From humble beginnings in Vietnam to higher education in Singapore, Loi Luu has grown from a budding entrepreneur to becoming a key figure in the Ethereum ecosystem. As Co-Founder of Kyber Network and investor of promising ecosystem projects, Loi's story has been pretty remarkable to follow.
Family is important in Loi's life. It is the primary driver of motivation for his many successes in his career. Growing up in a middle-income household meant being taught to be prudent and not to spend money unnecessarily. And he could not always have the opportunity to own the latest equipment or software to pursue his passion for computing. "Although I had to make do with an old computer, I am grateful to my family for helping me fund my passion and education."
Loi focused all his energy into his studies and worked hard for the last 10 years so he could one day repay his family's kindness and support. Today, as a newly-minted husband and father, that same fire is lit towards a very bright journey for his wife and son.
While Loi has solid values regarding money, he recalls how there were very few avenues to learn about investing in financial products. He started regularly setting aside a small portion of pocket money and his work income to save for his golden years or emergencies. But the learning curve for anything beyond compounded savings felt too complicated and inaccessible to general students and young working adults.
In traditional finance, investment products mostly cater to benefit accredited investors and require a high minimum quantum. This prevents many young people from starting early on their financial literacy and growing their wealth.
How DeFi Can Move The Needle
Loi's key lessons in learning about the world's financial systems was during his undergraduate years as the Co-Founder of his first startup truognha.com - a platform to solve school management problems in Vietnam.
Naturally, when Loi was a first-time founder, there were many challenging firsts of building a technology startup, including managing the financial runway. "It was a formative experience which made me understand the values of resilience, teamwork, and good money management in the startup world."
To a certain extent, Loi feels that DeFi can help address financial challenges entrepreneurs and retail investors face. Because DeFi is more accessible to even the young and old, it can give people greater access to a whole suite of financial services and autonomy over their funds.
A project that is building such access is InstaDApp - one that Loi invested in. "They're becoming a window into multiple DeFi protocols... a convenient interface that makes it easy for users to move assets while allowing developers to easily build on top of them". And their progress is only growing. With $175 million in assets, they help hundreds of users optimize their fund management across multiple platforms.
When it comes to the younger generation, teenagers can quickly learn the fundamentals of trading, investing, lending, and borrowing, all from their mobile devices. What's notably impressive is how DeFi converges with blockchain gaming and NFTs (Non-fungible tokens). A perfect way for game-loving kids to pick up financial principles. One example is how games such as Axie Infinity allow its users to acquire special game token and NFTs that can be traded in open marketplaces. Some other projects even allow users to borrow money using NFTs as collateral.
Over time, more DeFi protocols will be natively embedded within the gaming ecosystems. Eventually, many kids could have their first experience of interacting with money online through blockchain games.
"I believe there will be more tech-savvy kids who are 'DeFi natives' with their main financial transactions occurring on the blockchain."
As for yields in DeFi, the market sees a constant inflow of new projects; projects that Loi is very familiar with, having used the likes of Aave, Compound, and Fulcrum by BZx, and asset management platforms like InstaDApp, DeFi Saver, Melon, and TokenSets.
In his opinion, to 'Yield Smarter' in DeFi means to efficiently maximize your yields with the least amount of time and effort, through a transparent and secure process. And he is always impressed with projects that abstract away complexities of DeFi, so users have better access to do so.
"I believe this is what Unagii is trying to achieve (to yield smarter). They have done an excellent job as one of our third-party KyberDAO staking pools... for those who want to save on gas costs or those who do not have the time to vote on every epoch."
Despite the vast options to yield, Loi eats what he serves. He is currently staking his KNC on KyberDAO with an estimated average yield of 6-12% to date (after ~5 epochs). Which is plenty more attractive to what you can get from a typical savings plan at your local bank. And competitive enough with leading DeFi platforms. "I believe this KNC staking model will establish a long-term virtuous loop. The success of the DeFi space, growth of the Kyber ecosystem, and value creation for KNC holders go hand in hand."
Interest in DeFi has been brewing for a long time since 2018, even before the term 'DeFi' gained popularity. With the endless possibilities offered by Ethereum and smart contracts, projects and users have long been romanced by the promise of programmable money and a revolutionary financial system built on top of the blockchain.
"With hundreds of tokens being created, my co-founders and I saw the need for a convenient and secure token exchange solution that did not depend on centralized servers." They envisioned a solution to allow users to truly own their assets and DApps to efficiently fulfill their liquidity needs.
Many projects across trading, lending, and asset management were later founded and matured as interest and desire in USD-pegged stablecoins like DAI, USDC, and USDT grew in response to crypto volatility. Given their composable nature, he saw a rapid rise in different innovative use cases such as flash loans and DeFi Smart Accounts. These smart contract-enabled use cases all require on-chain liquidity for token swaps, rebalancing, or liquidation.
This was, therefore, the period where Kyber optimized their on-chain liquidity protocol and integrated many financial DApps, solidifying their role as the liquidity infrastructure for DeFi.
The team at Kyber has since had an impactful launch with its Katalyst upgrade and KyberDAO release in July 2020. With 5,000 voters and ~USD1 million in ETH rewards distributed, it marks KyberDAO as one of the most popular and active DAOs to date, with the highest on-chain voter participation.
And their success with KyberDAO also means a growing number of delegates to us at Unagii, with over 800k KNC to date. We couldn't be happier that users are supporting our platform and finding ease of use in the process.
Most of Kyber's efforts are now focused on enhancing liquidity and slowly opening up their reserves system. This involves working closely with professional market makers, developers, and the Chicago DeFi Alliance to build the necessary infrastructure to streamline the on-chain market-making process.
Sometime this month, Kyber will be releasing an exciting new initiative to complement their existing Fed Price Reserve (FPR) to introduce an end-to-end liquidity framework for market makers. Their goal is to make it much easier and faster to onboard market makers to on-chain market-making, provide all the tooling, education, and support they need, and launch an incentive program to help make the process as profitable as possible. It involves months of research into this topic, together with the Chicago DeFi Alliance and the top professional market makers in the space today.
With the increasing risk of network congestion and gas prices, Kyber also has a dedicated team researching Layer 2 scaling solutions. However, this is still at an early stage. Their KyberSwap team has more feature launches lined up for retail traders too.
Today, Kyber is the most integrated DeFi protocol in the world, with over US$1 billion worth of transactions facilitated since its inception. They support over 80 different tokens and powers over 100 integrated projects, including popular wallets Trust, Enjin, Argent, and the HTC Exodus smartphone, as well as DeFi platforms bZx, Nuo, DeFi Saver, InstaDApp, Set Protocol, Melon, and many others.