chainlink intelChainlink Live Benchmark Protocol: Non-Dilutive Stablecoin Alternative

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and with that lets get started on shadelink live hey everybody welcome to chain link live my name is andy boyan from chain link labs and im here to talk to benchmark protocol ive got kurt euler and david mass from benchmark hey guys welcome how you doing hey were doing well thanks again for having us on youre absolutely welcome its my pleasure we were just talking before the cut a little bit about financial markets traditional markets and how theyre seeing uh d5 and the opportunity in the macro system and and everything but lets start with with benchmark itself because you guys are kind of a a gateway from the traditional finance world youre at least speak in the same language as a lot of these institutions and investors what is benchmark how does it work what kind of makes it unique yeah sure ill start um well have to kind of play off each other here since theres three of us but um you know benchmark protocol is is a d5 protocol um it connects traditional financial markets to d5 markets and and its built on the ethereum blockchain um its a rules based and this is going to sound a little bit like word salad so well break it down but its a rules-based non-dilutive supply elastic currency that can also be used as a hedging device um traditional collateral within d5 lending has primarily been ethereum or stable coins and our product as a supply elastic currency is a new form of collateral in the space and uh ultimately you know our our goal is for the mark token to be a stable coin alternative so you know when users trade out of coins or use stable coins for for denominating contracts whether its lending or or anything else you know we think we can take some of that market share and put that into elastic currencies so thats thats what were looking to do um you know when i say supply elastic token um many users also call that a rebase token so essentially we alter our supply um when our price is fluctuating around our peg and we can of course get into more details as we uh get further along here but uh the main features are that its non-dilutive and supply elastic so a non-dilutive asset means you always own your percentage of the market when you acquire your percentage of our of our network you will always own that percentage you can never be diluted inflation is applied fairly to everyone all holders um and yeah thats essentially our platform can you guys walk through elastic supply and and how that works i think when people first get into elasticsupply theyre kind of shocked by suddenly getting more coins in their wallet or suddenly losing coins in directly from their wallet is that how the mark token is working and and explain why thats not actually a loss or a game yeah sure so um a rebase so our rebase occurs daily um so each day during uh trading hours we will uh call an algorithm which will adjust the supply across all wallet holders so essentially what happens is um and this is going to get into a little bit of or a lot of detail but our our token price um is pegged to one sdr so one sdr is approximately a dollar 42 and um the sdr is based on a basket of five currencies which is considered consists of the dollar the euro the chinese yuan the japanese yen and the british pound so thats our pegs so essentially our our token um price will fluctuate around that peg if its if the algorithm is doing its job so when the price is above that peg um we will adjust supply up bringing the price down towards the peg or when the market price is below the peg we will remove supply adjusting the price up theres another aspect of our rebase algorithm which is a volatility index um and so essentially we we utilize um chain link to to help us with uh pulling the data from that volatility index its called the vxx its an exchange traded note and basically what we do there is if the market is showing increased volatility from the prior day we use that to further increase the supply so what that does is it essentially hedges fear and volatility in the market and prevents liquidation events so um a little bit in the background there um you know stable coins have certain issues relating to um collateralization and and the way theyre kind of issued and again we can talk about that more in a minute but um what we do is we try to proactively adjust our supply to meet the demand so whether thats raising it or decreasing the supply when the demand changes we want to be able to adjust very quickly to that and match our supply with the demand and thats how you achieve the price stability or the the sine wave around the uh the peg so back to your question um its exactly what you said each day the wallets are adjusted people will see a different number of tokens that they own in their wallet and oftentimes if if they havent researched theyre kind of like whered my coins go or why do i have more tokens and so thats why ive kind of noted it its educations a big topic for us and we want to make sure everybody who who buys our token or who who wants to learn more about benchmark protocol has an outlet to do so so ive seen elastic supply theres a few different ways ive seen where theyll just add supply or cut supply directly in the wallet ive also seen protocols do theyll like take a weighted average of the past five days or whatever whatever it is something in the past to say like well heres about what supply should be given historical trends you guys are using the volatility index to look forward and say given what it just the volatility just was we expect this to happen in the next is it a couple of days is it a week or whats sort of the time frame around there yeah and im sorry i might have to mute uh a little bit more frequently i have a dog and i know the the theme has has been you know these these doge memes and in the market so were okay with the physical bugs were good right yeah its really interesting i mean um it took a lot of work to get the data were looking for and um because we really need to pinpoint exactly what would make our algorithm accurate seamless and really pick up data live on a daily basis thats exactly what were doing were reacting to data in capital markets um in real time essentially once per day theres a slight lag and latency from our data so technically for rebasing today well be picking up the vxx data from yesterday so effectively the benchmark protocol is picking up sentiment in the markets not from a month out or from a month before you know looking backwards its in real time which is really important so if we look at like you know federal reserve sorts of processes um theyll take a look at indicators over the course of a quarter and say were going to raise interest rates or not or whatever their you know metrics are you guys could do it daily basically is is were going to find a way to adjust our monetary policy whenever as needed yeah essentially you know were picking up data from its a derivative from the volatility index and um the short-term notes um based off of the s p 500 so any volatility thats occurring from those markets u.s capital markets were going to be taking that into account and um adjusting our algorithm based on key numerics our were getting into the weeds i love this so if you have questions at any level audience this is chain link live ask them now but heres my question so these are volatility from s p 500 short term notes you said are those correlated enough with crypto markets to kind of do what needs to be done or does that not matter because really youre looking around this sdr uh index which is about you know these various fiat uh currencies well its a two-pronged approach which makes our algorithm quite interesting and pretty reactive um yeah i mean when you when you look at capital markets and then generally when you see the more volatility in the markets youll see options prices creeping up um so lets say the s p 500 is is dropping pretty climatically usually youll see the cost of hedging will increase and when theres more stability in the market options will cost a little less money so generally well be adjusting our protocol when the s p 500 for example is falling well be accounting for that in our algorithm by a supply adjustment upwards which actually goes a long way in injecting liquidity and supply into the system well um why sdr so you know a lot of stable coin protocols theyre you know theyre around a dollar or a euro or ive seen some that are theres an arbitrary one that they just picked a number because why do you need a number if its on ethereum um so what what is special about sdr that makes it a unique asset yeah so theres a couple of reasons why is i think um a better peg i think youre getting a lot of lag here david are you getting the same thing i am yes um i could pick up that question i i mean essentially were picking up the scr for for diversity and assets were not just looking at the us dollar which accounts for basically 40 in our basket were also picking up for the other global currencies in the world um for for baseline diversification its really important to us and our algorithm works long term um we need a stable stable prong um basically for um i mean basically if we were just taking the us dollar listen its a mature market its a first world country its not a developing country but you need stable assets within a basket to operate and the best way of doing that in our opinion is picking up four other alternatives within this basket mitigating risk is all about diversity and i think were doing that pretty well so uh by including more than just the u.s dollar chinese yuan the euro et cetera um like does this open it up are our economists and you know people in traditional finance are they looking at this like this is a more globally accessible uh um a stable coin for us because it it its got a more stable peg because its basically aggregating all these fiat yeah you hit the nail on the head i mean look look at look at all the traders that are holding cur cryptocurrencies buying crypto speculators its not just the u.s so i think if youre just picking up the us within an algo youre omitting most of the market so i i think thats pretty important um long term at least yeah i mean were us-based and and so i have a default to a dollar just because im used to it um but i dont need if im selling something for it to hold the position i dont need it in a dollar i just need it to stay put whatever it is or if im collateralizing with something it doesnt need to be at a dollar it just needs to stay about it the value that i expect so um thats a really interesting take there and i really appreciate that you guys are coming at that a little bit more unique what are um i think we already talked a little bit about how youre using chain link uh kurt mentioned the sdr feed as well as the vxx feed um with that do you have anything to add to that other elements of that integration well i cant talk to things that are in the pipeline and were working on other things i just cant really allude to that right now but the primary focus right now is picking up that vxx data and were only using it when capital markets are trading so uh monday through friday well be picking up that vxx data applying it to our algorithm but for now thats really all i can talk about no problem well im going to talk about something you have announced then um you you guys havent announced the benchmark protocol peer-to-peer cross-chain marketplace thats a mouthful too but lets pull out a couple uh benchmark says you guys cross chain here to queer marketplace so what is this um what whats how is it unique whats um what does mark do in this ecosystem yeah were really excited about it thanks for bringing that up um its the first of its kind i think within the market and um you could call it just that you could just call it marketplace i think thats a little bit easier but its actually its a peer-to-peer lending platform and initially its going to be launched on ethereum um the launch is actually quite imminent um im not going to tie us down to a specific launch date um but were also going to be rolling out the platform on another l1 when we go live that will be another surprise in the pipeline but its a place where you could allow for lending contracts to be created by any user for any erc20 token you could probably hear the dog in the background right so the dog likes it can you say that last part again any erc 20 token any erc20 token right so its not going to just be a sample size of the total token population any erc20 token which is huge from a utility perspective yeah thats really interesting um you know given uh for a lot of lending markets you know what is collateral and what can you borrow thats i mean thats it thats your product match and youre limited to to whats gone down but um uh so thats a really interesting note right there and you so were left with cross chain and weve got a bread crumb that its l1 uh thats great and well keep track of you guys and make sure we know whats going on with that in the future as well um i got a question from the audience hey keon im going to call you that because thats how i can see it and keon has a question about south africa for someone in south africa does this mitigate volatility for assets pegged to the dollar and i believe keown is talking about using the sdr as the peg value and yeah its still a little off okay cant win with us today i got the dog park background got some sea on kurts end um my familys getting home from school like its a whole thing thats all right yeah uh listen i i think you dont have were not covering every single currency within our global basket um i mean that would be a great way to diversify risk but we had to go with something thats popular something thats been formidified throughout the years thats why we went with the sdr and the five currencies within that basket but i will tell you from um the viewpoint of mitigating your risk you definitely want an str basket versus just something with single currency exposure yeah so if im a global trading desk and ive got assets and i want to you know hold a position in cash then but if im trading globally then i dont want to just keep it necessarily in a dollar thats inefficient like then that net volatility pops up as kion mentions so that this is really like its just a different stage of trading that i think a lot of crypto and d5 isnt addressing yet its dollar or sometimes euro or yuan and thats it and its not combined very well yet well yeah i mean youre when you look at the primary trading pairs um at least from a stablecoin perspective youre looking at usdt usdc and then you know the dominant movers within the market like bitcoin and ethereum um so i think the market is just totally overlooking um you know some of these alternatives which i think will probably be moving the needle in the future as as some of these markets progress and theyre more mature um more to come on that in my opinion great question thank you um so you guys come you too and i assume more of your team come from traditional finance world youre clearly positioned to speak to hedge funds and investment desks that are in these markets that speak these uh terms how are institutional investors or like the people that youre talking to how are they reacting to d5 like do they get it are they degen theyre just not ready to go i think we talked about this at the beginning but lets come back to this again what what are their general thoughts or questions about defy or benchmark specifically if you if you dont mind yeah i think its its a really interesting topic right because you see all these net inflows coming into the market and where the net inflows going um so you see bitcoin dominance trickling down more money moving to ethereum and then a lot of the d5 protocols right so institutions are in an ins theyre in a very interesting pocket right now because the regulatory landscape is very gray and theres a little bit more clarity thats been coming out um from a global perspective and even local law domestically uh but theyre starting to dip their toes and get a little bit more comfortable with the bigger primitive assets like bitcoin and ethereum which in my mind lays out the ultimate roadmap for more speculative assets which in our eyes like you know you look at the top 100 from cmc perspective you see some of the top d5 protocols theyre mature assets within but not from an outsiders perspective so i think ultimately youll see more inflows to some of these these assets with lower market caps kurt do you want to try again i dont know if your stream has fixed is it better a little a little okay well cut me off if its if its too distracting um yeah i mean i think from from our perspective the lending marketplace is going to be a good way to introduce our product to um people that come from the traditional finance world you know people understanding they understand loans they understand um you know interest rates and i think that when we can package that with our protocol it its more digestible i think for somebody thats not totally into you know the rebases and farming and yield optimization strategies and things like that so i think that um that will help and you know our our token will be part of the ecosystem and users will be incentivized to use our token within the lending marketplace so so we think that its really a proving ground for this what we like to call e5 or elastic finance space where the whole purpose of an elastic supply token is to hold value um over a period of time not be inflated right stable coin counterparts um theyre tied to their fiat counterpart i should say and they inflate in the same way right one usdt right is always worth one dollar so if one dollar has less purchasing power then so too does its digital counterpart and i think thats what were trying to avoid and were trying to to show that a supply elastic currency holds its value and can be used in in a lending contact and we think thats pretty important to push forward this space as a whole yeah really interesting perspective on um you know just what markets youre speaking to what language youre speaking to and how they understand uh what they can do uh were getting a bunch of questions now so lets hit a couple of good user questions before we wrap up today um if youre joining us late this is chain link live were talking to benchmark protocol and uh my name is andy boyan with chain link labs lets uh well start with a road map question any news regarding the launch of dual farming initiative on east network i dont know what that means it sounds like somebody whos been in your discord and knows whats up uh can you comment on this at all yeah so this is this is something weve been working on behind the scenes um no no announcement yet for when this will happen um but essentially weve come up with a new way to reward farmers and um it involves partnering with other projects and its something that were looking to integrate into our our interface um at some point in the in the next few months and and maybe thats a good question that i could show our interface a little bit here if that makes sense yeah absolutely that would now be a good time to do that yeah lets see what you guys got all right im going to click share screen lets see here all right so im going to show um this is the pressed right so this is where one second were still loading here okay there we go all right looking good go for it all right so this is what we call the press which is essentially a section of our of our protocol where users can stake liquidity tokens and earn yield so um you can see some of our our pools here you know showing off our pretty high apys of 300 percent for for unit swap pools so um users can can stake lp tokens here earn mark rewards we also have a single asset staking platform um where users can take their mark token and earn a reward token which is called xmark xmark is essentially um if if youre familiar with sushi essentially just a uh receipt of doing so it tells you that youve staked your your mark and youve earned x mark um you can return it at any time based on an exchange ratio here but whats interesting about xmark is its not a rebase token and it it goes cross chain so we have xmark pools on on finance smart chain and on polygon so users can also earn yield across chain um if they so uh wish to do that and we also have a couple balancer pools on as well um which are here um so yeah thats really our our staking and um lp platform so and so your liquidity is cross chain uh on unit on balancer on bsc and on polygon but then the core rebase action is still is on eth but moving to an l1 another l1 sometime soon so so the rebase yeah the rebase will always happen on eth because it has to happen in the native amm um but thats why we created this x mark token to go across chain because it essentially represents a pool of marked tokens so the underlying assets will rebase um but the number of x mark that you own will always be constant so itll function more like a traditional coin but thats why its easier to integrate cross chain because it doesnt rely on the rebase mechanism going cross chain yeah um i i dont know if you had more to share not it wasnt coming up so if you have another screen to share try turning your video off somebody in um i dont know if you can turn the video off and then we can leave your sound on and maybe we can just have you as an avatar uh sometimes thatll improve it but if you if youve got another screen you want to share go ahead and bring that up in the meantime im going to bring up a question for david can you guys talk about the difference fuddbuster asks great name can you guys talk about the difference between holding mark and holding mark denominated debt for users that are more novice or for anybody because im not novice but i dont know exactly what he means id love to hear this explanation yeah i think this is more relating to the release of our marketplace and yeah we have plans to incentivize the use of the mark token within the marketplace we havent really talked about utility before um you know granularly when youre talking about mark and um the integration with the marketplace um i dont really want to get too much into the details with denominated debt i think its going to potentially go over a lot of the viewers heads but i i do want to quickly touch base on on utility so for example as i said you know mark holders if theyre actually going to be transacting on the marketplace theyre going to be able to actually have reduced transaction fees and other yield generating opportunities the mark token and thats actually going to probably be the collection of other fees on the marketplace which will probably move the needle um we actually do have a big announcement related to the overall functionality of the marketplace in the pipeline and were still ironing out some of the details so for any users that are watching this video just pay attention to some of the news um we need a little alpha on chain link live sometimes um i think that might tie into another question that popped up here will you guys use gas optimized bridges you mentioned like theres some perks and benefits basically to to using this token does this relate to this question yeah i mean so basically if were going to be launching the peer-to-peer marketplace on other l1 gas optimized bridges um for example if we were going to i see the questions about polygon if we were going to use polygon any transactions on the bridge would have to go through the matic bridge and be subject to those fees but weve already announced finance smart chain um and a couple other hot places for the marketplace you could think about the marketplace as an ave with a ton of assets not just on polygon or ethereum so you could see the breadth of the exposure that well potentially get awesome thank you guys and thank you for all these questions theyre great you guys are clearly paying attention here ive got one more question for you david from marvin before we wrap this up what kind of dog you got thats thats the most pertinent question probably um hes a labrador and hes very vocal um i still love him though yeah for sure we got a coveted hamster so uh yeah all right well guys this has been great oh before we go i want to give you a chance whats the best place for our audience future audience who watch this on youtube later where can they find you guys and more about benchmark whats the main place some people are telegram some people are discord some people are equal like where do we go to get involved sure for news related items uh you follow our twitter um what is our exact twitter handle its a benchmark spark underscore you should probably know that right um we have a really active community on telegram were not we also have a discord but um education is key and a lot of our users pay close attention to the news and how our algorithm works um telegram is the best place to interact with uh fellow mark holders thats fantastic i want to encourage everybody whos watching join communities thats how to succeed in d5 thats how you get started if you want to eventually make a career transition thats how to learn about these protocols how to use them how to find out more so join the benchmark telegram and discord follow them on twitter join the chain link discord and telegram and follow us on twitter of course please uh everyone i want you to like and subscribe to this channel to help me out because we do these q and as pretty frequently i got another one tomorrow at the same time with all sorts of interesting projects where i love it i just get to learn about benchmark now sdr like im just exposed to all sorts of really cool new things um david and kurt thank you so much for being here with me i really appreciate you taking the time thank you andy thank you it was a pleasure oh absolutely mine uh to our audience thank you again for being here like and subscribe thanks to juwan for hanging out with me in the chats and everybody well see you next time on chain link live you Join us on Chainlink Live for a video Q&A with Benchmark Protocol. We cover Benchmark Protocol’s elastic supply token and how they achieve a no-liquidation model, how CBOE Volatility Index and Special Drawing Rights provide Benchmark users with unique metrics to power its rebase mechanism, and how Chainlink Price Feeds for secure volatility index data.Featuring: Kurt Uhler, COO and David Mass, Founder & CEO at Benchmark Protocol Benchmark Protocol: Benchmark Protocol Twitter: Benchmark Protocol Blog: Benchmark Protocol Telegram: Benchmark Protocol Discord: