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Speaker E: Yeah, so there are a few most important aspects that we're working on. In the same theme of creating access for users, we are taking restaking natively live on some of the l two s working with a couple of partners there who can offer native restaking for Kelp Tao on l two s directly so users don't have to bridge their assets back to mainnet and restate. This is first of its kind and I think it is going to save a lot of gas, fees and effort for users. So l two expansion is the most important thing that we're focusing on, apart from creating defi opportunities. We already have over $15 million in lp pools across four dexs, soon getting to 40 million. And then that opens up a lot of lending market integrations and CDP protocol integrations that users can access. Those are the two things. And then apart from that, obviously under the same theme of access, working with Ledger and several other wallet partners to have restaking where users are using their platforms.
Speaker A: Okay, so just taking that same relationship that you built at stator, instead of hey, stake with stator via ledger, you are saying, hey, restake with Kelp via Ledgere is a partnership that is underway.
Speaker E: Yep, yep, absolutely. And the third most important thing that we are focusing on is actually creating some, creating some interesting products and use cases for avss because those. So the AVss are going to be a very important and critical part of the Eigen layer ecosystem. So we've been running some experiments and problem solving with a few aviasses on some of their requirements. Like some some avss want triple staking. They want to stake their governance token, use that as a security and their partner's governance token, use that as a security along with ideally as security. So all of these interesting use cases are coming up during our conversations and learnings with the AVSs. So focusing on that and soon we'll probably see some interesting products coming out of that stream as well.
Speaker A: Beautiful. Amit, if people are peaked about kelp Dow and they want to learn more, where should they go?
Speaker E: So they should just simply log into kelpdao xyz you can find all information about kelp dao smart contracts are security which is the most important thing along with option to stake or restake your assets.
Speaker A: Beautiful. Where did the name kelp come from?
Speaker E: Kelp is this algae that powers this entire underwater ecosystem and we believe restaking is going to be such ecosystem which is rich and supports a lot of dapps and applications. So hence the name kelp. We want the RSC token to kind of nurture the entire ecosystem.
Speaker A: Beautiful. Love it. Amit thank you so much. Banknotation. We are here with Daniel from Swell. Daniel, welcome to the show.
Speaker G: Great to be here. Thanks for the opportunity.
Speaker A: David Daniel, I think swell might be the earliest, the oldest of all of these projects. You came onto the world of staking first, before liquid restaking. Talk about the beginnings of swell, the inspiration to build swell. And then we'll get into the pivot, into lrTs.
Speaker G: Yeah, absolutely. Yeah. So just a quick background on myself. My name's Daniel. I'm the founder as well. Originally, my background has been a mix of finance, technology and innovation. And then really went down the crypto rabbit hole a little after the sort of ethereum, ICO went into a reading of austrian economics, trying to understand central banking in one thing, led to another, and then into bitcoin, into Ethereum, then into DeFi, in terms of the original inspiration for swell, saw an opportunity in late 2021, early 2022, to do something in what I thought would be one of the most powerful crypto economic primitives, which was the LST. I thought it would be the thing that would really take DeFi to the next level, to have a yield bearing instrument backed by Ethereum sort of consensus mechanism, and then put together a seed round and then was off and away from there. And then we launched our LST in early 2023, and then basically saw some good traction there. Got up to about 100 million in TVL, and then saw the writing on the wall when reading the Eigen layer whitepaper and seeing that, look what the LSTs did for DeFi, the LRTs are going to do in a much bigger way. If the bent model is sort of like, you have this yield bearing instrument powering DeFi as a base layer asset. Well, the LRT is sort of like a double plus yield bearing instrument powered by this new sort of ecosystem of upcoming Avss as an Eigen layer. And then it made sense for swell then to really triple down on that.
Speaker A: Yeah. And the timing, I think, was pretty interesting for you guys, because you guys, like you said you guys were going to build an LST, but then you're pretty, like, fortuitous and in the way. And when Eigen Lair was born, if you will, for then you'd be able to take that advantage, all of the deposits into the LST version of swell and turn that into the LRT version of swell. Talk about that transition, because I think that is what swell is currently going through. Talk about the transition from LST to LRT. And, like, the logistics behind all of that.
Speaker G: Yeah, absolutely. I'd say, like, generally speaking, we're still sort of early ish in the, like, evolution of lrts generally. I think that LRT design will continue to shake out as Eigen layer moves through its various stages in this roadmap, with stage two, stage three, or m two, m three, respectively. And so far as swell is concerned, one of the biggest integrations from the LST perspective was always to get the LST accepted as restaking collateral on eigenlayer. So that was a big unlock for us when Eigen layer did decide to expand its universe of LST collaterals to be accepted. And then throughout that entire time, we were building a very strong community that was passionate not only about liquid staking, but also this new phenomenon of liquid restaking. And so when eigenlay did open those caps, initially, we saw a massive influx of people basically looking to get exposure to restaking. And we're in the middle of this incentive campaign with our voyage. And it made a lot of sense for people to effectively farm both swell pearls and Naga layer points, too. And then we recently launched about two weeks ago, our own native LRT, called Rsweeth. R suite is effectively a mechanism for people to get uncapped exposure to eigen layer points in a way that has the underlying validators natively restate. So this is the current sort of state of affairs at the moment with swell. We're currently undergoing the development of r suite v two. And what r suite v two will enable is not only the acceptance of native ETh at the underlying, but also LST, such as sweeth. And that will sort of be a really important step to us. Eventually hoping to unify some meaningful percentage of restake liquidity on eigen layer for utilization in deFi, with maximum composability and optionality for restakers.
Speaker A: Beautiful. And that's when twelve will become like one unified system and be able to inject all of its liquidity from its LST into its LRT. So like bringing the advantage of being early into the world of native. Of restaking. Right?
Speaker G: Exactly right.
Speaker A: Beautiful. Okay. What would you say is the competitive advantage of swell? What does swell bring into the world of LRT? Is that what's your guys strategy?
Speaker G: Yeah, absolutely. I think just generally in terms of it from an advantage perspective, I think the fact that we spent a lot of time thinking about Ethereum staking like on the beacon chain side, at first principles level for such a long time, is a competitive advantage. And also our understanding of Defi, which is in some ways one third of the total LRT spectrum, if you think about in terms of the beacon chain defi, and then everything on eigenlayer. So we have the beacon chain and Defi ready to go and I think everyone's sort of starting at the similar point in time as regards Eigen layer, trying to figure out, okay, how does this thing actually work? Where are the risks, where are the like, how does the rewards work and where's the opportunities? And how does one best position themselves to win the market? So I'd say that's firstly the advantage. And I think from a legacy standpoint, or from an origin standpoint. Moving forward, though, I think in terms of our approach, there's been really three key things that we've really focused in on as regards our design for an LRT protocol. The first thing is really advocating for an ecosystem first approach. So swells effectively created a liquid restaping council that comprises some of the best operators and most promising ABS's on eigenlayer. So we have folks like alt layer there, witness chain, Emstone P two, and a whole host of others as well. And having them be part and parcel of the co building process means that the LRT that we will build out and continue to iterate on will be purpose built for those ecosystem actors within Eigen layer. Because it's all about try to match up across the opt in mechanism between restakers operators and avss. The second thing as well, in addition to the ecosystem approach, is also having a real focus on risk. And so part of that we've been working together with like the Argon Labs team directly, and also with various risk experts, including chaos and Gauntlet, as regards things like abs selection, pricing, underwriting, and these sorts of things, so that we're going in with eyes wide open as regards sort of risk return and these sorts of things. And the final thing for us is really just about trying to drive as much value to the underlying LRT as possible. And so being early to these sorts of collaborations, and then driving the rewards and passing them through to our restakers, and also exploring ways in which we might be able to vertically integrate some of this stuff. So looking at, okay, not only what's an LRT, ultimately it's a liquefaction of restake liquidity. But then what else can you do on top of that? Could you create things like a sort of a proof of restake l two restake roll up and then pass through the revenues to the LRT. Like these sorts of things that were sort of constantly ideating on, which is like, really a part of like this well core contributed DNA is to think about these sorts of things.
Speaker A: Beautiful. That was. That was a lot. Wow. Um, one of the things that you touched on is about just making sure managing risk while also integrating with the AVss. Right. And kind of the idea that I've had about LRT's, it's all about maximizing exposure to yields while minimizing risk. Right. Like how much extra yield can you get while making sure that you never ever get slashed? Do you have any strategy or plan around this?
Speaker G: Yeah, I think generally speaking, the strategy is really about trying to quantify and qualify what operators to work with and also what avss as well that those operators will be opting into, and then understanding not only how those interact, but also like the underlying assets of the restaking pool itself. And so a lot of that is just going to be like constant dialogue with the operators and the avss as well, and then being able to feed into these models and then applying governance and interventions when necessary, particularly in the nascent stages of the technology, much in the similar way that Eigenlay has approached it with their committees, with their multisigs, with their step through in terms of sort of opening up gradually through guided launch, liquidity, getting battle tested audits and these sorts of things. So, yeah, it's definitely multifaceted approach as regards risk.
Speaker A: What are you guys working on right now? Like, what is on the near term roadmap for swell? And then just overall, what would you say in the swell community? Are people excited about?
Speaker G: Yeah, definitely. I think the key new term things that we're working on is LTG. So we're getting busily ready for that. The other thing is governance and like Dao operations, which will come part of the token being live. We've got a flow with defi integrations as well, that we want to have for our LRT, including supporting that with various oracles and whatnot. And also some cross chain plans, too. In terms of what the communities are most excited about, I'd say it's a token. So, yeah, surprise. Yeah, so we want to make that as successful as possible. And, yeah, just keep, keep growing the protocol and keep providing as best as we can. Really seamless and easy to use reking experience since us.
Speaker A: Well, you guys have been around for a while because again, you guys did the LST before even like, re staking was even a thing. So you guys have grown a community, which I think is one of the kind of unique things as well. You guys have actually had the time to collect a bunch of people who are now, what do you call them? Swelling. Swellers. Swellers, yeah. And so like talk, talk about the growth of the, the swell community. What's the vibe of swell culture.
Speaker G: Yeah, I think the vibe of swell culture is. I think a lot of people wanted the restaking it early and we told them, look, we can't get it on the first one. We didn't, we didn't make it to the first whitelist, but we'll be there for the second one. So I think the spot community is really invested in restaking. I think they really invested in Defi. I think we have a quite a crypto native and defi savvy user base. We've got circa, you know, 100,000 stakers or unique depositors at the moment. Even if you were to sort of like take out some of the, like, potential, like gaming or sibling, I think it's still a very strong community. So, yeah, I think people are really excited about restocking, to be honest.
Speaker A: Beautiful. If people want to go and open up like the technical documents or just read a higher level landscape about swell, where should they go?
Speaker G: Yeah, they just go to our website, swell network and then just jump into the docs section and then, and if you have any questions, feel free to jump to the discord. The teams always happy to answer any questions and take on any feedback.
Speaker A: What about you, Daniel? Where can they follow you?
Speaker G: Yeah, you could just follow me on, on Twitter. My handle is Daniel. Swell underscore beautiful.
Speaker A: And we'll get all those links in the show notes. Daniel, thank you so much.
Speaker G: Thank you so much, David, appreciate your time.
Speaker A: Break this nation. I'm here with Lucas Kaczynski of Renzo. Lucas, Chris, welcome to the show.
Speaker F: David, thanks for having us. Excited to talk about Renzo and what we're up to.
Speaker A: Hell yeah. Let's talk a little bit about you first. Who are you? How did you come to be at Renzo? What's your quick crypto background?
Speaker F: So I've been in the space full time since 2018 1st, joined the Tezos foundation and was what a company called Tokensoft and then a founding contributor to a project named Moonwell, which is a lending protocol. Earlier, over the summer, summer of 2022, a group of us got together and started just brainstorming about how Eigen layer is going to play out some of the challenges. And what we realized was that there was a need for two things. A product that could align incentives very well, both on users that are trying to stake and avss is trying to get those stakers and somebody that, a team that had experience on managing risk and has been around in the space for a long time. So we pulled together a small team this is June, July of last summer and started building Renzo in August.
Speaker A: Beautiful. And how the team come together. Who did you, how did this team form? Who are the other founders and team members?
Speaker F: Yeah, so the contributing founders to Renzo. We all know each other. So there's three of us, James and Krathik. I was a portfolio company for Krathik when he was at a fund named Woodstock. And James previously co founded Tokensoft. So when I worked at Tokensoft for two years, I reported directly to him. So what you essentially have is three founding contributors that have a technical background, heavy research quant background, and a growth operations background across the crypto space for the last six, seven years.
Speaker A: Beautiful. Let's go into a little bit of that realization that you had about just the aligning of the incentives between the users, the liquidity and the avss. I really like that as an entrance point. Let's just keep, keep going down. That conversation shed a little bit more light about just like the problem that you identified and wanted to help tackle.
Speaker F: Yeah. So when you look at Eigen layer and you take a step back, theres a lot of noise right now, round points and everything else. But at its core, Eigenlayer has AbS's as you guys done a really good job explaining what they are. And there are services that other projects are going to be using, mostly roll ups. And there's this really nice cycle that Renzo is able to help complete. And what I mean by that is ABS's have clients, and those clients are roll ups. Those roll ups are going to use ABS's and they need security. And that security has to come from somewhere. And there's a lot of complications. Not complications, but complexity built into eigen layer. Because it's a marketplace, it's a free marketplace to attract those users and make it very simple for them to have on and off ramp into Eigen layer is really important for an ecosystem to thrive. You need both parts of the supply and demand of the marketplace to come together. There's this issue right now where Eigen layer is attracting rollups to use them, but rollups, so we're talking like arbitrum optimism base, the same services that are being used and adding value. It's actually sucking liquidity out of those ecosystems. So Renzo is positioned in a way where we're actually aligned incentives with those roll ups, l two s and l one SDE and the avss, so that the value could also remain on those networks. And the reason we're able to do that is how we designed Renzo from the very beginning. So, this past week, we introduced our next feature, which we launched with just native restaking. Renzo is the first protocol that is actually able to take native restaking and lsts and use them as collateral to have one lrtail. And the reason that's really important is where we're seeing other players having to do things like vampire attack other networks to be able to bring that funnel in. Renzo is directly aligned with those ecosystems. So one of the partnerships that we announced was bnB. So, in a few weeks here, BnB users are actually going to be able to come to Renzo on bnb chain deposit, be ethan, and get easy eth back on that chain. So it completes this loop. Same thing with arbitrum. We announced a partnership with Arbitrum and Connex. Using Connext as the bridge layer, users on Arbitrum are going to be able to deposit eth. Native eth get easy eth back, and the TVL stays on that chain. And that same TVL is securing the same services that Eigen layer is essentially offering to roll ups.
Speaker A: Okay, I really like this. So, we have capital on these roll ups, mainly ETH, usually ETH stem stables, too, but ignoring the stables. And what you're saying is that you can either put your ETH in Eigen layer, or you can put it on the layer, too. And so right now, this thing, there's a tension here, because any capital that goes into Eigen layer is pulling away from liquidity. And Defi. Renzo is trying to actually complete this circuit. And so when you put it into the. Specifically the Renzo LRT, then actually, that capital gets immediately turned, returned back to the ecosystem in the layer two. Is this. Are you natively minting easy eth? Ez Eth is Renzo's liquid restaked token. So this is your guys particular one, is easy ETH natively minted on each of these layer twos? Or how does that actual, uh, flow? How does it actually flow back to the layer two?
Speaker F: Yeah, so you're spot on. We're trying to close this loop because what's happening right now, that TVL has to get bridged back to Mainnet, and the roll ups are losing their. Their TVL, uh, their users want access to eigen layer. So we are going to provide that. Um, easy eth will be natively minted on each of these l two s. And the nice thing is, it's not just native Ethan. But also, if that l two has their own LSt, you're able to actually deposit both into Renzo and get one lrt token back. So the fungibility and the user experience is much better because you're not fragmenting liquidity.
Speaker A: So that's like a mantle eth, for example. Is that kind of what you're alluding to?
Speaker F: Exactly. So like if you, if you look at mantle, Meath could get deposited into Renzo on mantle. You get easy eth back on mantle. But if they also have native Eth, you could also put that into Renzo and you still get easy eth back. And the reason that's really important, it seems like this slight differentiation, but the fungibility of a token is so important because for a user to have a good experience, when we say good experience, to actually be able to use DeFi properly, you need to have deep liquidity on Dex itself. The more tokens that you have, LRT's kind of representing it, you're fragmenting it and the user experience becomes really bad. And then essentially you start compounding what the integrations could be, whether it's a lending protocol, an aggregator, a per platform, the deeper the liquidity, the better experience that users have being able to use that asset.
Speaker A: Okay, so the strategy here from Renzo is you guys are just using layer twos as like your top of capital funnel into the Renzo liquid restaking protocol. Are there any other tricks up your guys lever? Is that the main differentiator or what else would you like to bring onto the table here?
Speaker F: Yeah, so we're starting off with Mainnet. So today you could go bouncer uni v three curve pool. There's a pendle pool and there's a couple other integrations in the pipeline. And then we're branching out to create the funnel, a bigger funnel for users to be able to actually access Eigen layer. And we're the only ones that have those incentives perfectly aligned. The other piece that is super important and we're going to start hearing about this a lot more as Eigen Layer DA and Eigen layer mainnet comes a little bit closer. All the frenzy right now is on points and these defi integrations, but where our team is actually focused. So there's eleven people now contributing to Renzo. So we're doing all these things, but at the same time we're spending a ton of time aligning on the risk management and how AVss are going to be captured. And what we mean by that is it's a huge coordination effort between operators and AVss to safely and efficiently be able to get capital. And then return those rewards that are getting generated by avss back to the users. And that sounds very simple, but there's quite a bit of complexity that's built in there and not everybody's going to be able to capture those rewards. So, for example, we see points right now on LRTs to be able to attract users and capital. We think that's going to actually get shifted down towards AVss because you're going to have new AVss that launched that can't pay stakers in ETH. Right. They don't have anybody using them, but they're trying to attract capital and solve for their cold star problems. So what are they going to do? They're going to incentivize an either point or their native token. So thinking about these things and making sure that you have a protocol that not only accepts native ETH, but is also able to collect ERC 20 tokens as rewards and efficiently return those to the users, that's where you start getting this risk return optimal strategy that we're building within Runzo.
Speaker A: Beautiful, beautiful. Okay, Lucas, what is near term on the roadmap that you want to highlight? What is getting users excited about Renzo?
Speaker F: Yeah, the biggest thing is essentially what we're talking about right now. So in a couple weeks here, you're going to see Renzo launch on arbitrum and on BNB chain. And in the coming weeks, you're going to see a half dozen other l, two announcements come out. Whether it's bass, whether it's metis, whether it's scroll. There's a lot of conversations going on with Linnea and bring in all these people and all these ecosystems really to Eigen layer. Right. So Renzo is becoming this settlement layer. And in order to be able to do that, we also have to take into consideration how risk is managed on the protocol.
Speaker A: One last question before we tie this off here. What about becoming a validator in the Renzo system? Is this closed? Is it open? What is the future of that look like?
Speaker F: Yeah, so the way Renzo is going to market, it's following a similar playbook that you saw Lido do a few years ago where there's a smaller set of operators, but they're extremely high quality. So right now, figment and P two. P are the two validators that are staking and will be restaking the assets deposited on Renzo. And over time, you'll see us decentralize that operator set. The reason that's really important is you want a high quality operator from a security standpoint, securing these avss because every single AV's is different and the operator has different requirements to be able to secure them. And the coordination effort to secure something very new is extremely high. So you'll see maybe three to five operators in the early days, and then over time, will decentralize as things become more easier and less risky.
Speaker A: Sure. Beautiful. Lucas, if people are peaked about Renzo, where should listeners go to find out more?
Speaker F: Yeah, just go to renzoprotocol.com dot. You could restate directly from Mainnet. It's literally one click super easy. That's we try to make it easy with easy eth.
Speaker A: Beautiful. Awesome. All those links will be available in the show. Notes. Lucas, thank you so much for joining me.
Speaker F: Thanks, David, for having us.