Strips Finance AMA Recap
Strips Finance is an interest rate derivatives exchange built on Arbitrum and BSC.
On October 6, Ming Wu, CEO of STRIPS joined us to answer our questions.
Ming Wu, STRIPS CEO
I previously worked at a high-frequency trading firm. I was initially attracted to crypto for the trading opportunities but ultimately stayed for the technology.
Questions from the CryptoRank team
#1. Can you tell us about STRIPS? What problems do you solve, both in the space and for the community?
Ming W.: – Definitely, our vision at STRIPS is to build the decentralized fixed income marketplace of the future. We built STRIPS out of our own frustration with the lack of tools in DeFi to hedge our yield farming APY or to trade interest rates easily. We are building the marketplace to make it easier for anyone to trade interest rates. Interest rates are the largest financial market in the world, which trades over $6.5 TRILLION dollars a day, over 80% of all derivatives volume in the world.
However, despite the rapid growth in DeFi, the fixed-rate and fixed income market is still very nascent. We believe one of the issues in the current approach of other fixed-rate protocols is that they are inherently capital inefficient and do not offer the same level of flexibility as STRIPS. We believe that the future success of DeFi will inevitably grow the interest rate trading market into a trillion-dollar market.
#2. Could you briefly describe the milestones STRIPS has achieved, and about your upcoming plans?
Ming W.: – We launched our testnet in August and got tremendous traction, with over 700m TVL and 400k wallets. Even though those numbers may be exaggerated, but we were still shocked. About upcoming milestones, we are really excited about our upcoming token sale on Oct 13. Then our mainnet is slated to be launched on November/December of this year.
Questions from Twitter
#1. If you are really focused on developing a derivatives platform with AMM payments technology, then what use would you have with NFT that you plan to incorporate in Q1 2022? Could it be that they can be adapted to derivatives platforms as well?
Ming W.: – As people can see on our website roadmap, we have included NFTs in our future product releases. We believe NFTs are a great tool to reward and engage our community of users. We plan to gamify the trading experience and offer unique incentives and rewards through NFT and character leveling. Users will be able to share their NFT levels through discord and telegram! Traders and stakers with high volumes will receive special NFT prizes that will also reward them financially.
#2. It caught my attention that “STRIPS AMM technology enables cross-chain performance markets on the most popular DeFi and CeFi platforms”, but are AMMs really not only used in DeFi markets? If so, how will they be made compatible with CeFi?
Ming W.: – One of our unique innovations is that our AMMs allow for trading of ANY type of interest rate – from the yield of a yield farm to the supply/borrow rate on AAVE to centralized exchange funding rates. This is the unique advantage of using derivatives.
#3. Could you tell us about the background and experience of STRIPS‘ development team? How will they carry out your project during this current pandemic?
Ming W.: – Our team is very geographically diverse, covering all time zones across the globe (there will always be someone looking at the code). Our core team comes from a background in trading and portfolio management. We are all highly effective and efficient at delivering results. Despite the pandemic, we were able to launch our testnet in 3 months from the inception of the project, despite building a very complicated product from scratch.
Questions from Telegram
#1. What are your security measures adopted from hacking and bugs in a smart contract? Have you conducted any audits to make your smart contract safe?
Ming W.: – We have conducted 2 independent audits, and currently undergoing one full scope audit with Certik. We also have 2 more auditors lined up, in November and another one in February of 2022. We take security very seriously.
#2. Can I monitor interest rate differentials between markets on STRIPS up to date to arbitrage? Can we speculate on the convergence and divergence between interest rates? How do we leverage collateral to increase farm returns in STRIPS? What are your farming advantages for those who want to borrow and lend?
Ming W.: – Yes, you can definitely trade interest rate spreads (swap spreads) on STRIPS. You can speculate on many different interest rate spreads. As we offer 10x leverage inherently on STRIPS, a user can earn the yield farm APY with 10x leverage! However not that you will be paying a fixed borrowing fee!
#3. While technology is developing rapidly, do you have a team working on the necessary improvements to prevent another project with more innovative technology than STRIPS?
Ming W.: – We believe that our moat is our speed of innovation. We believe in collaboration and open source, hence we will also be open-sourcing our code when we launch on mainnet.