Make Wildcats Great Again | Laurence Day - Wildcat Labs

[Music] I'm finding myself a little bit sidelined I'm normally a real Walker and talker uh but this time I now have to go back every time that I want to um I'm waiting for the the this to start oh and it started hello everyone uh thank you for joining me uh on uh day x of East Denver well guess day one of the main event next to uh for those of you that are not here and watching from online next to an orchestra which is about 30 40 m away so if you hear ambient music I promise you that's where it's coming from I didn't choose this so the topic of this talk is making wild cats great again so question for the audience raise your hand if you know what a wild cat [Music] was the fact that bu of you are not raising your hand is really disappointing given I've spoken about it for 3 years but wildcat banks were a feature of westbound expansion in the states in the 1800s they were individual banks that were set up effectively in the middle of nowhere and uh they they took in deposits and they issued their own script notes they were called wild cats because people either I I think the the prevailing Theory goes that a lot of the not had wild cats on them or because they were so in the middle of nowhere that wild cats were the only things that you could see so they the way it worked was obviously this was the 1800s so you had to kind of go in and be like I'd like to redeem my stuff please please show me your backing collateral and there are a couple of famous cases where you would uh you know you get like a chest of the money that was backing the coins and You' peel back a layer of coins there would just be like iron screws so they eventually like they proliferated really hard and then ultimately collapsed um the the way it's told by Elizabeth Warren and Co who uses Wildcat as a slur is that they effectively like were such a disaster that they necessitated the creation of the Federal Reserve and the banking system which we all love today now I've already actually I've just gone over these slides already but uh yeah they they relied on you knowing that they existed like everything did in the 1800s they also relied on the fact that like they were in the middle of nowhere so it was actually quite difficult to cash your script in so you would end up having to trade those token uh not tokens I'm I'm I'm skipping ahead slightly um you would have to trade your Wildcat notes for whatever people reckon they were worth for in whatever like bum town that you were in now it turns out that we are actually in the year of Our Lord 2025 slightly better positioned to inspect the details of what's backing things and we don't need to go to allegation because we could just sit there on an RPC so I think there's been a little bit of historical revisionism about wild cats in the last 10 15 years especially by pet people from like uh Peter selan who really really big on kind of like open banking again but yeah uh the reality is they they did expand the monetary Supply they they did provide credit even though it was dangerously edged credit because you didn't necessarily know if it you know how well it was backed but you had that option there available to you and given that at the time most of what people were doing were trading Furs and what have you it it did give you an option to do some kind of financial engineering so I I am hating the fact that I have to go back here to click next I should have brought my own clicker apologies everyone so we've all been here for long enough God knows we are trapped in an unending cycle of down but it was worse 3 years ago um as you all remember we all collectively loan something like 50 55 billion through platforms such as Genesis blockfi Celsius and so on last time because Zer was a phenomenon that was happening and 8% on your usdc was an amazing deal but we didn't know where anything was we didn't know who was receiving it we didn't know on what terms it was all completely opaque I would argue that we can do better this time and we should just because these platforms collapsed isn't necessarily although tied as an indictment on their business model however it needs more eyes it really really does it needs people to be able to see and inspect and autistically write 30 tweet threads on what's Happening to what borrower on what terms I hope you watch this eventually Adam so I I do believe that like I I work as an adviser to Oiler I am one of my first big defi nerd Snipes was arve I love over collateralized lending being able to effectively Lombard loan assets one for the other with ltvs I think it's amazing it's one of the things that really like excited me about crypto but if you don't have that Capital to start it makes expansion incredibly difficult and currently there are a couple of Brokers that exist such as hidden Road Falcon X there are a couple of protocols as well which still all do secured lending now but there are not many mechanisms to enable or support under collateralized credit that is recorded and visible on chain today I I think it's probably a little bit trite to say the phrase borrow against your future but that's effective L what the VC model is right well you're not borrowing it you're giving it to people but we need a mechanism to do that I I I've I've thought about this for years before I started in crypto I worked at a startup that did AI ml modeling on like individuals and how much you could borrow in a community you know this was back in a time before saying all of those words together got you 50 million in a preed investment from like slavering uh VCS but it does require thinking a little bit different to how we do things now in crypto we very much say you know trust but verify not your keys not your coin Etc the default thinking here is that debt is over collateralized by default this is why we always talk about the concept of bad debt I think that was something that happened very recently on Venus with zky I think that was like in the last couple of days if not hours if I not got that wrong but it does require that we the point of a ledger is to inspect things publicly what better purpose then to use it to record actual debt it means that we should at least try and introduce a mechanism for under collateralized true under collateralized lending on ethereum and that means bringing wild cats back I think we know where I'm going with all of this especially if you've seen Twitter in the last 2 hours or so your favorite twatters do agree this has been a long beat drum that it is a thing that we need to introduce as a primitive again I'm not sure for context uh was Lawyers the rest of it does suggest that I borrow a billion dollars and then flee a country I think so that's why that one's cropped but the but the general G is there credit is a growth engine for every economy and defi is our attempt at creating one of our own we need credit expansion so I'm not much of a believer in telling people what to do unless they're in my the group chats I don't think a neutral facilitation layer to decide anything about what a deal should look like this is also because I've been corrupted by contract law and I think that freedom of contract is pretty important if you decide that you want to borrow $100 million worth of Mady tokens at 30% APR that should be on you there should be a mechanism to allow for that I I also believe that you should not necessarily be pulling debt to go to multiple people because then you have Tagan we saw this happening on a couple of protocols in the past one would collapse and it would effectively haircut everyone you should also be able to trade that debt if you go actually I'm lending to Lawrence and he looks like a shite deal now but I do think that someone should be able to like collect this in court I should be able to sell that debt on tokenized again true borrow or lender Agreements are often very different to what an underwriter will decide they are and I think there should be a mechanism to allow for that but the problem is always that you need someone will always say what could go wrong with underwriting or handling defaults three Jan's a really good thing that if you're American I really recommend looking at 3j and they partner with collection agencies in the US they ask you to use pled to tie things like your bank account details and so on and so forth they they partner with agencies that will break your kneecaps if uh if you default maybe don't do that but it is very much an American Tool right now uh Andre cronier has just released block Bureau some people think this is a dark path I think it rocks grabbing a bunch of like hundreds of millions of transactions and getting a model for like what does your behavior onchain look like in terms of your ability to repay I think it's useful but these are all focusing on individuals who want things like mortgages or short-term five figure loans so when it comes to underwriting I also believe that it should be very much caveat mtor you should be able to facilitate those things by doing your own due diligence if a borrower does not want to tell you their details or like you know kind of where they're based or what their financials look like you shouldn't lend to them that's pretty simple so the other part is and I I think this this angers a lot of crypto lawyers when people default we we saw this with three arrows Capital may they rot in hell they're like things like claros don't cut it this kind of like come by our notion of unchain mechanisms for resolving courts just doesn't work when it's millions and millions of dollars that have been like you know Alam into the void so but we do do have ethereum Tech so you can say here is Tech that creates a legally binding contract and you can just sign that with ecdsa it turns out there are not many countries in the world that don't permit that as a legally binding signature and but with that said yeah if someone comes to you and says oh yeah hey I'd like to borrow like I'm some arbitrary Market maker based out of I know Slovenia not that I have any problem with slovenians and I want to borrow at 7% that probably not that much over the you know the overnight rate in the states and they be like well no you should actually reflect that a bit higher with what you're offering and if they don't you shouldn't lend to them so again if you saw Twitter we built this and we released it 2 hours ago with the Wildcat protocol a new version that has been the bane of my development life for the last year the fact that I have not killed myself publicly is Testament to how much I want this to happen well we've changed uh very much un voked everyone talks about hooks for everything univ V4 every type of deal new versions of balancer pre and post-transaction hooks that gate logic you can now have fixed duration markets you can now have things like you know minimum deposits if you want to like ZK proofs are a really important part of where I think this is going ZK Tech is finally commercial grade and if you want to be able to say I am only willing to borrow from someone that has sent me the DNA of of their dad we now have the ability to do that even if it's something much lighter like I just want to check on chain through chain analysis that they're not ofac sanctioned that's possible that's light work that's one function call but you can pass things along like oh we've hashed a passport and that matches what's on your Kraken accounts amazing I do believe that you should be able to borrow what works for you and lend to who you trust I've not been following much of the slides but I think that's important it's live now is not going to thank me for doing this but winter mut have been using this like in a very hamstrung version for V1 uh to not stop them from doing something like 77 million and no one hates wintermute for doing it more than they do for everything else for charts we've been onboarding a bunch of people over the last couple of weeks and it's surprising cuz people go if you're a huge Market maker why would you need to borrow under collateralized or like why would you need to ask the retail markets and the answer is if you believe that you're able to effectively use that capital and things like Brokers C you at a certain limit why would you not try I I will confess I considered speaking to bit the other day uh you know in the after the heck is like we could probably try and spin you up like something really quickly but then they got their Bridge loans really quickly from bitg so you good on them that's private credit that was no collateral no interest rate give it back when you're ready and I want that kind of stuff to be available on chain for everyone thank you very much [Applause] I don't know if I have time for question I have 50 seconds I might just stand here and sing I'm not s