Saddle x Geode Q&A
13 min read

Saddle x Geode Q&A

TL;DR

  • Saddle hosted its first Twitter Spaces' event with one of their partners - Geode Finance.
  • In this partnership, Geode provided Saddle with their own ETH2 staking solution.
  • Follow Saddle & Geode for more information

Listen Here: https://www.youtube.com/watch?v=SRNZ4DuXMvE

Partnership Announcement: https://geodefi.medium.com/geode-partners-with-saddle-finance-36392292d09c

Transcript:

Bianca|Saddle 0:00

So what do you envision working with us in the future with the partnership and growing with what we have now with this solution?

Oranges|Geode  0:12

Well, I think, I think I think someone having their own having your own needs to stake the solution just just adds another another layer to your product offering to users. You obviously do ETH, and Bitcoin swaps and some stable swaps, but being able to facilitate ETH to derivative swaps, I think is going to be a good revenue driver for the Saddle protocol, it'll encourage TVL, and also be a good revenue driver, by us allowing you to stay keep as well on top.

It’s going to be it'd be a great TVL job for you to drive revenue from your swaps. And also, it'll drive additional revenue from acting staking as a service as well. So we think Saddle is going to be-will benefit greatly from this solution. But also, you will be a key part of the Geode ecosystem by being a liquidity provider for our wider ecosystem.

Bianca|Saddle 1:16

Thank you for that. Um, does anyone have any other questions? So far?

DeFiFry|Geode 1:23

No questions.

Weeb|Saddle 1:25

Again, I can ask a question. Let's see. Well, what are the main differences between Geode Finance and other staking solutions that are already out? And what is Geode Finance trying to solve that is different from other staking solutions.

Oranges|Geode 1:44

So if we take Lido, just as, because it's the most obvious example of a staking solution out there. So they're basically a semi-centralized vanilla staking solution where users can stake ETH with Lido for example, they take a fee, and you get stETH. And that's, basically it.

What Geode is doing is, it's not really a B2C solution, like Lido, it is a B2B solution. So what we're doing is we're providing DAOs with a white label staking solution for their users. So what we're trying to do is decentralize the staking space, bring staking to all projects in the wider Ethereum ecosystem, and allow anyone to be able to provide any doubt be able to provide staking solution services to their users, and improve composability and capital efficiency within the ecosystem by giving them their own staking token.

So it's much more of a B2B play, allowing everyone to have their own staking solution rather than come stake eth with Geode, and we'll give you a token and and give a fee. We're creating a ecosystem with many, many different staking tokens for the different DAOs that join us to spread the risk. So there's no third party risk. And just makes staking more accessible generally. What was the second part of your question? Sorry.

Weeb|Saddle  3:19

I think that was the question. Perfect.

Bianca|Saddle 3:26

Thank you, um, does anyone else have any more questions?

Weeb|Saddle 3:30

I just wanted to ask-how are things looking on Geode Finance side? I know you guys launched it on testnet. How's things looking there?

DeFiFry|Geode  3:40

So far, so good. With the testnet, we've been having a bunch of users just come in and try it out. And just trying to, you know, sort out all the usual type bugs. But it's been a really positive experience. So far been getting really great user feedback. I would say, if anybody here in the spaces hasn't gone over there already and done. So just Geode.fi, and try the app out, you just need a little bit of a testnet ETH. We got faucet link on there. And yeah, it's been a really positive experience so far.

Oranges|Geode 4:10

It's also been a really useful way for our partners to kind of get a good visualization of what the product looks like. It's all good saying in theory, we're able to stake solution, but it's nice to actually see what Geode will ultimately look like and for partners to use our testnet to test their own products and integrate with that, and then see how things work. That's been really useful so far.

Weeb|Saddle 4:40

For sure, I think there's a world of difference between having a whitepaper and kind of like things that are logical and makes sense to build versus having like an MVP or like a product on testnet, so that you could actually realize that this is a real product that's possible, and people can actually use it right now today. So I think it's really cool.

Oranges|Geode  5:00

Yeah, exactly it, it also shows that, you know, we're actually building this and it's actually happening, instead of it will be in theory. A lot of what I found is when you speak to people they want to see what you've created. And if you haven't quite launched yet, so main net, then having testnet is a fantastic way of kind of showing not only intent, but also showing the product and giving them…pictures paints 1000 words they say?

DeFiFry|Geode  5:26

Absolutely. Yeah, there's nothing like being able to actually put your hands on it.

Bianca|Saddle  5:31

Another question I have is when working with the ecosystem and within different pools, what are some challenges that arise on your end?

Oranges|Geode  5:42

That's, that's a good question. So, I mean, Geode ultimately going to be a multi chain protocol. So one challenge for Ethereum, for example, at the moment is the fact that withdrawals aren't enabled on the validator side. So...and that's not going to be the case probably for another 8 to 12 months. So that's definitely a challenge, you know, keeping the peg on these on these staked assets, it can be quite hard to do, unless you have a huge amount of liquidity.

So that's, that's a challenge where we're working on and planning for. Other than that, it's getting enough node operators onto the network to diversify the the risk from a node operator side and to give our users as much choice as possible to be able to spread out their risk profile when it comes to node operator choices. I say they're the main two kind of things that come to mind straight away.

But then obviously, as we go into different chains, the stake environment varies and comes that comes with their own challenges. So for example, on Avalanche, which proofs stake chain, there wasn't really any communication between the P chain and the C chain. So there's challenges there in terms of how you move funds, now you move funds across in a trustless manner. So it kind of depends on the chain. And then yeah, the situation on each chain.

Bianca|Saddle  7:11

Thank you.

Weeb|Saddle  7:13

And I guess on our side for using VMM functionalities, you guys would have to kind of find a sweet spot for parameters like a- or the admin fees to kind of facilitate better swaps between different representations, and I would assume that will depend on amount of liquidity available, but also amount of...and users that are swapping through those pools.

Oranges|Geode  7:38

Yes, yes, exactly. So it's going to be it's going to be a bit of a work in progress as we launch and we and we see what liquidity is available for each particular...is to staking token. But we do plan to have like a fit a fixed fee on Geode decks for for swaps.

Bianca|Saddle 7:54

Is there anything more you'd like to add that wasn't specify in the Medium article that I want to share with members?

Oranges|Geode  8:03

Um, I think I think from a from an Ethereum standpoint, it’ s quite clear. And the plan is quite clear and documented. And we'll be making more announcements with more details as we get closer to launch on Ethereum. But I think I know Saddle as as gone multichain, you guys, you know, moved on to Arbitrum, and a couple of others. And that's, that's really exciting.

And I think, I think one thing is we can hopefully join you in that in this multichain journey. And as you go on, as we both go on to other chains that we’re both interested in there could be good opportunities to partner, to provide staking solutions on other chains and liquidity on other chains with Saddle. So I think watch this space in terms of multichain world.

DeFiFry|Geode  8:53

Yeah, I would agree definitely watch this space in terms of a multichain proof of stake world we want to we don't want to be you know, centralized in any one particular chain. We want to change staking everywhere for everybody. So, you know, definitely stay tuned.

Bianca|Saddle  9:11

Okay, great. Zim asks, What are your plans for growth? Lido already has huge market share

Oranges|Geode  9:22

Sorry, who has huge market share? Yeah, they're huge. They've got a they've got a huge monopoly in the Ethereum staking space. And the thing is, we're not competing with Lido. I think I think there's a common misconception that we're just another staking provider. But we're not. What we're doing is we're offering a vanilla staking solution to other projects to have their own Lido.

So Saddle can have their own Lido within Geode integration. Are they Sushi, Uniswap-any DAO can have their own ETH2 staking solution and can compete with Lido themselves. Geode just provides this ecosystem and the ability for these DAOs to do this. So, say, Saddle gets, you know, integrates with us and has only... staking solution. Lido charges 10% of awards, Saddle comes in and charges 5%. And suddenly you've got a massive advantage over Lido.

And even though with the way Ethereum is set up at the moment, withdrawals aren't enabled yet. But once withdrawals are enabled, and you got Saddle with 5% fee, and Lido 10%, you're probably going to see a lot of funds move out of Lido’s ETH and into Saddle’s ETH. This is obviously just an example. I don't know what Saddle plans to do on fees. But yeah, this is what this this, I think is one of the key things about Lido in the sense…we're not competing directly, we're actually providing, we're actually creating a lot of competition.

And in terms of how do we plan to grow? Well, it's a bit of a flywheel with every partnership we get with every partner who integrates with Geode and becomes a part of our ecosystem, the quicker we grow, and the more projects will wish to join, and the more projects will see the value of having their own ETH generating, you're generating asset, which they can use to benefit their own protocol in various different ways. Whether it's just simply offering a vanilla staking solution themselves and undercutting others in terms of fee, or creating new and exciting products, using that ETH token that you're generating token to benefit their users. I guess, probably the simplest example of that in a really easy to understand way in DeFi, say, lending protocols, where at the moment you deposit ETH, you get hardly anything for that, and you can borrow money against it.

But why can't we use a yield generating staked ETH as collateral for a loan and suddenly getting 5% validated rewards for your for your deposit, where you getting nothing at the moment, and that that's a great example, I think of how you can improve capital efficiency within the wider ecosystem. And when we move into a proof of stake world, in my opinion, at least, like all Ethereum should be revenue generating, and if not earning revenues, just seems like a wasted opportunity. And that's something we're trying to try and promote and to change.

Bianca|Saddle  12:34

Zim says “brilliant”, and thanks for the clarification.

DeFiFry|Geode 12:40

Yeah, absolutely. I mean, Oranges that are a fantastic job explaining it. And it's something that, you know, takes a minute to kind of wrap your head around that it's not just another centralized staking solution. It's sort of arming everybody else to have their own staking solutions.

Weeb|Saddle  12:57

Yeah, it'd be really interesting to see much of a competition that will achieve between different protocols, as well as the idea of decentralizing the ownership of one protocol into different types of kind of like a ownership into different protocols. I think that's a really cool idea. So you're not really trusting one specific protocol for your answers. But you can have a choice there to which protocol you want to entrust the future of your stake fees.

Oranges|Geode 13:25

Exactly. I mean, if you take just because like I was mentioned, I don't like to really bang on one particular protocol. But I think they've got about $6 billion worth of ETH, not till a recent, it's probably a bit low now with the recent price correction in ETH. But you get the picture a lot, like governed by multisig wallet. So that $6 billion, I know it's very unlikely to happen.

I think it's...past multisig. But technically, you know, that's that's a risk, though, that that those funds could technically be colluded and removed from the system. And then ultimately, the (right?), the total amount of each state with Lido, I don't know the exact number on hand, but that's ultimately controlled with Lido. Lido DAO. So if something happens to Lido, it gets compromised, it closes, something happens with their their infrastructure, or the validation that something goes wrong there, then that's a that's a that's a lot of ETH under control, which is suddenly at risk.

Whereas, if you can have 10, 20, 100 different DAOs, or their own staking solution, where users are deposited evenly across them, based on their preference, and the different products that they can offer with a yield generating Ethereum token, then that's a lot safer for the wider ecosystem, which I think is the way it was kind of envisioned as well, not to have a monopoly of a couple of key players, but to have validators across the entire ecosystem across 1000s of different people instead of just one main player.

DeFiFry|Geode 15:00

Yeah, make it safer for everybody by spreading the risk around.

Oranges|Geode 15:04

Exactly we've had, I won't name the protocol, but we've had discussions with a particular protocol who actually have invested their treasury funds into Lido. And they have more funds to invest. But they can't invest any more into Lido, because the third party risk. They're just not willing to put any more funds into one particular project for for third party risk reasons. And if they had their own ETH2 staking solution, they could manage their own treasury with their own funds, with withdrawal contracts going back to themselves for all of their ETH. And they could suddenly use their entire treasury or the allocation they wish to devote to staking without having to worry about relying on a third party for their for managing their funds. And then they don't pay the 10% either at night or recharging. So it's win-win.

Bianca|Saddle  15:53

Thanks for that. Another question I have regarding protocols or ecosystems, I wanted to know if there were like past mistakes that you've made with that and how you've overcome it, or things you did better in the future.

Oranges|Geode  16:13

We were pretty new. We live on testnet. But we haven't- we're not like our product isn't live in the real world yet. So we haven't had the opportunity to make too many mistakes. But what I would say is a couple of members of the team have come from another DAO in the past, which made some big mistakes. And they that was partly inspiration for creating what we've created. Creating like a decentralized, risk free, you know, so to speak kind of solution.

DeFiFry|Geode 16:49

Absolutely. Yeah. I think, you know, trying to learn from past mistakes in terms of centralization, and exactly like oranges said, just, you know, rather than being another competitor to a Lido or some of that changed the game that just let's come up with a new blueprint for this.

Bianca|Saddle 17:07

Okay, cool. Are there any more questions? If there are any more questions, Geode want to share any last thoughts or more anything else that we haven't covered?

DeFiFry|Geode  17:20

I think we covered a lot of you know, the core stuff for sure. And if, again, you know, anybody is interested and hasn't used our testnet already. Check out the website, Geode.fi, and use the app and let us know what you think. We've got a great Discord. Come over there and join it. And we're happy to hear what you think. And yeah, growing community just getting started and watch this space.

Oranges|Geode  17:45

Yeah, I think that's it really. We're looking to transform the way staking is done on any proof of stake chain, where Ethereum native and very keen on the Ethereum ecosystem, the decentralization that brings. So we're very much looking forward to launching on Ethereum, and yeah, watch this space, if we if we if we can do what we envision, then the the staking environments can be very different in 12 months time. And hopefully, there won't be any more monopoly.

DeFiFry|Geode  18:16

Absolutely, keep our fingers crossed.

Weeb|Saddle 18:19

Yeah. And just to add a little bit to that. And then beyond just, you know, what we could do from Saddle’s side and what Geode could do from Geode’s side... I'm also excited about what other protocols that work with Geode will make on top of this, you know, some other creative ways to using the fees. And I think, there, there's a lot of room for technical improvements, and just innovation there. So I'm excited to see kind of the future, even outside of this partnership. So yeah. So I gotta say-

DeFiFry|Geode 18:54

I was gonna say thank you, Weeb. Yeah, we agree. We think there's exactly honestly, the more partners that the better. I mean, it just brings that many more people solving the problem.

Oranges|Geode  19:02

Yeah, it's actually quite, it's quite hard to keep your mouth shut sometimes with some of the partners we're talking to. But there's some there's some really interesting kind of innovations and things that are hopefully going to come down the pipeline. People have some really innovative products and ideas that they could they could do with their own staking token, both on Ethereum and on other chains. And yeah, watch this space. Keep an eye on Twitter, because there should be some exciting announcements coming out over the coming weeks and months that I think will take quite a few people by surprise.

Bianca|Saddle  19:35

That's exciting. Well, thank you so much to the Geode finance team. Thank you for everyone joining... in the community that supports us. This was a Q&A. Be sure to hit up Geode Finance and Saddle Finance for questions and just to stay in tune with future projects. It was great having this space…and if no one else has any more questions, I hope you all have a great weekend.

DeFiFry|Geode 20:06

Awesome. Have a good weekend, guys. Take care. Thank you. Yes. And thank you for the opportunity. So, really appreciate it.

Bianca|Saddle 20:13

Yes. Thank you. Bye

Saddle Finance: https://saddle.exchange/

Geode Finance: https://www.geode.fi/

Saddle Twitter: https://twitter.com/saddlefinance

Geode Twitter:  https://twitter.com/Geode_Finance

Saddle Discord: discord.gg/saddle

Geode Discord:  ​​https://discord.gg/RC8fTTuJtm