moment you buy a principal token at a discount you secure your fixed rates right so so if you see in the market in the am that that principal token eat is trading at maybe 91 cents to the dollar you know that it's a 10 fixed rate api so as soon as you buy it you're effectively taking somebody's deposit position so you've locked in your fixed rate ety and we wanted to do that because what we've seen in traditional markets and what we've seen in d5 even currently right now a lot of people are playing around with variable interest rates to be able to create a fixed rate market but however if the variable interest rates go from ten percent down to three percent uh some of those fixed rate holders actually lose a little bit of their fixed rates and you know it goes down to i mean they're still guaranteed two percent but they lost the other three or four percent so we want to ensure that the users lock in their fixed rates and no matter what happens on the variable interest side you know these they're still secured on their fixture inside this is another question from hari is this order book or amm it's an amm so the reason that we chose to do an amm is because we want to be able to enable users to have additional functionalities uh with their principal tokens and with their yield tokens you know if it's if it's an order book you know you don't really get a maker and take your fee you essentially are just holding these principal tokens in their shield tokens without earning additional deal you know order books we feel are something that could be built on top of us you know additionally we've been talking to a lot of other you know on on-ramps we've talked about exchanges those are ways for us to be able to have order bug functionalities right if an exchange makes principal tokens tradable you know users can go there to be able to trade on an order book that's a little bit more you know accurate and specific but you know in terms of defy it's all about enabling yield enabling users to be able to earn you know passive income and uh having an amm and the staking ability for all users to kind of put their assets to to work even further is something that we want to uh to be able to do so yes so win as q as so ultimately this depends on the discount so to speak yes so ultimately the fixed rate is dependent on the discount and so you know like i said a lot of our thinking has been around how to create that big discount right how to uh enable how to incentivize users to sell their their principal tokens at a bigger discount and like i said if you looked at the yield token compounding slide you know if the if the variable interest rates are are 20 and the fixed rate interest are 10 if you do that entire process five six seven eight nine times you effectively you know uh tripled your apy from 20 to 69 so um you know you can definitely start to see the fixed rate fixed rate discount starts to gravitate in terms of ppy towards that variable interest rate so that eventually we probably estimate that if the variable interest is you know 20 or even 15 the fixed rate could be like 12 you know because it's still profitable at that point but that's usually the buffer before it starts to not get profitable so yeah that's answer that question what what type of ccs what type of applications can be built on top of element uh we do have a construction paper it's on paper.element.fi you could there's a little a few product ideas um that you could build on top of that uh we have a lot of different ideas for structured products um you know if you look at traditional finances you know principal protected product which actually naturally you know incorporates a zero coupon bond so you know these type of principal tokens trading at a discount actually make the most sense for a base of a principle of a principal protected product we you could build a yield ladder as well which is basically like a compounding you know liquid uh ladder that goes into different terms and as soon as it matures to go to the next one to kind of compound your fixed rate interest gains but there's also there's also a lot of different use use cases and usability for these primitives we're going to be releasing a blog post series previews too we have about 16 i think at the moment it's about 16 different product ideas that people can build and what's really interesting is if you're a builder um and you you kind of see these use cases and you want to build a product uh if you want to take a fee you know for yourself you know you essentially can do that that's essentially functioning as a prime broker you know and people are people at this moment they feel like the sentiments are gravitating towards like a d5 broker you know people are creating different products on their own and offering it as a service i think a lot of different users can can do that as well um with the next question from why sure is would it be on polygon so we've actually talked to the polygon team um i would say a few times already um we have looked into polygon like i said i think uh yearn ultimately is what aggregates our current yields if there are attractive yields on polygon that we might uh wrap to kind of create fixed rates for then we could definitely go on polygon as well it's one of those things where like i said we function as a middle player so we would have to uh see where you know balancer goes where uh the yields that we want to generate from uh goes as well so and uh hari asked who who's maintaining or controlling the interest rates the users do so we don't want the protocols to determine interest rates whatsoever you know we've seen protocols try to justify you know setting interest rates and ultimately fail we want users to be able to you know when you determine what you want to sell your principal tokens for and and and what discount the you you as the seller determines what the interest rate is you know and then when buyers you know when they determine their their essentially their appetite for fixed rates they also determine what the interest rates are so if there's too many sellers selling their their principal tokens and not a single buyer then the fixed rate number just keeps going up and up because the discounts just keep going higher and higher so you know and then ultimately maybe i get to 10 might get the 15 when the buyers start to come in they kind of bring that you know demand back up and so that's how the the control and the maintaining of interest rate kind of fluctuate between the two right so it's it's like a tug of war between the people that are interested in fixed rates and the people that are interested in variable interest so what's really interesting here is that in the amm assuming that there are not there aren't a single buyer of fixed rates like it's just all sellers uh at the at the maturity even if you know the discount discounted rate is 20 and everybody's just dumping on the on the sellers of the amm the principal tokens are going to be worth one for one in terms of value to the e anyways or the underlying asset so it doesn't matter if everybody's just selling you know at the end of the day all assets within the amm charity is work one for one in value so like i said there's no permanent loss and nobody is losing any value in terms of their asset so yes so my next question is from cc could this be used for options um it's it's one of those things you know discounted assets in general uh are one of those things that we've looked into uh in terms of the usability and utility or you know other protocols or you know such as derivatives futures market and of course options and if you think about like a european you know cash settled option one that is you know redeemable in three months from now um you could technically purchase you know a principal token that you know is trading at a discount at the moment but it's gonna be worth one either in three months you could use that and if a protocol offers it as a form of collateral to underwrite a cover call option you could utilize those discounted assets to essentially save on purchasing the collateral to write the cover call option and still earn premiums you know as as the principal token reaches the maturity of both the covered call option and and um the uh maturity on on the element protocol so we we do have a lot of thoughts around that and and like i said we have a blog post that's coming out pretty soon that details all the different product ideas that you can kind of look into but yeah that's definitely one of the different specific use cases that we've we've thought about as well i think one of our goals is to be able to create multiple use cases because the more use cases there are for principal tokens and for yield tokens the more trading activity happens on the emap and the more trading activity that happens on amm the more trading fees are you know liquidity providers you know earned ultimately so it just brings more yields to all of our users okay um sorry cece's asking will you be doing a public sale um well we we don't have a native token um like i said you know a lot of our thoughts have been around the protocol economics and sustainability around not having to rely on a native token but like i said we we thought a lot about you know the future and what's possible and like i said it's we haven't announced anything yet in regards to that but if we do you know happily share with the community thanks um bringing it back to what you were talking about earlier with the sort of fixed week trends but it's fluctuating based on the the the sort of sellers and bias if i can call it that so on the ui point of view is it like a like a marketplace where you see a bunch of different um orders or is it going to be aggregated and then the user just sees like one um one number in the front end yes it's going to be aggregated so it's going to be automatically calculated for you so if you look it's very we're trying to make it look like essentially a uni swap interface where when you click an asset it'll just pop up like what the fixed rate is going to be at this moment if you buy this amount that way it's really straightforward to users in terms of what discount they're getting and what fixed rates they're going to be securing the moment they make that purchase okay so so like um if i buy sort of a particular i'm going to call it a bond just just for ease of language um someone else buys like five minutes after me they might have a completely different um sort of return rate or interest rate yes all right yes so it depends on of course depends on the pool size the the amm liquidity uh but and and the size of your purchase if you're making a small purchase it might not necessarily affect their face rates but if you're making like a you know a huge whale purchase then it might okay and and so would i get like a like an lp token uh or like let's say a nft like with unisof v3 to represent mine so when you yeah when you stick when you stake your assets into the you need into the balancer v2 uh amms you do get an lp token yes you get an lp token for your position that you've stayed into um you know the amount so aaron just has asked a question about you know high-five finance they do fixed-rate lending um well we don't we don't actually do any form of lending at all you know we we do buys by themselves right so you you're buying a discount so you're you're securing a fixed rate so now i'm not entirely familiar with what hifi does but you know in terms of fixed rates that we don't we just ultimately only do buys themselves of that market um but lending is something that could be built on top of us right similar to if you think about any form of markets in in general they've always all started with buys and sells you know real estate started with buys and sells you know cars commodities all started with buys and sells and then eventually people build lending on top of that we kind of want to build that same primitive where you essentially start with the buys and sells of mixed rates variable interest and then people could build lending on top of that okay um so kind of i think what a couple people were mentioning earlier like uh this sounds like it kind of relies on the market itself having a high return so what do you think will happen or could happen if and when uh yields you know at some point it will eventually dry up and become a lot closer to tread fire right so what will happen then so a lot of our simulations are extremely conservative like when we do analysis we're modeling our numbers around like a three percent fixed rate api or a three percent variable interest fixed apy and the fixed rate is 1.5 you know we're asking ourselves is it still profitable to take on these positions if these fixed rates and interest rates are this low and by seeking it into the amm if there is significant trading volume it is actually still attractive because um if like for example we've modeled out a fixed rate of 1.

5 percent and staking that specific asset into the amm you know like i said a 1.5 million trading volume daily for the next three months you're earning an additional 12 percent epy so you're earning 1.5 percent in fixed rates but you're also earning 12 in a mps so these are some of the things that we've thought about in terms of how to incentivize users to still take on these positions and earn you know total yield uh in the event of the market downturns right because in when the market downturns and everybody's yields are you know two percent three percent we want to be able to still give users an avenue to earn additional yield on top of their one percent two percent so this is one of the ways okay and and a related question to this is um so because you you mentioned yearn and uh you know like a few months ago erin uh suffered this hack for the uh v1 vault so what would happen if whether it's irene or some other underlying platform uh yield generating platform that used suffers a hack um how would that affect um this this product so so there's there's two things here so number one you know we we because all the assets are essentially locked into a term it gives not only us as a protocol but yearn as a protocol to be able to figure out you know a way to kind of rest you know they've been relatively reliable in terms of figuring out compensation plans and restoring you know assets back into the pool you know without having you know users automatically just react right away and sell you know sell on whatever panic selling whatever what has is happening in the market so that's one of the things that we're doing number two is that you know we've always also been thinking about insurance i know urine has been as well uh i know you've seen the news recently nexus mutual just you know they publish this diagram about being able to cover an entire protocol with insurance so you know i think both protocols are definitely you know urine and us as well are exploring insurance opportunities for our users to be able to kind of alleviate a lot of those protocol risks and exploits okay i'll let you answer their check questions first yeah so you know johnson mentioned that you know fixed rate it just sounds more like 88 miles per hour it does 88 miles per hour they determine their fixed rate interest via you know the the average 30-day variable interest divided by two to determine the fixed rates uh we don't want to rely on any sort of calculations for those type of fixed rates because black swan events do happen like like you've seen two weeks ago you know what happens if you know they're assuming that okay in the past 30 30 days the fixed rate i mean the variable interest was 10 we can divide that by half and be conservative and say that the fixed rates are five percent but if the market crashes entirely and the you know the variable interest goes down to two percent like it has now the fixed rate actually suffers from that right because now the fixed rates are higher than what the the variable interest is now so the the users that are you know quote unquote uh guaranteed or fixed rates are not actually guaranteed with its rates so um this is very common in you know traditional markets you know like a floating rate bond and a fixed-rate bond do exist you know when you buy a fixed-rate bond at five percent you're guaranteed that even if the variable interest goes down to three percent if the variable interest goes up to three percent the person that sells you the bond is actually subsidizing the loss you know but if you know if that happens in the protocol where you know the the losses could be you know billions of dollars i don't i'm not sure a protocol could actually be able to subsidize those losses therefore we're trying to eliminate those risks and just kind of allow users to be able to create the discounts on their own uh hari asked what are the minimum and maximum for fixed and variable interest um those are determined by the market those are determined by users you know they could go you know if if it's like a crazy bull market like d5 summer and the apys are 25 30 we think fixed rates could be anywhere from 15 to 20 you know if if it's you know like right now where yearns you know apys for die or uscc is at like 10 you could definitely see like a seven to eight percent fixed rate yeah i think that's that's all the questions so going back to the some questions just now about um like multi-chain um so so is there anything stopping someone else from uh let's say they're on bsc and they find a year include and define a balancer clone uh what's stopping them from essentially forking what you guys are doing and then uh just launching it on vsc is there any kind of blocks that you guys put no that i think that's one of the really cool things about open source is that every anybody's allowed to you know essentially take anybody's code and use it and we don't we don't really particularly find any issues with that um however you know the assets that are on bsc right now you know they would have to fit a lot of different criterias to be able to have an appeal for fixed rate interest right so in regards to we do bitcoin ethereum usdc and dye usc and that makes the most sense because they're stable coins but ethereum and bitcoin are the two assets that people particularly are interested in buying at a discount because it's part of their investment strategy they're like pretty much holding bitcoin or ethereum for the next two to five years so if you're thinking about you know bsc you know you have to think about their assets that are listed there you know is it is it safe you know are their balancer you know copies and so forth are those safe as well so you know security is like i said it's one of our main concerns so you know but you know in terms of open source and what people are able to do and what they want to do i think we don't really have a problem with it we're not going to be concerned about it as well okay cool um so you mentioned you've done your uh your testing has been running for for a while um and minutes coming in three weeks any any numbers you want to share about like uh people using like yeah we've crashed the girly faucet i think twice now or three times which is you know not normal and we haven't we've had a lot of users um i think on average uh test net users you know range somewhere between 500 to 1000 users we we've actually had for the past couple of weeks we've had over 2000 users now two dozen different unique addresses a lot of our users come from hong kong china japan surprisingly uh asia actually covers half of our total use cases for our test that the other half is the united states but you know it's interesting to see the demographics um behind our test net but yeah it's um it's been really really successful we've shipped i think uh about multiple versions of our test set now we've implemented a lot of different fixes uh so you know the performance issues are all fixed now do you want to test it out uh you could go to testnap.element.5 and definitely test it out you know if you need gorilla eat i can definitely share a medium post for you people get some assets to test it out um right now there's because it's a test that not because a lot of people don't know what they're doing uh there's a lot of different arbitrage opportunities uh people who've read our papers and understand their traders they've gone into our test set with one you know one test each and come out with two e at the end of 30 minutes because they see the arbitrage opportunities they see the you know the discounts are too too small or you know the premiums are too big and they mint and the arbitrage show these opportunities are probably going to be on mainland as well but we're not sure how long they're going to last for because like i said the market is very efficient so you know when you find these opportunities you know they create bots and they basically make it more efficient yeah so you mentioned 30 minutes so so is there like a minimum time for this um kind of bond to expire so initially we're gonna be launching we believe a three month term and a six month term uh we've modeled out shorter terms like two weeks but short terms don't really make sense because it feels like even the fixed rates are variable rates so we want to go three months and six months that way you know the terms are locked and people can use those assets in the meantime but we're also exploring other terms going forward but initial main that's going to be three months and six months okay so so the 30 minutes is that expiry or they just sold it off on a secondary market somehow oh uh you mean a 30 minute arbitrage yeah they just sold it in the second part so they mint it and they realized that you know the premiums or the yield tokens were too high and the discounts were too low so they sold both and still actually made a profit and redid it again re-minted and kept profiting so those are things that are possible initially you know if the market isn't pricing these assets correctly but then once it starts to kind of even out it becomes much more efficient okay cool cool um so so uh to kind of like zoom out a little bit more look at kind of the macro side uh i asked a couple of these questions to to ken uh last month and i feel like uh it'd be interesting to hear your answers and see if there's any uh differences or similarities um kind of a lot of people are are wondering like what's driving these yields into d5 uh you know there's the whole like degen leveraging some people say there's uh like third third world countries are being able to access finance for the first time uh before this they couldn't do you have a sense in your personal opinion like how much of these yields are coming from from what sources i i think some of the most some of the biggest yield generating i would say organic yield generating protocols out there are the amms like curve i think curve generates a lot of yield uh uni swap generates a lot of yield sushi as well you know just trading trading in general they're kind of just taking all those fees away from centralized exchanges um of course lending protocols like hobby and compound are also organic forms of yield they're driving you know the borrowing uh of assets and the supplying of assets i think are where where the yields are coming from um of course right now because we're you know quote-unquote in the bull market people are you know creating these native tokens that are you know generating value and they're selling it and that's where a lot of the you know additional yields are coming from so i think those aren't where i think yields are coming from depending on the market cycle but when things start to really calm down i would say when the market turns around i think majority of the organic yield comes from borrowing and lending and from trading fees in general of course it still remains to be seen there's going to be a lot of other protocols that come out that are able to generate their different forms of yield you know i guess that element is trying to be able to create organic yield as well so you know i think other protocols are gonna come out pretty soon make it interesting okay and um so i shared with you some answers from the questions uh from what the one question i asked for the attendance before the meetup uh you can feel free to comment on uh what you think whether any of those are fixed you but but my question that here actually is more on we're used to seeing fixed yield in in traditional finance uh that's the vast majority of yield that people are are familiar with uh but in d5 it's almost the exact opposite right like that i i personally don't know any uh didn't know any fixed yield platforms uh before element so why do you think that that's the case and what's stopping like you know thousands of people out there of potential projects out there from from creating these uh fixed yield protocols well so the reason i the reason that i think fix your protocols don't really exist in the market right now is because their numbers are relatively unattractive like you know if i can you know go into a protocol that's earning me 10 000 api which is you know 20 30 which is typically what you see out there even 15 why would i want to buy a fixed rate that gives me three percent or five percent you know that's relatively one of the reasons that it's relative it's unattractive in the market right now so you know we we want to be able to you know add additional use cases for those fixed fields right like i said you're buying it at 10 fixed rates or 7 or 80 you can still use it to lp and earn additional apy on top of it depending on the trading fee so i think making it a little bit more attractive is one of the ways to go in regards to fixed rates for for other protocols i mean everyone you know there are other ways to doing fixed rates you know lending floating rate bonds as i've mentioned before but we don't really know which one is the safest we don't really know which one is something that the users are particularly interested in we believe that uh selling discounted assets in the form of like a zero coupon bond is probably the most secure way to earn a fixed rate interest without letting the variable interest market really affect what happens once you've once you've secured your fixed rate um income okay and uh because your product sounds like it sounds like it will be very appealing to uh the mainstream uh financial institutions like the traditional finance big players uh so have you had any talks with any of them about how potentially element could be integrated with their products or they could sell like a d5 product to the to the men on the street yeah both both so we've talked to like prime brokers you know brokers their job is to create products right so we talked about our primitives and how they could kind of create products based on some of their ideas uh so so that they could sell d5 related products to their their clients but also yes we could talk to institutions well people who are interested in earning physics rates of course um the big hurdle there is custody because a lot of these institutions don't necessarily hold their own assets they don't hold their own crypto um they rely on a custodial solution so talking to custodial support and you know supporting our principal tokens as you know custody is something that we've also been kind of like kind of gearing towards and having discussions about so if custody support can can hold principal tokens they can effectively quote unquote be holding fixed rates for some of their clients and from there uh i feel free to not answer if you if you prefer not to but like uh do you have a sense of like uh any kind of alpha from uh institutional interest uh in in d5 specifically uh on top of just crypto i i think there is a lot of a lot of interest you know um mainly because a lot of these different protocols don't really have a comparable you know example to in there in comparison to traditional markets uh like for example the yield token compounding you know aspect and mechanism that i've described earlier uh they don't know how to relate that to traditional markets so we have to come up with our own example and so the example that i like to use is savings accounts so you know like let's say everybody here has a maybank account and you know you deposit 100 ringgit into your savings account and they enable you to lock it up for a year and you're earning you know one percent savings you know savings rate um if maybank allows you to split you know your deposit into a coupon and then you your your one percent savings into a coupon but you're allowed to sell your 100 ringgit into the market for 99.

5 you know and somebody buys that to earn their fixed rate but you use that 99.5 ringgit to redeposit back into the protocol that's how you're able to you know earn a higher savings rate and basically quote-unquote increasing your exposure to the bank save savings rate at a small small discount uh by effectively creating a fixed rate market but if you think about the underlying strategy in all of this even if you've done it 10 times and now you're down to 95 ringgit and you have like an 8 variable interest savings rate in in maybank or any other bank account the underlying strategy is that you're still in a bank savings account so the the risk profile doesn't actually increase right you're not necessarily exposing yourself to a different strategy that's a lot riskier you're still in the same you know relatively conservative strategy you're just able to you know ex you know increase your exposure to that sense training strategy so that's how we're able to kind of explain it to them in a way that they you know understand but you know that's not something that's possible in in banking systems and traditional markets right now so you know d5 and technology enables us to kind of create markets for both sides okay so so they're interested in these like new age kind of products that they're not uh okay so we have a couple minutes left if anyone wants to ask any last-minute questions i'll feel free to ask in the chat um otherwise i would uh just ask some more kind of like uh general how to get into the space kind of questions um for windrun uh so firstly like like the the element team is is very much uh decentralized right so you mentioned like this the eastern core devs there's uh maker now uh so how did you guys like find each other before you even started on the project well we i think the the crypto and you know space is relatively small even you know because it's a very rich niche place built and you know our team at its core are all a bunch of researchers so you know researchers we all kind of know each other so we were all introduced to each other you know i would say like late last summer so you know we all i think fit a different category and strong suit that kind of really gels together you know like these guys are really strong in like technical analysis analysis and mathematics you know some some people are like charles is really strong in governance uh that's his expertise i mostly focus on just protocol economics and token economics in general and you know how incentives work on the protocol so you know and you know i do a lot of the growth and strategy and their own product ideas as well so those are like you know we all kind of just you know we're able to put this this really strong team together will our ceo did a great job of putting all of us together and creating a solid team that's really well balanced okay um sorry before you ask before you answer john's question in the chat um i want to ask a related question of like there are people here who are not developers who've been in the space for a while uh and i guess it's two questions so first can you like describe like what does growth and strategy mean in the context of defy and if someone wanted to emulate you in uh whether it's growth and strategy or some other non-technical position like what would your advice be for them yeah so so even though i come from a non-technical background i do take a proactive approach in understanding the tech i think that's also important because you have to understand how the product works and that does require a little bit of understanding of the tech in order to kind of put things together and see what works with what what and what doesn't so but in regards to growth and strategy what i do is i think about how we could scale you know user acquisition you know in regards to institutions like you mentioned or also just retail customers uh d5 participants as well uh strategy around that is of course like how we're going to move forward with the protocol like what's our initial first step in terms of you know acquiring users what's our second step um i think a lot about product ideas as well you know i think products generating products and how they fit with what we're building i think is really important and you know in order to think about product ideas and integration so like i said that's part of strategy as well integrations and partnerships you have to really be focused on what's going on in the space like you have to know what like you have to be on the pulse essentially in terms of like the current events what's coming out you know how does this certain protocol is it a good idea and then you know those are some of the ways that i think you know enables you to become like a really good business development growth or strategy person you know you just have to be able to understand what's what's currently the current events that are happening in the space and how it relates to and how it is relevant to what you're building okay so i think uh we'll let you answer that one last question before we wrap up the meal um john yeah he says if i have 100 usd and i sell it at a discount and reinvested again to earn 10 percent at usd so so if if you're reinvesting it again to earn a 10 uh then the discount would be bigger right so if if if you're profitable earning a variable interest at ten percent then even if you're selling at a five percent discount six percent discount you're still profitable you're still net profit like if you remember the like i said you could look at our paper that element on fi we we've run a lot of different simulations depending on the discount of the asset depending on the variable interest but um i'm assuming that i'm selling at a not at a 50 50 discount which so it's 99.50 and i'm earning a one percent you know uh variable interest so i'm creating a half percent fixed rate and earning a one percent variable interest and it's still profitable so in this case you know if i'm selling at a at a 0.05 uh discount or like a five cent discount um and i'm earning at a ten percent variable interest then um the market is fairly inefficient and people are going to correct that because either everybody's going to start doing the same thing and minting and selling until the discounted rate gets a lot bigger or nobody's going to buy the fixed rate until it goes to that you know i would say suggested discounted rate so that's that's the that's to answer that question um but yes it in terms of like how the yield token compounding works um you essentially just sell your principal tokens that's locked in for a term at a discount and then you repurpose that capital back into the protocol to essentially double down or almost double down on your variable interest position um i i think it's probably better to look at an exact example um yes i'm also happy to take this offline as well to just kind of extend it further to anybody who's interested okay cool so um it's already 9 33 or 3 minutes over time i do want to make sure people uh can can leave politely um so thanks thanks a lot woodruff for um joining us today um yeah so please uh thank him everyone in the chat um if anyone wants to stay on after the meetup officially ends uh feel free to do so i will stop recording now