Let's dive into a project analysis today. You guys are going to love it because it's going to break down Flow and give you some insights of where this chain is going. And we'll get started. I just want to thank our sponsor today and that is iTrust Capital. This is where you guys can start getting into long-term strategies around your crypto. And the way you do it is a crypto IRA. One thing you can do of course over there is join and get a $100 funding reward if you use our link to get started. Let the iTrust team know that we have sent you over there. Man, they've got a lot of news too happening. So, keep an eye. They are getting ready to launch a lot of new products. This is the place for you if you're considering crypto IRAs.
I want to go over to a couple of points we've hit on for a while. Flow is one of those ancient topics that we've had here on the show and it's one we've done a variety of videos on from a lot of different angles because we kind of like where it has been going. And of course, there has been times, I know many of you will say, "Well, Paul, it hasn't been moving here recently." Let's look at some of the fundamentals. We're going to bring on Ro in a minute to kind of break down what those are.
If you look at the activity right now, Flow price. You can kind of see where we're going. This is the ranking right now, 191 in terms of the overall coin market cap position. And if you look at market cap in general, it has been in a downward motion. But of course, this may change as we start to see things happening on chain with the TVL continuing to grow pretty significantly as well when a lot of other markets have not necessarily moved. And of course, if you compare over on Dune Analytics to some of the competition that are out there, you've got Flow, Adera, Ton, Near, but notice Flow's upward trend. Some of these other major tokens are not necessarily in the same place in terms of TVL comparisons. So, that's kind of the thing that we're looking at here.
One other thing I want to kind of hit on right here: this is one of the fastest growing L1s based on a 30-day chain. You've got Flow holding at over a thousand percent. Aptos is in the run here. Polygon is in the run here. So, definitely in good company going forward. And if you look and compare to another chain, SUI, and you look at where SUI is holding right now at 154, this could get interesting because SUI of course has a market cap of 5.6 billion right there. So very interesting as we start to move in.
I want to go over to our guest today and that of course is Rohan coming in from Dapper Labs and Flow. How are you Rohan?
I'm doing amazing. Thanks for having me.
Nice to see you back. You were on our show a couple times. We've had you, a lot of updates. I want to go right into the enshrined protocols model that you guys have gone and done. Explain that to our audience first.
Well, first of all, the concept here is that Dapper Labs, the for-profit corporation, the company responsible for NBA Top Shot and a whole bunch of other successful crypto products, is building on top of technology that's being built by the Flow Foundation. So, my former co-founder Dita Shirley runs the Flow Foundation. They're going to build the protocol. We're going to build the application. Okay. But the key point about what we're doing differently this time is that the protocol is available for use for everybody to build on top of. So it's enshrined in the sense that it's a dedicated protocol for its given use case on top of the L1 and it drives value and revenue back into the native token. But it is an open network that anyone can build on, unlike, let's say, NBA Top Shot the first version, which was more of an application that was difficult for outsiders to build on top of.
So you guys of course have launched Peak Money. This is going to be a new multi-chain product earning 15% or more on your USD savings. So explain this: what does this do for Flow?
Well, so here's the unique thing. The first enshrined protocol we're developing is called Flow Credit Markets. It's a new kind of lending protocol which has automation built into the smart contract from the ground up. And so what that means is borrowers can go much higher in LTV while minimizing the risk of liquidation. And we're going to be publishing all these papers that show every single one of the crypto crashes over the last 10 years, the system would have written them out with zero liquidation, which of course matters a lot to normal people. If you stick your Bitcoin or your stable coin somewhere where you're trying to earn 10 to 15% yield, you don't want to end up with a liquidation if there's a price drop or some sort of oracle exploit or whatever it might be. So that's the fundamental core of it: a lending protocol that lets us get higher LTV while minimizing liquidation risk. And Peak Money is a wrapper around it that lets users bring, whether it's stable coins connecting their bank accounts, they can buy Bitcoin, they can buy Ethereum, of course they can also buy Flow. And then they can put that into the lending protocol, borrow out stable coins, put it into those yield sources, delta neutral. And that's where the yield is driven from. And it's all transparent, all onchain, all non-custodial, and fully audited and auditable by any individual. And that's just the start. And so basically it's the model that shows what the future of finance is going to be, which is instead of these complicated intermediaries and structures where you have to negotiate individually, you just have autonomous tokens that sit in user wallets and take actions that they're programmed to take with assets all across the world. And so it's going to start with cryptocurrencies obviously, whether it's Bitcoin, Ethereum, Flow, but it will, the same system applies equally well to any tokenized asset. And as you know, trillions of dollars of real world assets are going to be tokenized in the coming years. And so that's the reason we are moving into this direction. That's the reason we're so passionate about making Flow fully interoperable with the Ethereum ecosystem so liquidity can bridge in and out super easily. And the applications that we're building are designed to let anybody take advantage of the power of tokenization and DeFi, whether they want to invest in crypto or just benefit from the increased yield and the more complicated, more accessible investment products that are going to be available to them.
So explain to me how you protect against that, especially liquidation issues or events that I mean I've seen some products out there that have kind of built this in, but how does yours work?
So it's very simple. Basically the onchain automation looks at your position every single second, every single block which is actually faster than a second, and rebalances it to make sure you don't get liquidated. And the way it rebalances is because all we've done is we've taken your Bitcoin, we've put it into a lending protocol, we've taken out stable coins and those stable coins are sitting somewhere earning yield. And so instead of selling your Bitcoin when the Bitcoin price drops, we just unwind your USD position here, pay back the USD debt, so you don't get liquidated, and then when Bitcoin pops back up, we take out more USD, put it into the yield source again. And so effectively, as long as the yield source is chosen to be something that's delta neutral and denominated in the same currency as the borrow, then you're not exposed to currency risk. And we're picking yield sources that are safe. And again you can combine tradfi as well as crypto yield sources.
I'm going to be interested in taking a look at this. When does this thing launch? Is it available now?
Flow Credit Markets is on mainnet right now. We haven't, there's no dev docs or anything. It's still going through final audits. Peak Money we're opening the waitlist December 2nd. So by the time this airs, the waitlist will be open.
So perfect. So we'll have the launch of Peak Money. You guys will be able to jump into this because that's the problem I think a lot of people have run into in a lot of these yield markets is it's very complex getting into them, moving your assets in and out. You know the problem that's been out there for some time. What happens to like More Markets, Kitty Punch, you know, some of these other platforms? What happens to those?
So, More Markets is the first lending protocol on Flow, it was a sort of a Liss implementation. We're working with that team really closely to make sure everything that we're building on Flow Credit Markets is fully EVM compatible. So, I believe they're going to be the EVM front end. So you can come with your MetaMask, you can come with your Trust wallet, whatever EVM wallet that you have and interact with the Flow Credit Market smart contract that sits on the Cadence side, benefits from the higher safety and security and lower cost etc. But More Markets basically becomes the interoperability layer. Okay. Kitty Punch is the DEX that the Uniswap implementation that sits on Flow and that's being used for all of the trading and so this product will drive more and more volume into their application, including for example on Peak Money when you're on ramp you're actually buying PayPal USD and you're swapping that for wBTC that's also natively deployed on Flow, so all of that volume helps. We've shown that in terms of the yield numbers on Kitty Punch, so that's good.
What about the liquidity side? Is this similar to Deepbook like what Deepbook and Sui have done in terms of liquidity depth?
Well, the liquidity depth is also something that's going to be benefiting the whole ecosystem because a big part of this effort working is bridging in yield sources from different currencies. It's working very closely with Layer Zero on their OFT implementation as well and making sure there's really deep depth for currency swaps whether it's between stable coins as well as Bitcoin, Ethereum, Flow and stable coins.
Yeah, I was just showing this was the Deepbook example that was being used in terms of institutional grade liquidity. This is a thing that I think we'll start to take up because this of course is Grayscale talking about this right here. And it's going to be something that we're probably going to see more sophisticated investors starting to look at some of these kinds of platforms and utilizing. Do you think we would see any kind of institutional moves onto something like what you guys are doing with Peak Money?
Yeah, 100%. I mean both Peak Money as well as just deploying into the smart contract natively because a lot of the folks that are most interested right now are folks that are already sitting on large amounts of Bitcoin, stable coins. They're already in these yield farms. And so this is a way for them to get more juice out of the work that they're already doing. And so those will be big drivers of TVL into Flow Credit Markets, the smart contract. But the Peak Money product is aimed to be retail and it's going to start with, you know, millennial etc. But then it's going to layer in more gamification, more opportunities for the asymmetric opportunities that exist in DeFi. Make those open and accessible without the complexity of the crypto side, right? Which is the key management, the onboarding, the MEV, the front running, all of those pieces we abstracted out completely. Part of it because Flow natively has MEV protection, all of these things. But part of it because of our application. So the on-ramps are going to be super simple: a credit card or bank account or just transfer in from, you know, connect your Coinbase, transfer in from crypto. So it's part user experience, part technology.
What about native vaults within the Flow wallet? Because we've seen this in the Slush wallet with SUI. We're starting to see it in other wallets showing up. Vault control, vault management. How are you guys going to do that?
Same concept. It'll be an open system where I think it's either earn.flow.com or vaults.flow.com that will be up in the next week or so. And anybody can come in and create their own positions. And eventually will be able to design their own strategies. So, it's fully EVM compatible as well. I believe we're using the same standard as EVM vaults and others. And some of the strategy operators that are currently most active on other chains are also coming in and setting up their own strategies. So, you can buy into those vaults if you want access to a different risk return profile. It's all transparent and auditable. But as you mentioned earlier, part of the thing we're trying to stay away from is this like blackbox DeFi thinking, saying, "Hey, there's just a percentage rate and then you just put it here and you got to trust me."
Yeah. Hope is not strategy.
Dapper Labs moving treasury on chain. What stable coin are you guys going to use? Would it be PYUSD?
The whole ecosystem is centered around PayPal USD right now. There is obviously USDC as well and potentially tether down the line. But PayPal represents that consumer vision as well, right, and we want deep interoperability with other consumer financial applications. And the other thing to recognize is the programmability of all of this means that any consumer product can now very easily give their consumers a wallet, give those wallets access to DeFi, whether you're a game, whether you're a social network, whether you're anyone that has consumer eyeballs can use this as an opportunity to deepen the relationship they have with their customer, make extra money, and effectively offer the whole world of DeFi to their customers. So these kinds of platform integrations we get really excited about.
Yeah. Would this update mean that Flow is deflationary? Because I'm looking here at your statement: update creates a direct link between network usage and network value. In fact, this model is designed to make Flow token net deflationary at a sustained 250 TPS. That's basically the goal here. Or is it done?
