We continue to approach projects in the DeFi space, so as to offer the community direct statements from team management on their respective projects. This time, we interview Pascal Tallarida, CEO of synthetic trading protocol Jarvis Network. The interview covers the team's mission, technical developments, tokenomics, and plans for the future, in addition to going into detail about specific features.
Here's our shortened list of questions:
- The Jarvis Network Vision
- Best resource for Jarvis Network growth
- The Jarvis Network exchange - a hybrid broker/exchange
- Scaling solutions
- Design plans for "uberizing brokerage"
- The importance of the Synthereum mainnet
- Most popular synthetic assets
- Market maker incentivization
- The Jarvis Reward Token (JRT)
- Secondary tokens sJRT and veJRT
- Building on UMA
1. What was the *AHA* moment that made you realize the DeFi market needs Jarvis network?
I don’t think there was a single “AHA” moment, but rather many. For example, I am quite a big DeFi advocate, and I used to introduce DeFi to friends, family, or even to curious neighbors. Of course I always start with the simplest example, like money markets, and draw parallels with the way commercial banks work.
One common feedback I receive is: can I use euros? I don’t want to buy US dollars. And every time I have to tell them that they must use US dollars in DeFi... while a few minutes ago, when I was introducing them to DeFi, I was telling them how DeFi is a global and borderless financial system, and that anyone in the world can access it or provide financial services there. Global - but which relies entirely on USD - is a bit antinomic. We need more stablecoins, and we need a way to trade and exchange them.
2. Is there a dashboard we can take a look at for performance and growth metrics?
Yes, we have set up a subgraph, and launch a dashboard to display some data. You can see the TVL, liquidity available in the pools, trades happening on our Exchange or on AMMs, etc. Do not mind the UI, it is a temporary design, and we will be working on a nicer version at some point..
3. What is the product of Jarvis that can be easily understood by many and let them dig deeper from there?
Our exchange, app.jarvis.exchange, is our first product which is built to interact with our liquidity pools. It allows you to mint jEUR, jGBP or jCHF with USDC, exchange these synthetic assets between them, or burn them to redeem USDC (from the user perspective, minting looks like buying, and burning looks like selling) -- everything happens according to Chainlink’s oracle prices. Even though we called it an exchange, it is more like an on-chain Forex broker, but in the future, we will be connecting it to various AMM liquidity pools and it will therefore be a hybrid broker/exchange.
4. Will you be implementing some form of a scaling solution, like zk-Rollup or Optimistic to help with scaling?
Yes, it is mandatory! I have big plans to bring our technology to regular Forex traders and brokers, as well as to as many people as possible in various parts of the world. But they will not be using it on the Layer 1, because of both the gas fees and the number of transactions per second.
Since we cannot know which solution will have the most traction, and attract many other projects that are needed for us to create interesting synergies and use cases (AMM, money markets, etc.), we will not chose a specific solution, but rather deploy on almost every EVM-compatible scaling layer -- from sidechains to layer 2 to competing blockchains. Unfortunately, it will divide the liquidity, but like that we can start creating synergies on these new ecosystems and see which one we should heavily bet on.
5. How do you plan to “uberize brokerage”, as you describe it in your vision?
A broker is an entity that gives you access to a market. On Synthereum, you can issue synthetic assets through two means: either yourself, with your own collateral (like Maker for example) or against a pool, with your collateral and your counterparty’s. The latter acts somehow like a broker, offering access to an asset against a margin deposit: you and your counterparty both deposit 100 USDC in a contract, and the contract issues 100 dollar worth of synthetic assets over-collateralized by these 200 USDC; you are long and your counterparty is short.
Uberizing brokerage means that anyone could be this counterparty: someone in Japan willing to give access to the JPY market could deposit funds in the contract for example, and become a broker for JPY. Like regular brokers, they should hedge their exposure on another venue.
6. Congratulations on the Synthereum mainnet launch in February. Can you give us a sense why that was an important milestone for you?
We launched our first testnet in February 2020 on the top of UMA v1. But they asked us to move to their v2, and it took us a year to launch our mainnet on it. During this year, I saw many projects being launched, the TVL of DeFi growing, and at some point I felt like an imposter who is stuck on the testnet, and did not feel comfortable participating in online events, or even doing some educational videos on YouTube.
Launching on the mainnet fixed that! It was an important milestone because now we can say that we are contributing to this space, bringing new use cases, users, TVL, etc.
7. What are the most popular assets on your synthetic trading protocol? Are you going to add any exciting new assets?
For now, it is our synthetic Euro, but it is not relevant because we just launched and we capped our protocol to $1M of TVL. We are going to add some African and South East Asian currencies, which is personally the most exciting milestone.
8. How are market makers incentivized to contribute, and how do “no dealing” and “dealing desks” fit in?
Market makers are the one providing liquidity in the pools to mint synthetic assets against them. They earn trading fees, the yield that the collateral may generate, and some incentives in both JRT and UMA tokens. They also have the choice to act like a no-dealing desk broker, and “transfer” their risk/exposure to someone else (by simply hedging their short exposure on a regular broker for example) or act like a dealing desk, and keep the risk and exposure internally. They should analyze the behavior of the market participants as well as the markets themselves to decide whether or not they should hedge their risk. It really is a job for savvy liquidity providers. I do not expect a lot of people providing liquidity to the system doing it. Most likely they will just be passive liquidity providers, hoping that the fees, yield and incentives cover any potential losses they may suffer from.
9. What purpose does the Jarvis Reward Token (JRT) serve?
JRT is used for governance. It can be staked with or without vesting, the latter providing more voting power, and can eventually boost the yield.
JRT, even staked, can also be used as collateral to mint synthetic assets.
There are two more use cases that we have not revealed yet. What I can say is that JRT will have a utility within our wallet and for liquidity providers.
10. How do the secondary tokens sJRT and veJRT factor into the token economics?
stJRT is a tokenized staked JRT. It allows power DeFi users to stake JRT to participate in the governance and earn a yield, while leveraging from their JRT to use them somewhere else as collateral. veJRT is staked JRT which has been vested. It is more for passive users, who are just here for the yield. Since they lock their token, they carry an additional risk and their holders renounce their liquidity and fungibility; in compensation, veJRT provides more voting power and boosts the yield.
11. Why is Jarvis building on UMA?
We met the UMA team in 2019. We did not have funds back then, and we had just one developer in the team. We needed to partner with another project. UMA is a platform on the top of which you can build financial contracts. We loved their ideas, we were very impressed by their team, and we actually are the first project who built on their platform. We actually launched in February 2020 on their v1. Moving to their v2 was quite complicated for us because of their new priceless system. They helped us move forward by inviting us to fork them, modify their contract to fit our design, and submit our changes to their governance to be the first approved fork within their ecosystem.
For more information on Jarvis Network, check out their various channels here:
The Publish0x team will publish more interviews with up-and-coming DeFi projects in the weeks to come. Stay tuned for these!