NUTS Finance Journey Recollection

Since our inception in 2018, we’ve experienced both triumphs and challenges. As we approach the start of 2025, I want to provide a comprehensive overview of our journey and share our vision for the future. For the past seven years, NUTS Finance has been dedicated to building the nuts and bolts of on-chain financial applications, and our commitment to this vision remains unwavering.

For each period I will cover the following key topics:

1. What is the product we built?
2. When was it launched?
3. What happened to those products now?
4. Key learnings

Inception (2018–2019)

• Since the start we knew it was going to take multiple attempts and projects to realize this vision, therefore we set up NUTS Finance as a development lab with each protocol representing its own project
• We are 7 years into our building journey and the vision remains unchanged
• Our first attempt was the NUTS Platform — a middleware solution that enables application builders to launch smart contract based financial applications with minimal smart contract development
• We spent 1 year building the NUTS Platform and SDK, but we did not garner sufficient interests and we were unable to get past the validation stage, NUTS Platform failed to launch

Key Learnings

1. Respect the market and demand
2. Importance of embracing Web3 culture and being adaptive crypto native participants

Acoconut (2019–2021)

• Acoconut aggregated different format of ERC20 BTC into a unified liquidity format called acBTC
• Protocol launched on Ethereum Mainnet in September 2020
• We raised $500k from a select group of angel investors in December 2020
• Protocol expanded to BSC (now BNB Chain) in February 2021
• We conducted a crowdpooling event on DODO Dex in February 2021 and successfully raised BUSD 294,000. The subscription was heavily oversubscribed at BUSD 76m.
• We began aggregating long-tail BTC derivatives in the BSC ecosystem (ie. vBTC, fBTC, acsBTC), some of these long-tail assets suffered exploits and rebasing hiccups which impacted our operations
• TVL reached a peak of $70M in April 2021 (all BTC deposits — BTC price at $62k)
• We succumbed to mercenary liquidity and as the overall market enters crypto winter, we did not have a convincing strategy to attract new BTC liquidity and made the decision to sunset the protocol in Q1 2022
• Despite the volatile price action of the AC token, our team currently still owns 45% of the circulating supply. Only 30% of the total supply has been minted for LPs during the liquidity mining phase.
  https://etherscan.io/token/0x9A0aBA393aac4dFbFf4333B06c407458002C6183#balances
• Majority of investors exited at multiple returns

Key Learnings

1. Importance of protocol liquidity management
2. Token is a product of its own
3. Importance of assets integration with 3rd party protocols
4. managing burn and runway based on the cyclicality nature of the crypto industry

Tapio & Taiga (2021 to now)

• We were invited by Web3 Foundation to build DeFi protocols in Polkadot ecosystem, we chose to collaborate with the Acala to launch Tapio and Taiga
• Given Polkadot’s network design and configuration, Kusama was the canary network of Polkadot
• Tapio was originally designed to aggregate liquid staked DOT (LDOT on Acala) and provide a stable peg between native DOT and liquid staked DOT (LDOT)
• Taiga was designed to aggregate liquid staked KSM (LSM on Karura) assets and provide a stable peg between native KSM and liquid staked KSM (LKSM)
• Acala suffered the aUSD exploit in August 2022. However, tDOT and its underlying pegging mechanism “stable asset” was able to maintain its peg throughout the aUSD depeg situation
• We closed a funding round led by Polychain Capital in October 2022 post aUSD incident
• tDOT TVL reached $12M in December 2023
• After the aUSD incident and the traction of Kusama network significantly reduced, we made a strategic decision to reposition Taiga to service DOT assets and reposition Tapio to service assets in the Ethereum and L2 ecosystem
• Taiga currently operates on Acala, with approx. $4.24m of TVL in DOT liquidity and have generated over $132m in trading volume
• During the summer of 2022, a flurry of Liquid Staking Tokens protocols (LSTs) were introduced and some only lasted for 2 to 3 months. We spent Q3 and Q4 2022 on repositioning Tapio and have launched Tapio Testnet here
• In late 2022, the concept of Liquid Restaking Tokens (LRTs) was brought to mainstream and have introduced LRTs as another form of ETH derived asset. Based on our prior experience and learnings with integrating long-tail derivative assets, we decided to temporarily pause go-to-market efforts for Tapio. This allows us to take a meticulous approach to asset selection, focusing on LSTs and LRTs
• We are currently preparing for the mainnet launch of Tapio protocol in Q1 2025
• Tapio will establish a strong protocol-to-protocol integration with Pike, leveraging its proven asset stability to address the impossible triangle of LSTs and LRTs: market share, asset fragmentation and utility

Key Learnings

1. Importance of agility and adaptability when an unforeseen event happens to a wider ecosystem network
2. The stable asset mechanism is extremely robust and suitable to handle liquid staking assets given its stable peg mechanics

Pike (2023 to now)

• While building Tapio and Taiga, we were invited by the Acala team to build a money market, Pike. The use case was to use tDOT and DOT derivatives as collaterals to drive adoption for aUSD
• At the start of Q1 2023, the proposition of Pike expanded to service the broader crypto ecosystem (ie. EVM and non-EVM networks) given the new possibilities of interoperability solutions like Wormhole arbitrary messaging
• With the help of some key technology partners, Pike was set to tackle the native cross-chain lending narrative
• Given this narrative, Pike was able to garner mindshare and attention across both EVM and non-EVM communities. Pike beta launched in February 2024
• We conducted a successful community presale at the end of Q1 2024, raising $6.45M from the Pike community
• Pike suffered two security exploits in April 2024, resulting in a loss of $2M
• All users have been fully repaid in May 2024. User restitution plan can be found here
• We are currently working towards the relaunch of Pike, based on a new architecture design that overcomes the challenges we faced when building Pike beta

Key Learnings

1. Balancing trade-offs between shipping speed and technical debt
2. Effective and transparent communication with the community
3. A new modular approach to building native cross-chain DeFi applications
4. Token launch experiments to combat airdrop farmers and mercenary capital

Forward Looking

• Our vision remains unwavering, to drive progression for decentralized finance by building and enabling innovative on-chain financial primitives
• We are excited about the future of DeFi and we are confident that our team has the capability to push the envelop in solving for on-chain capital efficiency
• In order to realize this vision, we are committed long-term to allocating resources and dedicating our efforts to establishing the following core functions and guiding principles:

Talent acquisition and team building

• To identify, empower and align talents
• Continuously evaluate and strive to bolster our roster

Protocol development

• Build highly secured, innovative and composable smart contracts that can solve existing problems in DeFi
• Establish best practices for smart contract development
• Empower protocol teams and open source contributors to leverage our smart contract solutions

Product development

• Be obsessed with user feedback and adopt an agile approach to building consumer applications
• Enable third party developers to build open source consumer applications

Business and partnerships development

• Focus on building sustainable and mutually beneficial relationships with: networks, upstream/downstream protocols, infrastructure providers and liquidity providers

Community building

• Build effective communication channels and implement a noise filtering feedback loop system
• Execute relentlessly and timely communication
• Be willing to experiment, transparent about our approach and have fun

Token

• Treat token as a standalone product and focus on distribution
• Incorporate token as an essential part of establishing protocol fly-wheel effects
• Leverage token to align long-term incentives and interests with stakeholders

Final Words

All the information I presented here regarding projects we worked in the past and are actively working on can be cross referenced via the corresponding Twitter timelines, DeFiLlama, project websites, blogs and on-chain explorers.

Daniel and I have embarked on our respective entrepreneurial journeys in our previous career before founding NUTS Finance. Despite the mistakes that we have made and learned from, we never have any malicious intentions for our users, community members, business partners and investors. We take pride in ourselves for being fair and honest founders with a high pedigree of integrity.

We strive to continuously improve ourselves in order to realize our vision as a team. Vamos!

Sources

ACoconut (@ACoconutDAO) on X
ACoconut on DefiLlama
AC token on Etherscan
Tapio Website
Tapio (@TapioFinance) on X
Tapio on DeFiLlama
Pike Website
Pike (@PikeFinance) on X
Pike on DefiLlama