Fireside Chat Recap | Episode 8 | Flourishing Capital and Steady State Collaboration
To celebrate Steady State’s strategic partnership with Flourishing Capital, founders Eric Gomez and William Perone were this week’s special guests on Fireside Chat. Both share why our communities should be excited about this collaboration and discuss their ideal investment strategies.
Silvia started by introducing Fireside chat guests and the Flourishing Capital and SteadyState partnership as the topic of discussion.
Silvia: Looking back at the previous week’s hacks, 12.7 million worth of Tokenized Bitcoin was stolen by hackers who exploited a bug in the codebase. With 12+ and counting exploits thus far, what do you think, guys?
Jon mentions the risks associated with a new chain in the DeFi ecosystem, mentioning all the different ways the industry has come. Adding that even though the industry becomes more mature, there is still too much to figure out.
Will jumps in talking about how even though smart contracts seem like small pieces from the entire chain’s codebase, they can get very complicated. And even if you go through audit after the audit, something will come in.
Eric then joins in by emphasizing the size and volume of Binance, stating that as the largest chain, they will always attract the right and wrong attention. Stating that it’s just a consequence of growth. He also mentions they brought in Ciphertrace to help assess the extent of exploits on the system.
Brian then caps off stressing the importance of open-source technologies over inferior centralized technology, pointing out that hacks like that are usually via exposing vulnerabilities, not inside the smart contract but making changes on, for example, the address at the front end side website.
Silvia introduces the team — introducing flourishing as a platform building AI-powered crypto for portfolios and their partnership with Steady State.
Silvia: What does this collaboration mean for SteadyState, Jonathan, or Brian? Could you please give us more insight?
Jon starts by talking about Flourishing Capital’s growing community, emphasizing this because Steady State is building a narrative that can protect communities rather than single parties through moving the risk on to DAOs.
Silvia: Eric, what will this collaboration mean for Flourishing Capital?
Eric then points out that a solid risk model is required for a DeFi insurance protocol to succeed. Tipping Steady State is the perfect position to run their portfolio management processes; adding the partnership can help better DeFi products.
Jon then talks about the 2008 financial crisis that occurred because of over-attachment to one centralized model that caused the whole system to break because all the protocols were relying on each other
Eric then adds talking about how traditional market indicators are starting to evaluate counterparty risk and bond issuances, giving an example of Coinbase that offers larger debt raises, thus raising investor confidence
Will points out that the whole infrastructure is built for regulated equities — a framework that doesn’t exist within crypto. Eric agrees that DeFi lacks fundamental infrastructure pointing out that you could set up a DeFi protocol, but if somebody controls most of the nodes, it’s a shadow governance organization.
Silvia: How will SteadyState and Flourishing Capital integrate their technologies?
Jon starts by saying because SteadyState’s data is open source, Flourishing gets to choose what they’d like to do with it. Adding Flourishing will be interacting with SteadyState’s DAO in the short-run and long-term in a decentralized approach as they push to remain open source alongside other partners. He mentions that Flourishing could use SteadyState’s data to build measures and evaluate our risk assessment standards.
Will joins in by saying they have an API that integrated third-party systems meaning between Flourishing and Steady State. It could be a two-way integration where both parties share different types of information, helping each other grow.
Brian agrees, adding that the partnership was fostered to mutual growth between both data companies.
Eric concludes by mentioning that the partnership is meant to push an industry-standard around risk calculations by standardizing and building out relevant mechanisms.
Silvia: (User question) — Could you elaborate on 3rd party integrations?
Brian explains we’re looking to work with everyone in the space because DeFi is very collaborative. Will adds that a good system allows you to integrate with other offerings for a more complete offering.
Silvia: Please share your favorite investment strategies, their pros, and cons plus their risks.
Jon states that he uses DEX aggregators and yields because they simplify the investment process. He also uses DEX aggregators.
Eric prefers to chart watch with other active traders to put together a diversified portfolio. Stating that he doesn’t jump on trends preferring to diversify and come up with a decorated portfolio.
Will prefers arbitraging Stablecoins between DEXs and chains. They added a feature that allows people to find the optimal route from one coin to another because crypto trading works like forex.
Silvia: My strategy is to buy high sell low. Anyway, how should we approach risk management in DeFi?
Jon starts by talking about his three main types of risks. Financial relationship risk, credit risk, and technological risk.
Will talks about investing between large-cap crypto companies and startups and the types of risks involved. According to Eric, the larger the cap, the more the derivatives.
Silvia: What do you guys see as future opportunities in crypto investment?
Eric talks about the linkage between tokenization and NFTs, stating that companies issue both tokens and NFTS.
Silvia: Are you guys going to sell user data?
Jon says he’ll never sell user data. Even though it’s a blockchain and everything is public and open-source — SteadyState has evaluations on data as a service provider to the community.
Eric agrees and says the only thing they sell is market signals based on analysis stating that selling data is unethical and a violation of user trust adding linking your identity to blockchain transactions is the reason why KYC exists.
Join us next week where we’ll be joined by our lead Risk Analysis Database (RAD) developer Jasmine Brunson. It’ll be the first part of our Mini Risk Series as we discuss why our RAD technology is a gamechanger.
About Steady State
Steady State gives DeFi protocols and platforms a practical solution to safeguard their financial future. With the help of Chainlink Keeper technology, our platform aims to eliminate bottlenecks in DeFi insurance by using automated processes, shared coverage policies, and a cutting-edge risk analysis database. Steady State is creating a new paradigm for decentralized insurance by delivering DeFi’s best-ever insurance platform for protocols.
To learn more about Steady State and the impact of our pragmatic approach to Defi insurance, visit us at the links below:
Steady State cautions that statements in this communication that are forward-looking, and provide information other than historical information, involve risks, contingencies and uncertainties that may impact actual results of operations and prospective transactions.