I spent about 6 months on creating an implementation of @ISDA's SIMM for DeFi. I hope this represents a step forwards in providing an open-source guide to removing the risks around arbitrary leverage in DeFi. As a lender, you can use an AI model to audit collateral LTV limits for safety. This gives you minimum safety bounds, derived from cross-industry quants and experts to rely on. For risk managers, structurers and lending protocols this gives you a benchmark on how to set parameters with a full methodology. Now caveats, I'm really not happy with putting this out there today as I feel like it's not finished and I keep finding errors here and there. But it's at the point, where my errors seem to just be grammatical or bad phrasing, or some random slop that snuck in. Whilst, I remain unable to say this is a final version I think it's well past the 80/20 principle and needs to just get out there. Contributors ... 1) As mentioned, this isn't finished (arg). There are a number of sloppy parts in the back components in particular. 2) We need to extend this to a new crypto risk class - btc, eth, sol, avax etc. - bridges (wBTC, BTC.b etc) - wrappers / staking (wstETH, weETH, wETH etc.) 3) I'll be working on some edits over the next few weeks into FX, Equities, Comm etc as they're a LOT easier than tokenised funds. Link in comments ...

Random thought of the day, is it me or do a lot of other founders find many teams they talk to have ASPD and narcissism tendencies. The core identifying trait is like that “social climber” in a friend group. Some teams are so obsessed with appearing “focused” that they basically trample on anyone that doesn’t precisely fit their own personal agenda as of that second. My personal view is that these people and teams become very much disliked in the industry. People want them to fail behind closed doors. One of the best traits of a founder / team imo seems to be the inquisitive but productive one. There are times that you need to guard personal time and you can’t meet everyone but this can be done in a better way. One of the best founders at balancing this correctly is honestly probably @StaniKulechov people want aave to succeed because of the way they team treat those around them. There are too many teams to mention that are indeed good at this but the ones that aren’t really do stand out and there are a lot of them. My suggestion as someone that interacts with a lot of other founders is that if you’re a founder or head of sales etc, remember that your counterparts move around and that making the human connection is the most important thing for success. I don’t know if we’re good at this but I would hope so. This week alone we had 2-3 really interesting leads come from people that we “just like” but found themselves in a really interesting role.

There should not be a centralised entity setting params in lending and borrowing markets with black box methods. This should be automated and entirely transparent

Can’t be AGI if it has a context window

if only there was a super awesome zk-kyc solution that was free and already used widely in defi

Excited to scale @RealityFi_xyz's rToken powered by @bitget and @BitgetWallet on @arbitrum. @KeyringNetwork is the trust layer for on-chain markets.

Maths is cooked so our quants became voice actors instead … new [un]wind episode live! Check comments for 🇨🇳 Chinese, 🇰🇷 Korean and 🇯🇵 Japanese versions.

We intend to publish two more pieces of research that will kill the structuring (or so-called "curator") model for good in the next few months. WIP.

Finally.

APAC funding rates are ripping in crypto. The chopstick premium is waiting. The blocker seems to be APAC brokerage.

This is pretty bad. I don't think this is anything to do with @SebastienBubeck but more to do with @OpenAI and @AnthropicAI and how they are poisoning things around them in the pursuit of profit. @elonmusk was not wrong about @sama's stripping of the for-profit at the top of @OpenAI this is the first of many clashes that is a clear net loss for humanity by these companies. Shameless behaviour if true.

More animation fun coming this week from @KeyringNetwork team! First personification of @KeyringResearch on RHS!

The Russian-Ukrainian conflict highlights a fundamental risk / flaw in tokenised asset collateral in DeFi that has been overlooked. This year Belgium was under a lot of pressure from the @Europarl_EN to seize Russian-linked collateral on @EuroclearGroup. The action would have resulted in the collateral being transferred from Russian-linked accounts to another entity(s) that would receive the yield, instead of the Russian-linked accounts, to fund the Ukrainian war effort. DeFi is absolutely not geared up for this. Imagine you have TokenA and it has balanceOf mapping like (0x1:1000, 0x2: 1000, 0x3: 1000)* and 0x2 is sanctioned. Suddenly 1000 units of TokenA are impaired because the 0x2 cannot redeem them. The valuation has dropped but only for the units of 0x2. The impairment could potentially be reflected in the oracle price but it doesn't make so much sense because the assets of 0x1 and 0x3 can absolutely be redeemed, so why should they see a NAV change? This is a fork in the oracle price between two sets of users. More problematic... If the issuer of TokenA then seizes the assets and moves their rights to a wallet address 0x4 the protocol is left with bad debt if assets are borrowed against this collateral. It is unclear in such a seizure whether the subpoena would require the movement between wallet addresses or if they could just redirect yield. I suspect reading a lot of the PPMs they would have to move the wallet addresses! This is the minor point though, the major point is that the TokenA asset splits in value. This is another reason why lending markets need side pocket/impairment functionalities! * This is actually not how it would be but I wanted it to be easier to read. The balanceOf for TokenA would be 3000 assigned to a single DeFi collateral escrow contract that can be borrowed against. That vault, itself a derivative of TokenA, would have the BalanceOf as stated with 1k each to 0x1, 0x2, 0x3.