Derek Alia on Futureswap’s derivatives exchange platform

0:01i'm ashton addison from block west capital for investment pitch media in the crypto coin show and today on blockchain interviews we have derek alia ceo of future swap derek welcome to the show and thank you for taking the time to come on thanks axton thanks for having me really appreciate it you're very welcome i'm excited to dive into the world of decentralized exchanges amms and what

0:24feature swap is working on with some new initiatives and the version three coming out which i'm excited to dive into i would love for you to kick it off for the audience with an overview to start a future swap and then we can dive into the details yeah so on a high level future swap is a perpetual protocol that allows for anyone to engage on ethereum with our contracts

0:52allowing them to create perpetuals on any asset they want to with leverage up to 20x this is really exciting we were the first to create a fully decentralized perpetual um about a year ago slightly over a year ago which helped kick off a lot of this uh d5 bull run which was really fun uh being part of that uh and so we learned a lot and we're on version three now we're very excited

1:21with what we've created and uh we hope this next run is going to be as fun as the last one definitely and i'm glad your team's been a part of it and i know you had significant volume on future swap which we can dive into as well i'm curious you know the timing obviously was right uh when you were driving these solutions into the market can you talk about some of the problems

1:42and the frictions what was missing in the market and how you filled that gap uh with perpetuals was it just more asset types needed to be added into this decentralized world or was it something else yeah i think you know as a as a user of some of the other centralized exchanges we noticed that the market was moving in a direction where people wanted a decentralized

2:07solution and they wanted something that was non-custodial in the ethos of crypto i mean you're trading uh crypto on these centralized exchanges and it sort of breaks the experience of uh what the whole point is so we wanted to make sure that we stayed aligned with the values of crypto and created a fully decentralized uh solution for these these traders

2:32definitely and you talk about perpetuals and a lot of traders in crypto are just trading spot maybe you can talk a little bit about derivatives uh how that works and what is the value for crypto traders and getting involved in that i mean i think the biggest value add is where people are very excited about a certain currency or a certain um asset and they decide hey you know

2:58i think is really going up i really believe eip1559 is going to improve things and so beyond just what i can buy with my hundred dollars i want to leverage this up so i want to be able to take more exposure on an asset than i would be able to just over spot and so that's where perpetuals come in it allows you to engage um in a into a trade that allows you to have way

3:25more exposure on an asset and you get to be sort of in full control it starts going against you and price you can always close out and if it starts going in the direction that you um are hoping for you get to be in control and decide when you want to exit the position so it gets a lot of control to the user um on the other side of that great to know thanks for that

3:50explanation derek and i'm guessing having these uh positions in there has enabled future swap to in the past few months grow to over 4.2 billion dollars in volume so that's an amazing number uh congratulations on that so far can you talk about how you've been working with providing that liquidity and getting that volume on the exchange in the past few months yeah so i think

4:15there's definitely appetite for liquidity providers to have high yield um to be on a high yield protocol and one thing that future swap offers is a very competitive uh yield uh protocol and so we enable sort of this amm where people can put their liquidity uh into our our platform that gets used by traders what's interesting is that um on normal spot you're not really

4:42using the full pool every day you're using a fraction of the pool in future swap we can be using you know say there's a million dollars in pool we could use 10 million people can essentially churn multiple times a day so the the fees that you're generating on um on your assets are are far more so it makes it very attractive for liquidity providers to come to our platform and so that's

5:06that's one way we've been able to be very competitive uh to have the liquidity there for traders to come and and take on these trades um it's been it's been a really interesting experience for us definitely high yields are always great and do you think that is one of the main reasons or part of the reason why many traders are starting to move to dexes with amms over

5:28centralized exchanges certainly for liquidity providers i think this is a huge um incentive for them for traders at the end of the day so long as more liquidity provides a better trade experience which is the really what we've been able to build with more liquidity you have less slippage traders are more interested in having a better trade experience right

5:51so they want the best price execution which is something that future swap really focuses on uh making sure that we're very competitive against the other centralized exchanges um and so i think that's why they would be uh interested in this but yields definitely attract the liquidity providers definitely and i know with decentralized exchanges uh getting that liquidity is

6:12important because there can be higher slippage if there's not enough liquidity is that an issue that you ever ran into with feature swap our look our slippage was very low consistently lower than uh all of our competitors so we didn't really face this problem um which allowed us to sort of focus on other areas of development for future response definitely and is it mainly the high

6:38yields or the user experience or is there something else that's driving uh incentives for adoption for more traders to move from centralized trading exchanges over to future swap i think at the end of the day traders want um exposure on an asset and they want exposure in a way that they can understand future swap was one of those platforms where it was fairly easy

7:01to compare to another centralized exchange finance with bitmex and and go ahead and start engaging and so it was fairly trivial certainly there was some information around how to work with ethereum and metamask and gas costs that did affect uh usability but overall i think traders just want to engage in an experience that's that's relatively similar to what they've experienced

7:27before definitely and with future swap is it across blockchain or are you specifically focused on ethereum or are you continuing to expand throughout the blockchain ecoverse we we certainly love ethereum uh and you know there's other protocols out there that are very interesting um that we've been looking at um i think those are still

7:53in early stages and we'll continue to explore um those chains as they grow we're not limited to ethereum and we're definitely looking outside of the space for other opportunities but so far it seems like ethereum has a lot of the network effects that we're looking for and so much of the ecosystem is built there developer tools other projects users that it sort of

8:17makes it a lot easier for us to engage on that platform than it does um another platform definitely definitely and did you guys run into uh gas fee problems with ethereum or did you start utilizing layer two solutions or find another way to lower the cost for traders gas fees were incredibly high when we were launched i think they were some of the highest that

8:40they'd uh ever been on ethereum so our platform was indirectly affected by that um we don't have control over the gas fees of the protocol but uh you know that's just that's just how it is um and so now we're looking at other layer twos um arbor trump is coming on soon looks like optima optimism is also shortly coming up and we're very excited about these

9:05platforms uh we hope to launch um as soon as they launch so we're very excited we think it's a matter of weeks um and i think this will enable sort of a trade experience that's similar to what you expect on a centralized exchange with far lower gas fees so that's exciting for us very exciting and i mentioned at the beginning you're working on version

9:26three i'm guessing that is a part of it can you give a snapshot to the viewers on what's going to be coming in version 3 that's better than version 2 and when is that sort of expected yeah so version three is a totally redesigned version the ground up um we've assembled an amazing team of engineers uh and traders to build this new version and something that we focused on was

9:49making it as performant as possible and as cheap as possible so um before some people were paying upwards of a couple hundred dollars just to run a transaction because ethereum was so expensive on this version we've we've really reduced the cost uh in our contracts to make sure that you're under you're far under sort of uh five dollars a trade or something like

10:12this we hope to get it down to one dollar which is on on a decentralized system which is pretty low especially on ethereum so we're very excited about this making it easier for liquidity providers instead of having to add normally two assets something like usdc and eth for example you're just having to provide one so just add your usdc you don't have to worry about

10:34impermanent loss and you're off to the races um so it's much much easier we also are able to have far more assets in this version something that we've been waiting for for a long time so expect a variety of markets on our protocol and also increased leverage so those of you who want more exposure on an asset can can now engage in more that's very exciting and definitely on the

11:01impermanent loss side i think a lot of traders that are moving into decentralized exchanges are hesitant to put up liquidity because they are afraid of the volatility of the assets moving into stable coins is one thing but not having any permanent loss obviously is a huge advantage on top of that so that's great to know and as well in the platform is there a

11:24feature swap token that you're being utilized within the platform that users also can help engage in the ecosystem with yeah so our main governance token uh is fst so fst is the token of the protocol this is used to govern what upgrades what other markets we're adding any kind of token vote so this is the the way to engage in the platform

11:49and we do distribute this to liquidity providers and traders uh we want our user base to be the actual users that are using it we don't want tons of outside speculators who have very little understanding of it um having a big say in it so we distribute these to users and we hope to get a lot of engagement through that we were one of the very first projects

12:13in the space to have a defy governance token we saw this as you know this is going to be a thing with most most d5 projects this is a core need for the community to have a say and what what goes on in the governance um so we're really excited about this and it we think the future of fst is going to be very interesting given that uh this is a platform with

12:36a lot of usage and value definitely and speaking of the future what do you think derek will be one of the key factors to success for future swap you know five plus years down the road to maintain and become one of the top places to swap yeah i mean i think a great model for this is if you look at the excitement of something like uniswap and how that's been able to really

13:02take on um spot exchange and spot competition i think the same will happen in the perpetual space where you have um these these decentralized protocols that are really really close to the experience of a centralized exchange and if you look at the amount of volume going through these systems um it's incredible to think about how much value

13:29uh we can give to the to the traders and the quality providers so i'm very excited about this definitely and for people that are also looking at getting involved now with providing liquidity with trading on future swap and just getting involved in the community and looking for the updates for version three what's the best way for them to get involved in this

13:50i think the best way is to come to our discord ask any questions uh we're waiting for uh arbitrarium to launch and then we'll be uh launching with them we're super excited so uh you know the v3 is coming up and if you have any questions please please contact us um yeah i think that's the best way sounds great derek i'll leave the feature swap links and the community

14:13links as well in the description box below for the viewers for easy access to that all the best with version 3 launching of feature swap and the continued growth of the platform it does look really exciting and i'm excited for your team's growth and let's follow up in the near future awesome thanks a lot ashton i really appreciate it