HackMoney Summit | The Future is Permissionless

[Music] awesome so yeah so we're just going to jump into our next chat right away um it's going to be called the futures permission list that's going to be with a couple people from the badger dow team i also invite them on now uh yeah so we've got spadaboom uh in the corner and then we've also got will from the team so i'll let them do a quick little intro about the talk um and uh yeah let them take it from here sweet thanks jacob uh and thanks to hack money team uh great event today and great to hear uh lots of the other protocols involved speak um yeah today uh if you haven't guessed already we're uh both contributors at badger down myself and uh in spadaboom um and needless to say we're really excited about the future of the protocol of decentralized finance and where it's trending towards permissionless um so you know the word decentralization is taught uh you know tossed around a lot uh it exists within sort of our namesake being badger dao uh it spans across many different aspects as it pertains to our business uh but the the area that we're choosing to focus on today is really focused at the smart contract level uh so yeah we're hoping to dig in a little bit uh to a permissionless future why we're excited about it uh how badger is trending towards this and what this means for the future uh so chris why don't you start us off by sort of digging into um you know uh what permission this really means at a smart contract level and how you know perhaps decentralization isn't actualized in reality at the inception of a project but it's more sort of an intention to improve towards over time yeah sounds good everybody thanks for tuning off well i wanna really hit on that that last point and start there because i feel like there's a misconception in general around um anybody launching anything on ethereum assuming that it's pretty much decentralized you know from the get-go um a lot of the times you know smart contracts specifically and then let's talk about you know the d5 space in particular um when you launch these smart contracts there could be a variety of different parameters and controls around them that involve a human you know people obviously heard um you know the term eoa for example or multi-sigs these are all just different ways to have certain types of control and mechanics in a smart contract so you can have a smart contract that's deployed that does a certain thing but the entire smart contract can be changed because it's been tied to you know an individual you know when it relates to um different parameters around a smart contract a lot of the times they can be affected and changed by human intervention and it requires a lot of human involvement for the smart contracts to um operate in a certain manner as well and that goes against really the nature of why smart contracts were actually created and that's that's the point that i wanted to really focus on today is when we say the future is permissionless it's really about what the journey looks like for d5 protocols and for anyone developing and deploying smart contracts on ethereum to be able to have this progressive decentralization and eventually get to the point where you have immutable smart contracts that are permissionless in nature and enable you know if it's users or individuals or anyone to leverage those contracts and be able to have complete autonomy around putting their capital as an example into a d5 protocol and isolating their capital as part of that as part of that uh specific contract and or having the ability to um tell having the ability to dictate exactly um what they want that smart contract to be doing for them for them and then only as an example so that's that's really when we talk about the future promotions and i think speaking about badger in particular if you look at our protocol for those who aren't familiar badger has a variety of different products that that was built and released our most popular product is a vault product that enables anyone to earn interest and earn yield on their bitcoin and their bitcoin deposits across ethereum and a variety of other side chains and um those vaults you know have managed billions of dollars and those smart contracts have managed billions of dollars and they've been live on many of them for over a year and even still there's certain parameters and controls around um certain primers and controls around how those smart contracts actually progress from being completely being completely progressing to being completely immutable and if you think about the risks that come with different parameters in place like the risks associated with um having something controlled by an individual or a multi-sig or you know a two of three versus a five of seven multi-cigarette things along those lines it it changes um it changes the risk parameters for that specific contract and for the people actually using it so you need time to obviously mature and be on mainnet for for a period of time be battle tested obviously go through a variety of different audits before you can even get to the point where you can think about um making it more immutable but i'll stop there for a second i wasn't sure if well you wanted to dig deeper there or jump into something else uh no that was a great intro chris yeah maybe i mean obviously from our perspective the best examples uh come from within so maybe you can take us down the road a bit on badger's journey from inception i guess december of 2020 uh at this point um and how we're kind of working towards this and some of the stuff that we're that we're really sort of doubling down on from a deep tech perspective to make this a reality yeah sure so as i mentioned just briefly um you know we we launched in december of 2020 with our vault product uh where it enabled anybody with tokenized bitcoin to deposit it and these vault strategies these smart contract-based strategies would take different lp tokens like a curb lp token for those are familiar and it would do different things with it to generate yield and the primary the primary in the beginning at least those initial strategies the primary functionality was to take curve awards that are being earned by the lp sell them for the underlying position which is bitcoin and then auto compound those back for the lp so it takes the work out of the lp having to claim those rewards and saves them in gas and time and obviously time to actually do the auto compounding and that was really the core value proposition you know of those vaults and those vaults um in the beginning of course and i think this is you know the nature of d5 but um being at the current state of the market with d5 when contracts are deployed if there's quite a bit of excitement around the protocol in the protocol launch very quickly there is enormous amounts of capital that are deposited in touching these smart contracts as that happened with you know with ours with the contracts that um were deployed by badger which you know within the first couple months there was billions of dollars there and if you think about you know any type of regardless of how much you prepare and audit and review and do everything leading into a mainnet deployment and and having it in production for anybody to um to leverage and use it's it's next to impossible to get the type of maturity in that contract and have it be battle tested enough to be ready for that type of that type of capital and that's where certain levers and certain controls around the smart contract and allow around the parameters of that smart contract for example upgradability actually in badger's position actually reduces the risks and and better manages the the risks the risk parameters because if there was an issue or something needed to be changed because of the immaturity of that contract it could be upgraded through appropriate governance um through the token holders through the community but just having that capability is um is very important in those early early stages now as that progresses and becomes more battle tested and those strategies get better leveraged and they're in production for a longer period of time then you can get to a point where you can remove that upgrade ability you can make these contracts more immutable and then you know you the the other side of that and i think this is really the the basis of the conversation around a permissionless nature um you know when creating those contracts uh badger dow contributors and developers are designing uh what those strategies are in the smart contract so when you deposit a token into that contract what that contract actually does with that token is defined and those parameters are detailed by the developers and again that's another level of um i guess you could say control and and risk management and we see that with a lot of protocols today and again over time once those strategies have been deployed across a variety of different lp tokens on the same platform leveraging the same staking mechanics you know testing out different things like auto compounding versus um optimizing those rewards by taking them and selling them for a percentage of you know bitcoin and eth and stable coins versus just auto compounding you can get to the point where anybody can actually dictate what they want the vault to do and the protocol to do with their deposits and have the ability to actually deploy these themselves and manage the different functions associated with that contract like harvesting and doing things along those lines and that's when you get to the point where you have a complete autonomy in complete cell custody and that's where you know we're really trying to go you know with the badger protocol is moving from being an app where um you know different contributors dictate strategies deploy these vaults users come to the the app and deposit into those specific vaults and strategies to more of a baseline protocol where anyone can build on top of our underlying tech and they can permissionlessly deploy their own vaults with their own strategies for their own capital and and manage that really themselves without of course you know that's the whole point of the smart contract that it brings out automation without actually having to manage it but being able to um do that themselves and then build on top you think about all the different opportunities that can come from applications and other protocols building on top of um yield involved strategies like that you know the opportunities become become endless so that's you know that's where we started you know we started with um vaults with more control more human controls around the smart contract for risk mitigation to removing those controls but still having human input around what those actual strategies do to a point where anyone can deploy those strategies and dictate what the strategies do and and have a mat have a level of or have completely self-custody around those those vaults and build on top of the protocol themselves yeah so i think it's fair to say right and you know at inception for the most part you need some level of human intervention decentralization isn't fully realized you know at that point it's more of a well-intended thing that can kind of trickle down into other aspects right i.e governance um you know doing your best to sort of source decisions or involve token holders in those larger decisions so there's sort of like a decentralized decision making process to an extent um but rather the intention is is you know behind building the tech towards you know what becomes this permissionless thing into the future so i guess that's a you know it's a bit of an it's a bit of a an on-ramp into you know where where do you see this taking us the tech in general um i think you know from what you've said so far the opportunity for for badger um really lies and being this really strong foundational layer one and like you said you know you have to battle test you have to take time to build the right smart contracts you have to test them you have to make sure they work it would be silly to think that you could put you know an immutable contracts out there right at the gate um so i think this is a great approach but you know where we are today to where we're going in six months to 12 months from now where do you see this having the most impact for you know not only badger but potentially the defy ecosystem as a whole and as a whole and you know beyond that well you know well i think i think what's important is like this is our you know a lot of the contributors that have worked at badger this is the collective's um perspective i don't want to say uh goal but it's more like this is at least how we believe there should be a progressive state of decentralization that doesn't mean it's right doesn't mean it's wrong it's you know how the contributor is going to push things forward at badger and i know many other protocols actually see it a different way and actually deploy mutable contracts from the from the get-go with limited upgradeability and things along those lines but nonetheless i think it's important just to just to speak to that um speak to that uh those specifics right it's there is no right or wrong um as it relates to you know the next uh six to six to 12 months i think you know we're going to see more and more of this we're going to see more protocols mature um further refine and build better tech that goes into the past as as they've insured those protocols changed quite a bit and they get to a point where um you know the smart contracts themselves are are living and breathing you know organisms doing doing their own i think you cut out there chris you're just on mute oh sorry i just said i apologize i was um for cutting out i'm not sure what's going on but what was the last point what was the last point that it cut out before well uh you were just talking about the future potential for for other protocols looking to build on top where we're going with that yeah it's you know it's less about badger i think just more in general we're going to see more and more uh protocols mature detect mature and these smart contracts that are living in production you know removing more of those guardrails right and becoming things that there is enormous amount of confidence for other people other protocols and in turn other contracts to build on top of and build with and you know that's the journey that that we're intending to be on we want really anyone that's any individual or any protocol that's looking for unique reward management and composable yield strategies that want to have the ability to dictate almost like a factory you know what lp asset where that assets potentially going what um but yeah i guess the i'm not sure what caught up with the point that i was trying to make or what i was saying was um you know really we want any any uh protocol and any um even you know individual that's looking for the ability to customize and tailor their yield strategies and have confidence in um you know the the underlying security and the underlying management of those strategies to be able to build on top of badger and um again like have that level of customization around what the strategies are actually doing versus maybe potentially having the ability to integrate an existing strategy or vault for example which people probably heard the term of and instead actually dictate what that vault does um i think that's that's really what we're trying to progress towards and we're trying to build you know tech around to enable that because you know we're not there yet um you know some of the the tech that we use we leverage you know some off-chain functionality for the purpose of distributing rewards optimizing those rewards as an example um you know if if we're taken if the yield strategy is to take a curve lp and to put into convex you would then be earning you know two sets of rewards cvx and crv and to then you know what you do with those rewards is really what you know and this is obviously just a basic yield farming strategy but you know that what you do with those rewards is really you know the layer that we're talking about here because you could take those sell them back as most do um but instead if you can take you know 26 of one of the rewards and sell it for a stable coin that is then automatically deposited into another lp position and stake to earn more and then you know 44 that's doing something with a different asset that level of customization and if you think about you know how that expands in the future when it's not just basic yield farming strategies from large dow treasuries to apps that have specific functionalities that they're excuse me specific features that they're trying to offer to their users like you know maximizing xyz or a sell for paying loan like alchemists for example being able to have that level of customization i think just opens up a whole new world of opportunities and um ideally you know as we continue to you know build that out we can obviously build confidence in in the technology because of its of its um overall history and production and the security posture of it but as well give the ability for these new protocols and new applications to come up with really cool use cases what to do on top of that without having to have that level of domain expertise knowledge and workload resource allocation actually you know do the yield management part of that stack yeah for sure it makes sense that it kind of paints a clear picture right and from from i guess from our angle from badgers angle is you know the future is really double down on the tech and focus on on building this sort of permissionless um opportunity for for folks and other protocols to build on top um and obviously you know in doing some of that you obviously take some uh you know human intervention touch points out of the process which i guess could be good and bad but um you know at the end of the day you know the reason where we're sponsor pac money is to hopefully work with some you know great individuals looking to build um you know with badger and in decentralized finance um what do you think the future uh spada looks like for you know those who want to contribute um and uh the future of sort of building with badger because it feels like you know if in general the eco ecosystem moves in this direction it's it's definitely getting very tech heavy with a lot of opportunities to continue to innovate build um towards the future yeah i think you know you know things like hack money are so fantastic because it gives an opportunity for builders to come together and collaborate with really just other builders that may have have protocols that have been built that are that are looking for more eager builders to come in and build on top of or integrate with or um you know just collaborate with so i think you know naturally in the d5 space and then you know you want to talk about uh the the culture within daos is to you know just just get involved right and um if you look at what for this uh for this uh hackathon in particular you know one of our lead developers uh alex he's done a great job putting together a mix but we lost chris yeah well there he is you were just talking about alex yeah i was just i was just saying that um um you know alex has done a great job at making it easy for anyone to start building on badger and to get up to speed relatively quickly on our co-base and how everything works and um the different ways to actually start building today with a variety of different examples regardless of you know someone's uh you know experience building in this space building in deep fire or not and i think what's important is it should be easy for anybody to start to start building and that's as much like you know what you're actually building on top of as is the tools that enable someone to start building quickly so i feel like you know we've worked really hard especially over the last six to eight months to make those tools more accessible and as part of this hackathon in particular i feel like there's a a really good way to to get started and to kick start things so i'd encourage anybody that's looking to build anything around bitcoin looking to build anything around automated yield strategies to to dig in and help us work towards this place where you know yield strategies are completely permission it's almost like a factory or anyone can choose you know what goes in how it comes out has the ability to deploy it themselves um and um and have that complete level of autonomy so yeah for sure i think this uh idea of a permissionless future is a good mantra right like getting involved in in decentralized finance or working at a dow is is a very permissionless endeavor i would say right jumping in uh taking the plunge bringing something to the table and and then just you know building the future together so i think that makes a lot of sense um yeah i guess we can close things off chris with just like you know we're excited to be a part of pac money we've got some great uh prizes up for grabs if you hit the prize page we've got a lot of resources we've done our best to sort of put enough content to make the process permissionless for you to get involved and yeah i guess we can wrap there chris it's been a great chat and i'm excited for the future uh and i'm excited to just keep building and meet some new folks as they come through the door same super pumped awesome awesome thank you folks uh we still have a couple more minutes i was wondering if i could maybe ask a question from the audience uh on this um for sure it's about when you mention sort of this like kind of framework of progressive decentralization of defy apps and going from you know humans can intervene to humans can intervene via governance and then even maybe as far down the road it's like burning the key um i wonder what your thoughts are on protocols in general um like what the role is for protocols and actually kind of educating uh the people who are using their contracts on maybe what stage they're at or maybe the ecosystem in general kind of setting some standards for for sort of giving people more predictability on what kind of level of decentralization they're interacting with i think it's critical i i think you know uh transparency is you know the the highest standard across the board that wants that we want to uphold not we saying we as an industry so when anybody's interacting with these contracts they said they should have a level of understanding of how decentralized or not decentralized they are in which stage and path of that journey um those protocols are on and that smart contract in particular those smart contracts are in and that in itself and the willingness to be transparent i think you know uh is like that that first you know flag right if i think we should be moving to a place where um if the humans behind the protocols that are building them and and building these smart contracts aren't uh aren't open to bringing transparency at that level that in itself should be something that would make um that would make a potential user that's interacting with that contract uh weary so i i do agree that it should be something that is um that is highly transparent and i think as an industry we can and we should be doing a lot better at this because there is a lot of ambiguity and there's you know we hear the term aping there's a lot of eight being going around you know not boarding but like you know legit and um you know there is a lot of money that's that's being put into these contracts and being used nowadays versus a couple years ago so now more than ever it's important that the users that are interacting with them have an understanding of what that what they're actually interacting with awesome uh cool well thank you both for your thoughts and and your questions and and uh and in the talk of the last little bit um we appreciate you taking the time to to chat with us for hack money and thanks again for badger support and like you said feel free to take a look at the prizes and also the tech behind badger and how you can use it in your hacks thanks so much folks thanks for having us