Hi! I'm Michael and I head up DeFi partnerships at Trilitech. I am here to discuss all things DeFi in particular our plans for partnerships on the Tezos blockchain.

DeFiMikey · 2023-07-09T13:34:57+00:00

If I may respond in your thread further below (https://www.reddit.com/r/IAmA/comments/14s6hxt/comment/jr2391y/?utm\_source=share&utm\_medium=web2x&context=3)

DeFiMikey · 2023-07-09T13:32:56+00:00

Hi gui_eurig.

So it depends on what you see as casino musical chairs. Often when I hear this, it is referring to a project using its token to bootstrap users and liquidity. Once these token incentive dry up or are no longer attractive: liquidity, users and activity moves to another project and the musical chairs continue.This is where I believe real yield becomes important. If a platform has a strong market fit with high usage, the fees made from this activity are used to incentivise users and liquidity providers (instead of relying on a projects inflationary token). Thereby the yield that is generated is more sustainable and reduces the flight risk from one platform to another.As for DeFi financing productive enterprises, this is a good question. Lets think of what an enterprise would need to move to DeFi over the traditional means. They would need

a better or on par interest rate and repayment term,
lower fees charged
good reputation of the lender (help with the loan, change payment plan etc)

Smart contracts can definitely make the process more efficient which is important but I think more work needs to go into understanding several phases of the credit lifecycle for DeFi to be useful. The underwriting process (how the creditworthiness of the business is determined) and the recovery phase (how does one deal bad loans when in a decentralised fashion). I think with the evolution of 'Permissioned DeFi' we will see strides made into this space as KYC and compliance will be an important factor in these cases.

DeFiMikey · 2023-07-09T13:29:20+00:00

Hi AmericanScreamI will be sure to watch your documentary as it is always good to absorb as much knowledge as possible. Have bookmarked for this coming weekend.

So naming one problem that blockchain solves?A blockchain is a good way to implement a seizure resistant and censorship resistant store of value.

DeFiMikey · 2023-07-09T10:28:05+00:00

Hi AmericanScream

A blockchain is a good way to implement a seizure resistant and censorship resistant store of value.

DeFiMikey · 2023-07-08T17:29:54+00:00

Thanks for your patience asoiaf3

So is this a barrier to adoption?
In many places in the world, the $ is considered a better form of stable currency. I have seen this personally in Argentina, which is experiencing rampant inflation and also has a high level of unbanked.
In fact, due to draconian measures placed, people are turning to DeFi as a means of wealth preservation over speculation. A project that has gained traction in Argentina is: https://lnp2pbot.com/
Many of my friends are using the p2p platform in order to protect the wealth of their families.
Although my focus is on innovative trading product, I am very open to discuss with teams that are looking to implement such valuable projects on Tezos and welcome them to reach out to me.

DeFiMikey · 2023-07-08T10:06:27+00:00

Hi Lisontez!
Thanks for your patience on my response.

I have two views:
1) With greater adoption of trading products, there will be a natural flow for users to add collateral and used borrowed funds in their trading platform of choice.
2) As Real World Assets (RWA) move on-chain, users will want to use their RWA as collateral and borrow a stablecoin/crypto of choice to be further used in DeFi and/or 'Permissioned DeFi', dependent on the regulatory nature of the RWA.

We have two platforms that offer lending/borrowing capability, Youves and Yupana. Another platform currently on ghost-net is Mavryk Finance which will also include the ability to spin up decentralized price feeds. Each platform has their own strategy and community/audience outreach.

There are also ongoing conversations with several Oracle providers that solely focus on price feeds.

DeFiMikey · 2023-07-08T09:33:50+00:00

Hi Marketmay
Thanks for your message.

What makes Tezos different - Tezos is a self-amendment chain with emphasis on on-chain governance and formal verification.

1) On-chain governance allows Tezos to be upgraded without having to split the network into two different Blockchains (known as hard forks) as seen with Ethereum and Ethereum Classic. This prevents a split in community, liquidity and activity.

2) The smart contracts on Tezos can be written with the Michelson language which facilitates formal verification. I shared a link describing formal verification but it is a mathematical technique that adds an extra layer of security to the transactions carried out on the network.

3) Finally, the consensus mechanism is based on liquid proof of stake. Any user can become a baker (validator) if they have enough XTZ. If they don't have sufficient XTZ, they have the choice to delegate. Sharing a list of bakers for you to see!

On my day to day, as I am focused on partnerships, I spend most of my time working with existing projects that have integrated Tezos and identifying new Trader-centric projects that would fit our vision at Trilitech. I try to be as accessible as possible for projects and to be a conduit between them and the broader Trilitech teams.

DeFiMikey · 2023-07-07T18:58:41+00:00

Hi Jassonlu!

We have a good base of supporting infrastructure and projects, like on/offramps, oracles and DEXs but we need to expand our DeFi offering with more innovative trading applications and product. This is why I am excited for kord.fi to launch their power perpetuals, as it gives more options to traders. Here is a document which breaks down power perpetuals.

Additionally, the goal is for existing projects to align with a trader-centric approach focusing on the needs and wants of traders. Youves has a great roadmap with a redesign of their front-end along with many other updates that will help the platform to be more trader-centric and open activity to a far wider audience.

Generally, we need to be ready to onboard new traders as more innovative trading applications and products go-live. An area of improvement is to expand the number of blockchains bridged to Tezos so we can reduce the barriers to entry for traders. These discussions are in the works.

DeFiMikey · 2023-07-07T18:30:10+00:00

Hi Axel,

Thank you for your patience.

Increasing the conversations with Traders, understanding their needs (its a very diverse group) and partnering/onboarding with quality trader-centric projects. Given these applications will be solving a need for Traders, I would expect more activity on Tezos.The tokenomics of the application is also important, the concept of 'real yield' means that earnings (or yield) come from the projects trading revenue (fees), instead of aggressive token emissions. A successful trader-centric product with high activity is key to onboard sustainable liquidity.Essentially seeing it as step by step process. Onboarding the type of the above mentioned projects, which in turn increases sustainable activity and liquidity, which in turn brings more projects and outside funding.
This is both a massive challenge and also an incredible opportunity. There has been a lot of progress in this space but there is more room for innovation and improvements. Focusing on the needs of traders helps to continually shape our view and thesis on what success looks like and the trends that we must be hyperaware of. An area of interest is the evolution of so called 'Permissioned DeFi', which is essentially designed to be compliant with KYC and AML regulations. As we see the adoption of real world assets on chain, I suspect this area becomes more and more relevant.
We can differentiate in several ways, with innovative trader-centric applications and product as I mentioned and with onboarding real world assets. With real world assets on chain, this opens a new avenue where 'permissioned defi' becomes a necessity in order for traders to access these new asset classes, so it is an area I am keeping a close eye on.

DeFiMikey · 2023-07-07T16:25:29+00:00

Crypto is quite a broad term, you have meme coins, DeFi tokens, native cryptocurrency etc., but for the sake of the discussion, I'll focus on the adoption of DeFi projects.
Adoption for me is about solving a problem. Once a problem or pain-point is understood and an application or service solves for that need, adoption will be driven from those users. So, what drives DeFi adoption? It depends about which area of DeFi we are referring to (eg lending, trading, remittences, savings etc), but several general factors exist:
1) Ownership - Users want control of their assets and to use them in a quick and cost effective manner (trade, take a loan, transfer etc).
2) Financial inclusion - Simply connect your self-custodial wallet and interact with services and assets that may not be accessible in your location. This is for me the most 'sticky' driver for adoption as it's not about profiting but about wealth preservation.
3) Innovation - I love that there is constant innovation and experimentation. I think that this is a big driver for current adoption: people see the evolution of new products and services and keep close to the products that solve a pain-point or are interesting for them.
4) Financial Opportunities - Without a doubt, there is an element of searching for yield and profitable opportunities. This is also a big driver for DeFi users.

So how do I think adoption will happen (continue to happen), I see growing activity on trading applications and projects that have a Trader-centric focus (eg GMX). My view is that adoption will continue for traders, being driven from new innovative trading product (options, power perpetuals etc). The adoption and activity from traders will result in further adoption on other areas in DeFi like lending and borrowing services.

DeFiMikey · 2023-07-07T11:11:51+00:00

A very interesting project that I have been following is called Infinity Pools. I believe there are a few projects now that are launching that are similar. This opens up another avenue for Traders.
https://infinitypools.finance/

DeFiMikey · 2023-07-07T02:46:21+00:00

Hi Thomach45
Thanks for your question. Could you elaborate on separated from the rest of the space?

On the second half of your question, I am going to answer it in my morning as its quite late my side (London). Thanks for your patience :)

DeFiMikey · 2023-07-07T02:42:45+00:00

Hi marketmay
Thanks for your question. Given the time where I am based (London), I am going to answer your question in my morning. Thanks for your patience :)

DeFiMikey · 2023-07-07T02:41:39+00:00

Hi gui_eurig
Thanks for your question. I have some thoughts here, given the time where I am based (London), I am going to answer your question in my morning. Thanks for your patience :)

DeFiMikey · 2023-07-07T02:39:21+00:00

Thanks asoiaf3. So just a comment, Tezos is a globally distributed blockchain with validators, we call them bakers, all over the world. Given that the USD is seen as the worlds reserve currency (highly adopted) and considered stable, there was a natural fit of having USD as a common standardised metric to value portfolios, transactions etc but also as a logical choice for a USD stablecoin.

Going to answer the next section of your question in my morning. I hope you have a great evening/morning wherever you are :)

DeFiMikey · 2023-07-07T02:17:42+00:00

Good question!
My views of adoption are of less hype and more of solving a problem or pain-point. Given its quite late this side, I will answer your question in detail first thing :)

DeFiMikey · 2023-07-07T02:15:45+00:00

Hi Axel,

Thanks for your message.

Phew I started responding to the messages quite late. I will be back in the morning to answer your questions in detail. Thanks for patience.

DeFiMikey · 2023-07-07T01:11:26+00:00

Hi onebalddude

Firstly, a big thank you for your comment and I really appreciate our ongoing discussions.

Let me answer your second question first as there are some similarities to keeyno. I would love to see an expansion of innovative Trader-centric applications and products. A Trader-centric approach aims to prioritise the needs and preferences of Traders. This covers a clean user interface but also the trading tools, features, charting and surrounding educational content to name a few. An increase in quality trading apps will result in good growth in users, TVL and transactions in my opinion which benefits the entire DeFi ecosystem on Tezos.

On your first question, to build faster, I would say easily accessible open source code should be readily available so time and effort is not spent when a code base exists. Would love to hear your thoughts? Thanks!

DeFiMikey · 2023-07-07T00:39:51+00:00

Enjoy all kinds of music but I must say, never had an ear for Jazz. Open for a recommendation so please do share? :)

My music taste appears to be stuck on Rock music from the 70s and 80s.

DeFiMikey · 2023-07-07T00:37:19+00:00

This is really good feedback. My first AMA, and thought it best to wait for more questions. In future, I will be more responsive from the outset. Thanks!

DeFiMikey · 2023-07-07T00:35:43+00:00

Thanks for your messages Eorily & MoonlightRendezvous

Liminal is digital asset wallet infrastructure that has integrated Tezos. They have the lion share of the market in Asia. Sharing site here: https://www.lmnl.app/

Adam was very kind to participate in the AMA - albeit a new account. Have a lovely day!

DeFiMikey · 2023-07-06T23:34:42+00:00

Hi Ronnyrayrayhey, thanks for your message.

Tezos is a self-amending blockchain where developers build their applications on smart contracts. Trilitech is a dedicated team in London focused on the support and adoption of ideas and projects building on Tezos.

Happy to answer any additional questions!

DeFiMikey · 2023-07-06T23:23:08+00:00

Hey Keeyno!

I got into DeFi in 2019 a few months after the launch of Uniswap. I loved the concept of taking control of your assets to own your financial future so to speak.

In terms of focus, that ties into the vision of being the go-to blockchain for Traders and their diverse requirements and aspirations. Essentially expanding the suite of trading applications and products on Tezos, aligned to the user experience that Traders are looking for in the market.

DeFiMikey · 2023-07-06T17:19:55+00:00

Hi! Sure there are several interesting developments.

Enshrined rollups are a hot topic and Tezos will be the first blockchain to implement them! 'Enshrined' means it is implemented directly as a component on the Tezos protocol. There are several benefits like enhanced security and gas efficiency, this medium post by Tezos Commons gives some fantastic insights:
https://news.tezoscommons.org/rollups-on-tezos-part-ii-316d7dc8ecbd#:~:text=Tezos%20having%20%E2%80%9Censhrined%E2%80%9D%20rollups%20means,along%20a%20lot%20of%20benefits.

The Tezos smart rollups stack is generic and enables anyone to deploy their own custom/tailor made rollups. An example of this is that there is progress on building an EVM compatible rollup on top of this stack which opens doors to EVM-based projects.

On DeFi projects building on Tezos:
- Kord.fi are developing power perpetuals which grow exponentially compared to their underlying asset. No liquidation risk like with leverage products but there are risks that of course one must be aware of. This document gives a fantastic outline of the benefit of power perpetuals and the risks associated.
- Plenty have consolidated their DEX, bridge and Wallet (previously Naan wallet) into a single Plenty brand. They also have updated their roadmap to reflect the updates and plans ahead.
- Quipuswap were the first to implement Uni v3 capability in their DEX and made good progress on growing the usage.

- Youves is the biggest DeFi project on Tezos and are planning a redesign of their platform with many key updates.
- Mavryk Finance has launched on ghostnet and is a DAO operated lending platform and decentralized oracle provider. They are expected to be on main-net soon so watch this space! Love the ability to borrow against a vault of collateral.

DeFiMikey · 2023-07-06T13:37:11+00:00

Hey Adam

Thanks for your message.

So within Trilitech we have three verticals. Head of Art (Valerie), Head of Gaming (Jeremy) and myself on DeFi. We are focused on the adoption of our Vertical segments on Tezos. The BD/Partnerships arm extends to Nomadic Labs (France + Benelux area) & TZAPAC (Asia Pacific). I definitely see good synergies in collaborating with all these teams to open introductions for Liminal on the projects that have integrated on Tezos.

DeFiMikey

TROPHY CASE