The Crypto Illuminati
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Illuminati Round Table 🎙: Stablecoins, DEXs, and Privacy

Illuminati Round Table 🎙: Stablecoins, DEXs, and Privacy

Regulators are cracking down on #stablecoins, #dexs, and #privacy protocols, what should you expect?

Call Notes:

Introduction to Carter Woetzel

  • He has been in the Crypto/Web 3 space since 2017 and is the writer of a book named “Building Confidence in Blockchain”

  • He started as an Ethereum maxi and is a big fan of stablecoins, and he is deeply invested in how they work

  • During his journey from 2017 to 2020, he theorized how we would bridge Web 3 to the modern world of commerce without privacy to protect ourselves

  • He believes we need at least a granular level of privacy if the Web 3 world wants to attract institutional-grade liquidity

  • On his journey in Web 3, he discovered the seeker network – a blockchain built on Cosmos with privacy built into the L1 – and this is what drove him to be where he is today – The Lead Researcher & Economist for the Shade Protocol. 

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How will privacy draw in Institutional investment?

  • Woetzel stated he believes a combination of hardware-level encryption and zero-knowledge proofs will be the foundation for blockchain privacy and attract institutions into the Web 3/Crypto market

  • The end game he sees for this is KYC AML platforms built upon private DeFi blockchains – everyone who is KYC’d hold a viewing key, which will decrypt all the metadata tied to them

  • If an auditor comes along, they can request the viewing key from the platform to perform the audit, but all their other data is still encrypted

The primary catalyst for Big Boom in DeFi?

  • He replied – that a lot depends on the macroeconomic environment

  • While we wait for capital to flow back into the markets, tech development is paramount, so when liquidity does flow back in, there are high-quality services available for users to interact with

  • During this bear market, we’ve witnessed all the super high emissions with no value protocols die out, and the real yield narrative with projects like GMX will pull us through the bear market

Web 3/Crypto and the macro correlation 

  • Woetzel stated that although crypto is highly tied to the macro, he also believes there is a breakpoint in this correlation, which he dubbed the “Bitcoin floor” between $15,500 and $17,500

  • At this bitcoin floor, he believes the correlation between BTC and the macro diverges and weakens due to whales sustaining this zone, calling them “capital with conviction”, and will continue to do so as the macro downturn continues for “6 months at least”

  • He also mentioned seeing crypto as “a magnified and front-run version of traditional markets”

The stablecoin conversation 

  • Binance delisting USDC? 90% of the stablecoins used in the market are centralized (USDC, USDT, BUSD, etc.); he believes this is a highly competitive decision in terms of USDC vs. BUSD to give them more dominance

    • This may be seen as a step backward in terms of freedom to use what you want in terms of stables but still not too much of an issue

  • Woetzel stated he prefers USDC on centralized exchanges, and USDT is likely better for DeFi, but there are also good options like DAI and FRAX for DeFi stablecoins. Shade protocol stablecoin is coming in Q4, So watch out. 

Shade Protocol and the future coming up soon

  • The 2nd most privacy-preserving staking derivative on Cosmos and a bonds product on Cosmos is similar to that of OlympusDAO but without the ponzinomics and the solid treasury model

  • Now on to what lies in wait for Q4…

    • Shade Lend - first ever privacy preserving lending product – similar to MakerDAO

    • Silk stablecoin 

    • Shade-swap – privacy preserving completing front-run resistant DEX

    • These will launch side by side and work in perfect cohesion regarding liquidity and user utility 

    • FREE ALPHA – these products will launch alongside a multi-chain stable swap (an exchange created purely for exchanging stables and bridging them to where you need them quickly and wholly and cheaply privacy-preserving). Hunting for whales and market makers to support this launch 

Final thoughts

  • They are excited about Q4 for Cosmos expansion, which is becoming the main blockchain in DeFi

  • Woetzel predicts that in 2023, the staking derivative ecosystem will start taking off in the Cosmos ecosystem

  • This will unlock insane liquidity levels and birth many DeFi yield products, so keep your eyes on the cosmos ecosystem in 2023 

  • Woetzel believes staking derivatives will kick off a “DeFi Renaissance” in the more extensive Cosmos blockchain

  • P.S. Watch out for Shade Protocol and its developments

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