Spool is making DeFi easier and cheaper to access

0:01I'm Ashton Addison from blockwest capital for investment pitch media and today on the crypto coin show we have Philip zimmerer core contributor at school Philip welcome to the show and thank you for taking the time Ashlyn thank you for having me and hello everyone you're very welcome and let's dive into what spool's working on uh Dows defy self custody which is more important

0:24than ever in with the events that have occurred in cryptocurrency in the last week we know that if it's not your keys it's not your coins uh and I'm glad that your team is working on something that embodies that so let's start from the top Philip I'd love to hear uh from a high level what spool is working on and how you're contributing to the project

0:44sure um yeah I mean I think you hit the nail in the head right uh currently it's becoming more clear than ever that like self storage and self-custody are important and unfortunately people sometimes forego that in favor of like comfort but that comes with risks that are not immediately apparent right and one of the important things about difa is that

1:10it sometimes looks a little more risky to people than centralized Solutions because all of the risks are immediately apparent but that's actually an advantage right and with school we're sort of we're trying to to bridge this Gap by creating infrastructure that allows you to access default yields while still controlling your your risk and to diversify seamlessly across

1:34protocols so with spool you can essentially build your own personalized Vault that might be Diversified against uh across 10 different products or or yield pairing protocols while still having the same kind of Simplicity that you would have on a centralized service like block file and so on with the clear one distinction that with spool you retain the keys you retain custody and

2:00you always have full access to your your funds and you can remove them from wherever they are at any time there is no way to suspend withdrawals or anything like that so this is really what we're solving it's great to hear Philip and when I look at the comparison of you know yield generating platforms let's say for example we're using a centralized exchange like FTX or or binance and you

2:22want to stake uh you know some ether and some Finance coin or you want to go into defy and use some yield generating products a lot of it is scattered out you know in the centralized exchange it's easy because it's all on one page with different blockchains but in defy it's it's not like that is this one of the main functionalities of school that you're sort of simulating that that ease

2:45of use and having a bunch of different things in D5 they're all scattered out into one spot but with the advantages of self-custody yeah yeah exactly um I mean I think you're you're nailing it right there right there right like a lot of people are kind of intimidated by gifa at first right for us as blockchain natives it all feels like uh or second nature but uh the the reality is if

3:10you're new and if you're looking to earn some guilt on your assets you're faced with an abundance of choice and the risks associated with these choices they're pretty opaque right it's hard for you like imagine you're a newcomer and you're asking hey what's default what can I do and then someone throws like curve convex other compound urine and so on at you and you're like hold on

3:32what's Happening like I have to research all of this then all of these have like different uis you have to read through all the docs you're like what is even happening with my funds right it's pretty hard to gauge right so I I don't blame anyone that says well here with Finance I just put my fund there and then there's an earned program and I'm earning earning yield right it just

3:51feels much safer right so what we're really doing is we're like uh you could almost see it like an operating system right like with school you can simply sort of uh log in connect your wallet and then you will see all of the options you will see risk models that associate risk scores with all of these options if you're like interested in how these risk

4:14scores are built you can look into them you can find out oh these are the metrics used to judge these protocols really it's also a Learning Resource right and then you can click uh and choose no coding experience needed to sort of build a diversified portfolio of the protocols that you like combine them and then set a risk tolerance the risk tolerance essentially says how much risk

4:37am I willing to really take on for the yield that I'm getting um and then we have basically all of the ingredients to automatically build your portfolio and then we will distribute and diversify your funds across the the protocols that you've chosen based on the risk of adjusted yield right so if one protocol has like a high yield but a low relative risk score we would

4:58allocate more funds into that relative to the others right just as an example and then when you click deploy you are essentially deploying your own smart contract again with no coding experience needed that reflects all of these rules that you've just set and then you can with a single click and a single transaction deposit into uh this smart wall that you've just built and it's

5:21it's really yours right additional Advantage you only pay transaction fees once right if you were manually diversifying against across 10 protocols you would have like at least like 20 to 30 transactions with all the approvals and like multiple transactions involved which pool is only one transaction and then we're batching all of these transactions to actually get them into

5:42the yield sources we're batching yours with other uh users while still isolating you and keeping you isolated to the protocols that you've chosen right but whenever there is overlap we're using that to save on action keys and that's really the functionality of school right it makes it super easy to use D5 as it is intended without giving up on like self-sovereign

6:04self-custody of funds and so on that's great to hear Philip and not just because it's can be confusing to have these yield generating Platforms in different locations is that it actually takes a lot of time as well you know and to give the instructions um on on depositing on on one kind of platform and going through the steps with you know quite a few approvals as

6:28you mentioned um it it never goes as quickly as you hope so to expedite that process as well with spool I feel like uh it's just like a Time Saver which I think time is even more important than money yeah exactly I mean look this is also something that we crypto people as I call it often forget right like managing portfolios might be our life but it's

6:55it's not the life that other people want to have right if someone comes home from an eight hour shift or ten hour work day include like plus a commute or something the last thing they want to do is spend three or four hours to like research D5 portfolios to understand where they could get like a safe yield on their on their last paycheck right people want

7:14Simplicity this is why financial services are a thing in the real world right so this is one thing that D5 lacks currently we have a lack of financial services that allow people to sort of offload some of that responsibility which uh crypto Advocates often like um don't really like the concept of offloading your responsibility but a matter of fact this right no matter how

7:39often you tell people about the risk a lot of times people will choose like Comfort over anything else right and this is where I think uh D5 is lacking and that is in terms of like financial services that it bring that comfort of usage to to users right to allow them to like do a set it and forget it kind of solution that then manages everything

8:05for them and school is really the infrastructure maybe not for end users to build their own schools because that's still not very comfortable but think about the potential and this is where we're really like thriving right now in terms of the attention that we're getting it's sort of with a b2b2x approach where in the middle between school and the end user you have

8:26Financial Services providers that are using spool as infrastructure as sort of a set of smart contracts that allows them to build Financial products based or backed by all of these FIFA yield burning protocols that they're using Capital productively to generate yield then themselves build new user-centric financial services that really Target users and bring them this

8:50yield served in a way that is like approachable to them right and this is really where where I'm seeing a big gap in default right now and a lot of potential to solve it to grow the market cap of D5 definitely and I feel like after you know the centralized exchanges are all blowing up this month and and who knows you know when you see your balance in

9:13exchange if that's actually backed by coins on the blockchain they could have been moved by the company um as as seen here in the past with FTX um this is just a super important time for people to be able to use D5 and to learn about it and to find platforms like this that make it easier for people to get onboarded and yeah Phil how long has spool been in the works for and from

9:39what I understand right now it's in version one yeah so we've been we've actually started work on School uh back in 2020 in D5 summer and school is really like a doll of people that came together to try and solve their own kind of problem because all of us core contributors that were there from the early start um we were all manually yield farming in

10:03D5 summer 2020 right so we were all like uh trying to like Farm Wi-Fi on on curve back in the day and like jump from Farm to farm and then we all kind of also burnt out on it because it felt like seemingly every single day you would wake up and you missed another new yield farm and like something else is around the corner and you would try to farm the

10:25first block of something right we were like mm-hmm this is rough this needs to be easier right like let's try to build something that makes it easier so I I talked to a bunch of friends right that were also yield fine we're like how how would you like what would what would you want what do you want what would you want to see to make this easier on yourself right and then based on these

10:45suggestions really we started conceptualizing school now it's evolved a lot since then but so has default right you always need to go uh with the flow in that sense um so what we're seeing right now what's live right now is version one of school that was like conceived in late 2020 um and that's really also reflecting the state the default Market was in since

11:08then now with V1 live um right now we have sort of started working with businesses with institutions um that's actually a big focus of ours that I think also sets us apart we're talking a lot with institutions we have since set up an association in Switzerland that allows us like illegal to have a legal foothold as a bell in the real world I think it's a it's a

11:34very very uh Innovative setup there is going to be some papers published about that setup uh in conjunction with our uh Law Firm Bayan Kara in Switzerland about this unique setup that we've worked out with them which is pretty interesting this allows us to really work with institutions so we're talking to let's say banks financial services providers

11:56fintechs and so on um about how they would like to enter defy and I think this is somewhere I can provide some pretty interesting Insight because there is a clear mandate for defy in financial institutions which a lot of people don't know so a lot of Institutions have made the decision to get into default in 2021 and if you know anything about institutions it's that

12:21they move pretty slowly but once they move they are not stopping so a little bit of Market flood and so on and all the price of dollars coin is dropping let's back out of the decision that we've made that's not happening right they they know they did their due diligence and they know they want to move forward with it which is why I know there's a future for default as well

12:41right so we're talking to these these players and we're asking them hey guys you want to identify useful right and obviously they're looking at spool V1 as it is live right now and they're like wow this is great but for us to use it we would need x y and that we need we would need other features so we're like well that's too bad but obviously since uh we're working

13:05on V2 already why don't you join us why don't we do Breakaway sessions and we had one of those recently in London in person with a bunch of Institutions where we were discussing features that they would like to see right features uh and functions that would allow them to to get into D5 right and they are obviously controlled by Regulators so we're trying to enable

13:30these features to allow them onboarding so long story short to get to the point here we're building V2 actively it's due in q1 to in 2023 so we're very far along and I think this new version of spool like calling it V2 is probably even an understatement it's probably a complete evolution of uh what we're trying to do as a concept right it will allow the

13:54onboarding of massive liquidity into defy and right now we're really more concerned about where to actually get all of these funds uh in the future obviously we're not going to start off with V2 and have an instant couple of billion dollars in there because we're going to start off with pilot programs first so it's going to take a while just to sort of keep expectations uh under

14:16under control um but I'm super excited because we're like I cannot overstate the importance of building something with your clients rather than like what I imagine these clients to be because I'm just uh someone who who loves FIFA and someone who loves crypto right I can kind of extrapolate and imagine what the requirements of an Institutional user will be but nothing beats actually

14:42talking to them and finding out from them directly what it is so I'm super super excited about V2 of school and naturally um we've signed up the the best of the best uh in terms of audits and so on so uh I think that school version 2 will be the definitive version of spool whereas the current version of V1 I would still call that a a Beta release okay well

15:08that sounds really exciting and and you're you mentioned about you know onboarding major institutions and I feel like there's so many you know institutional like custody holders and these exchanges that have clients that say you know I want to invest in D5 I want to start using these pools but I don't want to go through the hassle of doing it and they are just saying you

15:31know we just don't really have that technology to you know be able to onboard you guys easily without having to do all the work ourselves and I feel like this is the missing piece for that exactly you're again you're you're understanding it perfectly right like custodians are also like one of these uh partners that are super important for school so uh we're working with some of

15:52some of the major custodians uh in the space with uh finalized agreements already were essentially we're building applications in their own software to or through our SDK we're enabling access uh for these custodians to directly deploy client funds into schools if they want to do so so what's the major advantage right so let's think about the logistics

16:16of this whole thing if I'm signed up with a custodian and they're holding my stable coins or my eth or or whatever asset I gave them right it's in their custody so I cannot like physically move it myself right I have to talk to the custodian to do it now if I give a custodian um a couple million dollars in sale of coins and tell them hey can you put this

16:38in D flat for me and earn yield the custodian like you said right they're in trouble because they have to do all of the work themselves and there is risks associated with FIFA right like no talking uh like no denying that just look at Rec news there is something happening every week and we're getting blessed for the funny article about what happened right but the reality is if you

16:59were affected it's not so funny at all right so uh as a custodian you're kind of like stuck right because you have all of these stable coins that represent uh an opportunity cost because they could be earning yield right now the client wants to earn yield on these tailor points but they don't want to do self-custody because they're signed up with a custodian so what do you really

17:18do right and with school we're coming in and we're allowing we're basically giving them full on default infrastructure because we have adapters that allow interaction with all of these different defect protocols while we're also adding additional tools to the toolbox in the form of risk models that they can use to objectively without making the because they don't

17:41want to make the decisions of like putting funds somewhere they want to point at some expert in this case the risk model to say hey we're using a third-party provider for risk we're using a third-party provider for software this all of this is audited three times and we have like a 1.5 million dollar Buck policy with from unified standing out as well so we're

18:01taking like a lot of care of security right and the custodian can use all of this and package it together and build vaults specific to the demands of the user and then just deploy all of that through a single click and a single interface for the user right everything's like neatly compartmentalized every technically every client could have their own Vault

18:22or three adults for that matter within spool right just representing different creation processes with different like preferences with regards to protocols and risk scores and risk tolerances right and for the custodian it's just super super easy to set this up right so it's really a solution again right I can only speak to the reactions that we're getting when we're talking to

18:44these parties when we're working with them it's always a slow process because everything involving like other people's funds right if you're dealing with responsive like with responsible parties they're gonna do multiple rounds of due diligence they're going to look at everything three times and like checks and balances because in the end nobody wants to be the guy that lost uh a lot

19:05of money in a hack or because of some uh hasty decisions right but the reactions are telling me that we're building exactly what uh these these service providers need right and I think this is usually the best sign that one can have when working on a project it's going on a call explaining the solution and then getting this reaction of like holy crap you're do you're solving

19:31exactly like this this exact pain Point that's like uh occurring to us every every single week right and that's like really the best feeling and honestly that's kind of what I live for as well amazing Philip and I'm really looking forward to to seeing this grow out and the potential does sound huge so I'm looking forward to to that V2 launch and taking it to the next step uh but for

19:54today uh if the viewers want to learn more about you know the D5 products the smart vaults and and check out version one what is the best way for them to get started on that yeah the best way is to obviously just follow all of our social media channels and uh go on spool.5 and you can find our docs there and I uh this is a shout out to our Tech writer

20:19um I think we have some of the best ducks in the game both uh like retail facing dogs as well as Tech talks so if you're a developer you can find all of the details everything High School works it's late out there if you're a retail user and you want to find out about use cases how how School Works how you can best set one up you can just look at the

20:40regular docs and I think all of the infos are there and then we also have some very easy to access um explainer videos on our YouTube channel so it's really like for whatever appetite you have and forever like how how big your like attention span is we have the right uh content for you except maybe a tick tock Channel like we're not doing that far yet but uh maybe that'll

21:05come soon too sounds great Philip I will leave the links to the socials and and the docs and the platform in the description box below I appreciate your insights into the future of D5 all the best with spool and version two in the near future and let let's definitely follow up then as well yeah that would be awesome thank you so much Ashton and talk to you soon