Audio and transcript from the December 21st, 2021 installment of “Conversations with the Coop” with Jeff Garzik of Vesper Finance!
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Crypto Texan: Hello, everyone. Welcome to Conversations with the Co-op. This is where we source questions from the Index Co-op community to gain insights from today's leaders in crypto and DeFi. Today on the show, we have Jeff Garzik with Vesper Finance. Jeff, excited to have you here today. Thanks for being here with us.
Jeff: Thanks for the invite. Excited to talk to the community here.
Crypto Texan: Absolutely. And so the way we typically start these off is just, you know, let's get a little bit of background on you, Jeff. And then how did you get into crypto and decentralized finance?
Jeff: I've been a lifelong computer nerd software engineer. I started programming at the age of eight. I did work for over 10 years on the Linux kernel in the late 1990s and 2000s - so deep, deep open source DNA, well before blockchain. And then in 2010, specifically slashdot.org News for Nerds post. In July of 2010, I discovered Bitcoin. First I was a skeptic. You know, how the heck can it be decentralized? Surely it's just five servers in an Amazon data center somewhere.
But happily, I was myself wrong, and because it was open source, you could look at the Bitcoin source code, and I can prove to myself that the technology really was as groundbreaking and world-changing as it has proved to be. So I jumped from Linux in 2010 over to being an early Bitcoin core developer, started contributing when Satoshi and Gavin, the inventor and his number two, were around and have continued in blockchain up until today. I've always been motivated by, you know, kind of payment freedom, inclusion, egalitarianism, banking, the unbanked, really the core of what came out of the 1990s peer-to-peer type of culture. And just I've been very fortunate in my personal life growing up upper middle class, where I grew up and my father grew up.
And so I've always kind of had one eye, to bring this kind of back to the present, Ethereum transaction fees, things like that really shutting out just so many people. When a single DEX trade costs $120 and you have $120 to your name, you just literally can't use the network. And so I like to focus on that, that level of inclusion and that kind of led to DeFi and Vesper Finance, which is one of the projects founded out of Bloq where I'm the CEO and CTO. It was about bringing DeFi to kind of, you know, the more retail inclusive, wider community.
Crypto's always had kind of rough edges, and you know, what the heck is a hash? I shouldn't have to tell, you know, my mother, my uncle what a string of incomprehensible numbers is, it should just work and it should just be secure. And I think DeFi gets us down that road and we wanted to build and further that cause making DeFi easier to use, making DeFi more accessible to more people on the retail side and also just more approachable and risk adjusted and kind of, you know, twice audited care taken for institutional customers as well.
So those were kind of the two audiences that I felt were not really being served by DeFi of present. You had, and we know them, we love them, we have plenty of depositors and the crypto degen DeFi expert category. But we really wanted to serve that broad audience because DeFi is for a broad audience. It is for everyone, not just the few whales that can afford soup fees on the Ethereum mainnet. And so that kind of brings us to today. You know, outside of that, I like doing outdoorsy stuff. I go backpacking, hiking, I own a tractor and play around on my land. All sorts of fun stuff.
Crypto Texan: Yeah, and I'm getting the impression from you, Jeff, that, you know, open source software and open source code development is really important to you. Just based on your experience with Linux, Bitcoin and now Bloq and Vesper as well. Why do you feel like open source code is so important and how? Is it such, do you feel like it's a huge improvement over closed source or what are the pros and cons of that just in your mind?
Jeff: Oh, absolutely, it's there. There's a saying from the open source community – "With many eyes, all bugs are shallow," meaning that you know, the more people that can, you know, specifically software engineers, but not necessarily limited to software engineers, the more people that look at source code and think about it metaphorically, beat it up and iterate on it, try to improve it, the better we all are.
And in contrast with closed source, you have fewer people, fewer eyes on software. And I think the track record, the data I try to be data driven, the track record is that closed source software relies on security through obscurity. And that has led to a number of different hacks over the decades, whereby once said secret's out, if that source code is leaked or reverse engineered, which is pretty easy to do these days, then your security through obscurity is totally useless. So I think that open source is more secure. Open source can be developed more quickly because you have more people working on it, more eyeballs as it were.
I think that's proved over the past couple of decades that I've been involved in open source. I was very much like biology or chemistry or some of the other hard sciences where peer review and the sharing of data and code among peers to produce the best, highest quality work has been imported into open source. So when I hear open source, I hear, you know, those biologists and chemists performing peer review on each other's work. That's, that's the gold standard. It doesn't always meet that standard. But that's the gold standard.
And I think that if you look at what software everyone uses just widely, I'm talking way outside the crypto space, you know, Android phones, they're built on Linux, that's open source. Most of the servers and data centers that are serving your Netflix, Disney, Amazon web pages and videos, and YouTube. All of that is served by open source servers and open source software. And so I think the track record is that it wins and it wins for some specific economic and engineering reasons.
Crypto Texan: Yeah, that makes sense. So let's talk about Bloq. We want to talk about Vesper, but I guess it's my understanding that Vesper was born out of Bloq. So can you talk about, what went into your founding of Bloq and what other projects have come out of Bloq? And what is the sole purpose of that organization and your role within that organization?
Jeff: Bloq was co-founded by myself and Matthew Roszak, who is a prolific investor and company operator in the space. I'm the CEO, CTO and Matthew is the executive chairman. What we were, we founded it in 2015, and it's really a vehicle for building and spinning out really well engineered crypto products, similar to– oh projects, excuse me.
I may draw the analogy to the Edison Company in the early nineteen hundreds that was formed around spinning out a lot of Thomas Edison's inventions. What we have created over at Bloq is a nodes and infrastructure business, which if you need a Bitcoin or Ethereum node that is a fully redundant, stable, highly available environment, you can come to bloq.com and buy that. We spun out Metronome in 2017. That's a, you know, very decentralized ethos type of project. It's fully permissionless. There is no governance DAO. There are no administration keys. There is, I think it's number 40 on the DeFi Pulse list, Metronome holds over $45 million worth of ETH in a vault that no one can touch, except for these core programmatic roles.
And just like the musical metronome that goes tick, tick, tick and gives you a beat, Metronome has been ticking away quietly since its 2017 launch. It's kind of an ETH backed, quasi stablecoin, if you want to think about it that way, we spun out a business that got a lot of press recently – Titan Mining that does Bitcoin mining. We have several other initiatives which are nonpublic but will be public pretty soon, and Vesper was one of those.
So we wanted to again take DeFi, we wanted to level up DeFi. We wanted to level up the user experience. We felt there were too many rough edges, felt it was very off-putting from both the economic as well as user experience standpoint. Just wanted to make DeFi more approachable, easier to use, and that was, kind of, we're already doing blockchain infrastructure at Bloq. And so it was very thematic and very on mission to spin out eventually what became of, what became Vesper Finance, as you see it today.
Crypto Texan: Yeah, I totally understand that, because when I'm trying to onboard friends who are interested in DeFi or interested in the crypto space, it could be clunky and, like you said, a little rough around the edges. But as you said, that's why y'all came into founding Vesper Finance. So can you tell us now, just what is Vesper Finance? What does this protocol do and what is it aiming to accomplish?
Jeff: We really wanted to make the user experience of participating in that initial layer of DeFi very simple, very approachable. We founded Vesper in kind of the early days of the pandemic, when there was the DeFi food festival, there were pickles and yams and sushis and all of these to the retail user who is not following, you know, crypto Twitter and crypto drama on a day to day basis, it was nearly impossible for the average person to make some sort of decision of where to put their their assets. Is that asset going into a well audited DeFi contract setup? Or is that going into some contract written by, you know, a drunk teenager? At 2:00 a.m., he put a Shiba Inu label on it, and there it goes.
It's so difficult, sometimes even for software engineers, to evaluate the security of a project that average users kind of had no hope. And we founded Vesper as a layer sort of, you know, maybe a translation protocol almost, for users to just say, "Well, I have confidence that Vesper Finance is going out and evaluating each of these projects through the Vesper community and deciding on security parameters, asset limits, performance parameters, and then deploying that into a decentralized, non-custodial set of pools." So the users, they wouldn't have to, you know, discern, okay pickle security or yam security or sushi security.
We've done, through that community and that software pipeline process, done that work for the users. And so they can just come to Vesper and have the confidence that if I have some, you know, let's pick a thematic token DPI. If they have some DPI tokens, they can have the confidence that they deposited into a Vesper pool. It's going to automatically seek the best APY among all the safe, tested, audited DeFi products such that you can have a confident -- higher confidence, you can never be certain, nothing in life is certain -- but have a much higher confidence that that balance is not going to go to zero one night and a hack.
Crypto Texan: Right, so y'all are leveraging the composability of other DeFi projects, is that correct? Is that how– and how do the Vesper Grow Pools or the Vesper Earn Pools, how do those work exactly?
Jeff: Yeah, that's exactly what's going on, is some people apply the label "meta aggregator" in that we connect directly to as many DeFi platforms as we can, which are safe, and we go through that first level of evaluation of, you know, is a given DeFi platform, that we want to compose with that composability, is that DeFi platform audited? What's its track record? How long has it been on the market? We call that seasoning. Has it kind of been through the Darwinian trial by fire of the open market and the open internet for a month, three months, six months, a year? All of those raise our trust and quality metrics.
How do the Vesper Grow pools work? They examined those metrics that produce a list of yield strategies, modular automated yield strategies, which are going out to Compound or Harvest or AAVE or Yearn and sourcing the best yield within those risk parameters. So again, that might be a lot of technical how it works, deep dive for the audience.
But you know, the top level experience for the audience members should be that users deposit a token and it compounds at the maximum safe market rate and they don't have to worry about things that are confusing, like impermanent loss, which just explaining what impermanent loss is to an average user is something that, in my humble opinion, should not, you know, that's a speed bump. That's mental friction for a user if they have to figure out these complex things. And so we want to reduce that mental friction of using DeFi as much as possible, and that's what Grow does. So you don't have to worry about impermanent loss, you just deposit a token and that token compounds similar to a savings account or something like that.
Crypto Texan: Yeah, and you mentioned that I guess gas fees on mainnet can be a little restrictive, right? You said if you have $120 to pay for gas, but you only have $120 to your name, it's just not going to work. So is Vesper deployed on other sidechains and layer twos? Or which ones are y'all looking at in the future?
Jeff: Yeah, absolutely it is. And the mental picture that I conjure is Ethereum is a pitcher of beer and we're pouring more and more beer, that's transaction volume, into this pitcher of beer. And eventually, when it gets full, it's going to spill over. And metaphorically, that's what's happening now out in the market. Ethereum transaction volume is high, which as the way the system works, the network use fees go up. That's gas fees. And when those fees go up, people look for alternatives that are lower fees, that's just natural economic incentives.
And so we're very technology neutral, we're not, we don't want to pick a winner. We want the market to pick a winner in terms of whether it's a layer two protocol such as an Arbitrum or ZK rollups, such as Loopring, or whether it's another L1 chain, a layer one chain such as an Avalanche. We are deploying across all of the L1s and L2s, all the places where the users are.
Because you want to go where the users are. The users, again, we believe in the wisdom of the market and the wisdom of the market is pointing us to specifically Polygon, where we're live in production as of late last week, December 17th, when Vesper Season 2 launched. We are coming to Arbitrum, which is an L2. We're coming to Avalanche, which is an L1, and the march continues. We want to be where the users are, and the users are finding that they want lower fees so that they can DeFi the way DeFi was intended.
If you're, you know, to construct an example, you're getting some reward in some tokens, such as VSP, then you want to be able to claim some of that and compound it perhaps daily, perhaps more frequently through some automated process. And all of that is incredibly expensive. So much so that your fees quickly overwhelm anything that you would earn on Ethereum mainnet.
But that's not the case on Polygon. That's not the case on Avalanche and some of these other lily pads that are being developed for the Vesper protocol. So I think that that brings inclusivity, that brings more retail users to DeFi. And it's okay that it's not Ethereum because, I like to call Ethereum Grand Central Station, meaning that if you want to go from, oh, I don't know, the Solana chain and the token on the Solana chain, let's call it Jeff Coin, to Avalanche, you're probably going to go through Ethereum. There are bridges, chain to chain bridges and some other things, but you're probably going to go through Ethereum to go from one lily pad to another.
And so that doesn't mean, you know, kind of is Ethereum obsolete. And I'd answer no. I think that it becomes what we network engineers call a backbone network where other networks are hanging off this main Ethereum backbone network. They're settling assets to and from ETH mainnet. But most users are not using ETH mainnet, most users are using the Avalanches, the Polygons, where the fees are actually lower. To a network engineer like me, this is a highly critical network topology. You have one network and then you have another network and then you have another network. And the edge of that network is where the users are actually transacting. And that's what's evolving out in the market today.
Crypto Texan: Okay, and there's, I guess, a little talk on Twitter in the past, I don't know, month or so, do you feel like Ethereum has abandoned its users in that sense?
Jeff: It's challenging for users right now. Just with the high fee level, excluding a lot, that pushes people to other chains. If you look at over a 10 year time span, 20 year time span, Ethereum 2 is, you know, it's being developed more slowly than some people like. But the march of progress continues. And I think that in a couple of years, which is a long time in internet time, things will rubber band back to the Ethereum 2 and Ethereum shards, which is sharding and partitioning, is kind of Ethereum's answer to these alternate chains.
And so, have they abandoned their users? You know, economically, I think the real politic answer is maybe a de facto yes, just as users are being priced out. But development wise, I'd say it's a strong no. The developers are continuing towards a future where the fees will be much lower on these shards. It's a good question. It's a complicated question. I think we're in a temporary period where Ethereum is more expensive than its developers would like, but it seems that that situation is likely to rubber band back to Ethereum.
Crypto Texan: Wow I really liked your answer there, Jeff. I appreciate that and am excited that Vesper has deployed on Polygon. Us at the Index Co-op, we have a lot of our assets, almost all of them now in one way or another, on the Polygon network. I think one of the great things about Polygon is just the low gas fees, right? And I feel like in DeFi, one of the trends that we're seeing is a lot more retail facing protocols, right? I mean, if you look at protocols like Curve and Yearn, I'm not really sure how friendly those are just to, you know, Joe Schmo on the street who's looking to get a little bit of yield on his assets, right? But then, you know, you've got protocols like Vesper that come around and you've got all these very interesting, I guess, vetting processes and you're on Polygon, which is a low gas fee, retail friendly environment. And you know, you can deposit DAI into Vesper and you can receive your interest in DPI, which is one of the partnerships that we have going on here between Index Co-op and Vesper.
Can you explain kind of what's going on under the hood when that happens? If you have a user that has DAI and they want to get yield and they can receive that yield in DPI? It's almost like kind of a way to dollar cost average into the DeFi Pulse index. But what's going on under the hood with that? And what was kind of the idea behind that product, did y'all see a lot of demand for something like this?
Jeff: Yeah, let me maybe high level it for the audience before getting into how it works.
Crypto Texan: Okay.
Jeff: The product is called Vesper Earn. We just launched a whole new product line, a whole new set of pools in Vesper Season 2 again this past Friday, December 17th. And what Vesper Earn does we feel is pretty unique in DeFi. Again, sort of purely focusing on what the user sees, what the user experiences. You can come to Vesper and on Ethereum or Polygon, you can deposit one token and we use, in the back end, this yield generating automation framework to generate yield, which then earns a second token. So, Vesper Grow Pools, you deposit ETH and you earn ETH and it's your basic compounding type experience that everybody's familiar with. Vesper Earn, in contrast, is when you deposit a stablecoin such as DAI, and in the background, robo-purchases, the DPI token.
We have several of these earn pools, such, if you deposit, I'll give several examples if you deposit ETH, it will earn DAI stablecoin, so that's for crypto hodlers, if you hold ETH or BTC, you can come to Vesper, hodl that, your principle is preserved, that's the, you know, very key to understand. And furthermore, the interest from that principle is used to earn a different token ETH to DAI, ETH into DAI says that you're depositing ETH and you're earning a stream of US dollars.
And in the inverse, we have several pools, several earn pools where users can deposit dollars in the form of stablecoins, the DAI stablecoin, and you can earn crypto. And so no matter whether you know, DPI or ETH or WBTC price is up or down that day, it's a stream of dollar interest. It's a stream of US dollars that goes to buy that particular token on the open market. So the DAI to DPI pool, users deposit US dollar stablecoin, and every time the robots rebalance the pool, which is every one to three days, some DAI yield is earned internally and that DAI is then swapped on the decentralized exchange market, the spot market, for DPI tokens. And so it's a robo purchase through this automated machinery of the token in question. So that's how the Vesper Earn pools work.
So it's X into Y is the pattern, it's DAI into DPI, ETH into DAI, BTC into DAI, that sort of pattern. And so it's a new experience. Usually you'll go to, I don't know, a yield farm or a site like Vesper and you'll deposit your token and you'll earn more of your token and maybe a bonus rewards token. In this case, again, it's one token into a second token. It's, if you're a fan of fantasy and science fiction, I like to call it transmuting. You transmute the yield from one token into your preferred target token. So it's a very interesting product. It takes a little bit of explanation for a new audience because it's a new DeFi primitive, but I think Vesper Earn is going to be something that really solves some key use cases that, a lot of people again they were doing it manually and they were paying high fees to do what we're now automating.
Crypto Texan: Well, yeah, I can see how there's a lot of just individual preferences of investors that this would, it's just a great product for them. Something that they would really want and need. How does Vesper Finance, I guess, drive revenues to the protocol's treasury? Is there a little fee on top of that? Or what is the treasury make-up of Vesper Finance? And is it governed by the DAO?
Jeff: Sure, yeah, jumping on the governance and revenue systems side, all of these polls have a set of fees associated with them. There's a performance fee on the yield earned. On the Grow pools, there's also a withdrawal fee. There's no withdrawal fee on these earn pools. And those fees from each one of these 30 or more Vesper pools go into the Vesper revenue system, the Vesper DAO revenue system.
And what that means is a bunch of, say, ETH pool fees and BTC pool fees, et cetera. All of those get melted down in kind of a smelter, that sells those tokens or swaps those tokens on the open market for VSP, which is the the Vesper Finance token. And so all these fees are going to buybacks of the VSP token on the spot market and then that VSP is further split. Half of it, basically half, goes to the Vesper DAO treasury and the other half goes to a special governance pool that people can participate in the revenue sharing of the Vesper system called vVSP. And so all of that is governed by the Vesper DAO, which is in turn governed by the voting through snapshot.org with your Vesper or your vVSP token.
So it's a DAO type shape. It's governed by a governance token, and that governance token links into that revenue system that I just described that all the pools and pool fees link into. So it's a very at once familiar and also, obviously personally, I feel a very nicely designed and elegant system where we incentivize people to come to us not only to use the products, but if you're a developer, then there is a 5% developer fee. If you're a high school kid in Dallas, Texas, and you know Solidity, then you can write up your idea of a fantastic modular yield algorithm. You can submit it to our QA and testing zone. And if it kind of survives the torture tests, then you will receive a stream of income for writing that, for as long as that pool exists. So it's a real interesting case where you can incentivize external developers to continue to grow Vesper beyond what the founding team originally put into it.
That was always the goal, you know, just like my experience with Linux and open source, Vesper's an open source project and open source projects are, as the word implies, open. They're open to a community coming in and helping to run the protocol. It's a challenge in that, as we say in open source, sometimes being transparent means you're airing your dirty laundry in public. But that's part of open source. That's part of working with the community and working with the community has led to several interesting features or directions where I, as the original designer, didn't think about or didn't expect. To me that really signaled that the Vesper community was starting to grow into its own, as I'm sure you see similar things with the Index Co-op in the Index Co-op community.
Crypto Texan: Yeah, we definitely do. And you know, I've kind of pigeonholed Vesper as a retail facing DeFi protocol. So and I'm wondering, you know, when you're looking at the scalability trilemma, you know, of, you know, scalability, security, or decentralization, do you feel like-- or I guess, which in a retail facing DeFi protocol is the most important there? Like, do you feel like scalability is more important because retail users probably do care a little bit less about security and decentralization? Just kind of wanted to get your thoughts on that in general.
Jeff: Well, we really led with heavy on the security side, reflecting that a lot of the the DeFi projects before Vesper, were lazy about that and they didn't really conform to just standard basic software engineering principles of continuous integration and continuous deployment, which also means continuous testing and auditing and that sort. So we really wanted to be in part a security layer for that DeFi experience because that security layer we felt didn't exist before, really before Vesper.
You had to do your own research and there are plenty of lazy, I’m just going to ape in and do no research folks, which you can't really blame them because there's a lot to research and it's a lot of noise versus signal. That really led to again, how can we be secure by default? How can we reduce user mistakes, even if it's the user making the mistake? How can we reduce the possibility of users screwing up? That goes into our user interface, user experience research and the entire, really the entire Vesper experience.
So that was first, first and foremost in our minds, kind of born out of the summer of 2020, DeFi experience and its lack of security. And then obviously, we followed up on that with scalability releasing on Polygon, et cetera. But yeah, definitely a, you know, I feel that the ease of use might sound trivial, but it actually really plays right into the security story because if your software is complex, it's easy to screw up and maybe fat finger thousands or millions of dollars into the wrong direction. And we wanted to avoid those kinds of mistakes. So ease of use, user experience, and security, we feel really go hand in hand. The secure experience is also the easiest to use and the hardest to screw up.
Crypto Texan: Yeah. And do you feel like retail coming to the space, is that the next big unlock, because I think for a long time, the meme was that institutions are coming. And I think in 2021, it finally did happen to an extent. And should the next meme be retail is coming? Because I think another thing that can happen in, I guess just the crypto space in general, is being too early, right? If you are way too early and the community or the ecosystem is not ready for that type of project yet, it can kind of fall to the wayside. So I'm assuming that you would think that Vesper being this retail facing filter for DeFi projects for the retail users, you don't feel like you're too early right now. Correct?
Jeff: I think that it's definitely the year. The years of retail institutions always move slowly. They dip a toe in the water and then they take the toe out of the water and then they put two toes in the water, et cetera. And it takes some years to get through their higher level decision making processes. You know, getting their own inside attorneys happy with the particular legal shape and stuff like that. So that process literally takes years for institutions, even very pro crypto, very interested in crypto institutions to actually come to the fore.
Fidelity is an excellent example. They initially got into Bitcoin mining. The CEO of Fidelity had a Bitcoin miner on her desk as part of the let me, you know, let's get serious with crypto. And then the next step was they accepted crypto for the Fidelity charitable side of things. And then once they had that comfort level and their inside attorneys were happy, they started to move on to Fidelity digital assets and they've continued to get deeper and deeper into crypto. But that process has literally taken, I think, five years so far, and their CEO from the top down is a crypto fan who wants to get Fidelity into crypto.
So those things on the institutional side are absolutely happening and you absolutely have champions inside of these institutions who want to get into DeFi as much as possible, but it takes a long time. Some of the hacks, the ways around that years-long process is like what Vesper's doing with Blockforce Capital. Blockforce Capital, they stand up hedge funds for various institutions. And institutions, they can very easily invest in a hedge fund because that shape and format is very familiar to them, whereas DeFi, that's a new shape, a new format. And so you have a hedge fund investing in DeFi and then an institution investing in the hedge fund. I know it's kind of a two step, but that is actually how you get institutions into DeFi more quickly. But again, that takes time.
And so, you know, from the philosophy side, as I talked about earlier in this AMA, to wanting to secure the user experience and just broaden the reach of DeFi, it's been not only a focus on retail, but I think retail is actually responding. They're responding to, you know if you're talking to average users, the average users are responding to what they see in everyday life, which is the web3 stuff a little bit. There's a lot of NFT stuff, all of that flows back into, that gets you into crypto, which gets you into DeFi. And as a retail user, we think that, or as a segment, we think retail users are probably the biggest growth segment in 2022 as a result.
Crypto Texan: Yeah, and now I want to talk about the future of Vesper. I'm also curious as to, you know, with your experience being an OG Bitcoin core developer and your experience in Linux, like how has that experience, I guess pushed you in this direction? Like what lessons have you learned in your previous lives in the open source world that, I don't know, that you apply on a daily basis to the Ethereum, DeFi world? And then what, in your mind, is the future outlook for Vesper and what's getting you excited on the horizon, on the roadmap there?
Jeff: Yeah, in terms of principles applied, transparency and community are pretty key. I think that blockchain, I often say, is enforced transparency, meaning that unless you're taking steps to hide it, all the transactions are easily viewable on Ethereum, or the sister networks, making it easy to sort of prove that you're doing what you said you were going to do. So that proof of execution or proof of promise is even more prevalent in blockchain than it was in previous Linux and open source. So as is community, open source is nothing without its community. It's a group of like minded individuals marching mostly in the same direction, getting together, organizing, communicating, and iterating how to move in that direction faster, better, more securely, more thoughtfully, more philosophically. And from open source to blockchain, transparency and community absolutely have primacy.
Also on the sort of nuts and bolts side, a lot of the software development, software engineering practices carry over. All the source code is on GitHub for any developer to to use, study, remix, improve upon. That's part of the open source way, it's open as our audit reports for security researchers to help bulletproof the system. So a lot of those practices really carry over from the Linux open source days into the blockchain DeFi open source days.
What's the future of Vesper Finance? Boy, that's an AMA in and of itself. So we just announced Vesper Season 2, which really gives a hint into what is the newly expanded future. A number of different product lines for those retail users, Vesper Grow, again that's deposit X earn X. So, you know, deposit ETH, earn ETH, et cetera. We're going to be expanding those to a number of pools, as you know, for this community we just added a DPI pool whereby you deposit DPI and that compounds at a certain rate. Vesper Earn, which we just announced, invests for season 2, that x into y type of primitive. You deposit a US dollar stablecoin and you earn a different token, say DPI - deposit DAI earn DPI, deposit DAI earn BTC, deposit ETH earn DAI. That sort of x into y pattern.
There are a number of multichain and cross-chain initiatives. Again, this is about inclusivity and getting more users. Are they using these products at a lower cost because that's to their benefit, they can compound more, do more on a lower fee chain. So expanding beyond Polygon, which we're live in production, to Avalanche, Arbitrum, and some of the L1s and L2s.
Spanning governance, we just upgraded the revenue system - our community voted upon VIP, a Vesper Improvement Proposal to upgrade the revenue system and the DAO. There's a governance forum participation along with that, so that people can help steer the ship, which was always the intention. That's the intention of the DAO, as it's a community-led, community-steered type of project. Finally, reaching out to a number of different projects, and this Index Co-op is an excellent example of that, bringing on board folks and their tokens like the DPI token such that Vesper is helping, you know where we're uplifting y'all and y'all are uplifting us. It's just a mutual kind of win-win, positive-positive type of relationship.
We want to do more of those across the DeFi and DeFi industry, and we have several, several more unannounced. We have, for example, FEI and FRAX, which are on their governance forums being discussed and studied. The future has a number of different initiatives, the Vesper Grow enhancements, the Vesper Earn x into y product line, a number of those are going to be coming out. The governance improvements, the multichain, all of that wrapped into this package are tied into a bow that we call Vesper Season 2. So a lot of stuff either just kicked off in the past couple of days or is coming down the pipe that I think users will really find of significant personal value to them.
Crypto Texan: Yeah, Vesper Season 2 sounds really exciting, and it sounds like y'all have got a whole lot going on over there on the protocol level and at the DAO as well. And yeah, I agree with what you said. I mean, when you have different DAOs and protocols that are partnering with each other, that symbiotic relationship, it's just it's so beneficial to everyone in the ecosystem and to further composability of different protocols that just, I just feel like that helps like exponentially with the growth, and the outreach, and the benefits to the community and the ecosystems in general. And one of the things you touched on was how, you know, community is great for DAOs and protocols in the sense that it can, I guess, help projects march along the same path.
But can that also be, in your mind, like, could that be a disadvantage too? Like just kind of thinking of Bitcoin maximalism? Do you feel like they're missing the mark there? Or is there some sort of benefit to having some maximalists in your community? And I feel like on Twitter, we're also starting to see kind of like Ethereum maximalism as well, and maybe in some sense, almost becoming as toxic as the ones that on Twitter that a lot of people don't like. I don't know, just kind of want to get your thoughts there, on maximalism and is there a certain percentage that could be good in a sense? Or are all these people just missing the mark in general of, in the philosophy of crypto?
Jeff: I would say that I would go to my Zen philosophy corner of my brain there, in that you always, I think, want super fans. It's easy to kind of nit pick and qualify statements and hedge, and maybe I'm not so sure about, and you really are emotionally, I think, refreshed no matter what community you're in with, this guy is just a super fan. He loves what you're doing. That really energizes people and you want positive energy. You want people who get you excited about your own work. And I think that level is definitely on the positive spectrum.
There's definitely, and I saw some of this from the earliest Bitcoin days continuing to today, specifically with Bitcoin, there was a, in the early days, a Bitcoin versus the world, including other coins, type of mentality. Some of the other coins have copied that, and I think that if you get into, you know propaganda and falsehoods, and you're kind of diverging away from science and honesty into more religious dogma that I think can be unhealthy, you know, unprofessional and dishonorable, and I at least care about that stuff, very much.
And I also, you know, in particular, I'll tell you, one of my trigger words is the, you know, I won't say it in case, you know, a safer work audience, but the s...coin word right, is to me, using that word is just, you know, denigrating people's innovation. There are obviously, you know, coins that are nothing but hype, coins that are nothing but scams but if you get into the maximalist rooms where everything but their coin is a scam, then that's, I think, gone too far and it winds up actually helping real criminals, real scammers hide in the noise.
So as in, as I led with, it's sort of philosophical zen - it's a range, there's not an absolute, you know, maximalism is bad, maximalism is good. I think that there's just a range of human behavior and some behavior is needlessly negative. You know, maybe more philosophy people are tribal in their DNA and just like, I don't know if you're a Dallas Cowboys fan, but you know, I'm certainly in the Atlanta Falcons fan that's part of my tribe. And sports fans sometimes go off the rails when it comes to, you know, hating on another team or pumping their team. And my deep, deep, you know, viction is that just tribalism is in our DNA, we can't help it.
Maximalism is part of tribalism, coins enhance tribalism. It's just something that we have to live with and deal with that some people will always go too far. You know, again, the people that are positive in the room, that are fans, that are adding energy, that are really interested in what you're doing and push you to be a better person. That's, you know, that's the type of person that I want in the room with me.
Crypto Texan: Yeah, absolutely, and I was especially interested to hear your take on that, just given your Bitcoin core developer OG background, but I think you and I share very similar sentiments there. And yeah, for the record, I am a Dallas Cowboy fan, living in Dallas, Texas. But I could change my mind on that any day, just depending on how the rest of the season goes. But anyway, Jeff, we're up on time, I really appreciate your insights. Thank you for telling us about Bloq and Vesper Finance. Would you mind just sharing with the audience one more thing and just tell us, where can they go to find out more about you and Vesper Finance?
Jeff: Absolutely. Stop by vesper.finance, that'll be your front gate into everything that we've talked about today. Follow us on @VesperFi on Twitter, you can follow me personally on Twitter, but sometimes I get a little bit raucous and political, and some people might not want that.
Crypto Texan: Those are the best Twitter handles to follow, Jeff, I don't know what you're talking about. But anyway, thanks to everyone in the audience who's listening live, I think we had about 33 of us in there at one point. This is being recorded, and so this will be published in about a week from now. Given the holidays, maybe a little bit longer, but Jeff and everyone else at Vesper, appreciate you being here with us today and everyone have a happy holiday. Thanks again.
Jeff: Thank you.
Host: @Crypto_Texan
Audio Engineer/Mixing: @LloveraFrank
Marketing Image: @ChavisChance / @cafpunk
Transcript: @qjuniperus
Conversations with the Coop - Jeff Garzik - Vesper Finance