Money Code
The future of finance is digital. Welcome to Money Code, the show that decodes stablecoins and the evolution of programmable money for builders, investors, and decision-makers. Each week, join hosts Chuk Okpalugo, Author of Stablecoin Blueprint and Raj Parekh, Head of Payments/Stablecoins at Monad Foundation as they break down the systems and strategies of seasoned operators in the space, revealing the insights you need for better build and buy decisions.
Money Code
How Vaults Bring Transparent, Programmable Yields w/ Tarun Chitra (Gauntlet)
Presented by Stablecon, Powered by BVNK
In episode 10 of Money Code, hosts Chuk Okpalugo and Raj Parekh are joined by Tarun Chitra, Co-Founder and CEO of Gauntlet, a leading vault curator.
We explore DeFi’s evolution and how the industry has converged on “vault curation”. DeFi vaults are the onchain analogue of ETFs or credit funds, but with 24/7 liquidity, programmable risk constraints, and hardened sandboxes that can safely support agentic/algorithmic asset management.
We discuss what vaults solve for, how fintechs should navigate yield options, and where DeFi and asset managers intersect as the world moves toward tokenized money and fully electronic credit markets.
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About Stablecon
Stablecon (https://stablecon.com/) is the premier gathering for those at the intersection of DeFi, economic policy, financial infrastructure, and institutional integration, and those reinventing global commerce.
By convening the brightest minds in fintech and crypto, Stablecon provides attendees with world class thought leadership and fosters unparalleled networking and strategic collaboration across the digital payments industry. Whether you’re building, advising, or navigating this new frontier, this is the room where it happens.
About BVNK
BVNK is the leading provider of stablecoin payments infrastructure, helping businesses move money faster, settle globally, and even launch their own stablecoin products. Head to https://bvnk.com/ to learn more.
Connect with the Hosts & Guest
Chuk Okpalugo: LinkedIn, X, stablecoinblueprint.com
Raj Parekh: LinkedIn, X, monad.xyz
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And I think the interesting thing about the NeoBanks for stablecoins is that uh you can offer the same yield product to anyone in the world effectively for the same rate. Right? Like none of these other products that your neobank or fintech kind of currently offers are really that ungeo blocked, like can really be that equal.
Chuk Okpalugo:This is MoneyCode. It's a show where we decode stable coins and programmable money so that you can better prepare for an on-chain feature. I'm Chuk Okpalugo, your host and author of Stablecoin Blueprint, and I'm here with my co-host Raj Perekh, head of stable coins and payments at Monad. How's it going, Raj?
Raj Parekh:Another action packed week uh in the future for Money, so I'm excited.
Chuk Okpalugo:Excellent. Uh Raj is gearing up for Monad's Mainnet launch, which by the time this episode comes out uh will probably just have happened. So really exciting times here. Uh and then we're very, very, very excited today to be joined by Tarun Chitra, the CEO and co-founder of Gauntlet and managing uh partner of Robot Ventures. Uh great to have you today, Tarun. Excited to be here. So before we dive in, a quick note. Money Code is brought to you by Stablecon Media and powered by BVNK. The views and opinions of the hosts and guests are their own and may not represent their companies, and nothing we discussed today constitutes investment advice or any other form of advice. Okay, uh so let's dive in. So I think uh our audience is uh very mixed. We uh they come from payments, some finance, some crypto, some builders um that may not necessarily be familiar with Gauntlet. Uh so maybe you can give us just a quick backstory of how you started Gauntlet, what what it started as, and what it's doing today.
Tarun Chitra:Yeah, so um, you know, I think uh for many people in uh potentially listeners of this podcast, or or even people in in crypto, uh we're a little bit of a dinosaur age-wise. Um you know, we were founded in 2018, which you know, in most of the time people are like, people were doing this in 2018. So uh, you know, I think I think we we've kind of uh been around for a while. Um but basically the premise that Gauntlet was founded with was uh my co-founders and I, we were all working in quant trading, and we were watching things happen during the ICO boom where people were making all these protocols or making UL1s, making new new chains, and they were really rigorous about the cryptography. They're like, here's exactly how much compute you need to break this thing, or here's the in this distributed system, here's like the number of nodes you need to compromise to attack the network. But they were not very uh kind of rigorous about the economics, right? They would just be like oh, we're just gonna copy Bitcoin's transaction fee policy, or we're gonna copy Bitcoin's inflation curve. And it was sort of weird to read these things because there's like this duality of uh kind of reading these things where it's like one side is like really rigorous and gives you very concrete guarantees, and the other side's like, we're making this network that has 10,000 times the supply of Bitcoin, but we're gonna charge you the exact same economics as Bitcoin, right? It doesn't totally make sense, and so I think at that time, this was before you know DeFi was like decentralized finance was a term. Um, I think you know USDT probably had 98% market share then, 97% market share. Like USDC was just getting started, and USDC sort of needed DeFi and decentralized finance to grow. So in the stablecoin landscape, then was USDT, and then a bunch of failed algorithmic stable coins like bit shares and things like that, that probably a lot of your listeners maybe never have heard of and would be better never hearing of uh again. Um and so our goal was to try to figure out how to make software to stress test these systems, like the way you would backtest a trading strategy or stress test a financial model against these new systems people were making. Now, there are a lot of idiosyncrasies in decentralized systems. You have to model different types of agents in the system. Um, you know, obviously now uh everyone talks about multi-agent modeling, but in 2018 that was sort of like a thing where it was like, okay, yeah, that's a research thing, right? That's not like a thing used in practice. But you know, at that time in in some of the fields we were working in, which were quant finance and self-driving cars and other places, people were doing multi-agent modeling to kind of get quantitative estimates of rare events, like tail events, like when something really blows up or or something really bad happens, what can you expect out of a complex system made of many actors? So we we started as a company that built simulation software for for doing this. And I would say our early days were like the palantir of this stuff, where we we have the simulation software, but then we go to our customers who are peak people building protocols and people building stable coins and people building chains, and we would sort of use our software to stress tests and give them sort of like here's where your thing breaks, here's where it doesn't break. And uh, you know, I think part of the reason we kind of got started is I was doing this as consulting. Someone tried to buy my one-person consultancy, and I was like, okay, well, clearly there's some someone wants this type of software, it's just unclear how you monetize it. But over time, um, it's sort of, you know, we kind of went from this more custom consulting model to a more SaaS model where people were paying for parameter updates, like what should the interest rate be in this protocol under some conditions? Or what should the loan, if I'm giving you a loan, what should the loan-to-value ratio be? Stuff like that. And then sort of in since February 2024, we've um kind of got into vault curation, which is a sort of form of on-chain asset management. Um, and you know, we had zero dollars in February 2024 under management. We have uh a little over 22.1 billion um today. So yeah, probably hopefully that was I try to summarize seven years in the 30 seconds. Right.
Chuk Okpalugo:No, that's great. And I think um starting with simulation-based risk analysis and assessment. I mean, I think the key theme here is risk management. Uh and when we when we talk about finance uh and capital markets, the these are key areas. And so you mentioned okay now since Febru 2024, you are a vault curator. Okay, so those that's gonna blow people's minds. Vault and curation, okay. What does that even mean? Right. I think we can do a little qu a bit of a quick uh kind of framing of where this all fits in within DeFi. And DeFi we said as decentralized finance. Um lots of different areas of DeFi. Uh and you know, I think my people are many uh people are very familiar with exchanges, trading, right? There's centralized exchanges and there's decentralized exchanges. Uh and then there's this kind of lending and borrowing, or capital provision and capital allocation. Where there's some people who want to get some earning, so they give their money to somebody else, and then somebody who wants to go and deploy that. And that could be I want to go borrow it for myself, I need to go and make a trade or make an investment or do something else, or uh essentially an asset manager who takes the capital that people have provided to earn a yield, and you go and deploy it uh in different places. And I think there's a very, you know, I say asset management because that is a very kind of clear try-fy um kind of anal analogy there where uh the the role of that player in the ecosystem is to make a return for the investors. Uh and now we have a way to do that on-chain. Uh and parts of it are on-chain and parts of it are not quite on-chain. Uh-and so uh vaults are essentially these type of funds that are managed by these asset managers, and these asset managers are the curators. I've made a bunch of, you know, uh moved over a bunch of things there. Maybe you can help kind of unpack, you know, what's how to think through this for like a tratify audience.
Tarun Chitra:For sure. I think maybe I'll give some historical analogs first before we kind of talk about sort of the current state. So my view in the history of finance is that every time there's sort of a new technological revolution in financial products, there's always this sort of gestation period where people are spending time trying to understand how the products work, understand the risk models, understand when they break, and inevitably you can't understand when they break until some rare bad events happen. Um and then from there, kind of building up modeling to figure out okay, like how would I actually own these assets, how would I utilize them, how would I scale them? Um, and if we look at the 1980s, um, I think there are two strains of kind of this starting with risk management and then turning into asset management um types of companies. The first is BlackRock, so sort of pre um, you know, the municipal bond and junk bond kind of revolution in the 80s, BlackRock was sort of serving as a risk manager and providing sort of risk recommendations for people who are participating in this market. And then that sort of turned into them running funds that were investing in in fixed income in general. And so, you know, on the sort of fund and fixed income side, there's sort of this natural tendency of people who are doing kind of the risk management to become asset managers, right? Because in some cases they don't, in some cases, they stay like credit rating agencies and they they kind of never cross the chasm. Um, another place this happened was in quant finance, where you know, um the kind of old school statistical arbitrage funds, so AQR, D, Shaw, uh, my old employer a long time ago, um Renaissance, et cetera, they like started by actually doing a lot more research um into these different products before they were trading. So I think there was kind of this, again, this gestation period where people spent a lot of time doing research and understanding these things uh before they went trading. Now, in the case of like BlackRock and AQR, they spent multiple years, and AQR's case probably multiple decades, writing a lot of academic research papers on like idiosyncrasies in these markets and making these markets a lot more easy for people to understand. Because at the end of the day, you know, why are you making a risk model? One is to protect your own assets and responsibly invest, but the other is also a form of education in the sense of like if you're an asset manager, having you know the investors in the product understand sort of what types of risks their capital is involved in. Um and and research and transparency is actually quite important to that. And actually, what you saw from the 80s technological revolution to now is like they started very transparent and then over time kind of became less transparent. Um so I I think you also saw in the the kind of low latency electronic trading in the early 2000s, you saw a similar kind of framing from research to production. And I I would argue that decentralized finance since 2019 to now has had a similar thing. And so one thing I think Gauntlet, at least among people in decentralized finance, is probably most famous for as we've sort of written some of the most highly cited academic papers on what how you should write the math for these things, what the risk model should look like, what math is wrong, things like that. And the reason I bring up this analogy is there's always this kind of natural thing of like you can't manage a large amount of assets for a very long time without having a good risk model that's robust to large shocks and large market conditions. But it's very hard to make that risk model a priori without the data happening or without the events happening, right? It's like it's like me trying to write hurricane insurance on Louisiana in the 90s. Like, sure, I could have collected premiums for 10 years or 15 years, and then Katrina came and completely wiped me out. And no amount of research I did until I got that event would have helped me price that correctly, right? So there's sort of this analog that you do need these rare events. So oftentimes it makes more sense before you're putting capital at risk. So like spend time really honing your analysis and risk model of these systems before you apply them in production. So I'm built building this analogy to kind of say that vault curation, the concept of vaults overall um grew out of watching the early DeFi protocols um evolve over time and then have some rare and bad events. And then from those bad events, people started to figure out okay, we need these types of risk controls or we need these types of mechanisms to make this safer for different types of assets. So, you know, if I if I kind of um describe decentralized finance as decentralized finance's history, I mean, before defining the history, I'll I should maybe say the goals. So the goals of decentralized finance historically um have been despite crypto starting as this decentralized revolution where anyone could you know run a node themselves or or use their own wallet and self-custody funds, um the empirical evidence is a large majority of users use custodial products, right? They they use Coinbase or Binance and they uh keep their assets there. And there's a lot of really good reasons too, right? Security-wise, maybe you're not gonna be trained to do something. Some of them offer insurance, some of them offer better yield, you know, there's a bunch of different reasons. Um, but every crypto cycle that I've been in since 2013 has always had this thing where like there's some centralized entity, accumulates a lot of assets, has some blowup, you know, whether it's Mt. Gox, whether it's all the random Korean exchanges in 2017, whether it's FTX, you know, there's like there's an entire history of this. Or and so decentralized finance is is almost like the reaction to every one of these blowups. Like every time something bad happens, like, oh, like, you know, the reaction to the 2017 ICO boom was like, oh, the exchanges are controlling all the listings. Why do I need to like launch my token on Ethereum, a blockchain, but I can't trade it on Ethereum, the blockchain, right? I have to like go to Binance, I have to go to this centralized entity. And so decentralized finance has always been take all these things that people like to use in a centralized manner, find a way to do them decentralized. So there's permissionless listing or permissionless borrowing or permissionless lending. So like the gatekeeper of the exchanges can't tell me you can't do this thing, but also find a way to make it as safe as doing it there, right? And and there's sort of this paradox there, like, can you even do that? And what we found over time is people have gotten much more accustomed to some hybrid model of this, right? And the hybrid model is really important because if I look at FTX, one of the problems of FTX is I couldn't watch where the money was at any time, right? And so then I could never know if I could fully withdraw my money. Whereas these hybrid models give you transparency into where the funds are and what they're allocated to, um, but they maybe don't uh kind of reveal the exact algorithm that's doing the allocation, right? So they're separating sort of private data from public data. And I would argue that vaults are a structure that is built around this principle, which is there's sometimes private data that you need. If you want to optimize yield, it's a competitive marketplace. And the best way to get the best yield is to have this marketplace where people are trading risk or trading reward uh competitively, but that means they have to have some private information. If it's fully public, it's it's it's kind of you're not going to get the best pricing. Uh and so that's what the DeFi 1.0 protocols were was everything was public, everything is transparent. So then the pricing was always more inefficient than the centralized markets, where you know you as a trader or user could keep some information private. Vaults came out of kind of a practicality of we want to be closer to centralized exchange performance, but we also don't want FTX style behavior occurring. And so they naturally serve as a form of funds where users can non-custodially deposit funds into this vehicle. Um, and there is a manager, a curator, in in the Parlands and Morpho, but there's actually many Vault protocols, so and they all have different names, but in some ways they're like different types of on-chain asset managers. Um, but I'll use the Morpho terminology since they're the largest Vault protocol. Um and these curators have some private data of a strategy of how they're determining where your funds get allocated to. So like maybe there's you know three yield opportunities. One is earning five percent and has some risk, another one is earning 10% and has more risk, but it's not clear how much more risk. Another one has three percent, but low risk. You know, how do I allocate my money to those three options? And the idea is the curator is themselves computing a risk model and then deciding how to allocate and then you know charging a performance fee for that. And so in this sense, uh but the curator never touches the funds themselves. The smart contract completely custodies the funds and allocates to the markets, as they say, but the the curator never themselves has custody of the funds. And I think this is one very big difference between a vault and a normal fund. You know, when you subscribe to a normal fund, you're sending money to the fund manager, and the legal system prevents the fund manager from investing in all sorts of stuff, and and maybe auditors and and and like this kind of other uh kind of ecosystem around that. But fundamentally, uh you know, the custody is held by the fund manager, and so I think that's a very large difference um between vaults and normal funds is that the smart contract is always holding the funds and you can see where it's allocated to and you can withdraw a deposit. The thing that's not private or the thing that's not public is how it gets allocated. And so by separating these concerns, the goal is to give users transparency and comfort of where their assets are and how and the ability to withdraw them, while also allowing for private strategies that don't get kind of commoditized or don't kind of get worse prices than centralized venues where everything's private. So I know that was like kind of a long explanation.
Raj Parekh:No, I mean that that was that was awesome. I mean, it was a great, great breakdown, and maybe just to unpack that further, but you mentioned like a I think a couple of really cool principles. I mean, the first principle of like maturation, right? I mean, we started, you know, around you know, DeFi summer, you could argue, like, you know, about four or five plus years at this point now, but battle tested has seen a lot of ups and downs as a byproduct of that. And now where we are today is a hardened system that we know works and it's uh it's transparent and immutable by by code, which is really interesting. The second principle I think you mentioned is you know, what I what I think of is like a new platform for money where you, you know, historically you've had a bank or some type of custodian or fund manager that was managing funds. Yes, there was some built-in compliance or you know, some legal legalities around it, but the transparency was really up to the fund manager, you know, making that information available for you. Um, now with these new systems, you're leveraging immutable, you know, smart contracts. There's transparency built in with a distributed ledger as well. Um so you can see everything as a entity or as a user. So if you see something that's like not going in the direction you're interested in, you're like, well, maybe I don't want to participate in that fund anymore. And you can actually do it a lot faster when you know beforehand, if the fund manager was going rogue, um, it might be too late before you can actually like take your money out at that point, too. Um, so there's a lot of interesting principles here when we are moving into a new platform for money where it's transparent. Um, you know, you can there's a lot of flexibility, whether you want to go in and out of those strategies as well. And there's also a multitude of different strategies at the same time, too. So there's a lot of optionality built in. Um and then you mentioned one thing that's really interesting around these hybrid models. Maybe if you could describe like, you know, one of the more like popular like hybrid models we've seen is actually like Coinbase and Morpho as an example, or what commonly you know, folks in the fintech world call DeFi mullet, uh, where you have some type of you know, smart contract or protocol that's used behind the scenes, but you're providing some type of either high yield or like fintech-y service in the front. But maybe talk about just like the evolution of where DeFi has come where um it's now being accessible through platforms like a Coinbase or a FinTech, and how that's actually like uh a huge way of actually accessing some of these systems, also.
Tarun Chitra:Yeah, I mean, I think fundamentally in finance, um there's always kind of been this separation between public information and private information. Like prices of stocks are public, but you know, people's particular holdings are not public. And I think blockchains obviously provide a really good substrate for the public piece. But if you force everyone into the public piece, you also have this kind of lemon adverse selection problem where like everyone who wants who has to use the fully public revelation, like I'm revealing my whole portfolio, I'm revealing all my investments to you at all times. There is a bit of a lemon problem for them as an individual, right? They're they're kind of they can get front run, there's a lot of adverse selection, they're telling the market, like, oh, there's someone who owns 20% of this asset who won't sell it faster than the centralized exchange, right? Like, there's a lot of information that's there. And I think the natural evolution in finance is always this tension between what is public and what is private. And like, if you look at the evolution of the rules on public traded stock markets over time, where there was full public order books, and then all of a sudden certain order types were not public, and then all of a sudden other order types were public eventually. You know, there's there's this evolution of this like tension between how much you want to make truly transparent that makes it efficient to quote and make a market, versus how much you want to keep private, like someone's individual portfolio or someone's individual balances is is kind of always intentional. I think this is sort of certainly what you're seeing in stable coins right now, where you know as both a crypto investor and someone who's just sort of been around crypto for a long time, the value of privacy has always been you know I think paramount to people who've been in crypto for you know a decade plus. But in some ways it never really was tangible to the average person until they had to use stable coins, where they were realizing that they're telling the whole world their balance or they're telling their whole world, the whole world they bought an embarrassing meme coin. And uh, you know, now people are, I think, kind of realizing like, hey, there's some things I want to be public, because maybe if I'm public I get a better price, but some things I want to be private and and you know not reveal all my investment decisions. And so I I guess I'm belaboring this point just more so to kind of give an idea of like different user preferences. And there are users who are really large whales who actually don't care that much about their privacy in the sense that like they're so large that yes, they care, they get front run on some small, on some transactions that are small relative to their size. They don't care, but they might really value the self-custody because they, you know, they don't want their assets to be somewhere that might be another FTX. On the other hand, when you think about the average user, right? The average user who's like has a few thousand dollars in a bank account, they want to earn the maximum amount of yield, but they really, really want downside protection. Like they can't afford to lose it. They want to be able to understand how to do that without having to do the math themselves, or without having to figure out the allocation themselves, and without having to like get front run a million times and lose money to realize that, oh, they did the wrong investment decision. And there's just a natural thing for for that part of the world to want to invest in a fund or invest in an ETF or an actively managed, semi-actively managed vehicle that takes care of that for them, right? And and in in you know, in US equities, you've seen this like just dominating trend over the last 10 to 15 years where there are more ETFs than single-name stocks now, right? And like people would rather have these kind of managed portfolios. And vaults are really built around that premise that there is a notion of a managed portfolio that can also be squared away with the crypto values of self-custody and ability to withdraw, ability to exit. Because fundamentally, I think you know, of of all the kind of original cypherpunk values of Bitcoin that exists, the one that DeFi does really value when it's real DeFi is the ability to exit. Like I can look at my money and I can, you know, I don't like a decision being made, or I don't like something that's happening on chain or something in the market that's that's weird. I can exit whenever I want. And I think the right to exit is something you need public transparency for, but the right to have optimal and safe yield might not be something you want fully public, right? And so vaults are trying to balance those two, and I think from the fintech point of view, you know, fintechs have been used to sort of being forced into this separation. You know, I think about a fintech as a front end for a I don't know, bank in the Midwest that is doing all their banking, and then they're they're kind of handling, you know, maybe they do loans over the weekend so that their end user doesn't know that like actually technically their money only moved Monday morning or whatever, right? The the fintech is kind of keeping a lot of the data private, like the metadata from the bank. Like they're not necessarily telling the bank, oh, this user bought, you know, Robinhood isn't telling their correspondent bank, like, oh, this user bought these options over the weekend, but they are telling them, like, hey, this is their balance on this exchange, like, okay, like, you know, you know, you can go read it, and then if some if they're doing a credit card transaction, you know, using an interconnect like plat or something, we can all be confident, all the parties involved can be confident, like this account has enough money. And that is this exact same public versus private separation. And I think DeFi to a lot of fintech companies for a long time has been scary because it's like everything's public. Now there's no there's no no way of kind of doing the separation that you're used to. And I think the the vault model, as well as just smart contracts that separate public and private, I think that's that to me, that's the fundamental essence. That is what enables you to do this thing where you give the customer experience and user experience that people expect from a fintech using kind of the private off-chain side. But use the public side to provide these guarantees on integrity, on ability to exit, on sort of knowing where your assets are. Um and those public guarantees allow for all the efficiencies I'm sure you guys have talked about in stablecoins in general.
Chuk Okpalugo:Yeah. I think that's a nice way of putting it. It's it's not kind of transparency at all costs. You need to get this right balance of what information needs to be private, what information needs to be public, so that you can reduce these products. And when you mentioned the actively managed funds and actively managed assets, um it kind of points me to the fact that this is just the on-chain version of, like you said, ETF, even platforms like Wealth Simple and Wealthfront, where you said, like, I just want this kind of risk for this kind of reward. I don't want to do all of the heavy lifting of rebalancing and investing and tracking the market. I want someone to do it, but I want a choice of what kind of risk balance that is. And so it is a uh decentralized way of achieving that same goal with the benefits that you mentioned of sufficient transparency to guarantee some of those kind of key things, the ability to withdraw, uh, and the fact that you know where those data are. And so I think that's a nice way of putting it in. I think to tie it back, uh what should listeners and and open fintech builders of financial products take away as the kind of the implication? I think the the client-based example is a good one. Hey, I'm building a consumer application. I can now provide my users with a full range of financial products. What deal do you want? Do you want a risk-free rate? Great, I've got you. Do you want something that's a bit more risky but has some downside protection? Here's another one. Uh and then the ability to kind of uh borrow against your assets. Um what other uh kind of real-world kind of implications are there for the builders of today?
Tarun Chitra:Yeah, so I think um you know one really important thing about the lending market, just to give more of a microstructure view of it, but not with not like at the technical level of like what the smart contracts are doing, but more just like a f supply and demand kind of description, is the lending markets in DeFi have evolved a lot over time. And I think if you understand the history and then understand where how we got to where we are, it's a lot easier to understand why it might be super interesting to people now. So the original kind of DeFi lending markets were actually because there weren't really great centralized lenders even in 2018, 2019. So, like Compound and Dharma were you know, and then of course a bunch of ICOs, including ETHLend, which became Abe. They they all were kind of focused on this idea that the only lender, only exchanges who were lending were like. kind of sketchy and you couldn't really figure out if they had your collateral or like when you borrowed from them they just took your collateral and there's no transparency. You know, 2018 you know Ethereum was going down because of CryptoKitties. So it was not like it was not like you could really even do a lot of super great inspection. And at the you know compared to swaps, you know, like like you know if I look at decentralized exchanges for spot trading like Uniswap, there it was very obvious what the product was. There was a centralized product and I want to make a decentralized version. Kind in the lending case there was a lot of like OTC lending there was a lot of you know I would message someone and ask them if they want to to to to do a loan with me. But there was a little less like organized loan lending outside of exchanges lending or at that time tether lending. And so there wasn't quite this thing of like smart contract the idea that like decentralized lending would exist in the form it does. So most of the initial um usage of DeFi lending in 2018 and 2019 was a lot of people who were Ethereum whales who you know Ethereum went from like you know near you know $1,000 to $80. And a lot of them just borrowed USD stable coins or they meant to die like in Maker DAO as a way of sort of hedging their Ethereum exposure. And so the initial kind of demand for lending was quite low. It was like a home equity loan. And if you look at you know the US for instance in terms of lending the one of the most overowned assets across the US so this is not like picking a particular state or jurisdiction just like average or the US is is homes and people's equity in their homes. But one of the least borrowed against assets is home equity. Like people really don't borrow against it compared to other things they borrowed. They borrow in other ways against their income, against other hard assets. And in some sense DeFi lending started as like a home equity loan like I accidentally bought into the ETH ICO that's my home and I was borrowing against it. But everyone's very risk averse so that it wasn't like super aggressive lending and there that means there wasn't that much yield being generated. Fast forward to DeFi summer people were borrowing because they're like oh I need to borrow this token to try to you know do yield farming and and and earn earn yield in some other asset but I don't want to sell my asset so I'll borrow instead by 2022 um what had happened was crypto finally started having yield bearing assets. So the Ethereum merge took place in October 2022 and that's when Ethereum moved from proof of work to proof of stake which meant that if you owned Ethereum you could stake your Ethereum and earn some yield 3 to 4%. And once there was positive yield to an asset now of course other assets had already had staking yield like Solana like near like there's there was a ton of staking coins but they didn't have really well developed DeFi ecosystems nor did they have a lot of stablecoin liquidity at that time. Like Ethereum still you know obviously today it's still quite dominant but it was even more dominant then in terms of stable coins were really all on Ethereum. And so once you had yield bearing assets you started to see the mark the demand for borrowing bifurcate. So you had one side of the market that was like I'm a whale I own a bunch of assets I'm just borrowing some USD to pay for expenses or do whatever make another investment. And on the other side you saw people who wanted levered uh yield. So they were like you know instead of getting 3% on Ethereum what if I borrowed against my Ethereum and got 5% because I borrowed 100% but then I had to pay a 1% borrow cost. So I got 5% 3 plus 3 minus 1. And this this leverage yield market grew a lot because it kind of made Ethereum yields more attractive in general and that created a lot of demand in the lending market. And the reason I bring this up is um a thing I kind of see right now in the tokenized asset world is like a lot of people who want to tokenize assets that don't have natural yield. And to me they remind me of the early days of DeFi like they're like you're tokenizing a home. I mean not literally but like metaphorically and like people are afraid to borrow against that asset aggressively they kind of are risk averse. Whereas when people are like oh I see this yield what if I could get a multiple of that yield they're willing to borrow more aggressively and generate more demand. And so I think thinking about yield bearing assets coming on chain is actually more valuable than thinking about kind of hard assets that don't have yield which I know is sort of against what people in crypto think right they're like Bitcoin is gold so like all our assets should be gold. But if you look at the DeFi lending markets they have really a lot of the demand side because the supply side is very elastic right like if there's demand there's enough on-chain capital stable coins and and ethan soul that will follow that um and the role of a curator is matching that like matching the supply and demand in some ways right that's what the asset manager is supposed to do. So like assume that stuff is getting more efficient over time and has gotten relatively smooth. Then the question becomes like where's the demand coming from and the demand is the yield bearing asset side and I think that is where if you're thinking about being a fintech where you want to get your users kind of using this stuff people will let you borrow against yield bearing assets on chain generally speaking cheaper than off-chain. And so if you are our fintech product where you have margin or stock loans or other types of yield products for your users and you have users who want to earn you know 1.5 or 2x times that yield this is the perfect market for that. So that that's sort of you know I'm I'm giving the history lesson more so that you can see that like it actually took you know crypto had to to develop those assets for this market to grow as much as it did.
Raj Parekh:No, I mean that makes I mean it makes ton of sense I mean the like the lot of the maturation story that you're talking about is like I think important detail too because again it goes back to like how robust these markets have become too but um I guess like maybe one thing if you can maybe break down a little bit more um you know there's a multitude of options out there. If I'm a fintech builder today let's say I'm you know I'm launching a Neo bank today I might have a high yield savings account where it you know offers the risk free rate maybe it's you know three to four percent on on deposits but you know my users are kind of bored of three to four percent they're like well I want it I want more but you know you know obviously the trade off is going to be more risk. In that case like what are the options for a fintech builder to say hey and maybe maybe you could describe like even the traditional finance options versus DeFi as well but if they wanted to you know leverage some of the the primitives that you're mentioning like what what is that option for them today?
Tarun Chitra:Yeah so I mean I will maybe now I'll give it a little bit more of the the view of the the gauntlet vaults just more because like we kind of have tailored our risk tranches more or less based on like you know we have a lot of fintech you know clients and users of these vaults where they they're a neobank or they're they're some type of entity and their users have stable coins and they're depositing in these vaults for for free yield. We sort of think of it in three tranches. So we think of a tranche called Prime and Prime is like basically risk free rate plus a little bit like risk free rate plus 50 to one base 50 base points to 1%. And that the idea is that the on-chain borrowers obviously have to pay some premium to risk free rate on average and it ends up being that amount when they're really low risk. Like they're barring against ether Bitcoin at a 10% loan to value ratio like really low amount um this is kind of this home equity loan thing I was talking about. Like there's enough demand for that but it it the yields will be lower. Then we talk about core which is um sort of in the 6 to 9% range and that is things where there's yield bearing assets and so your borrowers are oftentimes people who want leverage on the yield bearing assets. And you're taking basis risk right you're taking the risk that the yield goes down you're taking some principal risk but the goal of the curator is to manage that collateral risk for you so that you're not sort of implicit explicitly thinking about and so um that is sort of a higher risk option but generally speaking even then the the insolvency rates on those are you know in the 50 basis points and below like 10 to 50 basis points rate. Blended blended yeah so it it it is sufficiently low that I think it it's it's a relatively safe option especially for if you have a user base outset. And then our third category we call and and actually I think we we we call it core or balanced depending on on the protocol. And then finally we have the third category which is called frontier which is like trying to get above 10%. No it won't it won't always right it just is trying to find the more esoteric collateral obviously with a lot of risk bounds. And so the way I think about it is lending in crypto at least with stable coins almost always has these three tiers. And the main things you need to know are like A really understanding the collateral you're lending to and then B understanding the borrower demand. And the beauty of on-chain loans right is I might not know the identity of the user but I can oftentimes see what they're using it for. And these users who are trying to loop to get you know leverage on a single yield bearing asset all their actions are on-chain so you can track them and then use that to understand kind of the risk and this is the type of stuff that when you're you're a curator asset manager like you're constantly paying attention to is like your users whose usage you can see you you really um try to uh try to understand and then maybe you can offer a more aggressive loan to value just like like a bank does except you're doing it algorithmic right like we're bidding on the interest rates and loan to value type of stuff implicitly every Ethereum block or every base block. And so I kind of bring this up more because I think in general we got to this framework because fintech kind of different buckets of fintechs right you have like the brokerage like more Robinhood like their users want as high yield as possible fine with default risk. You have sort of like the Revolute users who like Revolute offers like every financial product right under the sun. And a lot of those are quite a bit higher with more risk like structured products than um you know obviously varies from country to country but then uh treasuries and the final is like of course the people who like really just want slightly better than treasury but very very low risk. And I think the interesting thing about the NeoBanks for stable coins is that you can offer the same yield product to anyone in the world effectively for the same rate right like none of these other products that your NeoBank or Syntech kind of currently offers are really that ungeocked like can really be that equal. And I think that's sort of the beauty of these things is like um you're you're really able to kind of like aggregate across all these different domains. So at least that's that's how I think about it for pure lending for other like higher risk stuff higher uh leverage stuff I you know I I don't think I've seen that much demand from fintechs to be honest. I think certain like crypto exchanges and and stuff do want to offer the much higher risk stuff but I probably not this audience probably is not that interested in that.
Chuk Okpalugo:And what about for the the asset managers the fund managers the existing kind of capital allocators? What you've described here is you know we're painting a story of DeFi enabling lots of platforms to enable their customers to invest in a range of assets I think you elegantly put it into like three buckets that I think people understand well especially if you go into any kind of investment application are you are you risky, are you safe? Are you more risk or more risk and so on? And so if you're a you're in a bit of battery how should you think about playing in this market? Do you you take your existing fund, try and tokenize it and then go talk to the curators and say hey I've got a great fund come and tokenize buy from my tokenized fund. Do you try to become a curator yourself? How should they think about that?
Tarun Chitra:Yeah so um that's a great question. So two things. So one is um we have done some you know they're small vaults they they haven't grown in kind of uh TVL a lot but we've done some kind of initial vaults where we took tokenized credit funds and let people get leverage like looped those funds. So like you know uh one of the funds we did was was Apollo's A cred fund which I think yields like in the like 11 ish 12% and you know using DeFi interest rates being sufficiently low you know we were able to offer you like a looped version at like 19 ish percent um and I think for funds that are you know private credit and have these kind of restrictions where it's like okay my distributions are monthly or quarterly um my Oracle like the price that the on-chain lender gets is you know I need my fund admin to provide the thing you can definitely do it um I just think you're gonna get you know you you will get better interest rates but I do think the onboarding for users is still not great like the I think the KYC procedures are still much harder and it it's somehow that part the friction hasn't been removed and obviously there's a ton of people working on it right like securitize super state etc right so I would say that the tokenization platforms have not quite like DeFi is like way ahead in terms of like the things you can do and how you can like tranch things and slice things versus like the tokenization stuff is like and a lot of it is just like trying to map the paper world to the digital world and like it's not fitting. It's like square peg round hole so I would say like that stuff is still not settled yet. Now there might be some opportunities in that um I think if you have more call it closer to liquid funds like daily liquidity um you know closer to ETF or even daily closed end fund that becomes extremely appealing. So if you're a fund admin or fund manager who has like higher liquidity maybe like medium yield um funds and you have a user base who you think would like to ARB the spread between DeFi rates and trad fi rates to get a levered version of that. I think that's like the perfect middle ground right now. Those people are probably more like you know insurers or people who like have bond funds, stuff that's like kind of not quite the private credit part of the world where it's like more irregular payments. Now that's not saying that won't happen but I that I I think like there's just a little further to go. So the the the the closer you are in the liquidity spectrum to treasuries the higher likelihood that you're gonna be that that's sort of the heuristic you should be using. And the question of whether to become a curator or whether to uh uh kind of partner with one I think the main thing is curation and to me I say this is from a personal thing I think the reason it's appealing or interesting is it's sort of basically like quant trading like you you have to bid on interest rates continuously it's like you know in the time we did this podcast we must have bid like you know 10,000 times or something right like so like this this kind of quantitative credit credit stuff has never really existed when I was in finance like despite you know having FPGAs for executing trades and and doing low latency stuff I still had to call someone to get a margin loan on stocks like like you know it's not fully automated like the lending part of the world in TradFi is like kind of half pencil and paper half like call someone on the phone. Whereas in DeFi it actually feels like the first time you have like electronic credit markets that are like 24-7 people are trading them continuously people are bidding on values continuously um and the reason I bring this up is this means that you as an asset manager need to treat yourself like an HFT firm. You can't treat yourself like a traditional asset manager. If you're you know you need to be like an ad network like people who are bidding on online ads 24-7 or people who are in HFT trading globally 24-7. If you are structured like that then it could make sense to be a curator. But if you're not I think you're opening yourself up to the can of worms it's like you have to get the security and custody stuff right you have to get key management right you have to get the quant bidding stuff right you know you have to get all the BD stuff.
Raj Parekh:And so I think in that case it probably makes more sense to partner versus um yeah I mean this is like a this is like a key reason why we call the show Money Code because code is you know money is now code and there's a lot there's a new evolution that you know some of these advisors fintechs all have to kind of realize and uh kind of grapple with this new reality as well. And maybe you know maybe just to you know as we're getting close on time here but you know if I'm a if I'm a PM or you know I'm an engineer at a fintech today and I had a you know I was tasked with you know I want to enable high yield for my users leveraging DeFi. What would be like the the checklist that you would advise like that PM or that engineer to say these are the the three or four things to to evaluate and you've kind of touched on a lot of these things like as part of part of this conversation but maybe if you can break it down just like what to look for and then how to how to underwrite that risk as well.
Tarun Chitra:Yeah so I actually think the first question that is probably the worst uh hardest one for a lot of people because they you know I think in the current market there's a lot more buzz and noise and so it's like you know is is actually picking what stable coin you want to people to use from the fintech side because not all stable coins have equivalent yield markets. Obviously USDC probably number one for on-chain yield market although honestly USDT is so close nowadays that I I would say like 2020 to 2024 USDC was by far the best uh stable coin for on-chain yield so off-chain you know like yield you earn at Binance yield you earn at Bybit tether USDT wins for sure hands down um on-chain yield it was definitely USDC like USDC's growth if you look at the supply curve was totally early days of DeFi it was like most of the growth and um because of that it was sort of the best place to get yield um but but tether's close so like if you're picking between USDC and USDT I would say kind of it's kind of a wash it's your choice based on your geo like you know obviously maybe you're in a geo where tether makes like a million times more sense. So I'm not gonna you know you gotta you gotta pick whatever your users use right now the harder part is if you're like bootstrapping your own stablecoin because then it's like the ecosystem effect in DeFi is is very real. Like you need to have enough liquidity of your stable coin versus other assets whether it's other stable coins or or the major assets like Ethereum or Bitcoin whether it's indirect or direct you also need to make sure that um you know a all of the kind of the integrations in like wallets and exchanges and etc for your coin exists so that people are actively trading it. And then obviously like you know there's obviously the bridge uh type and m zero type of worlds where these stable coins are service but you know you're still responsible for building to some extent a little bit of DeFi liquidity. Like yes you can convert to the base token like USDB or or M. But those are still kind of nascent stable coins. They're not super integrated into DeFi themselves. Like they exist but there's not like when I say integrated I mean you can use them and there's yield at you know a hundred million plus so that you know you when you're a a Neobank you know if your users are joining DeFi you don't want to be the biggest uh you know depositor in that coin right like suppose there's a stable coin where like your if your users deposited you would be 50% of the state that stablecoin supply that's probably not a good that's like bad concentration risk management for yourself right and so in USDC and USDT I think you know unless you're JP Morgan like you really are fine. But obviously if you're starting your own there's a lot more risk and I don't think you can promise high rates because you're gonna have to incentivize the liquidity and stuff like that and and you will eventually you won't be able to offer as high rates. I think you know PayPal has certainly learned this lesson their first time around at Pi USD and and I think hopefully they're being uh let you know if you look at the Pi USD chart versus like the days that they started and stopped incentives it's you know you you can see where where where the usage was. So I I I bring this up because I think a lot of people are grappling with this right I went to Money 2020 I think a week ago or two weeks ago whatever and uh I think I talked to a lot of people who are like we're in the process of deciding what stable coin to use and this is why I'm focusing on this so much because it seems like people who are in this realm are still thinking about that. I think there's a very big uh you know you're making a very big platform decision when you choose that. And I think USDC and USDT from a yield perspective by far the easiest. Once you do that I think the question is just more you know given whatever regulatory constraints you you might be under, you know, which products can you offer? And um generally speaking I think vaults are nice because curators can make you you know vaults are like funds like except instead of an LP agreement I'm writing a bunch of lines of code that calls a bunch of smart contracts. And I can make you a vault that has some constraints that you want like okay only our users can supply to this vault or only this type of borrower can be used or this interest rate caps or whatever, right? So I generally think one thing about vaults that's useful is this flexibility on configuration um that I think the original DeFi protocols didn't have because they lumped everyone together and everyone had to share the same parameters um which was just is is not true as vaults they can be more isolated in that way. And so I would think about that like what constraints you have and once you have a set of constraints then you can actually work backwards to the set of protocols and then rank them by yield. So stablecoin constraints you get the set of protocols you can look at the yield and then I think you can then you can make the risk assessment of the protocols.
Chuk Okpalugo:Sorry that was maybe a little long as well summarized you got it you know I think it's it's helpful to have that framework. Okay, and so one of the final question then um or actually not really final question but just thinking about that that framework you just provided where you know you you've got the way to think about okay stablecoin think about my constraints think about the platform. I think there's a lot of noise around just how these things fare in volatile market conditions. And you know a couple of months a couple of weeks ago you know did it be in the Really peg on Binance or was it just an Oracle outside in a certain way and so on. For someone who's outside the market that it's all times that's very confusing. Where do you start? Is it okay I've I really trust that I've done my underwriting on DD on the curator, on the the protocol, on the network um what do you can maybe you just add a little bit extra there just to help people just to figure out okay where should they focus?
Tarun Chitra:Yeah for sure. I would say unless you're a fintech who is using a non a new chain or you're making your own chain the base network should hopefully be the least due diligence you need. Like hopefully it's like Ethereum Solana an L2 that's used a lot like base um yeah or or or like an L1 that's been around for a while you know uh kind of uh someone like NIR or something um someone where you know the validators exist and have survived a crash and when there was a crash the validators didn't all leave that that that's like to me that's like if you have that then you know that the the chain survives for a while. I think the protocols honestly I think you know lindiness is obviously important the one of the most important things. I think the other thing that's important is performance over time like you know in terms of of yield. I think DeFi was born out of trying to be cockroaches from the 2017 crash and like how do we survive when Binance delists all these tokens um is sort of a very weird way of viewing it but it was built around this idea of of like really low risk but things still function. It's like super overcollateralized super dot dot dot right like maker launched at 150% over collateralization. So um like the protocols have survived the longest generally speaking I more or less less worried about that as much as I'm more worried about their performance or ability to scale there's sort of a sense in which certain protocols just reach a terminal capacity and then it required a new technical innovation to move to a larger scale I think the perpetuals market is like that where like there were tons of perpetuals DEXs before but like the hyperliquids and lighters of the world had to make a different set of design choices and technical changes to to get to the the volumes that they're at. So lindiness and TVL and volume and stuff like you know I think in lending protocols there's not really wash trading because it's collateral expensive like you're putting up collateral so like there's a huge opportunity cost for that. So you don't have to diligence that as much like generally speaking like the the loans are real there's not like wash fake loans and stuff. I think the the the main thing is like incident response and like community like how much risk do you have from the community especially if it's a DAO you know can the DAO add assets that are weird stuff like that is kind of important. But like generally speaking I think lindiness probably trumps everything else. And then on the curator side it's like evaluating asset manager, right? What's your track record? How well have they performed in certain events what's their sharp ratio like I really do think it's like that. But but but with the added caveat that their security posturing is extremely important. I think compared to being an asset manager in traditional finance I don't really have to care like okay if I'm in quant trading HFT I do care about security a little bit but I still mainly trust the data center right like I'm not thinking North Korea is going to break into my system and start giving bad allocations that make me lose money. But in crypto that's a very very real thing like you really do need to care about how well they think about security, how well they think about stress testing in a way that's a little different than a normal asset manager. I think like we've seen a lot of incidents with really strong trading firms in crypto who have had incidents where like they made really bad security issues Like they kind of got locked out of a multi-sig, or they they wrote, they misform malformed a signature. There's all sorts of like blockchain-specific security stuff that if that's you know, no matter how good of a curator you are, if you don't do that, you will have problems. So that's the one thing I would say you have to add on. And then track record how long they've been around crypto is important. And I do think one interesting thing, and certainly the thing that keeps me most interested in the space, is like research, writing, transparency, like people who are like constantly putting out content about what they're working on, I think is something different than traditional finance. In traditional finance, it's like a lot more, you know, people don't publish stuff, they don't kind of like write stuff. But here, because there's already a bunch of forced revelation and transparency, you see a lot more writing. And I think the writing quality and research quality is actually extremely important. And in that sense, people evaluate asset managers based on that, but it's sort of a different type of research, so I point it out.
Chuk Okpalugo:Right. That's helpful. And I guess as I think through it, it does seem still fairly quite complex. I'm thinking if if I'm a fintech provider, uh fintech uh offer offering. Um and I listen, I'm listening to this, I'm saying, okay, I see the benefit. I see that there's these all these options and ability to deploy capital in these really unique ways. But I think I need a bit of help. Uh and I'm sure that can come to Fotok itself or to walk them through. Okay, here we can provide a platform, a kind of a managed service essentially to provide your users with these uh additional things. And then over time, you know, the longer these things exist, the more lazy n there is, the more you know, every time there's a crash or every time there's a hack, people get better and better, and the robustness builds up over time. And so I guess you know, what is the goal, what is the feature of uh of DeFi? Where do we see you know 10 years from now, even longer, uh is you know, we've got Robin Hood, CEO of Latenev, and also BlackRock CEO, uh, and now even JP Morgan, CEO, Jamie Diamond, saying everything's gonna be tokenized. Uh and so if everything's tokenized, do things run on DeFi as it looks today? What is, you know, if you wave a magic wand, what does it look like in the future?
Tarun Chitra:I think the idea that asset allocators are algorithms and not groups of people manually making decisions is kind of the long-term dream. And like a gentic asset management. Yeah, like in a lot of ways you sort of think of you know, uh in quant trading, everyone thinks of themselves as doing that, but they're not really in a lot of ways. Like there's still a lot of manual, like there's still a lot of like manual algorithm design. Let's put that. It's not like really um, you know, the the either from the consumer side, the robo advisor type of thing, or from the like higher yield hedge fund side, like strategy development. It's still kind of not really there. Um, there's actually a very good podcast um by Ian Dunning, the head of AI at Hudson River Trading, that kind of gives he he does a good job characterizing this um recently. Um But I would I would say that like there's a world in which you know, in the same way ads went from like I have an ad agency and I have to go hire an ad agency, and then they they have all these people to like no, there are all these people online just bidding on ads constantly, and like you want to be good at marketing, you need to know how to to bid on on those ads if you want to do it cost effectively. Um I think that transition for finance to 24-7 all the time, everyone needs to be an algorithm. Like you can't do things manually is the end state. Now, whether it's agentic in the way people are thinking of in kind of AI meets fintech right now, or whether it's more agentic in the way of like quant trading, that is where I don't know what the final state is. Like those are two actually quite different versions of automation for live 24-7 constantly optimizing systems uh that are competitive. Um but I think both of them will end up needing a common substrate because I think the beauty of crypto is it can service the retail users and it can service the whale users all in the same substrate, in a way that I think normal traditional funds and asset measures don't for a lot of idiosyncratic reasons, but also um a lot of reasons in that it's not real you can't enforce a lot of covenants algorithmically in the way that you can in crypto. And I think vaults serve as these kind of like security enclaves, like they they let you encapsulate like certain operations that are safe and certain operations that are unsafe. And then you, as an AI algorithm, don't need to be like also have trained it to be like the security expert in that particular asset class or that particular type of thing. It can just think of like, hey, here's the high-level description of this, and I have an algorithm that's allocating in and out of it, right?
Chuk Okpalugo:It's like sandboxed.
Tarun Chitra:It's sandboxed, exactly. It acts like this. I I almost I really like thinking of these the goal of DeFi is like making these kind of hardened, safe sandboxes, and then the agents are just allocating across sandboxes and moving between them, right? And to me, that's where DeFi goes in the long run. Like I think like there's gonna be large pools of liquidity, the sandboxes kind of serve as a way of like safely atomizing them and like giving you you know higher, you know, better some better guarantees on yield or risk or whatever. And then there's the agents who can interact with those safely, and if they make a mistake, it's still okay, versus like if I make a mistake, it's like I lost all my money, right? Like, I think that's the problem with the current agentic AI finance stuff I see right now. Is like the security and like quant stuff is very weak, and like you see them like you see all these tail cases where they could lose all their money. And I like the encapsulation that separates the like tail events from the average behavior. Like the agents should be doing the average case behavior, but they should have some security around the tail case stuff.
Chuk Okpalugo:Yeah. I was gonna say, I think we just kind of live, white-bodied, brainstormed, a new startup opportunity, which is a kind of swarm of agentic uh investment asset managers. Uh and we would call it sandbox, if not for the existing project, the metaverse project that exists from last cycle. Anyway, maybe they'll pivot. Yeah. Yeah, exactly. If they're listening, um, you know, we can take we we take royalties. Um okay, this has been fantastic. I think so much to consume, so much to work through into our strategies and plans, uh, but helpful to see what the opportunities are when we think about investment allocation, providing the users with providing the users with investment choice in a safe way that's verifiable and you can uh withdraw uh at any time. Um and so as we close out, we just want to ask some quickfire questions.
Speaker 2:Sounds good.
Chuk Okpalugo:And so the first one, if we project out five years from now, and I know we we kind of just talked about this, but maybe it's a different answer, what does success look like for Gauntlet?
Tarun Chitra:Honestly, I think it's you know, in five, if I think stable coins grow in TVL by 10x in five years, um yield grows faster than supply. And this is just generally true in most markets because there's the money multiplier effect. Like once people are lending, that collateral gets reused, and then you kind of get you know what you learn in like your micro-econ 101 class, that there's this money multiplier effect. And in a world where there's that yield, I think we just want to be the place that no matter what type of user you are, retail whale hedge fund, we can offer you a product that is safe, secure, and or a AI agent, whatever, whoever you're I mean, in fact, we have a bunch of AI agents depositing in our vaults right now. So I can like it's definitely not zero uh TVL. But the goal is like we only cover every part of the risk spectrum and every part of the yield spectrum, which will grow inevitably as stable coins grow. It's kind of a you know, be the API for yield for for whatever type of user. That's it's I guess that's like kind of the simplest description. Nice. Okay.
Chuk Okpalugo:And separate from all this, what is your favorite book, movie, TV show, or other content?
Tarun Chitra:I don't watch enough TV show movies, so that one is probably out. Um I mean.
Chuk Okpalugo:I feel like Well, actually, you said already.
Tarun Chitra:You recommended the podcast with the Oh yeah, Ian Dunning's podcast on odd lots, yeah, on on HFT. I think um, you know, there's in terms of books, there's a very famous book um from the 1920s and 30s that I was recently rereading called A Mathematician's Apology by G. H. Hardy. And it's a book about uh a mathematician who's like, I don't want to disrespect the sciences or engineering for like figuring out how to make math useful. But I want you to know that I only care about it because of the aesthetics and the beauty, and like the actual usage is is not what I care about. And one reason I bring it up is I somehow feel like this is something I I I worry about in a world of like everyone using LLMs constantly. What is the sense of aesthetics anymore? Does it exist? And so I anyway, I've been reading a lot of books that are like old people's ideas of that a hundred years ago. So where where's the beauty and the art of actually the the craft? The prompt typing. Yeah.
Chuk Okpalugo:Um no, that's that's uh that's food for thought for sure. Um especially with all the AI generated everything. Everything, yeah, exactly. Um okay, and then final question. Um other than the head of AI at HRT, who else should we talk to to learn more about DeFi or just anyone else in the space?
Tarun Chitra:Yeah, I think um, I think someone who has an interesting worldview who kind of can bridge these is probably Christine Moy from Apollo, because she she kind of you know she runs digital assets there, but she has she's a very uh a dual lens of this, of like why a big asset manager cares about DeFi. And so that kind of sounds like the right fit.
Chuk Okpalugo:Yeah. So all right. Yeah. Make it we'll make it happen. Awesome. Uh Tirun, this has been fantastic. Uh we've I've learned a tremendous amount, uh, and I hope the listeners have done too. Um, where can listeners go to learn more about you and gauntlet?
Tarun Chitra:Yeah, so I'm uh at Twitter uh Tarun T-A-R-U-N, Chitra, C-H-I-T-R-A, no space, no separation, all one word, and uh gauntlet, uh Twitter at gauntlet underscore xyz or gauntlet.xyz. Awesome. Raj?
Raj Parekh:You can find me on Twitter X at rpark and mana.xyz.
Chuk Okpalugo:And you you've updated your Twitter handle, right, Raj?
Raj Parekh:Like you I got I got lucky with the handles marketplace. Right. So uh check that out. It's still in beta right now, but I was able to switch my handle because of that.
Chuk Okpalugo:So for folks who are like, you know, every so often people listen to one episode and they'll go back and listen to old ones, you're gonna see exactly when Raj acquired the the solid handle. That's great.
Speaker 2:That's right.
Chuk Okpalugo:Um for me uh stableprintblueprint.com uh for long form writing. Then you can find me on x chuck underscore xyz and then LinkedIn Chuck Up Lugo. Uh thank you all for listening, and Triune, thanks again for joining us. Glad to be here. Thanks so much for listening to Money Code. There was so much to take away from today's conversation. I learned a lot, and I hope you did too.
Raj Parekh:If you enjoyed this episode, do us a favor, share it with someone you know, or give us a five star rating on Apple, Spotify, or wherever you get your podcast from. Until next time.
