Ataxia, [25.11.20 09:41]
[In reply to McFly 🛹]
Welcome @guillaumepalayer, first question… can I call you Marty?
McFly 🛹, [25.11.20 09:42]
[In reply to Ataxia]
Yep
Ataxia, [25.11.20 09:42]
Cool, good start then. So, whats your background and how did you get into crypto?
McFly 🛹, [25.11.20 09:43]
My background is in product dev since the last decade. I started working with Zefram, my cofounder in late 2017 on betoken.fund, an assets mgt DAO
Since then we created baconlabs.dev, working daily with him since 3y now Last year in October, we joined metacartel as members and we started drafting some idea around an interest swap market
Ataxia, [25.11.20 09:45]
Wow, what a nice track record!
https://f12.network/
I really like this one too
[In reply to Ataxia]
Yep, really useful for hackathon, and the best part is that barnbridge is using it for doing stuff on discord, If they knew
Ataxia, [25.11.20 09:46]
that you’re coming for their snack?
McFly 🛹, [25.11.20 09:47]
[In reply to Ataxia]
probably
Ataxia, [25.11.20 09:46]
[In reply to McFly 🛹]
This leads me to my next question, how did the idea of MPH came about?
McFly 🛹, [25.11.20 09:47]
[In reply to Ataxia]
We were looking for new DeFi journey after assets mgt. Betoken didn’t got the traction expected so we started looking for new things to build. I’m a big fan of personal finance stuff
Ataxia, [25.11.20 09:47]
Same here, it is very exciting all the things you can do
McFly 🛹, [25.11.20 09:47]
and for me it was a pitty to don’t have any DeFi products offering fixed-deposit rate, the composability in DeFi offer tremendous opportunities and fixed-deposit is such a low hanging fruit.So we started jamming on the idea of swap rate but realized quickly that this thing doesn’t scale well
Betoken teached us that a two-sided market is difficult to scale and maintain so we wanted something with a simpler UX where you’re not limited by liquidity or time series like Yield is doing eg
But we got busy during the winter of 2019/20 and focused on other things. Back in Jan 2020 we started working again on it and we pushed a pilot with a feature that shaped the name of the project: upfront fixed-rate interest #future-fwd money kinda
Ataxia, [25.11.20 09:51]
i did see that first iteration, i thought it was cool
McFly 🛹, [25.11.20 09:52]
yep, but there is a tradeoff in terms of pool’s performance, you don’t compound the interest this way, so suboptimal in our opinion. We kept the name but pivoted to something looking like the current version
We needed funds to pay for audit, so summer 2020 was focusing on whitelabeling Betoken fund for a swiss company we got a bunch of money to boostrap the current version of 88mph. It was a long process but here we are 😊
Ataxia, [25.11.20 09:55]
Right. Now just before we get ahead of ourselves. I think that at this stage the average investor isnt fully aware of what the protocol does and how they could leverage it to get that compounding gains effect you’re looking for.
Could you try to ELI-5 how the protocol works and what the benefits are compared to say YFI?
McFly 🛹, [25.11.20 09:56]
Yep, will try my best
We can define 88mph as a protocol that sell fixed-rate bonds and floating rate bonds, allowing buyers to short or long the interest rate of various assets currently supporting USDC, DAI, UNI, yCRV, CRVRENSWBTC
Ataxia, [25.11.20 09:57]
ok so i’m 5 so what is a bond?
I understand by the way we just need to really break it down to get the message across to a wider audience i believe
McFly 🛹, [25.11.20 09:58]
[In reply to Ataxia]
Hmm, a fixed-income investment (instrument)
McFly 🛹, [25.11.20 09:58]
put it simpler, you have people who want to earn a fixed-rate interest on top of their digital dollars eg. They deposit the amount they want into 88mph for a certain duration, and they get some upfront MPH tokens and at maturity they can withdraw their principal + interest
No fund lockup, come and go as you want
Ataxia, [25.11.20 09:59]
so if they leave early they skip on the interests right?
McFly 🛹, [25.11.20 10:00]
[In reply to Ataxia]
Yep and you need to repay 100% of the MPH
But no penalty over than that, you get your full principal back, no pending period or weird stuff like that
Ataxia, [25.11.20 10:00]
Would it be accurate to classify fixed rate bonds as low risk investments?
McFly 🛹, [25.11.20 10:01]
[In reply to Ataxia]
I’d say less risky, as always there is always a risk. We manage this risk with differents tools
First, By pooling funds together the yield generated by the deposited funds could be more than the interest promised to the user on the underlying money markets used by 88mph
This surplus would be able to balance out the debt caused by deposits where the floating rate has dropped since the time of deposit. This way, risk of insolvency is reduced for the users, and the stability of 88mph’s interest rate is supported.
another interesting concept behind 88mph pooling is the creation of an overlapping deposit period effect.
If an older deposit could not generate enough yield to cover the debt caused by the interest promised to the depositor, and its deposit period would be over soon, the yield could still be paid out using the funds of other deposits.
this obviously is NOT solving the debt issue of the system
Ataxia, [25.11.20 10:05]
right but it pushes it back
McFly 🛹, [25.11.20 10:05]
It would make 88mph a fairly risky product if we were just doing the above So for each fixed-rate deposit we issue a floating rate bond attached to it and we list it for sell. We offer to depositor 75% of a floating rate EMA pulled from the rate of Compound, Aave, yEarn
Buying floating-rate bonds allows someone to immediately fill up the debt of one or more deposits using their own money, and in exchange they would receive the yield generated by those deposit
Ataxia, [25.11.20 10:08]
ah now that is brilliant
McFly 🛹, [25.11.20 10:08]
Given that each 88mph deposit would generate enough yield to cover its own deficit as long as the average interest rate during the deposit period stays above 75% of the initial value, a bond buyer would earn a profit as long as the interest rate doesn’t drop by more than 25%.
It’s similar to some other products that allows people to long and short interest rates (LSDai) except 88mph’s floating-rate bonds provides a profit even if the interest rate drops
Ataxia, [25.11.20 10:08]
[In reply to McFly 🛹]
how much does the yield rate deviate from the ema usually?
McFly 🛹, [25.11.20 10:09]
[In reply to Ataxia]
We don’t have data yet of that. Working we partners to stress test the first interest rate strat
We have plans to implement more sophisticated interest rate models in the future that take into account paramters such as the pool surplus/debt, floating-rate volatility, pool total deposit, and so on.
Another thing that help us derisk the system for fixed-income users is the creation of the first insurance fund financed by the governance treasury
It’ll held the required tokens to buy yCRV, USDC, UNi bonds, etc One of the first proposal we’ll draft when the gov will be released MPH tokeneconomics has also built-in mechanisms to incentivized depositors or bonds buyers
Ataxia, [25.11.20 10:12]
this is all very compelling. I think its a very sophisticated model, so much so that it goes over the head of most people
McFly 🛹, [25.11.20 10:12]
so if the system is creating too much debts, we can incentivize the bonds buyers with MPH rewards in top of the bond return last piece for a long terms road is the creation of structured products When you have bonds, you can create on top of it exotic products
We could imagine a mechanism that gives rise to this structure by the combination of a fixed income instrument and the use of derivatives, in this case in particular, an option (eg hegic.co).
for we definitely need more bandwidth to go in that direction But DeFi composability could help a lot new market segments to explore
Ataxia, [25.11.20 10:14]
Yeah one clear aspect of defi is how new instruments can be built on top of each other, its a whole new world really
McFly 🛹, [25.11.20 10:14]
it’s kinda endless
Ataxia, [25.11.20 10:14]
I totally agree
Ataxia, [25.11.20 10:16]
now, how do you plan to reach those goals? Attracting the first big wave of depositors seems to be the next big step for the protocol
McFly 🛹, [25.11.20 10:17]
The core team vision is low issuance for the foreseeable future to don’t wreck the liquidity mining program, and don’t dilute too much early adopters, while allowing the growth of the deposits TVL to generate sustainable profits for MPH stakers (so we’ll probably incentivize more the Compound pools to harvest more COMP). That’s the goal and it’ll be a test & learn process other the coming days/weeks.
TVL growth will start to be more incentivized in a few hours
w. a fair boost for Comp pools
Ataxia, [25.11.20 10:18]
[In reply to McFly 🛹]
Good to hear, going to be looking out for that
Its an iterative process after launch getting the incentives set right
McFly 🛹, [25.11.20 10:18]
Our goal is first growing the TVL without diluting to much early depositors
[In reply to Ataxia]
The example cited the most often those last days for us, is how harvested succeeded attracting 1b TVL
It tooks them some weeks to get it right but it was at the end a good decision
Ataxia, [25.11.20 10:18]
Also, the M&A fund invested on MPH, have you had any direct contact with either of them? Anything you can disclose on that end
McFly 🛹, [25.11.20 10:20]
[In reply to Ataxia]
Yep, we thought it was still early to onboard partners like M&A without knowing how the protocol’s launch will pan out fair for us and them at the end I suppose
We are currently talking with partners to onboard smarter people than us in the governance and draft meaningful proposals driving the future of 88mph
Ataxia, [25.11.20 10:23]
I am sure that the future is bright. I really think you’ve covered all the bases and have performed admirably through a not so easy launch of a complex protocol
Ataxia, [25.11.20 10:23]
one final question, you mentioned barnbridge as a competitor earlier, what do you think differenciates you the most from them?
McFly 🛹, [25.11.20 10:23]
Better memes?!
Ataxia, [25.11.20 10:23]
also any final words and we’ll have community Qs
Ataxia, [25.11.20 10:23]
[In reply to McFly 🛹]
sold
McFly 🛹, [25.11.20 10:24]
88mph represents deposits and bonds using ERC-721 standard non-fungible tokens. This means that users can transfer them between accounts, buy or sell them on exchanges, put wrappers around them to add more features, and more! The limit is your imagination.
Ataxia, [25.11.20 10:26]
you should totally make them have some seasonal art so i can hang my deposit on my virtual castle
McFly 🛹, [25.11.20 10:26]
hahah, working on it as a 2nd priority but regarding dev side, everything is ready Just in need of more creatives guys than us for the visual retro outrun vibes
Ataxia, [25.11.20 10:27]
Yeah, Back to the future 2 was the best one anyways
Ataxia, [25.11.20 10:28]
thanks for doing this Marty, I hope we can get the word out about this cool project. Now im going to let the lions on you
McFly 🛹, [25.11.20 10:28]
I’m good
McFly 🛹, [25.11.20 10:28]
let’s go
