Jupiter Lend v2 AMA by Jupiter

UX and the UX that only deflaken off of and doesn't even exist in TriF idle. And basically, you would have seen this in V1 or basically the state of the protocol before one week. We offer conditions that no other learning protocol can offer. So extremely high LTVs which is only capable because we have a liquidation engine that can give borrowers these conditions. So anytime we have any concepts, we always try to push the boundaries and ensure that our users are either able to earn more or have a better UX and they can get anywhere else. And LNV2 basically lets us take that up a notch by allowing users of Jupyterl and to introduce a totally new revenue stream. And this revenue stream can mean that they either earn more or their cost of capital comes down. So yeah, it's only just launched and to be honest, there's no other protocol that has anything like it today. So I'm sure it takes a little bit of time for people to poke around and kind of understand exactly what's happening. But after it starts to grow the effects that it's going to have for Jupyterl and actually the whole Salani ecosystem, it's going to be pretty cool. Nice. Are we able to talk about numbers? What kind of extra APY do you expect small collateral to add to the current numbers? Yeah, so it really depends on many, many things, right? What I kind of expect to happen is it's going to take a little bit of time to build liquidity. Anyone who understands how AMM's work today know that the venue that has the most competitive pricing is the one where all of the trading order flows. And because we're starting from zero as of two days ago, it's going to take us a little bit of time to build that initial liquidity into our smart vaults. But after that liquidity starts to grow, you'll start to see a lot more trading volume come in. And essentially what I expect to happen is once we reach that, like let's call it substantial enough liquidity, the order flow starts routing through us, the yields are going to be quite incredible. It may even be like percentage points that you'll be earning extra and percentage points that you'll be paying less to borrow. However, the market will see this extra yield come and then it'll kind of get diluted as more people start to use these vaults. So essentially what I expect is it's going to take a little while for it to warm up as builds liquidity. And then it's going to be really, really great. It's going to have maybe even percentage points of better conditions. And then kind of it'll start to stabilize it probably about 0.6 to 1% more yield on supply and reduction for the borrower. Obviously, it depends on many factors such as volatility in the markets, which usually brings more volumes. But I expect it will stabilize around that mark. Still sounds exciting. And I don't think we're in the most exciting part of the cycle. Yeah, this is pretty cool. And you also mentioned the unique liquidation model that fluid and Jupiter-Land utilizes. Could you please expand a bit on this? I know that you mentioned it before in the spaces that we had. But I think it's put in for it to go over it again. And by the way, folks in the audience, if you have any questions, please feel free to raise your hand and talk to B-Shall directly. Yeah, the liquidation engine that we've created basically, if you think of what every lending protocol is trying to do, it's trying to provide as high off an LTV as possible to all of the users, that is safe. The main idea here is that we want to do as much as possible and provide the best of value for borrowing as possible in all of T5, but we still need to ensure that it's a safe level. And what safety basically means is that if we have a market crash, we need to ensure our lend is up protected. And basically, the innovation that Jupiter-Land liquidation engine has is we can liquidate the entire loan book or all of the loans that exist in the protocol in one transaction. So what that means is that let's say there's a market crash and there's maybe a hundred loans that need liquidation. On every other lending protocol, a liquidator needs to go one by one and liquidate each of these loans individually. Let's just say it takes a unit of time, and if there's a hundred of them, it takes 100 times that. However, on Jupiter-Land, the liquidation engine can liquidate all of them in one transaction. So essentially, it doesn't matter if there's one loan to liquidate or a hundred loans or a thousand loans, it will always take a constant amount of time. And we've actually looked at some of the historic data during the market crashes that happened in October and in February of this year. And within one block, almost instantaneously, the entire loan book was back to a healthy amount. So this is what enables us to kind of push the boundaries of LTV without inducing any extra risk to the protocol. It's the fact that if the markets are to have a downturn, we are able to ensure that the protocol is safe in one transaction regardless of how big a drop it is. It's amazing. And... Yes. You might have a good question really quick. Of course. Yeah, go ahead. Some people may not know this, but the smart vault mechanism was originally developed on your Ethereum deployment first. I'm kind of curious, how did adoption of smart vaults play out on that side of things? I've seen some mentions before that Flute is actually one of the top dexes on the entire chain. Yeah, yeah. So, if I was to walk through a timeline, it came out, not many people knew about it or how to about it. It was a totally new novel thing that no one really paid attention to. But then one day, we kind of reached that amount of liquidity that I was talking about earlier, where we started to get a lot of the trading autoflow come in. And basically, during that period of time, we way, way, way outperformed all of the peers on the chain in terms of the rates that we will be able to provide on the supply side and the borrower side. In fact, it was so good the borrower cost was almost zero. In some cases, it was even like, you know, you were being paid to borrow. But this only lasted for a very short period of time because people started to notice and they came in and they kind of diluted that by utilizing the vaults more. So essentially, like if I was to talk about the adoption, it was like flow initially and then that reached a certain amount of like critical mass basically, where it started to just get a whole bunch of trading flow and the rates became super amazing. And then everyone kind of knew about fluid from then on. And yeah, like it is the fastest growing Dex ever on an EVM. It took about 100 days for it to reach 100 billion dollars of trading volume, which no lot of the Dex has ever done on the EVM side. And currently it's sitting at the number two Dex on Ethereum. So yeah, like as I was kind of saying, I think we are going to replicate that exact, that exact same trajectory on the slotted side now. It's going to be a little bit slow to begin with as the liquidity starts to grow, we get more order flow and then from there it will grow extremely quickly. Gotcha. And how popular would you say that individual smart vaults became, which like if you compare them on the EVM side of things, like which are the top vaults on the platform or any smart vaults like in the top five, for example, by TVO? Yeah, there is extreme demand for smart debt. So smart collateral, it's very, very useful and especially as issuers in a few use cases, they're super, super interesting. But smart debt always has extremely high demand. And basically the reason why is because let's say there's someone that wants to collateralize Bitcoin or soul, they believe in it long term. Using smart debt just gives you a better rate than if you are just a borrower like using one of our V1 vaults. So let's just say like the basic vaults. So yeah, like smart debt across all of the bar repairs has extremely high demand all the time. I guess. Okay, go ahead. I was just going to ask a follow-up question about smart debt. But if you go into continue talking about it, it's fine. Okay, yeah, let me get this one really quick and then I'll pass it to you. Under what circumstances does it make more sense to use a smart vault over a comparable regular vault? Like is it a simple mathematical comparison? I guess like ultimately why would people still use the standard vaults? Yeah, so in the next test, two or the three main types of smart vault, right? Like yeah, smart, and you have smart collateral and smart debt. Now smart collateral and smart debt are the most popular. The thing with smart collateral is your collateral is now denoted in two tokens and generally people are more comfortable with one asset issuer or one asset than another. So basically if you're using smart collateral, you need to be comfortable from a risk perspective with both of those assets. So if you're not like let's say for instance out of all of the BTC options we have on Jupyter Len, you're only comfortable with CBBTC then maybe you won't use smart collateral because you don't want to have exposure to the other type of BTC. That's the main decision to make here. On the Ethereum side of things, we see both strategies, people that are comfortable with like they want to use smart collateral for Bitcoin or they are only okay with CBBTC or WBTC whatever it might be. And that's the decision that's case by case basis. Now on the debt side of things, things get a little bit more interesting. It is getting a little bit technical but if you're borrowing smart debt and like let's say for instance you're denoting your debt in USDC and USDT, you don't actually take risk on if one of these are to DPEC because obviously this is a debt that you owe the protocol. So because of this, the decision to borrow in smart debt is often a lot simpler than the decision to maybe utilize smart collateral. So that kind of goes into the thing I was saying previously around how smart debt always has extremely high demand. It's both because the rates are better but also from a risk perspective, it's a lot simpler than potentially smart collateral. So yeah, like I do think that after you guys start to see the trading volume come in and you look at the UI, a large part of this decision will be economic where you start to see okay, there are better rates available on the smart debt faults than just the vanilla ones. So a lot of it is economic but oftentimes it's also hey, I don't want to have exposure to two assets, I just want to have exposure to one. Got it, that makes sense. EG, feel free to take over the mic. Thank you so much, Thorke. So I just wanted to follow up about smart debt and again to ask about numbers. How much realistically, how low realistically can the borrowing API go with smart debt? Can it even go negative? Can you actually earn money by borrowing money or is it not there yet at least? It's possible and it has happened on the EBM side before. It's not something that's going to be available every single day but if there's a lot of bullishness in the market, a lot of trading volume is happening on the chain and a lot of it is routing through through Jupyter-Land then the rates would be better. If there's a period of time where maybe right now what trading volume is not extremely high on the entire chain then the rates would be lower. I would say again a realistic expectation is going to be between 0.6 and 1.2% of an impact. Somewhere in that range is probably a realistic expectation if I am to use his start data. Then we'll have outliers where maybe for a short period of time it is negative to borrow but again it's not going to be something that I want anyone to expect to happen regularly. It's more just during these extremely bullish days in the market where a lot of people are buying things on chain and there's a lot of volume happening. And another question. So I'm looking at the website right now and I don't see a lot of options for smart worlds. So I see GPSD, RISD, PST, CIDOP, DC, USDC, maybe 5 more. Are you planning to add more worlds in the near future? And how complicated is the process? Like why not just add 100 from the get-go? What's the blocker here? Yeah, we will be rolling out more for sure. Honestly, the main reason why we started with these bunches is because it allows us to set the initial really strong foundations. As I mentioned, there is a little bit of a cold start problem. We need to build a little bit of liquidity initially and then after we build that things will start to grow a lot more aggressively. So right now we've set the vaults that we think will allow us to attract that initial liquidity and over time will scale from there and you'll see a lot more pop-up over time. In terms of adding it, our RISD team is managing it just as we manage all of the other vaults. The main decisions we need to make is what assets do we want to have, what exposures do we want to have, and we're just constantly balancing the risk and ensuring that from a RISD perspective, we're not going to teach and including too many assets or too many vaults. So yeah, I hope that answers your question. Like I...