GM, this is your Daily Bolt briefing
In today’s edition, we’re providing you with some information on Sei Network. Sei Network is slated to launch its mainnet tomorrow.
In addition, the native SEI token will go live via a Binance Launchpool, allowing Binance platform stakers to farm the governance token. Other tokens to be featured as Binance Launchpools include WLD, ARKM, PENDLE, MAV, RDNT, and more…
Be sure to tune into EP.6 of WOOM on Thursday 11AM EST, featuring Nick Drakon, Souvlaki, and this time; Sushiswap Head Chef Jared Grey.
Over and out ⬇
1/ The Block - Crypto's 'Best Bear Market Of All-Time' with Alok Vasudev
Preview: Joe, Phillip, and Grover from Sei host Christian from Aether Protocol to discuss real yield DeFi, security updates, and more! Click here to listen to the full episode (52 mins).
Read our Note (4 mins) and save 48 mins.
Aether Protocol: Real Yield DeFi
Aether Protocol is a next-generation money market building on Sei.
Sei Network is a general-purpose, open-source Layer 1 blockchain specialized for the exchange of digital assets.
Christian shares his experience as a software developer and his team's journey in the world of DeFi. He says that they started building on the Secret Network two years ago and built a lending platform and stablecoin called Shade Protocol.
Five weeks ago, they started the development of the Aether Protocol. The team comprises software developers with a background in the finance space. Aether Protocol aims to create a money market with core features that allow users to deposit money, earn yield, and borrow funds instantly. The team plans to integrate the money market with other applications.
Phillip asks why the Aether team chose to build on Sei Network. Christian explains that they chose Sei for its speed.
Christian highlights that speed is a key factor in improving user experience and conversion rates. If a site or app doesn't load quickly enough, users tend to abandon it. Sei offered a sub-two-second performance that aligns with the team's goal to provide a Web2-style experience on the blockchain.
Christian mentions the Sei team's commitment to regular updates and community engagement. He mentions their bi-weekly deployment and recent changes to the user interface. He talks about a referral program, an early bird NFT giveaway, and continuous improvements to the money market.
He highlights their plans for long-term sustainability and growth. He says that their business model generates more revenue and profit than similar platforms, providing them with a larger budget for growth.
Phillip asks about the design and implementation of Aether’s referral program. Christian explains the challenge of creating a referral program for a money market due to the uncertainty of how long users will stay and how much they will use the platform. The Aether team decided to reward people in the same way they make money: through collecting interest fees on active loans.
Christian says Aether generates three times as much revenue as Aave for an equivalent Total Value Locked (TVL). They've created an incentive system that does not require overpayment for users, resulting in more leftover revenue. This results in ten times more profit for reinvestment in protocol growth.
Aether’s focus is primarily on increasing borrowing since it's the main source of revenue. By encouraging borrowing and managing its risks, they increase borrowing activity per dollar in the protocol. The business model is inspired by other successful protocols such as Aave and Radiant Capital.
Phillip asks for an explanation of "Real Yield,". Christian explains that "Real Yield" is derived from actual business profits, not from minting tokens which are often devalued over time.
The value of Aether's token, SKYE, is determined by the usage of the Aether protocol and people paying fees, rather than relying solely on the creation of new tokens. This approach ensures that the SKYE’s token value is more stable and tied to the actual economic activity of the business.
Joe asks Christian about the future of DeFi in the next five years. Christian says the DeFi space will evolve to enable real-world use cases, much like traditional finance does. He mentions real estate as a potential area where DeFi functionality can be used effectively.
Grover asks Christian about the potential first use cases of Aether. Christian says the initial use cases of Aether will be for borrowing, allowing users to take loans against their staked assets without having to sell them. Other use cases might include shorting assets.
Aether: Security, Collateral, and Gas Optimization Updates
Thomas asks how Aether is ensuring the security of the protocol to prevent any exploitation.
Christian recognizes the importance of security. He says Aether plans for extensive testing and audits before they launch on the mainnet to ensure the safety of the users' funds.
He highlights Aether's plans to work with third-party auditing firms such as Oak Security and to host a hackathon to expose any potential security issues. Christian says that they aim to undergo formal verification of the money market code.
Locke shares some ideas for using Aether, such as taking out a loan to participate in other protocols like Levana.
Christian says that Aether protocol needs to be cautious about accepting collateral due to the potential risks. He says that they will be accepting tokens like BTC, ETH, USDC, USDT, and SEI. Christian mentions the possibility of accepting liquid staking derivatives and LP tokens as collateral.
Thomas brings up a recent Aether tweet about gas optimization integrations and asks for more details. Christian says the feature will go live on the Testnet.
Grover says that they're pushing as much information as possible out on Twitter, including the ongoing optimizations and resilience testing they're doing for the Sei network.