AMA Highlight: RAMP DEFI

By Gabriel Tan, Analyst.
March 16, 2021–9 min read.

Hillrise Group
Mar 24 · 9 min read

On Tuesday 16 March, we welcomed Lawrence Lim from RAMP DEFI into the Hillrise Group Telegram chat for an AMA. Lawrence is the co-founder of RAMP.

RAMP allows you to maximize capital efficiency on your staked crypto cross-chain. This is achieved by allowing users to use them as collateral to mint the ERC-20 rUSD stablecoin. This can in turn be used to generate yield elsewhere.

In this post, we have compiled key questions and answers from the event.

Daniel Dal Bello
Lawrence, thank you for joining us today for the second time! It’s always great to have returning guests. As long time supporters of RAMP we’re curious to hear how both your platform and traction has been growing since we last spoke here in September, especially as you’ve built quite the community over the last few months.

Ray Reijnders
Hey Lawrence, happy to have you here today!

Lawrence Lim
Thanks Daniel and Ray for having me here today! Very happy to be back again, been some time since our last appearance in September, and there’s been many new developments.

Quick summary on RAMP, we allow users to deposit staking/yield farming assets into our solution across chains, and users can collateralize a liquid stablecoin rUSD for use in DeFi, while earning staking/yield farming rewards at the same time.

A summary of notable milestones:

  • Launched phase 1 integrations of our ETH-based solution with Tezos, Tomo, IOST.
  • Launched BSC integration, and liquidity pools on PancakeSwap following rise in ETH fees.
  • Launched node operations, with over $150m staked into our nodes across GRT, XTZ, TOMO and IOST.
  • Launched burn mechanism where the fees generated would go to buying back and burning RAMP tokens.
  • rUSD minter currently under audit by several auditors (Arcadia, Beosin, Hacken). Will launch on both Ethereum and BSC, once ready.

Daniel Dal Bello
How has the BSC integration been received? Such a hot topic right now. Also curious about the impact of the burn mechanism and how that works?

Lawrence Lim
Very well received! BSC has been rapidly growing in terms of adoption given the super low fees, compared to ETH. It allows many users to access RAMP tokens without having to pay $50–100 per transaction on ETH. Community loves it.

Daniel Dal Bello
Was having this discussion today, fees are getting really prohibitive.

Lawrence Lim
Indeed, and I think BSC provides a very compelling solution here, notwithstanding the centralized nature. Sometimes, cheaper is just better, haha.

Also there is a RAMP-BUSD farm on Pancake giving over 200% APY, which is very good as well.

The burn mechanism has helped to support token value in cases where the market was more bearish. How our buyback works (which is different from many others) is that limit orders are set via 1inch at key support levels, and only when the value goes downwards, do the orders execute. This helps us to optimize the size of buybacks, and provide value through support at the same time.

Ray Reijnders
That’s a very interesting approach to buybacks, how do you decide on what these key support levels are?

Lawrence Lim
It’s more manual and judgement-driven based on weekly team reviews. We usually aim to stagger it upwards, as token value accrues, to consistently move and set these buyback levels higher on both USD terms (absolute return), and ETH terms (relative returns).

We do publish the wallet address, and screenshots of the buyback limit orders, for our community to access the data.

Michael Gainz, Community Member
Are you the first to do the rUSD minting for a portion of an independent chain’s stake? Or, rather, “will be the first” when it is online?

Lawrence Lim
Yup, rUSD is minted by the RAMP Protocol, using overcollateralized asset values to mint. You can see it as combining the best features of YFI (yield generating) and MakerDAO (overcollateralized stablecoin) into one solution.

Raymond Reijnders
There’s an incredible amount of layer-1 protocols trying to compete for attention, often adding a “twist” in their bid to be the elusive Eth-killer. However, we’ve seen most of these just building bridges back into Ethereum, even going so far as to create ERC-20 wrapped versions of their own tokens. In a similar manner, cross-chain stakers will mint rUSD for use on Ethereum.

Do you feel the above trend inadvertently strengthens Ethereum’s position?

Lawrence Lim
I think it’s about give-and-take.

The powerful thing about being a mature and well-developed ecosystem like Ethereum is that it accrues value very naturally without having to do much, whereas the alternative networks require substantial investments and development to simply keep up.

That said, it's also at times like this (high fees), where it creates gaps and opportunities. I think a two-way bridge will also allow value to flow back to alternative layer 1 protocols if done in a savvy manner. BSC has shown that it is possible to “suck” users and value over to a new chain by lowering the barriers to adoption.

I think at least for RAMP, we are chain agnostic. We are building minters in “liquidity hubs” where we expect high DeFi activity to take place. So that users can pursue the best opportunities using their collateralized liquidity, while still earning staking rewards.

From example, TomoChain users can mint rUSD directly into BSC or Ethereum. And can switch the rUSD from BSC into Ethereum seamlessly. This means that their liquidity is network-agnostic, and still yield generating on the core base assets.

So the concept is about making rUSD, which is a representation of collateralized liquidity, “global”.

Daniel Dal Bello
Within DeFi, I’m hearing increasing debates about “money lego” vs “superapps” — money lego being what we typically know within DeFi, where dApps typically only serve 1–2 functions and champion composability. Alternatively, superapps are like WeChat, doing everything from one app.

Lego may bring speed in innovation but are harder to integrate, while superapps may be better user-experiences but may lead to bloat. What do you think is the future of DeFi?

Lawrence Lim
I think as long as fees are reasonable, money legos will be the way to go. Superapps are great but composability is one of the biggest strengths of DeFi, because users need different solutions at different times, and one superapp is unlikely to “catch them all”.

Superapps probably can do better in centralized environments where competition can be beaten out more easily than in a decentralized environment.

Especially when the speed of innovation and changes in market preferences are so fast in DeFi, legos are the only way to really keep up with the speed of growth.

Michael Gainz
Is the future “anon” or “KYC”? It's a funny question but relevant. What advantages does being based in Singapore have for DeFi?

Lawrence Lim
I think that depends on the comfort level of teams. I can understand why some choose to remain anon, given the risks, especially on the regulatory side. Singapore has excellent crypto regulations, and our team is based here as well, so it's a very natural decision.

Ray Reijnders
With most innovative and successful projects, “copycats” quickly spring up, adding their own improvements on top.

We have been reviewing and speaking with companies exploring similar concepts as what you are doing with RAMP.

What sort of moat do you have to defend your positioning and market share among new competitors?

Lawrence Lim
Great question. There are definitely similar solutions out there — and sometimes surprisingly what many think are competitors, are not really competitors. For example Stafi — they wrap tokens and give rewards on the tokens. Many think they are a competitor, but RAMP can still collateralize these wrapped tokens into rUSD. So our solution is a lot more “friendly” than it looks ;)

Also, the moat that we expect RAMP to have is the global liquidity network, focusing on rUSD. I’ll use an example — consider the ability to have your SUSHI LP assets on Ethereum or your TOMO on Tomochain, being able to mint rUSD, which you can bring anywhere to pursue yield, whether its on BSC, or Ethereum, or Polkadot. There’s varied solutions, but I think RAMP might be the only one that offers such fluid liquidity across ecosystems.

Daniel Dal Bello
The ability to readily use rUSD across other protocols is paramount to demand and subsequently usage of the RAMP protocol. Integrations so far have been deliberate efforts by the team to form partnerships e.g with UniLend. Would you agree that this process is highly dependent on the team’s efforts?

How would you incentivise the community to take initiative and incentivise other projects to pro-actively integrate rUSD?

Lawrence Lim
Yes, so there are 3 core parts to our solution: 1) to allow users to deposit assets on various chains, 2) allow the fluid minting of rUSD into various ecosystems, and 3) having rUSD adopted within the money markets on various networks.

Point 1 and 2 are dependent on our team to develop / co-develop (where possible), and when it gets to point 3, rUSD is actually a money lego that the various DeFi solutions can use, so it is dependent on our partners to assist in driving adoption within their solutions.

There will be new vaults to bootstrap liquidity of rUSD (so far the current vaults have performed extremely well in terms of ROI for liquidity providers), and we’ll do co-marketing + incentive programs with partners to actively grow rUSD adoption.

Michael Gainz, Community Member
Wow does rUSD adoption help with $RAMP adoption? What is the incentive for acquiring RAMP token?

Lawrence Lim
There are 2 key components:

  1. RAMP, RAMP-ETH and RAMP-BUSD are collateral assets, which allows users to leverage their RAMP ownership for additional liquidity.
  2. A small % of yield farming/staking rewards are shared with the protocol for assets minted into rUSD, which means that the more rUSD minted, the more protocol fees generated. The protocol fees will be used to buyback RAMP tokens for either burn or redistribution back to RAMP stakers.

So the RAMP token is essentially where all the protocol value will accrue.

A Brown, Community Member
Guess we all know the “elephant” in the room…we know the audits are still ongoing, but is there a smaller time frame regarding a completion date associated?

Lawrence Lim
We are hopeful for a march audit completion, although the timeline is also subject to third parties feedback, so we prefer not to set a specific date. In particular when it comes to development, sometimes a small change may require a longer time than a big module change because it touches something that's on a base level. It’s part of the development iteration process, and we would place security over speed at this juncture.

It's always a trilemma trade-off between high security, good code, and speed of development, typically can only choose 2 out of 3 at best.

Ray Reijnders
The extreme composability with DeFi has been paramount to its exponential growth over the past year. However, one way to see this growth is a highly leveraged, derivative-fueled one. For example, depositing in lending protocols and borrowing from them to yield farm, then using LP tokens to re-stake elsewhere to generate additional yield. It can get complex.

As things get more intertwined and opaque, we can see the risk of a 2008-esque blowup growing. Do you see this as a great risk and how do we protect the ecosystem from it?

Lawrence Lim
Agree that it may be over-exposure, especially in a bubble context. I think it depends substantially on the strength of the protocols in dealing with asset recovery values.

Strangely, I think it may not be that bad as in the fiat banking system — there may be a certain market shock, but the ecosystem participants who participate will directly bear the brunt. And the assets are all collateralized, and liquidated above value. There’s no false capital injections to keep the ecosystem on life support, which is actually detrimental in the long run haha.

Michael Gainz
Awesome question. I’d like to add a little something.

Will there be a form of rUSD printing or fractional reserve printing/banking in RAMP’s future (not a bad thing for making money)?

Are you thinking that you will be a bank in the future?

Lawrence Lim
Not at the moment. Assets are all over-collateralized, so there’s no fractional printing involved, and we are not a bank, because we don't take custodial deposits of the assets. The smart contracts operate to help redeploy for yield, or prevent withdrawals, if minting rUSD. It's all code-driven and powered by the protocol along very clean parameters with no human intervention.

Hillrise Group supports ambitious Web3 startups with early-stage venture capital and fundamental research.

RAMP DEFI propose a new liquidity on/off-ramp to leverage illiquid staked assets from other blockchains into liquid capital which can be used within the Ethereum network.

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Hillrise Research

Fundamental research arm of Hillrise Group.

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