The Optimist Twitter Spaces - Cross-chain Lending with Pike Finance

In The Optimist’s Twitter Spaces which took place on February 26, 2024, Subli hosted Sushant from Pike Finance to discuss Sushant’s journey, Pike Finance innovation, cross-chain lending, community engagement, future expansion plans, and more! Read our notes below to learn more.

Background

Subli (Host) – Founder of The Optimist

Sushant (Guest) – Leading growth at Pike Finance

Pike Finance – a universal liquidity market optimized for native assets

Pike Finance: Interoperable Finance and Cross-Chain Lending

Sushant, from Sydney, shares his journey into DeFi and crypto since 2017, highlighting his initial interest in the fun and culture within the space, his background in biotech entrepreneurship, and his eventual shift towards utilizing his experience in DeFi.
Sushant explains his involvement in the Polkadot ecosystem for its interoperability features, his contributions to crowd loans, his work with a parachain, and his current role leading growth at Nuts Finance and Pike, focusing on marketing, partnerships, collaborations, and community engagement.
Subli acknowledges the demanding nature of growth leadership in DeFi protocols, noting it as a day and night job. Sushant confirms his dedication to DeFi, working even during off days out of passion, not obligation.
Subli shares his own entry into crypto via Curve and Convex, highlighting the endless learning and discovery in DeFi.
Sushant introduces Pike Finance as a lending market that allows cross-chain borrowing and lending, distinguishing it from traditional markets like Aave by enabling users to deposit assets on one chain and borrow on another, a capability not previously available before Pike.
Subli asks about the limitations of cross-chain lending before and the solutions Pike Finance is using now to make it capital efficient and ensure soft liquidation without generating bad debt.
Sushant explains that previously, cross-chain operations were mainly possible through bridges that could transfer assets but not the contents of smart contracts.
Now, Pike uses cross-chain messaging, allowing communication between different blockchain markets without moving assets, just the information, making operations more efficient and secure.
Subli says that liquidity stays on the original chain, and through cross-chain messaging, users can borrow against assets that remain on the chain.
Sushant agrees, highlighting that assets do not move between chains. He notes an exception with $USDC, where Circle‘s cross-chain transfer protocol (CCTP) can move $USDC between chains by burning and minting, maintaining the total amount of $USDC across chains.

Pike: Leveraging CCTP, Wormhole, and Base for Enhanced Security and Efficiency

Subli highlights the difference between bridges and CCTP, highlighting the security improvements of CCTP over traditional bridges, which have been a major source of DeFi exploits.
Sushant shares that Pike uses Wormhole for cross-chain messaging, chosen for its capability to connect both EVM and non-EVM ecosystems, aligning with Pike’s vision to connect all of DeFi. He mentions that Pike plans to allow for the use of various messaging protocols in the future, but currently relies on Wormhole.
Subli asks if Sushant’s statement about making Base their home place is correct. Sushant explains that Pike’s unique operation is due to its presence on four different chains within EVM and the decision to centralize smart contract logic on Base to make Pike more lightweight, faster, cheaper, and secure.
He explains that all smart contract logic and accounting happen on Base through wormhole messaging, allowing efficient and secure transactions across different chains.
Sushant adds that transactions are initiated from Base because it’s cheaper, faster, and technically superior, highlighting their bullish stance on the Base ecosystem and its potential to attract new users to the blockchain.
Subli mentions their bullish stance on Base and connections with Coinbase Wallet, hinting at future developments in gas fee abstraction and cross-chain swaps.
Sushant sees the potential for Pike to integrate into Coinbase Wallet, leveraging its user-friendly UX to introduce millions to DeFi through cross-chain lending, and highlights that Pike’s familiarity with traditional finance makes it an ideal entry point for newcomers to DeFi.

Complex World of DeFi Lending: Challenges and Innovations

Subli mentions receiving a question from a friend who is unfamiliar with crypto, asking where to wrap Bitcoin on an EVM chain for DeFi usage, noting the lack of straightforward DeFi options for Bitcoin.
Subli points out the overwhelming choice among 357 lending protocols on DeFiLlama, highlighting the difficulty in choosing due to various risk management and interest rates. Subli advocates for chain abstraction as a solution for easier mass adoption into DeFi.
Sushant agrees, highlighting the difficulty for newcomers in navigating the nearly 400 lending markets, most of which are similar to Aave.
He highlights the confusion over choosing a lending market and chain, underlining the importance of chain abstraction and user experience improvements, such as those seen in Coinbase and Rabby wallets, for switching chains seamlessly.
Subli comments on the benefits of using native assets over wrapped or bridged ones in lending markets, referencing Pike’s policy to only deal with native assets to reduce fragmentation and increase standardization across chains.
Sushant explains the dual transaction fees on Pike, including network and wormhole relaying fees, clarifying that wormhole fees are for cross-chain transaction guarantees and are often partially refunded.
He discusses the ongoing collaboration with the wormhole team to improve messaging performance and reduce costs, acknowledging the current and future improvements in the system’s efficiency and cost-effectiveness.
Subli says they are pioneering cross-lending with cross-messaging rather than bridges, a novelty in the space with about 400 different protocols, highlighting the importance of innovation and community engagement for growth in TVL and community development in the DeFi sector.
Sushant explains there are two main focuses: competing with Aave in the lending market and building a community. He notes a shift in perspective when realizing that many community members were unfamiliar with basic lending concepts, indicating a broader opportunity beyond just competing with Aave.
Sushant says that their educational efforts initially focused on cross-chain lending under the assumption that their audience was familiar with traditional lending concepts. They later discovered a significant portion of their community lacked basic lending knowledge, highlighting a need for fundamental lending education.
He mentions that Pike is attracting users new to lending by offering cross-chain lending opportunities, growing the lending market. This approach brings in users who are DeFi enthusiasts rather than loyal to specific chains, enhancing the diversity and reach of Pike’s community.
Sushant highlights that Pike’s strategy includes producing lending-focused content to educate their community on the basics of lending, aiming to grow the overall lending market and indirectly benefiting platforms like Aave.
He highlights the unique position of Pike in fostering a multi-chain community, contrasting with other DeFi protocols that are often limited to users from specific blockchain ecosystems. Pike’s inclusive approach allows it to engage a diverse user base across various chains, strengthening its community.

Updates on Pike’s Multi-Chain NFT Involvement and Future Plans

Subli asks about Pike’s involvement in multi-chain NFTs based on a post hinting at such a direction.
Sushant says that Pike, being a DeFi protocol, does not plan to enter the NFT space soon. He expresses admiration for multi-chain initiatives and mentions their focus on building a multi-chain lending market. He highlights their support for multi-chain NFT collections like DeGods and y00ts due to their cross-chain approach.
Sushant says that Pike does not intend to venture into NFT lending soon, highlighting the difference between traditional DeFi lending and NFT lending. He mentions the team’s lack of experience in NFT lending and their decision to focus on excelling in DeFi lending.
Subli asks about the current status of Pike, especially after the completion of a phase one beta that introduced caps on lending and borrowing, and asks what to expect from Pike in the coming months.
Sushant shares that Pike went live on mainnet four weeks ago as a beta with deposit caps for security reasons. He discusses the protocol’s commitment to safety, undergoing comprehensive security audits, and mentions impressive deposit figures despite the caps.
Sushant teases an upcoming unique points program and mentions plans to gradually raise and eventually remove caps, onboard new assets, and ecosystems, and make security audits public.
Subli remarks that points programs have been lucrative for protocols by gamifying the system and engaging the community, suggesting it’s an effective method for onboarding new members to a project.

Blockchain Ecosystems and Community Engagement: Insights from Pike

Subli asks about the next blockchain ecosystems Pike plans to expand to, highlighting the importance of evolving within the rapidly changing blockchain landscape.
Sushant acknowledges the significance of expanding to both existing and upcoming blockchains, including Monad and Blast, and highlights the importance of bridging EVM and non-EVM ecosystems. He prioritizes Solana for its potential to connect EVM and non-EVM in a novel way.
Subli asks about a timeline for this expansion, aiming to understand when such integrations might occur. Sushant suggests aiming for completion before the end of the year, indicating a broad timeline for their expansion efforts.
Subli discusses community involvement, specifically the role of NFTs within the Pike community, and asks for details about the Pikenians community project.
Sushant says that the Pikenians project is entirely community-driven, with the Pike team supporting but not directing it. He recounts how the community spontaneously developed the idea into a full-fledged NFT collection, highlighting community involvement in design and decision-making.
Sushant praises the community’s enthusiasm and involvement in creating the Pike-themed NFT project, highlighting it as an example of successful community engagement and project development.
Subli praises the Pike community’s vibe but suggests adding a “super optimism super ambassador” role due to difficulty in selecting roles on Discord.
Sushant recognizes the challenge with Discord roles due to rapid community growth, promising to personally assign the role to Subli while advising others to be patient and quick in selecting roles when available.
Subli acknowledges the difficulty in managing community roles due to Pike’s focus on their core project and asks about the best ways for newcomers to learn about Pike.
Sushant recommends Twitter for real-time updates and community creations, subscribing to Pike’s mirror for email updates, and joining their Discord, which requires demonstrating meaningful community contribution for full access.
Sushant says that the Points program will be announced, not launched, highlighting its uniqueness in rewarding community involvement beyond on-chain actions. He hints at the program’s future benefits for active community members.

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Show Information

Medium: Twitter (Audio)
Show: The Optimist Twitter Space
Show Title: Cross-chain Lending with Pike Finance
Show Date: February 26, 2024