On Monday, February 6th Savvy DeFi hosted a Twitter Space with LayerZero, Ava Labs and Trader Joe discussing the potential for BTC.B, OFTs (Omnichain Fungible Tokens) and a multi-chain future.
Read the transcript below or watch / listen to the youtube audio.
Unlocking BTC.B Liquidity
Audio / Video:
Transcript
[00:00:00] Roman Giler (Savvy): Wow, we got a packed house today. Really exciting for this space. Thank you guys for showing up. Give it a few more minutes before we really kick off, and a happy Monday to everybody.
[00:00:09] DaviDeFi (Trader Joe): Good Monday.
[00:00:10] Matthew Schmenck (Ava Labs): Yeah. Happy Monday. How’s your weekend?
[00:00:12] Roman Giler (Savvy): It was incredibly busy. We were working all throughout the weekend, sir, how about you?
[00:00:18] Matthew Schmenck (Ava Labs): It was a good weekend. I caught up on a lot of work yesterday. I’ve taken my first vacation since joining Ava lab.
[00:00:23] Akshay Gupta (Savvy): Of course you go up I’m assuming you went up a mountain to ski because it’s on brand.
[00:00:27] Hey, Raz. How’s it going, man?
[00:00:29] Raz (LayerZero): Good, good. Thanks for having me. How you guys doing?
[00:00:32] Akshay Gupta (Savvy): Pretty great. How was your weekend?
[00:00:34] Raz (LayerZero): Great. Good times. Got to take my daughter skiing, which was fun.
[00:00:37] Roman Giler (Savvy): Also we have Michael from Ava Labs here as well. Thank you for joining us. Really great seeing you here. How are you?
[00:00:43] Michael Kaplan (Ava Labs): Doing well, thanks. Yeah, thanks for having me. Excited to hop on.
[00:00:47] Roman Giler (Savvy): And to round off, we also have DaviDeFi from the famous Trader Joe and Brevey from GoGoPool. How are you guys?
[00:00:54] DaviDeFi (Trader Joe): I’m doing great, man.
[00:00:56] Breevie {GoGoPool): Yo, doing fantastic, man. Thanks for organizing this.
[00:00:59] Roman Giler (Savvy): Oh yeah, totally. This is my pleasure. I love putting these kind of things together and I guess this is like a great time to kick it off. Let’s get started. The reason for this talk and what we’re going to discuss today is actually something that’s really near and dear to my heart.
[00:01:12] And we’re gonna be talking about Bitcoin unlocking Liquidity. DeFi, what that means for the people here. How does that look like? What’s the vision and what’s the future? My name is Roman. I am the lead for Savvy DeFi, a recovering ex banker, and a overall Bitcoin lover and fan of DeFi. I’m joined here on stage with my amazing co-founder, Akshay, who I’ll pass the mic to, so you can introduce himself.
[00:01:36] Matt from Ava Labs. Michael, who’s an engineer at Ava Labs. And also Raz, who is the CTO of LayerZero. I’m really excited to talk to you guys about basically everything that I really love about DeFi, all combined into one. So with that, I’ll pass the mic to Akshay and he can introduce himself.
[00:01:53] Akshay Gupta (Savvy): Yeah. Hey everyone. My name is Akshay. I’m the tech lead at Savvy DeFi. And my background is, obviously in the tech world. I ran a tech consultancy for a decade and, just the ideals of crypto really alive with me. So I’ve just gone deeper and deeper around down the rabbit hole. And, now I’m a builder in DeFi and really excited to our project on Testnet and ready to come out soon.
[00:02:11] Roman Giler (Savvy): Great. I would love for you guys to introduce yourself. Raz, would you like to go first, sir?
[00:02:15] Raz (LayerZero): Sure. Hey guys. Raz, co-founder and CTO of LayerZero Labs. LayerZero as an omnichain interoperability Protocol that allows smart contracts to on different blockchains to communicate directly with one another via Arbitrum message passing.
[00:02:27] And one of the things obviously we’re talking about is BTC.B going omnichain with via LayerZero message passing and our OFT standard.
[00:02:34] Matthew Schmenck (Ava Labs): My name is Matt Schmenck.
[00:02:35] I’ve been here at Ava Labs for about a year now. I’m specifically a part of the business development team. Originally was focused on DeFi and institutional capital markets, but expanded my role to lead our external data efforts as well as help out quite a bit with infrastructure and tooling.
[00:02:50] Happy to be here in chat BTC.B.
[00:02:52]
[00:02:52] Michael Kaplan (Ava Labs): Yep. I can go next. I have one. I’m Michael. I’m a engineer on the Ava Labs team. I’ve been at the company for a little over three and a half years now, since 2019. But nowadays am focused on building the Avalanche Bridge both from Ethereum, but also Bitcoin. As well as Avalanche Warp Messaging, which is our cross subnet communication solution that we recently announced.
[00:03:14] So yeah, super excited to talk about BTC.B. I think it was a long time coming that we were hoping to build that bridge, and very excited to see its use catch on now.
[00:03:24] Roman Giler (Savvy): That’s amazing. So to set the stage as blockchain gets adoption and that increases, I’ve seen a rising issue regarding like the higher barrier to entry for newer users.
[00:03:33] And they usually start off with things like BTC and they have a hard time getting the complexities of DeFi and Web3 under their belt and various other blockchains and other things coming out. It’s just so hard to keep up. So the point that I wanted to do with creating this kind of space is to really kind of talk about what is it, what is BTC.B, right?
[00:03:51] And at a high level that is a bridged Bitcoin asset stored on the Avalanche C-Chain. And like, why should we care? In my opinion, it sounds like it unlocks a lot of the Liquidity opportunities that Bitcoin inherently has, on the Bitcoin blockchain, but now can be used in DeFi. And I’m really happy to see you guys here and wanted to just ask you guys a couple of questions and really get an understanding so that people that are listening to this can have ideas on how to use this awesome asset.
[00:04:17] Akshay Gupta (Savvy): So yeah, let’s kick it off with first question I’ll ask to Raz is since BTC.B is an OFT how have you seen the adoption that means that basically BTC.B is omnichain it can be accessed across many chains. Are you seeing adoption on all the chains including Avax and other chains?
[00:04:32] Raz (LayerZero): Sure, yeah. Since the announcement, there’s been over 22,000 transferslike, so movements over between chains via over LayerZero and 10,000 unique wallets. It’s seen a lot of usage, a wide adoption and a lot of people just interacting with it. And I think this is just the early stages of it as it expands like the true value here is that you can go between these chains without having going through a central chain. So point to point use it in DeFi there and then when you want, you can bring it back to or if you’re already on Avalanche, from Avalanche, go directly to Bitcoin without having gone through a centralized exchange, which is extremely powerful for users.
[00:05:05] DaviDeFi (Trader Joe): Yeah. Talking about adoption, I can also add that today actually, Bitcoin B is a market open on Trader. Joe Arbitrum adoption is definitely coming.
[00:05:15] Roman Giler (Savvy): Yes, sir. I’m really excited for that, by the way, Davide. And I hope to ask you a few more questions about that too. For Raz, what are some of the security considerations for OFT deployment and usage? Can you talk to us about that a bit?
[00:05:27] Raz (LayerZero): Yeah. basically the security boils down to the configuration of what whatever the OFT sets it to. So like LayerZero enables applications to set their own security parameters. So configurations, who’s the oracle, who the real layers are and what that, and that can change over time.
[00:05:42] So say there becomes better oracle or relayer options in the future they have the ability to switch that to something better along the lines, but essentially the security boils down to whoever the Oracle relayer are and then the actual smart contracts themselves. Now, what LayerZero does specifically is our smart contracts are immutable, meaning that we can’t upgrade them or change them.
[00:06:02] And so what BTC.B gets to enjoy is that these smart contracts will stand, have stood the test of time over the past year, securing billions and those contracts will not change in the future. And they have that they can depend on the fact that these contracts are secure.
[00:06:17] Akshay Gupta (Savvy): Nice. We’ve seen like BTC.B like rapidly grow. Like I think what we’re crossing 140 million worth of TVL at this point. And it’s in just a short amount of time. So like Ava, Labs perhaps Michael, you can speak to this is what how does BTC.B compare to the other kind of btc primitives in the EVM chains and why is BTC.B perhaps is getting so popular.
[00:06:36] Michael Kaplan (Ava Labs): Yeah, absolutely. So I think one easy comparison to draw for BTC.B would be WBTC on Ethereum. And there’s a couple key differences that I think really sets BTC.B apart. One is the lack of a custodian. So WBTC is a very centralized asset. You have to be KYC to actually convert from Bitcoin to WBTC and go back.
[00:06:58] So you’re putting your trust in that centralized entity. And they have the authority to, they require you to perform KYC and such. And there’s also a delay between when those deposits and withdrawals or transfers, onboards off boards, wraps on wraps, whatever you’d like to call them are processed because they all go through that one audited entity. And in contrast to BTC.B it’s much more of a traditional blockchain bridge architecture. And you can redeem your BTC.B for Bitcoin at any point in time from your core wallet.
[00:07:32] So I was just saying how BTC.B is differentiated from WBTC because of the lack of any custodian. Controlling the process of deposits and withdrawals and its availability in terms of being able to instantly move between the chains.
[00:07:47] So BTC.B uses a much more traditional blockchain bridge architecture with a distributed set of bridge nodes run by these third parties. And you can look up online who those third parties are, who you’re putting your trust in rather than having it all go through one centralized entity and having to go through a KYC process.
[00:08:05] Yeah. I guess also touching upon the fees a little bit rat. Bitcoin has custodian and merchant fees, and generally those are. I don’t know. They range between 20 to 50 bits in nature versus at this point in time BTC.B just has a flat fee that it makes moving large size Bitcoin on-chain much cheaper in nature.
[00:08:25] Akshay Gupta (Savvy): Let’s maybe perhaps dive in a bit to what has been like the most popular use cases you’ve seen of BTC.B so far? What are people doing with it on-chain?
[00:08:32] Michael Kaplan (Ava Labs): Yeah. I believe there’s some good Dune dashboards that track exactly where it’s moving to.
[00:08:37] Generally, I think most of it’s being used within borrowing and lending market at this point in time. But the most interesting thing to me is protocols that are deciding to discontinue the use of rat Bitcoin altogether because they have more trust in BTC.B and I think the DePeg event over the long weekend near Thanksgiving really opened a lot of people’s eyes up where, hey, this might not even be better than traditional finance if it’s not working on the weekends or if it’s taking holidays off.
[00:09:03] That was super interesting to me. And we said over at Trader Joe, I believe they’re launching pool and Arbitrum room as well today, that’s super exciting.
[00:09:11] Akshay Gupta (Savvy): That’s pretty cool. So right now how many chains are we talking like BTC.B? What are all the places it can be compatible with?
[00:09:17] Michael Kaplan (Ava Labs): Yeah, so right now it’s on obviously Avalanche, apposes, Arbitrum bnb chain Ethereum optimism and polygon, and, it can essentially go anywhere right outside of that. So it can move to any of the evms and anywhere that LayerZero supports. As well as anywhere we support in the future.
[00:09:31] BTC.B can expand and proliferate becoming essentially, the defacto rap version of Bitcoin on all chains and be able to have users, like I said before, go in two steps, go to Avalanche and then back to Bitcoin whenever they want, without having to do like I said, KYC or anything like that.
[00:09:46] Just everything on-chain and having that seamless user experience is what really makes it special.
[00:09:51] Akshay Gupta (Savvy): So when you look at these kind of OFT tokens, is a Liquidity, if, let’s say, BTC.B 10 millions on eats, hundred millions on Avax, 20 millions on Solana, is that all attributed to avalanche C-Chain? Or is it considered, when you look at the Liquidity at TVL, is it like considered respected those chains?
[00:10:07] Raz (LayerZero): So the way that it, I guess the total TVL the way it’s built because it’s using a proxy OFT on Avalanche cause it wasn’t initially built in with it is essentially you would see you can either look at the total amount on Avalanche, including what’s locked up in the proxy.
[00:10:20] Or you could look at what, minus the proxy the circulating supply on each chain in aggregate. But that’s how you’d look at it.
[00:10:27]
[00:10:27] Roman Giler (Savvy): But yeah I wanted to just actually ask a question for the whole panel here. How would you guys describe the synergies between LayerZero and Avalanche? And I’ll love to have Ross start that.
[00:10:39] Raz (LayerZero): Sure. I guess to LayerZero see is really just a Protocol, right? It is a way for applications to build, communicate, openly between each other on different blockchains. And because it’s open, truly open and permissionless meaning that anybody could run any of the component off-chain components.
[00:10:55] And the application, essentially putting trust and power into the application itself. It really lends itself to being like a true DeFi, and Decentralized product that application developers love to build on. And doesn’t depend on layers of our Labs truly in any way.
[00:11:09] And I think, that aligns with a lot of the DeFi nature of Avalanche and what they’re trying to build. But they could probably speak more to that.
[00:11:15] Michael Kaplan (Ava Labs): Yeah. Thanks. Can you guys hear me all right though? I was just gonna say on the Synergy front, specifically for Bitcoin I think it’s really cool to see, both of our goals here are really bringing Bitcoin to be one more useful have more functionality to it and really enable users to move it around however they would like.
[00:11:36] And I think it’s awesome how we really focused on bringing Bitcoin to the C-Chain as the first step. I think there’s any number of reasons we haven’t seen Bitcoin bridges catch on very much as of yet. Whether, just building trustworthy cross-chain bridges is hard, right?
[00:11:52] We’ve seen how many bridge hacks have occurred. Building Bitcoin bridges on top of that is even more difficult because of the lack of smart contracts support on Bitcoin. And previously there was this notion, I think that people who hold Bitcoin just wanna hold it. There’s the Bitcoin, Maxis I think are the loudest group of Bitcoin holders, but they’re not the largest group of Bitcoin holders.
[00:12:11] I think a lot of people who hold Bitcoin actually do want to take advantage of all these opportunities to put it to use in DeFi. And we, focused on enabling that first step to bring your Bitcoin from Bitcoin onto Avalanche and LayerZero has helped us out in terms of making it the new standard to be used across any chain.
[00:12:30] So yeah, I think. It’s really perfect synergies in that’s area in terms of bringing Bitcoin to the users to be able to leverage however they would like as easily as they can.
[00:12:39] Roman Giler (Savvy): So if you found yourself in a conversation with Bitcoin Maxi, or even someone who might not be a Maximalist, but it’s on defense about DeFi. What would you say to them? I guess, maybe not to convince, but just what would you say?
[00:12:53] Michael Kaplan (Ava Labs): Yeah, that’s a super interesting question. I honestly can see their point of view. I just think they’re missing out on all of the new options. And if you just want to stay bare bones, peer-to-peer payment systems at its core, the first iteration, it is Bitcoin, like that is the one, the first one.
[00:13:11] It will never be replaced in that sense. But there’s so much more innovation out there today that you’re really missing out on if you are just focused on one chain versus the other. But honestly, I don’t try to argue with any one about if they have an opinion, which chain is the best, go for it.
[00:13:27] I think this space is far too small to be arguing about one chain or the other within it. I think we should be talking about how we can expand it and grow it together. Yeah, that’s what I would say.
[00:13:39] Akshay Gupta (Savvy): Since like this BTC.B like OFT, SGX bridging whole framework has been so successful. Do you see that like being replicated to let’s say, Eth or other coins of that nature?
[00:13:50] Michael Kaplan (Ava Labs): I certainly hope so. I can’t speak to the OFT part. Maybe Raz has some alpha he can drop there. But yeah, I think as far as, cross-train interoperability, the more bridges the better. But also there needs to be some standardization across more bridges and interoperability protocols.
[00:14:07] Because as we’ve seen, they are vulnerable, they are attack points in the ecosystem from the number of bridge hacks that have occurred in the past year. I mean, I certainly hope we’ll see it continue to catch on, but don’t have any, anything else there really?
[00:14:20] Akshay Gupta (Savvy): Yeah. To add on to that OFT standard is just like an ERC 20 standard just enables applications to easily build on top of it.
[00:14:28] If you’re a bridge and you support OFT like Stargate and other bridges out there then you are able to take in any just like you could take, just like UniSwap takes any ERC 20 they could take into any OFT and be able to give that same experience to move it between chains so it’s not just limited to one user interface.
[00:14:43] Beyond that, OFT, gives the special, one of the most important things about OFT is that it becomes, it is the native token on each chain, right? It is not a wrapped version. It is deployed by the creator company or can be by the creator company. And so you’ll, I think you’re already seeing announcements coming out, but a lot of teams are going OFT because they could, they own the smart contracts.
[00:15:03] They can deploy their token everywhere and have it move seamlessly between chains and not fragment the Liquidity, right? If you don’t go OFT you risk the chance that some other bridge is going to wrap your token and move it to these other chains. And then usually if it gets any popularity, other bridges will do the same thing and fragment that liquid.
[00:15:21] And it composes like beyond the problem of fragmenting your Liquidity, it also creates a security risk in that you don’t own. They’re basically representing your token as you they’re in custody of, and they own and if they get hacked it hurts your brand, it hurts your name, it hurts everything, right?
[00:15:36] That it hurts your users who are holding that token and thinking, oh, that’s your token on the other chain. But it wasn’t your token, right? It was a wrap version. It’s an IOU. And so OFT allows teams to be in charge of that and deploy it and own it and be the official one on each chain and be in control of their own destiny versus letting someone else do it.
[00:15:54] With BTC.B being OFTs and in general, when a token is an OFT, does it need to go through Stargate for Liquidity or can it just directly? Nope. So Stargate does OFT wrapping. So basically as a service, it just provides the ability to bridge between chains, I think. And Stargate and other bridges because it’s a standard, right?
[00:16:11] Raz (LayerZero): Bridges can wrap OFT or and, they could charge their own fee if they wanted to, if you wanted to use that interface in the future, right? Or you can go directly, like BTC.B has its own websites. It’s free bridging between chains. So it just gives but there’s no Liquidity, right?
[00:16:24] It is minting and burning onto between chains and then locking cuz of proxy OFT on Avalanche C-Chain. There is no Liquidity problem. There’s no pools of Liquidity. It is just moving seamlessly between.
[00:16:38] Michael Kaplan (Ava Labs): So one of the reasons why we’re so excited about BTC.B in particular is because of its decentralized nature, the fact that you’re not fragmenting Liquidity. And for us, that’s extremely important because our role here and why, we named the title of this room is Unlocking Bitcoin’s Liquidity.
[00:16:56] What we do is we provide a non-liquidating and Auto-repaying lines of credit against Bitcoin. And for us, this means that in the future, using things like OFT technology allows us to tap into Liquidity everywhere while having the security of Avalanche, as well as making sure that our own Liquidity never gets fragmented.
[00:17:16] So this is an extremely big opportunity for DeFi and bridging Liquidity across markets. And with that we do have questions that we wanted to give you guys an opportunity to address because, this all is new, this technology is new, and we’ve seen things happen before. And recently there’s been a little bit of fud, and I’ll let Oxy kind of touch on that and give you an opportunity to clear the air and set the record.
[00:17:41] Akshay Gupta (Savvy): Yeah. As you mentioned, Raz, right? There’s so much competition across bridges merging. Naturally, there’s gonna be FUD created around LayerZero. And I want you, I want to give you an opportunity to address the, one of the, one of the concerns raised, which is the security vulnerabilities because of a shared, if you have, if you don’t have a shared security and like basically you bled bubble up to the application layer to pick their security parameters
[00:18:03] What is the security? What is like LayerZero perspective on that? .
[00:18:07] Raz (LayerZero): Sure. So I guess specifically shared security so when you have shared security, it’s a nice buzzword for someone else owns the security, not you. Shared security is someone else’s deciding those rules for you.
[00:18:19] A centralized organization of some sort, right? Doesn’t matter how many signers it is. It is not like a DAO body where they’re like necessarily voting, right? They there’s a team pushing code to these this Shared Security Model. And that team is calling this, generally calling the shots there.
[00:18:34] And shared security means I don’t have to think about it. But it also means I don’t have control over it. And so when they make decisions to upgrade, Or change the underlying security parameters even in good faith and trying to do something to make the Protocol better, more secure, cheaper, faster.
[00:18:50] They’re putting you in all of your Messaging at risk. And that is something we think is generally a very bad scenario to be in as an application. I think of it in terms of Messaging, right? Long term, who knows what the demand is going to be for the types of Messaging required, right?
[00:19:07] And whatever the majority needs is probably what a Shared Security Model will move towards, right? So maybe it’s gaming and high and speed versus security. And block confirmations go down in the name of speed cuz it’s a better user experience. But you built on that Shared Security Model because you.
[00:19:24] Their focus was on security, and you’re moving hundreds of millions of dollars. You don’t get a vote there. You’re opting into that Shared Security Model, and you’re gonna have to change your smart contracts and to use a different model or take on that status right, or whatever.
[00:19:36] Take on the less secure speed model. And so what LayerZero does is we give applications the choice. There is a shared security box where you choose default and you say, I’ll let, just like every other application, every other bridge in the current state, right? You say when you use MultiGen or Wormhole or any of them, right?
[00:19:54] You’re saying, I trust wormholes security settings and what they’re deciding for me, right? I’m opting, is at shared security. And with LayerZero, you can do the same thing you say, I choose default settings and whatever LayerZero decides for a security model I accept. But you don’t have to.
[00:20:09] The important thing is that you can choose not to. If the default settings are just, are something you don’t want in the future, if they change to and go a direction you don’t like, you as an application can choose to opt out of that and nowhere else can you really do that. Everywhere else you are forced into upgrades.
[00:20:26] You’re forced to take the new security model, you’re forced to take the speed upgrade. And as we’ve seen with bridging, when someone upgrades code with good intention, it could still result in a hack. And it has, this past year there have been three major issues where upgrades have ever lost hundreds of millions or could have lost hundreds of millions.
[00:20:45] And none of those were with negative intent, right? Those teams thought they were doing something good for the Protocol and their users and they ended up hurting ’em anyway. Yeah, shared security just sounds like another way to say middle there. Essentially, and now again, you’re trusting an intermediary, which was, that goes against a decentralization goal.
[00:21:06] Yeah. Another way to think of it, which I like to talk about is essentially imagine you guys have a Trezor or a Ledger. Imagine if, I guess when a new update gets sent to you. Like, when I get an update from my Trezor I get uncomfortable. I’m like, I don’t wanna, I don’t wanna, I don’t wanna accept it until I’m basically, I’m forced to do and it’s not that I don’t trust the treasury team, it’s just I don’t want to accept an update onto my hardware wallet. Cuz bugs can happen, things can happen and it scares me and I basically only accept it after it’s been out for months. And I basically have to.
[00:21:36] Now imagine if Trezor or Ledger or any of these hardware wallets could automatically push an update to you wherever, even forget the technical op ability to do say theoretically they could push an update to you Walt’s, in your backpack without you choose, without you opting in to do would you accept that? Because that is what bridges are doing today. All of these bridges have the option to just update your security model without your permission. And so do you want that? If you wouldn’t accept that for your Trezor, why would you accept that for your DeFi Protocol?
[00:22:07] Roman Giler (Savvy): No, that’s that’s a great answer actually. And we do feel similar about that. Decentralization isn’t only just in tech, it’s also in our ability to govern. Do you have any thoughts on the recent UniSwap bridging proposal drama? And the competition that’s happening? Cuz right now that’s like a super spicy topic and you guys are definitely in the middle of that.
[00:22:29] Raz (LayerZero): Yeah. Right now it’s that vote came down to technicality that a 60 and Z couldn’t get its vote in. They voiced their opinion that they would’ve vote. It was a temperature check. In general, UniSwap does, has in the past done all of their decision making on-chain, and for some reason, this woman was hurried through to a snapshot vote over a weekend.
[00:22:50] And, barely made it through and would not have made it through, I had teams been able to vote who wanted to. But that is how it goes. There’s lot of, it seems like a lot of politics going involved in it. But in general, I think the choice comes down to, does UniSwap wanna own this security or do they want someone else to.
[00:23:06] It seems anti in general, their ethos to give it to somebody else. But seems like that’s what the vote is on-chain today. And we’ll see whatever happens.
[00:23:15] Roman Giler (Savvy): Totally. It’s a very interesting thing to follow. I highly recommend people to check out the the real bridge wars that are happening in the forums, not on crypto Twitter actually.
[00:23:25] So it’s been really interesting seeing that happen. And I think ultimately I see LayerZero taking a lot of opportunity and market share from this sole bridging kind of sector. So I really, yeah pretty bullish on overall like what’s happening.
[00:23:40] Wanted to swing over to Matt for a minute. I know you’re back with us. Hopefully your cell signal is doing well. Do you guys on the Ava side have other like ERC 20s that you’re looking to use LayerZero technology on maybe WAVAX or even I don’t know, weth.e can you guys talk to that at all?
[00:24:01] Matthew Schmenck (Ava Labs): Yeah, I’m back now. Sorry, I might have missed the question.
[00:24:03] Roman Giler (Savvy): I was just asking with the um, seeming success of BTC.B and everything we just discussed, are you guys looking at other ERC 20s going that route? Like perhaps wrapped Avax or eth.e like bridged, things like that.
[00:24:17] Take a shot at it unless Matt can be able to hop back in. But yeah, I think generally we’re always looking to facilitate the growth of any project or asset on Avalanche to be brought to more users and more applications. So I can’t speak to any individual asset, whether it’s, WAVAX or bridged assets over from Ethereum.
[00:24:40] But I think we’re always looking for ways to increase that utility and increase that interoperability. Both with LayerZero and OFTs and also with Warp Messaging in terms of being able to send messages between Avalanche subnets in a way that’s authenticated end to end, so you’re not trusting anybody but the origin subnet where the message came from itself.
[00:25:03] And I think that would be a huge enabler for more cross subnet and cross-chain applications within the Avalanche ecosystem. So yeah, always looking to expand the reach of any token on Avalanche in including, WAVAX and web study.
[00:25:22] Awesome. I think this is like a, yeah, hopefully my connection’s a little better now, but in terms of expanding to other ERCs.
[00:25:29] I think there are a few non-public ones that I can hint around, but I can’t say directly. One being maybe a stablecoin that isn’t a US dollar Stablecoin, it’s something else that’s, it’s relatively large. And another being a blue chip Ethereum Protocol that hasn’t launched yet on Avalanche.
[00:25:47] But both of those two, I can’t really allude to any more than that, but always trying to expand.
[00:25:54] I think this is a perfect opportunity to give Davide the floor and kind of talk a little bit about why they chose to go the OFT route and they actually dropped that alpha this morning. Sir, please tell us why did you do this?
[00:26:08] DaviDeFi (Trader Joe): Yeah, of course. We had a great opportunity having been on Avalanche happily until today to have a blank slate and looking for what could have been the best solution as of today. So much has happened over the ERs and technology definitely evolved. We were all at the summit when Stargate dropped announcement and everyone started to talk about it and went on everyone’s radar.
[00:26:42] And since then we have seen the LayerZero and Stargate team continue to ship great partnerships and convincing solutions in the market. While talking to them, they’ve been extremely, and I say extremely good in supporting us. So shout out to the entire LayerZero team that has been very welcoming in talking to us and figuring out what the best approach towards Joe talk and us and a omnichain token will look like.
[00:27:18] And, indeed, many topics that have been discussed like the security model versus fragmentation have been taken into consideration. And our core mission by employing LayerZero technology was to offer a native experience of the Joe token wherever it is bridged or better said, not bridged, but wherever it is moved across chains by employing the OFT technology.
[00:27:53] And this means that one Arbitrum Joe holder can feel they have a Joe token that is perfectly Joe. And this is also good. And this partnership that we have made with LayerZero is to not only offer the Joe Token on another chain, but formed a partnership with them because we want to become a hub for all the OFT tokens that are owned across the chains that we support.
[00:28:28] And we want to become this hub because we have good experience on what it means to build solid Liquidity pools that are very necessary. As was mentioned before, for example, BTC.B can be bridged on many various chains at this point. The issue when you can only bridge ever is that you can bridge, you can move it on another chain, and then you can hold it in your wallet.
[00:28:57] So in order to give more utility to the talk on another chain, you need protocols to start adopting it. That is, of course, one of our missions with this BTC.B partnership to guarantee a home. Not only on Avalanche where it’s actually going great, like BTC.B adoption on Avalanche is beyond anyone’s imagination, I think is just being adopted as the Bitcoin for the community and from the community.
[00:29:35] And when users will then want to buy a Bitcoin wrapped asset on another chain where the Trader Joe is on. They will find the same native experience. Avalanche users have an Avalanche on whichever chains we are going to support finding their beloved BTC.B asset. This also allows anyone that will want to build on top of Trader Joe, wherever we are access to these pools so it can indeed improve adoption.
[00:30:14] And we are also talking with many other projects that are interested in becoming, that are interested in joining Avalanche and supporting them with the right information on how it could be if they want to adopt the LayerZero technology and solidify the narrative of becoming this this OFT app. So Joe and OFT is loved.
[00:30:42] Akshay Gupta (Savvy): It’s really exciting to see another like really a critical primitive token in the Avalanche DeFi ecosystem adopting the OFT standard. You know, when we were like inspecting out our own Protocol making sure that we were like multi chain proof in the future, I made sure to talk to the LayerZero team before we kicked off our audit to make sure, yo, what do we have to do to make sure that our synthetic Savvy tokens can implement a web T And they’re like, oh, you do nothing.
[00:31:05] Just follow the BTC.B template. And then when I studied that, I’m like, oh wait, this is super easy. All you gotta do is first of all, the ERC 20 contracts stays the same. You do nothing there. And then, all you gotta do is deploy the respective primitive token on whichever chain you want to, have the be considered part of omnichain and that’s it.
[00:31:25] It was just two contracts, just the proxy and the primitive. That’s really cool to see how easy it is to implement. And then having the flexibility of changing the security parameters as I see it fit over time made me really excited that yes, this is probably the direction that we would like to go with to make our own tokens in the future as well.
[00:31:41] So I’m really glad to see that you’ve now Joe’s also an o OFT. It makes us more and more bullish on implementing this standard.
[00:31:47] Roman Giler (Savvy): Yeah. Thank you. Thank you Davide, and thank you Trader Joe for taking that leap and advocating for the LayerZero tech, so we’re excited for you guys. I wanted to ask, where does LayerZero seats OFTs going? What about, oh, NFTs. We spent this whole time talking about just DeFi and Bitcoin and money and stuff, but there’s so much more to this space. So I wanted to quickly just ask like, where do you guys see this going for the NFT space and the gaming space?
[00:32:14] Raz (LayerZero): Yeah. So I guess when we first started LayerZero, when we first launched, we thought most of the traction was gonna be DeFi and token related bridging and asset movement contract calls related to that. But we found that 50% of the inbound was NFT in gaming.
[00:32:30] And they were all of these NFT and gaming teams were essentially asking how can I move my NFTs between chains? And so it was what helped, we started off at the OFT, but the O NFT came directly after at a pure necessity, right? From a gaming chains perspective, like teams that make games, right?
[00:32:44] You are looking to essentially, you’re trying move onto a fast chain in general. Sometimes you find some of these teams are finding that, these faster chains aren’t as reliable. And so when there’s a new drop or NFT or something unrelated to them could affect their gameplay.
[00:32:57] And so they’re even, a lot of them are making, Avalanche subjects and different types of their own chains. And the problem then becomes, if you’re a game developer, is now you have the subnet. And without it, without a way to move assets off the chain, you need to make Liquidity pools.
[00:33:10] So you need to onboard Liquidity, you need to create a marketplace, so you have invent your own OpenSea. And that’s just not part of their core competency, right? That’s not what they wanna be doing. They wanna be building their game. And so what the LayerZero OFT standard allows is for them to create assets on their chain, say on their Avalanche subnet, and then move those assets between to, C-Chain or Ethereum for OpenSea or anywhere, right?
[00:33:33] Where the marketplaces are and be able to go to those Liquidity pools, right? So long term being able to go to Solana and flow and anywhere else the NFTs have Liquidity and attract and have access to those users who could buy those assets and then become players of your game. As well as go wherever NFT ends up going in the future, right?
[00:33:51] It could be the Metaverse games where you can bring your NFTs and have it to your PFP in some game or profile picture, right? Anything, any or, avatar or hanging up on your wall in some, virtual reality room, right? It’s limitless for where it can go. And it makes it so that your actual art is not confined to a single chain, right?
[00:34:08] And you could take it with you wherever you want. And so that is the high demand that we’ve seen there is in the NFT space as well. And I think two week and a half ago that was when Pudgys launched Lil Pudgys as an o NFT and there’s a lot more coming in that same space.
[00:34:24] Michael Kaplan (Ava Labs): Yeah. And I have a good connection as well. LayerZero, such great partners, Ron being one of the first chains to have Stargate to now the BTC.B FP support and always really helping subnets whenever they need a cross messaging solution. Phenomenal team to work with and always fun to interact with in person or on calls and whatever setting.
[00:34:46] Thank you guys.
[00:34:46] Roman Giler (Savvy): that was pretty, pretty cool. So I guess what other things are you seeing outside from the PFP NFT space and like putting it into gaming? Are you seeing anything with like real world credentials or decentralized IDs being worked on with LayerZero Tech?
[00:35:02] Raz (LayerZero): So there are, I think over 15,000.
[00:35:06] Contracts deployed on Testnet and over 2000 on Mainnet. So there are a lot of applications ranging across, including identity and things like that. Specifically, I don’t think I can drop names of what’s being done. But yeah, there’s, it’s not just OFT and o NFTs. There’s a lot of creative new applications that are coming out.
[00:35:23] When we came up with and built LayerZero, we knew that we had a couple ideas and a bunch of ideas on what you could build on it, but we knew that we did not know everything that could be built on it. Just I’m sure when they internet was invented, they had no idea what we’d be doing today would be, the use cases for it, right?
[00:35:38] And so same thing with LayerZero. There’s, it’s unbounded on what could be built on it. But definitely identity related applications are being built.
[00:35:44] Roman Giler (Savvy): That’s awesome. I’d love to hear that. Is there, are there any other things that you guys wanted to tell us about that we may have not covered or might have forgot to ask? Feel free to, this is your moment to tell us I’m done, the whole group here.
[00:35:57] Michael Kaplan (Ava Labs): Honestly. I don’t know if we have time for q and a, but I think this large of a space would, it’d be good. Good to have a little bit of q and a.
[00:36:05] Roman Giler (Savvy): Yeah, totally agreed. We’re getting people asking us if we can keep it going longer, but I know you guys are super busy and it’s only Monday. So that we just started. I would love to open up for Q and A. I know people are have requested already and have also dropped a few questions in there.
[00:36:20] And if there’s anyone here that wants to come up, please raise your hand.
[00:36:26] Raz (LayerZero): Hey guys, I have a question for you. Just really quick for the Ava Labs, you’re on the BTC.B. I just recently went to a bunch of Bitcoin conferences. I listen to podcasts all the time. What are you guys doing? I think it’s the greatest product you guys have, but I don’t feel like I never hear anybody bring it up in the Bitcoin ecosystem.
[00:36:42] What are you guys doing to bring more awareness to the BTC.B product? Are you going to events, are you getting invited to speak? I don’t, I just don’t see it.
[00:36:51] Michael Kaplan (Ava Labs): Yeah, so I, I think you hit the nail on the head here. I think it’s all about education. I think Bitcoin Max’s that really like the purity and decentralization, especially being first kind of peer-to-peer network in which anyone can permissionlessly.
[00:37:07] I guess pass value on a blockchain. So I think, like you said, we need to Beefy up, I guess the Bitcoin conferences we’re going to, as well as education in general. Right now we have been trying to educate people and that’s just of a manual effort on our part, but marketing as well, hopefully we can Beefy that up in the future.
[00:37:26] Raz (LayerZero): And do you see your guys as a competitor to the Lightning Network? Do you guys see yourself as that?
[00:37:31] Michael Kaplan (Ava Labs): Yeah, I can take this one. I personally do not. I think the Lightning work is trying to enable just a faster way to send your Bitcoin from one pair to the next.
[00:37:43] But it comes with all these limitations in terms of the graph that it creates on top of Bitcoin and only being able to transfer an amount that’s within a channel and then trying to find a path across multiple channels to transfer these Bitcoin. So I think we have very different use cases.
[00:38:01] The Lightning Network is a bit more limited in just in terms of transferring Bitcoin quickly. While BTC.B is just more broadly for the DeFi ecosystem as a whole on Avalanche and on other chains.
[00:38:13] Akshay Gupta (Savvy): It’s also worth pointing out that BTC.B already flipped lightning in terms of total TVL, right? It’s in such short time.
[00:38:19] Raz (LayerZero): I have a node and I find that I would rather use Avalanches network. You guys solve all the problems that the Lightning Network’s trying to solve. Like I’d rather use BTC.B and have access to everything. Why would I need the Lightning Network?
[00:38:32] Michael Kaplan (Ava Labs): Yeah. Sending an ERC 20 transfer on the C-Chain, from my experience, is definitely far easier than trying to send a transfer on the Lightning Network. I think we cover that use case also. But I really also think that our objectives are totally different. So I don’t know why you would need a Lightning network, but it’s not as if if they come out with some new feature that’s the our competitor in that sense.
[00:38:53] Roman Giler (Savvy): Yeah. Just send me down to Bitcoin Miami. I’ll send you the invoice. I’ll be happily the spokesman for BTC.B and red Coin.
[00:39:01] Raz (LayerZero): I’ll DM you in private.
[00:39:04] Roman Giler (Savvy): No, but I wanted to give a chance for Dylan to ask a question. You have a hand raised. Welcome, and thank you for coming.
[00:39:11] Dylan: Yeah, guys, thanks. So I recently did a like a podcast breakdown of dynamic NFTs with Omnix and they really spoke highly of LayerZero in how they’re using it. And it was super cool to have them discuss the gamification of NFTs. And we really broke it all down. And now I have this other question after the podcast ended was like, oh shit, can then since BTC.B just recently said, oh, we can make NFTs on-chain, we take up an entire block space, but we could still make NFTs.
[00:39:38] And there was this whole rally around that. Do you think like Bitcoin NFTs and and this idea of omnichain or Omnix and like on o NFTs can work together so we can have Bitcoin, NFTs working, interchangeably or interoperably with these other chains. Is that like a possibility that you see happening?
[00:39:59] Raz (LayerZero): Yeah. Right now LayerZero is designed to work with smart contract naval blockchains. Bitcoin has some limit, has smart contract limitations. We have been investigating what that would look like. I think it’s possible, but it’s definitely further down on the roadmap of connecting Bitcoin in that way the future.
[00:40:14] But LayerZero plans would be everywhere it could possibly be.
[00:40:22] Michael Kaplan (Ava Labs): Okay. Solid. That’s the only question I had. Thank you.
[00:40:25] Roman Giler (Savvy): Thank you for coming up. See we have Usman here from Ava
[00:40:28] Labs. How are you my friend?
[00:40:30] Usman (Ava Labs): Doing well guys. Really enjoyed the space so far. It’s been really informative and got some of my favorite teams up here I had to come through.
[00:40:37] I have a question for the LayerZero team. For me, when BTC.B launched, it was very interesting to start seeing the traction that it started again and how much Bitcoin actually was bridged over to the Avalanche ecosystem and now how it’s over encompassing the Lightning Network.
[00:40:53] I’m curious if when you guys started powering that bridge, if that was ever envisioned, and now that it has been, is that forcing you guys to start putting more development focus into the Avalanche ecosystem in terms of how you can bridge different assets over here and this is a second part to the question, what’s your experience been dealing with other chains that are trying to do similar stuff?
[00:41:15] Raz (LayerZero): I guess so a bunch of questions there are the lightning part, right? To clarify, I don’t think that lightning and like Avalanche are trying to achieve the same things, right? What BTC.B is enabling is for you as a BTC holder to be able to have exposure in DeFi without relinquishing your underlying collateral, right? So imagine being able to go and offer up BTC.B as collateral and lend it outright and gain yield there in Bitcoin and not have to switch to a stablecoin or another native token or whatever that you don’t feel strongly about, right?
[00:41:51] And so just and being able to do that in decentralized manner, right? Not going through a centralized exchange where you can go directly from Bitcoin to Avalanche to another chain or span Avalanche and then go right back to Bitcoin with no intermediary entity, right?
[00:42:03] No KYC, no talking with people. And so that is what it’s trying to do. And that is nothing that I’m aware of that Lightning is trying to do, right? Lightning is trying to do fast transactions of Bitcoin. So I think, there are no way really a competitor in that way, right?
[00:42:17] Like that the use case is specifically for users who want exposure to DeFi, right? Who are Bitcoin holders, right? It’s all about risk tolerance. And so if you want that exposure, if you want to get Yield on your Bitcoin or you want to do something that uses Bitcoin and you don’t have permanent loss there then that is what BTC.B enables.
[00:42:35] And then yeah, further from that side of things. And then Avalanche, we work, a lot of the submits already use LayerZero. And it is they are very forward thinking on omnichain and how to connect all of these subnets to C-Chain and everywhere else. And had a great experience working with the team and how forward thinking there in that manner.
[00:42:51] And a lot of chains, in general, always thinking that this is clearly a multi chain ecosystem. Everything is going that way. There’s not gonna be a one chain to rule them all. And having an omnichain strategy makes a lot of sense for everybody.
[00:43:05] Yeah. Add in here as well, maybe there’ll be a BTC.B payments on that, in the not so distant future.
[00:43:11] We’ll see.
[00:43:11] Roman Giler (Savvy): That’s exciting, sir. I’m gonna have to DM you and bother you some more later about that. Maybe I’ll get some alpha. No I totally agree with you guys. And the reason why we specifically targeted BTC.B was because we wanted to, remove one of the other problems that finance face.
[00:43:28] And that’s like opportunity cost. And most people in crypto still see Bitcoin as the granddaddy, as the most important blockchain and cryptocurrency of them all, and arguably the most valuable. So there’s a lot of value there. And I personally would not be in the club that sells Bitcoin often.
[00:43:44] I’d rather borrow against mine because I ultimately think it’ll be much more valuable down the road. What we did was we built with both of your technologies, we’re going live on C-Chain cuz we really believe in the strength and security and decentralization of Avalanche as well as all of these other reasons like low cost and speed.
[00:44:01] And we love the fact that BTC.B offers offers. Us and everyone, the most permissionless Bitcoin that we can have outside of BTC on Bitcoin blockchain, which we can’t use for DeFi today unless we go through centralized means, which I am against personally. And I would love to, obviously WEX poetic about DeFi and self custody all day.
[00:44:21] But as a simple example, we would say like, with us using both of your technologies, a user can have, let’s say, two Bitcoin deposited through Savvy without asking us ever for any kind of permission into any kind of strategy that we built on top of. They can borrow up to 50% of that and essentially have a credit line against their future Yield on that BTC.B without any risk of getting liquidated because the debt is denominated in kind.
[00:44:47] So we effectively created a non-liquid Bitcoin Loan, and now this user can do everything that they wanted to do with the Liquidity they have while their whole Bitcoin or their two Bitcoin or whatever is working for them in DeFi and earning Yield. So you know, they could swap into other assets, they can lend, they can spend, they can off-ramp it to fia, provide market making, everything and anything.
[00:45:07] And it doesn’t have to just be on C-Chain, it can go to any chain. And that is powerful for us and that’s why we’re so excited about what’s happening here in DeFi, what you guys are both building, and I just wanted to say thank you for taking the time to come and talk to us today. I know you have a lot of things going on and you are both very busy protocols and platforms.
[00:45:26] So to from the bottom of my heart, thank you guys for doing this. I really appreciate it. I hope the people listening learn something and kind of have a little bit more understanding of all the amazing things that are happening here. And again, I just wanna say thank you so much. This has been an awesome space.
[00:45:41] I’m super, super bullish on what’s happening. So again, thank you.
[00:45:45]
[00:45:45] Michael Kaplan (Ava Labs): Thank you for having us. It’s been a great space and yeah, thanks for help spreading the word. That’s a critical component to all of this is not just building the tech, but actually bringing it to people and making sure they’re aware of it.
[00:45:56] So yeah, really appreciate you having us on.
[00:45:59] Roman Giler (Savvy): And to finally finish off for everyone that’s here and happen to be in this space. We actually have a Galaxy NFT campaign to really make you a part of this. So I highly recommend for people that attended if they wanna have an opportunity to be a part of our Fair Launch, they’re actually gonna be incentivized by minting this Galaxy NFT.
[00:46:16] So highly recommend that you guys do that.
[00:46:21] I really appreciate everyone here. Thank you guys so much. Thank you for having the space with us. Any final words? I’d love to give you guys an opportunity to close this out with us.
[00:46:32] Michael Kaplan (Ava Labs): Nope. Thanks again. This was really great. Hope y’all have a great rest of your day in productive weeks.
[00:46:40] Raz (LayerZero): Yeah, thanks for having us.
[00:46:42] Thank you. And I guess final words from my side are just be on the lookout. I think our DeFi ecosystem is definitely prime for an eruption in terms of stuff launching partnerships happening, integrations between different protocols and whatnot, as well as a bunch of launching in general.
[00:46:57] Just stay up to date on announcements and everything Avalanche related. So thank you once again and hope everyone has a great rest of their week.
[00:47:08] Akshay Gupta (Savvy): Quickly add as the world at large see things that we’re in a bear market there’s a lot of exciting innovation happening here and I’m really excited for the next bull market and look out for Savvy. We’ll be launching very soon this quarter.
[00:47:22] Thank you
[00:47:22] Raz (LayerZero): everyone.
[00:47:26] Thanks guys.
[00:47:28] Roman Giler (Savvy): Thanks again. All right. I’m gonna close it out on three.
