Standard Tech builds stablecoin on Polkadot system

0:01And today on Blockchain Interviews, we have Young Suk Kang, the co-founder and CEO of Standard Protocol. Young Suk, welcome to the show and thanks for taking the time to be here. Thank you. Thank you for having me. I would love to kick off the overview of Standard Protocol and just get a little

0:21bit of the vision and the focus and what your team's working on. So, Standard Protocol tries to provide the collateralized rebaseable stablecoin which is a stablecoin which is collateralized by the other assets of the Polkadot ecosystem. And we try to keep the value by rebasing by adjusting the supply that can be generated from collateralization. And

0:44also, we're trying to bring some Oracle system to generate synthetic assets and bring the new bring the next protocol for the DeFi. Mhm. Great. And yeah, this is definitely an interesting type of asset, a collateralized rebaseable stablecoin. You know, there's a lot of collateralized coins, algorithmic stablecoins. What made you first think of building a

1:10collateralized rebaseable coin that was based off of the Polkadot ecosystem? So, the problem about the algorithmic stablecoin is that there are actually three problems. So, first, they have there has been an algorithmic stablecoin which just prints out this coins in the expansionary cases like the first time of their launches. And then, in contractionary cases, when they cannot

1:34recover the price at $1, they have to require some people to give up their ownerships to recover the price back by limiting amount of liquidity circulating supply around the market. So, Mhm. ESD ESD used to have some coupons or Basis Cash used to have those bonds to store those like circulating stablecoins to

2:01provide scarcity so that the asset prices go up to $1. This has failed greatly in most of the algorithmic stablecoin projects. And for the Terra from and from some other stablecoins, they could just like print some of the money's let's print some of the stablecoins regardless of the Oracle information they provide. First of all, I have seen Terra and the

2:26coin does articles and well, you know the other examples. So, what I'm trying to bring here is that I want to bring a stablecoin without any manipulation at all. And want it to have like a real backed value by the assets. And try to come up with some automated algorithm to adjust the supply without any sacrifice of owner of the

2:54stablecoin holders to sacrifice sacrifice their ownership to recover the price. Mhm. Definitely. It's really interesting. Right now, the Polkadot ecosystem is growing really quickly and I'm interested to know if you can give any more details on the rebasing of the stablecoin based on the Polkadot ecosystem. So, the goal is to keep it at $1 to keep it stable. And with the

3:20ecosystem growing and also just fluctuating in both directions, how do you do that properly without the price fluctuating away from a dollar? Okay. So, there should be a variance to be $1 because this is basically physically not a US US dollar exactly. But, there are some benefits regarding variation of each cases of the price due to a collateralization. And

3:49also, we have a rebase mechanisms to adjust the supply so that we bring scarcity to the market where people just have people cannot generate stablecoins sometimes so that we can't have the adequate amount of circulating supply that could have that could our asset could have the same value to the $1. Also, we brought this collateralizations to our

4:17stablecoin mechanism because I the Standard Protocol did not want it to sacrifice the holders to do something to recover the price back. Rather, we would prefer taking a risk at first and then provide many opportunities regarding revolving around this protocol ecosystem. So, yeah, that's pretty much the difference between state our stablecoin

4:43and the other algorithmic stablecoins. Mhm. Thank you, Young Suk. And with the Polkadot ecosystem, I think it's a great ecosystem as it is growing and it seems to have a lot of solutions that are needed in DeFi. Can you talk a little bit about why Polkadot is the best blockchain technology for this type of rebaseable stablecoin? So, I have been around in Polkadot

5:05ecosystem for about more than 2 years and I have been watching Polkadot growing its a code base. And first of all, I have been around in this ecosystem so I know very I know I think I know very much about those like softwares and the code. And also, what I feel interesting about this Polkadot ecosystem is that you build the substrate parachain where you have a full control

5:33of your blockchain protocol. So, basically, I mean, while some people are just satisfied with the smart contracts, but there are some requirements where we can't where the blockchains can more innovate such as smart contract that's not provide some smooth upgrading process voted by the community. So, this could lead to some frictions on

6:00upgrading it. The substrate provides an on-chain where people can vote on-chain and then change it immediately. Also, parachain also provides interoperability in the Polkadot the relay chain can send informations across the blockchains in the Polkadot ecosystem without pretty much like lower cost. And also, there are all since the substrate is just a

6:29framework. So, there are many upgradeable features that a Polkadot developer can add to each to its blockchain. And it's kind of extending more and more giving more control to the technical perspectives and it is pretty much focused on the innovation. Due to this, I actually chose Polkadot cuz I see that there is so many spaces that one can

6:57innovate within its tech. And it's fit it's mostly safe with the first programming language, which is what I prefer. Yeah. Mhm. That's good to know. And yeah, you mentioned about blockchain interoperability there and you know, cross-chain. And right now, the majority of decentralized finance applications are are on Ethereum and there are there are growing out

7:21to the Solano ecosys- Solana ecosystem, other blockchains as well. I- is this something that your platform will be able to connect and tie in with the other decentralized finance ecosystems as they all grow together? Well, I think nowadays like maximalist perspective is not preferred, I think. We have There are so many good blockchain technologies out there.

7:49Like some of them has their weaknesses, but some of them has their strengths. I think what matters right now is that you have this idea of like financial products or some other other ideas that could be innovated and probably have many implementation across this blockchain ecosystem and then interoperate them all together. So, there are many bridge

8:16implementations in development going on such as chain bridge from ChainSafe Systems. Also, there are some bridges made by like some in-house develop- development team from Cosmos. Mhm. We would We would like to connect those bridges all together. And also, as a Tendermint fellow, I'm pretty much interested in implementing IBC into our protocol as well to provide some

8:44open communications to interoperating with other Cosmos SDK chains. Definitely. And we recently spoke with the Cosmos team about the release of the IBC and that seems very promising. And I completely agree with that maximalist perspective doesn't get you anywhere because we are so early on in this innovative technology that if all these blockchains are able to work together

9:07and communicate together, I think that will just bring the innovation into the market that much faster. So, I agree with you, Young Suk. And speaking of connecting different bridges, your Oracle platform is also trying to connect traditional finance and traditional financial products into the decentralized ecosystem. Can you just talk about that other aspect of

9:30Standard as well? So, other aspects of Standard is that we're actually trying to accommodate a real stablecoin to our protocol right now. So far, we have partnership between Jin Ko Bank, which is a private bank in Korea, which has license for operating all those like crypto cryptocurrency assets. And they wanted to experiment with our protocol

9:54to provide CBDC. So, one of the technical designs that we're considering right now is that they keep the keys for sending those digitized CBDC to our protocol or mint or burn or something. And then we connect those with the open banking API from the Korean government which aggregated all the banks API to operate with the fiat

10:21currency. So, we have received this API from the bank and then we're kind of trying to experiment with how we can connect this API to minting and burning the CBDC on our ecosystem right now. So, for example, this could be done like So, there's there's like open banking API where has where is like there is like a bank account which receives some Korean won from a user and then use that

10:51signal when once the bank receives the Korean won, it sends the signal to the bridge that they have received they have received some or balance additions and then the bridge account from the key that the bank owns and then can send those like transactions to our blockchains to mint digital KRW to the sender who sent the real Korean money. So, those kind of research is now going

11:19on and we'll try to release on technical design for the Web3 Foundation grant and try to get some try to get passed on it. Mhm. Wow, that's really interesting and I'm looking forward to seeing how that plays out and I think CBDCs are going to be a gateway for all of the regular people to more realize the potential of digital currencies and look into the

11:42decentralized finance ecosystem as well and I would call it like transfile like transition meaning that possession from fiat to cryptocurrency financial systems. Mhm. So, people could people using our standard protocol, I hope that they will have both advantages regarding fiat and the cryptocurrencies. Definitely and I haven't heard that term yet so I will definitely

12:10look for that one as that continues to grow out and I'm sure your team's leading the way with that. And just to go back to the stablecoin for a minute, you do have the rebasable stablecoin but you also have a multi token ecosystem throughout Standard and there's a lot more intricacies and I want to dive into that as well. Can you talk about the other

12:29token economics and you know, the ecosystem on top of the stablecoin and the other coins that are in Standard and how they work in synchronicity and it does it create a sustainable ecosystem for the participants in Standard? So, Meter is a is a basically a stablecoin which is generated from the vault where create the CDP out of your collaterals that you have in

12:54in Polkadot ecosystem. So, you could have a what Standard to leverage and then you see either our stablecoin to trade the other assets in the in Polkadot ecosystem or you could you could just keep it for you could just buy the leverage asset and then enable leverage trading. And also the Meter

13:21Meter or Lighter is our liquidity provider token just like Uniswap V2 where we have made a code for kind of replicating the Uniswap V2 and then you can receive that by making a pair between other crypto assets in our ecosystem or you could just get it by providing a liquidity to the existing pool. So, it pretty much operates the same as the liquidity provider token in

13:50Uniswap V2 and you could and you could claim your liquidity after providing a liquidity just like Uniswap. So, that's pretty much Meter for that and you can also stake this Meter to receive Standard with the farming module. The farming module is usually the best implementation of the most like cool contracts of the equilibrium smart contract ecosystem.

14:17And we'll try to stake that we'll try to bring those Meters to be staked in the pool so that people can receive Standard by providing liquidity. And Standard is our governance token where people can change the parameters of our stablecoin ecosystem. You can change the CDPs, probably provide the new assets for the synthetic synthetic assets and there

14:40will be more features coming out as our protocol is going to go through on-chain upgrades and people will be able to affect more features across our ecosystem. Great. Thank you for that explanation and it's great to understand how they all work together and I know you your team has done a lot of work so far and there's still so much to do as you

15:06continue to grow out the community and I would love to hear a glimpse into the next few months for you and your team and what are the major things that you're working on delivering out to the public with Standard? So, Standard tries to deliver the standard of digital assets literally with this name. So, I hope that people could understand us that we're trying to work hard. We're

15:31really working hard to deliver the standard of the assets and we're willing to do more research on other other protocols like what's good and what's bad and we'll try to come up with the new default new standard in the cryptocurrency ecosystem. Definitely. And for the viewers that are looking to follow along with the platform as you continue to grow and get involved in the ecosystem,

15:59what's the best way for them to learn more? Well, the best way to learn more is that we're trying to create our own YouTube channel for educating videos and stuff. So, I hope that people could watch us educating about our protocol soon and then probably we could interact in the Telegram by asking questions or we could do some AMAs and try to go there and then ask

16:23questions there, too. Definitely. Great, Youngseok. Well, I will add your YouTube, Telegram, the website and the platform in the description box below as well for the viewers. Thank you so much for taking the time with the time that we had today to just talk about Standard Protocol and really interesting initiatives that your team is working on. All the best with

16:42the platform moving forward and let's follow up in the near future. Thank you. Let's definitely follow up. We'll be working hard.