Nov 25, 2022
zkLend X rhino.fi AMA Recap 01/11/2022
Episode 3 of our ZEND&FRIENDS AMA Series 04, ‘StarkNet Native DeFi’. Rhino.fi Co-Founder, Ross, joined Brian on our Twitter Space. Rhino.fi formerly DeversiFi, is a multi-chain, self-custodial DeFi platform hosted on Layer 2 on top of Ethereum.
Full Recording
Listen to the full recording on our Spotify now.
AMA TLDR
The ‘Why’ of rhino.fi [01:12]
I used to be an energy trader and made my way into crypto in 2016 because it was way more interesting than anything else that was going on. My co-founders and I started in an exchange called Bitfinex running a project called FNX which was an experimentation ground where we were looking at different scaling technologies for Ethereum and how we could replicate the experience of a centralised exchange in a decentralised manner. We got to explore a lot of emerging technology including things like state channels and other scaling solutions and then ended up spinning out a startup with Bitfinex as a supporter to try and build some of the stuff in the wild and that was the FNX project which then turned into DeversiFi and now some of that technology is what is forming rhino.fi almost four years later.
I think it was Ethereum that caught my imagination more than anything. I had been keeping track of Bitcoin for a while, but Bitcoin seemed kind of boring and didn’t get the use case for it at the time. Then this thing called Ethereum came along and being able to be the world web if you like blockchains caught my attention. And I realised that I was spending more time looking at crypto on Discord and Telegram than I was looking at my own Bloomberg terminal. So that was the time that I decided it was time to make the jump into a startup. Making the transition was kind of scary, I feel for people that are jumping into crypto now because there’s just so much going on. Crypto is this incredible blend of economics, finance, memes, and all this stuff, the transition is quite scary which kind of forms some of the basis of what we’re doing at rhino.fi as well.
I met my other co-founders at mutual interest groups in London. We all ended up bumping into each other with something around decentralised energy trading that got us all talking. We stayed in touch and Will was at Bitfinex and asked me why don’t make the jump and join crypto full time so I joined him and then Dan followed. It was all very natural and fluid, and seemed to make sense at the time. They’re a fantastic pair to work with, even after all this time, it’s amazing to be able to work with such smart people at rhino.fi doing something that we love.
Rebranding to rhino.fi [06:06]
We started with the DeversiFi project, trying to solve the problem of centralised exchange trading for professional traders. We wanted to replicate what you got on Bitfinex or Binance as a very high-speed DEX order book experience. We wanted liquidity, low fees, the order book, the APIs, and all the good stuff, that’s what DeversiFi was. If you go to rhino.fi now, one of the core elements is still this high-speed trading experience where if you make a trade on rhino.fi you’re not just tapping into rhino.fi liquidity but you’re also tapping into aggregated liquidity from other centralised sources like Bitfinex. So you get access to incredibly deep liquidity which is moving at a high speed for very low fees. That was the core tenant of the old DeversiFi product. But we realised that is not what professional traders don’t care about using a decentralised exchange or not, they want to leverage and have super low fees. They are very happy being serviced by big centralised exchanges like Binance and Bitfinex. We took that feedback onboard and at the same time, there was lots of other stuff going on in the industry. We also realised that the use case didn’t excite us, it’s just what we were used to, but there was so much going on and we could take the core technology that we built and make it so much better, servicing so many more people. And that’s basically what the rebrand is all about, taking a break from that old order book product to what we’ve got now.
DeFi Control Centre [09:05]
I think it’s really important to say what we are trying to turn rhino.fi to. We want it to be the platform that makes DeFi accessible to anyone. Not just new people coming into the industry, but also people like us that are working in the industry full-time. We want it to be a tool and a very useful platform. We are building what we call a DeFi control centre or kind of like a super app. Where anybody can come into rhino.fi and they can act as all of the best opportunities in DeFi, semi-curated but mostly the long tail of everything as well to act as the best DeFi opportunities whether that is the best yield or best token opportunities from the latest chain launches or L2 launches, whether it’s order book trading if that’s your thing, swapping, trading, transfers, bridging and at the same time removing all the friction that makes accessing these DeFi opportunities very difficult even for people like you and me — having to manage several wallets, remembering seed phrases, having to pay native gas fees, going out and finding these opportunities in the first place. That’s what we are building, this super platform where we can offer the best opportunities in rhino.fi to anybody all in a self-custodial manner built on StarkWare and other technologies where you are always in control of your assets and we as an operator don’t have access to them. When you connect to the rhino.fi app it’s built on the technology called StarkWare, which you are very familiar with building on StarkNet. It’s built on the StarkEx technology at its core so when you transfer funds from Ethereum or anywhere else to rhino.fi that is on a wallet or a vault in rhino.fi that only you have access to and we don’t have access to and if rhino.fi was to go offline you could always get your funds back.
StarkEx Validium [11:45]
The technology we are using is StarkEx and it’s the Validium instance which means that we hold data off-chain so we’ve got a data availability committee that holds user data off-chain and only publishes to the blockchain if the operator was to exit. The data availability committee is made up of people like StarkWare themselves, Consensus, Nethermind, and lots of great people. What that means is any activity that you do online is only known to yourself and the operators, so similar to a centralised exchange in terms of privacy, it doesn’t have strong privacy guarantees it’s purely no one can see what you’re doing on the app. This Validium technology also has other benefits such as very high transactions per second, and lower state updates when we are pushing to Layer 2, so lots of cool benefits of having that Validium including privacy. If rhino.fi was to go offline or anything then the data availability committee will publish that data on-chain to allow the full withdrawal of funds from L2.
Cross-chain Swap [14:21]
We currently have our core on StarkEx so when your funds are deposited on rhino.fi they’re in one of two places, they’re on StarkEx or in one of these other chains or outposts. So if you swap rhino.fi let’s say USDC to Ethereum that is all on StarkEx but if you want to bridge your tokens to Polygon and buy a new token on Polygon we then use some of our collateral to do that bridging, to begin with. So for the five seconds that the swap is in flight, we are using our collateral to do that transaction and then funds end up in your wallet on Polygon, we are acting as the middleman there. Now once you’ve got your funds on Polygon, so they’re no longer on StarkEx they are controlled by you again, we can’t then access those funds, they are controlled by your wallet. And if you want to do Polygon to Polygon swaps that are all self custodial there’s no collateral involved apart from your own. If you then want to bridge the funds back to StarkEx or you want to bridge them to another chain like Binance or Arbitrum then again it goes through our collateral the reason for this is we are not quite sure what users want yet. We are seeing a lot of bridges being hacked so the technology is still not quite mature enough yet, and also we haven’t landed on exactly what users want from the swap experience. Once the two of those are nailed down the plan is to decentralise all of the steps not just the bridging step. We’ve had the Polygon bridge running for a while now think it’s just crossed twenty thousand transactions so it’s a really good way of bridging between rhino.fi and polygon, we also have a bridge to Binance and another one to Arbitrum and we’ll be adding these bridges as we go forward and then over time decentralising them or connecting up to other bridge protocols given that many great teams are working on that probably that hopefully we can just piggyback off the back of them and connect up what we’re doing to them. What it does allow is a nice swap experience. When you go and click in rhino.fi and you try to do a cross-chain swap it’s just effortless, you don’t even notice it’s happening, it’s brilliant. You get all the information you would from swapping on let’s say 1nch but you get that in a cross-chain way and it all ends up in your rhino.fi account, you see it on your portfolio, and you don’t pay any gas fees, it’s brilliant, please give it a go.
ParaSwap [18:52]
If you can think of a swap from StarkEx to Polygon there are a couple of different steps, there’s the stablecoin step which does the bridging from StarkEx to Polygon, we use our collateral for that so there’s no slippage you get one-to-one whatever stablecoin you start with you end up with the same stablecoin in Polygon in this case. Then there’s the trade element of it, for example, if you wanted to swap USDC to the “Banana coin” you then need to access the liquidity on that chain so we are working with ParaSwap to make sure that we get the best prices regardless of which native DEX that token is on. So every step along the way we are trying to minimise slippage to the user and one of those elements is by using ParaSwap.
There hasn’t been a need to look anywhere else, the ParaSwap team is brilliant and then lots of cool new features. They just launched limit orders that we are looking to offer, maybe even stop losses, cross-chain stop losses would be cool on rhino.fi and that would go through ParaSwap. We also work with them when we look at new chains so that if we launch they launch at the same time. Awesome team, very happy to be working with them.
Yield Farming [21:16]
The investor/yield section of rhino.fi is the one that gets us excited. We are working quite hard on it at the moment because there’s a lot that needs to happen before we think it reaches the point where everyone needs to be. The way it works is we use our collateral, first of all, anything that is on the yield section side of rhino.fi is something where we are happy putting our company funds as well, so we put the funds into Yearn or Lido and we then bring those LP tokens onto the platform and then users on that yield section can essentially buy those tokens but it feels like they’re supplying directly to the protocol. The benefit is no gas fees to the users, they can deposit or withdraw instantly, so you can have your funds working hard for you in the yield earning opportunity but then if you wanna access the latest hot new token you can one-click exit that yield position and then you can go on to swap on rhino.fi without paying any gas which is a very powerful way of presenting that to people. Over time we want to increase the options and availabilities like cross-chain swaps, fixed income, and lots of staking whatever chain they’re on. It’s still very young at the time, there are only about four opportunities on there but it’s an area of the platform we are very excited to be growing.
The way it will eventually go is we’ll move to something called DeFi pooling where every time the batch goes on-chain to update our Layer 2 state all of the activity will be aggregated into that batch and it will directly interact with the protocols and that is the way they are going to scale. We can’t use collateral for everything, the plan is to implement like DeFi pool which we already created as a part of our Layer 2 AMM design. Lots of cool things happening in exciting ways to grow that whole area of the app.
Choosing Where to Buidl [25:35]
We probably need to be more rigorous in how we select what we are going on too. We’ve got the projects and platforms that we like the most like StarkNet, zkSync, and Near, all of these that we like the look of, they have great communities and lots of new fresh exciting opportunities so those are the ones that we are always going to prioritise. We’ll go more in terms of what users want, and what the demand is. For example, it might be that we put more resources into other L1s instead of another L2 just depending on where the users are. For example, weren’t that excited about Aptos just because the whole way the thing has been fundraised and the players involved and all of that stuff, we do look at the reputation of the blockchains and the Layer 2s when deciding cause at the end of the day we don’t want to put stuff and run it by users until it’s been tested so for those chains we will need to wait a bit to make sure they’re not just attracting rug pools and the bad actors.
ZK Rollups [27:42]
We want to be supporting L2s, and we love ZK Rollups this is what Will’s been talking about and been passionate about for years, we met StarkWare back in 2018, I think it was. And we think that ZK Rollups and EVM compatible or equivalent are the way forward, we want to be supporting those technologies which are why we are so excited about StarkNet and zkSync, that’s the main thing. — Ross
We will start looking at things like unique opportunities on different blockchains or types of L2s. For example, it may be that we want to prioritise working on something else because we think there’s gonna be lots of cool native opportunities like there will be on StarkNet. After all, it’s more specialist instead of supporting the next copycat Optimistic Rollup that’s got a very small change and isn’t going to offer users anything new.
StarkEx to StarkNet [30:00]
We are very excited about StarkNet and have been ever since it was mentioned and we have been examining for a while how this fits in our tech stack. First of all, we will be posting what we call an outpost on StarkNet in the same way that we launched outposts on Polygon and Binance for example, and from that outpost, we hope to grow. So we use these outposts to be able to have that composable layer so we can do other things from that outpost. So it might be that for example, a vision would be of rhino.fi’s invest section you would want to click Invest or Lend into a zkLend position through your rhino.fi account for a fraction of the cost if you had to use another bridge or anything like that, so that’s the end goal. Looking at StarkNet maybe then there will be a full migration eventually, but the current plan is to have different outposts on lots of different chains and L2s and use StarkEx as the accounting layer, maybe that will change over time as the technology changes as matures, but that’s the plan for now.
Your Take on the Future of Web3 [34:48]
I didn’t think there were going to be lots of L1s existing at this time three years ago. I thought it was going to be a winner takes it. I think we will see a winner emerge in each of the two sections, ZK Rollups and Optimistic Rollups. I’m excited about ZK Rollup because of the relatively short time it can take to withdraw your assets from that Layer 2 to any other chain, it’s a lot faster than the 7 days for Optimistic Rollups.
About rhino.fi
rhino.fi (formerly DeversiFi) is a multi-chain, self-custodial DeFi platform hosted on Layer 2, on top of the Ethereum blockchain. http://rhino.fi has evolved into a DeFi hub where users can trade, swap, yield and stake their cryptocurrencies
Leveraging on StarkEx as scaling engine, rhino.fi settles transactions within the protocol and positng records back on layer 1 Ethereum, resulting in reduced transaction fees and faster transaction speed, while providing full on-chain security
Earlier this year, rhino.fi expanded toward multi-chain by adding cross-chain swaps (partnership with ParaSwap). Users can now swap tokens between Ethereum and Polygon without complex bridges and move assets between strategies without costly gas fees
The team also has plan to extend onto other EVM chains, such as Avalanche, BNB Chain, Optimism, Arbitrum
The team completed the rebranding, and DeversiFi relaunched as rhino.fi in July with the aim to provide a simpler entry-point that allows anyone the access to the best DeFi opportunities in one place, paving the way for next wave of mass adoption
rhino.fi team recently announced integration with zkSync. This integration includes bridging zkSync with existing supported networks (e.g. Ethereum, Polygon, BNB Chain & StarkEx), and soon directly integrating with other DeFi projects building on zkSync
This section was adapted from our original thread, here.
About zkLend
zkLend is an L2 money-market protocol built on StarkNet, combining zk-rollup scalability, superior transaction speed, and cost-savings with Ethereum’s security. The protocol offers a dual solution: a permissioned and compliance-focused solution for institutional clients, and a permissionless service for DeFi users — all without sacrificing decentralisation.
