Savings 2.0

angled is a stepcoin protocol so USD and euro stable coin and Merkel is an incentive infra and so I want to talk about like savings 2.0 zero. So the first uh savings account appeared with maker in 2020 with DSLR and now it represents approximately 10 billion uh in defy TVL. 10 billion in defy TVL is uh again approximately 7% of the old uh defy. So quite a lot uh depend on that.

Um and so I think like the current solution of savings account is quite archaic because it didn't really move since then. Um and so basically it's one year for hold. So whenever you opt in into the savings accounts, you receive the same yield as anybody else in uh this opportunity. Um and so I will propose like a new alternative uh to spend less for the same outcome. So it's mostly for the protocol on this side.

But if you spend less, maybe you have some spare dollars to to do other kind of kind of incentivize incentivize opportunity. Uh something more more expressive and a better better user experience. So, I'm just going to do a quick um a quick intro or like repeat for for some of you how a stable coin works in in the back because many of the stable coin like uh went toward the same model and so there's four pillars. Uh the first one is a primary market. There's a primary market when where you can issue or redeem um the stable coin against like highly liquid tokens.

So, USDC, USDT, uh this kind of stuff. The second part is a lending facility. So you can borrow the stable coin against uh whit listed collateral assets. Um and the third one is investment facility. So most of the time the stablecoin will invest the treasuries they own uh into some uh strategies.

And the last one is the saving solution. So again uh distribute uh protocol yield. So from the three other uh pilots to stable coin holders. And so we're going to focus on on the last one. And so how did they evolve since 2020 or 2022?

Uh primary markets uh really got a bump on the IM side. So like the way you're going to swap the assets and also on the risk management for instance at Engle we innovated a lot on the risk management side of it. Um following USDC PEG and many other SEO did the same thing. Uh so quite a lot happen on the primary market on the lending operation also like here um basically like the st the protocol um externalize this this side of it to other protocols such as moro oiler and this kind of other lending protocol because it's basically the same uh job to do and so it makes sense to have a state-of-the-art by just depending on other protocol because defy is for that composability um then the investment uh side of um there was a surge of real world assets uh so I think you didn't miss it and so many of the protocol um the step protocol invest into real world assets and they are doing some kind of like uh B module that invest either like in real world assets or in defi uh defy uh defy protocols and so basically what we do at angle we have like a max between uh what you can have with holding re real world assets yield tokens uh yield bearing assets and defy lowrisk uh yields and what happened to saving solution just nothing. Uh so something is is off with that and uh and uh we we're going to check uh what what is off.

So savings 1.0 zero. So what we currently have um so the way it works like uh for the saving solution is that there's one stable coin, two tokens, so one stable coin and one yield bearing token but it's actually just used as an accounting measure. Uh it doesn't uh it doesn't do anything else that just accounting. So basically you're going to in our case so it's USDA is a sable coin.

SUSD is a yield bearing version. you're just going to deposit your USDA into a smart contract and receive uh this receipt token uh STUSD that is yield bearing and that's it. That's the only thing that it's doing. And so it's complete outside of everything that the the stable coin protocol is doing. And so after that just to emphasize on that after that so you've got some diversification of treasury but not related to this the the yield bearing equity measure and so it has a lot of flows.

Uh the first one is rigid economics. uh why reject to economics is because there's a rule of thumb um in cyber protocol that you cannot give a savings rate higher than what you're lending for because otherwise you're going to get hub by like advanced users because they're just going to borrow the ST token from you and deposit into the savings account. So it's a zero sum game. Basically what what the protocol is uh what the user is earning the protocol is losing. And so it's really a bad it would be a really bad thing to have your savings rate uh higher than your B rate.

Uh the second one is user confusion. Um so many times I got the question what is the use for like this STUSD? Which one is a stable coin? So just confusing about like this accounting measure. um after that high maintenance and complexity just because you need to integrate two uh tokens to every defy application and so the savings 2.

0 zero that I'm going to present is okay so as it's only an accounting measure why don't we rely on this smart contract and just do offchain computation and so that user don't need to opt in into this opport opportunity and just like receive the yield through hairdrop uh without like interacting with another smart contract. So it keep it simple because you only have one token there's only one only the stable coin and so it doesn't lose too much the user and uh so just like the offchain uh kind of component that will consume the blockchain data to distribute the right wheel the right yield to the right users and so again as it's not at its tail it's fine grain you can have like different savings rates uh for each uh addresses it just depend on what the protocol wants to And so what does it solve? Um so as I was saying as it's like it could be a rate for one address uh in general. So you don't have like the issue with the lending and borrowing the borrowing and the savings rate uh because you can have um uh you can like give a rate that depends on the user journey. Um basically if you are borrowing from us then you will receive like a lower yield and so you can like really have a rate per user journey.

So it's pretty pretty powerful no development overhead because uh as it's highly commoditized like the way it works in general like the 100 plus uh seen protocol could rely on the same infrance so you could be like live after a go to market directly um and and yeah and so I just want to make a quick um comparison between the two solution and I'm going to focus on like quite a few of them. Uh the first one's a non-custodial both are not non-custo because the first one you don't even touch the capital of the user the capital stay in the the user wallet so it has no control of it over it and the previous solution so the savings 1.0 Z uh was based on smart contract. So it's non-custodial too. But this bring like another risk uh for the for the users uh because as you need to have your capital in the smart contract, there could be some um some smart contract risk.

There could be some u mismanagement of like the protocol uh keys that may uh make your capital in the end because it's stolen. Um, another one is it's more savy because again you have run rate and it's more like what you can find like in traditional finance like in general like having like one borrowing rate run borrow one borrowing rate sorry for that one for per user and same thing for the savings rates in general you don't have one savings rate for everybody it depends on what you're doing with this and so it's more close it's closer to what you would have in general um another one uh that is not in favor of like the 17 2.0 but I think it's not really a blocker is the latency. So with smart contract base you have uh yield that is going through like every block while with the other solution it's like every four hours but it's non-limiting in my point of view because in general as a user you don't really need to have access to this shield like in in constant time. So it could be decreased like four hours is still quite long but it could be decreased to uh 30 minutes or so.

Um the another one that I want to emphasize is the risk for the protocol. Again here there is no difference because the only funds at risk because there is this offchain component. So you could think okay so it would be more risky um in the way they are managing the the the the yield we we went through. Um but again here's it's only the unclaimed amount about so whatever that has not been claimed by users is at risk but what what what every everything else that has been claimed and on like the user like pockets cannot be redeemed from anywhere from the savings 2.0 solution.

So it's pretty close like to the same kind of risk for the protocol too. Um so yeah that's kind of like a round up on on that. Uh so yeah just to conclude um what I propose here is to stop this archive solution where you just have like this accounting measure onchain because it's just there's not many enough reason to keep that against like a navl like solution that I'm proposing with a offchain computation uh outside. So yeah thank you for for listening um and enjoy come [Applause]