Following the aftermath of the most recent Ethereum circuit, it’s always interesting to stay in touch with prominent projects and hear about how they’re progressing.
With that in mind, we wanted to use this interview to shine a spotlight on Blazar – a fixed lending protocol which spawned out of ETHLondon.
So this happened this weekend: Areti, @_k_u_b_a and I were finalists at #EthLondon! I think I’ve figured out the winning formula: a good idea, memes and a mascot https://t.co/7gR0teXP34
— Raphaël Mazet (@raph_alice) March 2, 2020
With a strong background in the Ethereum community, it’s evident that the founders – Raphaël Mazet, Jakub Wojciechowski and Areti Kampyli – are extremely well suited to execute on the project’s vision.
If you’re interested in helping them even more, please consider donating to their Gitcoin Grant which can be found here.
Our @Gitcoin grant page for CLR matching round #5 is live!
Please support us to launch DeFi’s stable-rate lending protocol! Help us keep building one of the projects that won ETHLondon @ETHGlobal
Donate Dai, get matched. Thank you!https://t.co/hV4xCu4nu1
— Blazar (@BlazarDeFi) March 23, 2020
Let’s get into it!
Tell us a bit about your background prior to Ethereum!
(Raph) was a financial communications consultant for a lot of multinational companies. I lived through the M&A and private equity boom of the mid-2000s, and then helped companies navigate the financial crisis. Those were my formative years.
I also worked in-house for the custodian arm of the Royal Bank of Canada. I was then a lobbyist in Latin America, which actually led to the creation of my first company, an advocacy platform, and then Alice – my last project – a social DeFi protocol. Alice was great as it got us thinking about problems around trust and transparency and how organisations manage future cash flow in a decentralized way.
(Kuba) was a software engineer consulting for banks and tech startups for about 8 years. I was largely doing traditional java development, enterprise stuff before finding blockchain and working on Alice with Raph.
Overall, it’s been a multi-year iterative process to get to where we are now. All that financial and blockchain experience is becoming hyper-relevant to Blazar today.
And how did you guys meet one another?
2 out of the 3 founders of Alice met at a hackathon in 2016. We were working on two companies initially, but it was Alice which got the first breakthrough. Alice is focused more on real-world clients whereas Blazar is all about DeFi.
And what was it about Blazar that was interesting to you?
Initially, we really wanted to focus on this notion of future cash flow and escrowing money.
How do we help people avoid the opportunity costs of putting funds in escrow when they could be earning interest on a lending protocol?
People are going to be putting a lot of money into staking and escrow systems and if you do it with the systems we see today, you’re going to miss out on a lot of interesting opportunities.
We then realised that there’s a more general problem around predictable interest rates in DeFi. With Blazar, we thought – What if we can give people their interest upfront and put them into these escrow tokens – which we’re calling future tokens. As we see it, there’s currently no fixed-rate lending in DeFi and that’s the gap that we’re looking to fill.
The future of stable money is future stable money $fDai #fEverything #ETHLondon pic.twitter.com/us1tveGaPv
— Blazar (@BlazarDeFi) March 2, 2020
We’ve also been thinking a lot about factoring and deferred payments but that’s another story!
Tell me a bit about the ETHLondon hackathon – How’d you guys come up with Blazar?
There was roughly a week before the hackathon of us bashing up ideas. There was no code started before the hackathon but we were iterating on different financial tools, largely considering something which we called “Defactoring” – an account’s receivable tool for DeFi.
More generally, we were thinking about different revenue streams which could be tokenized into the future. This led to the notion of “future money” or tokenizing future assets and everyone on our team agreed that was a killer idea for the hackathon.
A lot of the Star Trek meme aspects came later during the hackathon because it was super late at night!
Let’s talk about that name process – Humor me on the iterations!
Plainly speaking, we spent way too much time talking about names.
First, it was Daj, which is “interest” in Klingon. Next, it was Warp, since we were creating something to “travel into the future”. Lastly, we settled on Blazar.
It turns out the logo from the hackathon looks just like a blazar, and we wanted to keep up with the interstellar concept we formed with Daj . Blazars are what hold galaxies together, so we see the protocol as a form of gravity that holds DeFi together. Kind of like MakerDAO, but for stable-rates, not stablecoins.
We offer fixed-rate, fixed-term loans. As it stands today, there’s too much volatility with variable loans. Particles coming out at light speed embodied the notion that you can get your interest upfront and everyone was super excited for us to fill that fixed interest gap.
The naming process has helped us learn a lot. We wanted it to be a bit spacey and this was the perfect fit.
How did winning the hackathon help motivate you to keep working on the project?
Money isn’t important. More than anything, it’s the feedback that we’ve got.
If you win a hackathon, you’ve effectively captured and explained the imagination behind your vision. Lots of people were curious to hear if we would push it forward which was a great motivator.
As a former judge at ETHDenver, I actually judged PoolTogether which has obviously spawned into an awesome project. What that went to show is that you don’t need to win the hackathon for great ideas to take off.
@DajFutureMoney This is so cool!! Let’s get this to mainnet!
— Leighton Cusack (@lay2000lbs) March 2, 2020
It’s great to see positive feedback on your idea and we’ve done a lot of hackathons over the years. Sometimes they work, sometimes they don’t. At the end of the day, it’s all for the better!
What is Blazar?
In DeFi, there are lots of lending options but almost everything is a variable rate. If you look at the custodial lenders like Genesis and BlockFi, which are what we call private or custodial crypto lenders they’re fixed rate, fixed term. And custodial crypto lending is about 4x the size of DeFi lending so there’s a clear demand.
For depositors, this means they have visibility over their interest which allows them to plan ahead. For borrowers, they know that there’s no risk that their interest payments will suddenly double, kind of like what we’re seeing now.
With Blazar, when you deposit funds, you get your interest upfront. We’re exploring different ways to decide how you get that interest – streaming, at maturity, etc. – but what’s constant is that you’ll get a tokenized future asset. If you put in Dai, you get future Dai – fDAI.
The tradeoff is that with a variable lending protocol, you don’t know what interest you can get but you can take it out at any time. With Blazar, we’re using soft locks, so you can change the maturity but will have to pay interest back as a result. But if you push back the maturity date then you get more upfront interest.
And what’re the next steps for you guys?
Well, we’ve been conducting lots of market research. We’ve been talking with a lot of experienced people to get feedback, especially from some of our hackathon mentors.
Similarly, we’ve been building out our algorithms to make sure the fixed rates are stabilized on both sides. Basically we’re figuring out how to balance supply and demand while taking risk into account. We’ll probably need a DAO which backs the system as a last resort redeemer which we’re super excited to explore.
Throughout the process, we’ve also been exploring different rate discovery automation tools. Talking with the Yield protocol team has been super helpful in that regard.
What we’re doing is issuing zero-coupon bonds in the form of fTokens which are created by the depositors after the initial upfront interest, meaning there is nothing paid over the lifetime of the loan. You redeem for face value at maturity.
With Yield, it’s the borrowers that create zero-coupon bonds. They create yTokens by locking up their collateral. It’s this kind of collaboration and insight which makes us excited to see what we can come up with.
And how should people get involved?
We’ll have a website up and running soon!
Right now, most of our work is being pushed to Github. In the coming weeks, we’ll be rolling out more documentation which makes it easier to build with us.
We’re always welcoming comments, critics, ideas, you name it! Ping us on Twitter or message me on Telegram @raph_alice if you’re hoping to chat.
We’re always looking for as much feedback as possible and our overwhelming needs are researchers and developers.
Specifically, as it relates to liabilities matching with our risk management engine, the more researchers the better.
What we learned from situations like iEarn and bZx is that it’s actually better to go slow, so we’re being very intentional about how we roll things out in the coming months.
For those who were present at ETHLondon, the team’s ability to tie together a novel idea with awesome storytelling is just one of the many reasons we’re excited about this project.
As we mentioned in our intro, the best way to support a new project like Blazar is through Gitcoin Grant donations.
We hope you enjoyed this interview and look forward to watching Blazar explode in the coming months!
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