Talking Crypto #76 - Xavier from prePO
Primer: As a retail investor, it is difficult to get exposure to pre-IPO/pre-token projects. There are many hurdles that needs to be overcome. prePO, a project by Xavier Ekkel, aims to change this fact. Read on to learn how his protocol will solve this issue.
Background
Studied economics, finance, and computer science in university
Was very interested in Bitcoin. Played with a lot of altcoins
Afterwards, he started developing games and participating in game jams
During the ICO bubble, he checked out the gaming projects. Realized that there weren't many
Decided to try and make one. Started learning Solidity through the CryptoZombies tutorial
Worked for a few months in a crypto project
Came back to crypto quite recently
Before returning, he was working at Canva. Bullish on their long-term success and wanted to get upside exposure, but couldn't
Thought of creating a platform for people to get exposure to any pre-IPO company
Favourite Game
Into experimental games — games that pushed games forward as an art form
Big fan of the Beginner's Guide. Made by one of the creators of The Stanley Parable
Beginner's Guide is a collection of experimental games
Created a game that is quite similar to the Beginner's Guide
What Did He Learn Working At Canva?
Learned about the best practices for writing code and sending it out for review
Standards for working with a team, leading projects, and taking ownership
Took some of their values as well — effective altruism
prePO DAO has a pledge of using their time, effort, and treasury to make the world a better place
Canva has a great interface and is very easy to use. prePO is inspired by the same values
"I knew prePO had to be very, very, very simple to use. So anyone could be able to use it. So you have to pass the grandma test, they should be able to understand it." - Xavier Ekkel
prePO
One-Liner
A decentralized exchange that allows users to get exposure to the upside or downside of any pre-IPO company or pre-token project
The pre-IPO process
As a retail investor, it is difficult to get access to a pre-IPO company. It's normally reserved for institutional investors
If people wanted to trade such shares, they could potentially trade it with someone from the company that is offering those shares for trading. However, it has a number of drawbacks:
Price is not transparent
Minimum investment is quite steep
Limited to certain geographies
Faced with a lockup period
Have to do paperwork and, therefore, lose one's privacy
prePO enables unlimited, unrestricted access for everyone
This is achieved by synthetic assets. Investors get exposure to representations of the real thing
This allows them to scale and to have no minimum investment amount. There's no lockup period, investors have much lower fees, and it does not rely on the willingness of shareholders/token holders to make a trade
The Market For The Assets
Will have liquidity providers for the synthetic assets
Anyone could be a liquidity provider
3 layers of rewards for both traders and liquidity providers:
Pool fees as a liquidity provider
Every deposit will be earning yield farming rewards
PPO rewards — native governance token
Focused on making it as low risk and highly incentivized as possible. Will be taking measures in the underlying AMM — using concentrated liquidity and restricted ranges to reduce maximum loss
Team will initially define the market. If the asset keeps trading at the top range, the community governance could propose a tighter range
How Are Prices Set?
Prior to going public, there is no price oracle for private assets
Forces of supply and demand in the underlying AMM will facilitate price discovery
Once the asset goes public, the team will feed in the final settlement price
The Collateral
Collateral is backed by stablecoins
Will make it very simple for users. Users can provide any kind of token and, behind the scenes, it would be converted into the collateral
What happens behind the scenes:
deposit —> tokens sent to a yield farm & long and short tokens are created —> for a long trade, short tokens are sold so that the trader is holding only long tokens (and vice versa)
Are Pools Permissionless?
Starting with a curator approach that is governance-driven
Ultimately, token holders will decide which new markets to create and the parameters for them
Trading Fees
Will be decided by governance. Trading will not be free
Using prePO To Hedge Against An Airdrop
Definitely able to use prePO as a hedging mechanism
If users know that they are getting an airdrop, they can use prePO to lock some of it right now to hedge against their existing position
Any Issues With Creating A Market For A Company That Hasn't Given You Explicit Permission?
Think of it more as price discovery
When companies raise their next round of funding, they would have some kind of indicator of how much they can raise
Could introduce transparency and accountability. When private companies behave unethically, they may see their valuation drop on prePO
Foresees that some companies might choose to ignore it while others may try to partner with them
Mobile Support
Will focus on mobile support as a lot of crypto users are accessing crypto through their mobile devices
Dealing With Regulators
Important for the project to be sufficiently decentralized, much like how Ethereum is seen to be decentralized enough by regulators
Need to have a very distributed base of token holders and ensure that decisions are made in a decentralized way
Token Integrations
Long and short tokens are fully composable
An example is to take a bunch of long tokens of Elon Musk companies and put that into an Elon index
On Betting Markets
Did heavy research on betting markets. Found that they are not popular
Architecturally, prePO is like a betting market but they do not position themselves as one. They are targeting the regular retail investors
Problem with betting markets are that they are binary markets. Often, liquidity providers can lose 100% of their position
Their 3 layers of rewards will bring in liquidity and their AMM is set to restrict downside to a single digit maximum loss
Team Size
It always fluctuates
Bring people in on a project basis
Some are full-time while others are part-time
Currently have 10 right now
Looking to get the community more involved
Biggest Challenge So Far
Scaling the team
Tricky to find quality, dependable members that work remotely across different time zones
Building A Community
Have been focusing on it from the start since their protocol will eventually be run by the community
Community is on Discord
Recently released their simulator, which allows people to visualize different scenarios as a trader or a LP
Has a preacher program where community members spread the good word about prePO and be rewarded for their actions
Gives labels/roles to community members to make them feel more involved
What Is He Most Excited About?
Excited about a NFT game that they are about to release
It's based on Mergers & Acquisitions
A bit of a battle royale game
Players have to find companies and build up their own reputation by competing against other companies
Players can choose to compete, acquire, or merge with other companies to make their companies more powerful
Everyday, players earn runway points which are ERC-20 tokens. These points can be consumed to perform actions
It is also a game of accumulation as well. Could be beneficial to team up with others since using up runway points to compete with others makes the player more vulnerable
How Does The Game Tie Into The Platform?
Is a form of guerrilla marketing to draw the NFT crowd onto their platform
Their platform will eventually be heavily gamified. Every user will have their own user profile where they can perform actions to unlock achievements and be ranked on the leaderboards
If You Have A Billboard, What Message Would You Put On It?
Would put something cryptic
Have been researching alternate reality games where there are puzzles to be solved before one can find what it's essentially about
How Can Listeners Take Action
Join their Discord and follow their Twitter
Look forward to their game when it comes out
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