02 Oct EP023: Crypto & BTC Markets News With Cudo, THG Hosting, Vega Protocol and Delphi Digital
In This Episode:
- Market Spotlight: Distributed Markets for Redundant Compute
- DeFi Convention: Building Decentralized Derivatives Market
- Onchain Reaction
The explosion in cloud computing and the gaming industry over the past few years has left a great deal of redundant compute and network capacity unused. Cudo, which harnesses unused computing power, has teamed up with e-commerce giant The Hut Group’s hosting arm for a collaboration to solve this problem. Meanwhile, Vega Protocol Founder Barney Mannerings and Delphi Digital partner Jose Macedo discussed institutional adoption of DeFi. Lastly, the bitcoin price has managed to stay above the $10,000 threshold for 10 weeks, something Chainalysis Chief Economist Philip Gradwell considers pretty extraordinary considering it’s only managed to do this twice before.
Market Spotlight: Distributed Markets for Redundant Compute
The explosion in cloud computing and the gaming industry over the past few years has left a great deal of redundant compute and network capacity unused. That’s where Cudo, a tech company dedicated to capturing unused computing power, comes in. It is looking to solve this problem for companies like UK startup The Hut Group. The two companies are in a collaboration. Teana Baker-Taylor spoke with Matt Hawkins, founder and CEO of Cudo, and Dominic Rumsey, vice president of sales at THG Hosting, about gearing up for a blockchain-based world.
Rumsey works for the infrastructure provider arm of e-commerce tech provider THG. He explained some of the pain points that it experiences, saying,
(15:05) “We do a lot in fintech, adtech, gaming. But one of the challenges that we do have Teana as Matt has experienced in a previous life is that there are some times of year whereby we’re kind of sort of at a sellout. Maybe a gaming season is a good example whereby we stretch the capacity of the infrastructure that we have to offer and also the pretty massive network that we operate globally. And then there are other times of year when obviously there is capacity going spare and Cuto addresses that topic in a particularly interesting way.”
Rumsey also addressed the sectors that can benefit from this service the most, including the blockchain space, saying,
(19:34) A great juncture for any business is where they’re going from development to production. So they might be developing within public cloud but scaling within that environment is too costly or it won’t deliver the desired performance. So when they go from development to production, that’s a great time. Also, when markets hit certain maturities, so for example, some of the blockchain-related technology, as that becomes more commonplace, and organizations start moving from development to production, those types of markets really, really suit us very, very well.”
Cudo’s Matt Hawkins talked about the collaboration with THG Hosting and the type of scale that can be expected, saying,
(20:39) “From a scale, an infrastructure point of view, one of the reasons that we wanted to partner with The Hut Group is because as Dom’s just said, it’s the quality of their network. They’ve got a huge global network with very high quality infrastructure. For us, we’ve got about 20,000 nodes around the world. And what this does, The Hut Group’s network gives us real high-quality bandwidth networks, which is perfect for video streaming…audio streaming, there’s many different solutions. So for us, it gives us fantastic quality global infrastructure.”
Cudo’s Hawkins also discussed the company’s roadmap, which includes a new token that they are launching so they can use their network to provide complete oracle services to other blockchains like Algorand and Ethereum to make it much more cost effective.
DeFi Convention: Building Decentralized Derivatives Market
While liquidity pools and automated market making have been taking the DeFi spotlight of late, Veta Protocol started developing its DeFi network for issuing, trading and settling derivatives contracts two years ago. With the launch of the protocol nearing, Vega Protocol Founder Barney Mannerings and Delphi Digital partner Jose Macedo spoke with Trustology’s Paul Yardley about the trends.
Vega’s Mannerings compared what his team is building compared to Ethereum, saying,
(27:32) “The thing we noticed when we started thinking about building Vega was that everything at the time, a lot of focus was on Ethereum and the Ethereum ecosystem and building on Ethereum. And I have a lot of experience in derivatives and building derivatives marketplaces but also around the risks that exist in derivatives and the complexity of those products. And what we realized was that the Ethereum platform, its total power and computation is about the same as a pocket calculator. And really it wasn’t possible to build high-quality professional standard derivatives products on the Ethereum blockchain. So really what Vega is, is an attempt to deconstruct derivatives from top to bottom, work out exactly what it is that the traders need for capital efficient profesional derivatives and then build a blockchain assisted for trading those as efficiently as possible in a way that will open up the disruption eventually of the legacy centralized derivative market.”
Delphi Digital’s Jose Macedo discussed the demand for DeFi stemming from the institutional investor space, saying,
(29:59) “Institutional clients are brought in by the pace of innovation that’s happening. And they’re interested, I think particularly what interests them is the composibilty aspect of DeFi and the permissionless innovation that it enables. So obviously each tool that’s built on DeFi is kind of an open tool that can be leveraged by anyone else that’s building and composed together with other tools to build something entirely new. And I think with DeFi right now we’re still at kind of the email phase of the internet where we’re putting things that were previously possible and putting them onto this decentralized infrastructure. Although I do think there are completely new things, like flash loans, like automated market makers which are new and different. But I think what we’ll start to see , and especially with stuff like Vega coming online that allows much greater scalability, is that composability allowing us to build things that are completely new.”
Both Mannerings and Macedo agree that delivering value is how the industry will convince more institutions to adopt DeFi as a platform. Macedo said it this way,
(39:07) “Real value is the key. Creating real value. People aren’t going to use these products because they’re decentralized, because they’re censorship resistant. I think they really have to have architectures that are fundamentally better and more efficient…There’s been a lot of obviously less interesting stuff that’s happening with yield farming…but there’s also been incredible successes that we should also highlight in terms of I can now get better execution on stablecoin trades on a decentralized exchange than I can on a centralized one.”
Philip Gradwell, chief economist at Chainalysis, provided this week’s onchain reaction.
- (43:40) Bitcoin is in its tenth week with an average price above $10K. Gradwell said it’s pretty extraordinary, considering there’s only been two other times that bitcoin has maintained a high price above 10K for multiple weeks —in late 2017 to early 2018 for 13 weeks and again in mid-to-late 2019.
- (44:16) Over the last week, bitcoin exchange balances have likely increased a small amount.
- (46:02) Ethereum has become increasingly liquid with the growth in DeFi opportunities.