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Geode on Podcasts: FINNOVATORS

Simon Furlong — Co-founder Geode Finance

FINNOVATORS host is Manuel Rensink speaks with Geode Finance COO Simon Furlong about the future of liquid staking.

Next up, we‘ve transcribed Geode’s appearance on the FINNOVATORS podcast. Our co-founder and COO Simon Furlong (AKA Oranges), spoke with host Manuel Rensink regarding Geode’s mission to make liquid staking derivatives prominent in DeFi. Listen to the original podcast below, or continue scrolling for the transcribed version (slightly edited for readability)

Check out the original podcast episode below:

Tune in and listen to the episode above, as Manuel Rensink, host of the FINNOVATORS podcast, interviews the co-founder of Geode Finance, Simon Furlong.

About the FINNOVATORS Podcast

The FINNOVATORS podcast is brought to you from the future, the future of finance. Your host is Manuel Rensink, Director of Innovation Strategy at Securrency. Tune in for fascinating conversations with tech founders, finance wizzes, and legal experts from all around the world about decentralized finance, current events, and innovation opportunities. Get inspired by a future that is programmable, internet-native, sustainable, and accessible to all. The podcast series is presented by Securrency, a company at the intersection of institutional financial services and DeFi. Join us and subscribe to FINNOVATORS.

Listen on Apple Podcasts | Listen on Spotify | Host Manuel Rensink on Twitter

Podcast Transcription

Simon Furlong — Co-founder Geode Finance

Manuel: I’m Manuel Ransink, director of Innovation, Strategy, and Currency and host of the Finnovators Podcast. All my views and my guests’ views are solely opinions and might not reflect the views of currency. You should not read any opinion by myself or my guests as an inducement to make a particular investment or follow a particular strategy. Solely as a personal expression of opinion. This podcast is for informational purposes only. Today. I’m very pleased to be speaking with Simon Furlong, also known as Oranges, co-founder of Geode — a liquid staking solution.

For listeners who missed previous episodes where we discussed liquid staking. It is the act of delegating your tokens to a service that stakes for you without losing access to your funds. The funds stay in escrow and are locked and inaccessible as they would be with direct PoS staking. A type of voucher token is issued which itself can be staked or exchanged with DeFi protocols. Simon, welcome, and let’s start with you. What is your background? How did you get involved in crypto and what prompted you to start Geode?

Simon: Hi Manuel. Nice to meet you. So a bit about me. So my background is in finance. I graduated with a degree in financial economics. I worked in the City of London for about five years. I then took a bit of a tangent into media rights, and then when I got back into crypto, that’s when I guess I’ve cycled straight back into finance again.

I got into crypto in 2020 when DeFi started to become more and more apparent. Cryptocurrency before DeFi didn’t interest me too much because I never thought Bitcoin or other tokens would really act as a valid replacement for fiat currency. Whereas when DeFi started to emerge and started to be experimented with and obviously has evolved since, that to me, showed a real use case for Crypto assets and that’s what really got me interested and got me delving a bit deeper.

“In terms of Geode … we noticed a couple of really big flaws within … liquid staking … that made us kind of think, well, look, how can we do this better … that’s kind of where Geode was born really.”

In terms of Geode, I actually worked with my co-founder for a liquid staking provider on Ethereum, and we noticed while working there we noticed a couple of really big flaws within, well, the way this particular liquid staking platform operated. And that made us kind of think, well, look, how can we do this better, that there’s going to be a better way that this can be run. And that’s kind of where Geode was born really.

Manuel: I see. And I had to look it up, but a geode is this type of rock with these colorful crystals inside. So is there a link to what you do there or what was behind that?

Simon: So I didn’t actually come up with the name. That was from a couple of the other guys on the team. I think it’s about like a rock formation is very closely linked and then close together. And what we’re trying to do with Geode is, is exactly that. We’re bringing protocols into a liquid staking environment. I don’t quote me there I might be wrong, but that’s what I think is kind of for, I’m not really the name guy. I don’t have the imagination for the names.

Manuel: Makes sense as a story. So you mentioned previous to Geode you were already working at a liquid staking company, and you said, you know, you got interested in crypto because of DeFi. Why did you start out in staking? Why not a DEX or, I don’t know, a money market platform. Why staking?

Simon: If I’m honest, so I got involved in DeFi with my own money. I was using all the different protocols on Ethereum, and I just wanted to work for a DAO, and it just so happens that liquid, this liquid staking DAO, I could add value and help them out. And that in turn helped me out by giving me exposure, working for a time in my spare time. So it could very well be in a DEX, it could have been a lender. It just happened to be liquid staking.

Manuel: Interesting.

Simon: There’s no real reason.

“I got involved in DeFi with my own money. I was using all the different protocols on Ethereum, and I just wanted to work for a DAO.… I had no idea I’d end up, you know, co-founding something and then having my own project…. I was just trying to add value to myself, and learn an industry that I’m really interested in.”

Manuel: So a follow-up question on that then, why did you want to work for a DAO, a decentralized autonomous organization? Why not for a normal company corporate structure?

Simon: Well, at the time I still was working like in a regular job, I guess, but I wanted to grow my knowledge within the space. And I thought if I growing my knowledge and growing my contacts within the space, the best way to do that is to work for one of the protocols that I’m interacting with as a retail user. So that’s the main reason it was it was a it was a journey to learn more about the industry and then the space with the ultimate goal to somehow find a way to work with crypto full time in the longer term.

At the time, I had no idea I’d end up, you know, co-founding something and then having my own project, it’s a bit surreal really. But at the time it’s just about trying to get as involved as possible, because you see the amount of innovation going on in this sector. I think everyone who’s been looking at it so far, and people starting to get into it now, are going to be at a huge advantage compared to the rest of the population in five years’ time.

I think a lot of people are sleeping behind the wheel with what’s actually happening within DeFi now. And I think if you can if you can arm yourself with good knowledge of how these systems work, this can be a lot of people wanting or needing that kind of knowledge in the future. So I was just trying to add value to myself, and learn an industry that I’m really interested in.

Manuel: Absolutely, I understand, same here. So tell us a bit about the rest of your team. You say you’re the co-founder, so tell us about your other co-founders, and the rest of the team.

Simon: Sure. So there’s about nine of us in the team. We have two marketing guys, a community guy, and then the rest are basically our developers, which are core the core guys who have built the protocol that I owe so much debt to. My co-founder is the lead developer of the platform, and he’s architected the smart contracts, and led the team that created them. A lot of us know each other from working from that liquid staking provider previously. That’s where I met my co-founder, and that’s where I met some of the team members as well.

Manuel: Okay. And are you a distributed company or are you based in just one location?

Simon: Oh, no. So we’re everywhere. We’ve got guys in the US, we’ve got the guys in Turkey, I myself am in the UK. So yeah, global team.

Manuel: Okay, great. So tell us, obviously, there are quite a few liquid staking companies now. How is Geode positioned in the liquid staking landscape? How does it compare to the likes of, let’s say, Figment, Blockdaemon, Ankr, Stader Labs? The last two we had on this podcast as well. How do you compare?

Simon: So, your normal liquid staking solution, just say Ankr, or any of the ones you mentioned, they basically provide a functionality to allow the users to stake a base asset. So ETH, Avalanche, whatever, Fantom, whatever it may be. Then they handle the creation and management of validators, and give a return to that user and take a slice. I think it’s up to 10% is what they generally take. They’re very similar — there’s very little differences between them all really. What Geode does, is we don’t provide that kind of standard vanilla staking solution to our users. We’re a B2B2C project.

What we do is we provide any DAO with their own liquid staking solution. So we instead of just saying, “Hey, come stake with us, we’ll take it for you and give you a return”, we’re going, “hey, any DAO on Ethereum or Avalanche (or whatever the network is we’re on), come use our liquid staking solution. Brand it yourselves. Charge what you wish for it. Have your own staking derivative and manage your own staking solution, and we will provide the infrastructure so you don’t have to build anything. You don’t have to manage any validators. You don’t have to do anything. You just have to build your front end and then allow your users to stake with you. We will handle all the technical implementation, and all the work like that. We have partners from a node operations standpoint to handle the maintenance, the validation, and the yield generation.”

“What Geode does, is we don’t provide … [a] standard vanilla staking solution to our users. We’re a B2B2C project…. Come use our liquid staking solution. Brand it yourselves. Charge what you wish for it. Have your own staking derivative and manage your own staking solution….”

And then they just have a fantastic way of increasing TVL, driving revenue because they can take a percentage, they can take that 10% for themselves. Geode, we don’t charge anything for that. And then they can use their own staking derivatives within their own products, to improve their products and services.

Manuel: Okay. So we’ll go through the mechanics in a minute. But when you say any type of DAO, are some DAOs more natural clients to your solution than others? I would imagine it’s mainly DeFi DAOs.

Simon: Yes. I mean, technically, anyone could use it. But yes, there are some protocols that would benefit more. There’s a more obvious partnership than with other DAOs. So Constitution DAO, for example, probably won’t have much use for liquid staking solution. Whereas a lending protocol very much would. Because, if we take Avalanche for example (because that’s where we’re launching first), if you take a lending protocol, if you deposited AVAX onto that solution to borrow USDC, you will pay 2 or 3% on the USDC and you will see very, very marginal rates of return from your AVAX, unless it’s boosted by AVA Labs or any other kind of DeFi partnership.

If you staked staked-AVAX, and then borrowed against your staked-AVAX through their own staking derivative, then you’re instead you’re basically earning money to borrow money. Because if it costs you 3%, but you’re earning 7% on your staked assets, which you’re using as collateral, you’re instantly making money there. It’s a huge revenue driver, and TVL driver for the DAO itself. Because, they can then go and say, look, you know, you can deposit AVAX with us at 7%, and earn 7% instead of 1% against the competitors who don’t have the solution in place. And then retail users can compound their yields because not only are they earning money from staked AVAX from the liquid staking solution, but also they’re then borrowing an asset, say USDC, which they can then use in another farm to earn yield off that as well.

So it’s great for capital efficiency, it’s great for TVL growth, and it’s great for revenue for DAOs. And I guess a lending protocol is such a simple and obvious solution, but ultimately any DAO could benefit. You know, why are we not using staked derivatives for liquidity pairs on DEXs, for example?

“Retail users can compound their yields because not only are they earning money from staked AVAX from the liquid staking solution, but also they’re then borrowing an asset, say USDC, which they can then use in another farm to earn yield off that as well.”

Manuel: Yeah, exactly. So it will be better to have like staked-AVAX in a liquidity pool than AVAX, right? Because you just get that extra yield.

Simon: Yeah, exactly. So like our vision, from a retail side at least, is that AVAX should only be used for gas, and all the other AVAX should be staked. And when it comes to any proof stake chain, why we’re using base assets, or rather base assets should only be used for gas and for transaction fees.

Manuel: Exactly. For gas.

Simon: And securing the network.

Manuel: For gas and for securing the network, like you say. Exactly. Yeah, that makes a lot of sense. And that’s a good point. And it seems like a very large growth market because right now it’s not really happening yet, right. Not in any significant volume I think, for instance on DEXs or lending protocols.

Simon: Lido’s probably made the biggest efforts. It’s basically getting their token integrated into as many protocols as possible on Ethereum. And I’m sure they’ve done it on some other chains as well. I’m not to privy on the Solana ecosystem on is at the moment. But yeah they’ve obviously made a good effort and are trying to provide as much composability as possible, but they’re never going to get into every single protocol, or it has a very tall ask for them to get into every single protocol. Whereas if each DAO had their own liquid staking solution, with their own staking derivative and that can instantly be used within their own products and within their partners’ products.

So you would you then allow for liquid staking to be or liquid staking derivatives rather to be a lot more prominent within the DeFi ecosystem. And you also benefit the network involved as well because you’re diversifying the amount of liquid staking providers, and therefore you’re diversifying the risk across the whole chain. And I think one thing that’s in the news at the moment, Lido seems to be becoming a bit of a victim of its own success because it’s done so well, and has attracted so much TVL, that they’re getting to a point where actually they’ve almost taken on too much, and now people are looking on them and going, “wow, they got this much, this percentage of the validators on Ethereum?”

In a Proof of Stake world, the idea is to have it spread out in a decentralized manner across as many projects, or individuals as possible, so you get the maximum security for the network. If you end up having a huge percentage with one particular player, then that can actually be detrimental to the network, when it gets almost a too big to fail scenario can ultimately arise.

Manuel: Exactly. And the analogy, of course in Proof of Work, is the criticism leveled at Bitcoin at least up to a year ago or so, that Bitcoin was, you know, very centralized, and run by Chinese pools, right?

Simon: Yeah. Well, imagine a miner on Bitcoin has 40% of the hash rate. If one miner has 40% of the hash rate, then that’s worrying for the Bitcoin network. And if any liquid staking provider has say 40% of the validators, or 40% of the ETH or AVAX staked in a solution, then that is the equivalent of having 40% of the hash rate for that network. And that’s something that’s as an industry we need to be careful of.

“In a Proof of Stake world, the idea is to have it spread out … so you get the maximum security for the network. If you end up having a huge percentage with one particular player … a too big to fail scenario can ultimately arise…. For Geode in particular, it’s something we should be able to greatly help out, and prevent happening…. By allowing any DAO to have their own solution, we should help diversify where base assets are staked, and therefore improve network security and efficiency.”

But for Geode in particular, it’s something we should be able to greatly help out, and prevent happening. Because by allowing any DAO to have their own solution, we should help diversify where base assets are staked, and therefore improve network security and efficiency.

Manuel: Mm-hmm, okay, great. So take us through the mechanics. Now, let’s say I am the “FINNOVATORS DAO” and I invented the new type of DEX, like let’s say an AMM, and there’s no impermanent loss. Now, how do I engage with you?

Simon: You come speak to me, literally. You’ll probably have heard of us on Twitter, or something like that. You’ll come to our Discord. You email me, you know, our website — you can get in contact on Geode.fi, you’ll end up speaking to me from the team, and then it’s literally just a case of having a conversation and seeing what you need. We can show you our technical documentation for you to integrate, and then it’s only two transactions, two or three transactions, to confirm various addresses for you to integrate with us.

Manuel: Okay, and what kind of resources do I need at my end, and how much is it going to cost me?

Simon: So resource-wise, it’s just the front end. You need to build your frontend so your users can use your staking solution, and then as I said, you just got to confirm a couple of the addresses for the ownership of the staking solution — where do your funds go, where does the yield go, because Geode doesn’t want to hold that. We want to be as decentralized as possible, and give the DAO the control. We just need some addresses of where you want your funds to go to ultimately, or your user funds go to. And in terms of cost, we don’t charge anything for our solution.

Manuel: Okay. So then follow up question. How is it that you make money?

Simon: So, so we make money from value-add products. So for example on the Avalanche Network, so Yield Yak is our first partner. They’re our first launch partner, and we don’t charge anything for that offering. But what we do is we have a withdrawal pool that allows for instant exit liquidity from that staking derivative, yyAVAX, back to regular AVAX. And we will charge a fee, like an LP fee, just like on Curve or any other liquidity pool for that. So that’s where we make our fees, by supporting our ecosystem rather than charging our ecosystem.

Manuel: Okay. These are the famous “Dynamic Withdrawal Pools” that you list on your website, I think.

Simon: Yes, yeah. Look, um, we’ve worked really hard on our withdrawal pools because a liquid state solution is only as good as its exit liquidity. Like there is no point if your token derivative de-pegs, then faith in that solution goes very, very quickly. And if it’s not liquid where users can’t exit to go back to their regular base asset, then it isn’t liquid staking. It’s just staking.

Manuel: I suppose it’s also an arbitrage opportunity.

Simon: Yes, that’s another thing to consider, yeah exactly. So finding a way in which users can easily and quickly exit into regular AVAX, but also make making sure that the peg is maintained while maximizing yield for those users is quite tricky. But we’ve got a solution, which we’re pretty proud of, that we think will solve that issue.

“On Avalanche, there are liquid staking providers that have a cooldown period…. But the user has a bad experience, because they’ve got to wait 14 days. Whereas what we do, is we work with our node operators to ensure instant exit liquidity for users, without any waiting periods.”

So on Avalanche, there are liquid staking providers that have a cooldown period. You have to wait 14 days if you want to exit, because they basically say, “right, you want to exit 10 AVAX, we will go to the validator and exit 10 AVAX from the validator, but it’s got a 14 day waiting period.” So that’s how they guarantee that, because they literally take it from the validation process.

But the user has a bad experience, because they’ve got to wait 14 days. Whereas what we do, is we work with our node operators to ensure instant exit liquidity for users, without any waiting periods. And then there’s a special mechanics within it, which I won’t go into today, but they helped guarantee a peg, a 1-to-1 peg, between AVAX and their staking derivative.

Manuel: Is that available on your website, in a white paper, or is this the secret sauce?

Simon: A bit of both. So like, depending when this podcast goes out will depend on my answers. So I’ll keep it vague for now, but we will be writing information about it in due course. And once it is live, and we could be live when this podcast is out, it’ll be out in the open for everyone to see, like it’s an open-source world.

Manuel: Indeed. Yes. Just for full disclosure, we’re recording this podcast on the 22nd of April and we’ll be releasing it after the 29th of April. You mentioned that your solution is different from, you know, the others that I mentioned that are in the landscape. So, would you say that you’re the only solution that is doing this right now?

Simon: I would say we’re the only solution I’m aware of doing this, yeah. I think a white-label liquid staking solution, basically being an infrastructure provider to DAOs to offer liquid staking for their users, I think that is quite unique, and I haven’t seen it in the space so far.

Manuel: Me neither. Okay, great. Okay, so we already touched upon how Geode is planning to generate revenue. So tell us a bit about the company itself. Are you incorporated? If so, where? What is your funding situation, are you VC-backed? Tell us more about that.

Simon: Sure. So we do have a company structure, but that was more just for legal reasons, and funding reasons more than anything else. The team, as I mentioned earlier, is an international team based all around the world. In terms of, you know, who are our partners, and how we’re funded, we have recently raised $3 million through Multicoin Capital, so we are VC-backed. We have a couple of additional partners that came into that raise, which we’re really, really pleased of. Really, really happy about.

We’ve deliberately chosen very strategic investors that we feel are going to help us grow, and to penetrate the market as effectively as possible. So, it’s easy to raise money, but it’s not easy to raise money from people who are willing to advise you, and help you grow, and take you in the right direction.

So that was the whole point of the raise we did, is to get the right people behind us, because at the end of the day a team is only as good as the people behind you. And if we can get some very well-connected players and investors behind us helping us, then I think that’s going to help us dramatically.

“we have recently raised $3 million through Multicoin Capital, so we are VC-backed. We have a couple of additional partners that came into that raise, which we’re really, really pleased of…. It’s not easy to raise money from people who are willing to advise you, and help you grow, and take you in the right direction. So that was the whole point of the raise we did, is to get the right people behind us … a team is only as good as the people behind you.”

Manuel: Okay, and when you say strategic, the other ones, are they also VCs or are they, I mean, like potential clients for instance?

Simon: A bit of both. So one partner is GSR, one of the largest market makers in the space, in DeFi. They’ve got a huge amount of connections, their market-making skill sets and knowledge will be hugely valuable for us as a liquid staking provider going forward. C-squared Ventures, under Ciara Sun. Ciara — lovely, lovely lady and very, very well connected within the space.

So I think C-squared Ventures are going to be hugely valuable to us from my contacts and advisory standpoint. And then Yield Yak, as I mentioned earlier, our first partner. They’ve come into the seed round. As our first partner, we’ve given them access to do so, and they’re a hugely valuable strategic partner within the Avalanche ecosystem. That’s where we are launching first, and Yield Yak, as a yield aggregator, is hugely well connected within that space.

So for our very first chain, our first launch, we have a DeFi partner who can introduce us and to help us permeate into the Avalanche ecosystem. And then obviously we have all that we have Multicoin Capital, who’s hugely knowledgeable, and C-squared Ventures, and GSR to help us as well. So we’re really pleased with the teams we have behind us.

Manuel: Yeah. Okay, great. Yeah.

Simon: They put the ball in our court, so to speak.

Manuel: No pressure, right?

Simon: Yeah. Yeah, exactly.

Manuel: Okay, great. Yeah. I’m a big fan of Cristian at GSR. Okay great, good to hear, and congratulations! Now, some staking companies, they do have a token, others don’t. What is your strategy here?

Simon: Yes, so we will be having a token — date to be decided. We need to launch on avalanche first, and get everything kind of sorted there. So we haven’t had too many discussions internally yet on how that looks. But one thing’s for certain, we want to make sure it has some really strong utility. There’s a lot of tokens out there that just don’t have that utility. That, unfortunately, stops it from holding its value, or just isn’t there isn’t just isn’t much use case.

I mean Uniswap is a great example. Fantastic protocol, no utility, and it just seems like a shame in an industry which is all about utility to not have any with your token. And I’m hoping when we do eventually launch ours, there will be a ton of utility to help users dictate the direction of the liquid staking space. I mean, we ultimately want to become a DAO, like a fully-fledged decentralized, autonomous organization, and the Geode token, when that is live, will be a big part of that.

Manuel: Good point. I mean utility is, of course, super important, and not always obvious. And how for these staking platforms that don’t operate, that don’t have a token, they obviously demonstrate that you don’t need a token. So I’m very curious, maybe you can give us a bit more insight on the type of utility that you’re thinking about apart from the governance?

Simon: Yeah sure, like bear in mind that we haven’t had proper talks internally about this. So this is just kind of me giving you some ideas of how things could work. But if you think of how Convex works on Ethereum, with Curve polls, the Convex token ultimately helps dictate where liquidity goes on Curve. And I think the Geode token could be quite an interesting one, if we could ultimately help dictate where incentives are placed within the Geode ecosystem for exit liquidity into various withdraw pools, or token pairs. If we focus specifically on Avalanche, with our withdrawal pools there will be a withdrawal pool for every single token.

“I think the Geode token could be quite an interesting one, if we could ultimately help dictate where incentives are placed within the Geode ecosystem for exit liquidity into various withdraw pools, or token pairs…. So if the Geode token could ultimately be used to incentivize where exit liquidity is placed, then each DAO would be quite keen on making sure their withdraw pool has strong exit liquidity.”

So for every single DAO that integrates with Geode, it will have its own withdrawal pool for its own staking derivative. And the more liquidity you have in that withdrawal pool, i.e., the more exit liquidity you have, the easier it is to keep peg. And the more confidence users will have in using that particular staking derivative. You’re much more likely to use a staking derivative that has $10, $20, $30, $50 million of liquidity behind it if you wish to exit, versus $100,000.

So if the Geode token could ultimately be used to incentivize where exit liquidity is placed, then each DAO would be quite keen on making sure their withdraw pool has strong exit liquidity. For the reasons I’ve kind of mentioned in terms of user competence and user competence, I guess the main thing. Then maybe the Geode token could be used in some way in that manner. But that’s just one example. That’s probably quite a good one.

Manuel: Okay. And can you give us any sense when the Geode token will come out?

Simon: This year. Yeah, we want to we want it to be in line with our Ethereum launch or we want the token to launch on Ethereum, basically.

Manuel: Okay. On Ethereum. Nothing at launch?

Simon: No, no. Well, Geode is all about multichain. We want to be a multichain solution. Technically, we could be on any proof-of-stake chain, right? Or helping any DAO on any proof of stake chain. And if we are multichain, then I think Ethereum, you know, the home of the ERC-20 token seems to be the best fit for a multichain protocol. The reason we’re live on Avalanche first is because we saw a really strong need for liquid staking on Avalanche, and Avalanche currently has a fully-fledged liquid staking environment there were withdrawals are enabled.

There are very few liquid staking solutions out there and the ecosystem could benefit quite greatly from more liquid staking solutions, because it’s in its infancy. On Ethereum withdrawals aren’t enabled yet. We’re still in the proof of work. Proof of stake is coming this year, but you know there was recently a small delay on that so that there’s a few balls in the air, so to speak, as to, we don’t know a date when that’s done.

And withdrawals will take six months after the merge is completed before users can get their funds out. So liquid staking on Ethereum is a high-risk game right now because if anything goes wrong, your funds are stuck until six months after the merge. So let’s cut our teeth on Avalanche. You know, add value where we can really add value and then go from there.

Manuel: Makes sense. And let’s say I run a DAO on Binance Smart Chain or on another EVM-compatible tool. Is it easy for us to start partnering, or is there integration and extra integration required?

Simon: So we have to go chain by chain. So we’re starting on Avalanche. We will then be going on to Ethereum and then future chains to be decided. So at the moment, we know we can definitely have conversations with DAOs on other proof of stake chains, but we can’t say for sure when we will be on that chain, if that makes sense.

“The reason we’re live on Avalanche first is because we saw a really strong need for liquid staking on Avalanche, and Avalanche currently has a fully-fledged liquid staking environment there were withdrawals are enabled…. So we’re starting on Avalanche. We will then be going on to Ethereum and then future chains to be decided.”

Manuel: Yeah, sure. Okay. And talking about the merge, you said there has been a bit of a delay. And of course, it has been a story of many, many delays. How confident are you that the merge will happen this year?

Simon: Pretty confident. I think I have full faith in the Ethereum core developers. I think they’re doing a fantastic job. And I think when you are handling something so serious, so complex, I don’t mind a delay if it means that things are going to go smoothly and are going to work properly. And I think I think with Ethereum being so huge, you have to make sure everything’s perfect. So yeah. I think this year.

Manuel: I fully agree with you. Okay, great. Now we talked already about Yield Yak being a client of yours and then coming out with a staking derivative. Other parties on your website mentioned are Saddle, which are an automated market maker. Is that also a client of yours, or how do you interact with Saddle?

Simon: Yes, so Saddle are a partner of ours. They are ready and waiting for us to go on Ethereum basically. We started off going on a plan to go on Ethereum first. So we partnered with Saddle and we had a few other partnerships in the pipeline for Ethereum. But then we pivoted to Avalanche because for the reasons I mentioned earlier, it is in its infancy. We saw we could add more value there initially. So Saddle are very patiently waiting for us to go onto Ethereum.

Manuel: Now great well we’re all waiting. Good. And then the other one is Eden Network. Now I’m a big fan of Eden and I had a great podcast with Caleb. So what is your relationship with Eden?

Simon: Caleb’s a lovely guy. So Eden is our node operator. So they are going to be the node operator for Yield Yak’s staking solution, and they’re going to be our node operator of choice for all future integrations on Avalanche, and they will be coming with us on our multi-chain journey. They also participated in the round, in our seed round actually. So they’re a key strategic partner and advisor.

Manuel: So that’s away from their core business. The miner extractable value protection and indeed to the, they call it the trader extractable value where their participants actually get part of the MEV rewards.

Simon: Yeah. So it is a bit different, but they, they’re experts in block production and they’re taking that knowledge in book production to do node operation on Avalanche, and on other chains and helping us with our liquid staking solution by being the node operator for our future partners.

Manuel: Fantastic. Okay great, makes sense. Looking forward, what are some of the things in your roadmap that you’re most excited about?

Simon: So right now, I’m most excited about launching on Avalanche. I’m then super excited to launch on Ethereum, to be multi-chain, and to work out the tokenomics for the Geode token. They’re probably the big things on our roadmap right now. I think, you know, we could discuss a third proof of stake chain, but very much just be putting a finger in the air kind of thing. So I wouldn’t want to comment on which other chains we’re looking at. I think it’s a bit too early at this stage to do that.

“So right now, I’m most excited about launching on Avalanche. I’m then super excited to launch on Ethereum, to be multi-chain, and to work out the tokenomics for the Geode token. They’re probably the big things on our roadmap right now.”

Manuel: If you’re going to enable DAOs to issue their own staking derivatives — their own brand of staking derivatives like we said we have the yyAVAX for instance. Now if you’re going to have like 100 DAOs as clients, we’re going to have a lot of staking derivatives. How are we going to make sure that there’s a good venue for those staking derivatives to be traded.

Simon: So, yes, you’re right, there would be a lot of staking derivatives, but that’s not necessarily a bad thing. So the way it would be traded, there’s a couple of options. Each protocol will very much or most likely will have a trading power. So if we use Avalanche as an example, they will have yyAVAX and AVAX on Trader Joe, for example. And then they can easily incentivize their own staking derivative with other pairs.

So USDC, or whatever they wish. So we should see a lot of additional trading pairs on DEXs. Something we’ve been talking about is potentially creating a DEX that allows the trading between the different tokens within our ecosystem. So that’s another thing we’re considering.

Manuel: Would you have to create a separate DEX for that or could you just open pools on existing DEXs?

Simon: Both.

Manuel: Okay. Interesting. Okay. You said you are excited to go live on Avalanche. When will that happen?

Simon: Over the next couple of weeks.

Manuel: Okay. Your company is based on on the future being a multi-chain and proof of stake. What will the future hold for proof of work networks? And I don’t I don’t necessarily want to get all the Bitcoin maxis to start hating you on Twitter, but…

Simon: I think Bitcoin will ultimately be the only proof of work chain in the long term. I think it is too difficult, I think, for Bitcoin to shift away from proof of work. But I think everything else would be proof of stake and I think that’s quite apparent if you look at all emerging L1s are all proof of stake. If you’re looking at Ethereum as moving to proof of stake, and I think from an environmental factor, and also from a security budget standpoint, that proof of work is a very expensive way of securing the blockchain.

So I think everything’s maybe in a proof of stake direction. I think it is a multi-chain world. It isn’t just going to be Bitcoin, it isn’t just going to be Ethereum. It is clearly a multi-chain world. And I think the next thing, and I say the next thing but it already is a thing, is bridges. I think we’re going to need some very comprehensive bridges between all the different L1s and L2s in this ecosystem.

And I think ultimately we need to get to a point where, ideally, users just go to a bridge to swap to wherever they need to go to, and they don’t really need to know the inner workings underneath. So I guess ultimately it’s cross-chain, but we need to sort out security out. If cross-chain is the future, we’ve got some security things we need to fix.

“I think Bitcoin will ultimately be the only proof of work chain in the long term. I think it is too difficult, I think, for Bitcoin to shift away from proof of work. But I think everything else would be proof of stake and I think that’s quite apparent if you look at all emerging L1s are all proof of stake…. I guess ultimately it’s cross-chain, but we need to sort out security out. If cross-chain is the future, we’ve got some security things we need to fix.”

Manuel: Yes, indeed. Bridges are risky things. And maybe I can plug my episode here with Zetachain, great episode on, you know, the future of interoperability. Okay. Excellent. As we’re coming towards the end, is there anything else that we should discuss? Anything we missed?

Simon: I think we’ve covered a lot of ground here. In my mind, it’s clear that liquid staking is only just begun. I think the idea that one or two key players are going to eat the entire ecosystem is false. And I think I think ultimately for the security of the networks and for the benefits of users to increase the yields across the board for everyone, DAOs and retail alike, is to get liquid staking and staking derivatives prominent within the DeFi ecosystem.

And I think that goes for DAOs, that goes for centralized exchanges, that goes for, I mean, bridges — who knows. Like, you know, in theory, anyone can have a liquid staking solution through Geode. We’re talking about the future and what we think we will see, like multi-chain, and multiple L1s, and bridges. I think seeing multiple staking solutions for users to choose from and having staking derivatives replace base assets within DeFi is going to be a trend, well hopefully, Geode will set.

Manuel: And I agree with all of that. And I think Geode just seems like a great solution for DAOs. The future is multichain. It is proof of stake. If you are an LP on a DEX, you know, why would you be using AVAX or ETH? You should be using staked AVAX or ETH, and so that those coins can then be used for protecting the network, and generate extra yield for its owner.

It makes sense for certain DAOs to facilitate this for their users, and issue branded tokens, and it makes sense for there to be more liquid staking providers like you, so that you know risk is diversified. So great. I think this was extremely interesting. Now for DAOs and users will want to know more about you and follow you, where can they find you?

Simon: Twitter. You can follow me on @OxOranges. Our website is Geode.Fi, which has all of our social media. So our Discord, our Medium, our Twitter. I guess on Twitter @Geode_Finance is our handle. So you can find us there, and follow us there as well.

Manuel: Thank you so much for coming on the podcast. I thought it was extremely interesting and yes, I look forward to more announcements from Geode.

Simon: Thank you very much.

About Geode

Geode Finance enables DAOs to easily integrate liquid staking into their project, allowing them to bring their own governance, and keep their existing userbase. By providing DAOs with their own liquid staking derivative tokens, Geode’s unique staking toolset vastly improved yields, and boosts capital efficiency.

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Geode is building the new multichain staking universe, built for all Proof of Stake chains.

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