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Geode on Podcasts: The Web3 Podcast

The World’s First B2B Liquid Staking Solution w/ Simon Furlong of Geode

Podcast host Callum Woodcock and Geode COO Simon Furlong (@0xOranges) discuss how Geode is allowing DAOs to utilize liquid staking on a truly industrial scale.

For this article, we‘ve got a transcription of Geode’s appearance on the Web3 Podcast. Simon Furlong (AKA Oranges), Geode’s co-founder and COO, sat down with host Callum Woodcock to explain the way Geode works, and how it’s aimed to change the liquid staking landscape forever. Readers can find the original version of the podcast below, or continue past it for the transcribed version (very lightly edited for readability)

Check out the original podcast episode below:

Host of The Web3 Podcast, Callum Woodcock, and Geode COO Simon Furlong chat about the future of B2B liquid staking. Tune in above to listen to the original episode.

About the The Web3 Podcast

This is the podcast that simplifies Web3 and shines a light on the many talented founders, investors and thought leaders in the newest evolution of the internet. Take a journey down the rabbit hole, to a world of cryptocurrencies, NFTs, DAOs, DeFi, Blockchains and the Metaverse, with your host Callum Woodcock.

Listen on Apple Podcasts | Listen on Spotify | Callum Woodcock on Twitter

Podcast Transcription

S2E6: The World’s First B2B Liquid Staking Solution w/ Simon Furlong of Geode

Callum: Hello and welcome to the Web3 Podcast coming at you through the icy chill of crypto winter. I’m your host, Callum Woodcock, and this is the show that simplifies Web3 by shining a light on some of the incredible thought leaders, investors, entrepreneurs, and creators in this brand new iteration of the Internet.

I’m joined today by Simon Furlong. Simon is a Web3 entrepreneur and the founder of Geode, a DeFi liquid staking solution specifically aimed at DAOs, decentralized autonomous organizations. If you’re wondering how many more Web3-related words I can fit in a sentence, please keep listening — but for now, Simon, welcome to the show.

Simon: Hi, Callum. Thanks for having me. Lovely to be here.

Callum: It’s great to have you on. So as you know, from listening to previous episodes, we always kick this off by asking for an overview of your background and the story of how you first got into Web3.

Simon: Sure, so I guess a quick TL;DR. So I’ve got a degree in financial economics. I worked in the City of London for five or six years in the finance sector before having a brief break from that industry. I got into Web3 through a friend, a very close friend of mine who’s been in this space for a long time, and he basically introduced me to DeFi because before DeFi it was basically peer-to-peer, and that didn’t interest me too much.

“I’m sure if I paid more attention back in 2015 and saw what Ethereum had up its sleeve, maybe I could have got in a bit earlier, but yeah, my friend introduced me to Web3, and DeFi was, it was kind of way in and from there, I … got more and more interested in what people were doing, and then ended up here.”

I never thought Bitcoin or other tokens would be competition for fiat, so I didn’t think too much of crypto at that point. I thought was interesting still, but it wasn’t enough to really drag me in. But when I was introduced to DeFi, and I saw the very beginnings of DeFi, that’s what really got me interested, because suddenly there was this whole new use case that — I’m sure if I paid more attention back in 2015 and saw what Ethereum had up its sleeve, maybe I could have got in a bit earlier, but yeah, my friend introduced me to Web3, and DeFi was, it was kind of way in and from there, I just got the bug. Just got pilled, and got more and more interested in what people were doing, and then ended up here.

Callum: Yeah, and I think there are a lot of listeners to this podcast, certainly me, who also wish they’d got into crypto a lot earlier. I think the world was a very different place in 2015.

Simon: Yeah, yeah. Makes you imagine, right?

Callum: Yeah, exactly. So you’re obviously building a company in this space, but can you talk to me about where the idea for Geode came from? How did you start working on the project you’re currently working on?

Simon: So I was actually working for a liquid staking provider on Ethereum, and that’s where I met my co-founder, actually. And basically, long story short, that particular protocol got rugged by their own founders. I say, the last people you expect, but normally you think of an outside source coming in and doing something. But yeah and it made me and my friend think there’s got to be a better way. It exposed issues with liquid staking in its current form, which is basically one guy in the team owning the keys to all the validators. And it brought that question of there must be a better way of doing this.

Like how? Surely this isn’t the way liquid staking should work. Just one guy having all the keys to thousands of ETH. So, that’s where Geode came about initially, was how can we decentralize liquid staking, and remove the third-party trust element from liquid staking providers. Which then turned into more of a well, not only could we decentralize liquid staking, and remove these trust elements, but we can also offer it to DAOs. We can offer it as a service. And that’s where you get the real growth, because we could have just done another protocol that was just decentralized, and had these USPs and that’s fine. And I’m sure we would have done all right doing that.

“Long story short, that particular protocol got rugged by their own founders…. But yeah and it made me and my friend think there’s got to be a better way. It exposed issues with liquid staking in its current form, which is basically one guy in the team owning the keys to all the validators…. Surely this isn’t the way liquid staking should work. Just one guy having all the keys to thousands of ETH. So, that’s where Geode came about initially, was how can we decentralize liquid staking, and remove the third-party trust element from liquid staking providers.”

But if you think in a proof-of-stake world, where all chains are proof-of-stake or becoming proof-of-stake, with the exception of Bitcoin, there’s huge potential for a protocol like Geode to really grow. Because we’re starting on Avalanche, and we’re going to be providing liquid staking solutions to DAOs on Avalanche. But we can go on to Ethereum, we can go on to Near, we can go on to Fantom. We can go into any proof-of-stake chain, and benefit all the DAOs, and then by default their users, through offering a solution of what we’re doing. And as far as I’m aware, there aren’t that many, if at all, any B2B infrastructure providers for liquid staking.

Callum: That’s awesome. There’s a few questions that I’ve got off the back of that, but I’ve just thought for our listeners that perhaps aren’t yet so familiar with what liquid staking is, could you summarize what exactly liquid staking is?

Simon: Yeah, sure. So if you take Ethereum as an example, if you want to partake in the security of the Ethereum network, you need to create a validator, and creating a validator takes 32 ETH, which at today’s prices might not be too bad. But it’s generally a lot of money, and not many people can afford to put down 32 ETH, or necessarily want to put down 32 ETH. So liquid staking protocols came about and Lido was the first and main DAO to do that on Ethereum, and they basically allow any user to deposit any amount of ETH with them and then they accumulate these deposits with them to create validators.

So it helps the little guy basically, it allows anyone to partake in validation and securing the network to earn fees. And for Ethereum it would be fees denominated in ETH, which is quite a popular revenue stream to people. So these staking-as-a-service providers, Lido is one example, in essence, that’s what they offer. The liquid side of this staking solution comes by if you deposit ETH with Lido’s, just to use a great example, you receive a token in receipt of that, that represents your ETH staked with Lido, and therefore ETH in a validator, and for Lido that’s stETH. So what you can do, and what Lido have done very successfully and other protocols have done, is they provide liquidity to their staking derivatives.

“So liquid staking protocols came about … and they basically allow any user to deposit any amount of ETH with them and then they accumulate these deposits with them to create validators. So it helps the little guy … it allows anyone to partake in validation and securing the network to earn fees. And for Ethereum it would be fees denominated in ETH, which is quite a popular revenue stream to people.”

So stETH in this example, and they pair ETH with stETH. And that basically allows users to enter and exit stETH really easily, and in effect, provides liquidity to their staking derivatives; said “liquid staking”. And on Ethereum, the merge hasn’t happened yet. That’s hopefully in September, but withdrawals won’t be enabled for another six months after the merge happens. So if you stake in a validator at the moment, you’re not getting — you’re not seeing your money. You won’t be able to withdraw your money until early 2023, at the absolute earliest. Whereas liquid staking allows you to remove those funds whenever you wish, which is quite powerful.

Callum: Absolutely. The other question I wanted to ask was what was more around your commercial model because you are part of a growing sector of businesses that are selling to DAOs, selling to these decentralized organizations. Now, my background in Web2 (commercial director to startups), it’s very sales and marketing. That is a tricky concept to wrap your head around. How do you go about selling effectively to a decentralized organization? What does that process look like?

Simon: So, it’s not necessarily as hard as you think. What I would say is that some DAOs are more decentralized than others, and some DAOs require more processes than others. So I won’t name any names, but you’ll find when you approach particular DAOs, that they’ll instantly just go, you just need to write something on the forum and get consensus and go from there, and generally, they’re the hardest ones.

They’re tricky to infiltrate because you’ve got to write a proposal that’s interesting enough that really gets the community engaged, and makes the community think, “Yeah, we really need this solution.” Whereas other DAOs, it’s about speaking to the team, and if you can get in touch with the team, then if you can convince the team that it’s something that’s useful, even if there is a strong governance structure to go through, if you’ve got the team’s backing, then they can sell it to their community.

Because they will have they are the voice of the community, and they will have the ear of the community. So if you can get involved with the team and convince them that what you’re doing is interesting and how it net benefits not only the DAO itself but its users, because obviously, a DAO is nothing without its users. Then you’re on to a great start.

Callum: It’s really interesting. And the other thing that I always find fascinating, the first episode of this podcast, we had an investor could Hadley Harris, from Eniac Ventures, and he was saying how often DAO tooling start-ups will come to him, and they won’t really have a revenue model. They might say something about token swaps, but most of them just aren’t clear on where their revenue comes from. How have you structured Geode’s revenue model? Am I allowed to ask that question?

Simon: Yeah, of course, it’s an interesting one. Yeah, because how much you want to charge a DAO is a tough one. I think a lot of DAOs don’t necessarily have good revenue models anyway. That’s one thing we fix. We provide DAOs with a clear and obvious revenue structure, which I think is one of the key values we bring.

So we don’t charge any fees for our service. If a DAO integrates, Geode’s liquid staking solution, it has their own staking service, with their own staking derivative, they can charge up to 10% of the yield as fees. Just like any other liquid staking solution. Lido charges 10%. So you can match that, and that 10% of the yield goes to the DAO. So that could be for their treasury. That could be for the stakers of their token, you know, whatever they wish. They could use those funds to incentivize additional staking. Whatever they want to do with those funds, they can do as they wish. We don’t take any of that.

But what we do, is we basically do value add services in effect. So at the moment with our Avalanche integration, we are going to be providing a ton of liquidity to Yield Yak’s staking derivative, which is the yyAVAX token, and we’re basically going to be creating a pretty sophisticated withdrawal pool, that enables users to swap between the different tokens, while providing pretty solid peg-stability. So we will have fees for that pool which will accrue to Geode. And that’s kind of helping our ecosystem and helping our partners while allowing us to have some kind of revenue model come in.

“We basically do value add services in effect…. With our Avalanche integration, we are going to be providing a ton of liquidity to Yield Yak’s staking derivative, which is the yyAVAX token, and we’re basically … creating a pretty sophisticated withdrawal pool, that enables users to swap between the different tokens, while providing pretty solid peg-stability.”

And then future ideas could be we could become a node operator for our partners, for example. And if we become a node operator and help them with that validation, then we can take a small fee. So it’s things like that that we’re looking to do, these kind of value-add services which complement the existing staking solution that we offer to generate revenue. And I’m sure that there’ll be more. And it’s something we’re going to focus on a bit more later down the line.

Like for now, we just want to be able to provide the solution, get the adoption, provide as much value as possible to these different DAOs we plan to work with, get that ecosystem (what we call a universe), up and then we can kind of go from there. There’s no point sorting out the revenue model entirely if you’ve got zero TVL, right? So you want to get the TVL, you want to get the users, you want to get the DAOs who are using your solution, and get good adoption. And we’ve got a fee model already, but hopefully, there will be some more going forward.

Callum: I’m curious just to follow this train of thought for a little bit. What has your pre-launch at the moment, I understand?

Simon: Yes.

Callum: And so I guess there are two questions here: so one, when can the DAO universe expect Geode to launch? Because, I mean, from my perspective, it sounds very much like a no-brainer. And secondly, what has your go-to-market looked like so far? You know, how are you raising awareness? Have you got strong relationships with existing DAOs already? What’s that look like?

Simon: Yes, so regarding launch… Soon. I don’t want to give a date because with development it is never certain, and one of the worst things you can do with a new crypto project is say this is when we’re delivering something, and then you miss it because of unforeseen circumstances, and then the community doesn’t think you can deliver. So soon, and I do mean soon. Like we are very close. So hopefully, this will be out very very soon.

In terms of our go-to-market kind of strategy yeah, so there’s a lot of BD behind the scenes. There are a lot of partnerships we are forging and being introduced to. We’ve had a lot of conversations with different DAOs from different chains and we’ve had a lot of really positive feedback. I was in Barcelona for the $AVAX summit a few months ago and that was fantastic. It’s a great community there and literally every single person I spoke to was either interested or was quite fascinated by what we’re doing.

So yeah, there’s a lot of BD, but there’s a lot more to come, I think. And I think once we do go live with Yield Yak, I think that’ll help a lot because we’re not live yet. So I can talk everything, but until someone sees something live and working with some good TVL in, and providing value, I think that’s when things will really start to heat up for us.

Callum: You know it’s interesting, with your target market being DAOs, it makes me wonder, how are you structured as a business? What is your governance model? You have you spun up a DAO?

Simon: So no, we’re not live yet, so we don’t have a DAO at the moment. But the whole idea of Geode came around decentralization, and removing third party risk and giving the power to the DAOs themselves. You know, they own the withdrawal contracts. They control the funds, not a third party. So they can then invest their treasury assets if they wish, with no risk. They can manage their risk profile, they can choose their node operators, all this kind of stuff. It’s as if they created it themselves, right? Rather than going through a third party.

“When it comes to our internal structure, we’ve got quite an interesting mechanism…. You’ll have the token, the general token … that just acts just like a normal token, a normal governance token like any other DAO. They can make proposals, and vote on said proposals, and pass or fail…. So for each chain we’re on … we’re going to have what’s called a Senate…. Geode will be on the Senate’s team along with three others as a minimum, and that Senate will have the power to vote in all the proposals that go through governance…. It basically gives additional power to the DAOs that integrate with us.”

So when it comes to our internal structure, we’ve got quite an interesting mechanism. So you’ll have the token, the general token, it’s a bit of alpha for your users there. And then that just acts just like a normal token, a normal governance token like any other DAO. They can make proposals, and vote on said proposals, and pass or fail. But then what we’re going to have. So for each chain we’re on, so if we focus on Avalanche, we’re going to have what’s called a Senate. Now a Senate will consist of a minimum of four DAOs that have partnered with us.

We will be on the Senate, Geode will be on the Senate’s team along with three others as a minimum, and that Senate will have the power to vote in all the proposals that go through governance. So say proposal A goes through governance and passes and that says that’s the maximum fees a DAO can charge. Their solution is 0.001%, which, you know, wouldn’t be great for the DAOs, the Senate can vote to reject that. And conversely, if something goes in saying DAOs must charge 80% fee of the yield, the Senate can reject that as well. And what’s interesting about that is it basically gives additional power to the DAOs that integrate with us.

Say you take any other liquid staking provider and you integrate their token into your solution, you have no control over the governance of that particular token unless you go and buy a ton of that governance tokens and become an active participant in their ecosystem. Whereas if you become if you use Geode and you become you have your own solution with your own staking derivatives, right? And then you become a member of the Senate within Geode’s ecosystem, you have an active say, for free, in the direction of the Geode protocol, and therefore your own staking derivative.

And you can allow your own community to vote as to how your vote within the Senate should go. So you can literally bring your own community into the governance of your own liquid staking solution, which is something I think is quite special and something you wouldn’t get if you just integrate a liquid staking solution — a liquid staking token from any other project into your products.

Callum: Yep. It sounds like a much, much fairer and more inclusive way.

Simon: Yeah well it’s like the community of Geode gets a say, but then at the same time, there’s these, I guess these safety rails for the DAOs themselves that’s ultimately will be affected by those decisions. And by allowing the DAOs themselves to have an active say without having to own a ton of tokens, which, you know, they’re not going to have the budget or willingness to do.

You don’t see DAOs having a ton of other liquid staking tokens just to have a say in the governance, right? I think it’s quite a positive sell for the DAO and gives confidence as well because they ultimately will have control over the direction of the protocol. There’s no like left-wing change in leadership or something like that. Ultimately it all comes down to the Senate, and the partners involved.

Callum: Yeah, that’s awesome. No palace coups. So I don’t know if any of our listeners have noticed, but Simon is a rarity on this pod[cast] because he also has a British accent, and I’m always fascinated by this. So how does your team look like given, you know, you’ll be running a very much a Web3 business? Is your team decentralized, or are they are they predominately based in the UK?

Simon: No, they’re all over the world. I’m the only Brit in the team —

Callum: Heh, by design.

Simon: Yeah haha — So yeah, look we’ve got people all over the world, we’ve got people in the States, we’ve got people in Turkey, we’ve got people in the BVI, we’ve got people in Europe. It makes it interesting because the time zones are kind of all over the place. But yeah, we’ve got teams and advisors, very trusted and knowledgeable advisors, everywhere. So, yeah it’s interesting.

Callum: So I’ve got a few questions left. One question that I always love asking guests on this podcast perhaps isn’t is as related specifically to Geode, but more about the wider ecosystem. What are you most excited about when it comes to Web3? What do you see as the future of the space? And you can’t say Geode.

Simon: No, I can’t say Geode, that would be a bit too much of a shill, wouldn’t it. No, I’m most excited about scaling, honestly. So I think with layer 2, Optimism just released their tokens so that will be quite interesting for how they incentivize liquidity into their platform when that goes live. I think Arbitrum are probably going to be looking to do something similar soon. You’ve got subnets on Avalanche. And even if you look down the line, 2023, 2024, with sharding for Ethereum, there’s clearly demand for block space.

The problem chains have right now is meeting that demand, and you’re finding various different innovative ways of exploring that demand, and I’m interested to see all the experiments kind of play out, and see what ultimately wins, or becomes the most efficient way of scaling a blockchain. I think that’s what’s most interesting for me, because when you bring down fees and you increase the scalability of these blockchains, hopefully without too much compromise, because there are ways of scaling which we’ve seen like with BSC which isn’t ideal, you’re going to attract more users, and you’re going to start to attract more retail users.

And especially on Ethereum, you know, that has suffered from high fees and that has been a barrier to entry for a lot of users, especially in the less developed countries or the countries with less wealth where they only have a couple hundred dollars to put into DeFi. If you got a $50 transaction fee to get in and $50 get out is there’s no point, right? So I think seeing the ceiling scaling pan out and allowing the blockchain kind of environment to be available to everyone, I think is going to be really interesting.

“ I’m most excited about scaling, honestly…. I’m interested to see all the experiments kind of play out, and see what ultimately wins, or becomes the most efficient way of scaling a blockchain. I think that’s what’s most interesting for me, because when you bring down fees and you increase the scalability of these blockchains … you’re going to attract more users…”

And that’s when we’ll see real adoption. I mean, we obviously see the centralized exchanges allow bridging across to these different chains and different solutions. It just makes life a lot easier for users, and I think that’s what’s really exciting to me. I can use DeFi, I love DeFi, I love crypto. You know, I’m really involved in it, I work in it full time and I want more people to be able to have the opportunity to do so and be on the cutting edge of all of this space and technology and a real disruptor potentially for other industries.

Callum: Yeah, absolutely. And then just penultimate question then, I’m always interested to hear: what resources have had a profound impact on you, either in your personal life, or your professional life, or in your journey into Web3?

Simon: So I’m a big fan of podcasts. I like to be read to, I guess. One of the key ones like the Bankless podcast is fantastic. There’s so much stuff going on every single day in this space, it’s very hard to keep up to date with what’s going on, and what the new innovations are and the new mechanics, and different things coming up with different products and services. So any kind of reputable podcast I find that does like a weekly kind of round up, where you don’t have to spend your entire day on Twitter trying to find where everything is.

Where it’s just like an hour, and you can just listen to some knowledgeable people explaining everything that’s happened in that week. All the latest tech, all the latest updates, all the fuck ups, the hacks (or whatever it may be), I find that super, super useful because it not only keeps your finger on the pulse with relatively little work, It’s an hour of your week, but it also opens your mind to new ideas and new concepts as you hear about them, as they are discussed.

And I think that’s super, super important, I think. And that’s really helped me, like getting all the knowledge that you need to be able to work in this space, and to think of how to improve it. You need to know what’s going on, and these kind of roll-ups — little pun there for L2s, but these kind of roll-ups of information from these kinds of educators I think is really, really useful.

“So I’m a big fan of podcasts…. There’s so much stuff going on every single day in this space, it’s very hard to keep up to date with what’s going on … with different products and services. So any kind of reputable podcast I find … it not only keeps your finger on the pulse with relatively little work … it also opens your mind to new ideas and new concepts as you hear about them …”

Callum: Yeah, absolutely. We had the founders of Function Land on a few episodes ago who are building essentially a decentralized cloud. And they said exactly the same thing. They said, this space is changing so fast you can either listen to podcasts or spend your life on Twitter, which I think.

Simon: Yeah. Yeah, I think you know which one you prefer, right? Well, there’s not enough independent thinking in this space, and a lot of people can get sucked into just reading Twitter. And you don’t know how knowledgeable these guys actually are. There’s a lot of false information on Twitter, whereas these podcasts generally filter out all the bad information, generally speaking, and gives you like a filtered view of exactly what you need to be listening to and hearing about.

Callum: Yeah, absolutely. And then anything un-Web3 related that you would recommend? Do you have a book that’s really informed your career direction or anything else?

Simon: Yeah, not necessarily like any particular book or anything that’s inspired me. What I would say is if you’re interested in this space, then just having a solid understanding of economics, I think, is important. And I have heard people say, people do better without economics. Because they’re less, or rather, without any experience in the industry. Like within traditional finance for example, because then they’re not constrained to, “oh, this is how an option works, and therefore I can only work in this kind of parameter” because they’re just used to that kind of financial system.

Whereas people without any experience or don’t know what an option is, maybe they can be more innovative and creative in these financial products. But at the same time, ultimately this is digital finance. And I think if you don’t understand what an interest rate is, you don’t understand collateralization ratios, or inflation schedules, or simple loans and things like this, then you’re really going to struggle in understanding how these different protocols work.

And one of the best ways to learn in this space is by using products, and using services, and understanding how they work, and seeing what the value is. And I think if you can get a reasonable understanding of basic economics, then that’s going to put you in a great stead to understand these particles further.

“What I would say is if you’re interested in this space, then just having a solid understanding of economics, I think, is important…. If you don’t understand what an interest rate is … or inflation schedules, or simple loans and things like this, then you’re really going to struggle … I think if you can get a reasonable understanding of basic economics, then that’s going to put you in a great stead to understand these particles further.”

Callum: That makes total sense, and again, I think a really, really pertinent point. It’s not an argument I’ve heard on this podcast, the argument that actually being perhaps less financially literate than people that have spent their careers working in traditional fi (or TradFi, as it’s slightly irritatingly called in Web3), makes them more creative when they come out with these new products. A great point.

Final question, Simon, before I let you go. If listeners to this podcast would like to reach out, either because they want more information on Geode, or to ask any questions on anything you’ve touched on, what is the best platform to get you on?

Simon: To be honest, it’s probably Twitter. My DMs are always open. My handle is @0xOranges, so just a number “0” and then “Xoranges”. That’s probably the best, most direct way to get in touch with me, or through the Geode Discord channel.

Callum: Perfect. Simon, thank you so much.

Simon: Brilliant. Thank you for having me, cheers.

Callum: Thank you so much for listening. Another great conversation, this time with our new friend Simon Furlong of Geode, the world’s first B2B liquid staking solution. Check out the show notes, see upcoming guests, and play more episodes from our, if I say so myself, incredible line up of Web3 entrepreneurs, creatives, and thought leaders. Visit theweb3podcast.xyz. You’ll find us on all your favorite podcasting platforms. That means Apple, that means Amazon, that means Spotify, that means Anchor — or you can find us pretty much anywhere else. If you enjoyed this episode, please let me know. You can find me on Twitter, my handle is at @CallumWooders, or if there’s a Web3-related topic that you’d like to hear explored, I’d love to hear about that too. This has been the Web3 Podcast, thank you so much for listening, and I’ll see you next time.

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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