The Delphi Podcast Host and GP of Delphi Ventures  Tom Shaughnessy, hosts Tascha Punyaneramitdee of Alpha Finance.

Episode Highlights

The Delphi Podcast Host and GP of Delphi Ventures  Tom Shaughnessy, hosts Tascha Punyaneramitdee of Alpha Finance. The two discuss Alpha’s token economic plan (staking and unlocked features per product), value accrual, backstopping risk in the platform, growing to take on DeFi giants while staying nimble and releasing cutting edge products, AlphaX’s perpetual product and much more. Tascha is a magical founder. 

As a recap, we originally hosted Tascha on December 4, 2020 – view this episode here.

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Show Notes:

(2:19) – (First Question) Alpha Finance Overview.

(5:28) – Alpha Token’s staking Tiers.

(9:26) – AlphaX, a leveraged trading perpetual swap onchain.

(12:40) – The process behind the design of the user interface.

(15:35) – Thoughts about how Alpha Homora will work with Uniswap V3.

(19:54) – Alpha’s Risks.

(22:22) – Thoughts on Layer 2s.

(24:12) – Alpha’s target / retail users and funds / DeFi protocols.

(26:51) – Flip side of staking, where you have one pool of capital that’s inherently protecting multiple products?

(29:21) – What’s next for Alpha?

(32:29) – Thoughts on the direction of Alpha long-term.

(35:17) – Dealing with Culture clashes.

(38:31) – Thoughts on Alphas decentralization.

(43:15) – How do you stay small enough to be able to offer the innovative DeFi products that got you here?



Disclosures: This podcast is strictly informational and educational and is not investment advice or a solicitation to buy or sell any tokens or securities or to make any financial decisions. Do not trade or invest in any project, tokens, or securities based upon this podcast episode. The host may personally own tokens that are mentioned on the podcast. Lets Talk Bitcoin is a distribution partner for the Chain Reaction Podcast, and our current show features paid sponsorships which may be featured at the start, middle, and/or the end of the episode. These sponsorships are for informational purposes only and are not a solicitation to use any product or service. Delphi’s transparency page can be viewed

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Interview Transcript 

Tom (00:01):

Hey, everyone. Welcome back to the Delphi Podcast. I’m pretty amped to have Tascha on again from Alpha Finance. Full disclosure, we invest in Alpha, we’re extremely happy with our investment and helping them build a little bit on the side. I help run Delphi Ventures with my partners. Tascha, how’s it going?

Tascha (00:22):

It’s been great, and thanks for having me Tom.

Tom (00:25):

Tascha, every time I talk to you, it’s not even that long of gaps, and I feel like we have totally new things to discuss.

Tascha (00:33):

Yeah. It’s a crazy DeFi world and we’re innovating in all the areas that we can. So right now we have Tokenomics that’s coming up and we’ve thought a lot into how we can innovate on that as well and how do we set a new standard for the new industry?

Tom (00:54):

Yeah, really am for it. And for those who missed our first podcast with you, they can go back and check about Alpha. But I hate to ask you to give the 30-second overview again, but just for new people in this space, it would be good to hear.

Tascha (01:10):

Yeah. Alpha Finance is a DeFi lab so we are incubating a number of DeFi products and each product will be a product that closest market gap. So that means that let’s say we spot a huge market gap and we find a way to innovate on that and pretty much that’s the new product that we build, right? So that’s the low level on what each product is going to be. And then on a high level it’s more of how do we create an ecosystem out of all the products that we have, to make sure that it generates additional value for the users when using the whole ecosystem as opposed to using one product. So that’s a pretty high level. What that means for this model that we’re building is that there are several things, right?

Tascha (02:05):

One is that we always have to keep up with the markets, see what else are missing, what are the market gaps that we can quickly capture and pretty much move DeFi going forward. Second is that even though the market gaps that we spot are maybe something that other projects have been working on as well, we always try to find new and innovative way to solve it. I think that is the key thing. And what I want to give an example is that for AlphaX, for example it’s on chain for perpetual swap trading product and we’re closing that gap. There are many other projects that are solving that as well. And I think the cool thing about DeFi is that there’s so many green fields and there’s so many ways to look at the problem. The way that we’re looking at it is different from how the others are looking at it. And then we’re going to see pretty much how we’re going to work together with the other projects and innovate the whole industry going forward.

Tom (03:07):

That’s awesome. I mean, a huge focus for us is just we look for projects where they create a lot of value, right? You guys have clearly found niches in DeFi to capitalize on and to offer products in the clever yield farming. AlphaX is going to be composable on-chain perpetuals with the fund group kind of baked in, which is super interesting. And I guess the second part of that though is finding projects whose token actually can accrue that value and is unforkable and those tokens actually play a critical role within the actual project. I mean, THORChain is one that I always point to, which is just an obvious example of a token that’s critical to how the project actually operates.

Tom (03:47):

You guys are also in that same boat where you design a token that not only accrues value, but I think it’s maybe the first time we’re really seeing brand new features added for different staking tiers. I mean, people are used to getting fee rebates on exchanges but you’re offering real features to stakers within your products. Can you go through the thought process around your token econ and if you can dive a little bit into each tier too that would probably be super helpful.

Tascha (04:16):

Yeah, sure. The basic level is that Alpha token holders have a stake and then accrue the fees from all the Alpha products. Right now we have three products, Alpha Homora would be one. On Ethereum we want to be a C and then B to an Ethereum. And then all of these are in Alpha Homora family, but then in the future we’re coming up and pretty much launching more family. AlphaX is an example of the second family. That’s the base level and then we think of the next step in terms of what else can we do to make it more fun and make it more chemified, pretty much unite the commodity more while still creating real value to Alpha stakers. We think what this means for Alpha stakers to stake is that they are securing the whole protocol because the funds here are using to [inaudible 00:05:12] all of the Alpha ecosystem.

Tascha (05:16):

This is similar to have a model in terms of the funds being used in [inaudible 00:05:22]. Once we think of this as the next step we think, “Okay, how do we make sure that users who want to secure the ecosystem get something more.” So then we take a step back and see that the fact that they are securing the whole ecosystem means that they actually can have the option to take more risks on the product and making sure that these risks that they want to take are actually something that the protocol is acceptable. So not exceeding the risk level that we’re okay with, but it’s more of lowering the risk level that the other non stakers can take.

Tascha (05:58):

Then once we think of that, then we see, “Okay, how do we apply that concept to the products that we already have?” Then that means that the people who stake, whose the funds are in the staking contract using [inaudible 00:06:13], actually have the option to take higher leverage on Alpha Homora B2. They can or cannot open the high leverage depending on how much they want to take, but they have that option to go even higher as high as 40% more than what is available now. I think that’s the underlying thought process and we will apply the same thought process for other products that we’re building too.

Tascha (06:43):

And in terms of the tiers, we have five tiers. Once we have this concept of Alpha tier come into play, we wanted to gamify this whole concept and make it more committee engagement. Again, that’s how we come up with all the five characters with Alpha Woof Woof being the youngest one to Alpha Pack Leader who stakes more than one million Alpha. And then each tier will also have different features that they can unlock depending on the same framework that I shared with you.

Tom (07:23):

That’s awesome. Now I love that the token one accrues value, but two doubles as feature unlocks. And one of the things that I’d kind of like to discuss with you is some projects get pretty complicated as they tack on new offerings and new use cases, and that kind of complicates their token econ or their token econ kind of restricts them from going and offering new products. And I don’t have a great example off hand, but the thing that’s pretty cool about what you guys are doing is that you could tack on any number of products or features, and basically just accrue value forever on those new products and just add specific feature unlocks for stakers to those products. Basically your token econ suits really well to the kind of DeFi lab you’re building. Can you kind of share potentially what other products you might be thinking about and potentially how your token econ can be suited for those products potentially on additional features or enhancements for stakers?

Tascha (08:21):

Yeah. The second family that we’ve been working on is AlphaX, and AlphaX is a leveraged trading perpetual swap on chain. And there are several things with, I would say AlphaX, that are unique to other similar products in the same space, right? The first thing is that we are targeting DeFi users who may not have traded perpetual swap before, but they want to. There can be many, many reasons for that, one being that typically it’s complicated to go through funding re-payment, rebalancing, and a lot of complicated concepts that are involved in professional swap, right.

Tascha (09:07):

And second is that if I use those really love interoperability, and we also love interoperability, and what that means is AlphaX will not be a standalone product. It will interconnect with the other products through the tokenized positions. These leveraged positions are tokenizing in ERC-20, and you will be able to use the other DeFi products through these tokenized positions too. And then finally the last thing that is really, really crucial is that the way that we are thinking is in order for us to make it most user friendly as possible, we are also baking in the funding rate into the quoted price. That means that when users come in to trade on AlphaX, the price that they opened, the position set and closed the positions set already bake in the funding rate payment. So they don’t have to come back every six or eight hours to make sure the funding repayments are being processed.

Tascha (10:19):

And what that means is that they can just hold that token and do more things because if not, then the tokens will not be able to leave AlphaX. I think that also I lost a number of things that additional Alpha stakers can do and in terms of the features that they can unlock. The really basic one, which I think applying the same concept that we did for Alpha Homora B2 is enabling high leverage. I would say that is the minimum that Alpha stakers would be able to unlock. Depending on the five tiers, if you’re in one of the lower tier, then unlock a bit more high leverage. If you’re in one of the high tiers then you can have even more higher leverage. And then that’s the minimum. And then what can come even further is the usage of these tokenized positions. We can work with more partners to see, hey, what would the higher tier of Alpha stakers can do on the other 85 projects using these tokenized positions.

Tom (11:21):

That’s awesome, Tascha. I have a couple of questions there. I mean, when you guys roll out, I guess the features for staking, right? Some of them could be really specific, right? You could have lower fees or greater leverage, things like that. You guys have done a really good job on your user interface. Everything looks amazing on Alpha Homora V2. I guess my question is though, how do you design the user interface so that users actually are aware of either the money they’re going to save or the money they have saved and I guess all the feature unlocks. Because if I go up like leverage tier I save 10% of fees, I’m not sure I’m really going to know on most projects. I guess, how are you guys going about that differently so people are really aware?

Tascha (12:09):

Good question. On the tokenomics UI, we have two parts. One is staking where you can stake your Alpha tokens and then stake. And then the other is Alpha tiers. All of these two are under the same UI, so you can think of it as different tabs. So for the Alpha tier this will show what each tier can do. And then depending on what tier you’re at, it will also show something similar to what Tom you were saying in terms of how much you have unlocked, how much you’ve saved for each product.

Tom (12:46):

That’s awesome. Yeah, now it’s cool. Because that drives basically all the value of holding Alpha, well, at least in part. And I guess just switching over, so just accruing the fees by staking Alpha, do you guys have to make a decision on where someone is able to stake Alpha now that you guys have gone cross chain? If I stake Alpha on Ethereum, am I also going to earn fees from Alpha’s products I’m buying in smart chain and I guess as you guys expand beyond that.

Tascha (13:14):

Yeah. Right now those staking contract will be deployed on Ethereum only, and it will accrue the fees from everywhere, so including the fees from Binance matching too.

Tom (13:28):

That’s awesome. Yeah, now I guess that’s a good way to go about it. And would it be easy for those … Do you think it’s alienating anyone from other chains? If I’m a Binance smart chain bull for whatever reason, right? Would I be able to easily come over and stake Alpha or would I have to go through the whole conversion cross chain process?

Tascha (13:48):

Yeah. You would have to go through the cross chain process. Right now there’s one way, but then another way is [inaudible 00:13:56] by Binance. The first way is pretty much through The second way is the bridge that it’s helping. I mean, the Binance team is helping to add Alpha. Right now there are a few tokens that can go through that cross chain bridge already, but currently not is available for Alpha.

Tom (14:18):

Awesome. Cool. And I guess there was a couple of questions on each of your products just as an update, when you guys are thinking through Alpha Homora V2, you guys offer leverage yield farming. Uniswap launched V3 which, just a refresher, it allows people to take basically concentrated liquidity position. People could think about it as a band that you provide liquidity to, that’s much more specific than providing liquidity to the overall pool. I guess, Nipun your co-founder also had a great thread on this. I guess, how are you kind of thinking about how Alpha Homora will work with Uniswap V3.

Tascha (14:54):

Yeah. Adding leverage on top of Uniswap V3 still is a strategy. I think it is completely different thing in terms of Uniswap V3 and Alpha Homora. And if you look into Uniswap white paper, you would see there are three charts. I’m not sure if you recall, but let me just explain the three charts quickly. The first chart explaining the Uniswap V2 model saying that the price is fixed. So if you imagine the price as the height, right, and then the volume is the X assets, then you can imagine that there is a rectangle that are pretty short, but pretty long. That pretty much explains the Uniswap V2 old model, and pretty much saying that the price is fixed. But pretty much you can go through a pretty high speed pitch and it may not be ideal for larger trades, right?

Tascha (15:58):

And then for Uniswap V3, the width, it’s shorthand because you’re actually specifying the price range. What that means is that when the width is shorthand, you can actually go a bit higher in terms of the concentration of your liquidity. And hence you are getting less [inaudible 00:16:17] and pretty much going through a better trade in general if you know exactly where the price would move in a certain range. The tricky part with this though is that, I would say not a lot of people would know how to evaluate the price range for a particular asset, unless a stable coin. I would say, I think in the beginning it would be more of the advanced DeFi users who moved to Uniswap V3.

Tascha (16:48):

And then eventually when there are more tools, let’s say we’re also perhaps going to build even more tools to make it more user-friendly to use Uniswap and making sure that general devices can use Uniswap V3 as well. And then once those tools are being built perhaps by us, perhaps by [inaudible 00:17:09] or other projects, then that’s when more of the general DeFi users would move to Uniswap V3. And I think that’s how we’re thinking of how we will tie into the whole ecosystem here too, to make sure that the general DeFi users have an easier pathway to access and use this product, so that’s on high level.

Tascha (17:32):

In terms of the Alpha Homora product in particular, what that means is that for Alpha Homora product, you’re not speculating on what price range you’re betting on, right. But it’s more of you are getting additional liquidity from taking that rush automatically, without having to specify that range. I think it’s quite different on the user level, in a sense of understanding the concept, but also different on the mechanics inside as well. This is, I would say it may not be the best explanation as I’m not sure who knows how much about Uniswap, but Nipun is actually going to share a blog soon to explain more about this. And a lot of people have been asking, how would Alpha Homora V2 or Alpha Homora in general fit into Uniswap? And I think that would be a good explainer document.

Tom (18:32):

Yeah, now I’m super excited for his blog post. And I really appreciate your explanation and this tweet storm was great too. I guess one other question on that, I mean, is there any risk for Alpha to be, I guess like a double-edged sword. You guys could move first, you could provide these products faster than anybody else. Is there a risk though that you’re kind of stuck on other protocol’s decisions, right? Like Uniswap making a big change. Does that impact what you guys have launched or is it just a matter of continuing to innovate and support new projects that they throw out there?

Tascha (19:11):

Good question. I think there are several things that we do to make ask me to forecast while still agile and flexible, we need it. There are several things that we have been working on, even when we have only launched Alpha Homora product. The second product that the product are actually completed and waiting to be launched more so and going through one more audit. They both have gone through one round of audit already and will go through one more round. That means that we have a basket of our products that we want to launch and we’ll create that whole ecosystem of interoperably Alpha ecosystem.

Tascha (19:59):

Once we have those backlogs of products that we want to launch in our hand already, that means that we can keep an eye out and then see what are the big moves in the industry? And Uniswap V3 is a big move, right? And I think that it may not have an impact yet but I think it will be, and pretty much we want to move early in terms of working with them, seeing how we can build and giving assets to the general DeFi through our products too. I think it’s more of having the right balance of, while creating your own system, you are also innovating in the whole DeFi ecosystem too, because if not, then you’re just going to innovate in your own area where you’re pretty much out of sync with a whole different landscape. I think that’s not where we want to be.

Tom (20:52):

Now, I totally agree. And that’s an awesome answer. And I guess just moving to AlphaX, you described it earlier as just tokenized perpetuals, the funding really built in. It makes a lot of sense from a composability aspect to be able to use those tokens in different projects within DeFi. I guess the obvious question for you is how do you think about layer twos and potentially other projects offering, I guess, perpetuals on L2. And I mean, you guys are really unique because you’re composable and DeFi in my opinion. But I guess, how are you viewing the competition and how are you viewing your move to a layer two given it would probably be seriously needed for something like this.

Tascha (21:36):

Yeah, there are several trade-offs where we’re thinking of, because for AlphaX, the positions are tokenized, and to really make the most use of these tokenized positions, it’s the DeFi products on L1 that we make a lot of value for these tokenized positions. You can do more things with AAVE, you can do more things with Sushiswap and so on and so forth. I think, as we continue to see more of these DeFi products go on various L2s, let’s say Uniswap V3 on optimism. Sushiswap on a number of L1s and potentially on L2 as well. Then this also determines which ecosystem is actually the most active and where it would be best to launch AlphaX.

Tascha (22:27):

I think right now we are internally debating between L1 versus L2, because if it’s on L2, then yes, there would be lower guest fees. But the usage of the tokenized positions may not be as much as launching one L1. Perhaps we might launch on both if we want to optimize for both. And if we think that our users are two different groups, one who wants to just trade and enjoy the low fees and one who want to really optimize for the usage of the tokenized positions.

Tom (23:11):

Oops, sorry, I was muted. Oh, great. Sorry about that. Great answer, Tascha. And I guess my followup is, do you envision a lot of the users or the majority of, I guess the volume flow here to be from retail users and funds, or do you think the majority will be other DeFi protocols that want to use AlphaX for a myriad of different use cases?

Tascha (23:32):

Yeah, I think it will be actually the whales in DeFi. And then including the retails in DeFi too. I think this is the group that have been pretty much untapped by perpetual swap as a whole. And if you pretty much look at who uses perpetual swap now these are, I would say either sophisticated retail traders or institutional and funds who use on the centralized exchanges. And I think there are a lot of trade-offs between you seeing on centralized exchanges and then really using on chain, one being front running for sure. The other can be, perhaps these are the traits that let’s say the funds may not want potentially anyone to know about. Maybe it’s too large, maybe there’s so many security questions that come more with trading, let’s say from the funds aspect, a huge amount on chain.

Tascha (24:33):

In our opinion I think we’re less targeting on the funds who are trading perpetual swap on centralized exchange already, but we’re actually capturing a new target segment who are in DeFi already, who haven’t really traded perpetual swap. We have talked to a lot of, I would say, big players in DeFi, and they pretty much enter in trading world, in financial world through DeFi. I think they are more comfortable in staying this way in DeFi. And perhaps once they know pretty much how to trade perpetual swap on AlphaX which they don’t even need to know funding repayments, they don’t need to know rebalancing and pretty much they can achieve the same results. I would say this is more of the target users that we’re targeting. And this pretty much determines how we build the product too, because this is why we’re making the funding rate payment into the quarter price. This is also why we have that positions be tokenized because we want to optimize for the DeFi uses.

Tom (25:43):

That’s awesome. Yeah, now I definitely think whales will use this first. I am not a whale but I’m eager to try it out, it’s live [inaudible 00:25:49]. And I guess the other question I have for you just on the token econ, and if anyone else in the audience has a question let me know what brings people on stage, we have Tascha. I guess one other question I have is, so stakers for Alpha kind of backstop your whole system, right? Is there any concern on maybe AlphaX drives 90% of the fee generation, but Alpha stakers have to protect against some hooligans and Alpha Homora that might be up to no good or something. I guess is there any concern on having the flip side of this on the risk side, where you have one pool of capital that’s inherently protecting multiple products?

Tascha (26:29):

That’s a good question. I think the good thing about how our staking contract is built is that it can be scaled quite fast. I think when we first launch, we will go with one pool for the whole ecosystem, because I think that’s how you make sure you gain for the whole ecosystem and you help the whole ecosystem, right? Because if we limit to staking for let’s say AlphaX alone and separately staking for Alpha Homora, then now the decisions are on the users and on those stakers in deciding where they want to stay. But in this case it’s one pool for the whole ecosystem. I think we will go out with this first. And then as time goes on, we will continue to get the feedback from the community.

Tascha (27:19):

Of course we have to maintain security for all the products, so it doesn’t mean that AlphaX would have higher security than Alpha Homora. All of the Alpha products will go through the same security measures that we have published. There are five items in that security measures and multiple audits is one of them. Every product would go through these five measures before they’re launched. So yeah, we will continue to monitor and then see what is best. If let’s say people and community think that this is not the best way and they also don’t want to make the choice, perhaps we can help them make the choice [inaudible 00:28:04], which product they’re using. Then you’re sticking on that product. Or perhaps if you’re not using anything, then you can stay for the whole ecosystem, something like that. I think it’s more of a question when we launch and evaluate from the community feedback.

Tom (28:21):

That’s awesome. Now I guess it makes sense. And especially just drives that inclusion with staking the token and having access to not only the fees, but kind of feature locks on all of them. And I guess the other question for you is like, what’s next for Alpha? AlphaX has a plan that’s coming really soon. What other projects now have you released? I know I’m excited for a few, but I’m not sure which one’s next.

Tascha (28:45):

Yeah. Quite a few coming up. Alpha [inaudible 00:28:49] will be live really soon. And then Alpha Homora V2 will be relaunched. So that includes more leverage positions that you can take. You can open new positions on Alpha Homora V2. There are going to be new leveraged pools added to Alpha Homora V2, as well as more lending assets on Alpha Homora V2. Right now you can only lend if and stable coins, but once it’s relaunched, you can also lend other assets. For instance, YFI, AAVE link, so those are just a few examples.

Tascha (29:27):

And then that’s when we push out AlphaX. AlphaX would really bring the composability for all Alpha products in which Alpha Homora users will be able to hedge their positions on AlphaX. We’re going to make sure that the interface on this linkage part is really clear and simple. It will really benefit both Alpha Homora and AlphaX. For Alpha Homora users, they would benefit because when you’re taking a leverage position on a particular asset, let’s say you’re borrowing is to your if [inaudible 00:30:08] pool, right? In this case, you are exposed partially to a short position. The whole linkage between the two products will calculate for you how much you’re actually shorting and what that translates to if you’re going too long on if.

Tascha (30:24):

Once you confirm that process, you pretty much do several buttons. And then it will open the opposite position for you. So you’re roughly market neutral between Alpha Homora and AlphaX products. So that’s a benefit for Alpha Homora users. And then for AlphaX, of course, this means that you’re getting, I mean, we’re getting the initial group of user base from Alpha Homora, as we continue to grow and scale AlphaX. I would say this is the second family. We have the third family already and not yet shared with the community yet. I think it’s more on depending on the timing as well and the market, but I would just say that the third product is in an area of impermanent loss insurance. So that can be a quick [inaudible 00:31:17] on the third family.

Tom (31:20):

Yeah, now I’m excited for that one, because one hell is so hard to track and it’s so hard to fix. I mean, [inaudible 00:31:26] has a pretty nice way where they just kind of their token to offset it and THORChain has a couple of initiatives planned where they will also do something similar, but that will be really cool to kind of see from your end. I guess, just zooming out, Tascha, what do you view the direction of Alpha long-term. Because you guys started as providing niche DeFi services, but it seems like now you guys are going after traditional markets that exist, like perpetuals and lending and things like that. Do you think you’ll continue to focus on like niche DeFis or do you think that Alpha is getting so big that you may have to just go out there and compete with the other DeFi protocols that kind of exist in space?

Tascha (32:11):

That’s a really good question. And pretty much along the same line as internally what I’m thinking onto, and the way that I think about it is that, when you first start, you need to gain that differentiation, right? Typically differentiation is easier to gain in a niche area than as opposed to you go out on day one and you compete in lending. As a result, we started from niche area first, but as we go on, there are going to be new niches that we will continue to innovate in. At the same time as growing the product more towards the general area on anything, the general area is pretty much where I would say if the new DeFi users were to come in from traditional finance, from CeFi, they would come into this general area first that’s lending and then trading.

Tascha (33:08):

Pretty much I would say we are both innovating new areas and gain more niches as our competitive advantage, but also at the same time, really pushing the product to grow into the main area, to make sure that we are capturing the new fees of DeFi users who are coming in and then ask the next step really long-term, I would say we will apply the same concept to pretty much find a way to adapt what we built and innovate, not perhaps on traditional finances, that would be quite a long way from now, but then on the midterm it would be more on the relationship between CeFi and DeFi as the thing that’s the next bridge to expand more DeFi users. And then once we innovate in that area, then the next area that is more of the long-term path is innovating in the traditional finance. And I think that is why we also have SCB 10X, which is the venture arm of one of the largest commercial banks in Thailand as one of the investors and partners. We can start something down the line, starting here from Thailand and then eventually work outwards.

Tom (34:22):

Tascha, if there’s ever any Alpha meetups in Thailand, I’m totally down to come meet. Obviously [inaudible 00:34:31] would be a good place for an Alpha meetup. And I guess on your point of expanding to other products that may or may not exist, how do you handle that scaling internally. Because you’re not only having increasing head count, but then you have a technical burden of keeping up with everything. But frankly, you also have a lot of culture clashes, right? You have to deal with people that are Ethereum maxis, or Bitcoin, or sorry, finance smart chain maxis, or on Bitcoin. How do you navigate all those cultures being that you guys are building cross chain products?

Tascha (35:05):

Internally in terms of our resources, we do multiple things to scale quickly. One is of course always recruiting internally here in Thailand. Second is we are studying to, I would say de-centralize the project a bit more, so that means we’re not limited to talent in Thailand only because that may not scale as fast as we would like. We are interviewing and recruiting, I would say more of offshore developers as well. Starting from I would say those that we know off, perhaps maybe there are Thai who are living abroad and maybe they’re a friend of a friend. I think trust is really important especially when we onboard developers to code our product, right? So we will slowly decentralize the project step-by-step.

Tascha (35:59):

And then the third thing of course is we are working with SCB 10X not only to develop relationship long term, but they actually send developers to help us build in the meantime. Right now they have sent four developers already to pretty much join Alpha team for a number of time and pretty much really gain the knowledge of DeFi so we can do something more down the line too. That’s on the growing resources. In terms of managing communities and in clashing communities. As we go multi chain I think, it really comes down to, I would say, when you talk to the community, you really need to know which group you’re talking to and making sure that I would say being in the middle as much as possible. Typically we don’t really be as extreme. If you watch our Twitter, we don’t go extreme in one way or the other to make sure that we are set for the multi chain that we want to go for, right.

Tascha (37:06):

And I think the crash is, I would say normal. I think crash is pretty much signifying the change in the industry and with every change there’s some crash. This crash may be a good, I would say symbol for the industry being that it’s innovating, it’s moving to even more chains. And then eventually I would say there would be some middle grounds that the communities will find themselves. I think we just need to make sure we’re the middle person who doesn’t act too extreme one way or the other.

Tom (37:41):

Yeah. I mean, it’s cool that you guys could have different communities and different chains launch different alpha products. And basically it doesn’t really matter who wins at the end of the day for Alpha stakers. Because I guess that’s part of having global fear for all. And I know it might sound crazy today because you have to keep a firm hand in everything and you’re building mission critical tech a thousand miles an hour. But when do you think will be the time when a community member group can come along and propose new alpha product and handle the entire implementation start to finish? Do you think that might be … I’m assuming that’s probably a couple of years out. But I guess how do you think through that type of community building and that type of crazy decentralization?

Tascha (38:25):

Yeah, good question. And that is a preview of what’s coming up too. This coming month, April, we’re going to start a lot of new community initiatives, including getting more ideas from the community. In the beginning it might be more of us building or perhaps the developers in the community building some parts of it. Then down the line hopefully the whole product can be built and handled by the community. What is coming up is we’re going to do a number of developers grant to make sure that we work with more community while also getting the new tech being built. These are going to be more of the tools that we used as oppose of a new product. And as we continue to scale, then the scope of the developers grant will grow with the scale of decentralization. It would not just limit it to community tools, but it would go towards some parts of the product and then eventually the whole product. I think that would be the way they were thinking of it.

Tascha (39:34):

But the good thing is, with Alpha Finance lab as an ecosystem, that means that even the new product, it can just be, let’s say two teams joining hands to create the product and pretty much operate jointly for the product. I would say that agile way of working and the model that we have working for each product will make it better for us to scale. So in the future, there would be this person heading the Alpha Homora team, this new person heading AlphaX. And then this new person working with the external developers team to head AlphaY let’s say, which is the product developed by the community.

Tom (40:21):

Now that makes a lot of sense. I’m assuming this will probably be the case because AlphaX will launch on Ethereum, but do you envision a world where Alpha’s ecosystem has different products and different chains say like forever. I mean, if you guys build something on Binance smart chain or [inaudible 00:40:40] or something like that, that just straight up can exist on Ethereum, do you think that that will exist in the future? Or do you think that Alpha will have a copy of every implementation of your use cases on every chain?

Tascha (40:55):

I think that really determines on whether that she needs it. If that she needs it and there are a lot of uses and target demand that we want to capture, then we will launch. If not, then it won’t go to that chain because it’s not going to be worth the engineering resources to maintain a product. And I would say more products that we launched on multiple chains that reduces the speed for us to think about new products and incubate more products too.

Tom (41:28):

Yeah, now that’s totally fair. And I guess, how do you think through just the other benefits of having like an umbrella of projects. If you guys wanted to use another L2, sorry, another layer one that you guys already interact with for scaling. I’m probably jumping ahead on a lot of technical hurdles, Nipun will probably shoot me here. But is there any way to use Binance smart chain for scaling and AlphaX users won’t know the difference and you settle on Ethereum? What are the interrelatedness between the L1s that you work with that you can kind of benefit from? Because it seems like you clearly have the relationships and the plugins to kind of do this stuff.

Tascha (42:04):

What’s the relationship between L1s, it is quite, I would say limited to token transfer at the moment, while each of the L1s work on more of the advance linkage. Advanced linkage would include transferring the messages and really allowing the product on one chain to interact with another chain and I think that’s a few years out. So yeah, unfortunately they were fixed with the token transfer at the moment, but I think we will find a way to work around in the meantime while the scalable solution is being worked on.

Tom (42:45):

That’s awesome. And one last question from me, Tascha, and if anyone in the crowd has a question, just raise your hand. But the other question is, you spoke earlier about how you guys make it so big that you have to compete with traditional DeFi incumbents, I guess the flip side of that is how do you stay small enough to be able to offer the innovative DeFi products that kind of got you here? I’m assuming that’s kind of goes hand in hand with the decentralization aspects and letting other people build. But are you ever concerned, you wake up and you’re like, “Damn, I’d love to build that, but I’m just too busy with my bigger products.”

Tascha (43:20):

Yeah. I have that feeling and I’m sure Nipun has more of that feeling that I am, because he is, I would say very full of ideas. Some ideas are not yet I would say of a priority. Some ideas are something of our priority like AlphaX that we work together to incubate it. I think that this comes as we scale more of the team. Right now it’s the developers team for Alpha Finance lab. But going forward, we will have more of a mini unit into, under Alpha Finance that let’s say this unit works on Alpha Homora. This unit works on AlphaX. This unit works on incubating new products. And then once it’s incubated, then it’s transferred to the new unit. Once we achieve that stage of having a more modular teams to run each product, then I think that will be when we can really tackle a lot of ideas and not hold back by the resources.

Tom (44:26):

That’s awesome Tascha. Well, super excited for staking in AlphaX and the new products you’re launching and just to continue to see Alpha grow. Full disclosure for everyone that joined late, we’re static investors in Alpha through Delphi Ventures. Just another disclosure, this was being recorded, it’ll air on our podcast channel. And Tascha, I know you’re swamped, I really appreciate you coming on for a second time. And frankly, I’m really eager to have you on again, hopefully sometime soon.

Tascha (44:54):

Yeah. Thank you so much. And your questions are really great, actually have provoked me to think of a number of things and those things actually become action items, so thanks for that.

Tom (45:07):

Yeah, of course, Tascha, I appreciate that. Well, it’s been awesome having you on, we’ll let you go back and get back to building and thanks again.

Tascha (45:15):

Thank you. Thanks everyone.

Apr 1, 2021 | 46 minutes | Chain Reaction

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