PoolTogether Community Podcast #60 with Arcadia Finance

This is the PoolTogether Community Podcast. PoolTogether is the world's number one no-loss prize savings account. You can visit pooltogether.com to deposit. You're listening to the PoolTogether Community Podcast. I'm your host, Millie Yearley, and you can also call me Tim. You can also call me Hot Mike, and I'm drinking ginger, ginger seltzer thanks to my friend Mark here who brought it for me. And I am speaking with today Arcadia Finance. We got Smets, we got Jasper here, and we're going to talk, we're going to get some, we're going to get down deep into the DeFi. We're going to get down deep into what you can do with crypto. And so I'm pumped to talk about this. Thanks for being on the pod today, my peeps.

It's a pleasure.

Yeah, pleasure. Pleasure to be here and thanks for having us.

Totally. Have you ever been on a podcast before?

We did a couple in the past. I think Smet, often referred to me as Thomas, did a couple once before as well. One very, very long, a couple hours even.

It's in Dutch, unfortunately, but for the Dutch-speaking friends, still available on YouTube. It was a COVID show.

Oh, nice. I love the Netherlands. So good. I mean, I've been to,

you know, like Harlem and Amsterdam, of course. But yeah, good times.

Yeah. Both Smet and myself are from Belgium, just south of the Netherlands.

Oh, I love Belgium too. Been to Brussels and Ghent, right? Or where else? Where was I? Shoot. The place. No, what's the— it's like a small town that everybody goes to and it's so nice.

And it's a brew.

Yeah, brew. Yeah. So good. Anyway. Okay, cool. So let's start off with your origin stories. I love to hear how people get into crypto because PoolTogether is like the intro to crypto for a lot of people. It's one of those like killer apps, like, oh yeah, I'll totally do that with crypto and it's safe and it's secure. Like people just feel good about it. And so when they listen to PoolTogether Community Podcast, it's fun to hear how other people get into crypto and we can kind of like match our stories. So would love to hear your stories, my Belgian brothers.

Yes, sure. I'll kick that off. So how my blockchain story started was actually back in 2011. I've got a friend, a mutual friend of myself and Sven that sent me once a message on, I think it was Messenger or Facebook back at the time, like, hey, have you seen this new weird thing? It's called Bitcoin and you can actually mine it and earn money from it. At the time, I was quite skeptic. I was like, what the hell is this? Must be some pyramid scam crap. But then took a closer look at it, and then a couple weeks or months later, set up, let's say, a very small-scale Bitcoin mining thing. Back at the time, you were still able to do it on your laptop, on your single CPU. But got really interested in it, in, let's say, the technology behind it. Kept, let's say, a very keen interest. Everything blockchain related throughout the years. Also was part of, let's say, the origins of Ethereum, part of the DAO hack as well, unfortunately. So studied engineering here in Belgium. After my studies, I worked for a couple of years at traditional software companies, some multinationals, initially in the production processes, later on in the healthcare as well. But quite soon already in our after hours together with us, Matt, I think back in 2016, we started doing some blockchain-related developments. Initially started with an arbitrage bot on centralized exchanges, things very, let's say, OG exchanges. Some of them probably don't exist anymore now. Was just really cool and got us into doing blockchain developments. Then later in 2020, 2021, when DeFi started to kick off, both Thomas and I, we sort of focused more to the decentralized world. Was really the start of us making a number of MEV bots, so both the high-frequency arbitrage as well as the more one-of-one arbitrage or MEV strategies. We saw a whole lot of DeFi protocols, so our focus at the time on making those bots was on the one hand really the blue-chip DeFi protocols, but on the other hand also really the long-tail MEV strategies on new chains, new protocols. Yeah. And that's where we saw quite a lot of things happening in the space. I also noticed a couple of building blocks missing, some of the infrastructure that was lacking, the user experience that wasn't there yet, and that eventually grew into what we're building now with Arcadia Finance.

Yep. So for me, actually quite a similar story. I know Jasper actually already since high school. Unfortunately, not Listened to him in 2011, and then 2016, I think Jesper again was talking about blockchain with one of my friends. I was very skeptical, so I didn't believe the guys were doing something worthwhile, that they were all investing in Ponzi schemes. But then like day after day, they were always like saying, oh, the new thing went up again. So then 2016, I decided, yeah, maybe I should just start reading about it, give it a chance. So then start doing my own research just in time, of course, for the 2017 boom. So then I rode it completely to the top, but I think like most of us didn't sell a thing, so also completely rode it down, but I kept my keen interest. So I continued learning more, doing some small developments. And then decided I wanted to work with blockchain. So then started in 2019 for a company in Belgium, and I built all kinds of decentralized applications, actually more for traditional financial institutions like banks, clearinghouses, et cetera, which unfortunately didn't do more than just some POCs. But then luckily, as Jasper said, after hours, We built a lot of MEV bots, even though back then they were not called MEV bots, but just plain arbitrage bots. By our bots, we actually also got into contact with some, let's say, influential NFT people. Then we did some ghostwriting of smart contracts. So actually wrote a few NFT contracts for some quite known mints. And then, yeah, since 2022, started Arcadia Finance and now, yeah, a full year building already. So Millie, I hope that's already a good intro.

That was great. You cut out there at the end. Could you just say the last, like, 2 sentences again?

Yeah, sure. I don't know where I broke off, but I think in the end what we also did was ghostwriting some smart contracts for some NFT mints. And then since 2022, January, both started Arcadia Finance, pulled together a great team, and now building for a bit over a year, and soon we'll launch.

Awesome. So tell me about Arcadia Finance.

Yeah, sure. So Arcadia Finance, what we're building in a very, say, couple sentences, is a DeFi protocol that allows users to use leverage and use it on existing DEXs. They can do that through what we call our Arcadia margin accounts. So essentially a margin account is a fully, let's say, non-custodial user-owned smart contract where users can deposit multiple assets together. For example, not only your simple ERC-20 tokens, but also more the complex asset types like a Uniswap v3 LP token, for example. And with all those funds, say, deposited as collateral in such a margin account, Users are then able to use or to get completely DeFi-native leverage and use it in any other DeFi protocol as they see fit. The first use case that we will bring to market with, which will launch very soon, will actually be the use case where users can then take leverage and use it to create leverage on spot on existing DEXs. So you should really see it in a very simplified way as a layer on top, for example, of Uniswap. where you can use leverage in the same user experience as you used to when just trading normally spot on Uniswap.

And that's very interesting, and that's what you're launching with. But I'm looking down, I'm looking at your site and I'm like, wait, you can do this with NFTs too? How could you possibly do margin trading with NFTs?

Yeah, so our belief is that any asset that is of quality Should be able to be used as collateral. So independent of the technical implementation of the assets, if it's a quality asset and it represents certain capital, represents certain value, then should be able to be used as collateral. So that was really to say the grand idea behind what we're building, or say the red line behind what we've been building. If we then look at, for example, other token standards next to the ERC-20, so the normal fungible tokens, then we quite soon did come to the ERC-721, so the NFTs. The NFT standard is actually used for much more than just, I would say, the art collectible NFTs. For example, the Uniswap V3 LP positions are also according to the NFT standards. If you're then looking at how to price assets, it all depends on, let's say, the way of how you can price a certain asset. For example, a simple ERC-20 token, you have multiple oracle providers that you can just use. For more complex asset types like LP tokens, we can actually break them down into the underlying assets. For example, your LP token of ETH-USDC represents this amount of ETH, this amount of USDC, and then you can actually price those individual tokens. Of course, all in a flash loan resistant way to get the amount of tokens that are represented by an LP token. Then more specifically for the NFT art collectibles, There are actually already providers or data providers to Chainlink to provide price feeds for floor prices of certain collections. So in the first iteration, I could say we can allow users to deposit NFTs of the, let's say, the top collections and then price them at their floor value.

That's awesome. That's really cool. When are you going to launch? I know you said soon, and that's the typical answer, but don't give me that. Come on, come on, give me that alpha.

Okay, okay. All right, all right. The official launch date is the 28th of February, so end of this month. It will be a phased launch though. So we have like an allow list of some addresses that sign up. So if you want to be part of our launch. I think if you go to our website, you can still sign up. And yeah, so a lot of things going to happen, looking forward.

And so end of this month, we'll launch. It'll be a phased launch where initially, let's say, we keep the gates a little bit closed, both in terms of the users that can interact with it, but also in terms of the assets that we allow as collateral. So we'll not allow, let's say, all of the more complex asset types as collateral right from the start, even though technically we can, the code is ready for it. Of course, you have to gatekeep the risk and make sure that we're on top of all risks that come with each type of collateral. Then once that phased launch has been continued, we might need to do some fine-tuning in our risk model. Then we open really the gates for, let's say, the general public, be they Let's say the big audience to be able to use our protocol.

So I need to, I'm just learning about lending, borrowing, margin trading, and I'm just wrapping my head around it. And Richard in the PoolTogether community, @rliriano on Twitter, is very much my sensei, my Jedi. I am his Padawan. And so as I'm looking ahead, as I'm learning all this stuff and just like, oh wait, so like when I collateralize an NFT, It's the same thing as like shorting, depending on what I'm cloud— you know, like the, I'm just trying to like piece all these things together of like, okay, borrowing against something can also act as a short against another thing. So, but at the same time, yeah, I just, I have a bunch of stuff in my wallets, right? Like a bunch of little trickles here and there and stuff. And I'm like trying to think about like, now that we're talking about this, now that I'm looking at your site, And I love the decentralized nature of it. I love, you know, the fact that it's trying to make it as easy as possible, right? Like a one-stop shop, almost like an aggregator. I mean, you're not—

Sorry, I think you broke up from my side now.

Oh, I got so excited. I gestured and I hit my trackpad. And I, and so is the, you said Uniswap at first, but this is like, Any DEX, right?

Yeah, yes. So actually, let's go maybe a step back to see how the whole flow works. So indeed, you have a lot of assets in your wallet, quality assets, so they represent some value. What you can do is you can come to our website, you can open up your margin accounts. That's basically a smart contract that you deploy for yourself in which you can deposit at once a range of assets. So that can be the normal ERC-20 tokens, it can be some NFTs, that can be some DeFi tokens. And what we then can do is from our liquidity pools, if you, for instance, deposit a bunch of assets worth $1,000, we can give you in your margin account an additional $9,000, for instance, in the form of USDC. And then you can use that complete $9,000 to trade on any DEX. So it's not only Uniswap, basically any on-chain DEX you can use to route your trades through.

And then there's this composable, right? So it becomes an NFT. So that also can be like a derivative or like a second, another layer of tradable things, right?

Yes. So the The margin account, actually, it's a smart contract on its own that does the accounting of both the assets in the account as the liabilities against the account. So we can at each moment, like, the net value of your account. The cool thing is that margin account, so your own smart contract, is actually according to the ERC-721 standard itself. So if you go to OpenSea, for instance, you will see somewhere that you indeed own an Arcadia margin account, and we could even create like a dynamic image that shows at each moment in time what the net value is of that account. Or you can transfer a whole account at once. So I can, for instance, deposit a range of my assets in my margin account. I can even take some debt against it, and I can send that as a whole, for instance, to Jesper, or even sell it to Jesper. So it's really indeed another real DeFi Lego block that is as composable, as permissionless as possible.

It's so great as I learn about this stuff to be able to be like, oh, and then you can do this and oh, you can do this. And for example, one of the things, one of the needs that I'm seeing, at least that I want to see, is a place that's like an aggregator for NFT collateralization. Like, I would love to see a layer where I could just see You know, what are the, what's the lending and borrowing happening? Or what are like the people asking for loans, you know, or people who want to lend in one place across every platform, same thing. And then now, now you're saying, now I'm looking at this and, and, and for Arcadia, it's like, no, you can deposit everything into your margin account, right? And then you can, then you can borrow the, the, that gives you the, like the assets. To then create like in like long and short with margin other assets. And then you can even take that position and itself collateralize it. So anyway, I'm just, I'm like, oh, that's so great. But I would love to see how all of this kind of like plugs into each other in a nice neat like— Yeah,

yeah, sure. Of course, it has its downside. If you keep on packaging assets you issue debt against, you are basically recreating the housing bubble, I would say, where you Rehypothecate every loan time and time again. So I think there is a limit how far you can go with it. But the advantage is you all the time see all the risks in the system. So you as an LP provider, for instance, see what is happening with the assets you issued the loan against. And that's maybe something we can talk about later. But there as well, we give our LPs actually additional toolings to better manage risk. Yeah, because in the end they're the ones who write out the loans that borrowers take against their basket of assets.

Yeah. And I'm not trying to create another housing crisis or, you know, 'cause that's already happening anyway. But no, I'm, but what I'm saying is especially with NFT loans, there is this like over-the-counter handholding that has to happen even still just because of one, like I think the low volume, like there's not Too many people out there and people set like, hey, here's an asset I want to take a loan against, but they're not like monitoring it. Or you'll get all these. So anyways, there's like a wholesaler kind of role. There's like a middle person role that's popping up that, you know, to where I can quick go seal a deal on a loan with somebody and then I can get my yield in immediately and somebody else gets, you know, is basically paying me to do that. Like, so I can then sell that, that loan for immediate yield, whereas somebody else gets more yield.

Yeah.

You know, you see what I'm saying? But didn't have to do the legwork. Yeah. Yeah.

Maybe also important there to note is that all of our contracts or all of the margin or the leverage that you can take, actually completely peer-to-contract. So we don't have, let's say, a peer-to-peer model where individuals have to underwrite or provide liquidity for individual loan, so to say. So you can actually instantly get your leverage, your loan against your assets within the click, like within the same transaction. You don't have to wait until someone else accepts it. Now, for less liquid assets like the art collectible NFTs, that indeed poses a certain problem because you cannot keep giving or keep giving liquidity or keep giving loans against an illiquid asset, because if it's— if the value drops and you have to liquidate it, there needs to be a market for it, especially in our case since we liquidate in an atomic way. So meaning that we foresee that a liquidation bot, with our own background as making these kind of bots as well, just wants to buy the whole margin account and just sort of sells all of the individual assets himself and don't get any exposure to the assets themselves. To do that, you actually need on-chain liquidity for the assets. So related to those art collectible NFTs, there we have to take into account the available on-chain liquidity. I think, for example, an NFTX protocol or an NFT20, SudoSwap, some other protocols that provide, say, instant liquidity against art collectible NFTs. But since those projects are keeping getting built, keep popping up, You can actually use those NFTs as collateral, even in a peer-to-contract, say, loan way.

And then if I wanted to lend, that's the liquidity providing, right? That's the ability to, you know, get yield off of— is just providing USDC and wrapped ETH is what the website gives as examples. But I assume there's other things.

Yeah, it's when we go live, it'll be with those 2 assets. But of course, It's not limited to only USDC or wrapped ETH. I think there it'll be a bit of community input for which assets there's the most demand to be lent out.

So what's the future? What's— so we, we kind of, you talked about launching and with, you know, Uniswap or, and then these 2 assets, but what, what's the future for Arcadia? Like, say, you know, this is also great timing, by the way, with ETH Denver. That's happening. Will you be at ETH Denver? And then, yeah, what does the future look like? No, you're not?

Oh, no, unfortunately not.

Unfortunately not. We'll have to focus on getting our product live.

Gotcha.

That makes sense. So it's not really possible to combine, unfortunately. But yeah, what brings the future? Maybe you've said it before as well. Like, you find something or you build something and you realize, like, what can be used to do this and this and this and has this and this feature. So actually, the first use case that we bring live, that leverage trading on existing DEXs, is just one of those small use cases that the product that we've built can do. So we start with that leverage trading on DEXs, but actually the margin account can be used for much more. Since the margin account can use leverage on any DeFi protocol, it can also be used for, for example, leveraged yield farming, for escrowing, for making some more exotic strategies as well. So there's a whole bunch of things that can be done with, say, interacting or with leverage on other DeFi protocols. If you then look even a step further, you can actually use those Arcadia margin accounts as collateral for other protocols. For example, a protocol building on futures, a protocol building all related about escrow, for example. They can actually issue liabilities against The margin accounts and use the collateral within the margin accounts to manage counterparty risk.

So what about this? What if I was in an LP position and I can put that into my multi-asset account, my margin account, and then, so there's DeFi happening there, right? Like I could be in an LP position, I could be getting yield from that, right? And then And then also trading with it as well.

Yeah. Yeah. So what you, for instance, could do, you are LPing in, for instance, Uniswap V3. So you have an LP token representing some ETH, some USDC. You can put that in your margin account, then you can lend against it, for instance, ETH. You can in turn deposit it in more of that same Uniswap V3 position and as such build leverage positions. So you're basically leveraged LPing. So as long as the interest that you earn by LPing is higher than the interest rate you pay for the borrowed assets, you're making a profit or you're basically leveraging the spread between the two. So it's really indeed A tool that all people can like play around in DeFi with superpowers.

So when you talk about a margin trading account then, and you can, it's a single, so you're, it's a many input, single output thing, right? That's what you're talking about. There's not a way to like, I guess you would have to have multiple accounts if you wanted to like separate things, correct?

Yeah. In one, so how the account works under the hood is we do the accounting of all assets. So actually, we calculate the sum of all values in of we calculate the sum of all assets in your vault. So that's how much equity you have in the vault, and we calculate the sum of all liabilities against the vault. So if you have one loan. That's just the loan, but actually you can also open multiple positions. For instance, you could open a loan, you could write out some options. So then the liability side would be the sum of all those liabilities you have outstanding. And indeed, they're all denominated in the same base currency. So we calculate, for instance, all your assets are worth together 5,000 USDC, and you have liabilities against your vault for 4,000 USDC. So vault is healthy, net worth is 1,000 USDC. If you then as well want to take some loans, for instance, in ETH, then indeed you need a second margin account that does all the calculations in ETH, not in USDC. I hope that that answered the question. Yes, yes, it did. So quite technical. I think Jasper and I, we're busy with it every day, so we tend to go a bit too technical. If you have to like step up or set a step back, feel free to interrupt us and we can try to simplify things as we go.

No, I really appreciate the explanation and like kind of re-explaining things to me because it's really, you know, it is complex, but it's also fun to learn and get things. And so it's a very cool product. And I'm thinking, you know, What's— what are the risks like? As I mean, this is what you're thinking about, right? You're just going over risk assessments. Your risk model is mentioned in your last dev update. You know, what do you— what are you scared of? What— where are the vulnerabilities or what are the— what are the problems you're trying to solve to make this as permissionless and as, as healthy as possible?

Yeah, there are a couple, couple sides to it. Whether you're scared of it, of course, getting a message at 3 a.m. saying, hey, you're up. Of course, the, the general risk of smart contract exploits is always there, even if you have 25 audits, which we don't have 25 audits, by the way, we have a couple, but there's always a risk of smart contract exploit. Of course, you can take some measures to reduce that risk and use best practices in writing smart contracts, working with decent auditors, having auditors on file, doing community audits. So there are some ways to reduce that risk, say, to a minimum possible. But of course, you all, very often you only know about the potential flaw after it has been exploited. But that's of course one risk, the smart contract risk. The other risk there that could happen is market risks. For example, there are some assets in margin accounts. For example, I'm just going to say, for example, LINK, just naming a token, and suddenly something happens with LINK and the value of LINK goes to zero. It can happen. It has happened before. Then at that moment, the protocol can enter a stage where there is bad debt, meaning that some of the margin accounts, they get undercollateralized because their value just decreased that sharply. And it could happen very soon, within a single transaction, within a single block. And at that moment you have bad debt and the system will have to, let's say, get rid of it, get rid of that bad debt, repay it. And as such, the risk models of the protocol have to take into account that certain assets can just drop to zero. There are also some then countermeasures on how to prevent, let's say, a too high exposure to certain assets. And so you can work with exposures of certain assets protocol-wide, which we've also implemented. To prevent that, for example, 95% of all of the loans are taken against LINK as collateral and LINK would drop to zero, then the whole protocol would be finished. So to prevent these things, you also have a couple other ways on how to do that. That's more about the smart contract risk, the market risks. Thomas, you have still more risks to talk about, I assume. I had a couple other that I wanted to talk about,

but Yeah, I think something straightforward, the regulatory risk. DeFi in a lot of countries is still like kind of in this gray zone, which of course, if you want to operate a company, you want to know clear boundaries what you cannot and cannot do. But unfortunately for crypto DeFi, it's not set at all. So it's not that you know what you cannot do, you have to guess a bit. Of course, we have professional support here to do as much as we can within the clear boundaries, but it's definitely a risk game.

Okay. All right. We talked about, we talked about all the nerdy stuff and all the scary stuff. Now let's talk about the future. Let's, I would love to hear your predictions on where we're headed in crypto in 2023. And please tell me it's gonna be better than last year.

I'm quite sure it'll be better, to be honest. I think we lost a lot of the bad actors in the space. I think all of the, like, all of these schemes that could never work, I think people now know that there is no such thing as a free lunch, like all the undercollateralized tokens. The liquidity flywheels and all complex tokenomics just to hide that it's a Ponzi are now done. So I think if you see what is built in the last months, it is again fundamentals, either quality projects, and I think that will translate in again some pushes forward. In the short term, I think what we are really looking forward to is account abstraction. And I think that will be a deal breaker for the UX of a lot of protocols. I think many DeFi protocols or even blockchain protocols are still very hard to use. Like, I can't get it explained to my girlfriend, for instance, how she should use MetaMask, let alone to interact with a lot of smart contracts. I think with account abstraction, a lot will be better. There will be things like social recovery, different ways to still have full control over your assets, but not with a 12-word seed phrase. And I think especially for us, account abstraction makes sense. In the end, what we built is a kind of a smart wallet, right? It's not an end owned account, but it is a smart contract that holds your assets and you're still freely able to interact with other DeFi protocols with the assets in your account. I think with account abstraction, we can make it much more powerful that it really looks like you are doing what you are doing today with your wallet. Only you have the additional option to do stuff with margin, so with borrowed assets. So that's definitely something we look forward to. Yeah, I think the second big trend is put ZK in front of a protocol and suddenly everybody is interested in it. But I do believe that it is like not overhyped. Yeah. I really think that zero knowledge, both in scaling as in some new privacy tools, will break through this year. So that's definitely something we're looking forward to. It's maybe a bit less relevant for our protocol. Yes, we can deploy on some ZK EVMs, but I don't see us using ZK tech within our own protocol. But still something, as a nerd, I'm very looking forward to seeing materialize. And if I look a bit further ahead, then I really hope that Real-world assets will come to chain, and maybe not in the form as today, where it's basically off-chain assets that someone takes into custody and then tokenizes. But really, that companies issue bonds on chain, that companies issue stocks on chain, and that real parts of a company are tokenized, and not in the sense that some company holds them and issues. tokens, but that really the tokens itself represent the shares of the company. And then I think we will see, yeah, real yields in DeFi again. And I think that's a must-have, but quite sure that we will get there. It'll not be this year, but I'm hoping in 5 to 10 years that it has matured enough that we with Arcadia also can allow you to use your S&P 500 portfolio as collateral. I think that would be the way where we should be heading.

So let me, let me say that back to you, that last part. So you're just saying like, how do we use like real-world assets or even like stock assets, which I, that's, I guess that's real world, but it's still digital or whatever.

Yeah.

Using that as like borrowing against those, like long, like say you want to hold a long, a position long-term.

Yeah.

And so the being able to like get liquid on it. And still hold that position though. You're wanting to see those more on-chain this year?

Yeah. Yeah. I think this year is maybe a bit optimistic, but that's the thing I look forward in the next 5 years, let's say. Because in the end, that's also how today in the traditional financial world, a lot of people finance, especially maybe companies or the more wealthy, finance a lot of stuff. They use their stock portfolio or real estate portfolio as collateral to lend against, so they don't have to sell their assets to be able to buy new stuff. And they still have the upside. I think the S&P 500, for instance, on average has a return of 6%, which outbeats most Interest rates. So if you can lend against an asset that brings in 6% per year, then it starts to become much more interesting than that you have to sell it for cash and use that to buy stuff.

I like the way you think, but also I didn't hear, so you're ZK rollups, you're not optimistic rollup fans, huh?

We, I'm rollup fans. I think I'm rollup fans. One, if I then have to pick between the two, I think really forward-looking ZK rollups seem like the best solution, but they're not here while the optimistic rollups are alive and kicking. So I'm definitely not a ZK rollup maxi. I hope I didn't put that message across because we will actually launch on one of the big optimistic rollups as well in February.

Okay. So, I, one, one bad prediction is the quantum hack. Do you think that's happening anytime soon?

I don't, I don't think so. No.

Good question. Don't think so. And probably if it happens, then probably the whole crypto economy is the least of our worries.

This is, I don't know why it just came into my mind, but I just, Arcadia just brings this out of me. I never get this spicy, but I just was like, ooh, what about maybe that's my prediction for this year? Well, that's great. No, but I agree. The abstraction.

I mean, they're making progress, right? And I think as soon as the technology is really on point and, say, widely distributed, that it can become, say, a valid concern. But then it's not a valid concern only for people building in the blockchain space, but anything related to cryptography. We're definitely keeping our eyes on, on what's moving there. But I don't think that's a problem or a concern that we can solve ourselves.

I think it's in the same category as like going to Mars, right? So, so it's like we need to be able to do interplanetary space travel just in case. And it's like, well, the quantum hop is possible, so we need to have like the projection just in case. But on the flip side, let me, let me sweeten this again. Let me go back to happy Clouds and rainbows now.

And big balls. Yeah.

Yes. And this goes along with abstraction, and I think it's like the Starbucksification of crypto. So with Starbucks specifically, they're, they're a very large bank because everybody's got their money locked up in Starbucks gift cards in the app. You know, they at least have $20 in there that just auto-reloads. So Starbucks has, Starbucks has all this capital just, just able to be used, right? Because people can't, you can't get a refund on your gift cards. And then they have these rewards points. And right now all you're doing is buying lattes or extra little bonuses. But what if you could like, what if there was like that, that DeFi unlock there? And so I'm always trying to pull together a fi things like how do we get, how can you get, you know, if we have that milli yearly prize and you're buying your oat milk lattes at Starbucks, like what if that gives you more chances to win that million dollar prize a year? in PoolTogether. So that's the way I'm thinking is like, you know, account abstraction. No, none of my, my mom's not getting on, my mom's not getting on any sort of crypto anytime soon, but she's on Starbucks. They got her. She's able to operate an app. And my, you know, that's just, that blows my mind that my mom's like an iPhone Pro using her Starbucks app. Right. So anyway, these are the things in 2023, I think, That the, I guess Starbucks is the Trojan horse of crypto into the normies.

Yeah, I think it's a very good point, especially with the apps. Indeed, with account abstraction, you can in a self-custodial way use apps. You don't have to have MetaMask because like it sucks on the phone. So these are indeed things we should push for this and next year.

And for the reward points, in theory, you could issue them as a token or something else on chain. And then by every purchase, you get some extra tokens, and you can use these tokens to increase your odds at whatever you want. So yeah, definitely some opportunities there, some possibilities there. Of course, it's up to those big corporations to actually start using these kind of things and not just, let's say, use the word blockchain or crypto for some hype reasons. So probably that's still one of the main hurdles there as well, that currently any large corporation that looks into or announces that it's using blockchain or wants to use a blockchain, that they more see it as a way of getting along with the hype, getting along with the current technological thing, but truly implementing things that use blockchain in a meaningful manner and the value that adds both to the company and also to the blockchain community. That's often still another story.

Thanks for listening to the PoolTogether Community Podcast. You can visit pooltogether.com to deposit, and we'd love to hear what you thought about today's episode. So visit the PoolTogether Discord and let us know.