Luke: If you’re listening to a new episode of The Brave Technologist, and this is our interview we’re releasing from our series of guests we sat down with during the rare EVO conference in Vegas this past summer. If you haven’t heard the others yet, we encourage you to go back and tune into some ofthe live from Rare EVO episodes that featured leaders in crypto and Web3.

Everything from influencers like Crypto, Wendy, and the coups to enterprise organizations like Citibank, discussing how they’re embracing Web3. Even nonprofits like Stand With Crypto, who are leading the movement forward with legislators and the policymakers.

In this episode, we discussed how Defi has evolved from being tech driven to user experience driven. What’s standing in the way of mainstream defi adoption and how builders are fixing it. How layer two solutions are shaping and complicating the next phase of Defi, what’s holding back tokenized equities and what it’ll take to overcome regulatory hurdles and how matcha is making it easier for newcomers to start trading in defi.

And now for this week’s episode of The [00:01:00] Brave Technologist.

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Dorson, welcome to Brave Technologists. How are you doing today? Thank you. Pretty good. How about yourself? Yeah, yeah. Great. No, thanks, uh, for making the time. and so we’re here at Rare Ebo. Uh, you’re representing zero X and Matcha. Can you give us a little speak peek about, what you’re talking about today and, how it relates to your work?

Yeah. Happy to. I’m on a panel later today, talking about bridging the gap between web two and Web3. it’s a few folks on, like stratify a few folks on Web3. And yeah, really discussing how can we sort of make Web3 more accessible? How can we get a billion users into the space and interacting with the, the protocols and products.

Fantastic. Yeah. And, and you’ve been building in crypto since 2017. how has the Defi user experience evolved and where is it still falling short from your point of view? Yeah, I think it’s been really interesting. I feel like if you look back at like 20 17, 20 18 when sort of defi started to emerge, I think everything was very like infrastructure and technology focused.

That’s what we saw. Really core projects come up back then like make a DAO with [00:02:00] like the dice stable coin. We sort of first. Amms with Unis Swap, we saw Borrow and Land on compound and so really cool technical innovations. But I think the focus of the products was really getting that functionality out to the user.

Mm-hmm. Right. They were not mobile first. They were web apps, sometimes a little bit clunky to use. Right? Like you had to do multiple, like wallet interactions. Right. And so. It was really good for like power users who are like deep in the trenches, but I think most of these apps weren’t really like super accessible for, for sort of mainstream users.

And so now if we look at like what’s being built in this space today, I think we’re seeing a lot more focus on really like delightful ux, right? Mm-hmm. Making these apps look more like. Their web two abstracting way complexity, hiding sort of all the plumbing that’s underneath and really just helping users do the things that they come to the app to do.

And so I think that’s sort of the big shift I feel like I’ve been seeing over the last couple of years. It’s sort of moving from that technology, pure technology focus to more [00:03:00] of a UX focus. Like we’ve seen it in other, other consumer apps. and then, yeah, I think it’s still falling short. I feel like we haven’t Fully gotten there yet. Right. So like a lot of the technical infrastructure just isn’t in the place where you can hide away all the complexity. Mm-hmm. Right? So if you interact with tokens across multiple chains, it’s still not fully possible to abstract away all of that, right? You still have to deal with gas tokens on one chain, with gas tokens on the other chain.

You have to deal with bridging. You have to deal with potentially using different wallets. And so I think that’s sort of one space where there’s a lot of opportunity to keep simplifying and. To really make these apps feel like they’re more web two apps, but powered by all the cool things that Web3 are, are you like optimistic about where, you know, whether it’s like EIP ps or other, things that are on roadmaps of that getting better in the near future?

I think so. I mean, honestly, one really big one that that landed recently is like 4 3 3 7 Uhhuh Red one, the account abstraction and smart contract wallets. I think that actually. [00:04:00] Makes onboarding into apps so much easier. Uhhuh, and we’ve seen that, right? There’s a lot more, more like mobile apps for like crypto trading that are popping up and yeah, you just, you do social login, you on-ramp some funds and you’re sort of good to go.

You don’t have to deal with e oas, you don’t have to deal with like wallet notifications and switching, especially on mobile devices. So I think that helped a lot. I think like the pay masters that are built in fourth grade seven as well, right. That helps with like abstracting away the need for gas.

So I think there’s been a good amount of, like the technical groundwork has actually been late recently. Now it’s more around let’s get it to full adoption and then. I think the tricky thing is now a lot of users have these e oas, right? Mm-hmm. And we’re all used to using them, but none of this stuff works with UA, unfortunately.

Right? So it’s like, so now it’s like, okay, how do we, can we find a way to make it work with e OAS for the existing users, or does everybody essentially need to create, um, migrate to smart contracts, but. I think for new users, this actually solves a lot of the, a lot of the pain points now. Yeah. And, uh, you know, how do you think, are there any other [00:05:00] ways that we can make even trading on decentralized exchanges a little more accessible or, understandable for new people into crypto that, might not be as familiar with these things?

Yeah, I, I think so. I mean, so if I, I think if I look at like the quad running experience, but I think a lot of, like Ds now, if you look at like Matcha for example, or like, Unis swap or like Jupyter, right? they have actually really simple, nice ways of like, token A is like token B, and you can swap, I think it’s not that much different from going to like a Coinbase or like a Binance centralized exchange.

I think the tricky thing in Web3 or on Texas. You essentially have access to everything that’s out there. Right. And most of what’s out there is not great. Right, right, right, right. Versus if I trade on Coinbase, I know. Okay. Like the token went through some vetting. is it a quality project? I don’t know.

Right. But like, at least it’s, it’s most like, it’s very, certainly not a honey pot, it’s not a straight up scam or rpo. What this. There’s some vetting that went into it, [00:06:00] versus if I, if I trade on a dex, it’s, it’s really hard, right? Like I see a token, I see a lot of copycat. So for example, if I, if I go on a Dex right now, I search for Pengu, I’d probably find like 50 tokens.

Yeah. Pengu, right? It’s true. And, added, uh, space at the end or some character switch or, and there’s no real. you can kind of get a feel, but if you’re new to it, you don’t know. Right. or 10 different flavors of a different token. Right? I think that makes sense.

Um, trust and transparencies are kind of like big, uh, big themes in defi. Like, uh, what does execution transparency mean and why is it critical for user trust? Yeah, so I think in if I look at execution transparency, right? let’s go back to like, or even centralized exchanges, it’s sort of like I’m gonna buy token A by trading token B, and I know exactly how much I’m gonna get, right?

I know if I press the button, it’s gonna go through, it’s gonna get filled. The worst possible price is sort of what I, what I had selected in my order. Right. Versus on defi. I think when Dexus, sometimes there’s this [00:07:00] issue where some DERs might quote really optimistic. Then I try to actually swap it doesn’t work.

Or because somebody else already took that trade, or there’s too much movement in the, in the pool. Um, there might be really high like slippage, tolerances set by default. So I trade something and I actually move the market price significantly, not against me, right? And so I, I think, and some of that is fine, right?

Because like, I think I want to be able to trade in a pool that has no liquidity, right? It’s better. I still wanna be like, sometimes it’s better. I cost 10% slippage when I get out. I don’t get out at all, but I think as a user, I need to be aware, right? Uhhuh, like, I don’t wanna be, I don’t wanna be in a situation where I’m like, oh, I’m gonna sell a thousand dollars off this token.

I expect to get a thousand dollars and then, right. Why I’m only getting 900. What happened to, right, right, right. But if I’m told, Hey, you’re only gonna get 900 because you’re gonna cause a massive price impact. ‘cause it’s not liquidity. I think that’s actually okay. It’s still, it’s not ideal, but it’s better than not trading at all.

And so I think just being more transparent about. What can happen? How sort of, [00:08:00] yeah. Execution might impact price and, and all of that. for example, um, on matcha, we just launched matcha meta, which is a meta aggregator, right? So it goes out and compares price. Like if I, if I make it trade, it goes and compares all the different aggregators, like mm-hmm.

All those one inch BER zero. And what we do is actually, we don’t take the quotes at face value. We run them through a simulation engine to see could this even be filled? And we sometimes see, right, like some aggregators quote, really optimistically, once you simulate it, you either come up with a much worse price or the transaction fails outright because they sort of assume, okay, everything is going exceptionally well.

They execute this at top of block. Nobody taps into this pool before. And yeah, it’s probably not, not super realistic. And I think just building out tools like that to help users understand what they, what they can automatically expect, it’s fantastic. Yeah. I can’t tell you how many people who I’ve walked through on user support things, but think, who don’t understand what slippage even means, or like why it’s important.

It’s kind of like these whole new terms that. are new to people, but people in this space kind of [00:09:00] understand them. But, yeah. And, and, and kind of you, you touched on some of this already, but, but in your mind, what does a truly user first, defi experience look like? Yeah, it’s a, it’s a really good question.

I think it’s probably something around, like, it feels a lot like you’re interacting with a Web two app, but you actually, it’s powered by Web3 on the backend, right? There’s a lot of advantages of Web3 and defi powering user experiences, but it’s, it’s decentralized. There’s a lot, lot less like regulation.

You can do a lot more things, but it’s more accessible. It’s, it’s borderless. Permissionless. But I think what web two does exceptionally well is like the user experience right’s sort of onboarding is seamless. If you forget your password, you can just recover it. Right? Right. It’s not like, oh, you forgot to write down this 24.

Character passphrase. Well, good luck, right? Yeah, yeah. It’s like your fans are gone, right? And, and so I think bringing some of those like paradigms from Web two over so that the experience becomes really easy. it’s delightful. It’s fast, right? Yeah. But then we have sort of the decentralized [00:10:00] infrastructure and all the cool protocols that Power Web3.

Do all the heavy lifting on the, on the backend. It makes sense. It seems there’s like kind of a resistance to like, almost wanting to, you know, not a, not a resistance to, but people almost have to reinvent the wheel on things that are already figured out by web two apps. And it, it’s just like there needs to be more.

I totally agree with you on that. Like, um, you know, there have been. An explosion of L twos and L two-ish like solutions, out there over the past few years, what have been some of the biggest challenges, from, that you have had to encounter with matcha and Dex, with this expansion last time I checked there were close to like a hundred or so different solutions, and some are more active than others, but, from your per point of view, like what, what are some of the challenges you all see, with this emerging area?

Yeah, it’s, it’s a really interesting problem, right? Because if you look at sort of the explosion in chains that actually solved the really critical problem, right, which was speed and throughput, right? Like if you go back to like the NFT hype in 21, anytime a new NFT collection prop, you had like a hundred dollars gas to make the use.[00:11:00]

It was not usable. Took forever, was expensive. And so I feel like. That’s what something all the L twos and all L one solve really well. Right? It’s like we can now have super fast, super cheap transactions, but I think like basis mission was sub one second, sub 1 cent for transaction. That’s amazing. Yeah.

But I think the, the problem that came out of this, this whole explosion of changes. We started to really fragment the ecosystem and so now, right, like tokens are not on, not just on Ethereum or maybe like arbitrary or something or Avalanche, but they’re now on like 15, 20, 30 chains. I think the last time I checked Defi Lama tracks like 250 chains with, with any amount of text activity.

When the. It’s a ridiculous amount of complexity. And then not all of these are EVM compatible. So you need different wallets potentially to interact with them. You need gas tokens on each chain and you need to know which tokens on what chain, right? And so I think it just made it really complicated to interact.

And I think another part, from an like a deck perspective, [00:12:00] it’s started to also fragment liquidity. Right. ‘cause I now no longer have E to UT C pools on Ethereum. I need to have them on each EVM chain. And so some of these pools might actually be pretty shallow. And so if I wanted do E to UTC on some obscure EVM, like L two EVM, I might actually get really bad prices where it says if I do E to DC on Ethereum, I can pretty much do whatever I want.

Right? Yeah. I’m never gonna, never gonna move it. and so yeah, I think that’s, those are some of the challenges and I, and I think that’s where there’s a lot of opportunity to almost like. counteract that sort of fragmentation by finding a way to unify that in the, in the backend again, right. I think like super chain ERC 20 is really interesting.

Uhhuh, right from like on the op stack where it’s like, Hey, here’s a, shared ERC token standard for, for all. For this asset. And if you wanna move from like one chain to the other and they’re both on the op stack, you can just burn on one mint to the other. Mm-hmm. So you unify liquidity on the back end.

I think Circle 60 P does it to some degree as well, right? Where it’s, I could seamlessly move [00:13:00] USDC between the different chains through infrastructure and I think it, it helps sort of like make this a little bit easier, but it still leaves the problem, right. If I have. Let’s say I have an the Arrow token on base, and I want Penguin Solana.

How do I do that, right? It’s like, yeah, yeah. I can either do it myself and be okay. I go arrow to UT C, then I go find a bridge to UT C from base to Solana, and then on Solana I swap, or I find like a cross chain router, which I think that’s why. Then there’s a lot of opportunity and we’ve been, we’ve been building this on, on XX and matcha, right?

It’s like, how do we help users? Move truly from any to any token without having to worry about which chain it’s right, because ultimately I don’t think the user cares about like. Well, most users are not gonna be like, oh, I want this token on base and I have this token on. They’re just gonna be, I have this token, I wanna sell it, and I wanna buy that token.

Right, exactly. They just happen to be on different chains, but that doesn’t, that’s sort of the plumbing and it doesn’t need to be shown to the user, I think. Yeah. And, and, and the discovery of finding that they’ve got the wrong flavor [00:14:00] of something is often like a big turnoff. I mean, it just seems like a huge opportunity for something like the genetic AI to come out, like, you know, emerging. It would be cool to have agents that are just kind of helping you to get the right variant, a token or whatever, and just make it really dumbed down for the user. you know, in that, in that front. are you guys doing anything with ai? Are you guys exploring that at all, like r and d types of stuff or?

Yeah. So we are not doing anything ourselves directly. Yeah. But we support a bunch of builders that are working sort of in the HND AI space. Oh, cool. They use like the zero XAPI can be used for those workflows. And I think really, really well actually. That’s awesome. Especially we just released Alana, like swap API.

Oh, nice. We just released an alpha for crosscheck, API and so I think having all those building blocks, I think really excited to see. Sort of agent workflows, like really picked that up and, and build really cool products for our users. That’s super cool. Yeah. We love XX And you guys, you guys’, uh, API on our R swap.

so how do you think about designing products that work across multiple chains without overwhelming user? I know we talked about that a little bit before, but like, [00:15:00] is there any, like, are you guys thinking about that with the design of, your products?

how do you kind of approaching that? Yeah, definitely. I would say it’s a little bit more relevant for us on the MAA side and on xx. XX is api, so like the front end is sort of built by our customers. But on maa we have a user facing product and we currently have, we have cross chain swaps in there.

And I don’t think it’s essentially at the, like it’s at that level of user experience that we ultimately want it to be. Yeah. But it’s still very much like, okay, select the chain you come from now, select your token, now select the chain you want to go to select the token. Mm-hmm. I think it’s okay, but it’s not great, right?

Because a lot of tokens only exist on one chain, especially, well, at least the legit version of the token on one chain. And so I think there’s actually opportunity with like to use. AI based, like search algorithms or ranking algorithms too, right? To like figure out, okay, if a user wants to interact with Pengu, it’s very likely that they want the Solana version, right?

Yeah, yeah. They don’t want the Pengu coin on base, which is just a rip off that somebody created [00:16:00] and that’s $5 market cap. And so it’s, I think it’s really around like how can we strip away some of that complexity, right? Yeah. Like how can we remove. The awareness of the chain almost. Right? It’s like for the user that wants to see it, we show it, but like the basic experience should probably really be token to token.

Yeah. Chains is on the back end. I think it’s also gas, right? Like the default for most users should probably be, it’s a gases experience because. Then you don’t have to worry about like, oh, do I have to gas token on on my source chain? And then, oh, if I swapped to this new chain, do I now also need gas there?

I wanna swap it out, right? Versus if you can just wrap it all in a single interaction, any to any across chains including gas. Really simple, really seamless. That’s probably a really good product for most users. Yeah. I don’t think it’s a good product for every user, right? Yeah. ‘cause there are people in in crypto especially that really want that control.

And we’ve seen that with matcha meta, right? Yeah. It’s like there’s users who wanna be able to see, okay, here’s eight [00:17:00] integrators. I see the route, then I wanna be the one picking. I don’t want you to pick. For me, I’m the one picking. And I think for those users, maybe wrapping it all together isn’t the right thing, right?

Like they wanna see the complexity, but I think it’s almost like starting with that simple experience and then. Having sort of the, okay, you want to go to advanced mode or pro mode here, now we show this, we show all of this to you. Yeah. But it doesn’t have to be like that for Right. For everybody. No, it makes sense.

It makes sense. And um, you know, and we, this summer too, we’ve seen like emergence of new, like, you know, tokenized equities and things like that where, uh, you know, at least in this day, it looks like it could be moving to a, a place where you might start to see these on Dex over time. I mean, even though right now they seem kind of, are, are you guys.

Excited about this? Or are you guys looking into this? I’d love to get your take on it, coming from Aex on this new kind of area of you know, tokenized equities and other assets. Yeah, I’m, I’m super excited about it. I mean, I think essentially like our company mission is to create a tokenized world.

We all asset, we all value flow [00:18:00] freely, right? And, and as such, and I, I do believe in, ultimately I think everything is gonna be tokenized and everything is gonna be moving on chain and yeah. And then we can use, we can use Texas to trade it. I think with security tokens, what’s been holding us back right now is regulation, right?

Yeah. It’s like, and a lot of, and a lot of times where like I think you have players Odos, they’ve been tokenizing money market funds, equal products, but essentially they have just geofencing out of the us right? Or they’ve said, okay, it’s qualified purchases of credit investors only because there’s just too much ambiguity with the regulatory.

Regime. Right? And you don’t want to end up in a spot where like the SEC comes after you and said, well, you are an unregistered securities broker, right? But we’re gonna come after you. Now that’s not now term. We know how that feels. Yeah. And so that’s why, like, it’s, yeah, it’s, and so essentially I think right now where like, there’s more clarity coming from the regulators.

I mean this new SEC regime, and I think it will really help here. I think Robin Hood’s announcement at HCCA [00:19:00] couple weeks ago and like moving to tokenized stocks. Super exciting. And then like super state, right? They’re working on tokenized stocks for both. Yeah. Public trader, but also like for companies to essentially take themselves private on the blockchain.

Right. And I, those are the only things we’re looking into and I would love to be able to support them. And it seems like there’s ways to do it now with a Dex environment that are Regulatory compliant, right? Where it’s like you rely on KYC on on allow list of parties, you only trade between those.

It’s probably a little bit too early to route them through like Amms at this point. Right. Especially all the amms are pretty much staying away from it, right? Because. They don’t want to have the SC come after for it. But, but I think we are getting close to like being able to have sort of RFQ type processes where we have a market maker on one side.

You have a user on the other side routes through protocol like CX and you’ll be able to let’s say trade a super state, tokenized security or like a, a Robinhood tokenized security. Yeah. If it’s between the lawless parties. [00:20:00] But yeah, hopefully, in the future, if you look a few days on the road, everything’s tokenized.

Everything runs through, through Amms and, and we can just trade these tokens just like, any other crypto. Yeah. It’s interesting. Like part of me is like, okay, cool, you get exposure. And then part of me is also like, just remembering defi summer and, like how wild like all the derivative products got and, and all these things.

And the experimentation too. And I think it’ll be super exciting to kind of see it play out. yeah. for listeners who wanna explore defi or try matcha, for the first time, where should they start? Yeah. So, um, right now I think the best way to use matcha is, you can just go to the website.

you can create a wallet sort of directly on matcha xyz. Nice one of those embedded smart contract wallets. You can send some funds over from like your centralized exchange or if, if you already have a wallet, you just connect it. It’s even easier. Yeah, essentially just go to match X, y, Z, give it a try.

or like, there’s other, where there’s other apps out there. I think wallets are a really good starting point to explore this whole ecosystem as well. Right. like Coinbase wallet or Phantom or meta mask or any like Brave Brief wallet. Brave wallet in, [00:21:00] in your browser. Exactly. Right. And so I think you probably, I think a lot of users actually probably use a product already that has a wallet embedded at this point.

Just sort of giving that a, giving that a try and sort of playing around with it. And I think with a lot of these products too, right? It’s like you probably don’t want to go in and like, oh, I’m gonna put $50,000 in here and I’ll start picking like a big whale trader, right? It’s like you can start with like small amounts.

That’s the, that’s the beauty. I think also of these newer, like l is, whether it’s like transaction cost is super cheap, so yeah. If you wanna just test it out, you can just deposit it 10 bucks and like play around with it a little bit and get some exposure. And as you get more comfortable, you start doing like more meaningful investments.

But it’s really easy nowadays to sort of get onboarded. awesome. Yeah. now we, uh, covered a lot. Is there anything that we didn’t cover that you would like our audience to know about? About what you guys have, you know, anything cooking or, stuff you, were coming out with soon or, or anything like that?

yeah, I mean I, I’d love for the, I’d love for the use or for the audience to, to go ahead and, and check out matcha. Yeah. And I’m always if anybody like, has feedback, they can always ping me on, on x, on telegrams. Oh. [00:22:00] Always love to hear back from our users and, and talk to them. So, honestly would love honest feedback.

So it’s like, yeah. Where can they find you on X? what’s your handle? Uh, T Chale. Okay, cool. Yeah, we’ll put it in the show notes too. Okay, perfect. That’d be awesome. Yeah, it, it is. Great. Thank you for coming out today and this is a great conversation and I’d love to have you guys back too and kind of check back in on things, but thanks so much.

Cool. Awesome. Thank you. Alright,

Luke: Thanks for listening to the Brave Technologist Podcast.

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