How does TapiocaDAO revolutionize DeFi?

In this episode, [DegenCryptoThings]( of [DeFi Raiders]( is joined by [Matt]( of [TapiocaDAO]( to discuss Layer 0, omnichain, liquidity, governance and more.

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Read our notes below to learn more

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**About TapiocaDAO**

* It is a L0 omnichain money market across 12 EVM networks that allows users to lend and borrow assets between different networks.
* Defragmenting liquidity to attain unparalleled capital efficiency while also offering seamless interoperability.
* USD zero will be over collateralized and censorship resistant with only network gas tokens minting it and a first fungible stablecoin allowing users to bridge without an intermediary protocol.

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**About Matt**

* Founder of Pearl Labs which is the core contributor of TapiocaDAO.
* Worked as a product manager on a company called NYX gaming.
* Worked in the gaming gambling industry until 2020.
* Found out about L0 in early 2021.

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**Why Layer 0**

* The entire bridging concept was destined for failure.
* There are so many issues with bridging a certain asset and there’s no liquidity on the other side.
* L0 was the only one to remove the middleman, do transactions seamlessly and the security side is held up.
* OFT is allowing a token to live on many chains simultaneously without needing a bridge or a third party protocol.
* They haven’t seen many people touching OFTs.
* USD zero is the first stablecoin that uses OFT technology natively.
* A L0 has a relayer and an oracle.
* A relayer is what passes the messages and the oracle is what confirms it.
* The only time a hack could occur is if an oracle and a relayer collude with one another.
* The messages are passed through endpoints which are like mailboxes on every chain.

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**Challenges on adopting omnichain**

* Tapioca built all of their smart contracts natively to work with L0.
* A lot of protocols that built out multichain have deployed their contracts into several different chains.

**Liquidity Mining**

* Their DAO share option is based-off [Andre Cronje]( option liquidity mining which was built for the keeper network.
* There’s more sell pressure in bonding than just giving a project’s tokens out.
* The only thing that’s real at the end of the day is actual permanently owned liquidity.
* [Rektora]( invented the TWAML that means Time Weighted Average Magnitude Lock.
* TWAML creates efficiency through competition.
* The token model must match the goals of the protocol.
* [Curve]( model became kind of beholden to ve and their swap volume of stablecoin is only 20%.
* The problem with [Uniswap]( concentrated liquidity is it needs to be managed actively.
* Their $TAP token is going to be mainly on [SushiSwap]( then their USD zero be on Uniswap but they’re also going to cross pollinate when [Arrakis]( starts supporting tri-stable pools with Sushi and with [Balancer]( hybrid pools.

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**Runway, Transparency and Governance**

* Their burn rate is $80,000/month which is a total of almost $1M in a year and they have 2 years of funds in the bank.
* A lot of VCs just wanted predatory tokenomics.
* They share their multisig address all the time so people can look at it and see what their holdings are.
* A lot of DAOs are just weighted voting free for all, it’s a mess, there’s no vision and people don’t know what they’re talking about.
* They have a governance roadmap of how things are going to be decentralized over time.
* Their governance system is where over time, the multisig loses its power until it loses all power then the community will control it 100%.

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* [Follow Revelo Intel for more notes like this](
* [Listen to the original Twitter space](

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