Latest / TezTalks Radio - Tezos Ecosystem Podcast / 124: TezTalks DeFi Series | Monarch Lets You Lend Directly Without Curators

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124: TezTalks DeFi Series | Monarch Lets You Lend Directly Without Curators · TezTalks Radio - Tezos Ecosystem Podcast

• 0:01
  SPEAKER_00: The information presented in this program is for financial and financial purposes only, and it should not be considered financial investment, legal, tax, or professional advice.
• 0:08
  SPEAKER_00: Any thin is expressed by the host or guests are their own and do not necessarily reflect the views of the producers, sponsors, or affiliated organizations.
• 0:14
  SPEAKER_00: Digital assets are cryptocurrency, decentralized finance protocols, and related technologies involve significant risk, including the potential loss of capital.
• 0:20
  SPEAKER_00: Viewers should conduct their own research and consult qualified professional advisors before making any financial decisions.
• 0:42
  SPEAKER_02: Today we have Monarch LAN.
• 0:43
  SPEAKER_02: Monarch LAN uh recently integrated Etherlink, uh Tezos EVM.
• 0:49
  SPEAKER_02: And Anton here is the founder of Monarch.
• 0:52
  SPEAKER_02: Uh Anton, kindly introduce yourself and also briefly about what Monarch LAN does.
• 0:58
  SPEAKER_01: Yeah, thank you, Anthony.
• 1:00
  SPEAKER_01: Uh happy to be here.
• 1:02
  SPEAKER_01: Um, so Monarch Len is an open source platform that I've been building for almost two years.
• 1:10
  SPEAKER_01: The primary goal would be just to support um regular people or anyone to use the Morpho markets uh more freely.
• 1:19
  SPEAKER_01: So basically, when Morpho first came up, um, I think everybody loves the idea and how you know again they're solving the lending and ending problems, but there were no interface for um any person to kind of like lend directly to the markets.
• 1:39
  SPEAKER_01: You will you're kind of forced to choose a vault and choose a curator trust.
• 1:43
  SPEAKER_01: That's kind of like by design, by morph.
• 1:46
  SPEAKER_01: Um, but I just feel like you know the the base layer is very static, very well built, and it's like a very trustable layer that people should be interacting directly with.
• 1:59
  SPEAKER_01: So that's how I started Molnark.
• 2:01
  SPEAKER_01: And um, yeah, it's been steady growing for the last two years.
• 2:05
  SPEAKER_01: We just crossed a billion dollar total deposit withdrawal volumes a few months ago.
• 2:11
  SPEAKER_01: So yeah, I'm happy that um the community is trusting Molnark as a uh legitimate interface to interact with Morpho now.
• 2:23
  SPEAKER_02: Yeah, nice.
• 2:24
  SPEAKER_02: And uh maybe a bit about yourself as well.
• 2:27
  SPEAKER_02: Uh prior, like how do you join crypto and uh what got you to start Monarch two years back?
• 2:33
  SPEAKER_02: Uh like what do you see there that inspired you to get going?
• 2:37
  SPEAKER_02: Yeah.
• 2:38
  SPEAKER_01: Yeah, so I've been a builder in um crypto in general since 2018.
• 2:44
  SPEAKER_01: Um I've joined DeFi full-time in 2020.
• 2:48
  SPEAKER_01: I started with an option protocol called Open.
• 2:52
  SPEAKER_01: Um I've been and I worked there for two years and have to join another team called Lyra, now called Derive.
• 2:59
  SPEAKER_01: So they're both option protocols.
• 3:01
  SPEAKER_01: That's how I learned my first kind of like know-how knowledge about um basic trading and finance.
• 3:09
  SPEAKER_01: Um but around two years ago, I realized that I'm not an option trader myself.
• 3:15
  SPEAKER_01: And uh even though it's like interesting to learn about finance and deep like option strategies, uh, it's just not like my daily life.
• 3:24
  SPEAKER_01: And I think at the time, Morpho came up, and I just realized I feel like that was one of the first protocols that were just like built very, very properly.
• 3:35
  SPEAKER_01: And I've been working as this like contract developer before before that.
• 3:41
  SPEAKER_01: And I just think like, yeah, we I I want to try to like maximize this uh very well-designed protocol.
• 3:49
  SPEAKER_01: Um, so yeah, that's when I decided that um I'll build something that I want to use because Morpho is like safe enough for me to trust my maybe like 50% of my life savings with.
• 4:02
  SPEAKER_01: So yeah, that's how I start building Monarch.
• 4:05
  SPEAKER_01: And um, yeah, um it's been two years, like lots of lots of things changed uh in the process.
• 4:15
  SPEAKER_01: Like there have been lots of drama or like situation uh happening in both the curator uh ecosystem and just like brought it in DeFi in general.
• 4:26
  SPEAKER_01: Um so yeah, um I just think like more people like me should be able to access some very basic elements in DeFi directly instead of um handing trust to external private parties.
• 4:41
  SPEAKER_01: Yeah.
• 4:44
  SPEAKER_02: Got it.
• 4:44
  SPEAKER_02: So yeah, going back to I guess uh Monarch's main feature, which is uh permissionless direct access to uh Morpho markets.
• 4:53
  SPEAKER_02: Uh yeah, maybe walk us through also uh yeah, while while you're using Morpho itself, what was the main limitation there and what got you to uh build uh Monarch's current main feature?
• 5:08
  SPEAKER_01: Yeah, um I'll I'll share the screen while I um talk about this.
• 5:14
  unknown: Sure.
• 5:16
  SPEAKER_01: So basically um what Monarch does is it allows you to allow you to just like interact with the markets directly.
• 5:28
  SPEAKER_01: So if you go to the markets list here, you can see that let me figure this out first so I can see kind of like the coal markets.
• 5:36
  SPEAKER_01: There are like thousands of markets on Morpheful um open today.
• 5:40
  SPEAKER_01: Um all the markets are static elements that you know once set up, no one can change it.
• 5:46
  SPEAKER_01: So as a borrower, you got a perfect kind of like guarantee by the contracts that no one can change kind of like the liquidation parameters, etc.
• 5:55
  SPEAKER_01: Um, but as a supplier, the current Morpho interface.
• 6:00
  SPEAKER_01: Let me just show that real quick.
• 6:03
  SPEAKER_01: It kind of asks you to trust some intermediary intermediary service called Vault to kind of like manage your fonts basically.
• 6:14
  SPEAKER_01: So yeah, like um that's the that's kind of like the main feature uh Monarch offers when it first came up.
• 6:23
  SPEAKER_01: So now actually, sorry.
• 6:27
  SPEAKER_01: The page wasn't open in the shared one.
• 6:31
  SPEAKER_01: Okay, yeah, this is kind of like how you you kind of have to deposit the votes.
• 6:36
  SPEAKER_01: And votes are uh managed by these curators, right?
• 6:40
  SPEAKER_01: So you can see like Borf have been doing a very good job right now now about like showing the risk, like what is um happening, like what are these creators doing?
• 6:51
  SPEAKER_01: So you can see that it's actually quite hard for you to like as a as a deal the depositor to track what the what the creator has been doing.
• 7:01
  SPEAKER_01: Because in this in this case, you can see that this creator is adding lots of markets to the to the vault.
• 7:07
  SPEAKER_01: That means that you know when you first deposit to the vault, you may think, okay, these are my limited exposures, these are the assets I trust.
• 7:16
  SPEAKER_01: But as time goes by, like these creators have the authority and the power to like manage things on your uh on your behalf and kind of just like add more collateral exposure or different just like markets into the vaults.
• 7:30
  SPEAKER_01: So in the last two years, I think there have been like maybe a few events where you know um some creators blew up because they they created votes that they put most of the liquidity in some markets that were backed by shaky collaterals, and lots of sentiments uh we got after kind of like these instances like most developers, most depositors never understand how, like, why am I exposed to these assets, right?
• 8:01
  SPEAKER_01: So these are the kind of risks that I think DeFi is very, very exposed to today.
• 8:07
  SPEAKER_01: And um, the idea of Monarch is like it will give you more control, you will have to take more responsibility, but you will have full control about okay, um, what assets am I exposed to, and no one can change that.
• 8:24
  SPEAKER_01: So, yeah, that's Monarch.
• 8:27
  SPEAKER_01: And we can go into a little bit more um details later, but basically, it's just the main main the very main feature is telling you what are the main what are the big markets, uh what other volts deposit to in these markets so you can trust them, and you can do simple supply bottle, leverage, etc.
• 8:50
  SPEAKER_01: So yeah, that's basically it.
• 8:53
  SPEAKER_02: Got it.
• 8:53
  SPEAKER_02: And yeah, let's also dive into the Tesla's EVM uh integration.
• 8:59
  SPEAKER_02: Uh maybe yeah, you can also show us the markets that uh you guys cover for uh Etherlink specifically, and yeah, how does that value add DeFi users uh on Etherlink?
• 9:13
  SPEAKER_01: Yeah, so on Etherlink right now, there are like four big markets right now.
• 9:17
  SPEAKER_01: I think I think they're all initially created by the same curator.
• 9:23
  SPEAKER_01: But now with uh Monarch integrated, you can go here directly and then you can deposit directly to the markets.
• 9:30
  SPEAKER_01: So um I think I think the rates are kind of bad recently.
• 9:36
  SPEAKER_01: Uh but basically you can come here and you can see kind of like the detail uh breakdown of um the supply chain, the flow change, the rate change over the last period.
• 9:49
  SPEAKER_01: You can change uh you can choose like one day, seven days, etc.
• 9:53
  SPEAKER_01: And you can see all the activities here as well.
• 9:56
  SPEAKER_01: So we can see now it's basically just user depositing through volts.
• 10:02
  SPEAKER_01: Um yeah, this is like if you see this page, this is probably these, this is just the big vault address.
• 10:10
  SPEAKER_01: So you can see it's being supplying lots, adding lots of supply to the market.
• 10:16
  SPEAKER_01: And this page I tried to like parse it so that maybe it becomes clearer in terms of what it's actually doing.
• 10:27
  SPEAKER_01: Okay, it's not showing up pretty pretty well.
• 10:30
  SPEAKER_01: Uh okay, but yeah, like um you can you can click on analysis tabs like this, so you can see how concentrated the supplier the borrows are.
• 10:40
  SPEAKER_01: You can see this is like um pretty um pretty standard distribution for borrowers.
• 10:49
  SPEAKER_01: So like maybe four or five borrowers making up um, I'll say like maybe maybe less than 70% is like healthier, usually.
• 10:58
  SPEAKER_01: You can see this um charts about how much um how much percentage change of the collateral asset will leave how many, how many bad debt to to basically the in the pool.
• 11:13
  SPEAKER_01: So yeah, you can do all these kind of analysis, and then you can also just like simply supply to to the market.
• 11:20
  SPEAKER_01: So I already tried supply.
• 11:22
  SPEAKER_01: So you can see like we have a five USDC position here.
• 11:26
  SPEAKER_01: We can supply more pretty easily.
• 11:28
  SPEAKER_01: I'll just do it quickly.
• 11:31
  SPEAKER_01: So you'll be prompt with just like some signatures, and um once you sign, yeah, it's just very simple deposit.
• 11:43
  SPEAKER_01: And after doing that, you can go to the position uh portfolio tab where you can rebalance as well.
• 11:51
  SPEAKER_01: So the re how the rebalance works is that it only works on the same uh networks.
• 11:55
  SPEAKER_01: So you can see here I have a smart rebalance uh feature where you can choose other markets on the same network that has the same uh loan assets, right?
• 12:06
  SPEAKER_01: So now these are all the markets that has uh USDCS asset.
• 12:12
  SPEAKER_01: I can set up like percentage, like I don't want to um deposit more than 50% to this market, maybe.
• 12:21
  SPEAKER_01: And this calculator will kind of tell me uh what is like the optimal distribution among these markets to like have better yields.
• 12:31
  SPEAKER_01: Uh you can also do this manually if you want more control.
• 12:35
  SPEAKER_01: This is more like an automatic way to do it.
• 12:39
  SPEAKER_01: But yeah, this is the main feature that you won't get anywhere else.
• 12:46
  SPEAKER_01: Um, all the other features like borrowing, um, you can probably go to other interface as well to do similar things.
• 12:55
  SPEAKER_01: Um but yeah, like uh Monarch itself is pretty feature complete on all you want to do for for like a lending market.
• 13:03
  SPEAKER_02: Got it.
• 13:04
  SPEAKER_02: Nice.
• 13:04
  SPEAKER_02: Yeah, I think smart rebalance is uh pretty useful feature, especially uh when users already have uh money across different uh markets uh yeah, supplying them.
• 13:16
  SPEAKER_02: And yeah, you can categorize with uh uh yeah the same asset on the same network.
• 13:23
  SPEAKER_02: Uh yeah, on this coin actually, uh for Monarch, for you guys, uh when users execute transactions on your platform, uh, do you guys take any fees?
• 13:35
  SPEAKER_01: Yeah, good question.
• 13:37
  SPEAKER_01: So we built this virtual balance feature with the fee plugin.
• 13:42
  SPEAKER_01: You can see here that um it's like uh less than one BPS fee on all the capital moved every transaction, but it's cap at five dollars per transaction.
• 13:51
  SPEAKER_01: So if you're moving like a couple hundred thousand dollars or like tens of thousands, usually it's like you'll you'll hit the uh you'll hit the cap, so you don't have to worry about you know being charged like a very, very high amount.
• 14:06
  SPEAKER_01: I think this fee, this fee is estimated about like maybe a few hours of your yield of the day.
• 14:14
  SPEAKER_01: So the kind of like the the the logic behind it is like if you if you move it every like five five days, six days, you'll probably pay us like less than 10% in terms of like the the the XY yield you you you earn.
• 14:33
  SPEAKER_01: But you always have the um option to go fee less.
• 14:38
  SPEAKER_01: So you can also use the calculator here to get the proportion, and you can go to manual advance, then you can skip the fee.
• 14:46
  SPEAKER_01: Well, I don't recommend you do it, but you can you can do it.
• 14:50
  SPEAKER_01: Yeah.
• 14:50
  SPEAKER_01: And all the other features.
• 14:52
  SPEAKER_01: Well, like the deposit basic deposit and um withdrawal feature doesn't really have any fees.
• 14:58
  SPEAKER_01: We're trying to like only charge fees on features that are kind of like exclusive.
• 15:03
  SPEAKER_01: So the other thing is like if you go leverage on the borrower side, you can also we we sort of take a take a portion of it.
• 15:11
  SPEAKER_01: But yeah, that's like uh I think the the lever feature is kind of like limited to specific markets and specific networks now, because the only official uh kind of like swap adapter Morpho has right now is the ParaSwap adapter.
• 15:26
  SPEAKER_01: So um we'll need like to support a market to go leverage, uh we will need like Paraswap to integrate them as well.
• 15:34
  SPEAKER_01: That's basically the current situation.
• 15:37
  SPEAKER_02: I missed the uh yeah, maybe going going to the leverage portion for some of the other markets uh outside of Etherling, which which do you see people leveraging a lot on to unhire you during this yeah, thing in this period?
• 15:54
  SPEAKER_01: Well, I guess like they're different kinds of users.
• 15:58
  SPEAKER_01: Um I think most people kind of like I guess most DeFi borrowers or um never people who use leverage are mostly farmers, right?
• 16:09
  SPEAKER_01: So they will go to like very interesting markets.
• 16:17
  SPEAKER_01: Um I know like SUSDE, this one is pretty big in terms of like leveraging.
• 16:24
  SPEAKER_01: Um this is probably like the biggest along the top.
• 16:27
  SPEAKER_01: Um lots of like USD, well like um like stay basically stable coin, stay stable coin peers, right?
• 16:35
  SPEAKER_01: Because lots of these markets are um the the collateral assets are just something that you can earn points, maybe holding.
• 16:46
  SPEAKER_01: Like the borrower side, is like they just like leverage like 10x um the points, and the extra PT yields, just lots of lots of yields to to track.
• 16:58
  SPEAKER_02: Um got it, got it.
• 17:00
  SPEAKER_02: Yeah.
• 17:01
  SPEAKER_02: Yeah.
• 17:02
  SPEAKER_02: Okay.
• 17:03
  SPEAKER_02: And yeah, besides, yeah, besides smart rebalancing and leverage, uh, leveraging up of these markets, uh, maybe we can also go into auto vaults.
• 17:13
  SPEAKER_02: Uh uh for that, essentially, my my understanding is that users can create their own, essentially create their own vaults, right?
• 17:22
  SPEAKER_02: They are semi-automated or also manual.
• 17:24
  SPEAKER_02: Yeah, I think that's pretty interesting.
• 17:27
  SPEAKER_01: Yeah, so this auto vault feature is something uh we're pushing and we want to expand as well.
• 17:33
  SPEAKER_01: So currently it's only on base, it's been this way for a while, so we're like expanding just the infrastructure for it.
• 17:40
  SPEAKER_01: But the basic idea is that um you you instead of depositing into someone else's vault, you can create a vault yourself.
• 17:47
  SPEAKER_01: Um this is not so the the reason why we use a vault is because there are lots of like good infrastructure for vaults, like more vaults, have a good template, integrate very, very well with you know public um with other interface or you know, analysis toolings, etc.
• 18:06
  SPEAKER_01: Uh, but the thing is like you can actually set up a vault yourself, and then you can set what is kind of like your max exposure.
• 18:14
  SPEAKER_01: So, example vault I have right now is I set up a vault with something like this, right?
• 18:20
  SPEAKER_01: So this is like um I only so how it works is like once you set the caps, um our automation agent will run periodically to help you rebalance to reach the highest APY.
• 18:34
  SPEAKER_01: So what you can see here is basically saying that okay, I trust this market the most, so I can I'm willing to like put all my funds into um into this market, but all these other three markets, um, I trust them less.
• 18:50
  SPEAKER_01: So maybe like I I don't I don't want more than two-thirds of my assets, right?
• 18:56
  SPEAKER_01: And you can see given given some of these restrictions, our agent will run like every few hours here, and then try to like allocate it.
• 19:08
  SPEAKER_01: So you can see the allocations here is not like all in into one or two markets, right?
• 19:14
  SPEAKER_01: It's like somehow distributed.
• 19:16
  SPEAKER_01: Um, this is like showing how the restriction on on the vote level, right?
• 19:23
  SPEAKER_01: It it just like cannot cannot pass that like a fresh wheel set.
• 19:28
  SPEAKER_01: So by doing this, what you can do is like you can more conservatively uh add new markets, or or put it in other ways, like if you if you want to farm higher yields, you can you can add in lots of new markets, but you can but you can set like constraints yourself that you feel like comfortable.
• 19:47
  SPEAKER_01: And the agent itself, it's just an automation layer.
• 19:51
  SPEAKER_01: So you don't have there's actually very, very little trust you're putting in.
• 19:55
  SPEAKER_01: Like the best the agent can do is just to not not work.
• 19:58
  SPEAKER_01: Or try to like, okay, put your funds into lower yield markets that will just like it won't like steal your funds or anything.
• 20:08
  SPEAKER_01: Um by doing this, you basically become your own create curator.
• 20:12
  SPEAKER_01: You will have to like watch a lot more in terms of how you want to pick markets and then set these um max caps.
• 20:22
  SPEAKER_01: Um but yeah, that's kind of like the whole direction we are going to.
• 20:28
  SPEAKER_01: It's like we want to make everybody capable of managing their own fonts.
• 20:33
  SPEAKER_01: So yeah, thinking of thinking about just make yourself a curator, and that's what we're trying to do, to provide tools for to help you do it.
• 20:46
  SPEAKER_02: Um for this uh for this automation, um does it also uh take in the effect, like how that put when you when you do rebalancing across different vaults, you essentially deposit and withdraw.
• 21:02
  SPEAKER_02: Um maybe like is there a limitation as to how many times it can uh rebalance on a daily basis?
• 21:08
  SPEAKER_02: And do you factor that cost into the U itself?
• 21:14
  SPEAKER_01: Um like honestly, on layer twos right now, we just don't we don't really consider like we don't charge things at all.
• 21:24
  SPEAKER_01: We just want people to try to use it.
• 21:26
  SPEAKER_01: Um maybe they'll be in a few fee, but it's gonna be in the future.
• 21:30
  SPEAKER_01: Um we do plan on launching this on mainnet.
• 21:33
  SPEAKER_01: It will be more aggressive as uh apparently because the fee will be too high if we don't charge anything.
• 21:39
  SPEAKER_02: Oh so this is on testnet right now.
• 21:41
  SPEAKER_01: No, I mean it's on base, it's on L2s.
• 21:43
  SPEAKER_01: Yeah.
• 21:44
  SPEAKER_01: Like on layer two chains, like I'm not concerned about too much for.
• 21:49
  SPEAKER_01: Well, if if that if that happens, then we maybe we'll do something, but uh until then there's there'll be no no fees on layer two bulbs.
• 21:58
  SPEAKER_01: Um yeah.
• 22:00
  SPEAKER_01: And there are some interesting like monetization uh venue we're we're exploring, which is um, you know, like optimization, yellow optimization is one thing, right?
• 22:13
  SPEAKER_01: One big thing about automation.
• 22:16
  SPEAKER_01: Um it's actually pretty easy to do, so we don't plan on charging you.
• 22:20
  SPEAKER_01: It's like you can write a ball to do it yourself as well.
• 22:23
  SPEAKER_01: Um, but the harder thing is actually how to mitigate the the risk, right?
• 22:27
  SPEAKER_01: So let's say something happened to a market, we see some weird like activities in the market.
• 22:34
  SPEAKER_01: Um, the vault infrastructure actually has some good roles, roles you can set.
• 22:42
  SPEAKER_01: So it's called the Sentinel, or you can call it like the guardian if you want for the vault.
• 22:47
  SPEAKER_01: So these type of roles can only help you de-risk.
• 22:51
  SPEAKER_01: So they can only move the fonts out of the market, but they're just like sit in a vault and sit in idle.
• 22:57
  SPEAKER_01: So um we're also like trying to build some kind of service like this, but I think this is like uh very, very hard to generalize as well, because uh it's very hard to like generalize like a like a playbook for all the markets.
• 23:12
  SPEAKER_01: Um so we will probably go with some kind of configuration as well, like you can set, like how you want to watch the market, and um we can help you like de-risk.
• 23:23
  SPEAKER_01: And I think that'll be like a more um preferable service that we charge if it's on uh two.
• 23:32
  unknown: Yeah.
• 23:33
  SPEAKER_02: I think that makes a lot of sense, especially what happened recently.
• 23:36
  SPEAKER_02: I have friends who weren't able to move our RV uh fast enough and had their funds stuck for a yeah a period of time.
• 23:44
  SPEAKER_02: And yeah, it would be great if there was something like uh essentially a bot that constantly monitors uh the liquidity flows uh in some of these assets uh that they are exposed to.
• 23:58
  SPEAKER_01: Yeah, like um our our finding recently is that um actually these markets, uh actually if you if you deposit into like a popular market, like let's say there are like 20 other votes and 200 other people depositing, it's actually a lot easier for you to like detect something, right?
• 24:14
  SPEAKER_01: Because you're not the only player in.
• 24:16
  SPEAKER_01: And there are some patterns or you can just like follow someone who's always early or always fast.
• 24:22
  SPEAKER_01: Um but uh things will become different when you become like the dominant player into a market, right?
• 24:28
  SPEAKER_01: Because that means you cannot just look at the market anymore because you're like the only one in it, and it becomes a lot harder to like um see what's actually happening, and you have to like track other stuff.
• 24:41
  SPEAKER_01: So that's gonna be more complex, but I think for regular users like us, uh we we try to like roll out the next set of features.
• 24:54
  SPEAKER_02: Got it.
• 24:55
  SPEAKER_02: And for the agentics side of things, besides view optimization and uh sort of like a security or uh like what we were mentioning about Sentinel, what what other ways do you think agents can come to play a part in uh DeFi and vaults in general?
• 25:15
  SPEAKER_02: Yeah, just wondering if you you you've been looking into that area.
• 25:19
  SPEAKER_01: Yeah, I'm I'm also trying to build some some kind of like uh signal service for for agents.
• 25:28
  SPEAKER_01: I definitely think agents are better.
• 25:32
  SPEAKER_01: Like I think the perfect perfect scenario would be you'll need an agent to help you set up like some kind of signal that you want to that you want to track.
• 25:43
  SPEAKER_01: Something could be very specific to your wallet, right?
• 25:45
  SPEAKER_01: Or you to your position.
• 25:47
  SPEAKER_01: It's not like everybody cares about like BDC crash, maybe um, or a specific RWA D pack.
• 25:54
  SPEAKER_01: But it has to be something very specific to you.
• 25:57
  SPEAKER_01: So something like personalizable, uh, but also like the agent should help you like filter out noise system as well, right?
• 26:06
  SPEAKER_01: Because usually when you integrate some service that tracks some events, let's say someone move, like a whale movement, uh it's the it's usually very noisy, right?
• 26:16
  SPEAKER_01: So you'll need the agents to somehow um knock knock false alarm you all the time as well.
• 26:26
  SPEAKER_01: Yeah, I think I think that's something I I look I'm looking for into like the agent community build in general, because I think like agent passively, passively um receiving signals is like a big missing piece in the in the current like just like agent development ecosystem so far.
• 26:49
  SPEAKER_01: I think once we have a like a very robust system to do that, um there there will be a lot more services that plug into agents, and then the agent can help can learn how to react and how to identify humans to do it.
• 27:02
  SPEAKER_01: So yeah, bullish on the agents.
• 27:06
  SPEAKER_02: Nice.
• 27:06
  SPEAKER_02: Yeah, I because I was I did speak with uh a team called Alpha AI that they are building sort of like uh agent uh trading trigger bot.
• 27:19
  SPEAKER_02: So whenever uh certain maybe TA technical analysis indicators hit, then they automatically execute trades.
• 27:28
  SPEAKER_02: They also were very focused on the issue where uh currently agents are really just uh limited by cron jobs.
• 27:38
  SPEAKER_02: Uh maybe you're setting like very yeah, and it gets quite costly if you want to ramp it up to uh per 30 minutes or even shorter than that.
• 27:47
  SPEAKER_02: Yeah, so having the stock there, I think, would be a massive unlock.
• 27:51
  SPEAKER_02: And actually, yeah, I want your thoughts as well.
• 27:53
  SPEAKER_02: First, right now for you, your AutoVODs are sort of restricted to your user interface and your platform.
• 28:00
  SPEAKER_02: Uh whereas for at least what I'm seeing in many other protocols like Dune, uh Dune also released their own MCP server for users to manage and monitor uh flows.
• 28:13
  SPEAKER_02: Yeah, I was wondering what like would would there be a day where we see monarchs on MCP server for your own agents?
• 28:22
  SPEAKER_02: Yeah.
• 28:24
  SPEAKER_01: Yeah, I think I think I actually think that would be a good combo.
• 28:27
  SPEAKER_01: Like uh if you set up some automation service, right?
• 28:30
  SPEAKER_01: You probably want to pair with your own agents as well to like monitor it's actually working and you know receive notification.
• 28:37
  SPEAKER_01: I think I think that may maybe that'll become like a direction, right?
• 28:41
  SPEAKER_01: So everybody build something that not only works for you, but also work with your agents at the same time so you can feel very comfortable.
• 28:50
  SPEAKER_01: I I think that's a good direction.
• 28:51
  SPEAKER_01: I haven't really thought that much about it.
• 28:55
  SPEAKER_02: Yeah.
• 28:57
  SPEAKER_02: I'm just reading as well with uh all the updates that uh uh different projects are coming up with.
• 29:02
  SPEAKER_02: But I I think in in general, agent adoption uh on a retail user point of view is still very low.
• 29:10
  SPEAKER_02: So so yeah.
• 29:12
  SPEAKER_02: Yeah, and I mean we currently we're already seeing like virtual cards being issued to agents as well, but I think not many people are willing to put up uh their funds at risk.
• 29:29
  SPEAKER_01: I um I think there are several things that need to be in place.
• 29:34
  SPEAKER_01: One is probably like a notification, good notification service, right?
• 29:37
  SPEAKER_01: So maybe like a single app that user can connect their Ave guardian with, and maybe their Monarch Guardian as well, so you know like exactly what it's doing, and when something happened, I think people are fine with de-risking kind of service, right?
• 29:54
  SPEAKER_01: If someone can only pull your funds out of Ave, but not like do anything else.
• 29:58
  SPEAKER_01: So it's not like the agent is like managing your old money, but it it can only have very, very restricted permission, right?
• 30:08
  SPEAKER_01: So it's like one like get out feature.
• 30:12
  SPEAKER_01: I think that'll be something people kind of must adopt, right, going into the future, because uh DeFi has become more and more dangerous in a way.
• 30:26
  SPEAKER_01: Yeah.
• 30:26
  SPEAKER_01: And I think the most we can the the best we can do is to find as many services as possible, right?
• 30:32
  SPEAKER_01: As an individual to like help just like mitigate the risk.
• 30:38
  SPEAKER_01: Because sadly DeFi is very like PvP right now.
• 30:42
  SPEAKER_01: Um I think there's a way to fix it.
• 30:45
  SPEAKER_01: We can just we we just need to figure out to like uh fight this PvP battle.
• 30:53
  SPEAKER_02: Yeah, I think going back to I guess uh DeFi in general, I I actually even for myself after uh after the rec recent drift hack, I I took a lot of my funds out of uh some of these lending markets really because even by simply depositing your USDC, you're you're at risk when someone's uh mouth piece, uh yeah, it's compromised.
• 31:20
  SPEAKER_02: Uh yeah, I guess on on that note, like I I mean this feels like FTX uh all over again, but uh yeah, where people are keep even people on chain now are are scared to put their funds up.
• 31:33
  SPEAKER_02: Yeah, I'm just wondering, yeah, I guess for that is is there an education problem or like how how do we solve for DeFi adoption down the road?
• 31:44
  SPEAKER_01: I I do think it's an education problem.
• 31:47
  SPEAKER_01: Because uh I really like from the very beginning, I didn't like the narrative of like the good UX that votes created.
• 31:57
  SPEAKER_01: I think votes are valuable when they're actually doing like a good job, like managing the fund and managing the risk, you know, like actually helping you earn like good yield.
• 32:08
  SPEAKER_01: I think that should be kind of like celebrated, but not like because it's a good UX provider, right?
• 32:15
  SPEAKER_01: Because when it comes to money, the best UX is not to get it hacked or not to lose your money.
• 32:22
  SPEAKER_01: I think I heard it somewhere and I really like it.
• 32:24
  SPEAKER_01: It's like nothing else is like good at UX when it comes to like money.
• 32:29
  SPEAKER_01: So I think um we we like users in general have to learn that um usually these kind of UX and like uh easiness to onboard or easiness to yield come with the trade-off of lots of these like complex things that you might not really understand, which it's just like if you really think about it, there are lots of like conflicts of interest.
• 32:58
  SPEAKER_01: Like for simple examples, like the vote manager doesn't really make the most money if they give you the best yield.
• 33:05
  SPEAKER_01: They make the most money when they can get the most amount of like total deep TBL, right?
• 33:10
  SPEAKER_01: So it's like I'm not saying they're all doing it, but there are lots of like different like uh principal agent problems in the space that people I think just too easily uh ignore and then just like happily hand it out to other people, uh to these like creators, managers, uh, in exchange for like a good UX or like a good deal.
• 33:35
  SPEAKER_01: And we found that I think the last two years we already found that these yields are are not risk-free.
• 33:42
  SPEAKER_01: Lots of people take a hit.
• 33:45
  SPEAKER_01: So I'm kind of glad that we're like moving forward.
• 33:51
  SPEAKER_01: And um I'm also like I think like there are lots of things you can read from the current obvious situation.
• 33:58
  SPEAKER_01: Like maybe if you're like so optimistic, you can think, oh, maybe DeFi is too big to fail now.
• 34:03
  SPEAKER_01: So uh you may you may want to double down because people bail you out uh when something happened.
• 34:10
  SPEAKER_01: Um but yeah, I I think it's like fortunate enough, it's not like super, super bad, it's not like FTX to this like the central exchange world.
• 34:21
  SPEAKER_01: It's relatively small.
• 34:24
  SPEAKER_01: Um, but yeah, definitely definitely difficult times, and we have to look like reflect a lot.
• 34:33
  SPEAKER_02: Yeah, and yeah, I think at least for myself, when I not now that I'm using uh a bunch of DeFi, like even consumer crypto apps by far faster.
• 34:47
  SPEAKER_02: Uh or even uh GRVT, which is a pub decks, uh they have their mobile app.
• 34:52
  SPEAKER_02: Uh it's it's it's very interesting to see that actually all their all their earn features right now are backed by Morphos uh vaults.
• 35:00
  SPEAKER_02: They do specify it's uh select uh specific vault and you can click in to learn more.
• 35:06
  SPEAKER_02: But I think like like what you mentioned, the the UX is very focused on making it clean and easy.
• 35:12
  SPEAKER_02: So they just put like a percentage there, a deposit button.
• 35:15
  SPEAKER_02: If you don't click more, it's it's it's like fine print.
• 35:19
  SPEAKER_02: Uh but essentially I feel like there's a lot of a lot more risks that we are taking uh collectively now.
• 35:26
  SPEAKER_02: So everything feels very monopolized as well.
• 35:29
  SPEAKER_02: And if if all the liquidity is just melting to the same few volts, then yeah, we and people don't actually understand how they're earning their four to five percent.
• 35:38
  SPEAKER_02: And we we do have uh bigger issues to uh down the road.
• 35:42
  SPEAKER_01: Yeah, there are lots of things that you will probably find scary on Monarch if you look at the platform itself.
• 35:49
  SPEAKER_01: Like um there are lots of warnings about um, let's say like the biggest market, like on base, it has lots of like assumptions, like hard-code assumptions, right?
• 36:01
  SPEAKER_01: So actually, it's not like maybe if it in a USDCD peg situation, um like very, very bad things will happen.
• 36:11
  SPEAKER_01: And we actually build a page um that helps you track like all the this is like overcode dominance, and there's like a uh chart for all the pages.
• 36:21
  SPEAKER_01: So you can see like how much money is relying on this bag and really on this spec.
• 36:26
  SPEAKER_01: These are probably fine for now, but yeah, you can start to see that lots of markets have hidden assumptions that you're just like not aware of because they told you like they're managing the risk.
• 36:38
  SPEAKER_01: Um but yeah, like I think it's better that you somehow know a little bit about about what assets you're exposed to, right?
• 36:46
  SPEAKER_01: So when something happened, you got a notification, you at least know like you're safe or which position you should kind of like take out.
• 36:55
  SPEAKER_01: Uh-huh.
• 36:56
  SPEAKER_01: Yeah, I I think that's probably good enough for for the as a goal for for next one or two years for like all of us in Divide to like try to achieve that.
• 37:10
  SPEAKER_01: Um if we do that, we can we I think we're like on the good track.
• 37:17
  SPEAKER_02: Yeah, and yeah, I this this is the analytics platform you you just recently built, right?
• 37:23
  SPEAKER_01: Focusing on the yeah, this is like uh after the um was it the resolve incident, I think.
• 37:31
  SPEAKER_01: Uh oh sorry, that it was the Ave.
• 37:33
  SPEAKER_01: After that the Ave incident, I think because lots of people will discuss about usually when something happens with lending markets, people discuss like, oh, why are some markets using hard-coded Oracle path?
• 37:46
  SPEAKER_01: Um there are lots of reasons to use them.
• 37:48
  SPEAKER_01: They're like good in some sometimes they're good, but you just need to know their hidden assumptions.
• 37:53
  SPEAKER_01: And you you have to make the decision yourself about whether you feel comfortable.
• 37:58
  SPEAKER_01: Uh we did with this kind of assumptions.
• 38:00
  SPEAKER_01: I feel like maybe they're fine with me.
• 38:02
  SPEAKER_01: Like, you know, Coinbase BDC to BDC, it's basically like betting on Coinbase not gonna hack, right?
• 38:09
  SPEAKER_01: Um, but there are there are lots of different assumptions everywhere.
• 38:13
  SPEAKER_01: So yeah, if you use Monarch to like um examine the markets you're exposed to, um, you will see these kind of just like breakdowns and risks.
• 38:25
  SPEAKER_01: It's usually it's usually just around oracles, honestly.
• 38:30
  SPEAKER_01: Got it.
• 38:30
  SPEAKER_01: There are lots of recognition oracles.
• 38:33
  unknown: Yeah.
• 38:33
  SPEAKER_02: Yeah, I think this is very necessary.
• 38:36
  SPEAKER_02: Uh and I see, I see, I just I just realized this.
• 38:39
  SPEAKER_02: Maybe we can cover a bit more on this.
• 38:40
  SPEAKER_02: Uh the risks, the risk indicator.
• 38:44
  SPEAKER_02: Uh, how how does that like what do the three marks uh indicate?
• 38:50
  SPEAKER_02: Yeah.
• 38:51
  SPEAKER_01: Yeah, so the overall idea is like the three is about assets, the second one is about the oracle, and the last one is just like market state in general.
• 39:02
  SPEAKER_01: Um, the market state one, I think it's not super, super like you know, like up to date or like most relevant when it's like if there's something bad is happening.
• 39:16
  SPEAKER_01: It's like um when some if a market is already broken, right?
• 39:20
  SPEAKER_01: There are already tons of bad debts, then this this uh this uh this one will show you like, oh, probably you shouldn't deposit now because every time you deposit, you just like lose money automatically.
• 39:33
  SPEAKER_01: But the first two is basically just like letting you know how risky the market is.
• 39:38
  SPEAKER_01: Um assets is kind of trivial, which is like if if it's from like a trusted list.
• 39:45
  SPEAKER_01: Basically, Onark has its own like token, like a list of tokens.
• 39:49
  SPEAKER_01: I think it's quite conservative.
• 39:51
  SPEAKER_01: And we also integrate with pendo.
• 39:53
  SPEAKER_01: So everything like pendle kind of open markets with integrated with uh it's like show up showing up as recognized assets.
• 40:01
  SPEAKER_01: So it's more like to prevent scams, but the most important part is the middle middle stick, which is which is Oracle.
• 40:09
  SPEAKER_01: So you can see, let's take this market as example.
• 40:16
  SPEAKER_01: Okay.
• 40:17
  SPEAKER_01: Here so this is like a market using like advanced like a setup, which is like kind of like a meta oracle.
• 40:25
  SPEAKER_01: So there are several types of Oracle.
• 40:27
  SPEAKER_01: Moreful can like officially have a standard oracle that can compose of lots of different uh one oracle is composed of up to four different legs, different feeds.
• 40:38
  SPEAKER_01: So you can have an Oracle using Chainlink Plus, uh, in this case, Chronicle, and different price feeds that compose the final, that the final price.
• 40:48
  SPEAKER_01: And this Oracle is called the meta oracle, is something um developed by Steakhouse.
• 40:55
  unknown: Right?
• 40:55
  SPEAKER_01: So Steakhouse, the biggest creator on Morpho.
• 40:58
  SPEAKER_01: And what this does is like they have a primary oracle, and when there's like a D pack, so if the switch is like if they um detect like a threshold difference from the primary to the backup oracle, they switch to the other oracle.
• 41:16
  SPEAKER_01: So basically what it does is like usually this primary oracle is something more like static and hard-coded.
• 41:23
  SPEAKER_01: So you don't you're kind of like um you don't have to be worried about like manipulation at the time.
• 41:30
  SPEAKER_01: But if something actually happens, they can switch to the backup.
• 41:35
  SPEAKER_01: So you can you know actually liquidate people, not have bad data, etc.
• 41:39
  SPEAKER_01: So yeah, this is probably more advanced, but like a simple, like this is like a simpler example, which is just showing you um this is the Oracle, final Oracle path that we parse, right?
• 41:56
  SPEAKER_01: Like this this market is actually using C B B C B T C and USDC, but the Oracle prices uses BDC and USDC.
• 42:04
  SPEAKER_01: So it kind of assumed like both packs to be to be kind of like both assets to be packed, otherwise this pricing is not accurate.
• 42:14
  SPEAKER_01: So yeah, we kind of try to parse all these for you so you know like okay what assumptions you're um operating on.
• 42:24
  SPEAKER_01: And also more generally, there are just like some warnings if it's using an oracle that looks weird or just doesn't um yeah, it's just unrecognizable, basically.
• 42:36
  SPEAKER_02: Yeah.
• 42:37
  SPEAKER_02: Got it, got it.
• 42:38
  SPEAKER_02: Yeah, I think that's really good.
• 42:40
  SPEAKER_02: And I I guess most of these learning markets do not only use one oracle, right?
• 42:45
  SPEAKER_02: It's the steak house example with a backup oracle, it's it's fairly unique.
• 42:49
  SPEAKER_01: Yeah, yeah.
• 42:50
  SPEAKER_01: That is that is more I think that's new, that's more uh much more recent.
• 42:57
  SPEAKER_01: Most big markets are just like standard oracles.
• 43:01
  SPEAKER_01: There are lots of like custom oracles as well, like lots of projects like this market, for example.
• 43:06
  SPEAKER_01: Oh, sorry, this is standard oracle, this one, for example.
• 43:09
  SPEAKER_01: This is just an example of someone else create a market with their own oracle, which is now like using price fees.
• 43:17
  SPEAKER_01: So maybe it's like derived from their DEX or like protocol or like redemption mechanism, whatever.
• 43:22
  SPEAKER_01: Or maybe it can be can become their own like multi-sig, like uh price that's possible.
• 43:28
  SPEAKER_02: Yeah, hella risky.
• 43:30
  SPEAKER_01: Yeah, so yeah, if you if you look at like the funny thing about this page is like um you can use this page to look at the vote address.
• 43:41
  SPEAKER_01: Uh this is some uh these addresses are here because I kind of like uh browsed them before.
• 43:48
  SPEAKER_01: If you look at this, uh you you can take a look at the vote and the vault's position basically.
• 43:53
  SPEAKER_01: Uh and you can see kind of like the risk uh is like it's like that this is.
• 44:00
  SPEAKER_01: It is exposing to so a good quality to put in the vote address and then just like check here about like what the market is nice, yeah.
• 44:13
  SPEAKER_02: Uh yeah, actually, yeah, maybe one last part.
• 44:16
  SPEAKER_02: Uh moving more towards the RWA private credit side of things because I think moreful most most of their vaults are still on-chain uh lending markets, but I think crypto is now shifting more towards RWA and a lot of the assets are sitting off-chain.
• 44:34
  SPEAKER_02: For that, um yeah, how how do we I guess like do you is is it something that's visible uh for us?
• 44:43
  SPEAKER_02: No uh it's not visible.
• 44:45
  SPEAKER_01: Most of I know what you're trying to like say, the off-chain limit, like the I guess the off-chain um components, it's not very like visible directly on Walmark right now.
• 44:59
  SPEAKER_01: I'm trying to add something here.
• 45:01
  SPEAKER_01: Like this is like a good example is the the APY USD and APX USD tokens that's really popular recently.
• 45:10
  SPEAKER_01: So basically what it does is like you can see like this Oracle feeds.
• 45:15
  SPEAKER_01: Let me zoom in.
• 45:16
  SPEAKER_01: This Oracle feed they they use.
• 45:20
  SPEAKER_01: Um one of the feeds is basically their own kind of like nav feed.
• 45:26
  SPEAKER_01: So they report themselves about what is our you know current liability plus like overcollateralized ignitral.
• 45:34
  SPEAKER_02: So it's sort of like like uh how that put maybe it's like one of those daily attestation reports that they just exactly.
• 45:42
  SPEAKER_01: Yeah, but the thing is like you can see this is clearly, you know, whatever they say that it's happening.
• 45:50
  SPEAKER_01: And I think I think this starts to be like a problem where it becomes like very hard to actually track traffic like RTBAs.
• 46:00
  SPEAKER_01: Um, so actually, like if someone is, I'm just like recommending this tool if someone is unaware.
• 46:10
  SPEAKER_01: So someone built this like far on watch.
• 46:14
  SPEAKER_01: Yeah, this is like becoming my favorite tool uh in the last few months when it comes to like RBS or any weird stable coins.
• 46:24
  SPEAKER_01: Um, they have a very complex mechanism to like rig uh rank them.
• 46:29
  SPEAKER_01: Um you can see their mythology, they have everything open.
• 46:34
  SPEAKER_01: Um, I think their mythology changes over time as well.
• 46:37
  SPEAKER_01: They have like tens of versions of different mythology that are that they rank them.
• 46:42
  SPEAKER_01: They have safety score.
• 46:43
  SPEAKER_01: So I I guess like the very minimum you can do is you can click on some of the assets you're interested in and at least take a look at what they think, right, about this asset.
• 46:56
  SPEAKER_01: So, yeah, like use the like they give it a ranking, uh, like a like a rating, and um they try to like I think there's like a yield, uh sorry, risk adjusted yield.
• 47:12
  SPEAKER_01: Yeah, this is like a good uh view as well, which tells you about a lot about what is better as an advanced.
• 47:21
  SPEAKER_01: Wow.
• 47:22
  SPEAKER_01: Yeah, they have lots and lots of features that I just really like.
• 47:27
  SPEAKER_01: They do have an API, so I'm I'm actually like working on how to like integrate this nicely into Modark.
• 47:35
  SPEAKER_01: Um it's it's becoming harder because um somehow one one one side of myself, like I don't want to be super, super kind of like opinionated about what's good or what is bad in terms of markets.
• 47:53
  SPEAKER_01: But yeah, I think if if integrating this gave people more kind of like just like another tool or another, right, another third party to like provide their perspective, it's uh this should be objectively good, like a positive thing.
• 48:11
  SPEAKER_01: So we'll think about ways to like integrate this to like for you to track the the collateral, the assets.
• 48:20
  SPEAKER_02: Understood.
• 48:21
  SPEAKER_02: Thanks.
• 48:22
  SPEAKER_02: Yeah, I actually this is my first time hearing about this.
• 48:24
  SPEAKER_02: I I only know of RWA.xyz.
• 48:28
  SPEAKER_01: And oh yeah, yeah, I think I think they're good as well.
• 48:31
  SPEAKER_01: I think this platform just popped up like maybe two months ago.
• 48:34
  SPEAKER_01: Two months ago I first heard about it, but now that becomes so much better.
• 48:38
  SPEAKER_01: And um yeah, so I encourage people to take a look.
• 48:42
  SPEAKER_02: Nice.
• 48:43
  SPEAKER_01: Oh yeah, actually, they have a nice feature as well.
• 48:46
  SPEAKER_01: Um, they have a like a monitoring, so you can link your telegram and you can choose which asset you're you're interested in in tracking.
• 48:56
  SPEAKER_01: So they will send you a notification if the threat level change, or I think they have like a rating level change, etc.
• 49:04
  SPEAKER_02: Oh wow.
• 49:05
  SPEAKER_02: Yeah, it's that is very useful.
• 49:08
  SPEAKER_01: Yeah, if you're trading RWAs or stables, definitely, definitely take a look.
• 49:13
  unknown: Right?
• 49:13
  SPEAKER_01: So it's free, so you don't you don't lose anything.
• 49:17
  SPEAKER_02: Yeah, nice, nice.
• 49:19
  SPEAKER_02: Okay, yeah, appreciate that.
• 49:22
  SPEAKER_02: And yeah, I think uh it's good.
• 49:24
  SPEAKER_02: I mean, yeah, uh besides of besides pharos, your your own risks uh indicator is really pretty useful.
• 49:31
  SPEAKER_02: And and yeah, I think I think yeah, we covered most things really.
• 49:36
  SPEAKER_02: Uh uh Monarchs, uh core features, uh smart rebalancing, auto vault, uh future of DeFi, future of vaults, uh a bit on the risk side and also the RWA.
• 49:49
  SPEAKER_02: Yeah, maybe some uh final words for for you and yeah, just for our listeners to guess, yeah, use Monarch.
• 49:58
  SPEAKER_02: Maybe maybe you can recommend them certain things to do.
• 50:03
  SPEAKER_01: Yeah, um I think lots of the topic we talked about um in this small interview is something that we thought about building for our users as well.
• 50:14
  SPEAKER_01: Because basically we came from a uh like perspective that we are just like a small user in DeFi.
• 50:20
  SPEAKER_01: How do you survive in DeFi?
• 50:22
  SPEAKER_01: How do you like not trust other people?
• 50:24
  SPEAKER_01: How do you can like objectively earn yields?
• 50:27
  SPEAKER_01: That's like fair.
• 50:29
  SPEAKER_01: Um, so yeah, like a lot of those things like money training.
• 50:34
  SPEAKER_01: Uh, we have something built and we will be training pretty soon.
• 50:38
  SPEAKER_01: So yeah, like if you have any feedback or just like something you want to see someone build in general, uh it should be expects to be more related.
• 50:50
  SPEAKER_01: But if it's not therapy related to morphol, we will want to listen as well.
• 50:55
  SPEAKER_01: But yeah, it's if it's morpho related, you can talk to us and then um I'll be I'll be happy to like try to figure out you know how to help everyone survive in the in the dark forest.
• 51:09
  SPEAKER_02: Yeah, definitely creative, man.
• 51:12
  SPEAKER_02: Yeah, and yeah, I think that's about it for today's session.
• 51:15
  SPEAKER_02: And yeah, thank you, Anton, for your time.
• 51:18
  SPEAKER_02: Thank you.
• 51:19
  SPEAKER_03: Yeah, have a good day.