YieldNest: Restaking Vaults and AI Yield

0:00 Ladies and gentlemen, probably mostly gentlemen if we're being honest, I'm excited to announce a new podcast brought to you by Guardian called the Permissionless Podcast, and we're going to be going deep with DeFi Builders. We're going to see, you know, what it is that makes them tick, what it is that got them into DeFi, why do they keep building every day, what is it that keeps them up at night, what are some of the challenges that they overcome day-to-day, and really much, much more.

0:26 Today we're starting off with really a wonderful conversation that I had with myself and Brendan, our COO at Guardian, and Amadeo, the founder of YieldNest. And YieldNest, it really says it all in the name, is all about yield. It's all about taking the complexities of DeFi and the opportunities of DeFi and abstracting it away for users with their Max LRT products, where they essentially take all of the yield that you can get from restaking and securing networks, and then also compound that with strategies to move those funds into DeFi and put them to work in a risk adjusted way, so that users can have the best of dii without interacting with all the complexities, doing all the underwriting themselves, etc.

1:09 So this is something that in its own right is a very exciting idea for a protocol, but I think they're taking it to even the next level, and they're using AI in a way which I think is actually, it has some variability to it. I think there's a lot of fluff going on right now with AI x blockchain and, and all of the purported application of that.

1:30 I think that the way that they're using AI at YieldNest is actually quite interesting, and I think it has some Merit to actually bringing value to the end consumer, and, and I'll let Amadeo talk more about what that looks like as you see, as we get into it a little bit later on in our conversation here. But of course, before we jump into the conversation, my name is Owen, and over three years ago I founded Guardian, and really we set out with the premise in mind that DeFi and smart contracts on blockchains would house trillions, trillions of dollars of assets, and that they needed a Next Level, a next tier of security to really have confidence in shipping in that environment.

2:09 And today at Guardian, in our engagements we use two competing teams of researchers, both led by a world-renowned lead security researcher and accompanied by a full-time dedicated fuzzing engineer who's building out the infrastructure and setting up the necessary logic to be able to really battle test smart contracts against all the nooks and crannies and go to those Dusty corners of edge cases where maybe even perhaps a human mind is, is not well equipped to explore.

2:37 And even throughout all of our experimentation with our model and, and testing all these individual pieces together, we found that if you remove any one of these individual pieces, then the audit can miss up to 40% of the critical issues in the review. And so with that being said, with all of the experimentation that we've done, with all of the effort and resources that we've put into these reviews, I'm confident in saying that today we've ached achieved the standard necessary to onboard trillions and trillions of TVL, and already today with billions and billions sitting in smart contracts directly secured by Guardian.

3:10 Really now it's just up to the DeFi Market to catch up and give us those trillions to handle. But with all of that being said, let us now dive into the conversation with Amadeo from YieldNest. First of all, thanks for joining, dude. Happy to have you on and appreciate you making the time. So I guess first of all, really interested to just hear, like, what got you into DeFi, what was your path to getting started at YieldNest, and we can go from there.

3:40 Yeah, so it's a quite a long story, but yeah, let's go, guys. Thank you, thank you for having me and really appreciate it to be on the show and talk with you guys about decentralized finance and crypto and blockchain Technology. I am Amadeo, Brand, I'm from the Netherlands, background in computer science and economics. I actually got into Bitcoin a little bit by accident.

4:00 I, you know, like all the way back in 2011, I was kind of nerding around on the internet and found Bitcoin and was like, okay, well, this, this weird thing, didn't really understand. I bought a little bit and then it's was like, okay, forgot about, I was just a poor student back in the day, right? And then I didn't really understand it, but because of my interest and a little bit like, I'm a technologist, so I always was like kind of interested how would that work.

4:23 So I went to couple of meetups and yeah, it was cool, but then you know, in 20112 we had kind of this first Spike when it went from $50 to $100 and crashed down, like, all right, whatever, moved on and finished my degrees, and I always been pretty entrepreneurial, started working in corporate IT and insurance and Banking, and very quickly was like, hm, that Bitcoin thing is quite interesting.

4:46 And then I did more of a of of a deep dive, especially when Eve came out with smart contract. So yeah, 2012, 2011 was like my first touch point, and then in 2015, 16 I got re interested in it because time I was working in the Netherlands for a big corporate kind of IT organization, but was doing a lot with Banking and was working with in some big Dutch bank, and I was thinking to myself like, wow, these, these systems are so hard to work with, man.

5:13 From a developer perspective, this is hard. And then I think with smart contracts we could remove a lot of this complexities, and I got interested again, and then I went to meetups, and back in the day when you would go to meetups, you wouldn't get, like, overflow with memec coin[ __], you would actually have intellectual discussions and white and like programming, and that's kind of how I got started.

5:33 That's pretty cool, dude. I always love to hear, like, how folks found their way in, because there's no one path. It's always a different story and some circuitous route of how somebody sort of stumbled upon it, like you said, by accident, just sort of happened, and then you, you got interested. I can definitely relate to that. I think, well, first, you came in much, much earlier than I did.

5:50 I think around, like, 2021 when I saw Bitcoin just crash, that's what got me interested, and then looked at this thing called Ethereum, started reading Mastering Ethereum, and just like you, by, hey, that's actually pretty interesting, prettyy fun to just, like, binge a weekend learning about ECDSA and all this stuff. So yeah, they definitely relate to that, and always love to hear how folks sort of found their way in.

6:10 But yeah, I guess really how did from there, what sort of paths did you take, did you start an original dii protocol or DeFi project before getting to YieldNest, what was your journey there? I'm sure you've probably gone through the Gambit of different ideas and stuff before you got to where you are now. Yeah, so I was in this, is like in 2015, 16, this wasn't a bare market, right?

6:30 Like there was not 2017, the market started to rip again, but 156 I was like, oh, this is really interesting, and then I tried to explain it to my boss of the time at the bank, is like, hey, we can replace a lot of our infrastructure with this, and I think this much more efficient, but like, as that goes with new technologies, it's very hard to adopt, and it has a lot of issues still to resolve.

6:51 So at that time I started working for a hedge fund, so I start work with Cyber Capital, where I was a The security consultant and analyst and I had of it and everything. At the same time I was like doing everything in that fund, right? We had half a million dollars, but it was like we had the ambition to start a fund, and we started with small and then we grew to over 100 million in 2017, 18.

7:12 So I started more on the technical SL investing side, where the Cyber Capital was the first and still existing oldest crypto hge Fund in Europe, and it's still around, so functions, and I left that in 2018. Then 2018 was another Bear, right? This less interest, but I had a of a consultancy firm. I was doing a lot of like freelance software development and Consulting, and then in 2019 I started another fund for myself, this time DeFi Capital, where we build a full kind of corporate DeFi strategy for investors, and that went very well.

7:46 We almost timed the top perfectly with that fund, and that went great. With that in mind and that success, I expanded my wings and I was like, I want to do more real DeFi stuff. So then I went with Maker, Curve Finance and other amazing, like, Dows, mostly in the background as a contributor, and yeah, then after that I started YieldNest, because I was like, well, I, I would like to get more people into DeFi and build protocols that will kind of get rid of centralized Financial.

8:14 I'm a big believer that if we increase the velocity of money, we increase prosperity for Humanity, so I think that it's very important for us to, to find back that core culture and the reason why here. And I was like, well, I just want to embed my investment philosophy, not only for institutional investors or family offices. I want everyone to be able to just use the products that I built on chain in DeFi.

8:36 There is not no such thing as an Institutional or a retail investor in my opinion. Everybody is just the same, it's just go, right? Yeah, yeah, so I wanted to build these products for everyone. Yeah, that's what I, you be. Yeah, very disinflationary, bringing Financial products to the entire world, building for everybody at the same time, is not gated by all these regulations and all this stuff.

8:57 If you've got a, got a wallet, if you've got a private key, you can sign transactions and you can use the financial product. It also sounds like you, you've pretty much switched sides. You, you've come from the traditional Financial world, now you're on the other side, you're on DeFi, and you're pulling capital in, sort of, I think, as you say, like carrying out the vampire attack against centralized Finance.

9:15 What do you see for this over the longer term Horizon? Do you see, like, a full absorption of trafi TVL, as they say, into DeFi? What do you think that looks like? I mean, like, you guys live in New York, like, and I think we get in touch with some traditional financial institutions. In my opinion, a lot of the trfi, you know, it's crowded in bureaucracy, it's crowded in vagueness and annoying weird things that just protects a class of Elites that makes money of peasants, right?

9:48 Yeah, that's my view. And you know, like, I was good friends with people like Amaki, for example, and I admire people like that that have this vision, and that he now build dark F, and I think, think that in crypto you can see that now with all these mem coins and[ __]. Like, the reason why the president of the United States is talking about crypto and DeFi, the reason why it is a thing, is not because we launch mcoins, it is because we build a mutable Financial infrastructure that is ruled by mathematics and not by some sort of a bureaucratic law, right?

10:21 And I see a future where D5 is basically out competing centralized Financial structures, and, and I see a future where humans are more in control of themselves, and I think it will take time, but it is inevitable, and there's a lot of issues, but I'm taking that stance, and I think that we can create more velocity of money for everyone involved.

10:43 And myself, I travel a lot around the world and I do everything in crypto, so I, I do have bank accounts, right, but crypto is my, my life, and I think more and more people will live like that, especially when Europe comes with a CBDC or when the real plans of what Trump is doing will out. We will have to have a very hard industry and a very hard core of decentralized financial infrastructure that can weaponize and give us the tools to survive these attacks on our freedom.

11:10 Yeah, that's, that's my, yeah, I mean, I, I completely agree. I think, like you say, like the intermediaries, the middlemen, I think it's all kind of like a compensation for, I guess, like a lack of sophistication of the tools that we have to interact with each other, and I think really what we're seeing is we've got the level sophistication, we've got the technology, we've got the math, we've got it all figured out and implemented, and now we no longer need all of this blo to be able to transact in a trustless manner.

11:38 So I think we're just slowly seeing, it's really just a technology adoption curve, you know, it's like social, it's like mobile, it's like internet, like anything else that we're, that we're seeing slowly money and state, that is the, the end game, right? And, and I think we're losing that as an industry, but I think that that's why we're here, it's happening.

11:57 There's a lot of issues, right, with criminal, I don't want to build infrastructure used by criminals and stuff like that. Yeah, but I'm a big fan of real gun, for example, so you have privacy, but North Korea cannot La the money to it because there it's proof of Innocence, you can prove that you're just a normal user, right?

12:13 So I think those tools will come and Harden themselves. We're now in this weird phase in crypto where it's like memec coin this, memec coin that, and it's all a little bit like, it's all little unfortunately. But what do you think is the number one thing that is holding di5 back at the, this point? I think shiny object Syndrome from everybody involved.

12:33 I think Eve is still the main settlement layer for our financial system, like settlement assurances and time to finality matters more than transaction speed, in my opinion. Yeah, and it actually doesn't matter, right? Like G Finance, like Michael AG, fantastic Builder, amazing visionaire, and that infrastructure is really hard, and it's not going to go away. Uniswap V2 not going to go away, right?

12:57 So we're building these core Primitives on a immutable Ledger that is not controlled by anyone, and that is only going to get more more, right? And I think that what is holding us back is I think a lot of talented people are wasting their time on things where we could have, we could better work together to build, better proof systems, and I think blockchains are going to not called blockchains in the future, is going to be proof chains, right?

13:25 We're going to proof things to each other, and that's why transaction speed and stuff doesn't matter that much, it's all time to finality and settlement Assurance is that matters. And I think the whole industry is being grifted a lot, and there's a lot of meat grinders, it sad to be the most is all these meme coins where you get all these passionate people come in and they get, like, completely wrecked, right, and then oh, scam.

13:45 I mean, to be fair, like, like when I got into crypto I bought some coins, I maybe got a bit lucky because the number went up quite quickly for me, because I, well, actually for some time it went down and then it went up, right? Okay, happy, right, but then it crashed as well, and then I started Learn more.

13:59 So it's like, if you get rocked on a meme coin, you don't really learn anything. Yeah, if you get rocked on some sort of a scam maybe, or a mem coin with a suit at least, or somebody that has some intellectual honesty of like, hey, I need to submit a white paper, I need to submit the toonomic models, at least you learn something, right?

14:16 So I think that is very destructive for the space. So we get all these new people in, they're going to Solana or whatever, and then they lose money on the[ __] mem coin and they get wrecked and they're gone. So yeah, and that's their experience. Yeah, yeah, it's funny how it always, like, it takes, you have to lose money to, to really get interested and, and start to learn this stuff, like, all right, I'm going to figure this stuff out now.

14:37 Same exact thing started happened to me, started buying like all these, like, dgen DeFi coins, like all the Olympus forks, I don't know if you remember that, with like the crazy APY. Lost just an, an ungodly amount of money on, like, really stupid DeFi stuff like that, but I learned the mechanics of Olympus to a very deep level.

14:55 But yeah, it's funny how that's kind of like always like the cost of entry for DeFi is losing your, your absolute seat on some kind of weird coin. But yeah, I mean, sort of on that note, you talk a little bit about Solana. It seems like the product Market fit for Solana right now, at least from, you know, the perspective of what's been going on lately, is meme coins.

15:10 Do you think that that's all Solana will be? Do you think that Solana poses a real threat to Ethereum? What do you think, how do you think that plays out? The million dollar question, obviously, right? I think the most technical talent and the most, like, people with actual ass Soul and things like that are still on Eve, right?

15:25 But we need to be careful and we need to understand the core culture of why we're here. We need to get that back, we shouldn't just give up or something. So that it's, it's hard right now, but I think E is still the gang in terms of, like, yeah, settlement Assurance, time to finality, the trust insurances, the settlement guarantees, the like, hey, I submit a transaction, I have a hash, if I give a Ethereum transaction hash to you, like, you probably trust it more than some sort of a still processing bending Sal hash, right?

15:54 Then it's like, well, but, but Ethereum hash, you're okay, it's with an Ethereum hash, okay, it's accepted by me and it's, it's going to get submitted, right, where there's a small chance it gets dropped, and Solana you have a lot of other issues, right, that there's no functioning fee Market, there's no proper formal, not the protocal specs, but they have a lot of things they still need to catch up in, like where Eve is Miles Ahead in certain ways, but s is definitely catching up.

16:19 And I think actually on the long run all these things, they don't really matter. I think Eve will kind of still win, because it's the hardness, I think, in a lot of ways, like Eve is as hard or even harder than, than Bitcoin, right, where I think that matters. And then having such an expressive chain with blob space, for example, I think it's fantastic.

16:36 You basically have this kind of garbage collection space in your, you can write some data there, and it's like, even it's becoming this thing where it's almost, I think actually Bitcoin and E have that, like the distribution of the noes, like I'm running an E note here myself, for example, right, like only way to mimic what Eve or Bitcoin did with all these nodes, all these hobby people that just run it for you know, just like Hobby or passion, right?

16:59 That's so hard to mimic, that's almost impossible, right, because you cannot mimic that, like you have to kind of bribe all these people to run noes, or you have to bribe people to run these big operations to run their data centers, right, if you get a bunch of people that do it for passion and because they believe in something, right?

17:18 Yeah, that is just impossible to duplicate, I would say. Yeah, I think that is the main barrier to, like, you talk about all this immutable, so immutable systems deployed, like you said, like people are still using Uniswap V2 even though there's a Unis swop V3 and now there's a Uniswap V4. It's really the stickiness of an idea that, you know, as long as people are upholding it and, you know, continuing to, to carry it on, like that's, you're not going to be able to eradicate that fully, and, and I think that that is really the, the key to the longevity of what Ethereum has.

17:49 So I definitely agree with that, and I think obviously what we're seeing from the institutional interest is that ETH is obviously preferred over Solana, at least from what I've seen with the, the types of funds that are coming on. I know, I think obviously we've got the Black Rock, what is it like, the Weedle fund or whatever by Black Rock and all the are institutions.

18:08 Yeah, so pretty huge. Obviously we're rooting for the, the institutional and really the global adoption of Ethereum. I'm rooting for it because I'm not that great at Rust, much prefer Solidity, but yeah, I think I would agree with your take on, on that as well. But I mean, bringing that back to, to YieldNest, are you guys, I think you guys are mostly based on EVM, mostly on Ethereum, and, and within the Ethereum ecosystem also including some of the L2s and stuff like that.

18:36 But yeah, so I mean, maybe let's talk a little bit about, like, what is the, the product Market offering that you guys are building at YieldNest? It seems to just be like the greatest product Market fit, which is just come use Ethereum and get yield and provide value to the ecosystem through DeFi, through securing the network, through AVS, restaking and stuff like this.

18:54 But yeah, what is YieldNest about, and, and what's the offer that you guys make to the marketplace? Yeah, basically YieldNest is, you can best see it as a structured product platform, actually ESS is a liquid restating protocol, right, but restaking is much more than just EigenLayer, Symbiotic, etc. It's all about Capital efficiency. So you has started by kind of integrating EigenLayer as with Native restaking, so we're, we're taking validators and we're restating them in EigenLayer, so we're proving our validator, so we generate an offchain proof of our pre-signed exit transactions, then we prove our validator to an ion p, and then we restake the, the native validator, and there's not many lots that actually n native reaing, like the market sees that now, I guess, like that's, that's, that's kind of

19:40 How it started. And my idea was like, well, like, and if you go to docs that yield n. finance and go to the Max LRT page, you will see the architectural diagram where this is like an evolution, right? So we started with just as an LRT, and then I wanted to use EigenLayer and restaking to use these Capital efficient structure to build a structured product stack that rebalances between, you know, trfi products or DeFi products and does everything in between.

20:06 But the EigenLayer stack has been a little bit challenging for me to, to fully build on. Symbolic stack is, is a little bit better, but actually the, because of that, those Stacks were not fully developed yet, it pushed me to just build it myself. So what I eventually built is the Max LRT architecture. This is a completely new Vault architecture that kind of does everything that I wanted to do, where I thought I needed an layer, other things, but we don't Like, in the architecture that I now built, I don't really need those platforms anymore, and I can achieve the same thing that I wanted to achieve, right?

20:37 So basically, as I said, the main point of these blockchains is settlement insurances and time to finality, right, for your assets. So we have basically now four different derivatives, because what is decentralized finance? And DeFi is basically a derivative Market on steroids, in my opinion. That's kind of like the one of the basee layers, right? Yeah. And on top of that, it creates, because it can create all these derivatives really fast, it can create financial instruments, become a very commoditize, right, where you know, maybe like 10 years ago, if you wanted to have some sort of a Advanced Financial instrument, you needed to go to a private Banker, you needed to sit on a, a fancy table with a suit and a dinner, and then, okay, I'm buying these Financial products or something.

21:21 Now it's basically open for everyone, right? But this, the challenge is like, how do we structure these different products, right? Because if I say to you like, hey, DeFi offers all these really cool Financial products, you don't have to go yourself, you have to go to Curve Finance, you have to go in LP pool, you have to go to Convex, maybe you want to go to Concentrator, or you have to go to GMX, all these other traits, and or the funding rate Arbitrage, or all these components are quite complex, right?

21:50 Like for a retail user or even a pro DeFi user like, like myself or like you guys, like I don't have time to rebalance my portfol for the all the time. I just, you know, I have 20% of my assets that I play around with, but 80% of my asset I kind of want to keep in like this secure high yield, maximum high yield risk adjust returns.

22:09 I don't want to get burned on some ,% yields, but it would be nice to get, you know, get R risk adjusted Returns on, on the stable coin, BTC or B&B in this case. And how these volts are constructed is like, we created four derivatives, so we have Y and eax, Y and B bmax, y BTC Max and Y USD Max.

22:31 What do these do? They basically each product settles to its based layer and gives the highest Max risk adjusted returns, and it can take strategies and settle these strategies from any chain. So let's take wi Eve ma settles to E layer one, but it can take strategies on any EVM based chain. So I can go to base, I can do a strategy there for you without you necessarily knowing what base or all these Chang are, but I can, if there's a higher stable coin yield on base, I can get the stable coin yield on base and I can transport that yield back to E one.

23:05 So you still have your high settlement insurances, but you get the best of both worlds. You can, and you can still earn the yield from these multi-chain opportunities, right? And that is basically Max LRTs, and the same thing we do for Y and BTC Max. Y and BTC Max, for example, will be syncing back to Bitcoin core layer one, the ybnb max SS to be B chain, which some group of people like that, the stable conversion also will sync back to E one.

23:33 And with this stack we're only starting with four derivatives. That's kind of the starting point, and we're probably going to keep it like that for a long time, but if there's custom institutions or custom strategies, we can also expose that, right? So if you go to the website, you will see these Max, these four products and all the underlying strategies.

23:48 Some of them are exposed, and all of all of it are work as open source, so anybody can go into the contracts and use these strategies themselves if they're technical, or they can use a guy in this case on Yield Net, but any[ __] would work, right? So these product completely open source and expose themselves for anybody to just inject their crypto and get those strategies going, and for more retail audience and keep it simple, we just create four derivatives and people can get in one of those and earn the maximum amount of yield, where the yields automatically rebalance.

24:19 I love that, dude. I love just, like, keeping it simple with just the four volts, because I think that's sort of the plague that a lot of D5 protocols fall into, is like list like hundreds of different assets and pools and LPS and stuff. I like composing it all together into just these four options of different assets and settle on different layers, and you choose one of the four, whichever ones you're interested in, the underlying asset exposure to, and then you just focus on how do we optimize those to the Max and, and bring in the best strategies and risk adjusted returns for those four different assets.

24:50 I think that, first of all, is a, a huge improvement over probably a lot of different D protocols. I love the way you put it, which is like, d is an infinite composable derivatives layer, that's what it is. And then if you see it from, from that perspective, then what YieldNest is doing is just composing all those derivatives for you and, and doing the work of underwriting the risk for each composition and, and allocating accordingly.

25:14 I've got a ton of questions based on, like, how do you guys do that underwriting? What is the decision process like? I know you guys use AI in that, so I mean, maybe if you could walk us through, like, what is the decision making process like for that? Yeah, that's, that's the what magic comes in, right, the, and basically how we build it.

25:30 So yes, you can see if you go to the website for simple folds, but how I see the future of DeFi is keep it very simple, but yeah, give every user, if they want to, you can go to an advanced page and then you can start to dig down, right, and that's what we also want to encourage people to do.

25:47 As we said in the beginning, like, no, this is not meano[ __], it's like real stuff, and like, you can earn some yield and then, hey, I made some money, let's see what's actually happening under the hoood, and I would encourage everyone to open the contracts, to go to The Ether scans to see what's happening, right? That's what we encourage people to do, because if we don't do that as an industry, and they, the Maxs needs, they will always mature, right?

26:12 Like you have products like steak, do you have products Like Ur, you have products like Curve, we're all constantly building and improving ourselves, these systems are antifragile, right? So by, by far it's not perfect, but it's, it's at least in a direction that we go like, hey, this works, this is safe, we know it's safe because we have a lot of safety measures in place, and like, let's work on it together and let's Harden it together and let's expand the strategy set to.

26:37 So how does it work? And yeah, the Max RTS, basically I call them the self evolving vaults basically, or the, the self building structure products, because we use AI elements in there. We have, like, Nasdi, we deployed it, this is customiza model, and this is kind of constantly searching for new yield opportunity, and right now it's kind of like we use internally, it constantly looks everywhere, like what a good yield opportunity.

26:59 So when I, you know, open my terminal, I can see a whole list of, of yields, and I be like, all right, I can see these and these and these yields, we will first externally integrate with these yield options. So a user, for example, can now go to YX, again, then go to Euler or to Morpho to Max lever up their, their Position to Max lever or Max Loop one of these positions.

27:22 But the base highrisk adjust return is now around 8 or 9% on Eve, which is cool, R, but we give the user themselves the option to go up the risker. So we make sure that all our strategies are always, like, you know, we never want to lose principle, right? So that's kind of like the main goal. We monitor all these strategies very closely, and we use only the safest strategy that we understand, and mostly only from Blue Chip protocols like, you know, Curve, Yearn, Convex, Stak, do FX protocol.

27:52 So we want to make sure that the protocols that we use have been true, so a lot of audits. We're not going to use the random protocols embedded into the Max L defaults, but externally we will experiment. So externally we will give people options, say, hey, you can take your YX or your y x to this other derivative option to even earn a little bit more yields, right?

28:13 But you know, any external Integrations obviously have risks involved. When we integrate something, we also do our risk analysis, but it's not an enrin strategy. So when we enshrine a strategy, when it's actually part of the maxt architecture, we are making 100% sure that these all these positions are 24/7 monitored and have tread prevention algorithms in them as well.

28:37 So we use Hypernative, and we use our own alerting systems to kind of constantly check, hey, what's happening? We even look in the M Pool, so we look like, hey, oh, is there anything weird happening? If something weird happens, we can eject back to the top level volt. So the max volt, it kind of separate risks, so the max volt themselves have actually, like, no risk, right, because it's like, it's a 4626 world, it's very basic, very simple, with a little bit of an adjustment in there that we can accept multiple assets, so it's like a basket of different assets with also in itself that has deag protection, right, which is really cool.

29:14 And actually, if the Max RT Vault ever has a deack, it can potentially make money from the deack of the assets in the vault. That's one thing. The second thing then is, if we use strategies, let's say we use a Curve pool or we use a ear market, right, then that's an external strategy. So if we send money to Euler, we are monitoring Euler 2047.

29:33 If we see that Euler has Heck, if we see even any contract that is deployed that's going to attack the Euler Vault, we're going to eject out of the Euler Vault. That's programmed in, or we pass the protocol, right? So the, and we cannot do that ourselves, it's kind of like this pre-programmed function that only, it's, yeah, it's a permission call, but it's like not, I cannot just randomly take money or something.

29:57 There's only these special e money back to the max default or theoc, but no other operations are possible, right? So it's, it's only a set of operations that are allowed in the vault. Yeah, and I guess it's sort of an ancillary benefit using something like YieldNest, which is, as a normal user, if you're deposit into EigenLayer or, like you said, like Euler, if Euler gets hacked, like you're probably not going to be on your laptop at the very Split Second That hack happens to withdraw your funds.

30:25 So to have this infrastructure that's already set up for you monitor Ing and pulling it out, you know, as soon as they see something off, I mean, that, that's like a little, like, Shield barrier for, for your users as well, which makes sense to, to be able to aggregate all of those funds into this one position that's managed in such a way.

30:40 And once again, it's, it's very disinflationary in that anybody can access this. It's not that you're just accepting money from, you know, some institution and managing it for them in this way, you can manage everybody's assets in the entire world with this level of underwriting and this level of protection 24/7. So that's really, that you guys are doing that as being in the institutional space beforehand, like it's like, yeah, I, we're institutional grade, right?

31:04 So everything we built is institutional gr, but it's for everybody. Yeah, that's excellent, man. That's, that's really cool to see, and I think that's like really every new technological advancement, it, it brings a higher order of magnitude of quality to everybody, and I think that's really what technology brings, like, throughout history, and I think DeFi is just the next step of that for financial markets.

31:26 So I mean, stuff like this is, is very exciting for, for everybody. So very cool. And I also noticed that you guys, so you have the, you've got the Max LRT vaults, and then you also expose the individual strategies underneath that, and so if there was to be, like, some Advanced user or let's say, like, somebody who wants to integrate maybe with one of your strategies and, and build something on top of that, they could do that as well.

31:49 Is there, are there any existing Integrations or anything you guys like particularly want to see built on top of that, or, like, what was the thought process there? Yeah, it's more exposing and being completely transparent, like open Financial systems or decentralized financial systems, and the strategy per se, they're not even rocket science, I would say, right? It's more being pretty creative with different combinations of capital, and capital attracts Capital, right?

32:12 So there's these political structures once we have, right now we have over100 million doar in TVL, then of course we can allocate that Capital different strategies, right? So the way also our ve yd model works, we probably soon, but you can direct money into different strategies by voting on those, so protocols can actually start to fight over where, hey, I want money here, I want money here, and then you have subd Dows that will manage each different Max LRT.

32:39 I'm constructing it that I can distance myself more and more from it, and the more integration the better, I would say. That I hope to see a future where, YieldNest and mxls Ms such an amount of capital in, in these derivative products that actually other protocols will start to build against up, where you actually see, like, our AI agent.

32:59 And I think actually in the future, who's going to be the biggest users of DeFi? I think it's going to be AI agents or AI algorithms, right, where I think what's going to happen is that we have certain strategies we Expose and other agents probably going to build on top of that. Well, we have to Max LRTs, and I think that other Agents from other protocols will start to throw us strategies and say like, oh, can you please give us $ 10 million of, of TVL because we think we can generate you 8% yields and you're only earning 7% right now?

33:26 I'm like, all right, right. So I see a world where the agent to agent Commerce or agent to agent, like, DeFi strategy building is going to be a very big opportunity, and it's going to be a amazing thing to watch, right? We don't know what's going to happen yet, and also I will be the first to admit that AI agents are not yet at that level, right, but I think it's growing very, very fast, right?

33:51 We're seeing day by day that it's growing, and we already built a Nast interface, the SEI is, is virtuals Agent, but we train it with a custom Eliza model, as I said in the beginning, and we built this kind of interface where a user can talk to the agent. It's not, public yet, but we built that already inhouse, we're going to release it soon with AI ages.

34:13 The problem now is like the scalability to make it like a super Mass adopted product, that's a little bit challenging if you get like 10,000 concurrent users on some these agents, right? But let's Say, for a couple of users we could build it, and then the agent, you can create a safe account, so it creates a multi, you and the agent, and then the agents start to manage your, your money for you.

34:33 And obviously our agent is trained to understand that while the Max LDS are highest risk adjusted return for your users portfolio, so it's probably good to park some money in there. We're not giving it all the opinions, but that's kind of how we construct it. So yeah, I would like to see more agents built against Max LRTs, and I want to see other agent use our, our products.

34:53 Yeah, and but that's probably further away, but I, yeah, I'm not sure the timeline on it, but I think it's going to come soon, I hope this cycle. No, this is really exciting, because we've seen obviously a lot of new, like, AI coins and, like, AI projects, and I think at least personally my perspective on them has been that, you know, they're not actually that useful.

35:12 I think what they've been going for is, like, I don't know, perhaps trying to find, like, some new UX for users to interact with crypto and something like this. But I think actually the way that you're talking about AI is different, in that it actually unlocks something that previously could not have been possible with, with existing systems, like it previously had to be a manual decision or like some naive algorithm to determine, like, which assets need to go to which protocol to generate what yield and all this stuff, but what AI unlocks for us is now we have, like, sophisticated decision making with consideration for outside details and stuff like this in real time.

35:47 So yeah, I think it would be cool to see more AI projects using AI in this way and, and sort of bringing that on board. So I definitely agree with that, and I like also you, you mentioned earlier, like, you have a terminal that pulls up and it shows, like, all the yield opportunities in DeFi that's sort of like composed together by AIS, you know, maybe like just exploring the chain and, and seeing what's going on there.

36:06 That seems really cool to me as well, kind of like if you were to liken it to, like, a Bloomberg terminal from trafi, you have this, like, Bloomberg terminal of, like, yields throughout DeFi. I think that's just a really cool idea to, yeah, if poetic here, right? So DeFi is going to out compete CI, and it's for my course, like the slides I showed in the Tweet is for my course from 2020 that I gave, which around 70,000 people did with the Ivon Tech Academy, right, and, I sat there in a slide, and it's very valid, even, even more so today: defa is going to out compete CI.

36:35 DeFi will do to finance what the internet did to news media. DeFi is accessibility, efficiency, transparency, and most important, there's no gatekeeper between the Builder and the idea, and in this case the Builder and the idea can also be an agent, right? So there's no more Gatekeepers. So what does an AI Overlord going to do, or an AI intelligence system?

36:55 They're not going to be like, oh, Dam J Diamond, let's discuss some. They're going to build things in DeFi, and it's going to vastly out compete anything traditional Finance can. Yeah, it's really Limitless, it's like, it's hard to even anticipate, like, what that will look like. I, I'm just sure that it will be on inspiring when we do get it to the full as exent.

37:14 But yeah, so I think it's really interesting what you guys are, are doing with AI, and seems like the most promising application of AI that I've actually seen in a protocol to date, so that, that's really cool that you guys are working on that. And then you also mentioned the value CR of ve Y andd and, like, sort of the incentives to direct and allocate the protocol, based on those tokenomics.

37:35 So from my understanding, it's essentially just a part of the yield that comes from all the strategies acrs to ve y andd holders, and then what, what is the sort of governance setup that you guys have, and, and maybe where you guys at with that today? Yeah, awesome. Yeah, we, we put a lot of time into this, right?

37:49 So I've been working on this for over two years, and it's not just, you know, an LRT restaking, it's much more than that, right? So, basically it's a whole new infrastructure products Suite with AI enabled folds and data intelligence, and we create a subow environment where, when once a Max Vault reaches more than 500 million in, in TVL, it will get its own subd down, because it's generating sufficient amount of money to actually, sustain a subow, where, you know, some people or analysts can get paid to actually maintain it, and then the be y andd voters can kind of overrule their decisions.

38:26 So that's kind of like how we structured the Dow. We, we built that on top of the Aragon V2 stack. I'm a big fan of Aragon, I really like how they build their stack, because it's this kind of Open Source Code base that everybody again can see, and we're building different modules on Aragon, and everybody can use Aragon.

38:45 So it's again the similar stack how we build YieldNest, where it's like, hey, this is the maxt products with different underlying strategies, open source, everybody to use, also the governance stack is built in a similar manner, but then in collaboration with, with Aragon. I like that a lot. It's kind of like automated delegation, as the quote unquote business scales, you automatically spin up new, like, teams to manage stuff.

39:07 That's kind of a cool to, like, scale organization that, that obviously is a, is a progressive route fully get to completely autonomous, like AI driven complete autonomous vs, right? But there is the architecture is has, has this very good in mind, so there, there's a lot of thinking behind every of these moves, and there's just kind of like forward thing, right?

39:29 So we're building infrastructure that works today but is designed to also be capable and flexible enough to adapt and, adjust to any of future possible directions that it might have to take, because there's a lot of unknowns on this AI Revolution or in general. Yeah, best to remain, like, flexible in that sense. And I guess in terms of getting to that point, what do you think is the number one thing that is holding you guys back from getting to that, like, 10 billion TVs and you've got multiple subd Dows spun up?

40:00 What do you think is holding you guys back from that? Yeah, so I think it's, it's General DeFi sentiment and adoption, right? Like, when you talk with people, def is super risky and Stu, and it could be, right, but I would, I, I would make the argument that banks are more risky, you know. I live in drial a lot, and let's say what would you trust more?

40:17 I trust USDC more than I trust the Hong Kong bank account or something. Yeah, yeah, well, it's funny, it's ironic, because actually USDC, what it dpeg, like two years ago, because of a bank, because a bank went under. Yeah, it's not the best example actually, because UCC is, it's not really a crypto thing, it's more like a centralized CI thing, right?

40:36 So yeah, or like die. Yeah, yeah, yeah, these think that's hard analogies, right, but I would trust some things in, in crypto more than I trust, let's say, things in certain CI sectors, right? Hong Kong or Thailand or other different jurisdictions, I don't know, like if I would park $2 million there, but paring $2 million on chain, I would feel more safe, because I can see the protocol, I can persective, and especially with the Y as Max defaults, you know, there's this Conant monitoring as well, right?

41:03 Yeah, yeah, 100%. And yeah, I mean, associated with that I also saw that you guys, I think you guys have like TVL caps on some of your Maxell T volts at the moment. Is that due to like Rin strategies, because as you get more Capital it's harder to get the best returns, or is there another reason for that?

41:19 Yeah, so basically we started with wh X is the only one that has a gap currently, the rest are free floating. Okay, because wh X we need to adjust sometimes the strategy, so if we would get like a million Eeve inflow, like how would we handle that with the current straty? We need to be like sure, like, okay, it's, it's close to the cap, should we lifted or not?

41:38 And it's also a soft cap, right, so it's not really that big of an issue, but it's more like, hey guys, please not deposit a million in this, especially in the beginning when we were trying new strategies. We're like, hey, this is the first release of the Max LRT volt, right? The other VTS for more like LRT Volt or native, you know, restaking, which is kind of endless capacity, right, where this Vault had a bit of moral capacity issues, but right now we add, we added it to 5,000 Eve and I think we almost reached it.

42:05 So right now we're already ready for a higher info there, we kind of keep the Gap, it's, it's almost hit, so another 500 Eve and then the G gets hit, so actually we're now ready to accept more, and then soon we're going to lift the Caps. I think also because we, we are planning our dge soon, and I just kind of want to, because we now have a point system, but I always say that the ghosts of Satoshi are hunting me for my point system, because it's not something that I really like, but I think that having a token eventually is easier because we built all this technology to do tokens, right?

42:35 It's, it's better to have a token than instead of just points, so at some point we will transition to a token, right? So that's why now it's time for, you know, it's last moments before PGE, and we're, we want to distribute our governance power, we need to find that flywheel to be like, all right, so we have these architectures, this is our stack, this is our Dow, here's some AI that you can talk to if you want to learn more, right?

42:59 Like this will all be deployed, right, and then it's like, all right, then there's a token to incentivize Behavior. I think incentivizing Behavior, your points at some point, at some point, no pun intended, will become a little bit too much, like, yeah, but how much is it? And you know, actually also all these Point systems are not really trustless, because all most of our point system is actually, we went a little bit overboard with the point, because it's without a database, we did all onchain events logging, right, but a lot of Point systems are just a database somewhere, somebody probably just prints more points, you know.

43:32 That's def points, no, 100%. And I mean, yeah, also tokens obviously more composable with stuff on chain and, and everything with that, and also, yeah, I think in some sense, H, having like caps on the vaults, we actually did that. I built a, a D5 protocol way back in, I think, like 3, 4 years ago, we put caps on our vaults and it seemed like it almost increased the demand of the product because people were like, we need to get in.

43:58 So we would like open it up and then it would fill up within like a minute because people were like botting it and stuff like that. So yeah, I think it's some sense it also adds like some sort of like urgency and like Mystique around like getting in the vault. So yeah, that's a sort of an ancillary benefit of, yeah, it's a bit of both, right, but in this case it was a functional element to it.

44:16 Yeah, definitely, there's also all these other elements. I, yeah, I do think at some point with DeFi, as I said, like with these agent to agent, agents don't really care about these emotional things, right? So that's why, that's true. Yeah, when it's users then maybe it works, but agents, yeah, they're, they're just, underwriting logically. Yeah, and I, I think that some point that is, that is also a good thing, that we get more agents and then humans can, you know, start to touch grass, maybe at some point, I don't know, hopefully.

44:43 I mean, it also, it sort of removes the hype of crypto, which is like, you know, people, users are using whatever protocol, whatever chain is just the hype cycle at the moment, and sort of transitions back to who's actually shipping and who's got the best returns and, and yield opportunities, and those are the people who will get allocated capital, and I think that overall for the system will just be much better.

45:04 I think it accelerates the, the sort of vampire attack, that you, that you speak of on, on CI. If we, if we really get that going, I think it'll be a very positive Cycle. Stop staking or stop using calized Financial structures, because you're killing Innovation, killing babies. Stop killing babies, you're, you're, you know, to stake in a new system where you're actually helping Innovation and people thrive and people to innovate, and you motivate new Financial structures, right?

45:30 And eventually that's all better for Humanity, right? I think at the end of the line it's better to get rid of all these weird Financial Str. End of the day, money is politics. If you can still have money but less politics, I think that's better. Let's hope, let's hope that we can. I mean, if we're going to achieve that in any way, it's going to be because of blockchain and DeFi, so let's hope, and AI agents as well, so I think the intersection is coming together.

45:55 It seems like we're approaching some sort of Financial Singularity moment. Let's see what happens, I'm excited for it, but yeah, to, to close, to close it out, is there anything that you guys are working on right now that you guys are excited about that maybe you could talk about? Yes, I'm super excited about our Y USD X that coming out soon, like, and I'm a big fan of Frax Finance, and Sam G from FX is also an investor into YieldNest, and basically how it's looking right now, I think FRX is going to get this fat master account, right?

46:23 I think it's going to happen. So that means we will get a DeF5 protocol that has a master account at the Federal Reserve. Yeah, I mean, I don't know when it's the last time you deposited money in the, in, in your, in the fat master account, because you have that legal, you have that legal option, you don't have to put your money into a bank.

46:38 If you put your money into a bank, you basically agree that they're going to land it out and F fractional Reserve landed out, like, five times or something. It's Insanity, it's Insanity that we actually allow this. So with this kind of structure, there's a fat master account, and then instead of having your money into, into a centralized financial bank and stuff, you can have it in, then the Federal Reserve, where you earn 5%, right?

46:59 Obviously you want that be the capital efficient, so what is YieldNest doing? We're working with frags, working with cve, we working all these clue chips, where we would be then building a stable coin where it's rebalancing between different, DeFi components, and it's also easiest to kind of understand. So you have, let's say, there is certain lending and borrowing markets, or there is, you know, an FX protocol or Hypernative, where you could land your stable coins out and get a fee for the trading or underwriting of the trades, right?

47:27 That, that's one option, and Then with all the risk parameters in place, or you can say, well, I want to put my money some sort of a money market funds, right, where this on DeFi that's basic an automated Market maker or things like that, pools, or if those yields at some point go down, which we saw in previous more bare Cycles, you could switch it to a f master account.

47:47 So then at the end of the day it becomes this reflexive system, where, well, if the CI yields are better, then the money just moves to a more CI like RWA like system, if the DeFi yields are better, it moves back into Def, and that's really because building Y and USD X. Yeah, yeah, and I mean, that's really cool, because it's almost like dragging CI into DeFi and allowing that sort of layer to become a part of the composability that we all know in love with DeFi.

48:13 So yeah, that's actually pretty huge, so I'm, I'm, I'm excited to see that come out for Fra, and then obviously what, what you guys are integrating with it as well. And I know also you guys mentioned cross chain, are you guys in the works on, on Cross chain? What chains are you guys already? Yes, yes, like we have LayerZero Fully live and ready already for three months, but the, I do hope that the cross chain usability nfx.

48:36 I think we as all the D5 Builders know it's quite a pain in the ass, because then, hey, I integrated LayerZero, we have that scripts ready, you can already go to Stargate and you can see, YX, y e, y beam, btcx, they're all there, we can Bridge them over, but now it's like, okay, we now need to form the incentive structures and then we need to also transer the fundamental rate to the other chains that also be done actually this week.

49:01 So we're working on that, and obviously other things going, but before we plan any D we want to have that fully finished, so we want to have all the multiple chains, and we're starting probably with Base, Arbitrum and Ink, I think that's where we're going to start to not be too crazy, and then eventually it's any EVM compatible chain, and in the future we could also buch whatever chain that, that we see as safe or where we see yields, right?

49:26 So basically, basically the Max LT Vols will Bridge any strategy anywhere, and it will get the highest risk adjusted return for you. When we see a high yield on S or high yield a bar chain, going to go there, go to farm, and we settle it back to your preferred, like, settlement layer chain, and in my case it is E layer one, that's why I feel most secure, and we bring back the yields there, or we could even do another product on a Sonic, for example, if we want to, but for now, as I said, we want to keep it very simple and straightforward, and later we're going to expand more, product rate just there as well.

49:57 That's awesome, dude. Yeah, I think, I mean, a lot of projects are moving cross chain, I think it's another step, right, it's another step in the UX of crypto is just abstracting out all the networks that everything is deployed on and bringing it all together in, in one application, like you guys are doing now. So I think FL 1D f is still the best, right?

50:15 Like, of course there's a lot of shiny new objects, as I said at the beginning, right, so yes, there is a lot of, like, the other yields and other chains are high, but that is because they want to attract liquidity, but at the end of the day, if there incentive stops liity moves back to E one, because that's where you have a lot of this organic flows, you have a lot of this hardened infrastructure, so that eay one would be the base layer, right, for most DeFi, I think, and it will stay like that, where and these other layers will function as more special layers for certain high frequency trading or for certain special NFT marketplaces or whatever, right, but the core def5 will stay to they, I think.

50:52 Yeah, I mean, in that sense it's almost like you just go collect the Arbitrage opportunity on these L2s, on these other networks, and then bring it back to ETH, back to the home. And eventually my main goal would be with this is to make a price settlement happen on chain, right? Price Discovery needs to happen on chain, and ideally when the E ler one says that Bitcoin is, let's say, $100,000, or when Eve is $10,000, if E ler one says that, that is the, the truth of the system, right?

51:21 If you get there, then E one achieves, in my opinion, the ultimate achievement and goal that, that should strive against, right? And I, I could be, I think that for most DeFi that, that's the case, but then you also have the BTC with Y btcx or onb, so we offer these different sement layers. That's my personal opinion, but I still offer also sement layers on Bitcoin or on B&B, people want to do that, and we bring the yield there as well, right?

51:46 So I'm the protocol is completely chain agnostic, myself, I, I'm a big believer in E al1 def, which is a bit go contrarian belief, I guess, know, maybe you're just, you're just vampiring all that capital from the other chains and pushing them towards the ETH strategy. That's what I've been doing all along with my personal portfolio as well, right?

52:05 Like, I make money and I go back to E1, because I don't trust with big 100 money, I don't trust these other layers yet, right? Yeah, 100%. Yeah, absolutely. Well, first of all, dude, I, I think we, we had an amazing conversation, really cool stuff that you guys are doing at, at YieldNest, and I think we're starting to see, we're starting to see the actual application of AI and the intersection with D5, so I think that's really exciting stuff, I mean, just to wrap it up, is there anywhere we can send folks if they want to check out YieldNest, if they want to try out some of the Vault, some of the strategies, where should we send them?

52:36 Yeah, yeah, the best way to find us is, if you go to yield. finance, that's our website, always make sure to check the, you know, the right website, and also the good way to fin us this on YieldNest F or on any other of the social media, so the best way to follow all the announcement would be to follow YieldNest on Twitter, probably in the show notes below, and check out our website.

52:58 Awesome, we appreciate you having on, dude, and we will, we'll catch up with you, but yeah, dude, thanks for having the time. Yeah, thanks having. Do likewise, thank you guys, talk to you soon. Was an amazing conversation, thank you.