{"id":12899,"date":"2021-09-29T19:58:07","date_gmt":"2021-09-29T16:58:07","guid":{"rendered":"https:\/\/esatoshi.club\/?p=12899"},"modified":"2021-09-29T19:58:09","modified_gmt":"2021-09-29T16:58:09","slug":"waterfall-x-satoshi-club-ama-recap-from-28th-of-september","status":"publish","type":"post","link":"https:\/\/satoshi-club.esipick.com\/index.php\/2021\/09\/29\/waterfall-x-satoshi-club-ama-recap-from-28th-of-september\/","title":{"rendered":"Waterfall x Satoshi Club AMA Recap from 28th of September"},"content":{"rendered":"\n

Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Waterfall and our guest was @Yosemite_0x – representative of Waterfall. The AMA took place on the 28th of September.<\/a><\/p>\n\n\n\n

The total reward pool was 500$ and has been split into 3 parts.<\/p>\n\n\n\n

In this AMA Recap, we will try to summarise the most interesting points for you.<\/p>\n\n\n\n

Part 1 \u2014 introduction and questions from the Website<\/h2>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
Hello, community. Welcome to another AMA session, today we are going to learn about Waterfall project👏😁<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\n👍<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
\n@Yosemite_0x welcome to Satoshi Club<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
Thank you for having me.<\/p>\n\n\n\n

Excited to talk about the project with the Satoshi Fam!<\/p>\n\n\n\n

Jonah <\/strong>🏅🎹<\/strong> |\nSatoshi Club:<\/strong>
\nWe are happy to have you join us here today @Yosemite_0x<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
We are excited as well, very interesting project you have 😃<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\nThank you!<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
But let’s begin talking about you, Tom. Please give us an introduction about you and your experience in crypto and waterfall.<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\nSure thing!<\/p>\n\n\n\n

I am the Project Lead of Waterfall DeFi, the risk tranching protocol offering structured risk products to the DeFi space\u2026I started off my crypto journey back in 2017, my buddy was at MIT Lab and was using the lab to mine ETH, so I kinda joined on his bandwagon, and have been on and off since then. <\/p>\n\n\n\n

Gradually during last year’s DeFi summer, I decided to put more attention into the space, looking into yield farms and applications of derivatives, and finally, earlier this year decided to go all in, and take on the Project Lead role for Waterfall DeFi.<\/p>\n\n\n\n

Before going full time in crypto I was working in management consulting, operations, and strategic planning, having worked at McKinsey & Co, before moving to a food delivery tech unicorn Deliveroo. As the Project Lead in Waterfall DeFi, I am basically in charge of handling everything and making sure Waterfall gets to become one of the projects that stands out across the space and offers what the DeFi community needs especially in terms of risk management options in yield farming.<\/p>\n\n\n\n

👍<\/p>\n\n\n\n

All good – I am done \ud83d\ude42<\/p>\n\n\n\n

Jonah 🏅🎹 | Satoshi Club:<\/strong>
👏 Hope you brought some food to deliver to us… 😁<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
Hahaha.<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
Interesting story, great road that brought here with us 😃<\/p>\n\n\n\n

Now, what is the essence of Waterfall and what are the main products you offer to the public?<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\nSo Waterfall DeFi is a yield aggregator protocol that aims to bring true risk\ntranching to the DeFi landscape.<\/p>\n\n\n\n

We are built on BSC initially and would develop portfolios that include different farms. Instead of just offering a yield aggregation product, we actually would slice the portfolio into different “tranches” – essentially each tranche represents a risk\/reward combo that would allow the users to select<\/p>\n\n\n\n

The senior tranche would\nreceive a reduced yield return, in exchange for first lost protection. Junior\ntranche would receive a much higher, leveraged yield return, but their capital\nis used to cover any losses suffered from the portfolio.<\/p>\n\n\n\n

For example – a portfolio with 10% expected yield, after we slice it into 2 tranches, the senior tranche will receive 5% return, while the rest will flow to the junior tranche. So in a perfect world, the junior tranche will get 15%<\/p>\n\n\n\n

The senior tranche is essentially\nusing their future return to buy protection against any capital lost<\/p>\n\n\n\n

So in this example – if\nthe farm underperform and the return is only 3% – senior will still get their\n5% (as they are being paid out first), while junior might see a 2% lost in their\ncapital<\/p>\n\n\n\n

Like I mentioned earlier, we are launching first on BSC, with the first portfolio focusing on 3 BUSD farms. Going forward, once we are more matured and the community is more educated to the product, we will be pushing out not just safe, sustainable return package with major farms and high TVL, but also risky leveraged products and new farms with high APY<\/p>\n\n\n\n

Goal is to create\ndifferent types of investment options and risk factors that users can select\nbased on their preference!<\/p>\n\n\n\n

In essence, we are offering a product that is engineered to allow users to optimize their risk in their yield farming strategy<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
Done.<\/p>\n\n\n\n

Jonah 🏅🎹 | Satoshi Club:<\/strong>
An interesting concept I must say<\/p>\n\n\n\n

Are there already plans of integrating other chains?<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
Great, I agree with my mate, very interesting proposal.<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
In our opinion BSC is the second most mature defi space, with a lot of mature, high TVL farms right now, and the gas fees are negligible.<\/p>\n\n\n\n

That being said, this is\njust the first step, and we are actively looking at expanding into other\nblockchains in the near future<\/p>\n\n\n\n

Jonah 🏅🎹 | Satoshi Club:<\/strong>
Great.. 😉<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
Why not ETH network?<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\nThe gas fee involved would be too much, so we decided to explore BSC first for\nthe efficiency purpose<\/p>\n\n\n\n

Expanding to Solana and\nother EVM-compatible chains is on the roadmap, EVM side is easier since most of\nthe codebase can be reused, Solana we will expand our team with rust developers\nto do the work<\/p>\n\n\n\n

Jonah 🏅🎹 | Satoshi Club:<\/strong>
Great choice for the start\u2026.<\/p>\n\n\n\n

Andr\u00e9s M. | Satoshi Club:<\/strong>
Completely agree, great strategy.<\/p>\n\n\n\n

Thank you so much for your answers Tom. We have collected the best community questions for you, ready to proceed?<\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
\nYes sir!<\/p>\n\n\n\n

Q1 from Telegram User @bigboicity12<\/em><\/p>\n\n\n\n

I think many people here are quite interested in $WBT, both utility and structure. How $WBT works as a utility token for the network. How it benefits both the network and the owner. Is there any reward mechanism for holding $WBT? What are the benefits of holding? Also what is the competitive advantage of Waterfall Bot? What advantage do you have that other competitors don\u2019t have? How do you plan to compete with similar competitors in today\u2019s market in terms of scalability, security, features and adaptability?<\/strong><\/p>\n\n\n\n

Tom | Waterfall DeFi:<\/strong>
Thanks for the question @bigboicity12.<\/p>\n\n\n\n

But I have to correct you first, our token is $WTF not $WBT.<\/p>\n\n\n\n

Our project is fully committed into making the protocol as decentralized as possible. Even our team members are formed across the world of yield farming strategists and DeFi OGs.
As in our tokenomics, we have committed 60% of the tokens allocated to our community, via user incentives like staking, liquidity provisioning, public sale and our treasury \u2014 the usage will be decided in our future DAO.<\/p>\n\n\n\n

For more information\nabout our tokenomics, can refer to this article:\nhttps:\/\/medium.com\/waterfall-defi\/waterfall-defi-token-metrics-aead80c89627<\/p>\n\n\n\n

There are three major use\ncases for our tokens:<\/p>\n\n\n\n

  1. You can stake our token to earn the\n governance token, which in terms would allow you to vote on upcoming\n protocol decisions such as approving new portfolio strategy<\/li>
  2. Holders of our governance token would have\n the right to earn a portion of the transaction fee we charged from users<\/li>
  3. Going forward, users with our governance\n token can propose their own risk tranching products and earn structuring\n fees<\/li><\/ol>\n\n\n\n

    As for our product’s edge, there are a few similar concepted protocols in the space now, and Waterfall is a bit different from them due to the following features:<\/p>\n\n\n\n

    Diversification
    Our portfolio strategies package multiple DeFi assets and yield farms to ensure risk and return diversification
    In the future, we aim to include more diversified assets to ensure an abundance of options for the community.<\/p>\n\n\n\n

    Clear tranche differentiation
    A TVL limit is set initially for each tranches in the initial launch to ensure clear tranche differentiation
    Going forward will lift the limit but will introduce dynamic reward to incentive optimal user behavior<\/p>\n\n\n\n

    Three tranche approach
    We will launch with a three-tranche product, expanding the optionalities for the community<\/p>\n\n\n\n

    Fixed income product
    Will introduce a fixed income product by locking up the user deposit for a fixed period of time (seven days) during the deployment period<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    Done.<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    What is your governance token?<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    \nveWTF<\/p>\n\n\n\n

    Which user will get by staking WTF token they earned from using the protocol.<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    It sounds like a great option to invest, where and how we can buy $WTF?<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    \nHaha – public sale is coming soon, stay tuned and follow our social for the\nlatest updates!<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    Awesome…
    for the transaction fees that governance token holders will earn is there a fixed percentage they will get?<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    We can’t wait 😁, so how much is the max supply?<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    The percentage will be based on the portion carving out from the total pool, as well as the # of veWTF out there (aka how many people stake).<\/p>\n\n\n\n

    Total supply is 100M, initially we will have 5M in circulation.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    🤔But ser\u2026where’s the tok\u2026tok\u2026tokenomics?<\/p>\n\n\n\n

    😉Okay it’s here, go check it out, the tokenomics of\nour native token $WTF, featuring:
    \n1️⃣It’s allocation
    \n2️⃣It’s supply schedule
    \n3️⃣It’s usage (besides governance)<\/p>\n\n\n\n

    ☀️Follow this link: https:\/\/medium.com\/waterfall-defi\/waterfall-defi-token-metrics-aead80c89627<\/a><\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    Can refer to our tokenomics for more info \ud83d\ude42<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    So the more the number of stakers the higher the percentage??<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    Depends on the proposal where users will need to approve on \ud83d\ude42<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    Thanks for share it😃<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    Ok.. I get it 👍<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    \nThank you so much for the clear answers Tom. Would you like to add something\nbefore the next question?<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    \nI am ready for the next question \ud83d\ude42<\/p>\n\n\n\n

    Q2 from Telegram User @Jmagsss<\/em><\/p>\n\n\n\n

    Initially, Waterfall DeFi will be offering its users its own constructed and well-planned tranche strategies, starting from the three-tranche-system. To increase the options and choices of the users, does Waterfall Defi accepts proposals for new and alternate tranche strategies coming from its community? If so, can you tell us how can the community submit their proposals\/suggestions? Will the they be compensated\/rewarded if their proposal be selected and approved by your team? Also, do the community DAO have a say to this matter?<\/strong><\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    Yes – going forward users originated product is on our roadmap.<\/p>\n\n\n\n

    Users who have certain amount of veWTF tokens would be able to proposal potential products, and if enough upvote is reached from the community, we will be evaluating the possiblity, tech involved and risk profile. If it passes the evaluation, we will be packaging that into a proposal to hand to the governance DAO for voting.<\/p>\n\n\n\n

    If the DAO approves, user structured product will be live, and the user will earn a share of the transaction fee associated with this product.<\/p>\n\n\n\n

    This is on our roadmap, our first step is to ensure the product launch is smooth – so these will be upcoming product improvement.<\/p>\n\n\n\n

    Done<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    The project team does the Evaluation right??<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    \nThe project team will evaluate the tech involved and how to operationally\nrealize it<\/p>\n\n\n\n

    Where the DAO will vote on the green light or not.<\/p>\n\n\n\n

    Jonah <\/strong>🏅🎹<\/strong> |\nSatoshi Club:<\/strong>
    \n👍<\/p>\n\n\n\n

    So is the DAO all about a proposal of new products only, how about proposal for certain actions or decisions to be made on already existing products?<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    \nThose will also be part of the DAO function – which we will be working with the\ncommunity to decide on how it will be constructed<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    In that case no trasaction fee earnings for the proposer right??<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    What else is coming? Please share us your roadmap<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    % of transaction fee to proposer\/constructor will also be something that would need to voted by DAO if there is any changes.<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    Awesome 👍<\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    Sure thing – here are our rough timeline:<\/p>\n\n\n\n

    2021 Q3 – initial\nfunding, product development, initial marketing
    \n2021 Q4 – public sales, test and v1 product launch, with BUSD stablecoin farm\nintroduced
    \n2022 Q1 – v2 product launch, introduce DAO, expand selection of DeFi assets in\nthe portfolio, and user originated portfolio
    \n2022 Q2 – v3 product launch, introduce variable and perpetual expiry tranches<\/p>\n\n\n\n

    Jonah 🏅🎹 | Satoshi Club:<\/strong>
    Thanks for sharing.. 👍<\/p>\n\n\n\n

    Andr\u00e9s M. | Satoshi Club:<\/strong>
    Excellent, great events🥳<\/p>\n\n\n\n

    Well, let’s proceed with the next question<\/p>\n\n\n\n

    Q3 from Telegram User @linnlinnn197<\/em><\/p>\n\n\n\n

    I see Waterfall\u2019s management team has 3 people mostly with experience in the areas of strategy and asset management, but no one has certain expertise in security. While it is important for DeFi projects to attract users to invest and Yield and Pool today is security. In April 2020, Uniswap and Lendf.me were stolen $25m by hackers, or the latest Vee Finance. Can Waterfall confidently tell me if there are any team or advisors who are security experts to support the project?<\/strong><\/p>\n\n\n\n

    Tom | Waterfall DeFi:<\/strong>
    So the 3 are just key members of the team, we also have developers that have years of experience in block chain and we take the issue of security very seriously<\/p>\n\n\n\n

    So there are two types of risk that we will be facing<\/p>\n\n\n\n

    1. protocol risk – basically how secure our code\n is<\/li>
    2. 3rd party risk – basically how secure our\n partner’s code is<\/li><\/ol>\n\n\n\n

      For the first one – we take matters very seriously, and are now working with our auditor, Slowmist, to engage on contract review. Already got their initial feedback and only some minor comments (Thank god!), and we are revising the code and discussing with them again. Soon we will be releasing our audit report for you all to see. Going forward, we will continue to engage auditors and our partners’ tech team to undergo peer review, and making sure we are constantly reviewing our code to ensure security<\/p>\n\n\n\n

      For the second one – We\nusually would evaluate the risk involved in different crypto assets based on a\ncouple of factors, including: the reputation of the team\/protocol, amount of\nTVL committed by the community, the sustainability of the yield return, etc.<\/p>\n\n\n\n

      That’s why we introduce 3 BUSD stablecoin farms that all have high TVL and sustainable yield, which is the most secure \/ safe approach to engage with our first ever product launch. We will also limit the TVL for our first product to ensure we can plan for a smooth launch.<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      Impressive.. 🥳<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Security first. Great job caring about that important topic<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Absolutely.<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      What are the three farms?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      \nThose are BUSD farms in<\/p>\n\n\n\n

      Alpaca Finance
      C.R.E.A.M. Finance
      Venus Finance<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      What are the most important features of each of them?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      So for us – they all have high TVL (over 1B) and have provided a sustainable returns for users – thus become the perfect first product.<\/p>\n\n\n\n

      Which allows our users to try and get familiar with the concept, before we can go ahead and start tranching more exciting products \ud83d\ude42<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      So can we proceed to the Next question?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Yes.<\/p>\n\n\n\n

      Q4 from Telegram User @jodasf<\/em><\/p>\n\n\n\n

      I have read that each portfolio is \u201cdivided\u201d into different tranches, where the principal and yield are redistributed according to the seniority of the tranche and that users can choose in which tranche to deposit funds based on their expected return and risk appetite. could you tell us, how many types of tranches exist, what are their differences and what advantages do each of them offer to users?<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      So let me first give everyone a brief update on what “tranching” is.<\/p>\n\n\n\n

      In the Tradfi world, any structured products that have been:
      (1) backed by a pool of income-generating assets;
      (2) repackaged into different risk classes based on their repayment seniority known as \u201ctranches\u201d;
      (3) then sold to investors,
      would have leveraged the practice of \u201cRisk Tranching\u201d.<\/p>\n\n\n\n

      Risk tranched products are further categorized as \u201csenior\u201d tranches and \u201cjunior\u201d tranches. Interest and principal payment is first paid back to the most senior tranches as they carry the least risk. Junior tranches on the other hand generate a higher yield to compensate for undertaking a higher default risk and will receive the remaining principal and interest.<\/p>\n\n\n\n

      To visualize this,\nimagine every risk tranched product as a series of waterfalls. The senior\ntranches are the beginnings of the stream, starting at the mountain tops and\ntaking their fixed percentage yield while the junior tranches will receive the\nremaining runoff. When the market is doing well, yield increases; like a rainstorm\noverflowing the river banks the junior tranches receive a higher cut as senior\ntranches are only entitled to their fixed percentage yield. Vice versa, when\nthe market is in decline, yield decreases, like a drought where senior tranches\nremain entitled to their fixed cut as junior tranches are left with only\ndroplets.<\/p>\n\n\n\n

      So for our first product, we will have 3 tranches
      Senior
      Mezzanine
      Junior<\/p>\n\n\n\n

      And the risk factor (as well as reward %) is proportionally increased.<\/p>\n\n\n\n

      \"\"<\/figure>\n\n\n\n

      The more senior the tranche – the earlier they will be getting the return when the yield is being distributed, thus their risk is covered by the more junior tranches. As a result they will also give up a portion of their future earnings to the junior tranches in return for this protection<\/p>\n\n\n\n

      The junior tranche would have a leveraged yield, but also absorb a lot of risk (essentially covering for the whole portfolio) if the underlying assets start to underperform<\/p>\n\n\n\n

      So it is basically a pool where users can hedge among themselves, and people who have higher risk appetite can absorb the unwanted risk from more conservative users, but with a fee<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      Awesome. The higher the Risk the more the reward 👍<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Yes sir!<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      More risk, more earns. But is there any established APR for staking?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      So users will earn base yield from the farm, as well as WTF tokens when you use our product.<\/p>\n\n\n\n

      Meanwhile if they stake their WTF token for our governance token veWTF, they will earn additional WTF too.<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Oh excellent.<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      \nThe APR of that staking will be depended on the number of WTF being staked – as\nour token emission is set on a weekly basis for the community farming token\npart<\/p>\n\n\n\n

      Jonah <\/strong>🏅🎹<\/strong> |\nSatoshi Club:<\/strong>
      \nI also want to ask.. how do your users participate in each of these tranches?<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Thanks for the clarification😃👏<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      \nSo when our product is live, you can click into the portfolio and will see all\nthree tranches available for deposit, and associated return % will also be\nshown – this way user can freely choose which option goes best with his\/her\nstrategy<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Great financial product, congratulations to your team<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Thank you.<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      \nReady to go with the 5th question?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Yes!<\/p>\n\n\n\n

      Q5 from Telegram user @meml97<\/em><\/p>\n\n\n\n

      It caught my attention that there is a reward system on the Waterfall platform called \u201cRisk Reward\u201d, can you tell us more about it? How does this Risk Reward system exactly work? What risks do users need to take to be able to receive this reward and on what kind of characteristics will this reward system be based on? What users can be considered to receive said reward? Will it be available for every user that takes certains risks within the platform and their investments or do they need to meet other characteristics as well? Also, what kind of reward can they receive from this system to make it worth the risk taken?<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      So this risk\/reward is quite related to what we talked about earlier.<\/p>\n\n\n\n

      Basically different tranches will have different risk level, and that depends on the seniority in receiving the yield.<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Can refer to this.<\/p>\n\n\n\n

      And once the product is live, users can see the est. return % for each tranche, and decide if the risk is worth the reward they potentially can get \ud83d\ude42<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Let me use an example for this.<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Please😃<\/p>\n\n\n\n

      Think of this:
      Alice and Bob are two big whales. They both love yield farming and enjoy the high APY offered in the DeFi space. Alice is very aggressive with her capital: she likes putting her money into the latest yield farms that offer crazy high APY. Bob is conservative with his capital: he prefers having a guaranteed return of yield that endows him a stream of fixed cash flows over time.
      The thing about yield farms is even DeFi\u2019s biggest farms contain a certain risk of a full loss of capital due to protocol attacks, and the returns in yield farms often vary so that a guaranteed and predictable return is difficult to achieve.<\/p>\n\n\n\n

      To solve this, we ask\nAlice and Bob to bundle their capital together as a whole and deploy into\nfarms, so they are now a farming fund which Alice and Bob have 50% of ownership\nto the fund respectively. Suppose the predicted APY is 20%, Alice and Bob\nshould be splitting the yield half-half, getting half of the yield each.\nHowever, as Alice is looking for high yield and doesn\u2019t really care about\nrisks, while Bob is looking for low risk and predictable return, Alice and Bob\ncan negotiate a deal: As the yield starts getting farmed, say 20%, Bob will\nreceive a fixed amount of yield first, say 8%, and the rest of the yield, 12%,\ngoes to Alice. This doesn\u2019t seem fair right? Both contributed the same amount\nof capital however Bob is getting less yield than what he deserves. However,\nimagine now the yield farms perform poorly and the yield generated is only 15%.\nBob will still get his fixed payment: 8%, while Alice\u2019s only getting 7%.<\/p>\n\n\n\n

      Now you see the idea: Bob\nis sacrificing his some of his fair share (8% vs 12% under 20% APY situation)\nplus potential extra yield gains (8% vs 16% under 24% APY situation) to Alice\nin exchange for maintaining the stability of his yield returns, and hence Bob\ntransferred his portion of yield volatility risk to Alice, which Alice accepts\ntaking on the extra risk in exchange for higher returns under situations when\nyield is equal to or better than expected. If Alice did not enter such\nagreement, her share of yield will be split equally, getting only 10% instead\nof 12%.<\/p>\n\n\n\n

      Tranches, as a concept\ncame from TradFi, can be viewed as categories of risk and rewards in a pool of\ncapital: a senior tranche in Waterfall DeFi is the fixed yield return side with\nthe highest priority to receiving interest payments (a pool of many Bobs);\nwhile a junior tranche is the variable yield return side with the lowest\npriority to receiving interest payments (a pool of many Alices). Through\ntranching a pool of capital put into DeFi yield farms, users will have the\nautonomy to choose their desired balance of risk versus rewards, or\nessentially, insure their capital against yield volatility without upfront\npayment.<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      Very long let me read 😁<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      \n\ud83d\ude42<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      \nPerfect explanation, a good investment for each kind of investor<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      We try to cater to all the needs \ud83d\ude42<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      This is an Excellent Example I’m sure we have both Alice and Bob in this Club reading this 😁\u2026 And the ones in between as well<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      What about little investors, junior pool is a good investment for them?<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      \nI mean, a low amount of tokens is needed, right?<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      I would say each pool is not chosen depends on the size of the investors.<\/p>\n\n\n\n

      but rather their appetite for risk<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Oh got it<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      So if someone is small investor, but want a more secure \/ protected option, totally fine to take on the senior tranche.<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      Oh yeah..<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      \nPerfect explanation. Now, we are ready to proceed with the final question of\nthis first part of the AMA<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Yes<\/p>\n\n\n\n

      Q6 from Telegram user @yellowchamp<\/em><\/p>\n\n\n\n

      I found out in one of your document that Waterfall Defi will give a platform revenue share in which the platform will charge a Redemption Fee at the time of withdrawal. A portion of the redemption fee collected by the platform is distributed to the WTF token stakers. How much is percentage rate of the redemption fee while withdrawal in your platform? Is the redemption fee is the fee aside from withdrawal fee in your platform? As stated that a portion of the redemption fee collected by the platform is distributed to the WTF token stakers ,so what is allocation of the other portion of Redemption fee? As you give a platform revenue share which is the redemption fee,is it only for stakers of WTF tokens? How about the token holders that does not stake how would your platform incentivise or reward them? Thank you.<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      \nPlatform revenue share is our commitment to share the protocol generated\nrevenue to our community \u2014 the ultimate protocol owner, and the staking system\nis a good way to distribute rewards according to users’ holdings of the WTF\ntoken, hence a way to incentivize our community to lock up their tokens and\nmaintain a steady supply growth. <\/p>\n\n\n\n

      The percentage rate of\nthe redemption fees allocated to stakers is yet to be decided, and we will\nreview the redemption fees we have collected from our tranched products first\nwhen the time comes\u2026 together with the token reward in WTF we want to ensure our\ncommunity is rewarded for their contribution to the protocol (for example via\nliquidity provisioning\/governance voting)\u2026<\/p>\n\n\n\n

      In the future as the protocol grows to be further decentralized the DAO will be able to vote on the proportion of protocol fees going into stakers’ pocket versus foundation’s wallet\u2026 note that the profits generated for the foundation will be used for making sure devs are incentivized properly and maintain the Waterfall ecosystem growth, so it’s an important topic we must grind through a lot of internal discussions first before having a definite answer.<\/p>\n\n\n\n

      Done<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      Congratulations, I think the community is the pillar of the projects and main rewards should be for them<\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      Yes, sir – community is what makes and breaks a project.<\/p>\n\n\n\n

      Jonah 🏅🎹 | Satoshi Club:<\/strong>
      Yes I agree with you on this as well<\/p>\n\n\n\n

      Andr\u00e9s M. | Satoshi Club:<\/strong>
      \nAnd that makes 6\/6 great questions answered🥳🥳. Thank you Tom\nfor your time and clear answers, we are happy to have you here<\/p>\n\n\n\n

      Tom | Waterfall DeFi:<\/strong>
      Thanks for having me.<\/p>\n\n\n\n

      Part 2 \u2014 live questions from the Telegram community<\/strong><\/h2>\n\n\n\n

      Q1 from Telegram user <\/strong>@Pavel_Jarosh<\/em>
      Talking about BUSD Falls \u2013 a portfolio of three carefully selected BUSD stablecoin lending vaults on BSC (Binance Smart Chain): Alpaca Finance, C.R.E.A.M. Finance and Venus. Could you explain why these particular coins were selected and if they are still a subject of being substituted by more efficient or stable by a certain period of time? How do you protect your investors from the drops of each of them? Thank you!<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> So I stated earlier, these farms were picked because of their relatively high TVL (>1B on the protocol) and sustainable return. That being said I do want to address the second part of the question in detail – as we proceed, we will be expanding into other type of products for different type of portfolios (LP tokens, NFTs, staking in PoS chains, etc. – the sky is the limit), and we will be working with the community to figure out which are the products that they would like to see us tranche.<\/p>\n\n\n\n

      There are more and more products popping up in DeFi these days, and we truly believe diversification is going to be the key value add our protocol can bring to the community.<\/p>\n\n\n\n

      As for protection of drops – we pick these sustainable farm for the fact that their return is relatively stable, hence won’t have too much swing that might see huge drops. That being said, there are users who actually WANT to have high risk products, as they see those high return is what attracted them the first place into DeFi, so as a result we will be opening up with different products, ranging from safe to risky – so that users can pick which one they like most and engage<\/p>\n\n\n\n

      Q2 from Telegram user @rinnguyen<\/em>
      Do You plan to Include more “Diversified Assest” on the Platform so that Community will have more Options to choose From?<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> Great question. Diversified capital allocation is one of our selling point of our tranched products \u2014 once the deposit pool is full, the capital collected from our product users will be deployed into multiple farms, allowing a diversified set of yield return that we aim to minimize the individual farm specific risk, and ensuring the probability of the senior tranches getting their returns in case of a default.<\/p>\n\n\n\n

      Eventually we will expand the portfolio of farms our products will be working on, for example a portfolio that includes some new farms in the space with higher and riskier APY, emerging EVM blockchains such as Fantom has got some of the newly emerged farms that has caught our eyes too! Tarot is one of them and of course we will need our protocol and our first product the BUSD Falls getting mature first before making the next move\u2026yet the space is always inspiring us to try new stuff\u2026 beyond diversified farms we will also be looking for offering our community a diverse set of risk tranching options \u2014 from stablecoins to LP tranches, and in the future maybe we could do risk tranching of gamified NFT products? or tranching the risk of Layer 1 staking protocols\/systems such as Lido or Polkadot nominations? The limit is probably our imagination and it’s up to us to expand and discover what the community and the space needs.<\/p>\n\n\n\n

      Q3 from Telegram user @SHELBYWINAMA<\/em>
      I noticed the WaterfallDeFi project is the only project that can unlock the true value of tranching, which is “COLLERATION”. So can novice users understand and can you tell novices if it’s a COLLERATION? And how does GBV work to help you succeed?
      Can you explain it?<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> Thanks for paying attention to our investor, #GBV is our lead investor and has been tremendously helpful in helping us to get this project up and running. We are working closely with them and leveraging their knowledge and experience in the space to further optimize our product. They actually have a full team of experts that have tremendous experience in both TradFi and DeFi, and they have a very wide ranging investment portfolio too, so we are extremely thankful to their advice and support.<\/p>\n\n\n\n

      So correlation is the the fundamental concept behind risk tranching product – so in simple term, when you trade stock, you trade on price, when you trade options, you trade on volatility , and when you trade risk tranching products, you trade on correlation<\/p>\n\n\n\n

      Correlation means the relations between each assets’ performance, so if one goes up would it affect the others. This is why we are tranching a diversified portfolio, making sure that the correlation of the farms inside is smaller, thus achieving a diversified portfolio – reducing the risk while pushing up the yield.<\/p>\n\n\n\n

      For more information, we welcome you all to check out our investor GBV’s investor comment<\/p>\n\n\n\n

      https:\/\/medium.com\/waterfall-defi\/investment-team-comments-1-gbv-81621ee125de<\/a><\/p>\n\n\n\n

      Q4 from Telegram user @Apollo_0055<\/em>
      A-Increasing Token price
      B- make Token Valuable
      C-Building Community Trust<\/strong><\/p>\n\n\n\n

      From 3 aspects above,. I want to ask,. Which one the most important for you??
      If all above are important for you,. Which one that Will you do first??<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> I would say C\u2026. and AB come along\u2026 I understand the token price and the market capitalization of a project is one of the most important metric our community will look for, and there’s no wrong in that. <\/p>\n\n\n\n

      Essentially our tokens having a value in the decentralized world indicates the economic value of having an ownership and governance to our project\u2026 Building community trust is through constant hardwork and diligence, which we have been and will be continuing our efforts to provide what the DeFi space currently lacks of \u2014 a way to restructure risk and reward properly and efficiently\u2026.we hope that through using our products the DeFi community will be able to execute their risk management decisions at their fingertips, and this is how we build our protocol and keep adding value to it. <\/p>\n\n\n\n

      The tranched product space is TradFi is really huge, we hope to apply this in the decentralized space allowing the transfer and restructure of risk happens without a middle men(or all under a smart contract we could say)\u2026.and therefore gaining demand for our products no matter our users want leveraged yield (degens) or a stable return (institutions)!!<\/p>\n\n\n\n

      Q5 from Telegram user @Ajpaa<\/em>
      This multiple trenches slices portfolio of DeFi assets into different risk-adjusted return, enabling both risk-dislike investors and high risk-tolerance investors to generate expected returns from the same set of DeFi assets. What is the difference between the Senior, Mezzanine and Junior Trenches and how do they work? What is the set of unique expected yield, risk, security and maturity each of these trenches offer? Lastly how is the cash flows generated from the underlying yield-generating assets paid to these trenches in a waterfall manner?<\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> So I have explained how the tranche work earlier, basically junior users will take on additional risk from the senior, while senior in return pay that through some of their expected future yield.<\/p>\n\n\n\n

      As for the waterfall manner – we are basically will deploy the portfolio once each tranche’s TVL cap is hit, and after a set period of time, the pool (principal plus yield) will start to distribute the yield out, and the yield will flow from the most senior tranche to the most junior tranche, just like how water flow from a Waterfall, up from a higher platform and gradually drip to the bottom platform.<\/p>\n\n\n\n

      \"\"<\/figure>\n\n\n\n

      <\/p>\n\n\n\n

      Something like this<\/p>\n\n\n\n

      You can see the flow of yield in a graphic representation \ud83d\ude42<\/p>\n\n\n\n

      Q6 from Telegram user @highpee<\/em>
      I have seen that you have reserve the largest share, 45% of total $WTF supply to community. This is a laudable commitment. How will community earn from this? How will you share this community allocation? Will it be through Airdrop? <\/strong><\/p>\n\n\n\n

      Tom | Waterfall DeFi:
      <\/strong> Thank you for the kind word, and we definitely think this is a community-based project, with ~60% of the token (Community + Treasury) dedicated to the community<\/p>\n\n\n\n

      So there are multiple way to earn WTF tokens from the community pool, either through<\/p>\n\n\n\n

      1. Using our protocol, and earn via farming<\/li>
      2. Stake WTF token in exchange for veWTF governance token and farm additional WTF<\/li>
      3. be our LP provider<\/li><\/ol>\n\n\n\n

        Emission of the token is on a very carefully planned schedule, so we will have only a fixed amount being available every week once we launch, so users will earn WTF token through engaging in different actions listed above.<\/p>\n\n\n\n

        Airdrop and other marketing related effort will also be ways for people to earn our token, but those won’t be coming from the community pool, as we envision the community pool will be used purely for farming\/staking related actions.<\/p>\n\n\n\n

        Q7 from Telegram user @Rakshhitx5<\/em>
        I know the meaning of waterfall but how it relates to your project? Why did you choose the waterfall name for your project? Any specific reason or do you just like Waterfalls? \ud83d\ude09<\/strong><\/p>\n\n\n\n

        Tom | Waterfall DeFi:
        <\/strong> Waterfall is a pretty well known terminology in TradFi to describe risk tranching products. Let’s try to visualize this, imagine every risk tranching product as a series of waterfalls. The senior tranches are the beginnings of the stream, starting at the mountain tops and taking their fixed percentage yield while the junior tranches will receive the remaining runoff. <\/p>\n\n\n\n

        When the market is doing well, yield increases; like a rainstorm overflowing the river banks the junior tranches receive a higher cut as senior tranches are only entitled to their fixed percentage yield. Vice versa, when the market is in decline, yield decreases, like a drought where senior tranches remain entitled to their fixed cut as junior tranches are left with only droplets.<\/p>\n\n\n\n

        Q8 from Telegram user @Rosane1a88<\/em>
        The target of Waterfall DeFi are the decentralized financial markets. This type of markets solved several problems that exist in centralized environments. What weak points still exist in decentralized markets, and how is Waterfall DeFi going to solve them?<\/strong><\/p>\n\n\n\n

        Tom | Waterfall DeFi:
        <\/strong> Sure\u2026 essentially in the DeFi space everything is about composability \u2014 building on top of each other and together we build the grant vision of making finance decentralized, accessible and cost effective\u2026 In Waterfall DeFi our pools are deployed on top of yield farms first in Alpaca, Venus and CREAM Finance on BSC\u2026 <\/p>\n\n\n\n

        As our product suite grows we will deploy on more farms, and then LP risk tranching products we would then essentially helping out our AMM partners to have a rigid enough liquidity pool\u2026 and for our own products as we are restructuring risk and rewards we expect protocols to build on top of us and leverage our offerings as well! There are many innovative ideas waiting to be dug out and build out\u2026always stay tuned to Crypto Twitter and Telegram communities to find out the latest trend and what’s getting discovered, we are happy to be a part of the DeFi lego and together we are strong!!<\/p>\n\n\n\n

        Q9 from Telegram user @jazzmusic2000<\/em>
        Can you tell us about governance at Waterfall? How will your DAO be structured initially? To what extent will the community have the power to decide on the ecosystem?<\/strong><\/p>\n\n\n\n

        Tom | Waterfall DeFi:
        <\/strong> We have been through a lot of discussions of a proper governance model to ensure a DAO with proper democratization<\/p>\n\n\n\n

        An initial plan will be two multisigs with one as the Treasury DAO \u2014 with keyholders that we will invite industry leaders, our core devs and possible a few community long time ambassadors, and an Operation DAO<\/p>\n\n\n\n

        That as the question mentioned, getting our daily operations managed by our team, the Waterfall community and the DeFi community<\/p>\n\n\n\n

        And eventually in the future we envision our tranched products to be structured by the decentralized community, and whosoever structured great tranching products that offer optimal risk and return combinations that are used by the DeFi community will earn the structuring fees!<\/p>\n\n\n\n

        In the future we will keep looking for new industry standards of implementing and upgrading our DAO, there are so many new thinkings and ideas coming up in this space, we are also excited to explore more with the community as we build this project together<\/p>\n\n\n\n

        Q10 from Telegram user @JoanaZ<\/em>
        Waterfall will be good but it only will focused on the Risk Traching products? or Will “touch” other defi fields?<\/strong><\/p>\n\n\n\n

        Tom | Waterfall DeFi
        <\/strong> Alright this for the last one.<\/p>\n\n\n\n

        💫 The target of Waterfall DeFi are the decentralized financial markets. This type of markets solved several problems that exist in centralized environments. What weak points still exist in decentralized markets, and how is Waterfall DeFi going to solve them?<\/p>\n\n\n\n

        Personally I have to admit that the DeFi space is quite new, a lot of ideas are getting experimented, some failed, some obtained great success and getting used everyday\u2026 <\/p>\n\n\n\n

        Perpetuals are one of the super hot application in DeFi space while some of the algorithmic stablecoins are having a hard time\u2026 and it’s okay! Great thing about DeFi is it’s built by the community, owned by the community, and therefore you and I are always the leader in the space, finding out what’s next and what could be achieved. In terms of weak points i suppose it’s in terms of the scalability trilemma in blockchains, which is security scalability and decentralization, it’s very very difficult to have the three achieved simultaneously and therefore current DeFi space is waiting out for this to be built our by the finest elites in the layer-1 world\u2026.<\/p>\n\n\n\n

        For us as a part of the ecosystem my job is to keep my head down and building out what me and my team can build and add value to the space, and together with a place governed by the decentralized community I am sure the decentralized markets will be stronger everyday!<\/p>\n\n\n\n

        Part 3 \u2013 Quiz Results<\/strong><\/h2>\n\n\n\n

        In the final part, we tested your knowledge in terms of Waterfall. They\u2019ve prepared 4 questions for this part. The total reward pool for the quiz was 300$.
        For more information and future AMAs, join our Social Media channels:
        <\/strong>English Telegram group:\u00a0        https:\/\/t.me\/Satoshi_club<\/a>
        Russian Telegram group:\u00a0        https:\/\/t.me\/satoshi_club_ru<\/a>
        Spanish Telegram group:\u00a0        https:\/\/t.me\/satoshi_club_spanish<\/a>
        Telegram Channel:\u00a0        https:\/\/t.me\/satoshi_club_channel<\/a>
        Twitter:\u00a0        https:\/\/twitter.com\/realsatoshiclub<\/a>
        Website:\u00a0        https:\/\/esatoshi.club\/<\/a><\/p>\n\n\n\n

        Our partners<\/strong>
        Waterfall Telegram community:         https:\/\/t.me\/waterfalldefi<\/a>
        Twitter:         https:\/\/twitter.com\/waterfalldefi<\/a>
        Website:         https:\/\/waterfalldefi.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

        Hello, Satoshi clubbers! Another AMA took place in Satoshi Club and we would like to introduce to you the AMA session with our friends from Waterfall and our guest was @Yosemite_0x – representative of Waterfall. The AMA took place on the 28th of September. The total reward pool was 500$ and has been split into […]<\/p>\n","protected":false},"author":10,"featured_media":12633,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/posts\/12899"}],"collection":[{"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/comments?post=12899"}],"version-history":[{"count":17,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/posts\/12899\/revisions"}],"predecessor-version":[{"id":12919,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/posts\/12899\/revisions\/12919"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/media\/12633"}],"wp:attachment":[{"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/media?parent=12899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/categories?post=12899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/satoshi-club.esipick.com\/index.php\/wp-json\/wp\/v2\/tags?post=12899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}