Why Launching a New Stablecoin Is Insanely Difficult (And Why He Did It Anyway!) with Joseph from Nerite

In this episode I sit down with Joseph, also known as CupoJOSΞPH, for a deep dive into the world of decentralized finance and the fascinating journey that led to the creation of Nerite—a feature-packed stablecoin protocol on Arbitrum.

From Joseph’s early days impressing a crush by learning Solidity and his time working at ConsenSys during the launch of DAI, to experimenting with unpegged stablecoins like RAI and Open Dollar, you’ll get an insider look at how stablecoins have evolved—and the hard lessons learned along the way. Joseph and Gramajo unpack why most users say they want non-USD pegged stablecoins but rarely use them, the challenge of driving adoption for genuinely novel DeFi tech, and what it means to build for “users who lie.”

They also explore the special sauce behind Nerite—borrowing at self-selected interest rates, supporting multiple types of collateral, composable design, and native money streaming via Superfluid (no wrapping required!). You’ll hear about the double-edged sword of immutability, the power of combining governance rights with DeFi utility, and why the Nerite team isn’t chasing decentralization theater with pointless frontends.

08:52 How Dai Maintains $1 Peg

14:11 "Liquidy V2: Superior Stablecoin Security"

15:59 "Liquidy V2 Licensing Model"

25:48 Delayed Compensation Critique

31:07 "Nerite Superfluid Token Feature"

31:53 Innovative Real-Time Payment System

39:49 Customizable Loan Interest Rates

45:39 Governance Token Trade-off Issues

50:28 "Neurite DAO's Role in Arbitrum"

56:40 Collateral Limitations and Future Adaptation

01:03:37 Developers' Challenges in Crypto

01:04:29 "Challenges of Building for Users"

Links:

Nerite.org

Thefett Podcast

AMA

More

Transcript

0:00

Well, thanks again. I know, I know you're a busy person and you're busy building, so. And you've been dropping some news, so I appreciate you taking the time to meet with me. So, yeah, I'll just jump into it. So who is Joseph or Cup of Joseph? And how did you get into web3? I know you just did a podcast with Phat, which I'll also link in my show notes as well, so people can kind of get a really good story. But I'm probably going to be riffing a lot off of that podcast. Okay. Yeah, yeah. So how did I get started in crypto? You know, I. I prefer crypto over web3. I used to say web3 because it's. You can talk about it in public without normies realizing what you're talking about. So web three, you know, great term. But you know, I think for this audience, I really just call it crypto. Yeah, crypto's fine. Anyway, I haven't really seen anything in web 3 that isn't crypto that's like actually interesting. So. But, you know, other people can argue about that. Yeah, I let people figure it out. Like the on chain, you know, is it with a hyphen or no hyphen? I'm like, man, just pick one. So, yeah, for me, I was studying computer science in college and I had a project with this girl that I liked and she said, hey, have you heard about this thing Ethereum? And I'd never heard of it, but I just decided to learn solidity over the weekend to impress her. And that's it. That's how I learned about Ethereum, got into it. Love it, man. That was, that was like 2017. 2017. That's good, man. Yeah. I got into crypto in 2012, so I've been around for. Oh my God. I didn't start making content until recently, actually. So I actually just celebrated my three year anniversary of doing content. I had a blog post that I put it up. Yeah, thanks. And I kind of was reflecting on it. I was like, I've been in my feelings for about a week or two now, just like reflecting on this journey. And I mean, the TLDR on that post is really like, I get to meet new people and new ideas and all of that's super exciting. And I would put yiwu in there as well. Like, in terms of. Most people will be like, not another stablecoin. Oh, another thing on Arbitrum. People ask me, people come to me, joseph, you made a new stable coin. Despite there already being a thousand Stablecoins. Should I do one? And I say, no, I wouldn't wish this on anybody I know. Start a stable coin on my enemies. Trust me. I thought about it sometimes. I was like, should I. Should we be making a stable coin? I'm like, in nouns. And I was telling someone, I was like, should nouns make a stable coin? And I was like, nah, of that. People from the outside looking in. We'll see that. And I'll say, yours is different. You actually sent me down a pretty nice rabbit hole, one that I wasn't too familiar with, which now I feel like I need to research some more. So the things that got me into crypto were kind of like the. Was defi originally. So, like, for me, it was. I wasn't able to access traditional banking Systems back in 2008 when I was trying to go to college. And when I found out about bitcoin, I was like, dude, where was this when. When I needed it? You know, Like, I had to end up taking, like, a. A personal, like, loan from a friend, like a. Like a family friend to. To get myself through school. And I just think about, like, Defi, and I'm like, man, there's so many. There's so many opportunities now. So that's what got me there. Definitely the immutable aspect of it. So bitcoin being immutable, and then the decentralized aspect of it. So those are the things that always just call me. So I recently met with someone who did a token launcher, but it was all immutable. Once you launch it, it's done, which can be kind of scary, but it also has some positives. And so with you, what attracted me to. To Narrate specifically was the. I know that it's a liquidy V2 fork now. That's right. But it sent me down the liquidity rabbit hole. I had no idea that. Yeah, so it was freaking epic, man, because I've always loved the concept of dai And I know that you talked about it with fet, where I don't understand why we don't have. Why it hasn't been fully embraced. Everything's pegged back to the dollar, and I'm like, give me something. Yeah. Yeah, I definitely want to talk to you about it. I've made unpegged stable coins before. Yeah. I want something pegged to something else. As an American or someone that lives in America, I'm like, dude, I have enough USD exposure. Give me eth, Stablecoins, btc. So there's another. There's like a USDH on Stacks protocol. That one I like, which is. It's pegged to btc, essentially. So. Yeah. Anyways, let's talk about stablecoins. So why did you build another Stable coin? Another one, right? Another one, yeah. Even though that's a softball, like for people that don't know what narrate is. I wanted to explain. Why did you do this? Yeah. Okay. So, yeah, I mean, I was working at Consensus when DAI launched. When Maker launched dai. Right. And that was like a huge. That was just like a huge moment because it was the first time that someone who is not just like not connected to the government in some way, doesn't have a license, you know, is creating a currency that actually, you know, works. And it was also the first, actually, I think like peaceful stable currency because you have like USDC or usdt, you know, before that. But they're backed by treasury bills and treasury bills are like funding the United States war machine. And actually like making stable coins is like very useful. More useful than Bitcoin or Ethereum or other things that are like, fluctuating in price for certain use cases. But it's also like the peaceful version of that. So that, that really appealed to me and that was kind of, you know, part of my journey to get here. But I've contributed to like quite a few other stablecoin projects. So you already mentioned Liquidy V2 and actually started contributing to Liquidy V2 just like open. Just working on open source stuff for them last year before near right. Launched and took some of the inspiration and some of the tech from previous projects that I've done for unpegged stable coins. So if you want to get into the history of that, and I actually think more people in crypto should know this and know what experiments and what things have already been done and what works and what doesn't. You know, we started the first unpegged stablecoin was reflexer issuing rye and that used a PI controller instead of a stability, you know, basically pool or instead of a hard peg. So let me ask you this, why you said you like dai? DAI stays at a dollar. Why does DAI stay at a dollar? The way that I interpret it, back when I bought Dai in like 20, what, 19. I think it's like a basket of assets and it's like the dollar, Bitcoin and Ethereum. And between those three, there might be something else. But from what I remember is from within those three, the price should kind of stabilize. Like if the dollar was going up, bitcoin might go down. But If Bitcoin's going up and the dollar is losing its value, then it kind of equalizes. Yeah, I mean that's I guess one way kind of to think about it. There's a bunch of individual loans, it's backed by ETH and USDC mostly now and you've got all these different things that are backed by their individual loans. Dai's over collateralized, so it's backed by this, you know, combination of assets. But why does it trade at a dollar? Like why, why doesn't it fluctuate at all as the price of Bitcoin, you know, fluctuates? And the real reason is the protocol values 1 Dai at $1. So if you take out debt, your debt is valued at $1 per die. When you pay back debt to the protocol, it's valued at $1 per die. Right, and that's basically true for, that's true for near right, it's true for liquidy and every other US dollar pegged CDP protocol and CDP stands for collateralized debt position. So DAI is an example of a collateralized debt. Stablecoin and Reflexer was the first attempt in crypto and defi, you know, to make a non pegged stablecoin and you can actually go look up how it performed against all these other like currencies and you've got the Swiss franc that went way up compared to the dollar and the euro down a and you know, USDC the same. And rye. Rye was the best. Rye was the best, most stable version. Like it was actually more stable than the euro and other currencies. And basically it's really complicated and I don't want to. I could spend the next hour trying to explain like the mechanism but the protocol doesn't value Rye at any particular price. The price it values that fluctuates based on market rates and sometimes it's going, the price is going up and sometimes the price is going down and it's supposed to have the same value. So it dampens volatility on eth, it was only backed by ETH and by dampening volatility it like maintains the same value even if the price in dollars changes. So I think it start the original price was like 3.14, so it's trading at like$3.14 and then it just kind of like fluctuated around there and rye failed. Vitalik posts about it or used to a lot and put like $30 million into it at one point. But the mechanism for like maintaining stability was too confusing and they're yeah Just like, not a lot of people used it. It didn't have enough Ponzinomics or like number go up technology. So it never gained a lot of adoption. And now, now it's shut down and they're working on Rye Dollar to make like a version two of that, kind of based more on liquidity. And so we had this, like, we had this moment with Rye where it's not doing really well. But everybody says what you said. Everyone says, I wish there was a stablecoin that wasn't US dollar peg. But there was and you didn't know about it and you didn't use it. Yeah, right, correct. So there's a reason for that. Because people don't want their debt in an asset that goes up in price and it's just not as scalable. Right. So I contributed to Rye. And then there's another fork of rye called let's Get High, which is live right now. Yeah, I saw that one. Yeah. And so that's high. And high is awesome. Definitely check that out. It's on optimism. It's still growing. It's got the high wheel, which is an incredible innovation and number go up technology. And I really, I really like what they're doing. So they're also not pegged to a dollar and the price just goes up like with inflation. It's just like an inflation stable coin. So it just beats inflation and it makes money. So that's cool. And at the same time that high was being built, I was working on Open Dollar, which was another, like another PI controller stablecoin not pegged to a dollar, that was designed to go up on Arbitrum. And we launched that a little over 18 months ago in the beginning of like 2024. So it got to like slightly less than 2 million TVL. And I still think it's actually the best design stablecoin that I've ever seen. Like, it's better designed than Neurite. But it's also really hard to explain to people because who wants to, like, learn about how PI controllers work? People want to put their money into something that they don't have to think about very hard. And number just goes up. You don't want to have to think about all these other things. So the mechanism was too complicated and it's basically dead now. And that was Open Dollar. So that was like my, my previous StableCoin. And after open dollar kind of exploded, I didn't have like closure about how that went because I just had spent like a year designing this stablecoin and So I took some of the tech from Open Dollar and we put it into Liquidy. And so Liquidy V2, which by the way, Liquidy V1 is rated as the number one safest stablecoin in the world, even safer than USDC. It has a better safety rating by Bluechip.org, which is a stablecoin rating agency. It has a better safety rating than USDC or Tether because it has this new feature called redemptions. So at any time you can take one LUSD from Liquidy and you can redeem it for $1 worth of ETH at any time. So you can always get out of the stablecoin even if there's no liquidity for it on Uniswap or it's trading in the market at$0.01 each, you can always get a dollar of ETH for your stablecoin no matter what the price of ETH is. So that's pretty revolutionary. USDC,

you cannot call them up at 2: 15:02

00am on a Saturday and say like, hey, can I have one treasury bill for my $1 of USDC? They don't do that, you know. No. Yeah. So this kind of redeemability stuff and it's immutable, you know, what you said earlier is like important to you or one of the things that originally interested you in crypto. It's like this immutability. So Liquidy is really cool. I have really loved Liquidy and I heard their V2 was coming out. It creates yield bearing stable coins and it creates user set interest rates so you can borrow at whatever price, whatever interest rate that you want. And it also added tradable debt positions. So the debt positions are now NFTs, which is pretty cool. And that was a feature of Open Dollar originally. That's now part of Liquidy. And the other really cool thing that Liquidy V2 is doing is they have this licensing model where all the code is open source and it's free to read and it's totally available and it's you know, one of the most audited code bases of any like major defi protocol. And you can copy it and you can fork it on whatever chain you want, but you have to get a license from them because it's under a business license. And the license is like pretty, pretty cheap but, but it's like insanely valuable, right, because you have this license to this like very valuable code base. So when they were launching Liquidy V2 they came to me and said, Joseph, we really like your ideology around stablecoins and the work you did with Open dollar even though it didn't work. Do you want the license for Arbitrum? And I said, wow, someone's offering to give me something very valuable. I would be foolish not to do that. Yeah. And that is the like very long roundabout story about how Neurite came to exist. And so yeah, then I just started working on Neurite and there were a few other things that I always wanted out of a Stablecoin that we can get into. But yeah, there's just like a few things I always wanted Stablecoins to have that no one has ever really gotten around to. So I said, I'm just going to build. I don't know if anyone's going to use this. I'm just going to build what would the absolute ideal decentralized stablecoin look like. And I'm just going to build it and I'm just going to make it from scratch based on Liquid EV2. Now we're here and we've got almost 10 million TVL with$0 in bribes and $0 in marketing spent and no under the table bribes to market makers or any of the BS that most new defi protocols do. It's just kind of like really grassroots and everybody seems really happy with how it's going so far. So yeah, I mean, you know, people are using it every day and it's. I love everyone who uses it. I'm like insanely grateful. And yeah, that's kind of like brings us, brings us to now. But I think the history, maybe it's boring to like ramble on about the history, but like, I think it actually gives people a really good idea about like why are the features the way they are now? And like what, what brought us here? Yeah, no 1,000%. I think all that history is definitely valuable and I learned definitely a lot along the way, you know, so for context too, like for most of my listeners know, like I was actually like a BTC maxi for, for actually way too long. So I, I don't even have a lot of that Ethereum. Even though I was in the space early, I didn't have that early Ethereum exposure. Like I, I wasn't exposed to Ethereum. Like I heard about it, but to us it was like a shitcoin for the longest time, to be honest. So it wasn't until like a lot of people. Yeah, I mean it's like a shittier version of Bitcoin. I heard it has smart contracts, but. Who uses those exactly? 1,000%. Go look at the top 100 coins. Do you have a screen share? Can you pull that up? Go on Coingecko and look at the top. 100 coins right now. Let's go. Yeah. FYI, I'm not a bitcoin maxi anymore. I got out of that world. That's why I don't understand tribalism either. Like when people are like, oh, I don't mess with a new chain or something. I was like, hey, man. Yeah. So number one. Number one, bitcoin. Number two, Ethereum. Number two. Number three, Ripple. Who? The primary driver of value for Ripple right now is that they are building a clone of Ethereum that uses the EVM and they are making a EVM Stablecoin. Number four, tether, a token on Ethereum. Number five, bnb. Literally a fork of ethereum. A fork? Yeah. Solana, a token on Ethereum. Doge, staked ethereum. Tron, which is a fork of Ethereum. Cardano, which wishes it was ethereum. Exactly. Number 12, wrapped staked Ethereum. 13, a token on Ethereum. 14, a beacon. Wrapped beacon. Ethereum 15. Tokenized Bitcoin on Ethereum 16, stablecoin on Ethereum 17. Make your own Ethereum side chains. I don't know what figure is. We don't get to BTC fork till 22. Yeah, exactly. Crypto. What isn't is crypto. It's just ethereum. It's ethereum and stable coins. And the stable coins live on Ethereum. And then there's a bunch of schemes to scam you out of your eve. Yeah. Anyway, that's how I see it. Yeah. So I'm glad you figured that out. I'm glad after a couple years you found the light. Yeah. No, so like now. Yeah. So I've been in Ethereum now for five years messing around with it and just gone on the deep end. I still, I still follow like bitcoin news and technology and the L2s that are being built out there. I still mess around with those. I still think bitcoin defi. Has a. Ton of potential that hasn't been fully tapped in all the way and not like Celsius or any of these centralized versions of it. Like Bitcoin. There is no bitcoin defi. There is Ethereum L2s and EVM networks where people wrap bitcoin and then do stuff on eth. There's no bitcoin defi that doesn't exist because the defi like defi needs more computation to calculate how much money you're allowed to take out in the loan and you can't write smart contracts like that on. On bitcoin. You just can't. Yeah, exactly. I think wrapping it is still. There's good versions of wrapping it, I would say on Bitcoin, like better versions, you know, like. Oh yeah, like more trustless, less central versions of wrapping. Which. Yeah. Compared to just, I don't know, regular rapping, I guess, or whatever other flavor of rapping exists. So for anyone unfamiliar, I was gonna say. Yeah. For anyone not familiar, what are, what are some of the features that you kind of took from V2 of Liquidy and also added like your own special flavor to it? I know you kind of hinted it a little bit like there was some stuff that you wanted specifically on a. On you on the net. Right. $. And also I think you chose ARB as well as some kind of collateral. Yeah. Just like what are, what are those other things that you added, like the special sauce or flavor that you added? So it's got everything that Liquidy V2 has, right. It has Lido eth and Rocket Pool eth as collateral. It has user set interest rates so you can borrow at whatever rate that you decide at a minimum 0.5%. And then it has redemptions from whoever is paying the least amount, paying the lowest interest rate. And those are kind of like the core liquidy features. And then we added a bunch of new collateral types so you can borrow against some LRTs like etherfi eth or kelp eth. RSE. You can also borrow against ARB Token because it's really arbitrum native. And then we also added debt limits. So if you add new collaterals, you know, that increases risk for the system. So you have to add extra safety features. And we really, really care about safety and security more than anything. So we added a bunch of new safety features about making liquidations and borrowing more efficient so that it just like keeps the system healthy. Debt limits, for example, is one of those. And then we. Let's see what else. And then the. And then the other really big one is streaming, right. And this idea of being able to send a stablecoin linearly over time. And I think that's something that can't really exist in TradFi. And I've always wanted to see in a stablecoin but just haven't for whatever reason. So there's this other protocol called superfluID, which is kind of an OG. They've been around for a long time and they're like the money streaming protocol where instead of sending you$5 on the first of a month for a subscription. I can send $5 linearly over the next month. And your balance just kind of ticks up continuously, you know, And I really, I really have loved this idea for so many years because I've always wished when I was working that I didn't get paid every two weeks, that I got paid every second that I was working. Yeah, right. And I used to work, you know, normal W2 9 to 5 job. And I always have felt like whenever I do that or you do that, you're just giving your boss an interest free loan on your labor, you know? Yes. So why, you know, I just worked for you for eight hours, but I don't get paid for two weeks. Like you made money on my labor, so it's just not fair. And that whole system of like, paychecks every two weeks, subscriptions on the first of the month instead of, you know, a little bit over time. Even your bank account, you know, your bank account is making money for the bank continuously. Right. The Treasuries know that they're printing, you know, they're making money on your money continuously, but they only compound your interest once a month with the average balance of your account. Right. And if they, if they compounded continuously, you would have more money, but they literally don't. That's stealing, you know, 1,000%. Yeah. Yeah. It's just, it's just. Why does it, why is it like this? It doesn't, it literally doesn't have to be like this. You can, you know, it doesn't, it doesn't have to be that bad. So it's just inefficiency and I hate it. Yeah. I just say, you're, you're aware I've interviewed. So I used a tool called Alpha Friends, which was the tool that got me familiar with superfluid. And once I figured out, once I learned about superfluid, it was so hard to unsee. It's like there are certain technologies, like in the last, like five, six years that like, once you see it, it's hard to. It's hard to unsee it, like, kills me. Yeah, it was one of the ones where I was like, it's the one example I give people that I'm like, this could only happen in crypto, like on crypto rails. Traditional finance people are like, that's insane. Like, saying like, it's cool. And then, yeah, like, once you see it, I'm just like, dude, I need everything to be like this. Like, I don't understand why my Internet can't be like This. I don't understand why my water can't be like this. Like, all of it. My stock. I've left a company when. When I had been there for 11 months, like two weeks. So I was like two weeks shy of like hitting the vesting period, which I thought was freaking nuts. I'm like, I should still get 99, whatever that percentage is of my stock that, that I needed to get, especially after the one year period. Just everything about it. And what I liked about something that you kind of. That like, resonated with me, like, pretty heavily was it's so weird to me that like, Super Fluid didn't like, take off in this crazy trajectory where, like, everyone's implementing it left and right. Not to say that they're not successful. Like, for sure they're successful. I've. I'm a delegate and I vote on their stuff. Like, I'm not saying they're not successful, but, like, it's just nuts to me that it hasn't like proliferated like, literally. Everything using super fluid right now. 1000% doesn't have super Fluid in it right now. It doesn't make sense. Exactly. And I, and I like the way that you said it in, in Fett's podcast, which was like the deep dive one where it's the wrapping and I know it sounds so silly. It's like a such a little simple thing. You're like, dude, you're just wrapping usdc. Like, is it. How hard could it be? And when you said this is the first time you can actually. One of the first times you can use it without wrapping just like, natively. It's like a stablecoin that just has it out of the box and it works. I was like, damn, that's it. I was like, that's what it is. We need more Superfluid plugged in where you're not wrapping it. You're not like wrapping BTC or anything. It's just like, it's just native like that. So super boring. The DCA company, like, they should support Nairoid because it's coming. Yeah. Okay. Little things like that where I'm like, man, okay, I can see the edge that you have or that Narrate has like the Narrate dollars. And now it has that power essentially just out of the box. Like, it works just for like, context. If you want to stream usdc, you have to wrap it into Superfluid X usdc. And if you bring that to Uniswap and try to sell it, it'll be like, no that's not usdc. That's a different token that we don't know about, right? And so it breaks composability. And the thing that makes DeFi really, really cool and useful and like why everyone loves it, it's because every ERC20 just works. Every token that I swap on Uniswap, it just works. I can just bring it over here and it just works with this. I can bring it over here and it just works with that. Right? And that composability is really crazy. Like people outside of crypto, it's impossible to even explain what composability means because they, they don't get it. It's, it's just. Your money just works everywhere. You can do anything. You know, you can make a new currency in 5 seconds on your phone and then immediately bring it to a money market or a lending platform or an automatic market maker and it just works. And it's like that entire concept, you know, doesn't exist outside of. So you can't do that with superfluid tokens. But Nerite has superfluid built into it. So our token doesn't have wrapping. Usnd is our stablecoin. It's not wrapped, it just has streaming, it's just inside of it and it works with everything and it also has streaming. So it works exactly the same as any other token or any other stablecoin on Uniswap or Balancer, which is our primary liquidity hub right now, and all the other apps that you want it to work in, it just works. But you can also stream it. You can also pay a subscription. You can also, you know, send money linearly, send salary people that work for new, right? And like devs working on stuff, I stream them money. You know, they're getting paid every millisecond, right? Their balance is just continuously going up and it only takes one transaction to make a stream. I just say what wallet I want to send to and what's the flow rate? How much money per time do I want to send? Boom, done one transaction. And the UX improvement of that is like really cool. And yeah, it's really one of the things that I think makes Neurite really worth pursuing and why I felt that it needed to exist. And if you don't have a reason beyond stable, coins are hot. And maybe I can make a bunch of money. Don't launch a new stablecoin because it's a lot of liability, it's a lot of hardship and it's just hard, you know, it's Not. It's not really worth doing unless you have, like, a really strong reason to do it. And the streaming, I think, is really something that I truly want to exist in the world, so had to build it. Yeah. And there. And there's a reward too, right? Oh, yeah. Lots of rewards. Yeah. Yeah. Because I remember for anyone that doesn't know, superfluid is doing incentives, like. To. Build more apps, to build, like, completely new use cases, to integrate existing already, like, apps, and the community gets to vote on it, like via snapshot. And. And that's actually. That's actually how I found out about Net. Right. Actually, it was like, yeah, yeah, I, like, I was voting and I was like, huh, what's this? And then I was like, all right, that's something now I need to go mess around with because it's already has superfluid, like, connected to it somehow. Yeah. So everyone who's using Neurite right now either borrowing usnd by depositing a nerite or supplying usnd to our stability pools, which earn yields sustainably. 75% of all the borrowing fees goes to stability pool depositors, and they also earn 100% of liquidation fees and some other incentives as well. But everyone depositing there gets soup from superfluid. The soup token. Sup. They get it every single day. So you can actually claim superfluid rewards every day. And every time you claim, you're not claiming tokens, you're claiming a stream. And so more tokens get sent to you every day. So the more often you claim, your stream gets bigger and then you just get more tokens every day forever. Yeah. It'S a great incentive to use Nerite. And if you are farming stablecoins and you want exposure to the future of superfluid and this technology, it's a great time to do that right now. And yeah, we're very grateful to the superfluid community for voting to give us those ecosystem rewards. So we're just gonna, you know, keep building. Keep integrating with more superfluid apps and building this, like, streaming future. That is just better. Yeah, agreed. So something, let's see, we're at the 38 mark. Plenty of time. Yeah, yeah, yeah, I was gonna say. So I. I wanted to walk just so people could understand. So, like, you mentioned that you could set your own interest rates, which I think is like a. It's a unique feature, I would say. I know that it's from Liquidy, and then maybe someone else has done it before, but can you walk me through, like, what are some of the Trade offs, like right now. Like, I know you're doing an ARB incentive. I hold a thousand dollars in ARB and I want to deposit it. I. I own more. But yes, I've been loading up on it recently. If you want to open up the app right now and do it live for everyone, I'll send you a thousand dollars. All right, let's do it here. Let's open it real quick. And that's nerite.org which will n E R I T E. Yeah, which is a slug, in case anyone didn't know. No, it's a snail. Snail. Sorry. English. Snails are awesome. All right, go to the app tomorrow. Now DM me your address and I'll send you a thousand dollars in Arab right now. Oh, dang, man. I do have already got a. You've got an earn position. Nice. That's awesome. Yeah, I have a little one that I did with. Just experiment with. Here, let me. All right, cool. Got this. And Arbitrum is so fast. It's awesome. Yeah, that's. The rabbit hole I'm in right now is like messing around. This is only going to take a second. Right. I'm just going to come here. We're just going to do this live and that's awesome. That's one of my favorite things. Yeah, no, I mean, I'll snip it, just so you're aware. I'll snip it and make a shorter version. So if nobody wants to watch the whole thing, they could just watch this. They have to watch the whole thing. There you go. I just say I just sent you. I just sent you about a thousand dollars in our token. So on this page. So if you go to. If you go to the dashboard where you just work, so you've got, you've got. On the left, these are all the assets that you can borrow against, right? And it says how much the debt limit is and what's the average interest rate that people are paying. Then you've got this earn, right? And that's. Those are the stability pools. So each collateral has its own stability pool that earns from the interest that people borrowing against that particular asset are paying. And it earns in usnd in stablecoins and it's also earning soup rewards and it also gets ETH or Rocket Pool, eth or arb token or tbtc. There's a lot of Threshold users, which. That's The T&TBTC is for threshold. There's a lot of those users on Neurite, which is awesome. We're super Grateful and love to have them. And so the interest that they pay on this left side is going to everyone who deposits on the right and keeps the protocol safe. So yeah, you should, you should have gotten that ARB by now. And it's super simple. So you can just go to borrow and choose arb. Cool. You've got a couple thousand in there. That's looking good. That's more than I sent you. All right. And now I have my own. That's why. Yeah, great. So. So this is just, this is just, you know, we're backing a loan by ARB and we're issuing new US nd so we even give you. It looks kind of like uniswap, right? Like you just got like how much in, how much out? Right. So you're putting in 4200 arb. How much usnd do you want out? You've got a green, yellow and a red depending on like what, what your risk is. So you know, just like hit that green or whatever you want and boom, that's it. Like you can just go down and just borrow right there. You're going to pay a 10% interest rate and you can just slide this slider left and right and decide how much you want to pay. And those little ticks on the interest rate slider, they're kind of small. I don't know if you can see it on the screen recording because it's like super wide other people's positions. So somebody's paying at that interest rate. Yeah, I see someone's like a one. You don't want to be the one who is paying the least. And if, if you want to manage your interest rate manually, you can and set it wherever you want. You can set it to 0.05% and borrow for almost nothing, or you can just click manage and let one of our third party manager partners like Summerstone manage it for you. And so your interest rate will be updated once a week and it will just pay the lowest possible interest rate that you can get away with without any other additional risk. And that's it. So it's basically like one extra click and now you can just, you can take out a loan and it's going to charge you the first week of interest up front for safety so that people aren't like going in and out of positions constantly and like arbitraging stuff. And that's just like MEV protection for the protocol. And that's it, that's creating a loan and you just selected your own interest rate. So this says you can borrow usnd for 1% with no basically redemption risk and have it managed by Summerstone. You know, that's not very much 1% per year. I think that's quite a bit less than it costs to borrow stablecoins on AAVE or, you know, somewhere else. Yeah, it is. Yeah, that's exactly it. Does this update like this little. I like the little indicators down here that it's like low risk liquidation. It made it easier for me, like the first time I came in. Does this update, this one here, even though it's managed? Yeah, I mean, it's probably, I think, because there's only a few positions on arp, so the algorithm is saying like, yeah, you're like the second lowest position, so Summer Stone thinks you're safe. But the algorithm is like, yeah, I mean, one person gets redeemed and then you get redeemed. So that's really up to your risk profile. But redemptions are not even that bad. Right. Because $1 of your debt gets paid back and $1 of your collateral gets withdrawn. So it just, you know, lowers your exposure. Yeah, but there's no fee. You actually earn a. You actually earn a small fee when somebody redeems against you. So it's really. It's not that scary. You know, if you're eth exposure is like super important. Pay three and a half percent instead of three percent, you know? Yeah. And that's it. Keep it going. I'm glad that worked. You know, doing. Doing things. Live in tech, especially poor mark, and boom, you're up. Now you have this. You have this loan, and in your dashboard you have your earned position earning. How much is your earned position earning? 7 day APR 2.07%. Yeah, I put it into the ARP one. That's why. So, you know, you can really arbitrage these or go take your usnd and provide liquidity somewhere else or pay people with it through streaming, whatever you want to do, you know, and the whole time, you know, it's earning yield over here and the protocol is just, you know, taking along. Yeah. So that's it. It's pretty simple. I hate how complicated getting loans in tradfi is. And this interface, I think is really simplified, simplifies it, and is available to anyone in the world. So it's just, you know, accessible. And those are the things that make defi great. Yeah. And I think the two cool call outs to tell people too, about your. Your deployment that are kind of unique and cool, in my opinion, are. I could still vote. I believe in arbitrum dao. Right. And then I can trade the troves too, right? Like NFTs almost. Yeah. So the trove and a loan position is called a trove. In liquidy, those are tradable. It's actually an NFT. If you go look at your wallet on OpenSea, you'll go find it right now. Yeah, I'll do that while you're explaining. The other part of a scan or something. It probably doesn't look very good because it has a bunch of numbers on it, but yeah, you can trade that. So if there's ever like not liquidity or you don't have the money to pay back your loan, you can sell your entire loan. Right. So if you have $1,000 in debt and$2,000 in collateral, you should be able to sell that position for a thousand dollars, right? Yeah. And maybe if you sell at 999, somebody is willing to buy that because it's at a discount and they'll pay back your loan. So what I want to do next is build a system that prevents liquidations by auto selling your loan. Yeah, yeah. See like it doesn't look very good. It honestly doesn't look that bad, to be quite honest. I've seen worse. You've got your collateral, you've got your debt, your debt and your interest rate and, and who owns it and. Yeah. Oh, so that's opensea. Yeah, yeah, this is opensea. No, I think it looks great, to be honest. I don't think it looks bad. You can, you can just send that to me, you know, just send me that NFT and then I. And then I'm responsible for your debt and I own your collateral and that's it. Yeah, so it's, it's very similar to like Uniswap V3 where you have like NFT positions. Right. And then the other. And then on the ARB voting. Yeah, yeah, the ARB voting. So all the ARB that gets deposited in Neurite gets delegated to nearite dow. So there's kind of this problem I think, in governance tokens, especially L2 governance tokens, where you have to choose one or the other, you have to choose economic rights of your token and you LP it or you put it in a money market or you know, something else that earns yield or you participate in governance and you delegate it to yourself or someone else and your governance rights are used and you have to basically choose one or the other. Right. And I hate that trade off. It's very inefficient and it like prevents value from accruing to the governance token. And it also kind of takes people's rights away to say if your ARB is deposited in aave, then you're not allowed to vote with it. You know, the governance rights of that ARB cannot be used. If you deposit ARB or any other governance token in Uniswap can't, you know, you cannot use, use the governance rights to that. I think that's just taking people's agency away. Even like traditional stocks, right? Like I can vote in, you know, govern in corporate governance if I own a stock in a Fortune 500 company, right? And also it's like in, you know, you, it can be in market making or it can be in, you know, whatever other. It can be said you can be selling options, whatever, because they just say, oh, who owns it? Okay, you get to vote. And somehow we lost the right to do that when we put these governance tokens on chain just because of extra technical hurdles of Uniswap being able to handle vote tokens. And it's just inefficient. I didn't like it. So we built into the protocol. Any governance tokens deposited can be delegated to our dao and then the dao, which is, you know, made up of the users, can vote in Arbitrum governance. And I think that's, that's really cool. Cause it gives people agency. You know, you don't get to decide where your tokens are delegated when you deposit on Neurite. But the governance rights for your tokens are still being used like to your benefit. Right? Because if you're a Neurite user, you want more yield, you want more incentives, you want Arbitrum to be stable long term and have upgrades to the network that support Nearite and you know, the other things that we're working on. So you're still benefiting from that directly and you're not giving up your rights. You're, you know, we're actually using them. So Matt, personally, I think it's a massive improvement and a huge mistake that other protocols don't do this. And some people are upset about it, but I think it's great, so we're gonna do it. No, I think it's fantastic, man. It's actually I've had that dilemma myself. The exact same one where you're like, do I participate in defi or do I participate in the governance aspect of it? And I end up like, it's like silly, but I end up just splitting my bag in half. I'll be like, okay, I'll only do half the money in here and then I'll keep half so I can still vote Pan. It sucks, right? Yeah, it does. I agree. Yeah. Because you, you want to, you want to vote with everything that you own. Yeah. But you don't want to leave money on the table. Yeah, exactly. Yeah. So now, now your voting power is being used and you just borrowed 500 against it. And you can go yield farm with that or buy more arbitrary. And then deposit it and then borrow and then buy more arb. Right, exactly. And then borrow against that and buy eth. And now you have ETH exposure and you're participating in governance. We can make the first, like, governance, like leveraged governance. Voting. Yeah, that'll be fun. Let's do that. Right. Let's see. Yeah, people. Some people are really into it and other people told me that I'm attacking Arbitrum Dao, which I'm obviously not doing. I want Arbitram Dao to succeed. Everybody knows that. So. But we'll see. You know, it doesn't hurt us to have, you know, some spicy takes sometimes. And I think it's going to be very good. I would really like to see Neurite Dao, not myself near. Right. Dao be one of the largest delegates and have a say with the future of the chain or at least be able to input some influence and take our ecosystem and our community's input when Arbitram Dao is making upgrades or choosing what to do next. It's sad to me that a lot of the largest delegates on Arb or just in general and like delegate style daos or like people who are very good at posting on Twitter instead of people who know how that technology works or understand what the thing they're signing is or have built protocols that need Arbitrum or that chain to survive. The success of Newright is completely dependent on Arbitrum continuing to exist. So we're very incentivized and aligned with the future of Arbitrum. I mean, look at the hat. I shouldn't have to reiterate this. So, yeah, I'm gonna stop rambling, but that's that. Yeah. And I'm very, just very bullish on Arbitrum long term. Yeah, I know for me, I recently started going down that rabbit hole. Arbitrum Dao overall. And honestly, like the. Did my name come up? It did, actually. Yeah. They, they, they're, they, they know that I'm. We're doing a podcast and everything. Your name Came up. They've had nothing but good stuff to say about you. Yeah, no it was. They've been a super welcoming bunch. They're very supportive of like everyone doing everything in their ecosystem. Truly. I was actually pleasantly surprised. So I'm working on kind of like a RWA Arbitrum based thing. Didn't think that they would reach out to me and they did and I was just like wow. Didn't even know you guys were paying attention. So been bullish on. On the whole ARB rabbit hole that I've been going down. Definitely like it ENS has been another one too that's been super supportive. Yeah. So the Arbons. Yeah. I want ARP to succeed as well. Man. I agree with you. And the fact that you're. You're still going to use it all those like all the art that gets deposited and it makes the voice of Naray because we want you to succeed as well. So honestly it's like the best of both worlds in my opinion. The user gets to still participate in DeFi and through the NARAY DAO gets their voice heard as well. So everyone's aligned. So I hope more daos do that to be honest. More DEFI protocols like I hope so. Yeah. I hope so. I think GMX is the biggest one right now that is like a large delegate and that's just like Arbitram specifically. But it's the same across many ecosystems. Optimism scroll every ZK sync basically everybody. Right. We want the builders to have a voice because the apps on the chain is what makes the chain valuable at all. So you really, you really want the builders to be driving that, driving that train? Yeah. Agreed. 1,000% being conscious of time. I will try and wrap it up soon. Let's see. I had a quick one. Do you. So going back to the immutable contracts aspect, do you feel limited or empowered by a kind of that immutability? Like for example the types of collateral that you can accept in narrate or is that empowering? Yeah. Or what are the benefits? It's a double edged sword. Right. So if there's a problem, we can't fix it. Narait is immutable but it also means we can never change the rules and rug the protocol. It's just. It is, it is how it is and we cannot add new collateral types. We can change the debt limit and turn ones that are collaterals that we have off. So if there's ever an oracle problem or, or bad debt or you know, a couple other situations, the protocol will basically Automatically shut down that collateral and it can never come back. So if our Oracle, we use API 3, which is super reliable and then chainlink as a backup. But if any of our price feed oracles ever go down, that collateral just like can only be paid back, those loans can only be paid back and no new ones can ever be taken out again and it can never be turned back on. So like that is actually a very strong incentive for us to get it right and to not have any major fuck ups. Yeah. And if everything can be turned on again later, you know, oh whatever, something bad goes wrong, you know, we'll just upgrade the contracts. I don't like that. I don't like, you know, the entire 2008 financial crisis being caused by loans that increase, you know, that are variable rate loans that you know, increase after a certain amount of time. Right. That's like Basically what caused 2008 was like people had had loans that were updating their interest rate because the rules were changing. They didn't understand what they were signing. Yeah, exactly. Liquidy, neurite, other immutable protocols. The rules never change. Like what you're, what you see is like literally what you get and it can never change. So I just, I think that's better. I just think it's better. Yeah, no, it's powerful stuff to be honest. It's limited. I mean it is, it's limiting us, you know, two years from now, maybe all of the tokens that we have as collateral don't exist and there's new ones that are big and we'll just launch something new, you know, we don't need to change the things that exist. We can still react to these like market changes with our debt limits and where we put incentives and stuff like that. But terms of security, it's a smaller surface area to attack and I just, I just prefer it. I under. It's a trade off, you know, there's good and bad, but that's the calculation that we made. Yeah, no 1,000%. Another question I wanted to ask you is I saw a spirited debate on how could we don't have more decentralized front ends for defi. Because. And I wanted to get your like your take on that, you know, so like we have people who made those. Uh huh. Listen, listen. Okay. A lot of people have spent a lot of hours, a lot of engineering time making decentralized front ends and you don't even use them. Okay, you use them, you use them once in a. Once a year when something is going wrong. Yeah, right. And liquidy has like 6 different front ends. If there's ever something wrong with Neurite front end, maybe Defi Saver, you'll be able to use that. You know, us spending a bunch of time making a decentralized IPFS front end that is going to load slow. That is going to be like one more thing to maintain. Oh, this file, you know, can't be found so the whole thing breaks. It's not like it's such a waste of time. Yes, DNS sucks. Yes, I would like decentralized front ends. I would like every part of the stack to be decentralized. Yes. But I try to spend as little time as possible doing decentralization theater for products that people will never use. Because actually I think that my life is very short and life is fleeting and I want to spend as little time of it as possible doing stupid bs. Yeah, so. Oh yeah, this wasn't towards you by the way, specifically. No, no, I'm just saying, I'm just saying. General. Yeah, yeah, yeah. I've, I've spent a lot of time doing stuff like that and it was all like for naught because no one, no one cared. So now I don't do it. And I'm sorry if that's jaded or black pilled, but it doesn't, it doesn't really matter that much. It really doesn't. Especially when we're using liquidy fork and every single fork has basically the exact same interface. So it's very easy. All of our front end code is open Source. It's on GitHub. I'm not going to, you know, put it onto 10 different backup things. You can download it right now if you want. And that's important to you. And if you, if there's someone out there who's like, no near right needs a neat, needs a decentralized front end. Okay, please build it. And I will give you, just build it, you know, I will give you all the help that you want, you know, go for it, knock yourself out, you know. But no, it doesn't really matter to me. And I don't think it's as big of a selling point as people would like to believe, you know, or that they tell themselves. Yeah, that's hilarious. I wanted your take on that because I was like, I bet he has, he has a spicy one. A response because I see it on Twitter and I'm like, I don't know, sometimes I get very decentralized maxi. And then other times I'm like, you know, what are we doing Though, you know, like, is it. If the user experience is worse and everything, I was like, how are we going to convince people to use this thing? Yeah, congrats, congrats. You built something that nobody uses. Was that a good use of your time? No. Yeah. All right, I got two more, and one's really short, I promise, but this one is another spicy one, so go for it. You did an AMA on Reddit, which I'll link for people to check out as well. Oh, thank you. One of the comments that you said was, users lie about what they want. That's true. So I wanted to kind of get where your brain is at with running the recent snapshot that you did, so asking the community what it is that they favored. And this is the net right. Community. You posted a snapshot, you're like, hey, where do you think I should kind of focus? Or where should Naray focus? And it was like five choices. And the things that came back were connecting, exist, connect, connecting, narrate with existing defi apps, more integrations. That was like the front runner by a lot. It was like 49%. Yeah, yeah. So I just wanted to understand your brain in terms of like. So I saw that comment and then I saw the snapshot and I was. Like, oh, these are like, yeah, yeah. They'Re like, kind of conflicting a little bit. You know they are. Yes, yes, yes. Okay, a little bit. When I, When I was studying in school and when I was doing computer science and, like, starting entrepreneurial things, people constantly said, you gotta talk to your customers. You just gotta talk to your customers more and figure out what they want you to build. And don't build anything until you've done a hundred user interviews and, like, this other, like, Boomer stuff. And that is just. That. That's just so wrong. And I have spent several years building things in crypto and, and otherwise. You know that when I show people, they say, yes, that's exactly what I want. Or, yes, this is so cool. Or, you know, you did this at the beginning of our interview, actually, where you said, I wish someone would build a non dollar denominated stablecoin. And guess what? We did that. And you didn't use it, and you didn't use it so hard. And everybody, everybody says that they want Reflexor. Everybody said, if you go post, if you go post about Reflexor, every OG will say, yes. I love Reflexer. I definitely used Reflexer. And like, most of them are lying. They never used it. And second, they don't even know that it's shutting down. I have had to literally argue with people on Twitter like 10 different times who are saying like, why don't you, you know, do the reflex or style. I'm like, reflexer is shutting down because no one used it. Yeah, no it's not. And like you don't, you don't even know. So. So specifically on Reddit, somebody said the question I believe, and correct me if I'm wrong, but the question I was responding to was what's the hardest pill to swallow for a developer in crypto? And it's the fact that people are going to tell you, I want a way to send money over cross border. I want the U. I want better cross border UX payments. I want better UX cross border payments. Or I want a stablecoin that doesn't isn't US dollar dependent. Or I, you know, I want lending, but I just want a vault where I can just put USDC and it just earns, you know, and I don't have people built all those things. Right. And I want a wallet that's like MetaMask but does these other things. But then they don't use it when those apps exist. They just keep using MetaMask. Yeah. So, and I don't know, it's just, it's just a hard pill to swallow that when you're a builder and when you're an engineer and you're building new things, people are going to tell you what they think they want, but they're lying about what they actually are going to use. And the reality is, you know, there are like 50,000 DeFi users, like total, you know, and it's not that many people. Yes. Talk to customers. Yes. Get feedback. So the survey that we did about what should our devs focus on next, how did people vote? Like, how do you get votes for doing that? It's not just a poll on Twitter. It was a survey of people. And their voting power is shell points, which is our loyalty rewards point system on. Right. And our point system is way better than any other point system you've ever used because we just send tokens to your wallet instead of having made up numbers in a database. We just send tokens every day. And now that's composable. Right? That's the cool part about Defi. It's composable. So we just go on Snapchat, excuse me, snapshot, and everybody's tokens are already in their wallet and they can just vote on what should the devs work on next for near. So that's not a survey to the public. That's a survey to our existing users who are already using Neurite, who have already put millions of dollars into Neurite. So that's who we want feedback from because those are, those are the people who actually matter. And someone who is never going to put a dollar into Neurite or, you know, create any value for us is going to say, builder stablecoin, like this. And I, that, why would I, why would I listen to that person, you know? Yeah, that was probably a longer explanation than you were asking. That's the reality. That was perfect, man. No, it reminded me a lot of. I know you don't spend too much time on Forecaster, but Dan, Dan, dwr, he says this all the time. So it just, it very much reminded. Me of like he says users lie all the time. Oh, all the time. It's hilarious. People get, people get so mad on Farcaster. They're always like, dan, Dan doesn't listen to us. He doesn't like our feelings. And he's just like, same. It's the exact same things you're saying. Like, you know, people are like, oh, I want like a decentralized way to sign in and like, blah, blah, blah. And literally it's like, privy, sign in with your freaking Gmail, text me a number. Like, dude, this is what killed me on Farcaster. I signed up. I was one of the first people to use Farcaster and I was like, oh, there's going to be all these different clients. It's going to be so decentralized. So I made my account on Farcaster using the smart contracts directly. Yeah. And then I used a third party app because I didn't want to connect my credit card to my actual wallet that I used to sign up. And now I cannot get into that app for the life of me. And the third party thing that I use to create the username doesn't exist anymore. So I guess that's a point in favor of decentralized front end. But yeah, I am locked out of my Forecaster account. Like hard locked. Like, I have, I have the control over the account. But like, there's, but there's no account on like the actual Forecaster app. Like, there's no email, you know. Yeah, I don't know what to do about that. Anyway, I sent them an email about that. But whatever you want to. I love Forecaster. I want to get on it again. Okay. Yeah, I posted on there right before we went live. So if you want, you know, I'll shoot them a message saying, hey, we need you on here, man. I feel like you'd be a great. You'd be a great voice out there. Hell, yeah. And whatever Dan says about customers lying or users lying, he's right. Yeah. I don't know what he said, but whatever he says, he's right. I'll. I'll send you some. I'll send you some cast that he said. It's freaking hilarious. He does it, like, ever. Almost, like, every three months. He'll just, like, randomly post that. He's like, you guys are all lying. Like. Yeah, I mean, he's. He's definitely right. Yeah. So it just gave me that. Knows what to do. Yeah. So it's just hilarious. I. I thought maybe initially you were like, hey, like, I'm just using this as, like, a signal, you know, but not necessarily, like, that's what I'm an action. Because, you know, signal, signal. Like, it's data, you know, like, you're like, okay, But I do like the fact that you were saying, like, yeah, you didn't post this on Twitter because you would have gone, who the hell knows what from Twitter? Probably build a perp, Dex. That probably would have been the answer. Launch another stablecoin. A second one. Yeah. So that was that one and then the last one. This is like a super hard one. But I've asked everyone this since day one. What's your favorite snack? What's my favorite what? Your favorite snack. It's my favorite snack. Not a meal. Probably cherry tomatoes from my garden. Big front yard garden. Washington Post wrote an article about it last year, but basically. And next to my front door, there's, like a massive cherry potato tomato plant. It's like 6ft tall or something. And I grab cherry tomatoes every time I walk out the door, like, all summer. So that's great. Every time. Every time I go for a walk somewhere or I'm, you know, going to the coffee shop, where I just, like, grab a handful of tomatoes and just eat them as I walk around town in my giant Arborium hat. I love it. The. The visual. You're just, like, wearing it. You're like, I'm going to the coffee shop, just popping cherry tomatoes. Yeah, exactly. That's my life. It's great. That's a great live, man. Yeah. That's it, man. Thank you. I appreciate, again your time. Definitely. Everyone check out netwright.org we now have a video on how to take on a loan. If you want to do it, I'll probably deposit some. I'll do the full loop and deposit it. And people could see the full experience. I know you're having a one week arbitrum incentives specifically. So people if you're I'll have this posted pretty soon so people could check it out. It's from the 23rd to the 30th I believe. End of the month. That's right. And then regardless, Arbitron week. There you go guys. And then regardless, you still get the SUP protocol incentive and you get to support a cool app in my opinion. So definitely check it out. AirWrite.org we'll have the links everything below. Thanks again for your time.