Episode 13: Larry the Cucumber | Pickle Finance - The Future of Finance is Green
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A discussion and Q&A session with Larry the Cucumber, Cofounder at Pickle Finance. Recorded on December 17, 2021.
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Time Stamps:
01:09 - Larry’s Start in DeFi
02:01 - Vision Alignment of Pickle Finance, and start of Pickle Finance
04:23 - Pickle Finance’s Initial Mission
06:04 - Typical User Yield Farming Examples
07:18 - How Pickle Finance makes yield farming easier
11:03 - Governance Protocols and Pickle Finance
16:52 - Jars, Memes, Opolis Partnership
18:57 - The impact of Web3 on Payroll and Benefits for Contributors
21:12 - How Pickle Finance tackles interoperability
Pickle Finance
Humpty Calderon: Welcome to Crypto Sapiens, a show that hosts lively discussions with innovative web3 builders to help you learn about decentralized money systems, including Ethereum, Bitcoin, and DeFi. The podcast is for educational and entertainment purposes only, and it is not financial advice. Crypto Sapiens is presented in partnership with BanklessDAO, A movement for pioneers seeking freedom from the limitations of the traditional financial system. BanklessDAO will help the world go bankless by creating user-friendly on-ramps for people to discover decentralized financial technologies through education, media, and culture.
Hi everyone. I'm your host, Humpty Calderon. And today we are talking to Larry the Cucumber co-founder at Pickle Finance. He shares the origin story of Pickle Finance, including the changes across the DeFi landscape since the protocol was launched. We also touch on memes, aligning incentives to users, and the value of interoperability between protocols. Let's get started.
Larry the Cucumber: I got into the space 2016, 2017, you know, early days, obviously like most people at the time, not in a full-time capacity just poking around solidity, what programmable money and reflecting on what programmable money actually means and what it can achieve. And fast forward to 2020, I've been working on projects with myself and friends all the time, but not being in a full-time capacity and then DeFi summer starts with a yam finance and it's crazy how we saw that projects can bootstrap themselves and, you know as opposed to the ICOs have a really flat and fair distribution of project assets and equity to the stakeholders as you know and that vision aligned with me and you know, farming was fun and so we decided to me and a couple of buddies decided to create a new token and the thing at the time were food coins. We came, we came right around the time that sushi was here, Yam of course, What other emojis? The harvest tractor, I suppose and we saw an opportunity specifically to extend on yield aggregation which you know, yearn set the foundation for what they have done, it's quite amazing and we've been able to carve our own little niche in farming and, you know, there have been a lot of other protocols since who are attempting to do the same thing, but you know, it's a very necessary product and, you know we aim to deliver value and, you know, we have a lot of active users who we are able to engage for ideas and that's part of the fun of what we do in Defi and specifically yield farming, you know there's no one way, one right way to pursue yield. But so it's always a conversation, and that's what pickle finance. what part of the ethos of Pickle Finances to, you know, be in collaboration with our users to seek out the best yield so as to helping maximize profits make defi easier for them and you know, other people.
Humpty Calderon: Mm, I like that. Making it easier. I mean, I think you're touching on something that we try to talk about here as regularly as possible, and it's how do we make this incredibly complex space more accessible? Mm-hmm. More easier to use, more in line with maybe some of the language and tooling that we're used to, Bringing them into this decentralized space, right? Where there's ownership, there's accountability, there's better yields, obviously from, you know, the traditional systems that we're used to working with.
Larry the Cucumber: Yeah, totally.
Humpty Calderon: I want to, I want to explore a little bit of what you touched on earlier was what, which was the early days of Defi, which, you know, around 2016 went from maybe nothing to something and then of course, the explosion of defi summer last year. From your experience, what did you see happening in Defi and how was that evolving and how did that inspire you to develop pickle finance?
Larry the Cucumber: So actually, pickle finance, if you know, for some people who are who have been here a longer time we had an initial mission to stabilize stablecoin and that was due to the DAI token of constantly being off peg, but they, they changed their collateral requirements and, and included and so that was no longer such a big problem anymore. But we had always set out to do you know, some sort of public good and that really aligned with a lot of community members and so we're always trying to approach defi our development, our work with collaborative attitude now with other protocols, it's not so much unified under this stablecoin mission anymore, but that's sort of what drives us working with other protocols and to repeat myself, making things easier for everybody.
Humpty Calderon: Well, that's good. Yeah, and so of course food tokens, I remember my wallet at one point just looked like a menu ah, at some restaurant with way too many things that didn't necessarily taste good together, but that was fun though I mean again, going back to memes when the internet, right, Memes, when crypto, I think that that is relatable, that's fun, that's accessible, You know, I think also there was an interoperability to them so that you could potentially use one or the other, and then eventually there was a bridge between them and now you were kind of farming on these, like on this different scale right? But at the same time, still having fun while experimenting with these new technologies. So that's, that's good. So, in terms of like making things easier, let's talk a little bit about pickle finance, how does it work and what are some of the things that are built into it to make defi easy?
Larry the Cucumber: Absolutely. so, here's a typical user story. A user will deposit a certain curve LP token say STE on convex for example and convex is used to for those who weren't aware to boost CRV yields because they have accumulated a bunch of CRV governance tokens, which entitles them to a boost. There are a number of reward tokens that are received for doing so including CRV, CVX, the native convex governance token and in some other cases, you know, additional rewards such as three CRV tokens or spell tokens or whatever. So now you have three tokens that are potentially harvestable when a user wants to reap the rewards, but gas is often quite expensive especially recently with the NFP boom and to capture profits is a bit cumbersome and for smaller wallets doesn't make sense to frequently, but those people also might not want the exposure to such like volatile war tokens. Some people might, and that's great but for the people who want to just, you know, compound their base asset, like, I want more, I have deposited Eth LP tokens, I want more Eth that's my final goal, they can come to us and we will reinvest all those reward children's and socialize reinvestment so they're not paying any of the gas costs, We are and in doing so, they save on gas on the manual labor and they also get the benefits of compounding which you know for higher APRs the conversion to APY because your base position is getting built over time is it can be quite significant.
Humpty Calderon: Yeah, that's, that's interesting. And certainly, I think it is something that can be more rewarding and touches on some of those things that you mentioned in terms of you know, the gas expenses to try to make things easier as well, that's incredibly valuable.
Larry the Cucumber: Mm-hmm.
Humpty Calderon: So, in terms of, you know, just generally compared to other defi protocols, what are some of the things that maybe even including some of the things you already mention, that pickle is trying to solve in a unique way, would it be this auto compounding then would be one of the more unique elements of the protocol?
Larry the Cucumber: I would have to admit that auto-compounding is not novel as you did first and there's a bunch of other, such as harvest finance, stakeDAO, there's a plethora of them. So, a lot of it comes down to relationship building. and offering not necessarily unique, but you know figuring out what people want to put their assets in order to auto compound and initially we had started off with like stablecoin assets, like the curves I mentioned but then it was discovered that there was a lot of enthusiasm for more degen things like pool tools such as Alchemies, Alchemies is ALCX Eth pair because you know, the effects of compounding on APY on actual returns can be signed, like it's significant in those you know, higher than APR scenarios. So, you know, that's been a sort of evolution. we've discovered our use like this and another aspect that we looked to, it's I mentioned partnerships because, you know, It's a two-way street we benefit off of, you know, being able to compound their asset and we provide more exposure to their project, our community of you know, what other projects have an offer often inviting other people to come to community to do AMAs, so we can learn about them and then go their servers too to chat about pickle and so that's a cool part, a more technical endeavor , we're pursuing right now is the urine back scratcher, style product, which involves locking up a certain protocol, governance tokens to boost yields across our entire protocol and exchange, you know, give them a tradable token. So, yearn has done this with CRP and we are currently developing and in the later stages of doing this for FRAX finance and, you know, they'll be able to review, and it'll have the real product out soon and that'll be a real, you know, real big collaboration us two protocols
Humpty Calderon: That is an interesting evolution to defi that I wasn't aware of in terms of, you know, these governance tokens and I guess adding liquidity back to these projects so that they can earn yield, but at the same time still have some sort of like method of transmission
Larry the Cucumber: Yeah. Yeah. Curve was the one who pioneered that model of vote locking their CRV. And only those people who lock CRV for, you know, varying lengths of time up to four years, are able to hold a voting power in there you know DAO governance. And so, we were actually the first protocol to sort of adopt that model with DAI. DAI works largely the same way you; users can lock pickles up for up to four years and they get a couple of benefits from doing so. one thing they devote on governance proposals, two they get a share of protocol profits, 45 Percent of everything make back. And three, they earn boosted pickle rewards when participate in pickle trial, which are, you know, which are our faults the auto compact product. So that has worked really well for us over 50 percent of pickles in circulation are actually locked up because, you know, which is a good testament to how much people believe in us. It's pretty close but you know since then a lot of other protocols have developed the same system. Some examples include, oh, well, FRAX Finance, they're able to lock, users are able to lock for up two years on their platform, Spirit Swap over on Phantom does the same thing, Sushi is actually planning on launching O Sushi largely the same thing to be able to boost sushi yields.
Humpty Calderon: Yeah, I think it's interesting, right, because governance first of all is tricky, but also finding a way to like lock value into your protocol is just as tricky for a project because you know, not necessarily talking about the financial aspect of it, but having too much of it in liquidity can also hurt because there's a lot of, you know, it's difficult to kind of gauge I guess community activity or maybe even like how much of that community you're locking up into the protocol. So it's interesting to hear that there's these mechanisms being experimented with in terms of locking them and enabling some sort of like additional voting power and additional incentives through a reward structure for these token holders. So kind of like tackling these two things
Larry the Cucumber: there's huge value capture Yeah. In that you get those with interest most line.
Humpty Calderon: Yeah.
Larry the Cucumber: Who would be the, you know, sole participator
Humpty Calderon: Yeah. And I think that speaks to trying to mature the token voting governance too, a little bit.
Larry the Cucumber: Mm-hmm.
Humpty Calderon: And not just having, I guess people have their cake and eat it too, where they can use these tokens but also keep them, you know, liquid in a market and trading them you're really incentivizing people who are more, I guess dedicated, maybe the wrong word, but yeah with the protocol. And I think that is incredibly valuable in trying to find new novel ways to really capture that community that is aligned with your project to borrow your word there and, and really trying to reward them with, you know, additional incentives and not just financial incentives.
Larry the Cucumber: Yeah. Yeah. Well said.
Humpty Calderon: You know, you were talking about users, you know, and new moments ago in terms of like listening to your community and trying to see, you know, how you can you know, reward them and engage with them better creating you know, I guess functionality in the protocol that serves their needs based on what they're interested in. Also, you were talking about, you know, partnerships that add value to the platform. Talk to me a little bit about these partners. You know, what are some of the partners that are you know, that you're working with over at Pickle Finance and some of the ways that they are contributing to the project or ways that you're both kind of adding value to each of your projects?
Larry the Cucumber: Yeah. one of the ones I mentioned was frax, where, you know, in general, we facilitate the locking of the governance, and it benefits us cause we get boost reports for our users. It benefits them cause they have more token lockup, and then you know, another protocol namely us, would be able to participate in their governance. And as you know as protocol participant you might get some benefits as opposed to individual users which would be cool, I don't know how it actually works in practice, but, you know, ideally, you know, better each other by having large interests in each other and working together in the most effective ways and helping shape each other but apart from that other ways we look to collaborate are so lending platforms, you know, Spell or abracadabric has been a big one recently, they use yield-bearing collateral to be able to allow users to mint their stablecoin MIM (magic internet money) And you know, a very logical collaboration there would be for them to integrate a pickle vault receipt token and allow people to mint a stablecoin from their yield-bearing asset. They already have a couple of those and we're in talks with other protocols, you know, abracadabric, included others such as my finance over on Polygon who we would love to see integrate our which produces the automatic DAI yield of about 10% and, you know, and to see them allow users to use that collateral to mint their stablecoin would be awesome because Is see it as a win-win. It's hard to get that such stablecoin and in using that also be able participate in other defi activities, you know namely borrowing and so it's very possible for us to build on other protocols or, and for other protocols to build on us as a high Lego and that, you know, interoperability, composability is something we wanna encourage but, you know a lot of it is also marketing and communications endeavor to, you know, or sort of educate other protocols or work with them and help them in integrating us and vice versa.
Humpty Calderon: Yeah. And I do wanna come back to that in terms of interoperability, but I wanted to just trace back a little bit you were talking about jars, Just for clarification jars are pools in the pickle finance protocol?
Larry the Cucumber: Yeah, yeah, yeah. Jars are the main product. They're the ones where you deposit a certain asset and then we help them auto compile. Yeah, put your tokens in a jar.
Humpty Calderon: Okay. Yeah. And it makes sense, right? Keep with the meme. That's awesome. So I recently saw a tweet from the Pickle Finance Twitter account, and it was talking about the Opolis Jar
Larry the Cucumber: Uhhuh.
Humpty Calderon: Walk me through that. Is that a partnership with ops or is that just that you've enabled that token or their token to be added to the Jar.
Larry the Cucumber: Yeah, so that's that, That's an interesting question. Opolis is a partner of ours and are you aware of their platform?
Humpty Calderon: I am, and I hope to have 'em on this show soon. I'm a big fan of what they're doing.
Larry the Cucumber: Oh, that's really cool. Yeah, so Pickle actually made a strategic investment in Opolis.
Humpty Calderon: Oh, nice.
Larry the Cucumber: Yeah. Yeah. And so we work closely together to incorporate their services and, and, and promote their services in amongst our members, our core team, and then they recently came on them and Metacartel for an AMA and shared all the cool things Opolis is doing and, you know, I know several people who use it to automate or to, you know provide structure to receiving crypto payments. So, for people not aware Opolis is a payroll service and payroll and benefits service for sort of the web3 workers who might not be receiving, you know, monthly pay stubs from there regular job, but Opolis provides that structure, that legal structure and the, you know, the benefits insurance for very reasonable price and I would have loved to go with, Unfortunately, my country of residence isn't supported yet, but they do a great thing.
Humpty Calderon: Yeah, I'm a huge fan, I think one thing that you're addressing here, and I think it's worth exploring a little bit further, is just working in a web3 environment, right? So we're going from the traditional workspace, right, which is maybe you are. Going to college or getting a degree, you get hired, not necessary in that, you know, in that way but, you know, traditionally speaking, I think that's how it goes and then you work at that job, you get a promotion through that job, you get insurance, et cetera, et cetera. In the web3 space, a lot of that structure doesn't exist, you know? And there's projects like, you know, defi projects like Pickle Finance, there's NFT projects, there's DAOs. You know, there's a lot of things that are still missing in, I guess, the employment architecture that services like Opolis can provide in terms of like, you know, Defi and Web3 how do you think that that can continue to evolve in the future? You know, looking at something like maybe integrating opolis, not saying that you should or will, but you know, these DAO tooling that are DAO tools or just web3 tools, excuse me, that are being. How do you think Defi will continue to evolve and integrate, you know, all of these different technologies that are getting built to this space?
Larry the Cucumber: I think it's, as you mentioned much earlier that, you know, defi is still really hacky and, you know, we're focusing on building and a less so on HR and, you know, as you put it, the employment architecture but you know that will be necessary and Opolis I think is, you know, the first step towards that. so where, you know where DeFi projects, smaller ones, bootstrapped ones don't have the resources to run their own HR department and Opolis can provide all that structure and architecture. And yeah, I think in general it's gonna come that the space will mature and such and people will expect such services be provided, right? Like to buy your tax and with certainty to be able to access, you know, health benefits, whatnot. But, you know, the space is still nascent, and it might not come for a year, but, and that's fine cause, you know, we're all focused on building and that's the priority. But yeah. And as it matures, the, the architecture and whatnot will, will come every, like all the, all the supporting functions i guess
Humpty Calderon: cool. And so now to go back to talk about interoperability, since we kind of are addressing some of that now, you know how not just defi protocols, but the projects themselves can interoperate with, you know, toolings that is getting developed for this space. What are, you know, what are some ways you think the interoperability of protocols will continue to evolve in the future? Maybe we can touch on like cross-chain and cross-protocol and even cross membership
Larry the Cucumber: it's hard to, it's, that's really broad cause interoperability even up to now has seen limitless applications, you know, every Defi protocol has the potential to be used as a building block or Lego for another building block. but I guess just the, are you, are you thinking more specifically to pickle or, you know, what I've noticed as new you know, interoperability or trends in Defi
Humpty Calderon: Yeah. May maybe broadly and then more specifically pickle finance.
Larry the Cucumber: Yeah. More broadly
Humpty Calderon: And if you don't have an answer, that's fine.
Larry the Cucumber: No. Yeah. Yeah. No, we've noticed and I think a lot of people are probably aware too. The Olympus DAO protocol, they've recently introduced a new approach to liquidity. Are you aware of the project?
Humpty Calderon: Just generally
Larry the Cucumber: yeah. So, one aspect they have is the, OHM, the algorithmic token. But another one is their method of providing protocol liquidity which is really interesting and, and is sort of, is quite different from the traditional yield farming method where users, individual users stake their LP tokens and receive, you know, the protocols open and return for that service of providing liquidity. What they do is called bonding where users will provide Olympus with an elk token. Say it's, you know, pickle Eth and then after a set maturity period the user will receive, in return, it discounted pickle tokens. And, in such a way it acts as a bond.
Humpty Calderon: Hmm, interesting. I'll have to dive deeper into that because I hadn't heard of that, but that sounds like a different way of like using defi, I guess. So what's on the roadmap for pickle finance then?
Larry the Cucumber: It's some of the things I mentioned already where the, where the FRAX back scratcher, where we're constantly working on, you know, more jars, some of the side chain stuff we're still working on expanding on Arbitron which we've done recently to provide more jar. What else? Yeah, those are some of the big objectives right now. Expanding our farming opportunities to Uni v3, and yeah, those, those are some of the more immediate goals we have.
Humpty Calderon: That's great. What are some of the differences between I guess the current Uni V2 versus Uni V3 that you think are going to play a role in Pickle in the future?
Larry the Cucumber: It's, it's hard to say U V3 is slowly picking up. The adoption of V3 is slowly ramping up, and I didn't think it be so fast because it's sort of a little more complicated for normal users to approach, but certainly has benefits of, you know capital efficiency with their concentrated liquid. Where, you know users can provide liquidity in only a certain range and earn more fees on less capital. That's just a commentary on benefits of UNI V3 versus UNI V2 in general and, for us, it's just, you know, sort of an engineering to our, our existing code into, into this new paradigm.
Humpty Calderon:
That's all we have for today. I hope you enjoyed this conversation if you'd like to learn more about Pickle Finance, go to pickle.finance and on Twitter at Pickle Finance. Thanks for listening to Crypto Sapiens. Please give us a follow, like in a five-star review wherever you enjoy your podcast. And stay tuned for our next discussion.