Wild Credit AMA with CRE8R DAO
Primer: Wild Credit is a lending protocol with isolated lending pairs. In this AMA with CRE8R DAO, 0xdev0, their founder, takes us through his journey of building Wild Credit and the features they offer.
Team
Wild Credit has a solo founder - 0xdev0
At any given time, there are multiple people working on the project
Most people who joined their project did so via word of mouth
Thoughts On Team Anonymity
After going through the ICO explosion in 2017, he doesn’t believe that the anon status of the team should be taken into consideration when assessing the trustworthiness of the team
“A LinkedIn profile can be faked. Ex-Google credentials can be faked. A photo can be faked. And during the ICO craze, many were either faked or didn’t matter.”
- 0xdev0
What cannot be faked is reputation
Anonymity evens the playing field — everyone has the same chance regardless of their race, gender, or the country they were born in
The Origin Story Behind Wild Credit
The aim of the first iteration of Wild Credit was to combine the liquidity of an AMM and a lending protocol
The idea seemed bold and they needed a name that symbolises the risks involved
The term Wild is what came to mind
As the .credit domain was available, and it’s related to lending, Wild Credit was born
Over time, the task of merging liquidity of an AMM and a lending protocol was more challenging than originally anticipated
The idea was simplified into isolated lending pairs without the AMM functionality
What Keeps Him Up At Night?
There are many risks involved in running a protocol
One of those risks are smart contract bugs
To help mitigate the risk:
Their code was audited
They also have a $100,000 bug bounty
What Is His Typical Workday Like?
After waking up, he catches up on the crypto news on newsletter and Twitter
Check Discord and reply to new questions
Review code from their developers
Assign more tasks and work on partnerships
“It might sound boring. And sometimes it is. What matters is persistence and not giving up. We’ve been around for over a year and we’re not going anywhere anytime soon.”
- 0xdev0
If He Could Go Back In Time And Change Just One Thing For Wild Credit, What Would That Be?
He will fix the interest rate bug that forced them to shut down the protocol and re-build it just when they hit $100M in TVL in V1
How Is The Team Remunerated For Their Work When There’s No External Investors And No Pre-Sales?
During V1, the treasury managed to accumulate a sizable amount of revenue
This has allowed them to own their liquidity and use it for operational expenses such as developer compensations, audits, gas costs, marketing, etc.
What Is Their Elevator Pitch For Wild Credit?
Wild Credit is a lending protocol with isolated lending pairs
Unlike bundle-based protocols such as Compound or Aave, isolated pairs allow them to support a much wider range of tokens
Aside from using ERC-20 tokens as collateral, they are also the first and currently the only protocol allowing the use of Uniswap V3 positions as collateral
What Problems Is The Protocol Trying To Solve?
Bundle-based lending protocols such as Aave or Compound are forced to be very strict with which tokens they can support
Each token they add puts their whole liquidity at risk
As a result, they tend to focus only on the blue-chip assets and ignore everything else
There are hundreds of tokens with large communities that are not being served by any lending protocol
Wild Credit aims to change that
What Is Wild Credit’s Solution To The Problems?
They can support almost any asset
If a risky asset on one pair fails for any reason, it would not affect the rest of the protocol
It’s up to the liquidity providers to determine their own risk appetite when deciding which pairs to use
What Is The Unique Selling Point Of Wild Credit Compared To Other Lending Protocols?
Wild Credit is the first and currently the only protocol allowing you to use Uniswap V3 positions as collateral
Users will be able to use leverage to increase their trading fees
They could also borrow against their position while it keeps earning fees and use the borrowed funds elsewhere
Which Chain Is Wild Credit Launching On First And Why? Are There Any Multi-Chain Plans?
Has launched on Ethereum Mainnet
In the future, they plan to become multi-chain
What Are The Advantages/Disadvantages With Isolated Lending Pairs?
Advantage: isolated pairs can support a much larger set of assets due to risk being isolated
Disadvantage: liquidity will be fragmented
How Does The System Determine The Interest Rate?
They use a utilization-based interest rate model
It works similarly to the jump-rate model from Compound
The more people borrow relative to the supply, the higher the rate is
Why Is There A Need For Two LP Tokens Instead Of The Usual One?
Each pair has 2 tokens. You can supply both or just one and borrow the other
Since users have a choice of what they want to supply, there are also 2 LP tokens, each representing the underlying token in the pair
Users always get back the same amount they deposited plus interest
Can Anyone Use The Protocol To Liquidate?
Yes, anyone can use the protocol to liquidate others
In The Event Of A Massive Crash, How Does The Protocol Handle The Volume Of Liquidations?
It would be dependent on liquidators
They do not place any limits on the liquidations
Since they support flash loans, it makes liquidations even easier
Are There Any Backups In Case Liquidations Do Not Happen?
All tokens currently use a collateral factor of 0.6. This means you can only borrow up to 60% of the value of your collateral
This leaves the protocol with quite a large safety margin
Even if the liquidation did not happen instantly, there would still be enough collateral to liquidate it later
Other protocols tend to have a higher collateral factor (more risky) since they are more established
Any Roadmap To Share With Readers?
Most of the development has already been done
Still have plans to develop leveraged positions and possibly a stablecoin
Other goals include adding more assets and developing more partnerships
Imagine A Scenario Where Everything You’ve Planned For The Protocol Works Exactly As It Should Be. Can You Describe What That Vision Looks Like?
In the ideal world, you’d associate Wild Credit with lending
“Want to borrow some random new token? Just go to Wild Credit”
DODO Exchange Has A Single-Sided Liquidity Provisioning Structure As Well. How Does Wild Credit Single-Sided LPing Differ From Them?
Not familiar with their structure
DODO Exchange is an AMM (automated market maker). They focus on swaps, while Wild Credit focuses on lending
How Did They Implement Single-Sided LPing When Uniswap V3 LP Positions Are NFTs Instead Of Fungible ERC-20 Tokens?
Wild Credit allows both ERC-20 tokens and Uniswap V3 positions as collateral
If users decide to use Univ3 as collateral, the NFT position gets transferred into the pair where it continues to accrue swap fees for them
Once users repay their loan, they can withdraw their NFT position back to their wallet along with any fees it has accrued
If they get liquidated, their positions would get “unwrapped” - the token components of their positions would be used to repay their loan and they will get anything that’s left from it, if any
Most Uniswap V3 LP Positions Are Unprofitable For The Average Retail Investor. Would This Be A Concern For Users?
That’s up to liquidity providers to manage
Uniswap V3 has attracted a lot of liquidity which clearly indicates a lot of interest
They aim to serve those LPs if they wish to use their existing positions as collateral
Using UniV3 as collateral is not a requirement. Users can still use regular ERC-20 tokens as well
We Noticed That There Had Been A Token Migration on Dec 20, 2021. What’s That About?
The migration had to be done because they made a mistake and got locked out from the old treasury
The new treasury uses an upgraded timelock contract which adds safety features that prevent the same kind of unintended lockout
Tell Us More About The WILD Token And How It Accrues Value
The protocol earns fees on the interest rate spread. The interest paid by borrowers is earned partly by suppliers and partly by the protocol
WILD can be locked up to earn protocol fees and to gain governance power
Additionally, holders can also supply WILD to the WILD-ETH lending pair and earn supply interest without any lockups
Tell Us More About How The Locking Mechanism Works And Why Someone Would Want To Lock Up For Long Periods?
The locking mechanism works similarly to veFXS or veCRV
The longer your lock period is, the more veWILD you get. More veWILD gives you a higher APR and more governance power
More information can be found in their docs
What Measures Have They Taken To Prevent Exploits And To Reassure Users That The Protocol Is Safe?
Their code was audited by C4 and they also have a $100,000 bug bounty
The report can be found here
What Does The Community Govern Over And How Is Governance Implemented?
Currently, the governance is limited to the bi-weekly voting of borrow reward allocations. This is similar to the Curve wars
The voting is done using Snapshot
In the future, they plan to expand the voting to more functions of the protocol and make it more automated and decentralized
What Are Some Initiatives That The Community Has Come Up With?
Some people were very helpful in terms of providing feedback, helping to moderate the community and answer questions, building various analytic tools, etc.
They are incredibly grateful and lucky to have such a helpful community
Will The Community Be Able To Vote For Changes To The Collateral Factor For Any Given Asset?
Collateral factors are set so low for all assets to lower the risk
As the protocol is still new with not a lot of bots competing for the liquidations, it makes sense to assume that liquidations might not always happen instantly as they do with already established large projects
Once they grow, more parts of the protocol, including collateral factors, might be voted on by governance
Is There Anyone, Real Or Fictional, That You Really Admire And Why?
Personally, he does not have any specific idols
“What I admire is anyone with a lot of grit that sets a goal and keeps working towards that until it gets done. No matter how long it takes. That’s the only way to succeed at anything. As cliche as it might sound.”
- 0xdev0
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