Transcription
I'm Enzo. Um, I'm an early contributor in Waron, which is liquid staking, in One Sec, which does bridging, and New Sand, which does decentralized boarding.
Wateron is something called liquid staking. Um, liquid staking is staking without being locked. And so, staking is a way to lock the chain native assets, so ICP, and earn yield rewards on top of it. Now, the ICP is really good for this. The basic rewards is 7% for locking it for 6 months, or 13% for locking it for eight years. However, when you lock it up, you can't sell it. So, it means it belongs to you and you can't sell it. And that makes it really painful for a lot of people because not many people have the kind of cash needed to lock this up.
And so, in every other chain, there's an alternative called liquid staking where you earn a similar amount of yield, but you are liquid, so you can sell at any moment. And that's what we wanted to do because the one asset that a lot of people have on the chain is the chain native assets, and here there was not really like liquid staking. There were, there were a few, but they were not like scaled up. And so, we felt that we needed to properly decentralize first. And so, what was launched only once the SNS happened. Uh, SNS is the Service Nervous System. Tough to to say, uh, but it's the way it's a DAO wrapper on ICP. It's a DAO framework. And so, we really wanted Water Neuron to be launched under DAO first and foremost because Water Neuron has a mission of governance because the yield on ICP comes from the governance. And so, people go to Water Neuron, stake the ICP into nICP, and with the ICP that the protocol gets, it stakes them into the minimum amount of time neuron and votes with them. And with every vote, rewards are given. And the good thing about an ICP is instead of you receiving money every few days, like ICP tokens every days, it rather compounds. So, you buy, uh, let's say, a share in the fund. Okay. And tomorrow, instead of like withdrawing from the funds, which takes six months, you really want the money now. Uh, so you cut up your tickets and you sell part of your ticket to a friend, and then your friend can come back and claim your money because in the meantime, the fund grew.
Exactly how one works more or less. It's all liquidity problem, like we were saying. And so, the liquidity problem in DeFi is divided into five parts. DeFi is the ecosystem of five things. You need a lot of stablecoins, a lot of like liquid staking tokens. And then the both meets into a borrow lending. So, people who have, uh, liquid staking token will either want to get like overleveraged on the chain. So, borrow loops and be exposed to ICP 10x, let's say, or they would want to borrow against the ICP and use the money in the physical world. And so, once you have this board lending, then this drives up the volume in the DEX. And so, on ICP, when you look at it, we have, we had, so we still have two really good DEXs, so Kong Swap and ICP Swap. We don't have any lending. When we left, we didn't really have any liquid staking, and the stablecoin we have, we only have 4 million liquidity. And so, we needed to find a way to attract all of this and put it all together. And so, that's why the next thing we're tackling after Water is stable liquidity.
We feel like the CK BC bridge is great technology. Chain Fusion is like extremely good technology. However, it wasn't built with the UX first in mind. And so, to go back and forth between the chain, you need CK if, and it means that you need to like to export CKC, you need to go on a DEX, buy some CK if, come back, put it in your transaction, send it, and it's not enough gas, you need to buy some more, cut, try again. US way easier. You just need USDC. We take care of the rest, and you can export it to the chain. We've also made sure to scale the throughput. So, it means now more people can do it concurrently, which was very tough to do before. And so, we use like a novel, uh, feature that's very nice to do. And so, for us, this is a way to drive stablecoin liquidity in the IC, making sure the UX is dead simple.
Now, this is not enough. You need a reason for people to bridge USDC over, and that's why B lending comes into play. So, you want to make sure that bringing in stablecoin is super easy, but you want al also want to make sure that in the bore lending, people can like stake from any chain. And so, we know there is demand on ICP to borrow against ICP. We want people to bring USC from other chains into ICP to b for to enable other people to borrow. And this way, we can make the amount of stablecoins TVL go up on the chain, and then we can make the amount of volume go.
What we're missing in ICP DeFi, I think, is a lot more funders, a lot more protocols, and a lot more TVL. Um, all of them need to work together. I think ICP DeFi has more room to grow than on other chains because ICP DeFi can be natively cross-chain. So, for instance, USN is a cross-chain boarding protocol. Um, so what it means is you have one pool of USDC that sits across all chain. So, it means you can deposit your BTC on USAN and then bore USDC on Solana, or you can be on Arbitrum and borrow USDC there, or you can lend AR on Arbitrum and borrow USDC on Base. You can do all of those things. And so, this one central pool of USDC is really powerful. But to build those cross-chain protocols is very tough. Uh, but as we get more of them, I think our can be higher because you can integrate with more and more ecosystem.
Um, so what we need is like more founders that take bigger bets into like bigger bets that is are opin opinated, um, and to build really cool protocols because Water Neuron is something that exists already elsewhere, traditional liquid staking, but with a twist on the IC. One Sec is a bridge. So, it exists elsewhere, but we built it for a fraction of the cost because Definity did more of most of the work, and we used it as like a crypto cloud where we came and like did the shopping of like we need thresholds, we need HTTP out calls, we need timers, kind of thing. So, we didn't need to build an entire chain. Then new for us is the expression of taking the the new tools ICP gives us to create new DeFi primitives.
Bringing more liquidity from the outside is very tough. Um, because it means that people need to trust the chain. And so far, because ICP has been around for a while, I think more and more people will start to trust the chain. Uh, we just need to wait it out and encourage people to do it. We need to encourage people to do it. And I'm going to sound repetitive by building cool protocols. It's, it's, I see like countries. You go to France because there's the Eiffel Tower, the Lou, in the same town. That's why you go to Paris, right? You go to London because there's a lot of football stadium, there's a lot of pubs. That's where you go. You need stuff that people want to do on your chains for them to attract you. And I really believe that the IC is like kind of like the Dubai or the Switzerland of crypto, where you come here for something you need right now. Timers, let's say, I want to do an action of my protocol in DeFi on a regular interval, but still being decentralized. And then you realize that there's a lot of other cool things here. So, you decide to stay.
So, there's already a few. Um, the fact that we can host websites on chain is good. Um, the one thing that the IC offers, if let's forget everything web three related, right? You're a web two company. What does the IC offer you? It offers trust and transparency. So, let's say tomorrow I handle AI related data or financial data, um, I want to prove to my users, let's say I'm building an app where I handle your bank statements, right? And I connect your Monzo to your Revolut to your UBS, okay? And you wouldn't want to interact with a closed source app because you're logging in in all those features, so you're afraid they, you know, take your money away. And so, with Vet Keys, you can encrypt data on the blockchain. Now, this is not novel. I can encrypt data on my terminal, send it to a WSS3, and that's easy. Now, the problem is if you lose your key, you're finished. On the IC, it's linked to your II. And so, Vet Keys is a way to derive a key for you in a reproducible manner. And so, you don't need to save this key. You just need to get your II correct. So, what it means is you can build an app on the IC, build it in a canister. I can open source the app. Even I can control it, it's not a problem, but I can be transparent about it. The people can look at the app on GitHub, and now with AI, it's really easy. You can pipe the code into charge and it can tell you the app does what it says it does. You can check the hash, go on the dashboard, make sure that the cander you're interacting with has the same hash. And so, now you know for sure that I'm not going to sell your data. And if you compound, so with Vet Keys, I'm not going to see your data. Then your data with Vet Keys, that is just being rolled out, are going to be encrypted. And then if you add the regional subnet stuff, it means your data can only reside in Europe with the European subnets. So, then you add like GDPR compliance on top of it. And all of this makes it really cool for a small set of features, but for which I don't think we should trust clouds. And so, those sets of features are what the IC offers to web companies.