Idle Finance: AMA Transcript with Turing Research Network
May 7th 3pm GMT
Host: Coinballers
Thanks to everyone who has been able to join us today. We are really excited to host todays AMA with Idle Labs. I have been a big fan of Idle Protocol for a while now, and really excited to be joined today by Matteo Pandolfi, Co-founder & CEO of Idle Finance.
I’d also like to welcome our special guest, Emiliano Bonassi, Co-founder of DeFi Italy who is a renowned developer who has played a pivotal role in integrating Idle Strategies into the Yearn Ecosystem.
In terms of structure for today’s AMA, we will go through some questions Turing would like to pose to learn more about Idle Finance, and we will leave some time at the end to open the floor for community Q&A.
To make things a bit more fun, after the conclusion of today’s AMA, the Turing Admin team will judge the 3 best questions to receive a prize of 10 Idle each!
So, Matteo to start could you share a bit more about yourself and an introduction to Idle.Finance including the background of the project?
Guest: Matteo | idle.finance
Hey everybody, glad to be here with Turing Research Network community! I’m Matteo Pandolfi, co-founder of Idle Protocol and DAO, and CEO at Idle Labs.
As brief introduction, I’ve been involved in crypto for the last 6 year, and I moved 3 years ago into DeFi from the financial risk advisory sector, mainly because I fell for all the applications that I could get with smart contracts and its financial primitives.
In 2017, I deeply got into DEXs arbitrage with William and Samuele, long-time friends and other 2 Idle co-founders. In 2019, we started experimenting with the very first DeFi lending protocols and came out with an initial concept of Idle for optimizing yields, and then started looking at different hackathons and conferences to meet with the community and let them try it.
Long story short, we then got really into the weeds with DeFi and everything that happened during 2020, from DeFi Summer to Feb-March market turmoil or first protocol exploits. We also went to NYC for an acceleration program with ConsenSys where we met great minds and a vibrant community, and kept pragmatically building and contributing to the growth of the DeFi ecosystem.
Idle Protocol has been built for maximizing capital efficiency and minimizing risk exposure, and during time we reinforced and improved the smart contract base and integrations. We had focused on security since the beginning, and we made it a culture for development.
And the protocol comes with an easy to use and clean dashboard, where users can monitor their funds and use tools like staking, fiat on-ramps, or use the batch deposit (to help save gas for small-size deposits or during network congestion).
That being said, there’s still a lot to write now with $IDLE and governance, with Leagues that are now entering their second mandate! There are many initiatives running in the forum, and I would expect many of them to get through in the next months.
Summer 2021 will also bring officially recognized DAOs, and DeFi protocols can start getting structured with the wisdom of a globally distributed community of passionate participants that form professional teams, working together to improve the protocol and make it grow. Now we are 11 between developers, project managers and supervisors. And gladly, I see we are all amped to move initiatives and set up protocol and governance infrastructures to grow that number :)
On the protocol side, we are experimenting with many DeFi use cases like tranches or exploring leveraged and fixed yields, while moving forward with integration partners both for yield optimization (eg Yearn, Enzyme, PoolTogether, Harvest) or asset integration (eg RAI).
So essentially, now it’s go time for DeFi and DAOs :) and I’m amped to be part of this market and community.
Host: Coinballers
Amazing, sounds like quite a journey Matteo. Definitely one of the things that attracted me to Idle was the easy UX and focus on security. But great to get more of the background of how the team have reached this point.
Who do you see as your main competitors of Idle Finance and what do you see as the key competitive advantages?
Guest: Matteo | idle.finance
I would say protocols that have similar value propositions could Rari or Vesper. Idle is consistently building strategies based on three pillars:
- Optimization technology (competitive yields provided with a battle-tested dynamic allocation mechanism)
- Focus on security (4 audits, $ 500k bug bounty program)
- Battle-tested protocol (active since mid-2019 with now $170M of TVL)
With a variety of strategies, the protocol can offer an intuitive user experience, with a focus on security, while supporting integration partners with Leagues.
DeFi is on the launchpad, and many verticals can come out from both DeFi natives but also from integration partners that can vary from other DeFi or Fin-tech applications to treasury management for DAOs and institutional partners.
Host: Coinballers
Fantastic! I noticed that the TVL had increased to about $187m when I checked earlier. Growth has been exceptional! Also I know people are concerned generally about security in DeFi so brilliant to see the bug bounty and QuantStamp audits that have taken place
Speaking of TVL, who are the major DeFi players contributing to the TVL today and what is the role of the B2B affiliate program to grow it further?
Guest: Matteo | idle.finance
As per now, major contributors in the TVL have been from Harvest and Yearn. We’re now exploring synergies with other potential partners and improving the integration experience.
There are great DeFi wallets out there, from Argent to Zerion :) jokes aside, there are partners like Enzyme, PoolTogether or SmartDeFi that will start deploying capital in Idle at their launch.
The B2B program is an opportunity to be an integrated part of the Idle ecosystem and share protocol fees for deposits that originate from integration partners. The Pilot League team has been getting many partners in the pipeline, and now with Treasury League we will pursue in that direction.
As said above, there are many great dApps now, but the DeFi market is on the way of its maturation and we could even target other markets. At the end of the day what we’re trying to optimize is the behaviour of money, and idle funds are present in many markets, from institutional to corporations and for retails via Neobanks.
This initiative is the baseline for future collaborations, Leagues will be initially focusing and collaborating with DeFi leading protocols while fostering more use-cases with new projects. We aim to build strong relationships with our integration partners, and great protocols like Pool Together and Enzyme are on their way to release Idle integration.
If you guys really want another hint, I think our last Gitcoin Grants has been a great way to work out a base layer for other integration partners :)
Host: Coinballers
oof that sounds interesting! We will have to unleash @Falcone5 our resident sleuth to figure that out!! But the community is really excited at what the B2B Affiliate program can deliver so great to get your views on it!
I’d like to touch briefly on the Smart Treasury that was built by Asaf. People may have heard of the Idle Smart Treasury launched earlier in the year. What is it, how does it work, and how will it benefit token holders in the future?
Response Matteo | idle.finance
Since the $IDLE governance token launch, the forum has hosted several discussions on how to increase the on-chain liquidity of the token and provide new use cases. The community got to a consensus around Dec 2020 for a Smart Treasury approach to incentivize liquidity provision in the long run.
Its mechanism is a flywheel: fees generated by the protocol can be redirected into a Balancer smart pool, acting as a ‘buy-back machine’. This pool is available for investors to swap against, increasing on-chain liquidity. The fees generated from swaps are added into the pool, which serves as an additional income stream for the IDLE protocol.
The pool can be also used to reward community contributors that add value to the protocol, or we can introduce new assets to mitigate slippage and impermanent loss.
Generally, this component aims to increase protocol revenues and socialize profits to token holders by increasing the token market value.
Host: Coinballers
Sounds fantastic, and I have personally watched it evolve. And so as the protocol grows and revenues increase the Smart Treasury will have increasing impact!
Speaking of token utility. One common question I see coming up is around the role of the Idle Token in the ecosystem. How do you see token utility being added in the future and aside from voting rights how will this benefit token holders?
Guest: Matteo | idle.finance
That’s a question I’ve seen coming around in different channels, happy to speak more about it!
The $IDLE token has been initially conceived as a governance token, with the sole purpose of giving voting power to its holders.
We wanted to focus our community on that first application, to get it comfortable with this use case and understand the power of it. You know, teach a man to fish and you feed him for a lifetime.
I think our forum aficionados will know, but we had a signal from our community to develop LP Staking first, and then single token staking. In April, we released that first program with a successful market reaction and an improved trading experience. I’d say that May is the month of single staking, and Leagues are on it and it’s one of the first items in our priority list.
The forum hosted conversations around other use cases as well, for example using $IDLE as collateral to borrow out stablecoins (with Maker, Ruler or Unit), but I think our priorities are clear on this topic.
Host: Coinballers
Excellent, I think ‘wen idle token staking’ is the most frequently asked question in Idle chats, so I am sure community members will be really excited to see it come out in May!!
Can you talk more about the investors & supporters of the project, such as Consensys and Dialectic? Also there has been some concern from community members about the token release to seed investors on the 26th May — does the team have a statement on this?
Guest: Matteo | idle.finance
With our seed investors we have a good relationship and are always keen to hear about the current status of governance initiatives, and help with insights for new strategies and features. They’ve been supportive, and some of them are active in the governance forum.
Evan from Gumi is currently a Treasury League member, and provided many insights in the forum on initiatives like staking, insurance or smart treasury. He’s helping out with the B2B program as well and has a good view on OX (hope you don’t mind me sharing it but it’s really interesting,
https://medium.com/@etm612/ownership-will-eat-the-software-thats-eaten-the-world-82030c8b6a14
Similar thing with Simone from Dialectic, former Pilot League member. He has a good angle for LP pools incentives and deeply understands different DeFi architectures. He’s been quite involved in the Synthetix community, and with Ryan Zurrer, they inspired us for Idle Leagues with their SoV-reign model.
ConsenSys has been collaborating with Idle since July 2019, it was during a Gitcoin hackathon where we bootstrapped the first version. The core team went to NYC for an acceleration program run by the Tachyon team, where we met great minds and a vibrant community, and some of them are still advising the core team.
That said, I see May 26th is a big day for some community members, and I would like to say that the core team is not worried and focused on building up $IDLE token use cases to give a better place to stay for the token.
In general, they all have been contributing to the cause via governance posts, advising for the B2B program, or setting DAO foundations. They believe in DeFi values, and appreciate us working closely with our community.
Host: Coinballers
Great, its fantastic to see such big industry names who have been contributing to Idle since inception, and continue to be engaged in driving it into the future.
Thanks Matteo, we might give you a break to rest for a few minutes and move to Emiliano for a few questions and then come back to you for a few extra questions before we take some community questions if that’s ok?
Guest: Matteo | idle.finance
Sounds good to me, thanks Coinballers!
Host: Coinballers
We are really pleased that not only Matteo from the team could join us today, but also Emiliano Bonassi!
Really appreciate you taking the time to join us today Emiliano. Can I start by asking you just to do a quick introduction on yourself and your background in DeFi?
Guest: Emiliano Bonassi
Hi @Coinballers, thanks to have invited me, it’s a pleasure to be here!
I am in DeFi since 2018 and started to work on it very hard from the November 2019
I’ve started with my peer @simoneconti the community DeFi Italy to educate and share knowledge about it because we think that it’s great from a technological perspective and it’s an enabler and disruptive from several perspective
I worked full time on it for most of the 2020 developing many things, along to that snx.link one of the very first protocol on top of Synthetix, sai2dai.xyz a tracker for the migration from single collateral DAI to the current multi collateral DAI and continued with many other activities from white-hacking to support other projects on integrate each other in DeFi
Actually I am developing integrations and provide my support in my spare time during the night or the weekends, so actively not anymore work fully but anyway trying to have impact ;)
Host: Coinballers
Thanks Emiliano. I know several people who stalk your GitHub to see what you are working on but we won’t mention any names lol
I noticed your tweet a few days ago about the introduction of FlashLoans at an aggregation level. Can you give us a simple explanation of what this is and why it’s exciting for Idle?
Guest: Emiliano Bonassi
Of course, and I like to be stalked (not too much plz)
Actually when liquidity is parked in a pool it can be used more efficiently being lent and repaid in single transaction, that’s in few words a FlashLoan. The interesting part of the FlashLoan is that if you don’t repay in the same transaction, the transaction fails so it’s like you never got a loan and the operation is actually safe for lenders of the pool. Today, we have not so many protocols that offer FlashLoans.
The most important names are Aave, DyDx, KeeperDAO . but for instance Compound one of the largest lending pools does not support it
Why FlashLoans are useful?
Because you can use them not only for arbitrage opportunities without putting at risk your direct capital but for these use-cases:
1. You have a loan in USDC and want to switch to DAI aka debt swap, you take a FlashLoan to pay your USDC position, borrow DAI and swap to USDC and payback the loan
Why you would do that? Because maybe APY for DAI are more convenient for you in that moment. DeFi Saver do that like InstaDapp. You may do the same with the collateral
Other use-cases are migrate your debt position from Aave to Compound or any other lending platform, you ask temporarily liquidity for the move and then you are done
Other use-cases could be more financials like leveraged positions without manual winding but we can continue for hours to discuss about why FlashLoans are useful
Now If you are a integrator and would like to do the job for any FlashLoan provider (DyDx, aave, KeeperDao) you should build a different integration
If you have someone like Idle that exposes a standard interface for it, you would integrate once and you benefit from all the protocols that Idle integrates with not anymore effort
Last but not least this means that protocol like Compound can offer FlashLoans also if they natively does not support. How?
Using the lent liquidity by Idle to Compound, when you ask a FlashLoan to Idle, Idle redeem from compound, gives to you the liquidity and wait to put back again following the same dynamics described above aka safety because it occurs in the same transaction.
For Idle depositors why it’s important
More yield, easy peasy: FlashLoans has a fee, you gain from it
THE END :D
Host: Coinballers
haha excellent overview Emiliano — much alpha there!
So Idle can bring FlashLoans to protocols that don’t currently offer it and provide a single integration. I remember William mention previously that 50% of Aave revenue is derived from FlashLoans so this is big business!
Given your experience of DeFi I am wondering what future opportunities exist for development of new longer-term strategies that can help grow Idle Protocol? Are you planning on working on more strategies in the future?
Guest: Emiliano Bonassi
There are many opportunities. The hard job is to prioritize them. I definitely will spend my time to figure out what could be good strategies
Also if not directly involved, I think that a good product for Idle would be the tranches Aka different product for depositor based on risks, that are able to allocate the yield maximizing it for some categories.
I think that could be a good differentiation from other aggregators.
Regarding integrations I think that we already demonstrated that Idle can be plugged and can plug many protocols in DeFi. I think that we will see further integrations in the near feature, you just have to stalk as you do already (joking) some GitHub repo.
I would say that your feedback and in general the feedback of the community of a protocol is really important
So my invitation is to participate to the governance and forum dynamics, discussing and proposing ( and DYOR ;) )
Host: Coinballers
Great thanks Emiliano. Looks like I have a night of searching GitHub ahead
Amazing for the community to hear your views. I have a few more questions for Matteo now before we open up Q&A for the Community. We really appreciate you joining us today
Matteo, we just completed the first Pilot League. Can you explain the role of the pilot league and what were the key learnings, and how would you like to see it evolve in the future?
Guest: Matteo | idle.finance
Sure thing!
The Pilot League has been the first iteration of a more complex structure, with multiple Leagues that works towards the same goal: improving the protocol and the ownership experience for its community.
The PL has been a great venue to bootstrap processes, build the foundation of the organizational structure and get Leagues members comfortable with forum and community. Its goal was to promote community engagement, facilitate integration with other DeFi protocols, and develop new features and improvements for $IDLE and the protocol.
We had different key learnings from it, in many areas. And I think a sum up of them is that we all saw that we can win/fail fast, but learn even faster.
That’s why I love the forum and the initiatives we can run there. Community discussions can be set up for almost any topic and can create very quick and effective learning.
Once identified where to focus, running experiments and testing at pace is one of the key things that makes the difference. Measuring against defined KPIs and using the learnings to come up with new solutions is even better.
I think we touched this process with Pilot League, and now we have Treasury and Dev Leagues that will work on improving it. Dev League will have an angle for development of value-adding services and strategies for Idle or tools for coordinating between Leagues and community, and technical due diligence of potential integrations/acquisitions.
Treasury League will be responsible for a budget to be deployed for new initiatives, rewarding programs, community and partnerships growth; it’s the most dynamic League, and it could be the bedrock of new specialized Leagues.
We have been brainstorming around various areas, from communication to yield strategies, compliance, or venture. This modularity allows us to adapt the Leagues structure to the needs of the protocol over time.
Host: Coinballers
Really exciting Matteo and great to see the League expanding in scope and also some new faces joining the team. I have enjoyed watching the league evolve and I think they have an exciting mandate to deliver
I have one final question and then we will open up to a few questions from our community
Are there any future products that you see as being critical to the long-term success of Idle and how would the team articulate their vision for the future?
Guest: Matteo | idle.finance
Idle was founded on the vision that money should never sit still. On the protocol side, capital efficiency and pragmatic security is what drives us.
It’s been our north star since the beginning, but with $IDLE and governance we now want to fulfil a globally available decentralized capital pool operated by a community-based administration of the protocol.
We now identified some key improvements in initiatives such as $IDLE staking and tranches strategies as also Emiliano mentioned, but we’re on the lookout for other types of yield strategies like leveraged or fixed yield.
And as the Leagues’ mandate just started, we will be also improving the experience for our token holders while fostering protocol relationships with integration partners.
Host: Coinballers
Really exciting times Matteo, I think your vision of ‘money should never sit still’ is right at the centre of how DeFi is revolutionizing the world around us!
Thank you very much to both Matteo and Emiliano for taking the time to join us today, you guys know I am a big fan of Idle, but great to learn more about it today
So as promised we are going to un-mute the room shortly to give the community a chance to ask some questions. And Matteo or Emiliano, please feel free to select a few questions that you think would be good to explore.
Community Q&A
Thanks for everyones questions, lets give Matteo and Emiliano a chance to answer a few. Our team will review all questions and decide on which ones win, so its not based on which ones are answered now as there are too many to review them all now.
Guest: Matteo | idle.finance
Wow guys that’s huge, thanks for all the questions! We’re reading through them and will get back! 🙌
Guest: Emiliano Bonassi
I could start with some questions more related to the tech side and security aspects for @xperia3 @thuyyvan554 @ruleoffz @jandi454
Idle Protocol since the beginning like many other important protocols took the security as one of their tenets and pillars. Indeed, they moved slowly but safe. They built a very important relationship with QuantStamp which is a very well recognized auditor.
In addition they also explored other more decentralized opportunities for reviewing not the core stuffs but periphery contracts or integrations via ReviewsDAO.
Having multiple perspective helps you to cover more instead of doing a very big one security activity. In the past they had some accounting issue (DyDx bug) which led to very minimal issues (e.g. 1 wei (10^-18 eth) per rebalance) that they disclosed immediately and reacted transparently with a prompt workaround.
Last but not least, code is law this means that for any project you want to engage with you should do your analysis and research and not base your opinion just on badges.
Audits are very important but are not silver bullets. An audit helps to say that expert peoples with different perspective looked at the code and did not find out important issue.
Ultimately they have a bug bounty program with ImmuneFi. My personal feedback is that they put in place most of the tools you as a protocol could do to be safe.
Host: Coinballers
Thats great to hear Emiliano, security is key to sustainability in DeFi so its really re assuring to hear that from you given your experience!
Just as a reminder while we wait for Matteo to answer, the prizes of 10 Idle will be judged by our admin team and awarded here within 48 hours to give us time to review all questions and determine which ones were the best. To ensure all questions are considered properly!
Guest: Matteo | idle.finance
Good to see all this questions, I’ve selected some of them for topics I haven’t covered in the AMA
Question: “Idle connects with Compound, Aave, dYdX, Fulcrum, and DSR, and supports DAI, USDC and USDT” Any plan to be integrating with Rebasing Stablecoins ?”
Answer: We are currently working with RAI for asset integration, and the same thing can happen with FEI! stable/rebasing assets are an interesting topic in DeFi and we are currently exploring it!
Question: I’m a developer, and I’m interested in contributing to your project alongsides earning, Do you have any Bug Bounty to check for vulnerabilities?
Answer: We have a $500k Bug Bounty program with Immunefi (https://immunefi.com/bounty/idlefinance/). If you’re interested in contributing to the protocol, we’ll be waiting for you in our forum and its grant section! (https://gov.idle.finance/)
Question: Where do you see DeFi in the next 5 years (level of adoption/integration in the finance world), and what role does Idle have in it (i.e. where do you see Idle in 5 years)? What are the biggest challenges to get to there, and what’s getting done to overcome those?
Answer: 5 years in DeFi, looking at what happen in 2020, are mesozoic eras. But in an ideal world, blockchain complexity is abstracted away from users, and they don’t need to understand technicalities to use our and other blockchain products. Gas should be a thing only developers know about it, and smart contract hacks losses could be a thing of the past thanks to universal insurance implemented in all products.
Question: What are the plans to educate and raise awareness and adoption among the community to make more people understand about the project easily??
Answer: We are currently running a first Educational Grant (https://gov.idle.finance/t/grant-idle-educational-content-1/407) to enhance awareness and educate users about Idle — this is the first edition of this grant, and we’ll be working more on this side within the next Leagues mandates.
Question: What is PROJECT’s revenue model? In which ways do you generate revenue/profit?
Answer: The current revenue streams come from a 10% performance fee, flash loans will now contribute to protocol proceeds and with more strategies we can continue to improve the business model sustainability.
Question: there we see many projects that claims they are fully “Decentralized” . But they done their work in a Centralized way. How can we sure that IDLE Finance is fully Decentralized? Can you please tell us what’s your working method?
Answer: All admin privileges are controlled by $IDLE governance. The only 2 safety measure we retain is to pause deposit or rebalance function if there’s an emergency situation (https://developers.idle.finance/advanced/admin-powers). Additionally, with Leagues, we are fostering a community-based administration of the protocol, adding the foundation for a self-directed protocol with different professional teams that works towards the same goal!
Host: Coinballers
Really appreciate you taking time to answer so many of the community questions Matteo, we are really grateful for that!!
Guest: Matteo | idle.finance
Alright guys, yep that was the last one! :) Hope to see y’all in our governance forum to bounce ideas with Leagues (gov.idle.finance)
and if you want to keep up with latest release, our Twitter profile is the place to be (https://twitter.com/idlefinance)
Glad to have participated in this AMA, and looking forward to having other events with our community!
Host: Coinballers
Amazing!
Guest: Matteo | idle.finance
(Irl would be fantastic hopefully 👀🙌)
Host: Coinballers
Hugely informative and interesting AMA! I am conscious that we have taken a lot of your time today.
Our community really appreciates you taking the time to join us today and share more about Idle Finance. Thanks to Matteo and Emiliano and we look forward to watching Idle Protocol grow over the coming weeks, months and years!
Guest: Matteo | idle.finance
Thanks for hosting it Coinballers, and thanks to all Turing Research Network Community 🙏
Host: Coinballers
Finally to share the Idle Telegram rooms for those interested in joining
Official Idle Telegram — https://t.me/idlefinance
Idle Café (Unofficial) https://t.me/idlecafe
Thanks again from all of us at Turing to @pan_teo and @emilianobonassi !!
Winners of Community Q&A for Best Questions as judged by Turing Admins
Winner 1: @AbimKhan “How does IDLE Finance compare to many yield offering a very high APY on liquidity staking, and why would investors choose it over other yield opportunities?
And about FlashLoans , How will interest be calculated for lenders on the platform? On what basis and how will the amount of funds for borrowing be calculated?”
Winner 2: @SerkanMercan. “Idle connects with Compound, Aave, dYdX, Fulcrum, and DSR, and supports DAI, USDC and USDT” Any plan to be integrating with Rebasing Stablecoins?”
Winner 3: @FalconeDistrict IDLEs Dynamic Rebalancing Mechanism is very unique. What other sorts of ideas can be built around this mechanism?
