Alex Melikhov on Equilibrium’s cross-chain money market

0:01i am ashton addison from eventchain for investmentpitch media and the cryptocoin show and today on blockchain interviews we have alex melikov the ceo of equilibrium alex welcome to the show and thanks for taking the time to be here today uh hi everyone who wishing us today thank you very much for having me here super excited uh about the opportunity

0:23to share more details on equilibrium and the polkadot defy overall definitely and i'm very excited to dive into the world of d5 especially in the polka dot ecosystem and d5 overall has just been really hot throughout this bull market so far uh this year in cryptocurrency and i would just love for you to kick it off with just an overall explanation and overview and the focus

0:44of equilibrium in the platform yeah absolutely so in a nutshell equilibrium is the first interpretable conglomerates of t5 products it's actually comprised of the comprehensive uh lending platform and the professional grade specialized exchange um so the reason why we are uniting all these uh sort of defy use cases then uh one

1:12interface is that we are aiming basically to solve the d5 fragmentation as you probably recall uh the current defined markets is scattered across multiple protocols and even across multiple blockchain networks uh so by building things on polkadot which delivers the interpret interoperability uh functionality out of the box and um introducing all these defined use

1:39cases uh united in one stop shop we basically solve this this problem first of all and um secondly uh you you basically can consider that as building uh conglomerate as one of the approaches to solve this problem however basically the second approach might be uh building a sort of uh aggregator um like the guys from uh one inch project d or per se

2:08guys from refinance obviously this approach also makes sense however it represents certain drawbacks per se you're taking the risk of third-party technologies while when you're taking the approach of building conglomerates you have uh basically the green fields uh to design everything um almost off the ground um so we decided to take this approach um with respect to

2:34uh the opportunity to build things uh on on polka dot which is the brand new uh ecosystem uh which offers uh the uh ultimate number of uh technical innovations definitely it's very exciting alex and i wanted to dive in a little bit more for people that are just diving into d5 themselves right now in terms of the the problems that you're solving

3:00and i know the majority of d5 is on ethereum we're seeing the congestion there um with the transaction fees and also uh it's just a little slow and it's unexpected in terms of you know the it could be double the cost one day half the cost the next the next but it still seems to be a little bit too much money compared to something like binance smart chain

3:22and then there's that having to switch between different protocols is are those sort of the main issues right now is like the cost and also moving from a lending on one blockchain to the next and is that really the primary solution that equilibrium is going to be bringing um yes absolutely so definitely these issues that you ashton mentioned are on the table

3:46uh so first of all the um in expensive transactions uh is one of the reasons why um users are moving from ethereum to other chains uh binance smart chain or some some other blockchain platforms um obviously uh polkadot is also addressing this uh issue by introducing um first of all sharding outs of the box right so if you consider polkadot as the blockchain platform

4:12we have bar chains uh um here on the table and um on another site uh uh polka dot offers interoperability uniting blockchain networks um uh basically connected connecting them with the its valet chain via bridges and uh this is um kind of the solution to the uh fragmentation of uh of liquidity first of all right because

4:39in the current defy space you cannot uh freely move assets across different blockchains in the decentralized manner and such uh technical solutions as polka dots is one of the obvious solutions here uh to to this problem as well um yeah so um building the conglomerates of uh defy products on polka dot is um quite you know conscious decision

5:06uh because uh at some points we were um obviously choosing the blockchain platform to uh place our core technology to and uh the obvious choice was uh was poked out at this at that point because uh from our perspective it's one of the most um uh advantages um uh platform in terms of um its technical capabilities and how they they're solving the interoperability

5:32issue um because uh like you you know that's uh bridges and polka dots as are truly decentralized and actually uh the polkadot technology is taking uh basically close attention paying close attention to the decentralization and the optimization of the overall network capacity and transaction costs and its efficiency definitely and i agree alex and i was

6:02looking at the equilibrium website and i see that you have a a wide variety of uh defy lending products already could you talk about you know what's most popular what is what are the main products that you're delivering for the end users on equilibrium so first of all um the uh lending platform is uh the uh main components of our d5 platform or

6:30platform overall and the functionality of uh our lending platform includes obviously pooled lending um also a decentralized stablecoin functionality we have our just native decentralized stablecoin uh back to dollar and also we have the embedded functionality of synthetic assets um along with that we uh we are also offering

6:57uh the functionality of different other derivatives there will be builds on top of this uh of this of this of this platform as well so the uh different the main difference between equilibrium and other lending platform is that uh we are introducing the innovative economy model which is underpinning all this product line and we are bringing in uh certain

7:22innovations uh for example uh we are taking the risk-based approach um compared to the utilization approach which is common to the current defined lending protocols like compounds or other and the main difference here that this risk-based approach is inherited from the traditional finance and that means that we are assessing boring costs taking into consideration first of all

7:47the risk profile of particular user positions and the system solvency overall which means that actually uh the particular interest on the particular loan uh depends on the um sort of level of risk for a user position and users can set lower interest on their loans by providing either more collateral or less volatile collateral

8:13uh to their positions which is quite quite interesting and from our perspective it makes way more sense rather than just you know setting interest based on utilization of the particular assets and this approach makes the system more balanced and sustainable definitely and thank you for that and you mentioned there the pooled lending and synthetic asset generation

8:38combining with trading and i would love to just elaborate on that a little bit more you know a lot of these terms for people that are just starting to stake and and moving to liquidity pools are a little bit uh confused with the details and the intricacies between the different kinds of liquidity providing and staking could you just explain that a little bit more

8:58in terms of what is the pooled lending combining with synthetic asset generation and how does that provide value for the end users um yeah absolutely so first of all we'll clearly see the tendency on the markets that um different platforms are trying to build sort of ecosystems around their core products uh per se let's take into consideration the synthetics

9:22platform they introduced uh the synthetic asset generation first and then they were studying building exchange and some other uh features of their platform which were uh just um like from our standpoints uh artificially combined uh with uh one with each other um in the case of equilibrium we uh we're thinking of our product line as the integ integral uh sort of defy

9:49platform uh with uh a wide variety of features um uh from basically from from the very beginning and so that's why uh first of all we have rolled out the very thought out architecture for that and all these products that i mentioned are simply strengths of this architecture and it doesn't require for us from us that much development efforts to deliver sort of new functionality on top

10:18of that um yeah if this this addresses your uh your question yeah it does thank you and you know the d5 space has been exploding and with exponential growth and i'm curious to hear your story about the equilibrium team growing the product and you know how has the growth of the industry impacted the way that your team has been building and scaling and trying to get to market and

10:42keep up with this fast-paced growth um yeah so first of all uh we see uh quite a bunch of interests uh from the community um uh with regards to what we are building on polka dots and this is uh kind of exciting because uh the more and more newcomers actually joining our community and support us from different perspectives we recently have um conducted the first phase of our

11:12priority english offering for example and we have collected uh 250 000 dots which will be used as a bit for our power chain uh on the polka dot network and definitely in this kind of overall atmosphere of excitement it's quite easy to uh build new products and to deliver new functionality uh so we we definitely rely on the support of our community uh you know that uh party and auctions

11:40are coming to kusama uh and we'll be introducing uh the uh on on the kusama network as well it is called jinshire which will be a little bit different to what we are building on polka dot because it will be um sort of uh uh more more inheriting the experimental spirits of the kusama network first of all and we also uh when we we actually expect to

12:06um uh roll out the first uh the first uh sort of um modules of our system into production on on kusama first so um like uh getting back to your question how exactly this sort of defy growth uh and the excitement of the community impacts equilibrium and the development of our products so again we we think that it definitely um the right time to roll out the new

12:38functionality introduced to the community and bootstrap liquidity and uh acquire like facilitate the user acquisition at the same time definitely and thank you for going into detail on the pair chain lease offerings and in kasama i'm excited to see equilibrium uh first go to kusama and it is very promising uh what that technology can bring uh to to have equilibrium you know tie into

13:05that and i'm guessing that those lease offerings tie into the eq token as well could can you talk more about the equilibrium token and the ecosystem does it create a sustainable ecosystem for the participants inside of equilibrium um yeah for sure so we first of all we have the eq token which is the key assets for the equilibrium ecosystem it plays

13:31a significant role there uh being uh the first of all the um core assets for uh our blockchain uh it's um uh the polka dot connects it with the polkadot network uh secondly it will be used obviously as a governance token and it will enable the community to vote for some significant system parameters and thirdly it will be used as a

14:01platform currency so users will be paying fees and interest on their loans and maybe the most significant use case for uh the q token is um actually an opportunity to use it as as as collateral and as a bailout liquidity to secure loans in the system and to earn additional yields um so on the side of our jinshire power chain

14:26uh which will be connected with the kusama network uh we also have the utility token called um gens and this this token will be also distributed to existing kicho can holders and uh basically uh the the vast majority of tokens will be distributed uh even um like uh before the network will be launched um and uh specifically through the

14:54blo which is upcoming and we expect to roll out the plo on kusama uh relatively soon because uh um uh it seems like the the the persian auctions on kusama will be launched uh really really really shortly great thank you for that explanation alex and yeah i was going to ask the next steps for equilibrium are you waiting on

15:21kasama to enable the plos uh what are the main goals that your team's trying to achieve in the next two to three months as you continue to grow and launch the platform um so first of all we are expecting to um launch the core functionality uh specifically of our lending platform uh as we have since we have developed um almost everything in terms of our

15:49lending platform including the bailout functionality uh the functionality of pool landing and stablecoin functionality as well um so it will be sort of the first batch of features that will be rolled out into production uh simultaneously we will be launching our liquidity farming program which will allow the community to earn uh on uh liquidity provision into

16:13our system and we expect to bootstrap liquidity through that um on on our platform um so in with respect to our sort of uh short short term plans i think that's that's pretty much it and uh obviously um uh the significant uh portion of these plans is related to um obtaining the parashin slot and simultaneously we are getting prepared for the second phase of our plo

16:41in polka dots and we expect that like uh roughly in uh months one months or so after kusama uh parachute auctions will kick off uh the persian auctions will arrive at the polkadot network as well very exciting and for the viewers that are interested in following along with these launches on equilibrium and getting involved in the community what's the best way for them to learn more

17:12um yeah so first of all um you definitely need to follow our twitter accounts it's equilibrium defy also you can follow the twitter accounts of our genjira projects which is ginger defy also feel free to visit our website at equilibrium dot io and join our telegram channel as well sounds

17:40great alex i will leave all of those links in the description box below all the best with the upcoming launches and the whole platform i'm looking forward to seeing it launch and i will be following along and let's follow up in the near future absolutely thanks ashton thanks everyone for joining us today