On 6/19/2024 at 5:00 p.m. (UTC), an AMA session was held on Avalaunch Telegram group with Gavin Hasselbaink — Co-founder & CBDO, DeltaPrime, to dive into the inner workings of the protocol and explore what they envision for the future of DeFi.
Below we present to you an excerpt from AMA with questions and answers.
Avalaunch
Hello everyone and welcome to another exciting Avalaunch AMA! Today we are joined by DeltaPrime co-founder, Gavin Hasselbaink — how are you doing today?
Gavin | DeltaPrime
gmgm doing well, thanks for having me!
Avalaunch
Awesome! Ok let’s get right into it 🙂 We’d love to know a bit about yourself and how you came to build DeltaPrime!
Gavin | DeltaPrime
For sure! I’m Gavin. And I’m one of three DeltaPrime cofounders. I met the rest of the founding team back in December 2021, while solo-traveling Europe (bull market throwbacks). I was supposed to leave Sicily after a week, but got stuck for a month due to unforeseen circumstances. On the second to last day I met Piotr and his group of friends on a rooftop bar. Since I was living off of DeFi and Piotr (DP CEO) recently started working on a new web3 idea, the conversation quickly moved to DeFi and lending. Everyone knew that overcollateralized lending was extremely inefficient, and lots of people were trying to solve it. Avalanche was doing great due to it’s capital efficiency, which allowed us to use smart contracts as escrow accounts (otherwise extremely expensive). So the idea of DeltaPrime was born, aiming to leverage exactly that 🙂
Avalaunch
Nice! That’s a cool origin story. Could you tell us more about the team behind DeltaPrime?
Gavin | DeltaPrime
Yess, founding team consists of three people, Piotr (ceo), Kamil (cto) and me (cbdo). My background is primarily in communication, although I had been trading anything from stocks to forex to crypto before I met the others. Then there is Kamil. He is CTO at DeltaPrime, due to his extensive experience (he started coding at 7). He led a 20-headed team at HSBC before founding DeltaPrime. Lastly there is Piotr, CEO. He came previously from Redstone, where he, together with Redstone’s founder fantasized about a new type of lending. He has both extensive development experience (mainly frontend) as well as business experience, and is a bridge between the worlds of me and Kamil. There are 13 other teammembers, each of which provide insurmountable value to the protocol.
Avalaunch
Wow a solid all-rounded team! You guys have achieved so much with DeltaPrime and it’s only the beginning. DeltaPrime is playing a key role in shaping the growth of DeFi, can you give us an overview into the core goals of the platform?
Gavin | DeltaPrime
Thanks! Our core goal is to unlock liquidity from overcollateralized lending protocols. The capital efficiency of a overcollateralized protocols like Aave, leads to billions of dollars being trapped from almost every chain, Avalanche too, still has a ton of liquidity being unused. On DeltaPrime we allow users to demand capital, without being forced to lock extra capital up. This leads to higher cashflow throughout the whole ecosystem, as well as deeper liquidity in partnerprotocols like Trader Joe, in turn allowing for larger trades with lower slippage to be made on the chain.
Avalaunch
Amazing, DeltaPrime is solving a lot of challenges in DeFi and is doing a big part in taking decentralized lending/borrowing a step further. Since your deployment on Avalanche in January 2023, you’ve attracted $42M+ in TVL and unlocked $20M+ in liquidity — an amazing achievement! Can you dive into your strategy to building TVL and how you plan to continue this impressive growth?
Gavin | DeltaPrime
It has been some time hasn’t it 😄 At the end of the day we have two types of users, and we tailor our product to their unique goals and expectations: Depositors and borrowers. Depositors have two main goals: 1. Security, 2. Simplicity. We have invested heavily in the security of our platform straight from day one. https://docs.deltaprime.io, under the header security, shows a range of security features we have (including 7 audits, insurance pools, oracle & no-oracle solutions). Borrowers want to have freedom of investment: The more protocols we integrate, the more strategies that can be created. DeltaPrime is created in a way we can scale infinitely, so the value of DeltaPrime will exponentially scale as we develop.
Security docs – docs.deltaprime.io/protocol/security
Avalaunch
Yep simplifying DeFi and making it accessible to all users is super important. On DeltaPrime, users can deploy their collateral and borrowed funds into a wide range of DeFi protocols. Can you explain what some of the requirements are for a project to be whitelisted and integrated to the platform?
Gavin | DeltaPrime
Yeah so as you might have guessed from the previous answer, first and foremost: security. While we can’t guarantee an underlying protocol will never be exploited, we do have an extensive security audit, requiring, amongst other things: code audits, multisigs, timelocks as well as the assets staying liquid. Second up is user demand. We recently created a channel in our Discord, allowing users to share with us what they want to see in DeltaPrime. If there there is a ton of demand for a product or integration, and it’s safe, we are very likely to integrate it.
Avalaunch
Great, and making sure protocols put security first also creates a benchmark for the wider DeFi ecosystem. Your economic model has been designed to enable the protocol to sustainably grow whilst rewarding loyal supporters. Can you share more about the PRIME token and its role within the ecosystem?
Gavin | DeltaPrime
Diving into PRIME: PRIME itself is the base token. An ERC20 necessary to create sPRIME. It’s demand therefore also primarily flows from the demand of sPRIME. There is a lot I can say about both tokens, but focusing on sustainable growth + rewarding loyal supporters, I’ll zoom in on Community Owned Liquidity (COL) + locked sPRIME airdrops.
COL is liquidity that is put up as DEX liquidity by the protocol. It allows larger players to enter with lower slippage. This liquidity is community owned with a 30d timelock, and will only be used to create locked sPRIME, if the PRIME price moves up. The majority of this COL (which turns into AVAX) will be matched with new PRIME and airdropped to users based on hitting certain milestones. It can be used for a wide variety of usecases, except redeeming it for the underlying, ensuring it will keep providing liquidity on the market benefitting the wider ecosystem.
Good to note: The existence of locked sPRIME does not mean all airdrops necessarily will be locked. While this is the most sustainable, we do have plans for unlocked airdrops, but only for our real users pushing the platform 😉
And in the future I definitely expect governance to decide that what initially was locked sPRIME will now be airdropped as unlocked sPRIME. Those with the voting power (not the team) will have to make that decision though. (more on voting power as well as tokenomics can be found in our docs at https://docs.deltaprime.io/tokenomics )
Avalaunch
Thanks for the insight on PRIME (Avalaunch IDO currently live!) How do you see the DeFi space evolving and what are some of the biggest challenges that must first be solved?
Gavin | DeltaPrime
I would love for different verticals to come better together in the future. The way DeltaPrime is used right now for example, is solely within the DeFi ecosystem, but ideally you’d be able to get a loan for a Schrapnel weapon skin, or some metaverse villa. You know, the things you are happy to pay for. Before we get there though, either the whole space needs to use its liquidity more efficient, or we need to get a lot more normies educated about DeFi in order for them to put liquidity in (as the main reason we can’t expand to NFTs and Gaming yet is just a lack of liquid markets).
Avalaunch
Interoperability across verticals, loads of things that could be built there. Thanks for your take on that, great to hear it first hand from the DeltaPrime team!
Ok so now we move onto the community section of the AMA! We’ve chosen 10 questions that our community want to know the answers to!
Avalaunch
First up we @uyenlunan — have DeltaPrime uses Dedicated Smart Contracts (DSCs) for managing borrowed funds. Can you detail how DSCs work and their role in the protocol’s security and liquidity management?
Gavin | DeltaPrime
Yessir: Each DSC (Prime Account) is a separate smart contract that is the effective owner of both the collateral as well as the borrowed funds. While solvent — only the DSC owner is able to interact with the contract. This enables us to avoid mixing users’ funds, clear on-chain accounting, easy verification that you know exactly where your funds are as well as more effective active anti-exploit monitoring of individual Prime Accounts and the protocol as a whole.
It acts essentially as an escrow: you can use the DSC to interact with a variety of protocols, unless your account becomes insolvent, then liquidation bots can access the DSC to liquidate funds
Gavin | DeltaPrime
Difference between DSC and the Prime Account (PA) being that the PA essentially is the visual representation of your DSC.
Your DSC you can find and monitor on-chain.
Avalaunch
Now we hear from @Drtrader08 who wants to know — How does DeltaPrime plan to collaborate with other projects within the Avalanche ecosystem? Are there any upcoming integrations or features that the community should be excited about?
Gavin | DeltaPrime
If you know DeltaPrime, you know that we focus extensively on partnerships (with now 2 “Months of the partnership” behind us). We partner up with any protocol that’s safe, in demand and that we can therefore integrate into the DeltaPrime platform. While we have a couple very exciting partnerships coming up, I’m racking my brain rn, thinking of which ones we have announced already…
Ah! Most exciting one right now on Avalanche is definitely with Gogopool!
It’s missing an “n”, but you get the gist. They’re incentivising ggAVAX on DeltaPrime right now with 500 GGP per month 🔥: Tweet the published just now:https://x.com/GoGoPool_/status/1803476759196975277
We’ll announce some more over the next weeks 😉
Avalaunch
Very nice 😀
What specific advantages does the Diamond Beacon Proxy pattern offer for DeltaPrime’s scalability and future-proofing, and how does this pattern function within the protocol? From @VictoriaLuther199
Gavin | DeltaPrime
The Diamond Beacon Proxy (DBP) pattern allows DeltaPrime to add an unlimited number of integrations and to manage/remove current/old ones effectively. It also allows us to innovate and deliver new functionalities (not strictly with integrations only) without the need for major V1->V2 upgrades that would require users to move to a new version to get new functionalities in (think for example about allowing GGP to get their incentives in easily). Additionally, it allows for lower gas usage when setting up your Prime Account.
Within the protocol itself each tx to your PrimeAccount gets routed through the central Diamond contract that serves appropriate implementation contract. The implementation contracts are shared between all Prime Accounts guaranteeing same experience for all of our users whilst maintaining the PrimeAccount DSC separation so that each PA holds only the funds belonging to a given user.
ELI-Niels: scale fast, scale infinite (allowing us to move into those other verticals within the same PA if we wanted to)
If you are technical, check out this video from our CTO btw. It was on Avalanche Summit II that we found out he has a hidden talent for public speaking: https://www.youtube.com/watch?v=hB3f-DueXHc&t=2s
All about the DBP.
Avalaunch
Got it, thanks for that!
We have a question from @gamblecat297 – What is your vision for Delta Prime and how do you see Avalanche’s future?
Gavin | DeltaPrime
I’d revert to my previous answer: DeltaPrime is to:
1. Become the central bank in DeFi, allowing different forms of leverage and strategies that right now aren’t available anywhere else (making great progress there)
2. migrate into other popular verticals. The DBP allows us to go pretty much anywhere, so it gives us a ton of flexibility for whatever the next hype is gonna be.
As for Avalanche’s future, I remember Avalanche shining when Crabada turned the lights off. Smt similar had happened on BSC about a year before that, and that was only resolved once the BSC game had closed its doors, Crabada just needed to create their own subnet
Avalanche really shines when the bull is there. It’s amazing technology which just didn’t really have the chance to show its best self these past years. I expect that to change again as soon as the next bull comes
And whether that will be in Gamify, DeFi, points or a completely new vertical, we’ll be there 😉
Avalaunch
Yes a lot of technical innovation happening on Avalanche, we’re very excited!
Can you explain the concept and functionality of the Prime Account in DeltaPrime, and how it empowers users to manage their capital efficiently? From @BonitaLozano
Gavin | DeltaPrime
Ahh yeah so the PA is essentially the same as the DSC which I addressed here. The difference that we make is that the PA is your visual representation (the app you see) while the DSC is the contract you see on chain. But it comes down to the exact same thing.
The capital efficiency really comes from DeltaPrime, through the use of these escrow accounts, being able to liquidate liquidity, without having to trap it in some useless vault. Instead you can provide liquidity to our partners, benefitting both Avalanche and yourself. That’s why you experience it as undercollateralized (you put up $30, but yield on $80) while the PA just has $80 to secure $50 worth of debt
Avalaunch
A question from @SenaidHughes — DeltaPrime claims to enable users to borrow up to 5x their collateral. What are the underlying mechanisms that support such high leverage, and how does the platform manage the associated risks to prevent defaults and liquidations?
Gavin | DeltaPrime
It’s a combination of what I described above (coming down to:); All assets in the escrow can be liquidated to underwrite the risk, whereas in traditional lending markets only the ‘collateral’ can be used, while the borrowed funds are out of the platform’s control.
Together with management on individual assets and vaults. So not every asset has 5x borrowing power (amounting to 6x leverage). The borrowing power of an asset, or LP can be adjusted based on a combination of that assets:
– price feeds on the market
– liquidity within the ecosystem
– volatility over the past 365 days
Next to the Borrowing Power (BP), also the max exposure to either a protocol or the asset can be adjusted to manage risk
We also have some backup plans, take for example third party monitoring by hexagate or $2.3M+ insurance by DeltaPrime / Atomica, but so far (while it’s crucial we keep both), insurance has not been necessary for any real amounts.
Avalaunch
Thanks for breaking that down.
DeltaPrime’s team comprises individuals with diverse backgrounds in programming, business, and development. How do the unique skills and experiences of team members like Piotr Duda, Kamil Muca, and Gavin Hasselbaink contribute to the platform’s success and innovation? From @NilsaTellez50
Gavin | DeltaPrime
Right now we have been working together for almost 3 years. All of us have some programming experience, but Kamil is an expert on this topic. All of us have understanding of efficient communication (in one form or the other) but this is where my expertise lies. Piotr knows how to bridge the gaps.
We each have our own teams, but every important decision, we discuss together. Having worked together for this long, this intensely, we know each other’s strengths and challenges, allowing us to not waste time on unnecessary discussions, while still be able to challenge each other’s ideas, when necessary.
What does help is that we are extremely aligned in our thinking though. Honestly, for a team that came together as random as we got, it’s insane how much our values align😅
Avalaunch
It was meant to be!
A questions from @tripham8 — Will DeltaPrime’s token include extra functionality like staking or yield farming? Do you have a BuyBack scheme or a Token Burn plan in place to boost your token’s value and attract investors?
Gavin | DeltaPrime
Hahah reaaally tricky question legal wise
I honestly don’t think I should answer this. I’ll refer to our tokenomics: https://docs.deltaprime.io/tokenomics
Avalaunch
We understand!
Could you please share the key priorities outlined in DeltaPrime’s roadmap for the near future? From @Siddhant0811
Gavin | DeltaPrime
Ah, and I’ll recommend to read our ethos. Our main goal is sustainable growth of the platform, and we use every tool that we can to achieve that
As for this one:
Key priorities in our roadmap for the near future is growth and development. Next to the normal integrations, we have some major innovations that have not been seen in the web3 space before (including on DeltaPrime). We will partner up for this with some major protocols (at least 1 $1B+ protocol) to help us push this.
Short term that’s growth and development 😉
Avalaunch
Exciting stuff! Ok we’re onto our last community question and this one is from @Sandy_belcher_97 — Marketing is a significant factor for every project. What’s DeltaPrime’s plans for attracting users towards the project ecosystem?
Gavin | DeltaPrime
About 2 months ago we hired a Head of Marketing for DeltaPrime (can you believe we had no marketing team before this 🫠), who has been using the past 2 months to get up to speed and set up a 5-headed marketing team live today. They have been creating a ton of content, which is very closed to being pushed.
More long term I believe that marketing, while important, is not as important as a solid reputation. Our growth so far, while good, has been held back by massive whales “waiting and seeing” if we would be exploited. This is something that only time (and rock solid security) can solve.
So short term: bunch of marketing coming up; long term we attract users by keep offering what we have been offering for the past 1.5 years
Avalaunch
And there you have it, thanks so much for your insights! Big congrats again on everything you’ve achieved until now but it looks like you guys are just getting warmed up.
Avalaunch community — don’t forget to register for the PRIME IDO! ⏰
Thanks so much Gavin — it’s been a pleasure! And thanks everyone for tuning in. See you for the next one 🥳
Gavin | DeltaPrime
Whoop whoop! Thanks for having me 🙌
Lovish | Avalaunch
Interesting AMA, glad to have you here, Gavin.
Gavin | DeltaPrime
I’ll be sticking around btw, so feel free to ask follow up questions either here or in our Discord (link in FAQ on our landingpage)🫡
