The Benefits of Building a DeFi Project on Cardano | Steven Ward, Founder of Vyfi (FTC ep 21)

FinTech Chat (FTC) is a series of educational & informative interviews with world professionals in the FinTech / Crypto / Blockchain communities. We aim to provide content that is digestible in multiple mediums such as video, audio (podcast), and written (blog) form!

 

FTC Episode 21

In this episode, Blockchain Wayne interviews Steven Ward, Founder of Vyfi. Our guest shares some great insights about how different when a DeFi project is built on Cardano instead of other popular blockchains. He also gives some opinions on how a truly governance token model should run to get the most benefits for the project and its community.  

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos and grammatical errors may be present.

 

00:00

Intro: Interviews on crypto blockchain with your host, Blockchain Wayne on FTC

 

BLOCKCHAIN WAYNE: Hey everyone, welcome and thanks for watching. Today we’re joined by Steven Ward. Steven is a founder of Vyfi. Steven, thanks for joining us today to talk a little bit about your project Vyfi. 

 

STEVEN WARD: That’s an absolute pleasure, mate. It’s a pleasure to be here. 

 

00:29

BLOCKCHAIN WAYNE: Awesome awesome, well, man, I can’t wait to jump in to learn more about what Vyfi is, but first and foremost, tell everybody a little bit about yourself, your background and kind of what led you to where you are today? 

 

STEVEN WARD: Yeah absolutely so in crypto markets, I’ve been there for about four or five years, now that I’ve been trading, but prior to being involved with crypto markets, I was a hedge fund trader, I’m focusing on short term interest rates within the hedge fund. We were building… you know, bots. We were building essentially matrix systems to be able to automatically find differences between markets and then trade the differences between markets from there. I moved into stock brokerage because the essential thought that I had particularly after Brexit was I think it’s a lot better to take a cut of everyone else’s trade than it is to risk it all myself and in stock, in brokerage, we actually ended up working for an analytics platform where we were mostly analyzing stock market, the Australian stock market of course, because that’s where I’m from and then now, I’ve taken the dive and started running my own project in crypto. 

 

BLOCKCHAIN WAYNE: Awesome awesome, so Vyfi has… has a lot of things, a lot of things going on with it, I know. I heard about them at the Miami Crypto Experience a few weeks ago but tell us what… what is… what is Vyfi? What’s the main goal of Vyfi? 

 

STEVEN WARD: Yeah absolutely. The main goal of Vyfi is really to bring the tools that DeFi have to offer and to try and bring it to as many people as possible. So we really have this guiding principle that you know the majority of the world aren’t engaged with the cryptocurrency and aren’t engaged with these technologies as they exist. And there is already so much power there that we have at our fingertips, we want to bring that power to people and empower people through DeFi. 

 

BLOCKCHAIN WAYNE: Awesome awesome, so Vyfi… you know, most people are familiar with DeFi mainly being on the Ethereum chain, and you guys chose to do it on Cardano now for some interesting reasons, some obvious, some maybe not so obvious, so tell us about the reasoning behind building your project on Cardano. 

 

STEVEN WARD: Yeah we’ll start… we’ll start with the not so obvious that is of course, well look not of course, sorry that is the philosophy that guides the actual construction of the Cardano blockchain itself, Charles Hoskinson, he is one of the forefathers of crypto at this point I’d imagine, but he’s guiding philosophies to bring crypto to the people right and that philosophy fits in with exactly what I wanted to do when I started this project. So we actually did begin as an ERC20 token so much so we printed an ERC20 token. You can even go look up the address, it’s all there and it was after we printed the ERC20 token, we were ready to rock and roll that we suddenly said wait a second, what we actually want to achieve here doesn’t align as well with what’s happening over here with Cardano. So we decided to take the leap and make that change which was really difficult considering that people can write in solidity which is the language that runs the blockchain of Ethereum and the language that runs Cardano Plutus was invented six months ago so… 

 

03:43

BLOCKCHAIN WAYNE: Yeah, I had a dev in Miami. We were talking about Vyfi and he was like god that’s going to be hard considering… you know, and he mentioned Plutus being a challenge to… to do but there’s a lot of benefits of running on Cardano, so tell us a little bit about that and… 

 

STEVEN WARD: Yeah absolutely, so one of the biggest benefits is of course the scalability and that comes down to transaction fees, and also the rate at which transactions can be processed so when we’re dealing with Bitcoin, can only do 2000 transaction at once, Ethereum, I believe is 30000 on a block. Don’t quote me on those numbers. But Cardano has got the ability to essentially scale that to whatever the demand on the chain is at that particular point in time. Furthermore what is really interesting is that the actual language Plutus that we just mentioned by design, it’s built from Lambda Calculus. I don’t want to get too heavily into technicalities, but Lambda Calculus gives you some inherent security benefits that you don’t get from object oriented programming. So in the ability to check over maths and look over security possible security flaws, it’s actually more easily achievable, so multiple technical reasons… 

 

BLOCKCHAIN WAYNE: A little bit of a learning curve for… to get more people into the project as far as developers, but greater benefit, seems like a bigger benefit (STEVEN WARD: Yeah) the reward… the reward as a benefit is greater than the initial challenge to… 

 

STEVEN WARD: That’s exactly it… well we’re here for the long run. We want to be operating… you know, well into the future, so being not something where we’re trying to do it overnight, we recognize that it’s better to do it correctly and to do it correctly first up. 

 

BLOCKCHAIN WAYNE: Gotcha, so tell us, tell everybody where… where is Vyfi in the stage of their projects, like what’s… what’s current going on right now? 

 

STEVEN WARD: So right now, we’re kind of in the pro… We’ve minted a token. We’ve done a pre-ico. We’ve started building up our community. We’ve got quite a few active members. We’ve got a trading education channel, being a hedge fund trader. There’s quite a bit that I can offer in that field and most importantly I’d say, we’re… we’re constructing all the ecosystems that we require to get this up and running. 

 

BLOCKCHAIN WAYNE: Nice nice, and so what do you see as far as, say potentially a road map, what are some of the next steps that Vyfi is taking? 

 

STEVEN WARD: Yeah absolutely, so we’re looking to open up with one of the initial AMMs on Cardano chain, so similar to a Pancakeswap now that is going to be one facet of our project that we’re looking to have open fairly soon after the Alonzo fork which is when smart contracts become activated or basically the… the Cardano blockchain turns on in the sense that we think of Ethereum or we think of Binance from that will be August hopefully. But we’re always relying on another… on another company there, so we’ll say August, September now within that, we’ve already got our neural net, so we’ve essentially got this smart contract called the bar now, it is actually something that we took from Sushi we’ve adapted it from Sushi, because it’s definitely working differently. So we share profit from our AMM to people that stake Vyfi at the bar, so it’s our profit share mechanism for the automated market maker. But we also are running a proprietary trading firm alongside this project, and essentially the proprietary trading firm is being run using a neural net that we’ve built. I don’t know if anyone here knows about neural nets. Should I briefly describe what they are? (BLOCKCHAIN WAYNE: Sure yeah absolutely) So a neural net is essentially a IT system that allows you to get a computer. You feed that computer information and then the computer teaches itself the most optimal way to interpret that information depending on what outcome you want to give it on the other side. So in our circumstance, we feed it the information of liquidity pools which is the value between the currencies inside those liquidity pools, the rate, and then we give it the payout ratio that’s being offered by the AMM. And we essentially look at what is the impermanent risk between the currencies whilst weighting that against the payout between the liquidity pools. And then by munging all this data, we can essentially give our bot a risk ratio. Do we want a low medium or high risk ratio and based on that and the thousands of liquidity pools that we’ve put in, it will give us an approximate, well not an approximate, it gives us an exact answer. We try to keep it towards that level as much as possible of what are your 25 or 35 or 45 best liquidity pools. And how you should proportion your… and how you should proportion yourself based on the risk that you’re wanting to achieve. 

 

08:41

BLOCKCHAIN WAYNE: Oh nice nice, yeah I’ve seen some… I’ve seen some early renditions of the swap. It… it looks like it’s going to be a… you know, great platform. And (STEVEN WARD: yeah) I was telling you before we started recording, right? Yeah the obvious reasons, you know… we talked you talked about the less obvious that they’re not obviously… 

 

STEVEN WARD: I didn’t even mention the obvious. 

 

BLOCKCHAIN WAYNE: If they’re in gas fees right, they’re in gas fees has really caused a lot of projects to migrate away from Ethereum… you know, props to you guys for going on… going through something that’s cutting edge like Cardano versus going just settling for a Binance Smart Chain. And (STEVEN WARD: Yeah) I don’t know what… what are your feelings in far as far as Binance Smart Chain versus Cardano. I know there’s some major differences, maybe you can talk about the reasoning for that?

 

STEVEN WARD: Look let’s… yeah, that’s… that’s a huge one. The concept of Binance Smart Chain is based on this idea of Ce/DeFi as CZ said described it or centralized decentralized finance. (BLOCKCHAIN WAYNE: Yeah) Now yeah… ignore… ignoring the oxymoronic statement that… that is… what he’s essentially trying to get at I think in principle… I don’t know I’m not him, is the idea that you can have an authority that is still in some regards in control and that you can still report and you can still have things occur through, right, but by doing that and engaging with that system, you’re inherently giving up that control that other blockchains provide now as for… you know, it’s… we’re not gonna do a full pros and cons list, but as for a large part of the crypto community, what I can say is that the philosophy that this technology is built on is not the philosophy of giving up control to a centralized authority. (BLOCKCHAIN WAYNE: Okay) so when we’re going to set out our project, we’re not going to begin with the foundation of giving up control to a centralized authority. Our control is to the governance token. 

 

10:42

BLOCKCHAIN WAYNE: All right, awesome, and that’s kind of figure… I figured that was the answer you would give. Most people don’t realize that you know Binance Smart Chain mainly… you know, Binance controls the node, so it’s… it’s a blockchain. But they… you’re right, they pretty much control the nodes, and although when I hear people say that, I mean I know that’s what we’ve… we’ve adapted to call it CeFi, DeFi, centralized decentralized finance but yeah when you just sit and think for a second, it’s… it’s an oxymoron you can’t have both right? 

 

STEVEN WARD: Yeah, you absolutely cannot have both. And it’s… it’s within… it’s within that structure of… you know, and we should actually add in case people don’t know what a governance token is essentially the people that engage with our ecosystem, and in turn earn our coin will be the people that get to vote on what takes place in that ecosystem. So for example, if we want to introduce new farms, we would put a vote saying hello, we’ve been approached by 15 projects, we only want to put up five, which five do you guys want to, which five are we going to put up, not do you want to put up, which ones are going to be put up. This is your decision, not ours, very much like shareholders in a shareholder meeting, right? You don’t do the day-to-day operation, but with things that will impact your investment, you have a say in the process. 

 

BLOCKCHAIN WAYNE: Yeah, and that’s really really important, I think, people miss that when they look at default, when they look at governance tokens, most people are just looking at it for gains and or what they can earn passively through different protocols. But it’s important because to have a say in what… what happens versus you just kind of hoping that whoever’s in control makes it’s going to be a decision. And you’ve seen that… you know, I know we brought you on here to talk about Vyfi. I do want to talk about briefly because it’s… it’s kind of related your recent research work. You were part of a team that helped identify major uncovering with some rug pulls recently. 

 

STEVEN WARD: Yeah that’s correct. Look yeah… and it’s exactly in that front when you look and it’s really interesting at Poop coin. We are actually having… we are actually speaking at Poop coin. And this is the topic that we’re discussing at what point do you allow anonymity to get in the way of a good project, right? So you’ve got the idea of a governance token which gives the people the control but if you give the people the control, but the team that sits behind giving up that control is anonymous, then do you actually know that you’re getting control so to speak or are they just feeding you a false control, because you’ve got no way to actually identify whether you’re being given something real, are these the real options we have right now, where’s my backup to be able to check, who can I talk to some person with a username on telegram right? These questions are super complex. And I think they’re going to be plaguing… you know, our industry for years to come. 

 

13:51

BLOCKCHAIN WAYNE: Yeah yeah, it’s definitely… definitely a problem… you know, because it all comes down to trust… you know, and in DeFi, you think you shouldn’t have to trust the person, you should trust the tech, trust the smart contract, but there’s human input into those smart contracts and that can be manipulated. And you guys identified an intentional rug pull from a project that… you know, that was flaws in the smart contract that was you saw, you personally were impacted by that, right? 

 

STEVEN WARD: Yes, myself and a bunch of others that I personally know, but it’s really interesting within that as well, because a team such as that one sent one set of contracts to one auditor and a different set of contracts to another auditor. Now both of these auditors have no idea who these anonymous teams are, where they’re located or what they’re doing. Or they run only through vpn. They run only through username and they hide every time that there’s evidence of a time, time zone. Now when you’re dealing with a team that is refusing to identify themselves and there’s no way to be able to verify, because they’re not telling you who the other auditor is, between auditors whether you’ve actually received the same contracts, well then you kind of wind up in a position that, yeah we have a governance token… you know, but that governance token doesn’t actually represent any true control in the hands of the users. It only represents control in the hands of the devs, because they still haven’t given you anything. 

 

BLOCKCHAIN WAYNE: Yeah yeah and… you know, that brings up a good point because in… in DeFi, they could have their smart contract if… if a team has malicious intent, they can have a smart contract audited, and then alter it after the fact and publish it and say hey we have the audit when it’s not really the true project. So that’s one thing about after we first talked like it’s kind of there needs to be some checks and balances post audit as far as verifying that the audited smart contract is the one that’s… that’s put out there or not. 

 

STEVEN WARD: It’s super interesting you mentioned that because that’s a really nice circle, there a lot of what you described there is some of the issues that Plutus as a language help us solve. And it is… it comes from the advantage of Lambda Calculus. But there are some safety measures in built within Plutus that don’t exist within Solidity that allow us to hopefully negate some of those issues. 

 

16:25

BLOCKCHAIN WAYNE: Nice that… that’s… that’s great to hear because… you know, obviously trust just needs to be implemented… you know, people need to be able to have trust in the system and absolutely without trust you have… you have, these projects that are just doing rug pulls and… and briefly, I don’t want to get into too much detail because… you know, we’re here to talk about Vyfi, but you identify with… with this one hacked with Uranium, you got a special name for it, because it’s not just a single rug pull, right? So briefly what would you guys uncover? 

 

STEVEN WARD: Yeah we uncovered a bit of a rug farm, basically a set of what appears to be a set of devs just pulling multiple rugs left right and center. I don’t really want to name drop any projects we think might be associated with it now in case it’s not. But yeah, the evidence is all out there you can… you can certainly go look it’s all in the blockchain. 

 

BLOCKCHAIN WAYNE: Yeah… yeah, and… and that’s the thing about DeFi, anyone can launch a project, any dev, public anonymous, they can launch a project that doesn’t necessarily mean it’s legitimate. So people chasing games need to do their due diligence, so obviously the team at Vyfi, you guys are public, you’re not an anonymous team, what other… what other… what are the things that is your team doing to… to help people ensure that hey you know when Vyfi launches with their… their AML, with the Swap, with the DeFi protocols, what controls are you guys putting in place to (STEVEN WARD: yeah) reassure people? 

 

STEVEN WARD: This is actually something that I’m pretty happy with. I kind of designed it myself. I don’t… I wouldn’t say it’s world first, but it was a bit of a creative design. What we’ve essentially done is we’ve created a holdings company that’s our proprietary trading firm that’s essentially managing money on behalf of ourselves and private investors. And we’re going to be sharing the profits from that into our bar. From those… from that the actual governance token itself or our DeFi platform is all held in a trust. Now this trust has got the trustees as our holdings company but the beneficiaries is the governance token. So essentially whilst the trust or is being managed on behalf of the beneficiaries that just means that we are caretakers of what the beneficiaries are deciding. In other words we’re there to ensure a smooth transition of decisions made by the beneficiaries which are the gut which is the governance token in the first place. So we’ve… we’ve kind of had to yeah… talk to lawyers and there’s… there’s still a lot, there’s still work, there’s still a bit of work left to go. But we’re essentially want to set it up. So that not only would we be a governance token from a crypto perspective, but we would be a true governance token from a legal perspective as well that we as the holdings company would actually have no legal recourse to… let’s say our governance decides that they want to vote away 95% of our founders tokens, right? We’ve kept about one percent. I think it is to split between founders and for some marketing if they decide to vote away 99% of that, we don’t really have a choice right because legally we’re bound to the decision of the governance token, right, right so this is a sort of an implementation of a new layer. I’m hoping to be a new layer of trust within crypto itself and I feel also to second that Cardano is the perfect blockchain to attempt this new layer of trust. 

 

BLOCKCHAIN WAYNE: Yeah yeah absolutely. I mean that those are… those are some great things that… that needs… needs to happen, because I think a lot of times people will look at projects. And I’ve seen so many where… you know, the… the founders and team tokens is 70-80% of… of what’s out there… you know. And that’s okay pre-distribution but to… to especially if it’s a governance token having some level of distribution, that’s great. You know, you guys are definitely doing it the right way. I’ve seen… you know, some air drops recently of the tokens (STEVEN WARD: Yeah) so… 

 

STEVEN WARD: They’ve gone wild as well. We had some really good response. We got out almost 3000 original addresses from that. 

 

20:55

BLOCKCHAIN WAYNE: Nice nice, and that’s great, get more people holding the project, get it out there especially with it being a governance token and let the community… you know, let the community really drive that thing. Because that’s one thing I’ve learned is with projects I’ve seen a lot of great projects without community, they really don’t get adopted some of the best tech in the world, doesn’t matter if it’s great, if you aren’t using it. So you guys have definitely figured out that part as far as you know community and building trust in that community is going to help it grow versus just and you’re building a community based on trust and not a community based on pumps because we’ve seen both right? 

 

STEVEN WARD: Oh absolutely, and that’s… and that’s what’s really interesting. I think you can really see the difference. Please any listeners come and join our trading group. We’ve got a really really in-depth trading group that’s been making quite a bit of money recently. I’m rather proud and impressed with how we’ve been doing, but the reality is you don’t… and this I think is something is someone who runs a facebook group, you’ll say this, you’ll agree with me you don’t make money by trade begging and you don’t make money by rocking up and going: “Hey guys I’m too lazy to do my research, could you do me a favor and tell me every coin that I should buy? 

 

BLOCKCHAIN WAYNE: Oh man, I’ve got a thousand dollars, what should I put it in? I got that you know. 

 

STEVEN WARD: Yeah just absolutely useless, so our trading group is much more focused on the idea of how do we actually develop the skills to be able to find out what we need to find out to make those decisions right now and in… in teaching, I’ve… we’ve got now 2300 or so people that follow us there in teaching these skills and showing people what you need to do to find your own research. I found that we’ve been building that level of trust with the community in the first place because I’m literally telling the people: hey guys this is what scams look like, here is a couple of examples… you know, you can literally go through them right. And then they can look at us and they can see the stark contrast of what’s taking place. 

 

BLOCKCHAIN WAYNE: Awesome awesome. Yeah that’s why I wanted to bring up the… the rug pull incident. You know, the rug farm essence because it’s important for people to be aware of it, but also know… you know, as a founder of a project, you’ve also got a vested interest to make sure which… you know, no matter what but you… you’ve got the knowledge to make sure that your project is solid and looking for the things one that people want to see and one and then innovating on some things that people need to see or need to look for in other projects that… as that happened, I think that’s what’s gonna happen over the next few years is certain projects are gonna continue to set the bar higher and different things to improve the trust, improve the security, improved insurance of people’s funds. Because if… if I… if I go into a DeFi protocol and it loses value just because of the market, that’s just… you know, it is what it is, but if it happens like we talked about with the rug pull, I mean those are nefarious malicious actions that are taken, that are criminal… you know, basically. 

 

STEVEN WARD: Exactly, and you can’t protect, you can’t risk manage criminality, right right? And I’m a big believer in trading. I’m not going to feel sorry for you if you come to me and say oh my god I went all in on Doge right before the wallet that owns 28% of all the supplies dumped. I’m like, yeah well… you know, you probably shouldn’t have gone in when you know one wallet holds 28% of the supply. Yeah exactly right, I’m not going to feel sorry for you there, but that said, if you’re in a doge liquidity pool and then your liquidity gets pulled and you lose all your money, that’s how can you risk manage that you’re done. And actually on what you said… you know, I think we’re in a really interesting point in this industry where the… I really feel difficult calling myself a leader because I am fairly new to doing all of this, but the leaders in this industry need to start looking at ways of as you said innovating and coming up with new ideas on how to build those trust levels right? If we want the world to be able to come to us which is realistically what we want right, we are here to change the world, we are here to make sure that these central powers, these banks aren’t taking your money, and then doing derivatives with them and making you know crazy 700 percents on it and then completely bombing out the 2000s like 2008 completely bombing the housing market right? We’re here to stop that from taking place and instead, give you the power to decide how that’s managed (BLOCKCHAIN WAYNE: yeah) But how can you do that if you’re scared that at any point in time, my money might be stolen from me 

 

25:37

BLOCKCHAIN WAYNE: True true (STEVEN WARD: You can’t… you can’t) Trust is I guess the the lubricant that makes the wheels turn right, so…? (STEVEN WARD: Absolutely it is) Yeah cool, oh sorry that was a little bit of a side note. Hey Steven, look man, this has been… this has been great talking. As we wrap up, let’s tell everybody where can they find more information about Vyfi, where can they follow you guys at? 

 

STEVEN WARD: Yeah absolutely, so visit our website www.vyfi.io and that’s going to be related to our app vy.finance. Don’t go there though, that’s currently a car dealership, because we’re getting trolled by domain by an Australian team of domain… domain trolls. They bought it out from under us anyway 

 

BLOCKCHAIN WAYNE: That happened a lot, then they tried to make it all for selling it eventually. 

 

STEVEN WARD: Yeah yeah exactly exactly. That’s all just a bit of fun but yeah so vyfi.io and then we’ve got our white light paper there. We’re currently constructing our gitbook to further explain how all the prongs of the business sort of combine and come together. But there’s a really nice sort of easy chart which lets you just see it visually and then I would highly suggest you know our team is all public, so you can verify all of our experiences. So we’re building the neural net with propeller. …or with the minds from propeller.ai, not from business itself but the same people that started that company there. So they’ve got experience building neural nets for property markets and geospatial data for the last 15 years. Oh well sorry, they’ve only been doing eurolands but like seven so since they were doing them really they were one of the literally one of the researchers at Melbourne University that… that was researching these things. Yeah and definitely look us up join us on Telegram, join us on Discord. We run the trading group in Discord. And you know, swing in sega day… and you know, you’ll probably learn something about trading hopefully. 

 

27:38

BLOCKCHAIN WAYNE: Cool yeah, I’m definitely gonna check that one out. All right all right, Steven man, it’s been a pleasure having you… having you on today talk about Vyfi, all the great things that happen. You know, most people don’t hear about projects until they’re… they’re fully launched and rolling. And you guys are still in the process, so it’s a great chance for people to start doing their due diligence, learn more about Vyfi they want to get involved. And you know, it’s… it’s going to be exciting hopefully. I definitely get what you’re saying as far as you’re relying on another company you know but hopefully (BLOCKCHAIN WAYNE: Yes) in August is… is a go and either way, it’s gonna happen just… you know, we don’t know how delays can happen in the space, but hopefully that’ll launch and looking forward to seeing some great things and bringing you on after… after all that just to talk about some of the progress and (STEVEN WARD: Absolutely) PVL and all that great stuff for… you know, from an active project. 

 

STEVEN WARD: And on that point on that note as well, we’re pretty certainly going to be there in October. I believe at… at the Miami Crypto Experience, the Miami Crypto Experience so hope… hopefully we’ll be able to follow up with how we’ve been going since launch. 

 

BLOCKCHAIN WAYNE: Yeah I was looking forward to that for sure, so all right, Steven thanks again for joining us, thank you so much. Awesome everybody, thanks for watching and we’ll see you all in the next episode.

 

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About Steven Ward

Steven Ward has worked in Markets for 7 years. Starting as a Hedgefund Trader at Genesis Proprietary trading, where he traded in STIR’s (Short Term Interest Rates). Moving into brokerage and analytics after a few years on the trading floor, Steven has worked in all aspects of trading, from market operations, client management, analytics, through to back-end process management within the Australian regulatory framework. Steven brings these years of experience to the project as the driving creative force behind Vy.Finance.

 

About Blockchain Wayne (Host)

Wayne has been managing, teaching, and coaching high performing teams for over 20 years. He has a passion for helping and teaching people and a passion for cryptocurrency and blockchain projects. He has created various coaching programs and partnerships with select education platforms and cryptocurrency program tools.

 

You can learn more on his website: https://www.blockchainwayne.com/