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The Wolf Of All Streets
This New Crypto Protocol Could Unlock Billions - Here’s How Token Baskets Work | Dominic Ryder
00:21:34
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Transcript33 lines
- [00:00]
A
You can build something that is extremely good and nobody gives a shit because you haven't had the right marketing. Let's say that, for example, you talk about token and if, if the token goes up, you know, no one ever says anything, but as soon as it goes down, it's all your fault.
- [00:18]
B
When's the last time you heard about a new standard for ERC20 tokens? Today I spoke with Dominic Ryder from alvara about the ERC 7621 token protocol for creating a tokenized basket of assets. This is not like anything else I've heard before in crypto. There's actually something new and innovative happening on the blockchain to hear all about it. Listen to this interview. So I don't want to take for granted that everybody, everybody knows who you are and what Alvara is. So you have quite the background. Maybe you can give us the quick brief on how you got here.
- [01:07]
A
Yeah, sure. So I started out on my supposed to be gap year. I was supposed to study sociology at the University of Bristol and started junior stockbrokers, 250 cold calls a day, commission only. Absolutely loved it, just hyper stimulated with my ADHD and did extremely well. So I decided to take my Chartered Institute securities and Investments exams instead to become trader at the firm rather than just, you know, phone monkey. And yeah, by the time I left there I was senior trader and head of desk. I then moved to St James's Place Wealth Management, which is a FTSE 100 wealth manager in the UK as associate partner and then after that worked in traditional VC and then got into crypto full time, employed 2021 and I think I first got interested. Well, I heard about it way too early because of my trading circles, offensively early that I didn't actually take it seriously until about 2020. Well, 2018 I think I first bought XRP for my sins and then, yeah, since then I've been full time crypto 21 onwards.
- [02:24]
B
Well, it's interesting you come in as a trader, obviously, which a lot of people have, but it's a whole other commitment to come in as a builder and you've decided to do so co founding Alvara here, obviously. So maybe give us a TLDR on what it is and then we can talk about why you did that.
- [02:41]
A
Yeah, absolutely. So Alvara is sort of a. It was built out of some of my frustrations with traditional finance in that I didn't go the normal path being that I didn't go to university because I thought, well, I'm already doing very well here. I'll just take my professional exams and, you know, start trading and start working hard. What I found when I went into sort of VC and private equity in particular, is as soon as you go into, like an investment committee and, you know, people were asking questions and contributing, I would give my opinion. It was always of interest because I had the experience behind me. But particularly in the uk, there's a lot of nepotism and sort of blood is thicker than water. And so one of the first questions you get asked is, where did you study and what university did you go to? And as soon as I would say that I was, you know, shocker, state educated and didn't go on to university, they would never take my ideas seriously. And so this really annoyed me, considering that, you know, all the investment banks, JP Morgan, Goldman Sachs, Morgan Stanley, their internal applications, you get filtered out if you tick the box that you don't have a degree. And, you know, even though they'd hire like 21 year old, you know, spotty, just out of university or college, with zero experience, 10 years at the, you know, top positions in finance, because I didn't have that piece of paper that said, I've been drinking beer for four years, I was just sort of filtered out. And so what Alvara and the ERC 7621, which is the token standard that we have built the infrastructure for and designed, it aims to create a complete meritocracy within fund and asset management, where no matter who you are, no matter what background you have, as long as the 7621 conforms to that standard, it will pull that through onto the platform, rank it on the leaderboard and therefore you have your CFA is against your retail, you have all geographies, there's no barrier to entry, it's meritocracy, where the talent should rise to the top and people will see your performance speak for itself. So, yeah, it's trying to put a bit of equality back into the financial system.
- [05:04]
B
With that in mind, what is the BSKT Lab? Because that's obviously a standard you're using alongside, obviously, ERC 7621, which you've created.
- [05:13]
A
Well, so there's a. The original name for the 7621, before we got the official number from Ethereum, was the bts, which stood for Basket Token Standard. And so once we got the 7621, we sort of still had this basket connotation. And so we decided for sure we'll have BSKT Basket. So they are One and of the same. It's just the name has developed as we've had the numbers issued and everything like this. So the 7621 as a token standard is essentially, you can think of it like an NFT which can store infinite amounts of other ERC20 tokens and allows for external users to contribute. Ethereum and it will issue LP tokens back to those who contribute. So like how uni v2 issues the v2LP tokens to liquidity providers. Every 7621 has a unique ERC20LP representation. And so what this allows for is infinite scalability. We are the very bottom layer of a potential ecosystem that can have hundreds or thousands or tens of thousands of individual subdoues and sub protocols built on top of it. Because every basket has its unique LP token. So you as a basket manager and you're earning fees based on the assets under management, you can add liquidity, you can build staking, you can launch a governance token on top, you can build lending strategies, derivatives, anything that you can innovate on top of a normal ERC20 you can innovate and add to your ERC20LP token. So not only do you have the 7621, but you have the ability for a whole subdao or sub protocol built on top and around it. Alvara as the infrastructure provides the factory contract to allow anybody to mint one of these without needing to hire a developer. We have just factory options people click through and then, you know, the more people get contributors, then hopefully they can actually run it like a full business. So we're the home for minting, minting a fund, managing a fund and then even selling the rights to it in the future. So the whole business and entrepreneurial life cycle can take place for us.
- [07:47]
B
So is the whole fund a single minted bs bskt? I don't know why I can't say those four letters in a row. Or is it like somebody effectively utilizes those to create a larger fund with a number of those tokens?
- [08:03]
A
So it's in terms of the pricing and the. So the 7621, the BSKT that stores within it 100% collateralized tokens. So let's say that you have Ethereum wrapped, BNB wrapped, Avax wrapped solutions and your waiting is that's an index fund.
- [08:26]
B
Totally understand.
- [08:27]
A
Yeah, exactly. But it does actually purchase those assets. So rather than just tracking the price, you actually have the ownership. Which is great for smaller protocols because essentially Alvara rewards everybody. If you are A small protocol and the more your community add your token to their baskets then effectively it's like spot Bitcoin etf but for every single sort of token that has their community building these. So it's real flows going through Dex liquidity. So the buys are actually rooted through rather than just being off chain or representations.
- [09:09]
B
That's really interesting. What's the grand vision then for it? As you obviously see, you're going to have so many different kinds of people minting these. Like you said, now that I think about it, you have the communities, they're going to want to do it obviously to create that vehicle for exposure. Also to lock up a whole lot of tokens. Right. Because now you've got demand somewhat locked up, but you're also going to have people who are just literally hedge fund type guys who are going to see an opportunity to quickly structure these and market them and move them around.
- [09:43]
A
Yeah, there's a, there's a huge amount of sort of, you know, stakeholders. Let's say that for example, you talk about token and if, if the token goes up, you know, no one ever says anything but as soon as it goes down it's all your fault. And what the 7621 allows people to do and you know, wouldn't be so much with yourself, but let's say that you have, you know, let's say someone has like a telegram cool channel. Right?
- [10:13]
B
Right.
- [10:13]
A
One, one poor user is the guy who sees that after an hour and is the top of the cat and that person has a, you know, they see when the tweet or telegram call went out and they make a conscious decision that even though it's been live for an hour or two hours and there's been X movement on the chart, they make the conscious decision to buy. However, if it doesn't go well, it's not their fault. For some reason what the 7621 allows for is to basically get rid of that problem entirely. Because if you are a cool channel owner and you simply swap to, you know, 10% allocation into, I don't know, sand from sandbox, that's probably a bit too big for telegram call channel to have a price impact. But for this example, you know, everybody gets in at the same price. You put the tweet out after you have allocated 10% in your basket and for anyone who complains afterwards, you simply say, well if you were in the basket, which you can join here, you would have got the exact same price as every single other person in my community did. There's no longer any complaints. As in the solution is everybody gets in at one price because if everyone has contributed Ethereum to the cool channel owners basket, then when they do that swap, everyone is in at the exact same price. And therefore the instant objection to well I bought the top and now I'm angry is okay, well next time contribute to this basket, you'll get into the exact same price as everybody else. So it solves that problem. Another low hanging fruit is with sort of VCs and private investors. In the VC and private equity game, you know, 90 to 95% of the tokens and investments fail, whether it's in crypto, whether it's in a normal startup. That is true. However, crypto has this very unique and unfortunate dynamic for entrepreneurs where you can build something that is extremely good and nobody gives a shit because you haven't had the right marketing, right? And therefore, you know, these VCs who invest in these projects, they believed in the idea, they believed in the concept and you know, there's always the odd like you know, one or two in the portfolio that have been bad actors. But for those who are still pushing, for those who still have the liquidity, for those who still have the activity on their socials, but for those who have of no fault of their own being destroyed by vesting or haven't had that price discovery or just bad timing.
- [12:59]
B
In the market when everything goes down and you timed your launch at the wrong time or the. Yeah, exactly.
- [13:05]
A
And you as the vc, let's say your Animoca brand, you can have your all stars basket where you've got your sandbox, your mocaverse and then you can have your value basket and your value basket can be the investments that you and a lot of other people are underwater on. However, you still believe in the team, you still have confidence in the tech. You just know that because crypto's idea of what makes a good valuation is completely separated from reality. You can give individuals the opportunity to buy what you still have conviction in and it helps all of the tokens because they finally have that buy pressure. It allows for price discovery because everyone wants to buy low and sell high until it's time to buy low and then everybody buys high and they complain about it. And so I see that as a very, I don't see why any VC in the world would not, would not want to do that. As in, you know, they've written off a lot of these that are down 90% through no fault of the team and the tech. Therefore they can Breathe new life into them just by launching a value basket. So yeah, there's tons and tons of different ways it can be used. 7621 doesn't have to be just like liquid tokens either. You could use it almost like a multi spac. Let's say you're a VC again and you want to raise funding in order to invest into four companies. As long as you can tokenize it, anything can go into a 7621. So you know, whether that's property, weak commodities, gold, silver, anything that can be tokenized and has a source of liquidity to be bought, whether that's white labeled and private or through Dex, then it can go into a 7621. So the opportunities are huge. You know, the liquid token side is just the immediate. But in the future, as traditional finance comes on chain and as it develops, and anyone who believes in crypto and the fact share certificates exist is testament to that they should do, eventually you should be able to add anything into a 7621. So our job as Alvara is to allow for the mass adoption of the 7621 via our factory contract. Because just like when Pepsi and Disney came on and did NFT collections, they didn't think twice about the fact that they use the ERC 721. Because the 721 is the NFT. The NFT is a 721. And so if we can corner that market and get the token standard as the go to for onchain decentralized asset management, then eventually if we have the user base, then we become like a Fidelity funds network of decentralized fund and asset management. Because if we have the platform where customers go to get exposure to these, then that is a reason for legitimate institutions to launch with a 7621 because it gets aggregated by Alvara.
- [16:13]
B
And so there's a Alva token as well, correct?
- [16:18]
A
Alva, yes.
- [16:19]
B
So how does that fit into the ecosystem?
- [16:23]
A
So there's two core dynamics. Number one is for the factory contract, people who use that 5% as a minimum is always in the alpha token. So important distinction that the any coded 7621, whether it's developed independently or minted through the factory contract, we will still recognize and pull it through. Because obviously we do want traditional institutions to end up using this. And therefore, you know, they have mandates. They are not going to use something where they're forced to have 5% of the token. You know, if they're property fund, they're not just going to have 5% Alva for fun. And so we have the 5% Mechanic for those who don't want to pay to hire a developer and for those who want to easily mint it through us as the platform. So every contribution to a basket that's minted via us, every minting of a basket virus 5% is held in the Alba token. The second mechanic which is more attractive for institutions and those with large capital to allocate is that we've taken the same gauge weight governance voting that you see in Curve Finance. So the VE curve and we've applied that to Alva. So we have VE Alva. So vote Esco Alva where the more Alvara you lock and the longer that you lock it for the more voting power you get. With your voting power you vote to send Alvara rewards to your chosen basket. Which means that as a fund or asset manager I, if I have the capital then I can buy Alva stake Alva incentivize contributors via yield as well as any increase or decrease in price. The more depositors I get, the more fees I earn. The more fees I earn, the more Alar I can buy, the more Alvar I can stake, the longer I can stake it for, the more voting power you get. And so just like you had the curve wars where you had stake Dao, Pickle Finance, Y Finance, BC Finance, all fighting for as much VE curve as possible for their liquidity aggregators, we've applied that exact same mechanic so that institutions can incentivize their basket with Alvara yield. So we're trying to create the same mechanic that created the curve wars. But rather than having tens or twenties of liquidity aggregators, we want to apply it to thousands and tens of thousands of baskets.
- [18:59]
B
That makes perfect sense. So anything else I missed? Where can people participate? How can they gain access to this, start to actually use it?
- [19:08]
A
So depending on the date that people are watching this, if it is from 14 August onwards, then we are live on Mainnet. If it is beforehand, you can still try out the full platform on polio Testnet. Right now if you go on to Alvara XYZ and then click through, you can fully run through, you can see all of the mechanics, you can have a play around, see how it works and get yourself prepared for mainnet. But if it's past the 14th then right now, yeah, fair enough. Perfect.
- [19:44]
B
So anything else I missed?
- [19:46]
A
No, I don't think so. That's sort of high level from.
- [19:50]
B
Yeah, it's actually one of the few things I've heard that's actually unique.
- [19:55]
A
Yeah, tell me about it.
- [19:56]
B
Usually we have 7,000 versions of the same thing. So this is one that I've never heard. This is the first time I've seen a new ERC standard and well, we invented it.
- [20:06]
A
That's why the 7621 didn't exist until. Until we created it. But yeah, it's not. Yeah, not another hyper liquid or not another, you know, L2 etc. Etc. It actually is something that's trying to solve a problem. And the good thing about it is the market is unlimited. You know, it's as big as the sort of asset management market, you know, in the world, which is constantly growing and by definition only goes up.
- [20:35]
B
So if you imagine that once you get tokenized, everything, that's also going to become very, very interesting because you'll be able to put them in here with the baskets.
- [20:43]
A
Yeah, exactly. So if we can, you know, we have a phrase in the UK which is look after the pennies and the pounds, look after themselves. And so the factory contract allows for that retail adoption and that fast population of the platform. Whilst us, as a foundation, our job is to work on the B2B side and work with the institutions to get actual adoption from traditional finance.
- [21:08]
B
Really interesting, man, really interesting. I definitely was not familiar with it and very compelling. So congratulations. Hope it goes exceptionally well.
- [21:18]
A
Thank you. Let's go.