Pendulum launching forex trading on DeFi in February 2023

0:01I'm Ashton Addison from Block West capital for investment pitch media and today on the Crypto Coin Show we have Alexander Wilkie the co-founder of pendulum Alex welcome to the show and thank you for taking the time today hi Ashton thanks for having me and it's great to be here great to talk blockchain definitely and D5 specifically I feel like 2023 is going to be a big year

0:24especially after the issues of centralized exchanges more people looking for different decentralized finance options I feel like it's a huge narrative moving forward as the market turns around in cryptocurrency I appreciate you taking the time to come on so close to the launch of pendulum and I'm excited to dive into it so let's just kick it off from the top to start

0:45from for the viewers let's hear a little bit about what you and your team have built at pendulum how it's working within D5 and then we'll dive into all the details all right great so pendulum is a Fiat Forex infrastructure blockchain and we are building a platform where everyone and especially businesses which we're focusing on have equal access

1:10tool for an exchange and rates that Banks usually getting so we're building an alternative Forex Market on chain which is pretty exciting to go for we were trying already years before putting such a cross-border payment Journey on chain and hit different limits and yeah it wasn't working with blockchains that were already out there so we decided all

1:35right let's bring it on ourselves and all the defy Innovation that we saw can be actually pretty well used for bringing Forex on chain and yeah we're definitely very excited now that's very exciting because you know the Forex Market is a huge Market compared to cryptocurrencies even and to be able to use that the technology combine the best of both I think that's

2:01great and it will definitely drive a lot of adoption of the technology if we can move the people that are you know doing World Trade onto the blockchain and provide benefits for them and you mentioned there you've been you and your team obviously you've been thinking about this for a while as you continue to build out going through the trials

2:18and tribulations of you know what current blockchain infrastructure wouldn't work and how you've built pendulum to fit the glove can you talk a little bit about that journey and why we haven't seen Forex move into D5 sooner yeah so but what we were missing most of you were just stable coins first so we only had the Stellar Block band

2:45which had over 15 different stable points Focus mainly on Latin America Africa and currencies also so you could exchange already a Mexican peso to Tanzanian Shilling for example or euro to dollar or so there were these exchanges but the liquidity on their protocol own decks was was not enough for businesses actually to transact let's say ten thousand a hundred

3:11thousand or even bigger actions that's why we were very happy when the amms developed and uniswap came in the game and also some some more like curve some more taxes that were specialized on these stable coin swaps so we tried to build the journey even without them and had to add a lot of intermediaries like a market maker or a liquidity buyer on

3:37that so now this got all automated and yeah we thought okay let's build this together to put all the pieces together so we got the amms we got a nice blockchain infrastructure like a secure platform that works better for Fiat and stable points so specifically for that use things and yeah then plug it in and it's I'm very happy that a lot of assumptions that we actually took last

4:04year were going in the right direction and were even proven by other big players recently that Forex is actually possible to put them on chain right so that's was a big question mark still last year amazing that's great to hear and what are some of the main you know objectives that you have to first before to build the foundation of putting Forex on

4:32D5 you know you mentioned there about stable coins obviously that's important for defy but normally people are just using you know some usdc and there's not all these different currencies they're just like the US dollar so when you make Forex you know you have to make the Euro and the Japanese Yen and all all these different currencies I'm curious if that actually has to

4:52tie into you know the Fiat on and off ramp as well of those National currencies how do you make all that work yes so we kick off our launch with the assets actually from the Stellar blockchain so we'll bridge over with a trustless bridge concept called spacewalk and this will be specifically configured for the Stellar blockchain to bridge over some

5:16of the stable coins already so we'll start off with already like 15 plus stable coins on pend along with that so that's essential of course if you want to build a Forex Market that you have different points there and we will more or less follow also the concept that Stellar did there that the actual issuers of the stable points are also the theater on and off

5:38ramps so these are the same parties they are issuing the tokens they're taking let's say the Fiat in the traditional banking system and issuing them on chain and whenever there is an off-ramp happening they're Redeeming the stable coins and will issue that payment in the traditional banking system that works pretty nicely we did some Alpha and prototypes already from Europe to

6:02Tanzania I think it took in total three minutes and the money was them on the account on the bank account actually in Tanzania so only in Europe and U.S actually with the old banking systems they are they take days sometimes actually the other banking systems in the other countries are usually much faster from our experience that's done

6:26yeah so yeah you need to do that you need to stable coins then our firm so pendulum will also offer some major functions that you need like price feeds or specific the smart contracts for these stable coins themselves we'll put them in our runtime so they run faster Builders can work with them much faster so they don't need to yeah build build the whole infrastructure

6:55themselves because they can already like put some code pallets together right and our or a CTO also did some testing so if the smart contract runs and these runtime pallets and as we call them in the polkadel space or in the substrate space they run up to 100 times faster than a normal smart contract on chain which is also a great Advantage I think specifically for Builders and protocols

7:23that want to build something with the use case via stable Forex right definitely and I mentioned there in sort of traditional crypto stable coins Circle and usdt but mainly Circle and usdc which has grown quite significantly I saw that they put out a paper on Forex on chain I'm guessing your team looked into that

7:49I feel like this is a turning point where the industry is now paying attention you know Forex is just such a huge opportunity to capture to be able to put this into the blockchain space like now is the perfect time to be launching handling yeah it was a big relief actually and also a big excitement that we could just read up let's say all our strategy

8:14sessions from the last two years in that paper more or less so I can really recommend reading that coming out from uni Swap and circle and yeah there are great researchers who put some numbers there who explained the case why it is important and the main problems we always said it is time so the transaction speeds the cost and transparency right I think in the

8:39paper more or less what you what you can read is that it is actually yes about time cost but and then also the third one like the transparency one that changed a bit that you avoid the settlement risk actually that you have in the traditional world and I think it got a little bit of the learnings of last year so where we saw some failures from centralized to like Financial

9:01organizations a lot so you don't have that risk that there's just something not there which is written in the balance sheet right or has a different value that you cannot review 24 7. so this transparency which we always also focused on or we're highlighting that I think a lot more important so I think that's the best Advantage now we can we can have that we can put this Market

9:28to on a transparent public blockchain right and with that everyone can access it and everyone can review it can audit it whenever they want so it has actually a much higher security than yeah than in the traditional Market where you also have to pay in advance to trust someone then you get your cash back right so this is all built into a smart contract where

9:52you have a payment versus payment transaction which is automated there's no intermediary looking after that this runs on and I think this gives everyone yeah the predibly really also the security and the trust to act also with higher amounts on chain I think the industry learned a lot and moved a lot from these yes security disabilities

10:16also last year I mean they're also have been a lot of times on public blockchains and bridges and so on last year and I think also the industry moved there and improved there a lot in increasing security and going more for trustless operations trustless architectures of smart contracts yeah no it's beautiful to see that transition bring more transparency and

10:43self-custody to the nature of Forex it's very exciting and you mentioned there a couple times though about you know just the speed and the cost you know and that's sort of been an issue in traditional blockchains at least with ethereum you know to not be able to settle instantaneously or to have like quite a bit of cost if you if you're doing a

11:05very small transaction to not have the transaction fee be too high of a percentage of like the total cost do you think that you know where pendulum is at the launch that will be optimized or will we continue to see faster and cheaper as the you know sort of you work out how Forex is going to continue to build from end of this year and continuing on future years

11:34so I mean comparing to ethereum there are different levels so you have first you have the blockchain level where ethereum yeah was most of the time like at this fee market and then fees were jumping right when there was a lot on the Chain happening and then also sometimes when a game was launched it was it was very expensive to pay or invest for something else and so there

11:57were these Dynamics and I think now they move to proof of stay also polka dot I mean we're launching as a power chain of polka dot December we just yeah won the crowd loan for that our lead spot starts in February and actually what the concept of polkadot is so the fees from the blockchain are actually paid for two years with that crowd loan so we are

12:22flexible from the business model or from from the running of this blockchain with the fees but this is only once very small part I mean usually these fees they serve spam protect action and so on so that not everyone can send unlimited messages on the network Etc but what the main fees usually are in Forex is for the currency exchange so someone has to provide the T

12:47for the different currencies and then there is a like an order book then there's yeah some slippage happening between two between currency rates and so on and we have yeah we're very excited that we have a foreign a Forex amm actually so in amm a market maker an automated Market maker that is specialized especially on these stable coin swaps with even 2x better

13:12slippage and keys when you compare this to curve or a uni swap B3 Forex market and with this we start already off with an exchange of let's say not not even the main currencies but from let's say Brazilian real to maximum business or Canadian dollars or something we started off with offering five points of a fee for a transaction which is very low usually businesses pay

13:38two percent three percent right to their Bank when they exchange these currencies and this will work right from the start that's our goal and then of course with increased liquidity coming to the chain and we're also expanding to more geographies this year and bringing even more stable points onto Pentagon and more liquidity than this can even improve from from these

14:04five basis points but I think we already set the bar initially pretty high with the five basis points as a goal wow that's really good I'm looking forward to just seeing it and now you mentioned that the launch is like up very upcoming can you talk about you know what's the plan moving forward in 2023 and the next major milestone for the mainnet

14:27yes definitely so currently yeah everyone is Hands-On before the launch so in around 13 December so it's defined by a block number so the time is always adjusted but in about two weeks there will be the mainnet launch from pendulum so we're starting setting up the notes and then also our spacewalk Bridge launches and the Forex amm so it will be a busy

14:56launch week for us there and yeah thankfully to the polka dot and also our choice to the popular ecosystem we're starting with full security already so the let's notice all the transactions are already secured from the first second secured by the relay chain from polka dot so that's multi-billion and very decentralized chain so that's great and yeah

15:22further down the year in the second quarter we're we're trying to add features on the infrastructure level also integrate more wallets and bringing on more Fiat on and off ramps in more geographies there and then Q3 will start integrating more and more features for businesses so we'll have the multi-user account management for example which is

15:46pretty tricky to have you have I think from ethereum you have safe I always doing that almost everyone is using that to manage their funds but in other ecosystems this is pretty rare and if you want to have your let's say Finance team working with blockchain there are still some features missing so to make this really let's say compatible with business needs there's

16:10still some work to do and we're focusing on that also we're focusing on decentralized identity protocols where yeah talking already with some potential Partners there so we want to have this whole company also being compliant or that it's possible to do border payment in a compliant Manner and also use the advantages that you have on blockchain so there could be a reusable kyc process

16:35so you don't have to do this every time again for any on and off ramp that you're using and yeah there's a lot to come on that and yeah one of the most important things also that we will work on is of course privacy because you don't want your competitors to see everything that's also one topic which is needed on blockchain and I think it will

16:59be also one that yeah we will see also for Mass use cases here in 2023 so there must be a solution coming out of that we're also looking already into different angles how we do that also Auditors of course need me to buy that maybe a key to look at this and so on so there is a lot of complexity for that but we definitely need it so that's where we all agree so that's definitely

17:27on the roadmap also for Android of this year and of course much more so we have real-time price fee and tons of features more but for now we're focusing on the launch and then completing the infrastructure then starting with business features I think that summarizes it for this year yeah wow that's incredible and yeah there's a lot to go into it and I'm glad you

17:50mentioned privacy there as well I feel like you know once you move everything on chain you have that transparency but then also there's the transparency for all of the competitors to see what you're doing and building privacy layers or some kind of infrastructure to help protect the businesses you know proprietary information I feel like is important so looking forward to that and

18:13when you mentioned you know all of these different use cases for businesses I'm curious if you know because when I first think about Forex Trading I think you know it's just people at their desk that are that are just trading back and forth currencies all day but there's a lot of businesses that are you know International corporations that are working with multiple currencies or they

18:33just want to send currencies to their other unit in a different country and they're not necessarily just trading back and forth different Forex for profit do you see both of these sort of use cases as applicable to pendulum yes so first I mean I think the first wave of implementation and adoption will not necessarily come from the big corporations of course you always read

19:01about these projects and their projects but I think what we already learned is that a lot of smes and small smaller companies are trading internationally they're doing import export they're dealing and have a lot of international clients or suppliers and when you buy something I don't know from Asia from from another country from Latin America salad maybe in Mexico or somewhere else

19:26so that's that's a lot of Trades going on also not only on the corporation level and these companies move very fast some of them are already paying some for some services in usdt usdc right some are sending Bitcoins around so this is already a use case but of course to bring this to a wider adoption you have to let's say also Target or adopt or adapt the system

19:53to some not so crypto-saving people and not so crypto Savvy processes and that's what we're trying to do to increase and widen actually the target audience the use case for those so they can use in the best case that can use pendulum as an alternative banking account where they can that's internationally with very low fees and of course no monthly fees or something

20:17like that which would yeah the best outcome of our journey I would say by end of the year regarding privacy and also one one thing so it's it's a major problem I think we can agree on that for everyone and we learned that also and this is yeah definitely one of the bigger topics that we also have because of the compliance so when

20:46you want to act in Europe you want to pay your salaries to your stuff or something you can't avoid it and it's actually legally required that you protect that data to a minimum standard it's not really something that we want to do it's actually required to bring more business and more users to blockchain yeah great Point great point and for the upcoming launch what is the best

21:09way for the viewers and businesses to learn more about the platform and speak to the communities and follow along for when the launch is happening yeah I would say Twitter is always a good a good idea to follow us on Twitter and look what we're doing we're almost communicating everything every progress over there then at the launch we would be happy if

21:34you try to try us out give feedback in the community and Discord telegram wherever you want so that's also great and appreciated and will also drive and have an impact on the future roadmap of pendulum we will try and build a business Community also for blockchain in general so we really want to move the whole industry a little forward and really wide this

22:01this target audience because I think that's that's something we were working on already like with our team not only for pendulum but also before we're trying to bring those cases on chain to the mass market and not only to crypto save users and we see best use of our time

22:27definitely once you can break out of the small Market that is web 3 so far and moving to the general business and you know International remittances and Forex I think your Market will 1000x in size so I'm looking forward to seeing that growth and I will leave those Social Links and the link to the platform as well as you mentioned in the description box

22:50below for the viewers to follow along very exciting Alex thank you so much for building something that's that's has such potential to solve issues in all businesses around the world really I think that this is going to be more than just people trading Forex back and forth this is something that will help businesses so I appreciate you coming on

23:12To the show and explaining pendulum and looking forward to the launch in the near future here thank you very much thanks Aston thanks for having me thank you