Bridging the Gap Between DeFi and NFTs - Alex Salnikov

oh wonderful okay cool so we have um we have alex saldinov here from variable variable is an incredibly cool nfd project for anyone who hasn't heard this is uh this is really an og level so we're so happy and excited to have you here alex um we're really looking forward this is this talk is really about bridging the gap between uh d5 and nfts which are possibly like the two hottest subjects in blockchain and crypto right now so i feel like alex you're just about to you know blow this out of the water so thank you for being here and like let's kick it off thanks thanks danny uh hi everyone let me share my screen real quick um i hope you can hear me and see me so my name is alexander selnikov i'm co-founder and head of product at wearable variable is a community-owned nfg marketplace uh so as as danny said nft and d5 probably the hottest topics out there right now in blockchain so uh and since since september 2020 defy market just spiked and this this year isn't an exception uh so here you see this this chart of all the overall market uh volumes it's not complete i believe we just queried several projects but it's so much more and on the top it's variables numbers so we just started we've been on the market just for the year a little bit more and we have 32 million of total lifetime volume out of which 5.7 million is for the last month and and we have 31 000 total protocol users so it's it's just for you to understand how how how nascent and and promising this space is so uh nft is being why why nftc is so hot it's you know for me it became just the whole new answer to the question why blockchain i i've been encrypted since 2012 i i've constantly onboard people to to blockchain space and and they often us ask like why do i need it like i have a credit card it works fine for my money and and nfts are for the digital content first for digital collectibles for it's the whole new asset class that people um it it's it doesn't work for another way for the digital content right now you just can't you can't sell it on the internet there is like shopify uh digital downloadables for for for the content and and that's it so i know this this just the massive new wave of new users coming to blockchain through nfts nft is an asset class crypto punk's hash mag uh decentraland land just just showed us uh how how this can be a store of value that we all been experiencing with tokens with your c20 tokens since the beginning and right now the same works with nft is for for the again for the whole new audience it's really easy for non-creeped native people to digest what that is you just have it on your wallet this this this item this digital uh this digital item with the image name and description is yours it is in your wallet period so it like top shot uh nba top shot recently showed us how digestible that is to newcomers uh you you can show you you can show your display your nft is out there so you you you can brag on social networks that was what people do you can display meta verses uh the whole new level of of blockchain gaming uh with with assets inside games belonging to the users is emerging uh check out uh nfts are semi-fungible uh erc 1155 allow you to have 100 editions 1 000 editions anything you want um there there is a lot of fun in nfts uh loot boxes open auctions recently showed us how that can work like i know anybody who who was able to make a bid under the 10 minute time frame received an nft so this is all just just works so cool um nft is could be a key to unlock some experience right so some smart contract can check if you have a specific nfc to allow you to do something this wasn't explored yet or at least i haven't seen use cases like that or you can use nfts as identity for like your kyc or accredited status so i know the the possibilities are limitless but there is always uh there are always some cons nfts are really hard to price yeah yeah because they're they're less liquid they're singular by nature you you need to sell each nft separately um well you can bundle them but still you still need to add separate entities to the bundle uh they often chip it it doesn't make to my it doesn't make much sense to trade nfts that cost 20 dollars with the gas price of like 60. and and they are not interoperable enough right now and there is no like much systems you can plug nft in so um nft is like i i don't need to explain the uh the cool stuff about defy uh i i as i just did to nfts and between these spaces is a gap right now so defy is a global decentralized interoperable low latency i know accessible global accessible financial system and nft is an asset class which isn't yet a part of this financial system so what can be done to bridge this gap between the nft and d5 uh here i have several mechanics that that can can make these spaces closer together now uh the first one would be shared ownership so it's easy if you have several less liquid assets you bundle them together then you functionalize the bundle and while you have more liquid asset now so this has been explored widely in a space uh you can fractionalize one uh single expensive nfts and two into pieces and and put that on uni swap or you can bundle several nfts together and to make a fund uh that's that's been out there uh the the hardest part is like how do you understand which nfts to bundle together yeah and what happens after they've been bundled like who is the new owner if if they've been fractionalized um this has been like quite explored right now uh the second use case which which i seen been started to to plate with is is dropping and i think this is one like heavily underexplored uh so nfts are so digestible and they visual they understandable they are an understandable if you just have some d5 product wrapped into an nft it will become much more accessible and and allow you the whole new level of distribution so uh like urine and hadjik done this with nfts with wrapping insurance contracts and options construct option contracts inside nfts one use case which i haven't seen yet and i i i i so i like i want to see it so much is just wrapping simple erc20 tokens inside nfts so imagine you received some portion of illiquid yet illiquid tokens uh on on some kind of pre-sale or or whatever of a new project uh you can't go to unisop and sell them because they are not yet liquid another would be slippers like of 15 if you could just wrap this token inside nft and then go to wearable for example that can be like otc market for tokens so this this is underexplored it's an amazing use case to to bridge this nft and defy gap then then auctioning um auctioning is is nft native uh is nft native mechanic uh it's it's used for nfts now it's great it works people are have bidding worse but it isn't yet plugged into the defy space so uh imagine you have an nft with a bid of 100 dollars making make like uh placed for it what you can go what you can do is you can go to some lending service and you can loan uh take a loan with that nft as a collateral because as soon as you've got the first beat you know the floor price for the nft uh this isn't the connection i've seen yet with this nft default world uh then the second prediction games are this is this is the most nascent and the most capital efficient way to price an nft so let's run a prediction uh game on how much would that specific nft cost as soon as we've got this this range of of price we can do the same we can plug this asset into the into the g5 and and one more uh one more mechanic coming from d5 stuff to the nft is credit delegation uh so like avi and different and several other projects launched the credit delegation so you can delegate a credit line to the specific entity that knows how to how to make sure that specific loan would be repaid so if we have an nft project that like calculates whatever they the how however they want this this mechanic for the price for collateral they can use this credit line to then extend the credit line to their to their users first nfts so this is the mechanics how you can bridge nft and define some of them explore some of them aren't and and here's the project that are that are trying to do this and and uh let me just briefly cover uh each of them so art blocks uh known origin async are they are doing issuance issuance of the asset class is an important uh it's just the entry point for for for nfts you can put some some digital content or non-digital in terms of like the centrifuge is literally putting your homes in from of nft on chain uh this is like sounds futuristic but in some years we can see mortgage like plug your nft home to defy the system and now you have a mortgage uh price discovery upshot nft bank are taking different approaches upshot doing on uh prediction games uh peer-to-peer prediction games it's in just the latest invention of uh mechanism design they are applying this to understand how much this particular nft can cost nft bank runs data science a lot of data science jobs uh to to make sure that to recover the price for the entity from the market data i i already told you about wrapping uh financial defined financial projects into nfts why urine did insurance hedge did or will do nfts you you could see that some previews and variable for them uh on the landing part union protocol does this credit delegations and ft5 is a dow that can lend you some money with the nft collateral it's a dow because you can't so far know how much nft costs to liquidate it accordingly that's why you need to understand like uh some people need need to basically that's nfts that can be used as a collateral and nft funds the most explored probably area nftx does uh funds for nfts separate categories for example hash masks project has an nftx fund uh there it's an automated font so you can add any hash mask to that fund but it will be counted as equal hash masks so the again they don't have price discovery to make sure that the assets come into the fund awaited for their prices flaminga dao is the dao investing and nfts and nft projects blackpool is the dao investing in nfcs and nft projects metapurse does this niftix does fractionalizing so you're basically converting a one single large nft into a font and putting that on sale so what are the missing links between these these two areas uh for me uh i think the big opportunity in having just the the like the single most important infrastructure project in the nft space is the nft exchange protocol like uni swap for nfts to make sure that this will be a landmark like infrastructure point around all of which uh projects would work together because like you need the place to liquidate your assets you need to place you to trade your funds uh and and this this this is the really important piece of software that that we are going to build at variable with the wearable dial so the this is this thing needs to be community governed it needs to be interoperable to have on chain like sell and buy functions basically it needs to be liquid uh and then we are going to build indexer and sub graph around this to make sure that it's covered with enough like querying infrastructure on chain roads this is a big one scalability of course for the cheap nfts and and this this machine would basically serve as distribution as soon as you minted and nft you can call just the cell and putting this on on on sale inside the nft protocol and it will be distributed and sold that's that's the landmark like piece of infrastructure needed in the space price discovery is the second biggest problem out there i already covered separate several times if you want to to trade an entity you need to understand how much does it work if you want to trade it in an automated manner uh so it can be dow based some some members can decide how much it costs appraisal games as upshot does or or auction based if you have several beats you know the price floor uh on the miscellaneous part of infrastructure we have nft index for the whole ecosystem so imagine we have a representation of every nft under one fund under one big nft index fund uh 1155 on the curve is there is a project that did that but it's under explored again uh you can trade 1155s they are semi semi semi-fungible in the uni-swap manner nft launch pad uh we've we've seen several projects launching by selling nfts there is a big opportunity for an nft launch pad in the market and nfd perpetuals to make sure that that's more or less a combination of uh of liquids um i know of liquid trading mechanics so uh this is all infrastructure missing blocks open to be built and what i wanted to announce today is the wearable dao we launched this community owned initiative uh half of the year ago it went crazy and right now we are converting we are making one more step to be decentralized basically uh we are launching community treasury and staking mechanics to make sure that only the voters with skin and the game would participate in managing that community treasury to make sure they contribute long-term uh long-term efforts to the project um and the proposal the draft proposal for staking and community treasury is live on governance forum of on wearable governance forum gov.wearable.com and basically we expect this treasury to be taken and spent on the protocol infrastructure and marketing initiatives to build this this connection to build the infrastructure around nfts globally um that's it guys uh joined out the boss to build the most liquid nft protocol yeah contact us there you can find me on twitter it's insider0x and and you you can probably know the wearable twitter uh we just raised uh we just raced around uh from vcs there's 12 participants power phi 1kx coin fund coinbase ventures uh we have the best crew to build the the most professional nft dial out there please please join the initiatives guys thank you awesome awesome thank you alex that was incredible um we still have a couple minutes left um if you're got a minute here to take a couple questions if we have some from the comments yep sure excellent all right give me one second let me just pull those up for us um let's see you can also open those comments on the right hand panel of the stream yard there where you're looking and if there's any it's a lot of love for wearable for sure um well um i think i see a couple questions so probably the hardest part for the community is scalability the the gas fees are killing everybody so we're exploring scalability solutions where we are committed to the core team of variable not not the dao members are committed to implement at least one scalability solutions we feel that nft future is interoperable so we'll have just the prioritization of scalability solutions across which nft will live and just implement them by one by one i won't say with with one uh which one we will start with because uh i know the scalability solutions tend to have network effects and i i think i think we wanna we wanna i know coordinate with the space on on launching this uh separately um yep how about that one from zinc city an oracle solution for nfts yeah basically i was uh i think nft bank can do that uh these the guys literally uh made a trading bot that was analyzing access activity on on the marketplaces to understand like how much each axi could cost and they built a trading robot that that's bought and sold under under like undervalued and overvalued assets with that data i believe they're in the best position to build oracle solution for nft is that can be plugged into the deficit system later interesting interesting yeah if you guys have more questions from the community definitely reach out in the comments and and drop something in there for alex and uh let's see here we've got looks like we've got about three more minutes if we want to take it alex or some thank you you got some you got some fans in the audience um that's the best feeling yeah absolutely thank you guys if i was gonna throw out a question for you you know from your position what do you think uh the future holds in the next maybe 12 months for the space um from your position what would you what would you comment on for the nft space yeah yeah how is that going to look in in the next 12 months maybe i think a lot of new project would pop up in the like the recent future because we've seen the big uptick in activity in september and basically uh it takes a half of a however year or a year to build a great project so this year will be just the nft projects explosion that's one then uh we will see uh major layer two adoption in the nft space so as i predicted one one big player would go to some nft scalability solution and all all the rest of the of the market would go the same so we probably need to pick some some nft scalability solution that has on uh on chain defy like capabilities because you really want to plug in nfts nfts2d5 system as soon as you got there uh i i i i'm pretty sure that there will be several more nft layer ones with bridges to ethereum that's why we all need to have this multi-chain energy standard yeah i think us must try to do something like that um so like nft future is interoperable several bridges appear polka dot launch there will be major player on polka dot ecosystem um again so the like i think this year would be like uh under under the motto of fighting gas prices on ethereums while we're waiting for ethereum 2.

0 to launch uh and all the all the side side chains layer twos another layer ones would be battling with each other and for the nft space as well yeah absolutely and the competition i think is really healthy i think there's a lot of demand and you know there's going to be a lot of people stepping into that in order to meet that i mean that's the nature of the market um so that's i think exciting for for the future of interoperability i know that's a really key theme that you know me talking to a lot of the sponsors um throughout the event you know before the event and stuff like that that's a really key theme that's been coming up for this year is interoperability we've kind of i think had our our tribalism at times and we're really starting to come together to really stretch because we have to in order to achieve the goals that we want i think we have to come together as a theme i don't know if you have any comments about in operability here for the last like maybe two minutes yeah so uh basically interoperability is the common i know is the common denominator across the projects uh that that allow ethereum to thrive basically the contract to contract interaction is the key to interoperability that's why we need to have like on chain order books uh we need to have on-chain bridges that can be used without like off-chain parts if you want to use the bridge if you want to bridge an nft between one layer and another you you need to only be able to call the on-chain uh uh contract and that that's really important uh you probably want to to move some fonts um between these layers freely and to remain them locked under in inside defy contracts and and that kind of stuff but i think like the the uh the biggest need for interoperability the biggest like allowance the biggest enabler for interoperability is just great tools for developers if you have several bridges uh that are generalized enough the developers will come and build whatever whatever it is needed yeah you give them the tools and turn them loose in the right direction and they'll work it out we have several new comments um five to work in here what you meant predict a lot of collector dows yeah that's that's one uh i i think i totally agree with so yeah please guys get around together uh the dao is always as a better than than singular like individual collectors because there is like you know this this community power in promoting what you have collected and making it uh more expensive examples of cross chain nfts um let me think i i believe i believe some project like avigochi can have something like that but not sure i've seen the more the life yet uh there there was some game that has interoperability between tron eos and ethereum and that you can move your assets between these three blockchains right excellent excellent well we're out of time alex thank you so much for all of your insights it was really a privilege to hear from you and have you share and uh and thanks for taking the q a with us thank you jonathan thank you for having me today thank you all the space for for i know for being live all right cheers