AMA with Fran & Ryan on GemPad’s Telegram Channel on 23/9/2024

The following is a transcript of the GemPad Ask Me Anything, held with GemPad’s Rainlands and Fran and Ryan of the Stabull team, held on 23rd September 2024.You can listen to the original on our YouTube channel. 

The transcript was generated from the original source audio using AI, listened through and then we’ve done some light editing to remove repetitive content and improve the flow of the conversation, while maintaining the integrity of the original discussion.

*** TRANSCRIPT BEGINS ***

Rainlands: All right, all right, so we’re live! Hello, everyone, and of course, welcome to the AMA with Stabull!

Now, before we dive into specific features, and of course, everything that the team is all about with the presentation part of today’s AMA, we’re just going to start it off with my short introduction, which again, as per usual, will serve to give all of you listeners tuning in the hang of the basics.

For those of you that didn’t have a chance to check Stabull out yet, it is an innovative AMM designed to serve as a central liquidity source for stablecoins and RWAs across multiple chains.

As we’re getting into things, we’re just going to continue with the current deployed pools. I did want to mention—this is especially for those of you who haven’t had a chance to go through their Gitbook, white paper, or website—everything is as clear as possible there. And as I mentioned earlier, for all you visual learners, you have everything ready to go with the images as well.

Again, I strongly encourage you to have the website open as Fran gives his presentation, so you’ll have everything you need to know right there.

I also want to say that with the current deployed pools, you already have quite a lot of options. If you’re interested, there are Euro stablecoins, British Pound stablecoins, and even a Japanese Yen stablecoin.

This is not an exhaustive list of all the available options. Just a few that I remember and wanted to include in the intro. But for clarity, we’ll cover absolutely all of the options you can expect as we dive deeper into today’s AMA.

As we discuss deployed pools, I also want to tie this into the integrated chains. The first two are Ethereum and Polygon, but for anyone interested, there are plans to integrate more chains in the future. This is definitely something we’ll talk about later on.

To keep it short and simple—because we all know how my introductions tend to go—I want to mention a few things I personally found interesting. These are just the basics, and I won’t go into specifics here. 

Stabull also has a liquidity mining program in place to incentivize you to provide liquidity to the protocol. You’ll get all the information on associated fees with swapping here. And while I don’t want to touch on concrete numbers just yet—since Fran, the expert, is here—I will say that the fees are extremely low, which is something I love to see. I’m sure anyone interested in using the protocol will be happy with this as well.

Naturally, as we’re talking about Stabull, we’ll also dive into the security measures so you can rest assured that everything is safe and in order. This is something I personally appreciate as well.

We’ll also cover how easy the platform is to use and its clean user interface. This really highlights how much Stabull cares about the community and its users. They want to provide you with the best possible experience, making it as simple as possible for you to use.

Before handing the microphone over to Fran, I want to drop a pre-sale reminder. The pre-sale is already live and started today at 3 p.m. UTC. If you’re interested in contributing, you can find the link in the AMA announcement—it’s currently the last pinned message, and it’s also forwarded to our main chat, so no need to scroll. Everything’s hassle-free, as usual.

Lastly, if anything is left unanswered—although we strive to keep it community-focused—I encourage everyone here to join their Discord. Feel free to ask away or even just stop by to say hi, maybe strike up a conversation—no problem at all!

So, without further ado, Fran, it’s a pleasure to have you here. For starters, if you don’t mind, please provide a little background information about yourself and the rest of the team. Once we’re done with that, we’ll jump into the presentation, covering all the features and everything the listeners need to know.

Fran:  Thank you. Great to be here.

Well, I guess I’ll start off with a little bit of background. I’ve been in this industry for over 10 years. I’ve seen the rise and fall of various decentralization attempts and the different chains and consortiums that have arisen. You know, back in the day, it was just Bitcoin, and I partook in the first ICO, which was the Omni DEX on Bitcoin and the first attempt to create decentralized derivatives. Obviously, that was interesting, but with 10-minute block times, we needed to wait for smart contract programming languages like Solidity to come about.

I guess, fast forward, I’ve raised over $600 million across 35 customers, as one of the first investment bankers in this space. I’ve put together the tokenomics for companies like Chainlink and raised Sergey’s $33 million, as well as for Salt Lending, Bancor, and a bunch of others. So we’ve been in the advisory space, looking at evaluation models, go-to-market models, technical designs for the various borrowing, lending, derivatives, etc., on-chain. To us, it’s very clear that infrastructure is important and that the trend is, you know, the real world is going to come on-chain.

It took the best of what we learned over the last 10 years, and two years ago—just to give you a bit of a genesis of how Stabull came about—a bunch of stablecoin issuers came together. You know, the British Pound team, the Euro team, the New Zealand Dollar team, the Australian Dollar team, the Japanese Yen team, and they were all getting started with non-USD stablecoins. But they didn’t have the infrastructure because Uniswap, Curve, and all these AMMs aren’t designed for foreign currencies and commodities, right?

So, I ran a series of workshops and asked, “Hey, what do we need as an industry?” Out of that came some really good suggestions. Like, why don’t we make security number one? Why don’t we have, I don’t know, 5% of the protocol revenues go towards an insurance pool? Just lots of good, common-sense stuff. So, we reinvented the math behind the automated market maker, and we created a 4th generation AMM that’s more capital-efficient for stablecoins and real-world assets.

At the same time, we were researching to identify the biggest trends moving forward. Again, this was two years ago, and we identified that real-world assets—essentially, the world going on-chain—was about two years away. Now, we’ve seen hundreds of millions of dollars invested into real-world assets, non-USD stablecoins, Neo Banks, and other things in between. So, we have effectively built ahead of the big wave that has now started, creating a piece of infrastructure that is super simple and super important for the sector, right?

Stabull is designed to be a place where you can swap one asset for another. Right now, it’s Brazilian Real to US Dollars or various stablecoins. Soon, it’ll be oil, gold, silver, and a variety of other commodities. You can also earn an interest rate or an APY.

With Stabull, you either swap one asset for another, or you earn interest by adding liquidity. So, it’s very simple but scalable to billions and billions of dollars per day, per week, or whatever.

And yeah, happy to dive into any area you want me to explore further.

Rainlands:  Awesome. Perfect, Fran. Just wanted to say, I appreciate the introduction here and, of course, the rundown into everything that you guys are all about. Thank you very much for the information.

I did just want to ask you something that occurred to me. I wanted to ask because, more so, I wanted to start off with the basics before we get into dissecting the separate features and everything that you guys have available here.

I did want to just ask you about the name itself, and I’m sure this is something you guys are proud of as well. As we’re talking about stablecoins, and you guys actually having the name *Stabull*—who do I give the props to for the name? 

Because before we got into the game, doing my research, I’ll be completely honest: I figured it’s not pronounced *Stable*, but I was like, “Oh, it makes perfect sense.” So, who do I give the props to?

Fran Yeah. You know, when you create a new brand, it’s never easy. You ideate and come up with a list of names, and then, you know, it doesn’t feel right. And then, at three in the morning on a Tuesday, it just pops into your head. 

You know, like, what do we call it? *Stabull*, as in, you know, S-T-A-bull. It’s a play on words, and you know, we love the name. They can have a lot of fun with it that way.

Rainlands:  Yeah, for sure. And this is exactly why I decided to ask you here. So, yeah, perfect. Much appreciated. 

To keep everything moving with the features and whatnot, I did want to just— I assume it makes the most sense for all the listeners here to make it as simple as possible because this is something that both of us have established today: what you guys are doing is simplifying the entire experience. So, I figured we just start off with the basics for anyone tuning in, to have all the relevant information.

So, first and foremost, I guess we focus on stable pools, right? Makes the most sense. We’re going to then dive into blockchain, swapping of assets, maybe fees, just so we do a complete rundown before we actually move on to the community questions.

So yeah, first and foremost, if we start talking about stable pools currently—I’m not going to go into supported blockchains or supported stablecoins just yet, just to keep it moving with the basics, and then we’ll get to dissecting everything. But yeah, with the pools, one thing—and this is again just for clarity purposes, so everyone has all the useful information today—you obviously have two separate options that you can perform if you’re a user and want to take part in Stabull’s protocol.

So, you have two options as a, let’s say, liquidity provider: depositing and withdrawing liquidity from pools. And then you obviously have the second one, which would be if you’re a trader, swapping between the two tokens.

So, again, for clarity purposes, once you’re performing these two functions we’re discussing, I wanted to ask how those two operations affect token reserves, for anyone that would like to have a complete rundown on how this even works.

Fran:  OK, you want a technical explanation of how the swap and the bonding curve works. Is that correct? 

Rainlands: That would be great, correct. 

Fran: Well, let’s hand it over to Ryan. If you can unmute him, he is the Head of Product, and he’ll be able to concisely go into detail there.

Rainlands: Absolutely not an issue. Ryan, welcome. You’re unmuted. Hope you’re having an awesome day so far as well. And yeah, the floor is all yours.

Ryan: Yeah, thanks for having us. So, I guess the easiest way to describe this is like the difference from Uniswap or any other generalized AMM. Most AMMs and the pools that sit on them kind of fit into three categories. You’ve got your crypto pools, which are swapping any kind of high volatility crypto—Bitcoin, ETH, and anything else.

And then you have your stable-swap pools, which are pairs that are pegged to each other, like DAI to USDT or any 1-to-1 pool pairing. In between those, in terms of volatility, are non-USD stablecoins and RWAs pegged to USD. They don’t have as much volatility as cryptos, but they do have some compared to 1-to-1 peg pools.

So, I guess the innovative part of Stabull is that liquidity is dynamically recentered based on off-chain oracles. This is very important for stablecoins and RWAs, where the majority of price discovery actually occurs off-chain, whether that’s in the multi-trillion-dollar FX markets or the commodity markets. 

A lot of the movements in these stablecoins and RWAs, the price movements, are occurring off-chain and then have to be replicated on-chain. Quite often, that results in a lot of arbitrage profit being leaked to arbitrageurs and away from liquidity providers.

What the Stabull protocol does is dynamically recenter the liquidity around the off-chain oracle, in the hope of not leaking as much profit, making pricing more up-to-date, and reducing slippage compared to other AMMs with the same assets.

Rainlands:  Perfect, Ryan. Thank you very much, appreciate it. I hope that I didn’t cut you off because it kind of sounded to me like you wanted to add something. I do appreciate the answer. 

So, but yeah, I assume that this is all good to go here. So, Ryan, thank you very much for the in-depth explanation here, and for us to keep it moving.

So, a fairly simple one—this is me focusing specifically on the first blockchains, right? Something that we did mention in the intro as well, obviously talking about Ethereum and Polygon. So, this is something that I wanted to dissect into, let’s say, two separate parts, and to not overly complicate this. 

I’m just kind of curious about the thinking process that you guys had in mind as you were developing the product, all the features that you have here. Just wanted to ask—again, we’re gonna go into a second part, maybe I’ll even dissect it into three parts; I’ll see how we’re gonna be approaching this. But yeah, to keep it short and simple here, just with the first two integrations, again being Ethereum and Polygon. 

I wanted to ask you, how come you’ve decided to go with those two first? Is this something that you tie together to, let’s say, daily volume or anything else? Maybe you’re just a fan of the blockchains? 

Fran:  No, let’s, let’s just look at it pragmatically, right? Where are currently all of the stablecoins? They’re on Ethereum followed by Polygon. Every single layer one, layer two, and roll-up right now has stablecoins and RWA’s right at the top of their roadmap and strategy to increase use of their chain. 

So we are talking to 13 different chains, name them: we’re talking to them—TON, Ripple, Stellar, et cetera. All of them are prioritizing stablecoins and RWA’s, but they don’t have hundreds of millions or billions of dollars of stablecoins on their chains yet. So it makes perfect sense, right? That we just simply integrate the chains where the stablecoins exist first.

Rainlands: Honestly, it does, and it’s something that, honestly speaking, I didn’t even bear in mind when I was kind of, you know, saying, “OK, I definitely want to see how come you’ve decided to go with that.” But yeah, makes perfect sense here.

So Fran, much appreciated. And a little bit of an add-on to this, as I did mention before. So this is something that I guess I could tie together with fees, right? But we’re not going to be talking about fees just yet. But purely just for the sake of it—because I know that for protocol fees, that is something that, once the governance model is in place, anyone who is part of the governance will not only have a right to vote but also be able to make proposals, you know, specifically for the fees. Even though we’re not going to focus on those just yet, you can have a say in how it’s going to be divided, the amounts, basically everything of that nature.

So this brings me to the question of later integrations with blockchains. Is this something that you guys are ultimately planning to take the wheel on, or once the governance model is in place, is this something that anyone who is a part of it will also get a chance to vote on? Maybe make proposals if they see, “OK, this chain is good, maybe the options for stablecoins aren’t really there, but we still want it”? Is this something you’d also be willing to listen to feedback on for anyone part of the governance?

Fran:  Of course. Well, again, let’s take a pragmatic look, right? So, everybody wants stablecoins and RWAs on their chain. Currently, the stablecoins and RWAs are on Ethereum or Polygon. There’s a little bit on Stellar, there’s a little bit on Ripple, there’s a little bit on TON, Hashgraphs, and so on.

We will integrate any chain and add any pool as long as people come to us and say, “Hey, we will commit to a minimum amount of liquidity, a couple hundred thousand dollars on each side of the pool. If you can add a pool for, I don’t know, the Nigerian currency versus USD or tokenized gold.” If it’s on a different chain, most of the time, there’s a grant that covers the cost of integration. We’re just following the market. The market is going to dictate what is popular and where the liquidity is.

We’re just infrastructure that will load pools for anybody that is legitimate and wants a pool. When it comes to governance, we envisage that there are three different things people will be able to vote on:

1. We want to create healthy competition so that people vote with their $STABUL tokens in terms of which pool gets how much interest rate. That gives a very strong reason for people to accumulate voting power in the form of a governance token.
2. The protocol generates fees every time you swap. A fee is generated, and we have decided the first composition. So, we decided that 95% of all protocol fees will buy $STABUL off the market. Then, 30% goes into the long-term liquidity mining program, 5% goes to insurance, and so on. On a quarterly basis, people will be able to vote and say, “Hey, you know what, I think we need to have 10% go towards insurance,” or whatever the case might be.
3. We’re going to have, in H1 next year, as part of the DAO and on-chain voting, the ability for people to write proposals. For example, they might propose rewards for bringing $10 million of liquidity, whether it’s for tokenized gold, silver, or wrapped Bitcoin as a pair. Then, they can vote on whether this is a good risk/reward decision. Does the community want this pool with the incentive they’re asking for from the treasury?

You have to put the framework in place for good governance. Taking the experience we have from working on 30-something large DeFi projects over the last 10 years, we’ve distilled that experience. We created a decentralization roadmap and a governance framework roadmap that I think will work really nicely and create an equilibrium between people getting interest rates and accumulating tokens for voting power.

Rainlands:  Perfect. Yeah, it definitely makes sense, and it shows that you guys have a lot of experience. This is an additional question I wanted to ask for clarity, just to ensure I have all the relevant information.

First and foremost, I would assume, based on your answer, that there will be a specific amount of tokens required to gain voting power. This leads me to ask about the last point you made. If people are incentivized to hold more, I assume that holding more tokens gives you more voting power. Is there a minimum threshold to even make your own proposals if you hold a certain amount of tokens?

But again, just for clarity: If I hold more tokens, will I get more voting power, or is it the same for everyone regardless of their holdings?

Fran: No, I think this has to be a meritocratic model, basically. If you have tokens, you can vote on anything that there is a vote on. It’s not like electing a representative who then colludes and makes decisions on behalf of the masses. I think it’ll just be one token, one vote for anything that people want to participate in.

The incentives are really for issuers, large market makers, market mutual funds, family offices, and corporate treasuries. Think of it this way: say you have a market mutual fund, and you’re just trying to extract 4%-5% a year as a money market on these funds, and you have $100 million liquidity on a Stabull pool. If you then take 1% of that, or a million dollars, and buy $STABUL tokens, that buys you a million dollars worth of voting power, right? And if you then successfully vote that your pool can increase the interest rates by even 2% for the next 90 days, like every quarter, well, then, you make your million dollars back because the amount of interest rate increase is beyond the cost of buying the votes. 

So this is what I mean—it creates healthy competition between various market participants. We also have a deflationary mechanic, right? So, 5% of all the different swap fees will buy the $STABUL token, and instead of burning them, they are converted to a non-sellable version. We call this the Protocol Owned Liquidity Token. If you hold the Protocol Owned Liquidity Token, you get a share of all the fees. It’s like a stake-only pool. 

We have this described in our Gitbook. It might sound complicated, but it’s relatively straightforward. Stabull effectively offers the ability to swap one asset for another with a high degree of efficiency. We just did a test between a competitor and us, moving USDC to Euros, and we ended up 1.5% better off, which is a massive difference in terms of capital efficiency. 

You can also dust off your stablecoins and add them to earn liquidity. Then, you participate in governance and vote on things like allocating more towards insurance or deciding on proposals to load tokenized gold versus Singapore dollars. Or you might vote to change the interest rates to benefit your pool, where you are staking them.

Rainlands: Perfect, Fran. Much appreciated. Thank you very much for the full rundown on this. I especially wanted to give you props because even when something sounds complicated, you’re doing an absolutely phenomenal job of explaining it in a way that makes it feel simpler and more basic so everyone can understand.

I know I’ve said this probably two or three times today, but it shows you guys have experience. You’re building something and offering features for people in a way that simplifies the process. So, again, props to you and the rest of the team. Fran, thank you very much.

Lastly, just from my end, to keep it short and simple, I wanted to dive into some community questions today. As I promised, we’re going to keep it community-focused, and I have a bit of a problem with not talking too much! But this will be the last one.

It’s a fairly simple question—something I made notes on (I usually don’t). It’s about the bug bounty program, right? Personally, I think this enhances your security measures. It shows that you guys are serious and that you’re encouraging everyone to participate if they find something that might be a potential issue or risk. That’s where the bug bounty comes into play.

So, here’s my question: If there’s a cybersecurity company, community member, or even an individual interested in taking part, is the program already live? I know you guys have some features live and are working on updates and new features, but I wanted to know if it’s up and running. How can someone take part, and could you provide some basic information about it?

Fran: Yeah, thank you. And look, security is paramount for us. We’re trying to create an autonomous, super simple swap facility with absolute finality, clearing, and settlement for billions of dollars in FX and commodities. That’s our goal—to be a top 10 DeFi project. If we get this right, and I think we’ve got the recipe with the right steps and partnerships in place, we’ll move forward level by level. We’ll build dozens of partnerships and eventually end up with hundreds of millions, if not billions, of dollars in liquidity.

As we grow, this will become a giant target for hackers, and they will attempt to do what they do. So, we’ve built Stabull from the ground up using trusted developers we’ve worked with for over eight years. We’ve conducted several audits on our tools and token, and we’ll continue to do so with every material integration. For instance, when we integrate Ripple, Hashgraph, or others, we’ll make announcements every few months about new chains and pools going live, as well as partnerships—and, of course, audits for those updates.

Beyond just audits, we’re focused on security alert notifications, penetration testing, and more. We’ve partnered with Hackdra, who received a $200 million investment from Binance, ByBit, and other major exchanges. They handle security and cybersecurity event management, and they’ve developed a novel AI system for real-time security notifications.

We’re kicking off with a $50,000 bug bounty program, where critical, medium, and low-priority bounties will be rewarded. It’s being designed right now and should be live in days, not weeks. There will be a landing page on Hackdra, and we already have an Oznet profile there. People can submit ethical disclosures of vulnerabilities they find, and they’ll be rewarded from that $50,000 pool.

Of course, in this industry, we might encounter fake ethical hackers, but with a professional partner like Hackdra, we’ll be able to assess genuine claims. The bug bounty program is also a way to engage developers, and Hackdra’s wide-reaching community of cybersecurity experts is ideal for that. They’re even publishing an article about us soon.

Hopefully, that answers your question about the bug bounty program.

Rainlands: Thank you so much! I’m really glad I could provide the answers and even more feedback than expected—it’s always great to hear that the conversation was helpful. I truly enjoyed the discussion as well, Fran! Now, as promised, we’re moving on to community questions. You know the drill, Saint—you’re up first! You’re on the hot seat, so make your questions count! Hope you’re having an awesome day, and the floor is all yours. Welcome!

Saint: Hey Rainlands, how are you doing?  It’s great to hear from you.  Like your voice is always like cheering us up in crypto. 

Rainlands: It’s absolutely fantastic, thank you! Now, let’s keep moving with the questions.

Saint: I’m just curious, like this is a very obvious utility that was overlooked, breaching into different currency markets, and then you’re going into commodities and FX now. I like the idea, and how confidently you talk about bounties and having prize money. You’re spending a lot of cash, but where is that cash coming from, especially when you’re just starting the protocol?

Fran: Yeah, I’m happy to answer that. This is really a question about our cap table. We spent a lot of time ensuring that we don’t engage with predatory venture capitalists. We don’t have any typical investors who would dump everything as soon as it’s unlocked. Our lead investor is a publicly listed company on the Toronto Stock Exchange called 66 Capital Inc., one of the biggest Bitcoin miners globally. 

We also have strong backing from AlgoDAO, who are incredibly well-connected in the decentralized governance space, and Titan Block Capital, who see us as a potential alternative to the SWIFT network for on-chain FX clearing and settlement. Additionally, there’s Techemt Capital, which is our own firm. We’ve put our money into incubating this, alongside some high-net-worth individuals deeply involved in Real World Assets (RWA).

We only have about 25% left of the Pre-Sale, and we’re currently working to close it. That’s why we’ve made the last bit available on GemPad to decentralize the Pre-Sale a bit. So, if you participate, you’re investing alongside some very big names and loyal, active investors who are making introductions to token issuers and RWA providers every day. 

Hopefully, that answers your question.

Saint: Ok. I had a follow-up question, of course. So, you said that you already have Real World Asset commodity providers, and you’re mentioning a trillion-dollar market. Obviously, you might have your sights set on even more than this. So, how do you plan to onboard more liquidity providers in the future?

Fran: It’s a great question. 

Saint: Yeah. Should it be again through investors VCs?  What are you planning to do? 

Fran:  Yeah. So we always knew we would face the challenge of going from 0 to 1 — that’s the hardest step for any new decentralized or centralized exchange, getting that initial liquidity. It’s much easier to go from 1 to 2 or 2 to 3. To address that, we’ve designed a 10-year liquidity mining program. Anyone can participate, and it will really start to gain traction after the TGE (Token Generation Event) when the token is live and the APY can be claimed through the interface.

Outside of that, we’ve spent two years focused on hardcore business development. We’ve talked to every stablecoin issuer and Real World Asset provider out there. We’ve probably got some of the best insights into who’s doing what, where their tokens are, which chain they’re on, and their partnership plans.

We’re currently signing letters of intent with various issuers and liquidity providers, but we can’t preemptively announce them. However, I expect we’ll have tokenized gold and silver on board by Christmas, possibly even oil and other commodities. We should also have another chain live before the end of the year and could see six to twelve new pools by then too.

Our liquidity mining incentive is open to anyone. Plus, our business development team comes from high-caliber backgrounds, such as Cantor Fitzgerald and other major broker-dealer firms. We’ve also got a $200,000 campaign launching on October 1st with Magic Square. In a previous campaign, they took a project from 0 to $37 million in Total Value Locked (TVL) during the campaign period. We’ve vetted over 175 potential partners and chose Magic Square, De.Fi, and other top-tier names to run these campaigns.

Starting October 1st, we’ll have campaigns that reward users for swapping, adding liquidity, and participating in airdrops. So, while it’ll be a gradual process, you can expect monthly announcements — new pools, new chains, new partnerships, and liquidity providers coming on board. And, of course, we’ll be continuously running organic growth and user acquisition campaigns in parallel with all of this.

Saint: Ok, yeah, that was a satisfactory answer. And last question from the community here: you know, your community can chat on Discord, and here in Telegram, you just have the announcements. Is there somewhere the community can engage?

Fran: Yeah, we’re active on Telegram and Discord. I think Discord is where the more vibrant dialogue happens. We’ve just started to grow that. Of course, X (Twitter) is used for general announcements, information, and research or thought leadership content that we produce. I’d encourage people to get active, especially for when the governance portal goes live. I think the real action will be on Discord. Telegram is always handy for videos and the latest announcements, just like X. Go to our website and check out the various social links. Some people prefer Telegram, some prefer X. We have the main platforms covered, including LinkedIn and YouTube, to try and cover everything.

Ryan: Yeah, most of our community discussion at the moment is on our Discord server, which you can find on our website. As you mentioned, we do have a Telegram announcements channel, and we’ve been considering opening that up as a group to cater to the more Telegram-native users. If you think that’s a good idea, we can definitely get that going.”

Saint: OK, that was all for me, Rainlands, thank you Fran, thank you Ryan. 

Fran:  Yeah, great question, thank you!

Rainlands: Thank you very much for your questions, and we’re going to keep it moving to OG Benina. Hopefully, you’re having an awesome day so far as well. The floor is all yours. Welcome!

OG Benina: Thanks so much, Rainlands. I mean, I did follow it up and I really, really have to say I liked the presentation. It was a total breakdown of how the project would run.

I just want to ask a question regarding the actual token, the $STABUL token. I understand the governance part of it, where you could hold the token and be part of the governance—if there’s a vote, you could vote. But I want to see how $STABUL itself would be utilized in the entirety of the project. Are there any other benefits that come from holding it? Are there times where you could do some stuff around the $STABUL token aside from governance?

Fran:  Now, we’ve worked on 30-something different projects, and trying to stuff too much complexity into the design can create friction and lose users and the community. So, instead, what we realized is that these financial automata, as we call them—systems of smart contracts—once set up correctly, can just run and run, regardless of how many people use them daily. It could be 10 people one day or a million the next.

What we’ve done is design deflation into the system, where we automatically buy our own token off the market and lock it up or convert it into a non-sellable version. That’s the economic benefit of holding the token if you’re not purely interested in voting. In the future, we might offer discounted trading fees if you stake a certain amount of tokens. That would likely come after the governance portal goes live, which is probably around the end of Q1 next year.

What we’re trying to avoid is the classic trap many projects fall into, where they keep adding bells and whistles—like lotteries and NFTs—just to look busy. We have a really strong product-market fit and path to market. The critical thing is to create competition between different market participants, giving them a strong incentive to accumulate tokens to vote on interest rates, add new pools, or make major governance decisions.

At the same time, we have deflation and constant buy pressure on our token built into the system without adding complexity. The more liquidity in the pools, the larger the swaps that can occur; the larger the swaps, the more fees generated; the more fees generated, the more we automatically buy $STABUL off the market and put it into long-term liquidity incentives. That increases APY, which attracts more liquidity, and then interest rates balance out as more people join.

We’ve thought deeply about the game theory, tokenomics, and utility, and we believe we’ve created a fantastic design that satisfies all types of users.

 OG Benina: Thank you, Rainlands. 

Fran:  Thank you for the question. 

Rainlands: Ok, we’re going to keep it moving to a few more questions. Ceez, you’re up next. Hopefully, you’re having an awesome day so far as well. The floor is all yours. Welcome!

Ceez: Thank you very much, Rainlands. Really great AMA so far, actually. It’s been a while since I’ve heard your voice, Rainlands. Well, I hope you’re doing well too!

Rainlands: Absolutely, thanks. 

Ceez: Great. All right, so I wanted to talk about the stablecoins, the actual currencies that form the base for USDC. There’s the Japanese Yen, the New Zealand Dollar, and others. Now, some of these FX pools are already in the market. I wanted to know how you’re going to be able to access some of these pools, especially the US Dollar, which sometimes changes—like when the currency increases or depreciates. How are you going to get access to these pools directly from the FX market and then integrate that pool into your own app or liquidity pool in a way that allows you to control swap fees and manage transactions, especially when there’s a change in currency price?

Fran: That’s probably best for Ryan to answer. Just briefly from me—the SWIFT network and the legacy inter-dealer brokers and FX brokerage businesses are completely unconnected to the DeFi, on-chain space, right? So, if you look at entities like Circle, Paxos, or others, they have what’s called a bearer trust. You wire them money through the banking system, and they turn it into tokens, which you then use in DeFi.

From a technical perspective, we use off-chain oracles. But Ryan, do you want to perhaps offer a bit more on this?

Ryan: Sure. Yeah, I think your question is about how our pools reflect changes from off-chain FX markets, I believe. But yeah, basically continuing from what was said before, when there is a large currency change in the FX market off-chain, the oracles pulling data from those markets will update and send out an updated price. That affects our pools by shifting liquidity around that price.

So, that’s the main difference between the Stabull protocol and other generalized AMMs, which don’t have an oracle injected. In those pools, like NZDS-USDC, if there’s a change off-chain, nothing changes automatically in a generalized AMM pool. But with Stabull, the liquidity adjusts, and there’s suddenly an incentive to move the price in line with the off-chain price.

So, you’ll see Stabull pricing, even with lower liquidity or lower TVL, react a lot quicker to off-chain price changes. And that’s why we’re focused on non-USD stablecoins and RWAs because those are the assets where price discovery happens off-chain.

For other assets, like cryptos and USD stablecoins, a lot of the price discovery happens on-chain. That may not always be the case for RWAs and non-USD stablecoins, but in five years, perhaps price discovery will happen more on-chain.

Ceez:  OK, cool. I also understand that this stablecoin, this currency you’ve pegged to USDC, is kind of like the base for trading coins for forex traders, right? The others are more volatile because they’re traded more often. I also remember you mentioned that you would add more currencies to the pools if needed.

Now, one question about adding more currencies—especially those that are less volatile. For example, I think of the Russian currency and some others, like the Nigerian Naira you mentioned. Some of these aren’t really traded in the FX market. When adding these currencies, do you take into consideration how volatile they are and how they should be traded in the FX market, especially given their volatility?

Fran:  Well, I mean, currencies like the Russian ruble are trading to the tune of billions of dollars a month in the FX market, so there are definitely deeply liquid markets for those. Our plan is to add any pool that’s legitimate. We’ll do due diligence to ensure they have 1-to-1 tokens and aren’t a scam or fake stablecoin.

Think of it this way: we’ll integrate with a variety of Neo Banks as well. I look forward to the day when someone in Lithuania uses, say, flashy.cash—a Neo Bank over there. They wire in $10,000 or so of euros, and within a couple of clicks inside their Neo Bank account, they can buy Swiss Francs, Japanese Yen, New Zealand Dollar, tokenized gold, or maybe a bit of oil. They’ll never know it’s actually routing through and utilizing Stabull.finance to execute all of that, and everything’s run by oracles.

We’ve got a strong historical relationship with Chainlink and have been working with them to design our oracle solutions to satisfy our needs. We’re confident that we’ll be able to add more pools, more chains, more assets, and more currencies. The price discovery will be relatively clean and highly capital efficient, which is the key.

Ryan: And just to answer the last part of your question about volatility, the Stabull contracts have a number of parameters that can be changed, initially by us but eventually by governance, based on the volatility of the pool or the stablecoin being added. If it’s higher volatility, the alpha parameter may be lowered.

This is part of the design of the Stabull AMM, which we sometimes refer to as a hybrid curve. Unlike Uniswap or any constant product AMM, which spreads liquidity across all prices, Stabull’s liquidity is largely centered around an oracle, creating a hybrid, flattened curve.

There’s very low slippage around the oracle, but as you move further away, slippage and liquidity decrease. The size of the low-slippage flattened area of the curve is the parameter we change based on the volatility of the stablecoin.

Ceez: All right, yeah, thank you very much. So, I think you’ve answered the question very extensively. One last thing—are the developers working behind the scenes on this platform full-time, or do they have their own separate jobs? I’m asking because, when there’s a change or addition to the pools, are they available 24/7 to make those changes to the UI and the back end? 

Ryan: Oh yeah, I was just going to say yes, they are. The parameters I mentioned are smart contract parameters, and our smart contracts are currently controlled by a multi-sig across all contracts. Changes to those parameters that affect the pool will be made through a governance vote and then implemented based on the multi-sig.

But for UI changes, yes, our developers are available 24/7.

Ceez: Thank you very much. Thank you for the answers and for giving me the opportunity. I appreciate you.

Rainlands:  Thank you for the question, Ceez. We’re going to keep moving to two more participants. Next up is Freddie, and then we’ll go to Mazzie Mike. Freddie, hope you’re having an awesome day so far, and the floor is all yours. Welcome!

Freddie:  Hello, Rainlands. So can I go with my question? 

Rainlands: Of course, welcome. 

Freddie: So I just wanna know about your token. 

 How many percent of the token will be locked and how many will be burned? 

 Can you tell us how the token is going to be spent?

Fran: So it’s very difficult to hear you, could you repeat that? 

Freddie: How many percent of the token will be locked? And how many will be burned, can you tell us now the token is going to be split?

Fran: OK, so we have 10 million tokens total supply. 20% can never be sold—they are called protocol-owned liquidity. You can only get them by adding massive amounts of liquidity as a large partner, and even that has an expiry. So, in the future, you’ll see proposals where people say, ‘Hey, I’ve supplied a million dollars of liquidity for the last nine months. My nine months are over, and I’d like 1% of the supply for continuing to bring liquidity for another nine months.’

We realized, after working on so many projects over the years, that we can shift the incentive from the capital table to the revenue table, so to speak. People need to cover their cost of capital, and they can provide liquidity to so many different DeFi projects, right? We want to incentivize power users, but without giving them tokens they could perpetually sell. That’s what the 20% of the supply is for—it’s a kind of new invention in the space to avoid constant sell pressure.

Then, we have another 30% of the total supply locked in a 10+ year liquidity mining program, which is emitted across all pools. People will be able to vote on who gets how much APY per quarter, creating competition. About 23% of the total tokens are allocated to the pre-sale and public sale, with a two-year vesting period and various unlocks at TGE. The balance includes treasury, market makers, advisors, airdrops, and all that fun stuff.

Our tokenomics are available in the Gitbook. The key is that we have very simple, but highly scalable infrastructure—a multi-chain, RWA, stablecoin-specific DEX. We’re surprised nobody has built this before, but we also understand why: it’s not simple to make it simple.

I think that answers the bulk of your question, unless you’d like more detail on the tokenomics. Does that answer your question? Did I get it right?

Freddie: Oh, yes. Thanks for that—great answer. So, can I ask one last question?

Rainlands: Go for Freddie,no problem. 

Fran: Sorry, the last thing I wanted to add—just had a brain fart. You know, we have a highly scalable project, but we wanted to make sure it was fair. So, the market cap on day one is a small $3.25 million. We’ll have exchanges, listings, and ongoing marketing. So, I think we’re going to have a nice launch.

If this is a question about tokenomics, it’s important to understand that we’re not starting off at $100 million. We’re starting off very small to keep it fair for everyone involved.

Freddie: OK, man, thanks for that great answer. I just want to know what strategic innovations and initiatives you have to ensure your project stays on track, especially since the crypto market is so competitive and constantly changing.

Fran: Yeah, look, I mean, this has been a labor of love. We started the project two years ago and took our time deciding the best technology to use, the best design for the bonding curve. After heavy research, we concluded that by 2028, the market will have about $5 trillion of real-world assets on-chain. But how does that happen?

Well, the industry needs a wave of investment, and we’ve already witnessed that in the last 18 months. BlackRock created a billion-dollar fund for RWAs and stablecoins. Ripple is making huge moves and investments in stablecoins and RWAs. Hashgraph, TON, and others are making big partnerships. Then there’s Plume, which probably has the largest pipeline of real-world assets we’re talking to in depth.

These projects have received astronomical funding, but they’re only just starting to go live now. So, it was super important that we spent the last two years building relationships with all these well-capitalized, serious issuers. When they do go live, they’ll have a home for their products right away. A real-world asset-focused AMM is essential for issuers like Plume with a billion dollars’ worth of RWAs in their pipeline.

As the industry matures, we know pretty well who’s doing what, when they’re going live, and when they’re launching. As they come to market, we’ll load up a pool for them, and they’ll bring their liquidity, market makers, and announcements to let the world know their product is available on Stabull.finance.

Freddie: Ok, Rainlands, thanks for this great opportunity. It’s really been a great day. Have a great day, man!

Rainlands: Thank you for the questions, Freddie, and wishing the same to you. As I mentioned earlier, moving on to the last one—Mike, I’ve already unmuted you. You’re up next! You know how this goes, so make your questions count and make them great ones. The floor is yours! Welcome.

Mazzie Mike: Thank you so much, Rainlands. It’s so good to be here. Hello, Fran, and hello to everyone on the call. I’m going to keep it really quick since we’re out of time, but I wanted to start by commending you guys for a very detailed presentation. Also, all the information on your website is really detailed, and it just reinforces everything you’ve been saying here on the call. So, I wanted to commend you guys for that, but I also wanted to…

Rainlands: You got cut off, Mike, just so you know. You’ll probably have to start all over again. Looks like we lost you for a bit. OK, I gave you a few seconds to see if you’d reconnect. Perfect, we can hear you now.

Mazzie Mike: Oh, ok. I’m so sorry about that. So, I just mentioned that in 2023, over 600 stable tokens were detected, and it got me worried about the security of what you’re offering. Is there any sort of AI technology in place to predict these kinds of events, so that people who are invested won’t get stuck if market movements affect even stablecoins? Or perhaps you have some sort of insurance in place to protect investors for a short period, so they don’t lose a lot of funds when these market movements or de-pegging events happen with stablecoins?

Fran: Sure, that’s a very interesting question. So, we can avoid most of the problems by simply staying away from algorithmic, dubious stablecoins like Terra and Luna, right? I stay far away from that because the design was obviously going to turn into a disaster, and it did. It was pegged to an altcoin, not backed by actual dollars in a bank account.

So, when we talk to issuers, the first thing we ask for is proof of the bearer trust, the bankruptcy-remote structure, to ensure that even if the issuer’s business fails, the user’s tokens won’t disappear.

Now, if someone comes along and, say, market sells $200 million worth of USDC, and USDC unpegs to 95 cents instead of $1, that’s just what the market is saying. Ryan, do you want to comment on how we’re exploring machine learning and potential partnerships, like with Gora, to make things more capital-efficient and safer over time with various partners?

Ryan:  Yeah, I would just say that in response to the de-pegging question, because of this unique oracle design where the price is governed by the off-chain oracle, Stabull can help issuers maintain their peg in the short term. Some of you may know that a stablecoin’s peg is maintained by the belief or trust that you can always exchange one stablecoin for one unit of fiat currency. This process is often handled by market makers who maintain the price in the secondary market, like a DEX or centralized exchange, by taking advantage of the spread if it’s de-pegged, either with a premium or a discount.

Market makers profit from that spread by either removing supply or creating supply with the issuer. For smaller stablecoins or non-USD stablecoins trying to gain market share, this process can take time. There isn’t always a large market maker executing trades every hour. So, in some respects, where Stabull centers its liquidity around an off-chain oracle and offers a price closer to the peg rate, this mechanism can help maintain a less liquid peg in the short term. In the long term, though, supply must either be removed or added for the peg to be maintained.

Regarding your question about AI, Fran mentioned our upcoming partnership with Hackdra, which focuses on penetration testing and automated contract audits in response to new and existing vulnerabilities in smart contracts. Additionally, part of our roadmap includes controls over oracles. While it’s not too common now, one of the main DEX vulnerabilities a few years ago was oracle attacks, where attackers exploit or manipulate oracles to profit at the expense of liquidity providers.

Part of our roadmap is to add checks, controls, and anomaly detection to our oracles to prevent those issues. However, we’re more protected from oracle attacks because our oracles are off-chain, and it’s a lot easier to manipulate an on-chain oracle due to smaller liquidity. I hope that answered your question?

Mazzie Mike: You know, it did actually. I’m really impressed with the introduction of machine learning and AI. The reason I asked about the de-pegging was because of what happened with USDT, and it’s good to see that Fran had already taken precautions before launching. My question was about how you handle moments like that so it doesn’t become overwhelming to rely solely on human decisions. Machine learning and AI can help bridge that gap, and I’m glad you’ve introduced that.

But I wanted to ask one more thing. When I was reading, I saw a lot about currencies and stablecoins, and it got me thinking about innovative ways to introduce other commodities, like gold and crude oil. I’m glad Fran mentioned it, so I know you’re already thinking in that direction. But I wanted to find out—when it comes to bringing commodities like gold and others on board early, what are the barriers or difficulties? I see there are future plans to introduce them, but what’s holding that back? Are there any risks involved? What are your concerns when it comes to introducing commodities that aren’t currencies?

Fran: Yeah, so let’s split this between me and Ryan—I’ll cover the business perspective, and Ryan can talk about the technical side.

From a business perspective, many of these issuers have only just received their funding in the last nine months. For example, there’s a great business called Kinesis.Money, which has around $60-$70 million worth of tokenized gold and silver, and they’re really well designed. They’re based in the Freeport Economic Zone in Singapore, and their assets are stored in a vault, audited for proof of reserves, and everything else. However, all of their liquidity is currently on Stellar.

Now, we can’t disclose what we know, but we’re aware that they’re moving their liquidity to more accessible chains. As soon as that’s available on an EVM chain, it becomes easier for us to load a pool. So that’s the business direction. As soon as they’re ready on a chain that’s popular and already integrated with us, we can create a pool right away. Otherwise, we’d need to wait until we integrate the chain, which would involve a tri-party arrangement between a grant from Stellar, the issuer, and possibly even a market maker.

So yeah, we’ll load up any tokenized gold, silver, oil, or other commodities as soon as a professional team with bankruptcy-remote structures and non-fractional reserve practices makes their asset available on a chain that people already use.

From a technical perspective—how do we price commodities and handle price discovery? I’ll hand that over to Ryan for things like gold and oil.

Ryan: I mean, it’s much the same for the current suite of non-USD stablecoins. We have oracle providers that give us oracle prices for RWAs, just like they do for non-USD stablecoins. For example, one of our providers is Chainlink, probably the most well-known oracle provider. Their infrastructure includes several node operators who listen to real-world FX markets or commodity APIs for prices, whether from exchanges or over-the-counter. These prices are reported through the oracle and brought on-chain by Chainlink.

One limiting factor for which tokens and RWAs we can list is that we require an oracle. But with the number of oracle providers out there, and assuming it’s a popular market or RWA, there’s always an incentive for those node operators to offer that oracle.

Just to add to what Fran said, another limitation is fragmented liquidity. We talk to a lot of RWA issuers that are on different chains. Part of our roadmap, and a bigger part of our brand, will be multi-chain swaps. Our token will be available on CCIP, Chainlink’s interoperability layer, as a way to bridge the token between Ethereum and Polygon. We hope to make CCIP a bigger part of our infrastructure to enable users to swap something like NZDS for tokenized gold on another chain, all within a user-friendly portal like Stabull.

Mazzie Mike:  All right. Thank you so much for the answers. 

Fran: Great questions, thank you Mike

Rainlands:  Thank you very much, Mike. I was waiting to see if Mike had any feedback, but that’s it for today. I just wanted to say, Fran and Ryan, you two have been absolutely amazing. I appreciate you stopping by. Thank you for all the information and for answering not only my questions but also the community’s questions.

Before we conclude, I just want to remind everyone once again—considering it’s still the last pinned message and the announcement has been forwarded—if anyone is interested in contributing, the pre-sale link is available. You can visit it without any issues. And of course, for any additional questions, make sure to join their Discord.

We’ll catch you on the next one! Fran, Ryan, Pepe Elon, and the rest of the Stabull team, I wish you all the best of luck. We’ll talk soon. Thank you very much, and have a great rest of your day!

Fran:  Thanks for hosting us.  Fantastic.

Ryan: Cheers Rainlands. 

Rainlands: Thank you very much. We’re gonna catch you on the next one, cheers!