On April 15th, Synthetix made its debut in China. Its founder and CEO Kain Warwick had a video chat with Cobo co-founder and CEO Shenyu in the Mars Finance App. The two discussed and shared the synthetic track in the DeFi field, Layer 2, NFT, and DAO governance , the future development of Ethereum and other hottest topics at present, the following is the guest sharing text arrangement.
The live broadcast is supported by the exclusive live video broadcast of the Mars Finance App; translated by Dorothy, head of Synthetix Greater China.
God fish:
God fish:
Today I am very happy to communicate with the founder of Synthetix about some future developments of DeFi and the current status of Synthetix. First of all, I would like to invite guests to introduce themselves and the Synthetix project.
Kain：
Hello everyone, I am a serial entrepreneur with 20 years of entrepreneurial experience. I started my business in the currency circle in 2014. At that time, I worked as a payment company to help users buy coins with cash; in 2017, I founded the stable currency protocol Havven; After a transformation, at the end of 2018 and early 2019, the protocol was transformed into a project that issues derivatives like Synthetix.
We not only make stable coins like SUSD, but also support gold, Tesla stocks, and various assets such as commodities, indices, foreign exchange, etc. Our vision is to issue various assets on Ethereum , so that everyone can trade without access and threshold.
God fish:
God fish:
Why did the 2018 bear market transition from a stablecoin protocol to a synthetic asset class project? What kind of setbacks and difficulties have you encountered in the process of laying out this track? In addition, I am personally curious. The current development of DeFi revolves around assets that have been digitized. After the explosion of ICO in 2017, many assets were left on the chain. The path chosen by Synthetix is to move assets off the chain to the chain , this road is not very easy, you may encounter many problems and setbacks, how do you all solve them?
Kain：
In 2016, TEDA’s USDT was the only option in the entire industry. Everyone knows that USDT has various problems. When I started my business, I felt that the market needed more choices, especially decentralized and transparent. high choice.
However, in 2018, with the issuance of stablecoins such as TUSD, GUSD, and HUSD, it was difficult for the decentralized stablecoins of the Havven project to compete with these fiat-backed stablecoins in the market at that time. We hope that our stablecoin products will have richer and more differentiated uses, so we have made this transformation.
In addition, although native tokens are more understandable or easier to use for everyone, in fact, the demand for commodity products, stocks, and securities we issue is still quite large; moreover, the native tokens issued by Synthetix include BTC, Native tokens on blockchains such as LTC and XRP did not have good decentralized trading channels at the time, and it was difficult for everyone to trade these tokens on decentralized exchanges, so Synthetix provided you with a Good choice.
God fish:
God fish:
OK, we have a general understanding of the early development process of Synthetix. Next, can I ask Kain to introduce the operating mechanism of Synthetix in detail? Because synthetic assets are involved, the whole system is still relatively complicated. For many novice users, they may not have a systematic and macro perspective to understand some of the operations. I would like to take today's opportunity to ask Kain to explain to us what this system is like.
Kain：
God fish:
Layer 2
God fish:
A big challenge facing DeFi now is that the overall network performance is challenged by the DeFi boom, which leads to the congestion of the entire network. Under such circumstances, the community is also exploring many Layer 2 solutions, and Synthetix is also relatively early We started to explore and test some directions of Layer 2. We would like to ask about the current practice of Synthetix in the Layer 2 network, what progress has been made, and why such a solution was chosen?
Kain：
Our products are very complex from the perspective of smart contract design, so the fuel cost for calling our contracts has always been higher than other projects.
So during the whole process of the price of Ethereum rising and the network getting more and more congested, we realized very early that we needed to solve this problem, and it took us six months to explore a feasible solution. The solution is about Optimism. Uniswap and Optimism cooperated to make a demo called Unipig. After seeing the demo, we felt that this is what we want, so we spent five to six months working with Optimism on Optimism. Develop our Layer 2 network solution, and the complete Layer 2 solution will probably be launched next month.
God fish:
God fish:
My main concern is whether a unified and composable network can be formed in the end. It is still in the stage of observation and learning. We look forward to the early application of Synthetix on the layer-2 network.
God fish:
God fish:
Ethereum has just completed a Berlin hard fork upgrade. In the past year or so, especially during the period of the DeFi explosion, we have seen various innovations and application developments on Ethereum , In response to these phenomena, I would like to ask what kind of prospect Kain has for the future of Ethereum? In addition, I would like to talk about how the next hard fork, especially the 1559 proposal, will affect the DeFi protocol layer?
Kain：
Since 312 last year (Black Thursday for me), both the usage and the price of Ethereum have been rising. It is very important to find a suitable expansion solution in this process. Synthetix has long been exploring the feasibility of this aspect. At that time, our choices were very limited, but now more and more expansion solutions are emerging in the market. Compared with our then, the current project has many choices. In the next 6-12 months, I think that although these expansion plans are uncertain, I am more confident that one or more expansion plans will be verified, and we will be able to achieve a certain degree of expansion this year.
In addition, the 1559 proposal mainly wanted to solve the problem of user experience (UX) at that time - the fee paid by users was too high. From 1-3 Gwei in a single transaction before, it has increased to 100 Gwei now, and the increase of dozens of times is very important for It is unbearable for users. The original intention of the proposal is to solve this problem. By changing the policy and burning Ethereum to improve the problem, this process will have some negative impacts on everyone in the entire ecosystem, including the protocol layer, users, and miners. , but on the whole, I believe this proposal is a good thing for the entire Ethereum network, so I support it.
God fish:
God fish:
This week, F2Pool just finished testing and launched the MEV version of the node, captured some arbitrage profits in DeFi, and shared the profits with miners. Another thing is that we have seen that due to the massive adoption of MEV mining pools recently, about 60% of the entire network has adopted nodes like MEV, resulting in a decline in the use of invalid space in the entire network. In the past, there were a lot of arbitrage and IDO transactions. With MEV, these transactions will no longer occupy a large amount of space in the entire block, so the network has improved in the past week or two.
The other is 1559. We believe that 1559 will improve the user experience, and the important point is that the Ethereum protocol itself can capture the dividends in the entire ecological development process, so it may sacrifice some short-term benefits for the entire Ethereum ecosystem. But the future will bring explosive economic models and potential, so we also support 1559 - although there may be short-term pain, it will bring a better future in the long run.
Kain：
Since Shenyu mentioned flashbot, I also want to mention that the emergence of flashbot represents the most interesting point in the industry: sometimes we face a problem and come up with a solution, and then this solution can solve an unrelated problem. For example, we are faced with the problem of capacity expansion and MEV, and the solution of MEV alleviates the problem of block space occupation without threatening network security. This is also the most interesting place to do blockchain development.
God fish:
God fish:
The next question, we see that the Ethereum ecosystem not only brings products such as smart contracts and DeFi, but the entire community has also made a lot of explorations and attempts around decentralized governance. Synthetix is also the earliest DeFi project that started to move towards decentralization. Regarding the transformation of governance, I would like to ask the boss of Kain, can he share the progress and experience of community governance, and look forward to the possible form and prospects of such a DAO organization in the next few years?
Kain：
The three most interesting aspects of the blockchain industry to me are financial engineering, computer programming, and community governance. I think community governance is more interesting, and it is also the driving force for me to continue to innovate in the industry.
Synthetix can be said to be the most active and radical project to try a new governance model among all projects. Very early on, we began to transform from a foundation to a DAO model.
During this whole transformation process, we cannot say that we have reached a state of 100% decentralization now, but we will be a little more decentralized than other projects. Our exploration in DAO may not be of great significance independently, but I hope that our transformation process can leave some positive impact on the industry in the long run and leave a case for everyone to explore.
The Synthetix governance model has two major chunks:
1) Spartan Council (representative system), eight members are elected by all community members in Discord every three months to form the highest council of Synthetix, which can make decisions on all proposals (the founding team is not in this council, there is no vote right).
2) Three DAO organizations:
Synthetix DAO (cash reserve management authority inherited from the Foundation)
Grants DAO (rewards for ecological projects, also self-governed by the community)
Protocol DAO (do protocol update)
Synthetix is composed of these three DAOs. It is neither a company nor a foundation. It is a relatively decentralized organization. The founders have no voting rights in the Supreme Council and cannot decide everything. They can only influence Or persuasion to fulfill your vision.
In addition, I think that the governance of all blockchain projects may be divided into two stages. The first stage is the previous corporate system and foundation system, which are relatively centralized; the new stage is that the project is a DAO organization. centralized.
When we just started the transformation, we were crossing the river by feeling the stones. We didn’t have so many tools. We worked with Compound, MakerDAO and other companies in the industry to help the industry develop better tools. Now new projects come out At that time, they will be able to get good support, because they already have ready-made governance tools to use, and it will be relatively easier to step on the shoulders of those in front of them to explore.
Share a few governance tools that I think are good:
Aragon is a project that the entire Ethereum community likes very much, but we later realized that there are some problems with this project. It has too many service areas, and it is really not so convenient to use;
Snapshot is a good project that can vote through offline signals to help users save fuel costs;
Compound has a governance section that can change the protocol code directly on the chain;
God fish:
NFT
God fish:
In addition to the recent vigorous development of DAO in the DeFi field, we have also seen that the overall innovation and popularity of NFT are also very high, attracting a large number of non-blockchain users. In addition, NFT projects combined with DeFi have also begun to appear. We also see Kain's younger brother also made a very cool NFT game project, can Kain please introduce this project to everyone? In addition, we learned that Kain is a very experienced collector in the NFT field and has collected many interesting NFT items. Can you share with us your experience in NFT collection here? How do you view the future development of NFT?
Kain：
My two younger brothers, Kieren and Aaron, made a battle game, sort of like battle orders. I think the biggest attraction of such NFT games to gamers is that players can truly own game props without worrying about developers or game studios changing parameters or deleting props.
For users, NFT is more attractive than DeFi. Because there are very few people in the DeFi circle who really understand finance or are willing to use financial tools and products, which account for a very small portion of the global population. On the contrary, art is a common language for all mankind, and everyone can resonate. There is no high threshold. It is wonderful to combine the art with the digital world, so I like NFT very much.
We have seen many artists enter the NFT field and share their artwork with users all over the world. Let me share. I just won a bid today and bought a painting that plays a small movie in a loop, from an artist named Life with Art. This painting is actually not expensive. It only cost me one ETH. In fact, I don’t really want to Tell everyone, because after I finish, people may bid on his artwork with me.
(Please ask Kain to share his most expensive NFT collection)
I spent 35 ETHs on dontbuymeme’s Hayden character limited card and gave it to Hayden (the founder of Uniswap), but the most valuable NFT I’ve ever bought should be Cryptopunk. Looks like it's worth $70,000.
God fish:
God fish:
I am actually a novice user in the NFT field, and I don’t have that much understanding of art, so I just buy it casually. In 2017, I bought a lot of abandoned projects, a game called Crypto Nation, which cost more than 500 ETH at the time. If this is an NFT, it is the most expensive I have ever bought.
Recently, I have also been looking at some NFT collections, such as the recently popular 1111, which is selling well on Opensea. Yesterday they issued an announcement saying that they will launch a satellite into the sky, and then the photos taken by the satellite will also be made into NFT airdrops. holder.
I think more and more interesting stories and some directions will develop on NFT. Maybe in the future, NFT will be combined with distributed personal data. In the future, everyone’s data can be confirmed by NFT on the blockchain. Use and transaction; In addition, privacy and some other technologies may be combined to accelerate the progress of the entire human society while ensuring the privacy of this individual, because a large amount of data can produce good economic effects and accelerate the development of scientific applications; and then In the long run, the future is not limited to the confirmation of some digital art right now, but may be more about the processing and use of data closely related to human beings, so I am still very optimistic about the future of the entire NFT.
Q & A session
Ask Kain a question
1. What do you think of Synthetix’s imitation disk?
Kain：
Our earliest imitation disk was released on TRON, and it was posted by a community member. He has been lurking in the community for a long time, asked many questions, and finally released a fake disk himself.
I am not surprised by these imitation disks, and I have nothing to worry about. They do not affect us, because I think the community and consensus are the most important, and this is the decisive factor affecting a product, the common beliefs of users, the trust in the product or the founder, these things cannot be imitated by others.
If it is a relatively simple spot trading platform like Uniswap, it may be easier to imitate. A relatively complex product like ours requires an understanding and experience of financial products, and it is not so easy to imitate, so we are still very confident and will not care too much about imitations.
2. What are the advantages of Synthetix over UMA?
Kain：
The advantage of Synthetix is that we can support assets with relatively high valuations and relatively high liquidity, such as BTC, ETH, and Tesla stocks, which have good liquidity in the market and have a high market value. They are brought to Ethereum, allowing everyone to trade directly on Ethereum.
The advantage of UMA is that some long-tail products are products with poor liquidity and few people trade in reality. They are more suitable for derivatives with unique and unconventional designs.
Ask the Godfish question
1. Will Ethereum’s DeFi be robbed of most of its shares by BSC?
I don't think that's going to be the case in the medium and long term.
Ethereum is currently very innovative, and there are endless innovative and challenging projects, which prevents it from stealing shares because of the cheap gas fee on BSC; in addition, the entire ecology of Ethereum is also actively exploring, including the second layer. In the long run, the overall infrastructure and value of the Ethereum ecology may be much greater than today, so I think these two networks may use BSC as the side chain of Ethereum more to see
