Today I was part of an AMA with Johan and Keno from the strudel.finance protocol. It was a very insightful AMA showcasing an impressive and undervalued project. read below!
Crypto_Thai, [05.11.20 10:01]
Could you introduce yourself and tell us all the in’s and outs for Strudel
Johann Barbie, [05.11.20 10:02]
sure, so @keno313 and me, we are from berlin, and we usually work with a blockchain collective called LeapDAO.We mostly spend our time researching layer-2 scalability, in the past we’ve build a plasma chain for EF. All of these systems require bridges, that connect chains. and hence creating a bridge from BTC to ETH wasn’t far fetched.
The Strudel Protocol is something that was in our minds for a long time already. seeing that WBTC, RenBTC and others have quite insecure setups. Strudel is an experiment to diversify the risk profile in the tokenized Bitcoin space. We had exciting time coding up and launching the project. Yet, after the launch, the fun hasn’t stopped. We are currently facing all kind of challenges and opportunities that we are happy to talk about in the AMA.
Ataxia, [05.11.20 10:06]
How cool! Before we go into more strudel topics, would you like to share a bit about what LeapDAO is?
Keno, [05.11.20 10:06]
LeapDAO is a collective of like-minded developers working together using holocracy. At the moment we are working on a grant for Nervos CKB.
Johann Barbie, [05.11.20 10:07]
its a small team that varries in size between 5 and 15 guys, depending on bull or bear 😁
Ataxia, [05.11.20 10:07]
[In reply to Johann Barbie]
Of course! Any website or info for those interested?
Johann Barbie, [05.11.20 10:07]
you can find all details here: https://leapdao.org/
Ataxia, [05.11.20 10:08]
Awesome! Now back into strudels. Could you please elaborate on this? most farmers are very familiar with wBTC, why is it insecure?
Johann Barbie, [05.11.20 10:10]
there is no way to do a trustless (totally secure) bridge between Bitcoin and Ethereum, as Bitcoin does not support smart contracts. wBTC uses centralized custodians to hold the BTC in a multisig, while they are issued and traded on Ethereum. Multisigs in bitcoin are limited to 15 signers. so this is what limits the security. if wallet holders collude, they can run away with the BTC.
Ataxia, [05.11.20 10:11]
So there’s a centralized breaking point where the whole wBTC system collapses
Ataxia, [05.11.20 10:12]
Vitalik himself was concerned about this iirc
Johann Barbie, [05.11.20 10:12]
Exactly. and in the situation where PayPal is getting into crypto, and potentially bying custodians like Bitgo( issuer of WBTC). the goverment and other parties can get involved as well.
Ataxia, [05.11.20 10:12]
Now thats an issue for descentralization too..
Ataxia, [05.11.20 10:13]
So, how is the strudel bridge different?
Keno, [05.11.20 10:14]
The Strudel bridge is trustless by being one directional. We are using SPV proofs to remove custodians out of the equation. Bitcoin has a special OPCODE, OP_RETURN which allows to put data into the chain. We are using this OPCODE to write the Ethereum address of the receiver. This creates a different kind of asset than wBTC, it creates a supply fork of BTC. vBTC can never rejoin the Bitcoin supply.
Crypto_Thai, [05.11.20 10:16]
What will be the main reason for an investor to get into Strudel?
Johann Barbie, [05.11.20 10:18]
we see an inherent demand for BTC in DeFi. But bridging assets creates custodial risk for the ecosystem. With Strudel we enable Farmers to use their BTC in Defi, without the need to think about that risk. this proposition is what we offer to investors.
vBTC is the pegged asset, while $TRDL is the goverance and community token. Investors will be able to affect the future of the protocol with $TRDL and use vBTC for farming.
Crypto_Thai, [05.11.20 10:20]
That’s really interesting. Thanks for the clear explanation
Ataxia, [05.11.20 10:20]
So from my market study, I can't stop drawing comparisons with pickle, which has had enormous success by implementing profit strategies on top of their original goal of pegging stablecoins.
My question is, what kind of profit strategies and value gaining mechanisms do you see being implemented on the strudel protocol?
Johann Barbie, [05.11.20 10:23]
yes, pickle is a great comparison. we started of with farming, like them, to stabilize the vBTC peg. currently we are expanding into 2 more startegies. first being supply auctions, and second relay auctions…
Crypto_Thai, [05.11.20 10:24]
Did you already test these auctions?
Johann Barbie, [05.11.20 10:25]
The supply auctions are based on seigniorage shares. daily auctions are held to peg vBTC. when vBTC is under peg, $TRDL is issued to buy it from the market. when vBTC is at or over peg it is sold back and the received $TRDL is burned.
Johann Barbie, [05.11.20 10:25]
fees collected in rolling daily auctions are distributed to $TRDL holders.
Crypto_Thai, [05.11.20 10:26]
For the people who are more into a visual concept, do you have a model/matrix for this?
Johann Barbie, [05.11.20 10:27]
[In reply to Crypto_Thai]
not in production yet, we expect these to come online in the next weeks.
Crypto_Thai, [05.11.20 10:27]
That would be great
Johann Barbie, [05.11.20 10:29]
one other interesting upgrade of vBTC over BTC is the ability to flashloan an amount of up to 21M. the fees generated also go to $TRDL holders.
Keno, [05.11.20 10:30]
The Relay auctions are a shared initiative together with the Keep project (tBTC) and Relay operators will be rewarded in both Keep and $TRDL.
Ataxia, [05.11.20 10:30]
Johann Barbie, [05.11.20 10:31]
that is a great diagram. except we do reverse dutch auctions 😁 price starts high, then goes down. when everything sold, every-one gets the average.
Ataxia, [05.11.20 10:32]
[In reply to Johann Barbie]
aha! I thought about it
Johann Barbie, [05.11.20 10:33]
to sumarize — we want to provide more strategies for liquidity eventually, but now we focus on estbalishing the asset that we issue: vBTC.
Johann Barbie, [05.11.20 10:36]
while wBTC and renBTC are simply copying over BTC onto Ethereum, we want to issue an asset that is an improvement.
Ataxia, [05.11.20 10:37]
It certainly looks like it is. Let's talk about some other stuff. I read your announcement about a governance rollup
Ataxia, [05.11.20 10:38]
would you mind explaining the room what a “governance rollup” is?
Keno, [05.11.20 10:39]
Current governance options include Onchain voting or Snapshots. The first being very expensive, the latter not fully decentralized.
Keno, [05.11.20 10:40]
A rollup is a Layer 2 scaling technology that compresses many Layer 2 transactions into one Layer 1 transaction.
Keno, [05.11.20 10:40]
Hence we can achieve both, cheap votes and onchain execution.
Keno, [05.11.20 10:41]
Community governance is supposed to be at the heart of the Strudel protocol, hence we are launching our first iteration tomorrow.
Keno, [05.11.20 10:41]
Users will be able to deposit their $TRDL and vote on community proposals.
Ataxia, [05.11.20 10:43]
So to recap:
-Strudel has a working trustless BTC relay
-About to implement a segniorage pegging system which will generate both profits and can buyback $TRDL
-Launching collab project: Relayer auction
-Governance L2 implementation
Ataxia, [05.11.20 10:43]
And the market cap is currently 70k fully dilluted
go figure
Johann Barbie, [05.11.20 10:43]
😎 no investment advice. dyor
Johann Barbie, [05.11.20 10:44]
great summary @Ataxia1
Crypto_Thai, [05.11.20 10:46]
When it comes down to user engagement. What will the marketing rollout look like for Strudel?
Ataxia, [05.11.20 10:48]
Well I for one am running a strudeling contest! if you feel like trying the strudel burn any amount of BTC and I’ll give you 100 extra strudles
Johann Barbie, [05.11.20 10:48]
organic growth has been the basis of our project. in addition to listing the tokens every-where possible, we intend to do giveaways, collaborate with other projects, and mostly innovate!
Johann Barbie, [05.11.20 10:50]
as @keno313 and me are coders, we rely on the great community for marketing and have most of the dev-fund allocated to it. together with the governance, we intend to launch grants for active community members.
Crypto_Thai, [05.11.20 10:54]
I will open the chat for the community questions, if there is any
-:::::- 5m@rt H3@d -:::::-, [05.11.20 10:58]
Do *Strudel* use vaults in near future? 😁
Johann Barbie, [05.11.20 11:00]
we are experimenting with BTC vaults that laverage compound. this has not impressive returns currently. once we get vBTC registered on compound or other lendings platforms, that might improve.
Ataxia, [05.11.20 11:01]
[In reply to -:::::- 5m@rt H3@d -:::::-]
Also the profits from the segniorage share auctions could be distribued like pickle staking
Johann Barbie, [05.11.20 11:02]
[In reply to Ataxia]
interesting idea 🤔
Stan Valentijn, [05.11.20 11:04]
What are current challenges to deal with internally when it comes to expanding?
Johann Barbie, [05.11.20 11:05]
[In reply to Stan Valentijn]
- our initial pegging also got arbitraged by bots, and needs to be renewed. we’ve mostly been busy with that.
- we are constantly improving on the token model, so that there is more upside, and less sell pressure on $TRDL.
-:::::- 5m@rt H3@d -:::::-, [05.11.20 11:06]
Will we see partnerships or there are already planned.?
Johann Barbie, [05.11.20 11:08]
[In reply to -:::::- 5m@rt H3@d -:::::-]
as mentioned, we’ve been helping out the tBTC team with their relay, and launching a project together soon.
Together with Deora.Earth we will launch our Governance system. They do pretty cool things around quadratic voting as well.And finally, with the Shell.Protocol, we are exploring launching a pool which includes vBTC and other tokenized Bitcoins.
-:::::- 5m@rt H3@d -:::::-, [05.11.20 11:13]
Are there audits planned for your contract?
Johann Barbie, [05.11.20 11:15]
yeah, we are looking for teams to execute the audit. there is a form for them to apply…
Keno, [05.11.20 11:15]
Keno, [05.11.20 11:17]
Because we do not have any external funding we offer a share of the dev-fund (about 5.6% of $TRDL issuance)
Keno, [05.11.20 11:20]
Thank you so much for the questions, check out our Discord for any further questions: https://discord.gg/CcEE5mC
