Barrett on Cypher Protocol's expiratory futures platform

0:00i'm ashton addison from block west capital for investment pitch media and the Crypto Coin Show and today on blockchain interviews we have barrett the core contributor of cipher protocol barrett welcome to the show and thank you for taking the time hey ashton appreciate that excited to be here chat all things time for dubai and solana yeah very exciting i think

0:24what cypher's working on solana is something that not a lot of people in crypto are doing right now but i think will be a huge industry moving forward especially in years to come as we're still early on i would love for you to kick off our conversation by just a little bit about your time in blockchain how that led to contributing to cipher and then what cypher is all

0:45about yeah wow so i guess like my time in blockchain like as a developer or like a builder in the ecosystem really kicked off at the beginning of 2021 i'd been like widely familiar with like the space given like my background in math and finance so it's always been something that's like very interesting to me and you know obviously played

1:07around with like bitcoin back back in the day in like 2012 thought it was really cool and then you know took a it was a lull for like a handful of years and then like you know 2017 started to like really ramp up like paying attention again amazing and now that's led you to working on cypher which you know from just playing with bitcoin to now working

1:30on a futures protocol on solana is a big step i'd love to hear a little bit about you know cypher what inspired you to start building this technology and just overall what is cypher yeah so cypher is a expiratory or dated futures protocol on solana which means that unlike normal you know futures and solana ecosystem or defy at large right they're perpetuals right

1:57so these markets actually expire and will settle right just like more of like a traditional style futures product cool well when i think of futures you know there's been a lot of talk with bitcoin adopting futures in ethereum solana's still a little bit down the list i think for the mainstream financial institutions and the main exchanges to start

2:25implementing that but i think of the chicago mercantile exchange and i believe they're doing some kind of futures with bitcoin is that different from what's going on with cipher and can maybe even explain those differences yeah of course so like the cme they have like bitcoin futures and ethereum futures and those are you know traditional futures products on

2:47Like the layer one token themselves right whereas cipher enables access to a variety of different asset classes right we aren't just focused on you know providing features for like general spot tokens like solana e btc we're you know creating these rather unique markets that the community is really driving you know the initialization of right

3:13so initially the markets that are tradable on cypher will be pre-public markets so your pre-ipo pre-ido allowing you know retail and institutions to gain exposure to late stage private capital markets right really democratizing that excess and bringing price discovery forward right currently ipos and ido's suffer from the inability of like liquidity and you know

3:41actual open market trading right so when you see like a company that ipos or has an ideo they're relatively volatile big price gaps up sometimes down as well right and a protocol like cipher right would be able to you know be a facilitator of understanding what the market is willing to pay for some asset given its you know public launch right and i think that's

4:06like something that's really exciting and one of the big reasons why the team you know got in and you know got dirty and started building the protocol itself right is really to open up that access right i think that's like a big ethos in d5 and crypto at large right is democratization open transparent financial systems and one of the most closed and

4:28undemocratized spaces in finance is like private capital markets right definitely good point and when i think of you're right about like the low liquidity and it feels like if there's an idea coming out especially if it's more of a speculative one it's not like you know a name brand that you know is gonna succeed it's anybody's game where it's gonna go you know and if you

4:52have one of those pre pre markets to sort of have that supply and demand and to get a glimpse of like where is the market see this valued at as it's coming out i think that's obviously very helpful and you mentioned there you know open transparent democratized i'm curious about the democratization and sort of the decentralization of the platform as

5:15well and one thing that i think of is with these listings of different futures is there what's the approval process can anybody list it in a totally decentralized protocol or is the founding team or is there a committee that sort of determines what and should not what should be traded and what should not be traded yeah great question so the way that like a market gets

5:39initialized right is the community the token holders the dow right get together somebody or you know an institution an it a single person writes a group of people right come together and they go hey we want to trade you know this type of market right whether that's spacex or you know you know psi options prior to an ido or an ieo right they can come they make that

6:04proposal then the dow the community holders the token holders right get together and they vote yes or no right to initialize a market if vote passes then the market would be programmatically you know initialized by the smart contract that sits on salon's chain and then that's kind of how we maintain this i and it's not truly permissionless right

6:28because you can't just come and like see the market but it is permissionless in a sense right like the core contributors don't have you know the control to be like hey like you can't list this market right or you know xyz other things that's really up to you know the community and the token holders so maybe you know a market does get initialized and it's not

6:50as exciting to trade maybe the community won't you know continue to initialize other markets in that like sector right and so this is helps you know prevent this long tail of low liquidity style markets so we want to keep you know a lot of people engaged we being like a price discovery mechanism you need like liquidity and volume in

7:13in the you know protocol or those given markets right and so it's important to have that buy-in from the community and you know allowing them to be the ones that are like hey we want to trade this or we don't want to trade this definitely good point and with pre-market futures that come on once the coin comes out or the idea with ipo is open and the spot is actually trading

7:39on the market does the futures continue to be listed on cypher or there's different expiry dates sort of like how bitcoin has a futures expiry for next christmas and two years from now five years from now how does that work yeah great question so initially excuse me so initially when a you know protocol or an organization goes public

8:06right these markets will settle right and so we allow for you know end of trading day in crypto there is no like end of trading day right it's 24 7. So there will be some like time frame after an ido that the markets can work to converge towards right and then you know at true expiration date we utilize a couple different oracle systems to pull in

8:30that data to the like to the program to ensure like proper financial settlement of the actual markets right so yes so currently they will not be you know there won't be like rolling expirations of these like free public markets and then turning into public now something in the future is definitely open for us given this is a you know synthetic style platform the

8:57the you know community can propose like hey we want to have rolling 30 60 90 day futures on you know these given you know spa tokens or you know other types of markets that can be created through the protocol like rarity tranche nft futures pair futures etc right definitely great point and i really like that you always keep coming back to the community

9:22and that you know it's their vote if they have the cipher tokens at least that's what i'm understanding and i'd love to know a little bit more about you know the cypher protocol governance tokens and if there's any other functionality or what is the totality of the cypher token and what it can do and does it create a sustainable ecosystem for all the

9:42participants in the ecosystem yeah of course so obviously you know one of the big use cases for you know scythe's native token will be you know that on-chain governance right initializing new markets in kind of adjusting how the dow functions you know saying like hey like we want to allocate resources to certain partnerships to incentivize protocols to build on top of

10:06cypher whether those are structured products other types of markets right etc aggregators could be a number of different options there some of like the more native utility right will be in the form of fee reductions right so if you're a trader and you have a margin account for cipher right and you hold size native token in there you can reduce your fees right so

10:31there's a fee tier for that and you know the more tokens you hold the lower fees you have to pay really incentivizing that long-term holding and participation in the you know ecosystem for cypher very cool and can you give a snapshot of where exactly i know you've been working on this for a while now you know where it's at right now in terms of the

10:55exploratory futures being out is that already live is there people already trading or what does that look like yeah great question so the protocol is not live we are you know going to devnet here relatively soon i think we're targeting you know end of month early february for that which is really exciting yeah the team has been heads down for a

11:18good amount of time really working hard to get this out to the community and so really excited to kind of turn the turn the lights on in a sense definitely and when you do get this out obviously this is a huge step forward for driving more traditional traders institutions people that also just like advanced options and more flexibility not just

11:42trading bitcoin and ethereum spot you know do what kind of audience do you see using this primarily do you think this is just crypto traders or are we getting in bigger institutions yeah great question so the way that we look at it is that this is you know a democratization tool right so we do anticipate to see a good amount of retail excitement about these style

12:07of markets as well as you know in the future i believe that institutions will you know start to begin like the heavier flow into you know defy and crypto at large and so very excited about those you know opportunities in the future but you know we are understanding that the early you know adopters of the protocol will be more crypto native people they're already

12:28more familiar with on ramping you know liquidity and interacting with these dapps although we have done i believe like a good job of designing something that is very you know retail oriented something similar to that of like a robin hood or a public.com to help onboard new users into the space but definitely are focused you know

12:50on you know retail or crypto native institutions in the early days right definitely and i'd love to get your perspective on you know the technology underlying cypher using the solana blockchain i haven't seen futures products on solana maybe you can talk about that niche on solana and also just why solana is the best technology for cypress protocol

13:16yeah great question so there are a couple of other like futures protocols out there or derivatives protocols in general right you have mango markets they you know have spot and perps perps are perpetual futures right there's drift it's perpetual futures you have zeta markets that is doing you know perfect or they're doing expiratory futures on spot tokens as

13:40well as some like options psi options is here doing options as well so there's a number of really awesome derivative style products i think you know cypher's niche again there aren't that many people doing the expiratory the dated nature of futures right most of them are perps and defy and crypto kind of in general in cypher on top

14:01of you know kind of focusing on this more expiratory and dated nature being that like synthetic style we can the protocol can be utilized to create a myriad of markets right which is something that i think is really exciting you can design really creative financial products like you know the nft rarity tranche index futures you could do something on inflation for like

14:24traditional style currencies like us dollar and euro you know you can do pairs right like fx style for crypto etc which is super exciting right and then so i think that's kind of like really where you know cypher is like slotting in their niche in the awesome amount of you know protocols in the solana ecosystem now for why we chose solana given that we you

14:52know believe that institutions are coming in the future you're going to need something that has like high throughput capability and you know transactions are really cheap right and so solana provides both of those and i think that's something really important also we're built on top of serum which is a decentralized order book mechanism in the salon ecosystem

15:13provides a lot of liquidity across like a number of different protocols actually which is super exciting and if you want to gain you know a lot of adoption from crypto and non-crypto native people right i think an order book is the appropriate way to do so it really allows for that price discovery to be brought forward right so you really need somebody in

15:35there placing a bid ask order you know saying i'm willing to buy this asset at something or i'm willing to sell this asset at something to understand what the market is willing to pay for some you know given asset right whereas like amms under like today's like infrastructure and design choices it's really like hey here's you know x amount of money i

15:57want to buy this token and you'll swap me like some you know amount that's specified by the amms you know curve on that you know given pool and so not such a great price discovery mechanism but is you know utilized a lot for trading in d5 and swapping between certain currencies but again really focus on that order book so serum was one of like the

16:20original protocols in solana and given that it wasn't already an on-chain order book it made a lot of sense for us to you know utilize that infrastructure and build on top of it composability is very nice with you know anchor being like the new i should say new one of the you know opinionated frameworks in the solana ecosystem right yeah thank you for that background

16:43information and it's great to hear that you are working on with the crm decks because i actually do like the serum decks i think it's a great staple in the solana ecosystem and good points about institutional adoption high throughput all things that are going to be necessary for high frequency and effective trading so thank you so much for explaining all of

17:05this barrett for the communities that are looking to follow along with cypher for the launch to learn more about it and get involved in the communities what is the best way for them to learn more yeah so i think like some of the best ways you know follow us on twitter at cipher underscore protocol and that's c-y-p-h-e-r and then we have like a discord

17:26community as well the discord link is in the twitter bio we also have you know a newsletter that we send out so if you go to cypher.trade you can sign up for the newsletter and stay up to date obviously i think you know the newsletter is like once a week whereas like twitter is like more in the know updates constantly the discord community

17:46is you know starting to blossom which is very exciting and so i think if you're looking for more day-to-day updates twitter and discord if you're looking for more you know like structured longer form stuff that newsletter we also have you know we publish like blogs on the website for you know talking from anything from like education to you know what is cipher

18:08like assets etc and then we also you know have a couple like medium articles out there as well very cool thank you barrett i will leave all those links as well for the viewers in the description box below i appreciate you taking the time to come on all the best with cypher moving forward in 2022 and beyond and let's follow up in the near future

18:29awesome thank you so much ashton i really appreciate you giving me the opportunity to come on the pod you