Interview: Degen Responsibly with Tratium

Yours truly chats with the DegenResponsibly crew to discuss Tokemak and the ramifications of Reactors for DeFi projects.

Interview: Degen Responsibly with Tratium

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Rough Transcript Below

[00:00:01.330] - Speaker 1
We are getting ready to go trading. How you doing, buddy? Welcome. We're excited to have you in our hangout space. I wonder if this Twitter spaces is actually being held in a reactor. It'd be really cool if we were in a reactor building right now.

[00:00:31.630] - Speaker 6
Freedom. You just got the invite to come up and speak.

[00:00:39.350] - Speaker 1
We're a little early. We got a few minutes here to hit the time and then everyone's phones gets a notification. So just hang out, lay back, vibe out, you know what I'm saying? Treadium, what's up? How are you doing?

[00:00:56.750] - tratium
Hey guys, can you hear me?

[00:00:58.570] - Speaker 1
Can hear you just fine.

[00:01:01.070] - tratium
Excellent.

[00:01:02.570] - Speaker 1
Welcome to the spaces.

[00:01:04.850] - tratium
Yeah, thank you. Thanks for having me. I'm excited to chat with you guys about Tracer and Tokemak.

[00:01:11.110] - Speaker 1
Yeah, let's do it. It's been pretty big. Very timely that they got the Tracer reactor going. Literally like today or yesterday.

[00:01:23.530] - tratium
Depending on when I saw that announcement. I was wondering if there was some sort of planning there or if it was just a happen chance.

[00:01:30.530] - Speaker 1
Honestly, pure happens chance. So we're excited to talk about it though. A little intro. I think, you know Bob Boyle on the DJ responsibly account. And then Flame is another one of our hosts from the Olympus Odyssey community.

[00:01:50.270] - tratium
Yeah, I recognize these names. Of course, he doesn't know Bob. He's been crucial. I think he actually probably did the very first longest form shill for getting a reactor during core one for Tracer. And it certainly convinced me to change my votes.

[00:02:12.060] - Speaker 1
There you go.

[00:02:14.030] - Speaker 6
That was like four days. Four days of anxiety right there.

[00:02:17.770] - tratium
I like that. It was a blast. It was a real good time.

[00:02:21.830] - Speaker 1
Four days of anxiety. Like when the voting is going on.

[00:02:26.510] - tratium
Yeah.

[00:02:26.910] - Speaker 6
Because you would see the votes go up and then you'd be in the top five and you get knocked out and then it come back.

[00:02:37.230] - Speaker 1
Yeah, I remember I just started joining the core team back then and it was pretty exciting. I'm not going to lie to be part of that. I've been in the Crypto game for a while, but I'd never seen a product like Tokemak. That was my first time seeing anything like this.

[00:02:56.670] - tratium
Yeah. I don't think there has been a governance event that kind of exciting. There just hasn't ever been. It's always just voting on IPS and just people just voting. Maybe the seafood stuff was pretty exciting when that was going on, deciding he was going to remain on the treasury, but not really the same thing. It's like this kind of all out, like race 100 meters, sprint at the last few minutes, trying to get all these reactors up and voted for and stuff. It was exciting. And the leak reactor was open. Everyone was freaking out watching it, posting screenshot and stuff. It was a real good time.

[00:03:36.240] - Speaker 1
And Sifu, he was the one that rugged. Was it magic? What was the Wonderland. Wonderland? Yeah.

[00:03:44.560] - tratium
He just launched. I think he just launched his own token a couple of days ago. He's staying in the limelight, surprisingly so. His back, tornado, Caching, everything.

[00:03:54.070] - Speaker 1
Yeah. Like his backstory is he was the Quadriga. He was like part of the Quadriga founder. I'm from Canada. And so actually I had Ethan on Quadriga that got rubbed. So that guy. And you know what's funny about him in his Twitter account, he was denying it and everything, and everyone's like, dude, they're trying to tag the FBI and stuff. And it was just funny.

[00:04:21.690] - tratium
Yeah. He very obviously did it. He hinted that he did it, then he kept denying it. It's a wild store. Crypto is just a wild west out here. I'm not against more sensible regulation. Just we can usher in the era of actually bring to mass market and stuff. I always want there to be the actual DJ D, five Wild West subsection, or maybe even the majority of it. But I do think we do need regulation to reach that mass adoption stage. But, yeah, we need a kind of a quarantine area for people to be able to invest in stuff that is not going to get these really shady people running Treasuries and stuff. We do need a safe space for retail who doesn't quite know how to navigate the complexities and can't be sensible about not getting rugged.

[00:05:11.710] - Speaker 1
100%. Everyone's just joining us. Welcome to the Tokemak Tracer Djen Responsibly spaces. We want to get as many people in here as possible because this is like seriously grade A Alpha and just in general, really good knowledge about how these ecosystems work and work together. So invite your friends, go tweet this out. Let's drop these links in the discord. Bob, if you can help us on a couple of Discords and Flame, even the Odyssey one. I know Odyssey is an NFP Focus project, but I think there's a lot of really interesting stuff here that can help people learn. And we're excited. We also need to invite AJ up here. We're going to get AJ up here. The kind of runner show for tonight is just going to do a quick intro. And then AJ is just going to speak because he really helped kind of get the Toke Mac Tracer partnership going. And then we'll jump into Trading and kind of what Tokemak has meant to trace her. And then Trade is going to be our subject matter expert on topmac tonight. He's going to dive into kind of all the pieces, the mechanics, how the product works, kind of the Alpha that Carson dropped recently.

[00:06:30.230] - Speaker 1
And we're going to discuss all of it tonight. So pretty excited for that.

[00:06:35.610] - tratium
Looking forward.

[00:06:37.470] - Speaker 1
All right. And AJ, let's give AJ a minute while we wait for AJ really quick. If you're new to tracer, tracer is a protocol in arbitrary for derivatives. We became third in the first round of reactor voting. So I want to thank the community. And we're so excited that in the last 24 hours our reactor finally kicked up. And I believe almost 800,000 or $900,000 worth of liquidity was added to our Sushi pool. So huge fans of what Tokemak means. It's been pretty big for the project. It's brought a lot of credibility to the project. We've talked with different partners, institutional investors, and having Tracer and the Tokemak reactor is almost instant credibility. So it's been really important from that angle. And even just the liquidity is great, but also the ecosystem, the awareness. So we're pretty fired up about it. We're just trying to troubleshoot AJ here.

[00:07:51.330] - tratium
He says he can't hear. This is the problem with I love Twitter Spaces for hopping in stuff like this, but the admin side of it like inviting people. I didn't even see the request that you sent me to like hop up to be a speaker, just disappear somewhere.

[00:08:05.790] - Speaker 1
Yeah. Twitter Spaces is known to Rug basically everyone.

[00:08:13.870] - Speaker 3
Yeah, I mean, that's how the whole name Rugrato came about, right?

[00:08:19.390] - Speaker 1
I didn't know that because it was a running joke.

[00:08:23.200] - Speaker 3
Like Dees would host these spaces with Faroke and they would constantly get kicked out of the spaces for just random reasons. They would just get dropped and the joke was all, I got rubbed again. Twitter Spaces rubbed me again. And so I think that's how Rugradio came about.

[00:08:41.730] - Speaker 1
I swear those guys were on Spaces for like 8 hours at a time. So Twitter is probably like our servers are going to die if these guys are on any longer.

[00:08:51.070] - tratium
Ran out of disk space have to do alive.

[00:08:55.790] - Speaker 1
Yeah, we're trying to get AJ in here because we actually have Ray, one of our team members, speaking in like ten minutes south by southwest. So AJ is going to do a quick say Hi and then he's going to hop and we're going to dive deep into Tokemak, but looks like AJ is on. Aj, what's up?

[00:09:13.000] - Speaker 6
Hello, how are you?

[00:09:16.790] - tratium
We're good.

[00:09:17.480] - Speaker 1
We can hear you loud and clear. I was just kind of saying that we're going to have you kind of intro on how Tracer Tokemak got started and kind of what that early days were like. If you want to hop into that.

[00:09:32.890] - Speaker 6
Yeah, sure.

[00:09:33.760] - Speaker 4
Do you guys still have me loud and clear or is it like cutting out a bit?

[00:09:37.200] - Speaker 6
Are we good?

[00:09:38.570] - Speaker 1
You're good?

[00:09:39.250] - tratium
Sounds great.

[00:09:39.800] - Speaker 4
Yeah, perfect.

[00:09:40.740] - Speaker 6
Well, yeah, for context.

[00:09:42.550] - Speaker 4
I've been handling kind of the biz Dev and growth side of Tracer since its inception.

[00:09:48.090] - Speaker 6
Maybe two years ago now.

[00:09:49.940] - Speaker 4
And yeah, prior to creating the petrol pools, which is kind of our product in the market at the moment, we were working on a per swap mechanism and it was kind of funny, actually.

[00:10:02.230] - Speaker 6
Naively.

[00:10:03.030] - Speaker 4
We thought that the best way to start things off would be to reach out to different market makers and liquidity providers in the space and basically began researching who the best crypto market makers were at the time and stumbled upon Fractal wealth, who at that point were essentialized market maker and who would later become the parent entity for Tokemak and Membrane and basically jumped on a call with Craig and Carson from the Fractal team in early 2021. And I guess from that point I was pretty confident there would be a team that can deliver over the long term. And yeah, over the next couple of months development started to come out about tokemak it was announced to the public and basically we got to call one where they were announcing a list of 36 teams I believe was the original short list of people who were going to be eligible for a reactor. And Tracer wasn't included on the list. So kind of frantically jumped on a call with Craig and Internet Paul I believe, and basically tried to show them as much as possible on Tracer and what we were building. And eventually we were included on the final shortlist of 42.

[00:11:22.970] - Speaker 4
So a bit of an underdog story. I remember ending up all saying that he slid Tracer into Core and basically said there's no promises, there's like some big fish you're competing against. And it was I guess a real underdog story. When the core voting process began. It drove a lot of hype in the general default environment. It was kind of a successful campaign to win over the hearts and minds with the underdog approach. In many ways we were one of the only core projects who had really thin liquidity on both sides compared to the other candidates like Sushi swap and synthetics. And I think some of the argument we were having was our arguments have been included was that Sushi swap doesn't need any more liquidity. That like liquidity would be from a reactor, would be a drop in the ocean and unnoticeable considering how liquid some of these large market cap tokens are. And yeah, it was a kind of crazy period if some of you remember Kane was putting up statuses saying where can I buy tokemak? And yeah, it was a few sleepless nights there in the last week of the core voting and it was kind of like Bob Boyle, some other people on my team and myself consistently trying to rally the pilots, selling them on I guess Tracer being the best use case for a token reactor.

[00:12:49.970] - Speaker 4
And we also had some assistance from some shared investors we have in the space DeFi God, who is still a big Toke whale from what I can tell, helped us out as well on that side of things. And yeah, just the whole sell around tokemak being able to provide the most value to projects within early liquidity. And Tracer was really the best use case for that. So we were lucky enough to finish three in the first call boat and kind of excited for the future of the relationship between Toke and Tracer and how with the two petrol pools, we can provide additional utility for different T assets taking long and short positions. But yeah, that was kind of how we got the ball rolling.

[00:13:40.010] - Speaker 1
That's an awesome story. And I remember looking at Tokemak thinking this is the first really interesting use case for dying in my mind. And then I went down the Toke wormhole or the rabbit hole and now I'm also a Toke DJ and of course, Tracer DJ. Thanks, AJ. That's a really good, awesome story maybe about the future really quick because we got you here for four more minutes. What are you fired up about on just kind of the collapse between the two teams. Our reactor just went live yesterday or depends on what time zone you're in the last 24 hours. How do you see the rest of liquidity rolling out for Tracer?

[00:14:22.730] - Speaker 4
Yeah, well, it's going to be interesting to see, I guess the response in the market as liquidity deepens across the four exchanges. But yeah, it jumped from seven and a half K liquidity on Sushi swap yesterday in the Trace a week pair to over 900K.

[00:14:40.460] - Speaker 6
Which was pretty crazy.

[00:14:41.560] - Speaker 4
So at this point in time, I'm pretty eager just to push people who've been interested in buying Trace OTC to buy it on the market and try and get a nice pump going in the lead up to our V Two release. In terms of our relationship with Tokemak, I'm excited to see I don't know if you guys were listening to the GMI Twitter spaces last week, but Carson kind of hinted at a second type of tokenic asset coming out that would provide utility to governance tokens who maybe don't have a lot of utility. So I think Tracer could provide another unique use case there to really drive forward, I guess, the core value proposition of Tokemak. And yeah, hopefully we can extinguish some of the Toke side that's been going on recently because I think they're doing a great job and they've abstracted a lot of the complexity away from the end user to offer really simple experience. So yeah, I don't know how people are being salty about the mechanism.

[00:15:43.710] - Speaker 1
Yeah, for sure. Cool, man. Well, thanks for hopping on here and given the back story, we appreciate it. And drop some love for AJ in the chat here. So give him a round of applause because you really help make this happen. So we appreciate you, AJ tratium, do you want to introduce yourself and just kind of Toke base and a bit of your story?

[00:16:04.910] - tratium
Yeah, sure. So I'm tratium. I've been in crypto since the beginning. I was mining Bitcoin in my College dorm room back in early 2011. I remember sending emails to my dad saying, hey, can you send me some cash? Not for my tuition, but so I can build more Bitcoin mining rigs because we got free internet, free power at the College dorm room. So mining Bitcoin for free at one point to $4 and selling it immediately because I needed to pay back the computer expenses and campus food and tuition and stuff. So I never actually kept much of it. So I didn't make it rich in the early days because I was too poor to be able to keep it. And then in 2014, I entered that cycle as well and sold it all near the top so I could thru hike the Appalachian Trail. And then a couple of years later in 2017, 2018, got back in at the beginning of that cycle, aped into all the crazy ICOs and stuff made and lost quite a lot. But it wasn't until this cycle where crypto really started to feel that it was getting real. I've always thought that Bitcoin and Ethereum have had massive utility.

[00:17:27.580] - tratium
I mean, we're seeing it, especially now with the need for this borderless sovereign currency and stuff. But this cycle seems like it's big times now. But in the past ten years, Besides Bitcoin, Ethereum and last year I got really into Thor chain because that project just like Tokemak has really good Toke on it and it is super important. Use case. Across the past ten years, there hasn't been really that many projects that I've felt like were super important. I know there are plenty out there. There's a ton of fantastic projects that are happening, but it really is only once in a blue moon where something that has such a needed utility comes around that you feel like, oh shit, this is going to change the landscape of crypto, of DeFi in particular. And that's what I felt when I kind of came across tokemak. And this was the day after the geneticist. So I missed out on Denesis, but still got a great price because it was still around that degeneresist price. And I ape with everything after just completely diving in overnight and reading everything I could about it and thinking, wow, this is a major problem in D Five, like a lack of liquidity.

[00:18:51.090] - tratium
And so I got heavy into it and started researching and it just was such an interesting protocol that I just got completely absorbed with it. I loved the kind of Mecca aesthetic that I had going on. I still do. I noticed they didn't go to Tokemak XYZ, just takes you straight to the app. And I was like, oh yeah, they need like a splash page, like a landing page thing that kind of explains the point of the protocol because that didn't really exist. You had to sift through Twitter and medium to find out kind of the basics. So I threw together, I believe it's tokemak. Net is what I have it on right now as kind of like a little proof of concept landing page that I thought kind of matched the Tokemak aesthetic. And I sent it over to another DJ on Twitter who I knew spoke Japanese. And I was like, hey, can you, like, proofread some of these Japanese I have in here? Because I wanted to go for that kind of, like Mecca aesthetic that had going on. And she's like, oh, you know, the Tokemak team? I'm like, no, I'm just designing a website just for fun.

[00:19:56.120] - tratium
And she introwed me directly to Carson and Craig and was like, hey, you two could jam together. And she linked us up. And I was popped into a meeting with the Toke Act team where I kind of explained what I had built as a quick landing page. And I also thrown together the kind of first revision of Tokyobase where I had written up some basic docs and news articles, and they loved it. They were like, hey, this is a needed resource community, straight, grassroots community thing to build a website, provide ecosystem news. I feel like I'm a bit of a Toke historian. I feel like because every single Sunday I'm in front of my computer, my wife's like, okay, I'm going to go get my hair done. I'm going to go do something else while you do leaky Sunday. And I just sit there in front of my computer typing it up every Sunday and following all the news. And then I've reached out to some excellent community members, like Ghost, Danica, so many others that are these gigabytes that can just spit out these excellent articles about the future of Toke Act, the future of other products that are coming out.

[00:21:06.040] - tratium
We have Insane in the Membrane by Oaks Paradem and some really cool stuff like Sparkle Crimes as well, has really dived deep on some stuff in our editorials. And so we just kind of have this site that has all this community news, and we'll be expanding it to include membrane and exit and anything else that comes out of the Tokyrise. But yeah, that's pretty much where we are. So, yeah, I'm just a community member that loves tokemak because it's providing something incredibly useful, and it just scratches that part of my brain that just wants to learn and it's complex enough to stay interesting.

[00:21:42.870] - Speaker 1
I want to also shout out real quick, Sparkle Crimes, so give Sparkle Crimes a follow. He actually did an amazing thread on Tracer as well, and so we appreciate it. But big Alpha coming from Sparkle Crimes on Toke base. I see you have Toke base. You have brain base and exhibits. Can you just maybe walk through those three components?

[00:22:05.630] - tratium
Yeah, sure. So those are I just launched. So actually, I haven't fully rolled it out yet, but I'm not switching. But I have another domain just called Starbase that will be kind of like a parent level entry point to Tokabase exabase and membrane base. And again, whatever else comes out of the Toke ears just so I can organize better the different content and guides and news and stuff, because there's definitely going to be a future where some people are interested in Exa or Membrane or Toke, but not the other ones. And so I want to be split them apart. But yes, so Tokabase is the OG and it's focused on Tokemak news. So we have kind of pilot manual guides that include like how to buy Toke, what is Tokemak, and the other basics. News articles include editorials by the aforementioned writers that we have, and just every little thing that pops up. Anything interesting that kind of gets leaked in Alpha, in podcasts or interviews, or in Discord. I'll write it up. I'm always on Discord, always on Twitter, like searching for Alpha. And so I take screenshots. I call it the inverse bra of the Toke averse.

[00:23:21.910] - tratium
I'm just snapping my way through everything that's going on. But yes, the brain base and exercise mostly are just placeholders for now. But in the next two months or so, it sounds like Membrane will be starting to roll out and maybe the same time frame for Exa? Not sure. So those will start having content once more is known for those.

[00:23:43.870] - Speaker 1
I don't know what is Membrane.

[00:23:46.380] - tratium
So Membrane is like an OTC product for over the counter and request for, quote, kind of a Bloomberg RFQ system for DeFi native. So right now, if you are a market maker, if you're a big fund or someone that wants to swap tokens over the counter, as in not use a centralized exchange or not use an AMM, you want to get better execution, price and such, you are probably going to be messaging other market makers, other VC funds or whoever it is on Twitter, just sending a message directly saying hey, I'll give you this if you give me that. So there's not really a DeFi native trustless way of doing over the counter token exchanges. And so Membrane is that product it's going to well, as far as I know, we've mostly just been speculating around what is actually going to be, but from what I know it's going to be this a non custodial and perhaps a custodial version as well option for doing these OTC trades. And as a clearing house through Membrane that can trustlessly enable these OTC swaps.

[00:25:05.050] - Speaker 1
There's a thread that I'm trying to pin from Archer and that kind of describes the Tokemak. I don't know what you want to say ecosystem or how it works, but I know there's a lot of contention over this kind of schematic diagram that people may have said it was too complex. Can you just walk everyone through maybe what that diagram is and kind of how Tokemak actually works?

[00:25:33.910]
Sure.

[00:25:34.740] - tratium
So I'll start from the top and get down into that diagram specifically. But as AJ mentioned, Liquidity is vitally important to a project success. Like if you only have $7,000 with Liquidity and someone comes in trying to swap any amount, really with that low Liquidity, even doing a couple of $100 swap will cause massive slippage. You can't trade that token in size and as AJ mentioned, if you can't even reach out to bigger investors saying, hey, invest in our product because we think that it's going to be useful, because you know that they won't really be able to get access to any kind of spot in size. It's going to affect the market too much because there's thin liquidity. And that's a major problem. And Carson puts it very aptly by saying liquidity is bandwidth, there's data is bandwidth, but what the value is, what's being transferred over the wire. And if value is the equivalent of data in Web three, you need to be able to transfer vast amounts of vast amounts of that value around. And that is only possible with deep, deep, deep liquidity. So that is the problem that Tokemak aims to solve.

[00:26:55.490] - tratium
It enables right now, there's a bit of a problem with small projects or even large projects being able to incentivize liquidity to even exist in exchanges on AMS or wherever else it needs to be they are offering. We're seeing double digit, triple digit, quadruple digit or more APRs APYs being offered. Just so people stake their tokens in pools. That is like a massive expense. And it's necessary right now because protocols are desperate for liquidity. If they don't have it, their Toke can't be traded. It's useless. And if people can't buy the token, they're not going to really feel any vested interest in a project. And if the token price goes down, they're going to leave it's like locusts moving from one force to another. And so you need to have deep, sustainable liquidity in order to have a successful project. That's just the way it is in crypto. It's an attention economy. And if price goes down, you no longer have any attention going on. So what's the solution to that? Like you can't just have a project completely, never sell any of their tokens and own all that liquidity themselves, because then you have a distribution problem.

[00:28:07.570] - tratium
Users can't get the tokens right? Then you don't have any users. It's kind of a chicken and egg issue. So Tokemak offers a simple way for both Dows VCs and users to be able to deposit their idle assets, their unproductive tokens into a reactor. And essentially a reactor is a liquidity pool that will be deployed to outside venues. But the way it differs from most normal liquidity pools is that if you go to unisop sushi swap, the pool is going to be, let's say tracers, and you need to deposit both sides. And so you're exposed to both sides. If you only want to own tracer because you're tracer Gigabyte and you only want to own TCR, you can't do that because you have to split up 50 50. And so you're exposed to two different assets. Personally, I'm fine with that. I like having an Am auto balance my portfolio, but it's inflexible. And from a user experience perspective, it's much easier to have a single sided pool. The design of the reactors allows for that. You deposit an asset on one side of the reactor and that's the token side on a pair reactor, the pair side and on the other side is Toke, which directs the liquidity on the other side.

[00:29:34.420] - tratium
So if you'd have a pair reactor that has a theory in it and a token reactor that has Tracer in it, Toke can be used to combine those two together, deploy it to an AMM, and have deep liquidity that stays there, because the Toke that is directing that liquidity effectively buys it. If you already have Toke in the LD side and you already have assets in the reactor side, on the asset side, you have permanent liquidity then, and it's incentivized by Tokemak in the form of Toka emissions. And the user is again exposed to only one asset per reactor. And it's a fantastic way of simplifying the process of incentivizing liquidity. And there's a lot of unlocks that this gets you. So you can have users deposit into the reactors just in the form of whatever idle assets they have, and that can be liquidity that is directed elsewhere. But then you can also have this visibility for Dow Dow swaps. So you can have Tracer come to tokemak work on their own respective proposals and have Tracer swap, let's say $1 million worth of TCR for a million dollars worth of Toca. And they both offline.

[00:31:03.110] - tratium
Maybe swap those two between the two Treasuries. And now Tracer has a million dollars worth of Toke, which you can use to liquidity direct and Mac has a million dollars worth of Tracer, which they just put in their reserves in the event of impermanent loss or some sort of reserves are needed. Because for the project itself, like Tracer, for example, that native asset isn't really that valuable in its own treasury, right. For other users that want that token, it has value. But when a project's treasury is 100% of its own native asset, it's almost useless. Like you can't really use that money for anything because you can't dump it. It's hard to pay for things with it. It's almost like monopoly money for the protocol themselves. But doing a dowdo swap enables them to offload their own native asset in exchange for something that's far more valuable to them, which is going to be to direct liquidity.

[00:32:03.830] - Speaker 1
And we can confirm that. I think Tracer is the 10th largest holder of Toke tokens, and it's been an amazing treasury asset.

[00:32:12.630] - tratium
Yeah. So I have a dashboard here, Alpha leak. This might be seen as soon a Toke Wars site that shows a leaderboard of different Dows and how much Toke they own, the value of that and what their places. So according to my dashboard, I see Tracer stage two with 30,000 Toke. That's about a million dollars worth of $727,000. That gives them the ability to direct hundreds of $1,000 liquidity and they can just again swap that with the Token Act team and have access to that. So right around the core events, we saw a ton of projects, especially like Shapeshift, going all in on these governance proposals to do these Dow swaps so that they can accumulate as much token as possible. And I think we're seeing a kind of very smallish but growing subsection of D five particular handful of D five founders that really understand the long term value of Tokemak and are silently accumulating as much token as they possibly can.

[00:33:23.930] - Speaker 1
There's one other dynamic here that's interesting is projects can basically bribe Tracer for votes. Can you just kind of speak to that real quick and break that down a bit?

[00:33:35.440] - tratium
Yeah, sure. And I'll note myself, I need to get back to that Curve diagram as well, but yeah, so the bribe aspect of it very similar to voting for Curve and Convex. There's just a separate website votemak, and I believe it might be getting rolled into some of the redacted hidden hand stuff. Not sure where it is right now, but during core events, you have all these reactors, all these projects fighting for a reactor and end users like us vote for them. Just like AJ was talking about. It was this very exciting moment where everyone was watching the votes pile in, especially down to the last few seconds. The King brothers like Aping in with millions of dollars worth. But the best way to just, instead of having to as a project outright buy all this Toke yourself to do the votes you can more cheaply just say, hey, if there's a bunch of basically mercenary capital with Toke out there that doesn't really have any strong opinions of where to direct their vote, just throw them out a couple of cents, $0.50 per vote to assign it to the reactor that I favor. And so during Core, you could go on to votemak.com. See that Thor chain had, let's say, $100,000 worth of bribes.

[00:34:56.050] - tratium
Maybe Tracer had some bribes. Shapeshift had quite a few bribes, if I remember correctly. And so as a user, you can say, okay, this is how much my votes will earn. If I vote for this particular reactor, you can see the bribe amount per vote. And you could use that to decide if you want to not have any sort of strong principles over who you care about winning a reactor and just want to our profit, Maxi. And you can just vote for whatever reactor will bribe you the most.

[00:35:25.030] - Speaker 1
Yeah. And there's $871,000 worth of active bribes right now, so if you go to votemak.com, you can see them there. Crazy.

[00:35:35.570] - tratium
Yeah. And so if we don't already, I'm sure we'll see the same thing outside of Core where we'll start getting bribes just for liquidity directing to specific exchanges, assigning Toke to specific reactors. And that's going to be fun, right? You're going to be able to get bribe for just random gas governance actions. But it's also important to know that there is a maybe not delicate, but there is a balance between the Toke side and the asset side of a reactor for how much Toke is emitted and the incentivisation for either side of those. And so the Tokemak team has been working fairly closely with the votemak guys after Redacted acquired them to ensure that Carson is advising the Redacted folk so that the bribe system doesn't throw the kind of incentive pendulum, as I kind of like to call it after the Thor chain guys, doesn't throw that incentive pendulum out of whack and keeps that balancing act.

[00:36:47.790] - Speaker 1
And curve. You wanted to talk about the diagram, why did it get so much contention? And yeah, if you can break that diagram, I also have that tagged. So I recommend everyone go through S. Archer there, go look at the Tweet. But also follow the host on this panel and the speaker. So quick, shout out to everyone taking their time to dive into this. But yeah, hit that diagram.

[00:37:13.170] - tratium
Yeah. So I think the diagram itself, I think the contents of the diagram was meaningless to the fact that it got reposted by all these other accounts, kind of poking fun at it because in reality, it's not terribly complex. I think a lot of people just saw a complex diagram and thought, oh, here we go with D Five 2.0, D Five 3.0. The Olympus elephant sucking itself off like everything is just a cyclical or Lobis of like, protocols feeding off each other. And people are kind of seem to be getting sick of that. Maybe in the wake of Olympus and a lot of the Olympus Forks kind of collapsing, I think a lot of people think that D Five Two and three are failed experiments. They're not FYI. But the curve diagram in particular isn't really terribly complex. If you actually take a minute to look at it and understand what's going on, which is essentially what does the token act protocol do with the liquidity it has pointed to curve, and what does it do with the emissions that it receives from that liquidity? Maybe this is the same kind of process that a human brain would go through as an individual liquidity provider.

[00:38:31.670] - tratium
You LP into curve, you get curve rewards, and then what you do with them, like a lot of DJs would just dump them on the open market to make a profit. But that's not great for the price of curve. It's not a fulfilling symbiotic relationship and it's unhealthy for kind of everyone but the profit. Maxi. So this diagram is really more explaining that. Okay, so when Tokemak protocol receives its emissions from these curve LP pools, what are you going to do with them? You're going to lock curve, maybe into convex, and then you receive Convex's rewards, which is usually, I think, CVX, three curve and curve. And so you've received multiple tokens as rewards and again, we don't want to dump those. Those are valuable. We want to have governance power. So we put those back into the pools, we compound those, increase our own governance power so that we can have more sway over gauge votes, more protocol owned liquidity, because that's the point. We want to reach singularity by acquiring tokens and fees, basically emptying out our treasury of Toka and refilling it with non native assets. It's protocol owned assets in the summary.

[00:39:50.430] - tratium
And so, yeah, the chart basically just explains the human brain analogy for what do I do with the rewards I receive? And in our case, we want to compound them and use them for governance to increase our power over networks and protocols that we can utilize to make both of us successful. And so it's not a Ponzi diagram, it's a we don't want to dump this. We want to use the governance tokens to govern diagram.

[00:40:20.730] - Speaker 1
Yeah, I love that. I've been trying to explain the Ponzi nomics of crypto to a lot of Tragify people and that, hey, this is a little anti Ponzi nomics in a lot of ways I'm on Tokemak right now. The APR's in the LPs are like 100% Apr state. Toke is 30% Apr on the single sided assets like for Fox, it's 20 tracer, 20 Sushi, et cetera. What are your thoughts on kind of the APRs that are being emitted out of tow and the sustainability of those rewards on even the top price?

[00:41:05.230] - tratium
Yeah, I think there was also some kind of drama recently in the Toke Act discord on the issue of VCs being able to use their Escrow tokens to LD liquidity directing reactors, and that fact that they'll be getting rewards as well, and they'll be getting a quarter of the rewards as most normal liquid Toca that's voting. But the issue is, are they going to dump on the market? Are these 30%? Or in the case of the LP pool, 100% Apr? Is that sustainable to have a healthy token? And it's kind of interesting because on the one hand, Tokemak is a project that is designed to eliminate the need for these liquidity mining incentives. But Tokemak can't necessarily get dog food itself and allow itself to not need to do the emissions itself, because really, Tokemak is it's handling the liquidity mining incentives for other protocols. It's kind of taken that bullet for the other protocols, and in return, it's accruing the fees earned from the nonnative assets that are entered into reactors. So I think that the Apr on Tokemak is fairly sustainable. You have a situation where we're emitting valuable liquidity directing tokens that most interested parties want to receive and further utilize to direct more liquidity staking something and receiving rewards for.

[00:42:52.200] - tratium
It just kind of like how Olympus showed is really more of a I don't want to get diluted in the network. I don't want other people to have more of a percentage ownership of the network than I do. So you keep your assets staked in a pool too, to retain your governance power. And so I think that VCs and Dows and users and market makers and users who actually care to direct liquidity will not be dumping their token. Token is not just a valueless governance token. It is a highly utilitarian governance Toke. And again, I came from the Thor chain kind of ecosystem last year, and what I saw with that ecosystem is that the Rune rewards that people would receive usually went right back into the protocol because they're super powerful. And so I think that you can't really compare tokemak emissions to that of something that doesn't have utility because there's no reason to keep most tokens. But in the case of token act, it's very useful. So I think that especially I'm a bit of a contrarian here maybe, but I think that when VCs can start voting with their Toke, it will unlock a massive increase in total value locked across the system because these are VCs that want to use Toke for its intended use.

[00:44:21.020] - tratium
That's why they invested in the protocol. And so we're going to see TBL jump astronomically. I think when they start doing that and I think they're going to stay put, I think they're going to diamond handed.

[00:44:33.130] - Speaker 1
Yeah, that's pretty awesome. Right now what I love about Tokemak is when you go promote. So if you go to, let's say the tracer the tracer reactor, I think we're like fourth down the list. You can go promote. And it opens up this kind of dashboard where I get to vote on where that liquidity is directed to. Can you maybe walk a little bit through the voting real quick? And if you're a Toke holder or a project with Toke, how should you think about which liquidity pool to send kind of your votes too?

[00:45:09.860] - tratium
Yeah, I definitely think that is on a project by project basis, end users. At this point, I think that it doesn't matter which venue you decide to direct to, your yield is going to be the same as maybe it's possible in the future there's going to be maybe some incentives for directing to the pool to the third party venue that is most profitable. But for now, it doesn't really matter where you direct liquidity to. The Apr is going to be the same. So at that point, it's really just as a Dow maybe. Where do you want that to go? Do you see users begging for deeper liquidity on sushi swap and most of the liquidity is being deployed to Uniswap or curve. Then you go back into the system, go to promote and reallocate your votes to the sushi swap reactor, and then boom, a couple of days later at the start of the next cycle, that liquidity will get rebalanced back over to sushi. So you have a really fine grain control over exactly where you want your liquidity to go. And in the future I think we'll start seeing this UI, maybe get more, more even complex when more exchanges and additional chains or multi network is supported.

[00:46:27.800] - tratium
Because then again, Tracer, an excellent example of this, which is deployed on Rbtrum, has deep liquidity there on the network it's been deployed to. But if they redeploy over to F mainnet or Optimism or ZK Sync or something, they have to undergo this whole process of incentivizing liquidity across layers, which is even harder than incentivizing liquidity on top of that mainnet because users are really hesitant to bridge over to multiple layers. But if that's supported within Tokemak, then you can go into the Tokemak system and say okay, we have shallow liquidity on this layer two. Let me reallocate votes from mainnet, dump it over to an L Two next cycle, boom, it gets deployed and you suddenly instantly have a faucet turned on of deep liquidity on any chain, any network, any exchange you want. Again, right now Curve, Uniswap, Sushi, swap and balancer are supported with Ox coming soon. And right now we're only actively deploying To, Curve, Unison and Sushi, I believe. But in the future the end goal is to be deployed and be able to direct liquidity to all exchanges across all chains, across all networks, which is a lofty goal, but having that ability will crack the problem of the chicken egg problem of liquidity on kind of lesser explored layers and chains.

[00:48:07.590] - Speaker 1
Yeah. And when AJ was on the chat at the top of the show we had I think he said like $7,000 or something in liquidity depth. We now have $900,000 in liquidity depth on Sushi and I think that's just partial deployment. I don't know if I'm reading this right, but I see 18.1 million near TCR and 5.6 million the Toke side. So I don't know exactly how much liquidity will end up in our L One markets, but trading how do you look at what liquidity of each project is going to get, specifically.

[00:48:48.090] - tratium
About which exchange will receive equality?

[00:48:52.370] - Speaker 1
Yeah, roughly like kind of on the back end. How are they kind of allocating that out?

[00:48:57.810] - tratium
So currently Curve is the default, so that's kind of the basic integration because it's more stable. And during this guarded deployment Curve was getting 100% of liquidity deployed, and in the past week or two it's been updated so that we're starting to trickle some liquidity to Unisoft and Sushi swap. But ultimately Curve will probably remain the default. I don't know anything particular about this, but Curve will probably remain the default for a while. But it would be possible, assuming if you owned 100% of the LD votes of Liquidity directing votes, you could decide to put 100% liquidity to whichever exchange you want in its current state. During this guarded deployment, it is being kind of guided by the Tokemak team and they're only trickling Liquidity out during the guarded phase. But ultimately, once the guardrails have been lifted, it will be 100% up to the liquidity directors to decide where the liquidity goes and the token app team hands off on as far as where it gets deployed, it's all up to the LDS.

[00:50:18.430] - Speaker 1
Cool. I love that. And for Tracer, I know one of the big things was giving utility to our governance token because you could drop it in the Trace reactor in the early days was earning 70% Apr, which was pretty amazing. But maybe to some Alpha drops from Carson on the GMI spaces last week, he said that they were looking to drive utility for governance tokens for whatever reason, some governance Toke from regulation standpoint, or they just haven't thought about deep kind of utility for the token. But can you just speak on some of those Alpha leaks from Carson's GMI spaces here and what your take on them is?

[00:51:03.200] - tratium
Sure, I can't speak too deeply on the added utility to governance Toke I'm not too privy on that, so I'll skip that one. But there will be another core event in a couple of months, so there was kind of some questions of if we're going to go straight from core two to liquidity deployment to permissionless reactors where any new reactor gets spun up, but we'll be having another core event. So that's going to be very exciting. We'll get another round of exciting governance action. And I believe Carson also mentioned layer two support will be coming sooner rather than later, which is super exciting to me because every time I've been wanting to use these FL two for the past year, optimism was all hyped up around this time last year. And then every time I've been trying to hop over to another layer, I discovered that the Synapse bridge, the Hop bridge, whatever it is, doesn't have any liquidity. And I can't actually do anything useful on these layer twos. So I think that layer two bridges or layer two destination exchanges are one of the most important unlocks that tokemak will enable just driving liquidity to other layer too.

[00:52:21.400] - tratium
And so releasing support for L two s soon is very, very exciting to me.

[00:52:28.320] - Speaker 1
Yeah, we're fired up about that on Arbitrary as well. Getting some liquidity on our truck is super exciting because a lot of the functionality, especially of Tracer's product, is with the pool tokens on Arbitrary, but that's also where rewards are emitted. And so that changes. Like if you've not tried Arbitrary, it really feels like what Ethereum was like four years ago before crypto kiddies jammed up the network and then NFTs were crazy. All right, I love it. I just tagged actually the Tracer Tweet recently. You can check out the tracer wrapped pool on Sushi mainland and you can see the Jump 6000% jump in Liquidity there. So not insignificant. So we're pretty fired up about that. If anyone wants to maybe hop up here to ask any questions or kind of share your thoughts on Topmac or Tracer, we're excited to have you up. So just request to speak. And tratium, is there any kind of final thoughts on how people should think or look at Tokemak and anything that you want to end the show off before we get into some questions?

[00:53:39.430] - tratium
Yeah, sure. So I don't have any Alpha leaks in particular. Again, I'm just a community member. I don't have anything. I'm not privy to anything that's not public information. But I will say that I have been in crypto for a very long time. And as I mentioned at the beginning, very few projects have really piqued my interest. Like Tokemak, and I think it's really important to understand the utility that it unlocks people who actually use Web Three and use D Five. The issue of Liquidity is painfully obvious. Almost every single D Five 1.0 project, if you look at the chart in USD terms, in F terms, they have a huge spike up and then it's just a slope down to basically trending to zero. And it's not because the projects are bad, it's because Liquidity Mining incentives are completely unsustainable. And genuinely, Tokemak is the very first project that actually aims to solve that in a way that is instantaneous and accessible. Olympus Bonds, I think, are also a great product for that. But Tokemak, the instantaneousness of Liquidity To directing is, I think, going to be a game changer. So, yeah, I just encourage people to, if you are a community member of a Dow, show it to the founders, show it to the rest of your community, because Liquidity Mining is going to kill your project if you don't do something about it.

[00:55:11.420] - tratium
And Tokemak is the solution for it. So, yeah.

[00:55:17.230] - Speaker 1
Love that. Yeah. Liquidity Mining will kill your project. Cool, man. Well, I appreciate you coming on here, and anyone want to hop up, share thoughts, experiences, maybe using Tokemak, we'd love to have you up. So please just request Flame, any thoughts from the show here?

[00:55:39.610]
Yeah.

[00:55:40.110] - Speaker 3
First of all, I just want to thank you for coming on. This is all more about a project that I've been involved with since unfortunately the day after the Dao Genesis ended. But I've held every single token that I bought since then, and I even have a token back sweatshirt because I'm that big of a nerd. And I think one thing to underscore here are a couple of points that have been touched on and I think are really the cornerstones of why a lot of people love Toke back and why we thought it was important to have you on as a guest. You know where the spaces is called Djen responsibly, right. A lot of people, when they were Liquidity Staking, got killed by impermanent loss. And I was one of those people in a couple of different situations, and I was just like, enough. I don't have time to actively manage LP positions to this level to where I don't want to get cleaned out this way. And then Tokemak came along, I was like, well, this is a no brainer, single sided staking to create liquidity with no impermanent loss. If there is a definition of being a responsible agent, it's that right there.

[00:57:06.840] - Speaker 3
And then you take it to the next level and you have this gas less governance, right? You can vote gaslessly. You can do all these things gasoline. You have to pay gas to stake and unstake. But that's kind of part for the course in any protocol. So there's new primitives being built. You know, Tokemak is an innovative platform, and it's really helped projects succeed in ways that weren't available until these mechanics were put in place. So I just want to say the whole reason we got this Twitter space to start is because we wanted to talk to other people and understand more about how they're making these investment opportunities possible. Right. And I really appreciate the fact that you guys not only are continuing to innovate and continuing to put out new products on top of the products that already exist, but you're also creating more and more value for your community. And the community itself is still a very vibrant.

[00:58:41.730] - Speaker 1
I don't know if we're getting rubbed by Twitter or not, but we had a request and Link Fighter is up here, but really quick on that flight. Thank you for really explaining why we started these spaces. Our account is Djen responsible in the top left corner there. Please go and give it a quick follow. And it's meant to be a community led space that is not specific to any one project, and we're trying to kind of cross pollinate good quality people and projects operating in the space. But Link Fighter, welcome up here. Do you have a question or something you want to say?

[00:59:22.230] - Speaker 5
Yeah, I'm pretty new to Toke Matt. First of all, shout out to all my Link Marines. As far as the single side of liquidity goes, is there anything that makes you guys different than Bangkok?

[00:59:33.630] - tratium
Yes. So Bangkok is commonly kind of referred to as a competitor to the Mac I, but don't see it really as a competitor because Bank Or itself does offer single sided and permanent Lobis protected pools, which is fantastic for liquidity providers, but it's only for liquidity within the bank or AMM. The kind of second dimension that Tokemak unlocks is being able to deploy liquidity to other AMM. So, for example, if Tracer wanted to say, hey, encourage their users to provide liquidity into Bangkok, that's great. And they can tell other users to swap on bangkor. But that doesn't really help if users want to swap on sushi or on other decks or maybe in the future other sexes. And that's kind of the extra level that Tokemak offers. Is it's both Bangor and Tokemak offer that single sided and permanent loss protected pools, but Bank Or does not have the ability to deploy liquidity and that kind of limits its usefulness to Dows as this kind of liquidity mining mercenary capital eliminating service.

[01:00:50.610] - Speaker 5
Right on. Yeah, keep up the good work. I'm going to stick my TCR there and let's get a link vault opened up.

[01:00:58.470] - Speaker 1
Yeah, man. Thank you for hopping up here. The Tracer team is actually OG link builders in the ecosystem. So we're huge fans of Link, of course.

[01:01:11.830] - tratium
Cool.

[01:01:12.330] - Speaker 1
I actually was just looking at bank. I used bank work back in the day because it was one of the OG. They have 1 billion in total liquidity there. I'm trying to assume that is on the platform, but Tokemak has 1.5 billion in TV in their products. So even though Banker has been around an OG builder in the space, Tokemak has come along and kind of like the last six to eight months trading and really opened it up.

[01:01:48.050] - tratium
Yeah, it's been crushing it. And I guess maybe my last thing. I would like to kind of Echo what Flame said in that a lot of Echo what he said. And also go back to what I said earlier about liquidity mine will kill your project. And I desperately want crypto and DeFi to succeed. But again, with the attention economy where people's attentions are almost directly correlated to token price, we will see this never ending cycle of projects, new projects being released and then fading off into irrelevance as their token price gets demolished by liquidity mining. And the only solution to that is to have sustainable liquidity. If we're going to have long term projects are going to stick around. And so we want D Five to succeed. In my opinion, it's the first project that does this like partner first approach where everything that Tokemak touches and everyone that partners hand in hand, it's like a rubbed your back rub mine sort of situation. Everyone benefits, the users, the protocols, the Dows, the VCs. It's good for everyone, it's a healthy environment. And that's the only way that D Five is going to succeed if it's sustainable.

[01:03:02.990] - Speaker 1
And I would add like the voting mechanism behind Tokemak like you're taking 40 projects and you're selecting five and in that process there's like due diligence happening. People are looking under the hood and saying, hey, is this a good team? Is this a good project? It's almost like high signal on what people should be looking at in terms of kind of quality. Around D Five projects, it's almost impossible to look at Coin market cap or D Five Llama and be like, all right, what is good here? And so when you go to the tokenic reactors, you see kind of that community DD from other people that either have a token economics perspective or they have a developer perspective or they understand smart contracts or they understand governance or community, et cetera. I think that's like an under. Yeah, sorry, go ahead.

[01:03:53.900] - tratium
That's a great point because it is like a curated list of projects and founders that get it?

[01:04:00.590] - Speaker 1
Yeah, no, absolutely. Any other kind of thoughts from the community or questions to end us off here? Well, maybe keep it open for one or two more minutes but this has been like an awesome space. Again, please follow the DJ responsely channel. We are going to bring on some dope people we're going to trade back on here. I saw trading that you had tried to do a podcast but no Bueno on that. I think you could easily be you just needed a good co host, in my opinion.

[01:04:33.710] - tratium
Yeah, I was sitting in front of my mic and stuff just trying to talk to myself and I just couldn't do it. I had got my wife to sit next to me and try to talk to her and have her be like the rubber duck but it didn't work. Having a normal conversation with humans like this is much easier. I will say that. Yeah.

[01:04:49.620] - Speaker 1
I love that. You're actually more than welcome to come on the show any time so just let us know when you want to chat about something and if you want maybe down the road to be kind of a co host, we'd love to have you also join us on a consistent basis so we'll leave that invite open.

[01:05:08.280] - tratium
But yeah, I'll keep that in mind and I'll hit you guys up.

[01:05:13.130] - Speaker 1
Yeah. Flame. You want to wrap this one up?

[01:05:20.190] - Speaker 3
Yeah. Sorry for the pause. First of all, thank you all for coming and being a part of the audience and for asking questions and participating. The whole point of this is for us to all kind of figure out how to navigate our way through the roller coaster of crypto and NFPs and the goal is to keep bringing on guests that are doing quality work and that we can all hopefully learn from and figure out how to be better investors and literally DJing responsibly. With that being said, thank you all for great space. Definitely look forward to the next one and be on the lookout for a tweet announcing our next guest should be a good one. Thank you.

[01:06:10.990] - tratium
Thanks for having me, guys.

[01:06:11.880] - Speaker 3
I appreciate it.

[01:06:14.770] - Speaker 1
Drop some hearts in the chat here for heart reactions, for trading and the squad. Let's get those hearts going.

[01:06:24.310] - tratium
Thanks for the love, guys.

[01:06:26.110] - Speaker 1
Show that love. There we go. Awesome. All right, everyone. Have a good night.

[01:06:32.300] - tratium
Take care.

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