Cool. Today I would like to talk about forconomics which I think is a new paradigm how projects can collaborate in DeFi. Who heard about forconomics? Very few. So great.
Um maybe first to understand forconomics quickly um a primer liquidity v1 was launched 2021. It's a interest free. It gives you interest free loans against your E in LUSD. Some of you might have heard about LUSD. It had more than 5 billion in loans.
And the most important part for this talk, it was a top three forked project. So it was heavily forked. So it seemed to be a really nice blueprint if you want to have a stable coin. Um but at the end there weren't many synergies. So when we built V2, liquidity V2 which launched this year which has bold as a stable coin, we wanted to do things differently.
So V2 I think with V2 we created a successor which is the most efficient and decentralized borrowing and stable coin solution in DeFi. I think um which brought a lot of innovations. uh one innovation uses set interest rates something unheard in thready and even defy 100% of the revenue of borrowers uh is passed through the the users that makes it really efficient this protocol is not taxed nothing is extracted which I think is really beautiful and can be only done in in DeFi we have protocol incentivized liquidity we have heard it before liquidity is a really important point. So the protocol takes care that there is liquidity for the stable coin. But most importantly, we also wanted to pioneer for economics or Max from our team pioneered that and shift uh from competition to collaboration with forks.
Something we haven't seen a lot in DeFi and uh you will see how it's going. But first, what's the idea? Um yes, strange. I always try to find the slides here but I think you see them there. Um what V2 offers it's cheap credit and leverage and it provides uh almost like a commodity for people that want to build that on other chains and bring a stable coin there.
If you have another chain, you have to bring USDC, USDT. But if you want to have your native stable coin against your native assets on orbitum orb on base, um I think liquidity v2 is a very nice solution to get that. So defy teams want a sound product and a fast go to market because it's incredibly hard to build such a such a protocol and it costs a lot of money. Um at liquidity we had I think this beautiful product but bootstrapping is really hard product is just the first step. So we were trying to figure out how can we get more synergies and what we did in the essence we said okay we're not going to make the code open source it's still source available everybody can look at it but it's on the BL license unis swap has that has that morph has that so everybody industry is having that um which will switch to an open source license in three years so we have the IP and other projects have the incentives, have a reach, have a network.
And we wanted to combine that. And how we did that is um that we said we want um we allow forks to take our code in their own ecosystems with their own collateral. So to align the markets um they can deploy that and freely do that if they also give something back and collaborate. So in the form of tokens usually the agreement is that part of the tokens four to 5% goes back to the existing ecosystem they can use the code um we share other stuff which we will see then um how is it going actually I was totally surprised when Max came with the idea I saw maybe five projects then three three go away right now we have 20 such agreements and that shows how people are looking for such a product that they like a offthe-shelf product that can take and and run with it. Four projects are live.
There is right now 370 million in TVL across the first forks that are live. There you see uh some names, some chains, some networks um that are coming and how does that help liquidity? I call it yield festival. But with these forks, first of all, what's even more important, liquidity v2 becomes its own brand. People know it from other chains.
So we share user bases without competing on the same use cases. But um forks give also back incentives to bold user that's a stable coin um or liquidity provider of these um stable coin pairs. So that's how liquidity benefits and the project benefit by just almost needing only a business team to run the project. That then translates into like a point program. That's how you um bootstrap protocol these days and helps us on our side.
But I think the really nice part and that's the part I like with the fork project how well that that went. There is a lot more to share and to benefit from each other. One is awareness. Liquidity users might go to another fork. Um uh users from other forks might come to mainet to us.
So that's um the awareness. People know the concept. So um and don't need to relearn that. uh integrations people know that have integrated us know the code know how it works can judge the small changes fork makes and can more easily onboard them. um you have expertise especially of auditors that know the code very well can easily help you to um audit your code and the changes you made and even the tooling or front ends a lot of stuff when we started that I actually wasn't aware how much that would be and how beneficial that is and that's why I really think to me it makes a lot of sense and I think we will see that much more because we have teams that are really great in building products and other teams that are great to bringing these products to different ecosystem and I think they can collaborate in a much better way like that.
So I hope that gave you a bit uh uh inside view what we call forconomics which I think is a fascinating uh approach uh how we can collaborate in DeFi and with that that was my seven minute talk. Thank you very much.
Automatic transcript — names and jargon may be misspelled.