The End Of Centralized Exchanges | Kain Warwick's Infinex

I think there's a large cohort of OG eth people that have never done a salon transaction their first Salon transaction will be on infinex I guarantee you like for the majority of like OG e people their first time that they use salana will be on infinex without even realizing welcome to bank list where we explore the frontier of D5 platforms eating CI Banks today on the show we have Kane Warwick hot on the heels of the $65 million Patron sale from his

brand new platform infinex Kane thinks that defi is already better than centralized crypto platforms like binance except the only issue is that all the quality defi apps are fragmented across the crypto Universe different apps on different chains all creating and providing a ton of worldclass products but with dog [ __ ] ux for users according to Kane we are no longer in the era of educating users into self- custodial private keys or learning defi interfaces one by one or chain swapping our assets to get there according to

Kane in 2024 we have the technology to create one seamless interface abstracting all the chains and integrating together all of the defi apps the thesis is simple take all the best of what defi has to offer and package it up into a single interface abstract everything in the background using intents solvers and chain abstraction tools like gelato and near and with this you can even use Litecoin or xrp which to this day have large masses of users who keep their funds on binance because that's that's what they do and integrate those assets into

infinex as well if infinex works I expect it to unlock crypto for the next wave of users because we already know that cudgeling users into self- custody and private Keys is an exhausted opportunity what we need is the next wave of technology to onboard the next billion users and Kane thinks that he's cracked the code with a technology that we have in 2024 as a disclaimer both Bank Clos Ventures and myself are infinex patrons we're excited about what Kane is building and how aligned it is with bankless Mission so how could we not be and for those eager to see me and Kane Warwick go head-to-head in karate Combat on October 11th we of course chat

about that too at the very end of the podcast so let's go ahead and get right into the episode with Kane Warwick from infinex but first a moment to talk about some of these fantastic sponsors that make this show possible bankless Nation I'm here with Kane Warwick father of modern yield farming benevolent ex dictator of synthetics owner of mansions and now founder of infinex Kane welcome back to Bist yeah thanks for having me uh infinex is the tip of the chain the tip of the cane war with chain the most recent thing that you have committed your life to uh talk about that a little bit like what's the thesis behind it what what is it uh why does the world need it yeah

the the thesis is onchain finance which I think is something that has been around for a while this idea that you know we want to bring everyone on chain um I don't think that we were quite ready to do it I don't think we had um all of the tech in place to be able to do it even though we thought we did um you know one of the interesting things about uh this new Journey stepping back from building protocols and building a you know something that's more like a user interface um has been realizing all of the weird coping strategies as a def5

Founder that uh that I think um you know I needed to to live by so there's a there's a bunch of stuff that I that has you know kind of popped out for me that I'm like oh wow we actually were a bit further away from this than I thought what is what is onchain binance how would you define that yeah this is the interesting thing right like if you talk to a lot of D5 people I think they would say oh no we've already got that it's called defi it's over here right um and and you know okay let's break that down right um defi over here is the a

interface and the drift interface and the Unis swap interface and all of these like interfaces that are individual features that binance has right um and for the average user navigating a bunch of different interfaces understanding how to connect to them um understanding that you bring your own wallet there's no you know Global account or anything like that um is very difficult right um and that's why they stay on binance but even more importantly even if you you

believed that this were true that this you know fragmented ecosystem of individual feature based interfaces was better we actually don't even have all the features right if you talk to a binance user um and we've talked to a bunch of binance users we talked to people uh uh in in a bunch of exchanges um over the last 18 months the average binance user if we walk down on the street and said hey binance users you know what do you want to do um we'll say I want to deposit

xrp that's the first thing they want to do we can't do that in defi there's no xrp not only is there no xrp but we actually will then say well actually you're an idiot so go somewhere else right and and this is the reality that like most of what centralized exchanges do we talk a lot about trading volume and fees and all of you know those are the things that make money but what they do like one of their core value props is they store people's crypto that's it they store people's crypto in a way where they're not going to lose it right

so it's not self- custodial it's you know a ton of counterart risk but it's what people like it's what people use and so we can keep building hoping that people will want the things that we're building or we actually ask a genuine question what do you want and then build that and that's what infinex is okay so there's a large cohort of crypto people the the Deep crypto people who are very like values driven even if you're trading meme coins like you probably still understand and appreciate the value of self- custody uh and this is

something that we've been trying to espouse to the world let's get the world onchain let's get everyone some private Keys uh and I think we've done a decent good job of populating that corner of the internet with our kind of people yeah and then maybe what you're alluding to is like well that effort has actually kind of been exhausted uh if you are a self- custody crypto person uh there's not that many of those people those types of people out there in the world that we haven't already found and put into our corner of the internet and so I I think what maybe what you're alluding

to is that infinex is like the next step to getting the value of crypto ethos like a bankless binance uh that can like reach out to uh the next further out Centric circle of crypto exactly who are in crypto these are crypto users like they're daily active binance users they're in crypto they're as in crypto as I am we just say they're doing it wrong right um and the funny thing is Right we've been building for enthusiasts and if this were any other industry building for enthusiasts would have failed

utterly years ago right but crypto being what it is and tokens being what they are there's such a powerful coordination mechanism there's such a powerful uh monetization mechanism an incentive structure that we got hooked on our own Supply we're like we are just killing it here like this is amazing right everything that we're doing is is working so well but we were building for enthusiast we ran out of Enthusiast right and then when we ran out of enthusiasts We buried our head in the sand and said no no it's okay we we can

make more enthusiasts right um and the we simply just have to teach them how to be and like you know I've said this a couple times but I some of the things that I believed right and I think maybe even in one of the conversations that we had I was like no no it's it's good that private keys are so hard to manage because it makes people appreciate how good they are and it's like no like that's not how we make that's not how we get adoption yes for some no for most sure it like for and the sum is Tapped

Out we've tapped out those people right if you think about it like Linux right there was there was a per per of time where uh Linux users and I was one of them um had this view that like the the year of the Linux desktop was like perpetually next year like next year everyone's going to work out Linux right um the irony of ironies is that Linux dominates the world but it dominates it by being the infrastructure that people build things on top of right and you know all of the data centers in the

world run on Linux that's just what they run on but we use Macs and we still use Windows machines right like um you know and I mean even there's an argument like you know obviously OSX um you know has its Unix you know history whatever um but like for a user for a genuine end user you need to control the experience end to end you know this is like a very job Zan thing but like if you want to build good software you got to build Hardware right like you need to control the endtoend experience right and we we

have a view at infinex that if you want people to use crypto and be on chain that you need to build an endtoend experience right um and optimizing for uh censorship resistance gives you a poor ux that only certain people are going to be willing to deal with right and so we are not censorship resistant not today right um but we are non-custodial and that's the most important thing we give people all of the things that are amazing about onchain and we're non-custodial

but yes someone could censor us right someone could shut down the system um and we're not nation state resistant today you know but my view is if we build a thing that is valuable enough like those are technical problems that can be solved we can decentralize you know that infrastructure such that um you know maybe you don't get the perfect endend user experience but you can get something approaching it and we can get better and better over time um but you need to start with demand if you have no demand for it and and you haven't uh you

know built an audience and built distribution then building something that is maximally censorship resistant which again we've been doing like in Def you know synthetics was maximally sensorship resistant you can't shut it down right you can't even shut down the interfaces we've got pinned interfaces on ipfs that let you do the things that will be there for the rest of time right um and so you know that is the fallback that we have but we're trying to bring people on chain and you got to meet them where they live I want to uh kind of Pop open in the hood and take a look at what

infinex actually looks like from like the tech stack we're calling this onchain binance uh binance has like a frontend an interface it's also got like engines and you know custodial systems uh how is infinex similar what does it have that similar and what is it what does it have this different so what what infinex does that is different to binance is it doesn't co-mingle funds so each user has their own account right which is a smart contract or a program um or uh you know soon right we'll be using um near chain signatures um so

that you will have a smart contract that will control uh a wallet address on the Litecoin Network for example right um and so you'll be able to deposit native Litecoin into infinex and control it through this non-custodial interface right you sign a message using a pass key and it will translate that message send it to Litecoin Network and I mean it won't do anything because no one does anything with Litecoin but like it'll let you put your Litecoin there and it's a safer place to put it right if you're a Litecoin user that is what you use it

that's what you use it for yeah like more so than even Bitcoin like Bitcoin kind of pivoted away from just like a pet rock to like you know it does stuff again now right there's runes and ordinals and l2s and all kinds of fun stuff that's that's emerged Litecoin doesn't have that Litecoin is like purely an asset that you hold right and same with xrp right but there are are huge segments of the market and this is the really interesting thing right if you go down coin gecko from top to bottom go through the 30 assets there's like 10 solidly that defi doesn't really

touch right or doesn't touch well um you know maybe you've got wrapped versions synthetic versions but like you can't really get them into defi on salana or ethereum or you know Cosmos or po like none of these ecosystems uh let you let you do that and so infinex gives you the ability to do that um it also gives you the ability to access the features that binance offers as a full stack application running on a database on

chain okay so um an example of that is if you want to uh margin trade right right so if you want to margin trade you've got some eth and you want to use that as margin to borrow some stables and trade we take you to a MH obviously right in the back end you don't take in the front end in the front and they just click a button and say I I want I want access to margin I want to you know I've got some eth and I want to borrow um you know a th000 usdc to trade mudang MH

cool okay fine we can do that right um it doesn't matter that the eth is on arbitrum and is going to be borrowed uh via a on arbitrum and the usdc will then be bridged over to salana or whatever like none of that matters is Mund on salana I don't know actually I let's act that it is so like I've got eth on arbitrum I put my eth into infinex I borrow Stables on arbitrum version of a yes and then infinex will allow me to take those Stables over to salana and buy mundang Y and I don't I

don't know about any chain you don't know about any chain it's completely abstracted away I I said this on Twitter the other day I think that there are there's a large cohort of OG eth people that have never done a saler transaction first salana transaction will be on infinex I guarantee you like for the majority of like OG e people their first time that they use salana will be on infinex without even realizing it they'll be like ah whiff okay yeah that's fine because they can get the deniability yeah like it's not me right

it's it's funny it happened the other way around where you know we had this yield farming thing um and um uh one of the salana guys was like wait a second I don't I I don't want to be farming on base and I'm like yeah you don't really get a choice right like you put your like it just does thing where the thing happens right same thing with Bull Run we've got this mini uh you know trading game it happens on blast mhm doesn't matter if you like blast or not that's where it happens right I've played that game I had no idea blast like it's on blast right so uh you know these things are happening on different chains chains

that you may never have interacted with right and you know it's only going to expand um we're going to have another you know 10 chains next year right or 15 chains and so you know almost definitely balance the probabilities your first first IBC transaction will be via infinex oh interesting like cuz other than to like Farm some airdrop like Dimension or something like who has installed one of those weird wallet like they you just haven't right like you're like I've got metamask it's bad enough right I don't need anything else so so all of this stuff happens in the

background you get access to onchain protocols on various networks um you get bridged across to wherever you need to be um and you get access to the features you want and the features that people on binance want right um because again we're not targeting enthusiasts we're targeting the existing binance user they want storage they want to store their assets right safely um and for them safe is not non-custodial safe is a Vibe right safe is a feeling right they like

CZ he does weird funds are SAU yeah literally like he does weird stuff he's super rich he's probably not going to rug them like who knows right but it's a Vibe they don't they don't care about custody non custody whatever they just want a vibe that feels safe so this is the reason why it's so important that we have uh a broad uh cohort of patrons right in in uh the infinex ecosystem because how does someone who's on binance get that Vibe of safety they get it from someone

on Twitter right someone on Twitter is like hey I did a deep dive into the tech and it looks great and whatever and they're like I trust this guy yeah he's a smart guy right passes his test passes my test yeah exactly like hu's looked into it and you know if he likes it then I'm cool right like he's smarter than me I don't know right so like sure whatever um and so building up that Vibe of safety that like this is a safe place for me to store my assets is really critical right that's like table stakes in my mind and there's never been a di5 platform that has been able to accept all of the top 100 assets natively long

custodi hasn't it wasn't even possible until like this year really right so there's a whole bunch of stuff that's come together pass Keys Turn Key near chain signatures all of this stuff come together uh that's allowed us to do it um and then you go okay what else as a user I've got some assets on this platform now what do I want to do I want to do spot trading I just want to swap right you know I want to buy some moodang or I want to buy some whiff or I want to buy Pepe or you know I want to buy some new mem coin or or whatever um

or I want to buy Sky right I heard that it's rebranding it's cool there's this rebalancing thing like you know let's buy some dii tokens right whatever is it doesn't matter right so you've got some Bitcoin and you want to buy Sky mhm that's easy on binance right binance makes binance abstracts the chains away in an incredible fashion right so you can do that very easily on binance you can't do that very easily on on Def we're going to make it easy for people to do that yeah sell point you know Z1

of a BTC and and you know buy some uh you know buy some defi tokens cool um so we do all of that we add margin we add some lending we add some staking and the best thing is each of these marginal things that we add each new feature that we add not only are there like 10 amazing solutions that exist for it right um you know whether it's lrts lsts you know all kinds of stuff um but it costs us nothing right the integration you don't develop it we're not building

protocols protocols already there right IFI already spilled the value it's you're just packaging it and selling it to the customer ex exactly mhm uh so you you mentioned like there's 10 different um uh offerings often of the same type in crypto there's like five different ways five different platforms to go margin long uh how how do you manage that hairiness in the back end right like whether you want to deposit into a or compound or any other lending protocol might be determined by the yields maybe maybe Moro is giving the better yields today how do you like

package up and make sure you're actually offering the best in that one moment that defi is offering how do you manage this complexity yeah it's it's a very good question um both from like a a user perspective and I think also like a philosophical perspective as well um what are we optimizing for this is the other reason why it's so important we have a broad range of patrons uh who are you know governing the system because we need as much input as possible into this process we don't want to be necessarily you know King makers or or picking

winners um I think in the short term Lindy is probably the biggest determinant for me right like if if I were the benevolent dictator of infinex and I could just make decisions and do whatever I wanted I would pick something like a for reasons right because you know and probably I'd pick something like a on you know uh main net and arbitrum like the place where it has the most depth the most assets the you know to make it easy right because there's an argument that if binance builds a

feature and it breaks in you don't lose money by doing the thing right like you TR to you can lose money in binance but not that way right you're probably not going to lose money by clicking a button and binance you know nukes the you know eth or whatever right like they they do some weird thing where they pay too high a gas fee or something like that that's on them right so this is different because it's non-custodial and so infinex is not necessarily covering your losses so we probably in the early phase need to optimize for safety over anything else

right um you know building up a reputation for safety and also building up a reputation for letting user opt in you know all of the things that you do as an infinex user you opt into you upgrade your account no one else can upgrade your account you have an account that is a you know perfect Blank Slate when you first get it set up it doesn't connect to anything MH you the only way that you can lose that money is if that account itself is hacked right but it's not connected to a it's not connected to Unis swap it's not connected anywhere right and then you go okay I want to do

Unis swap optin I want to do a op in and you shoes right so if you want to enable cream Finance 3 right like I mean you should know what you're doing right first of all and there'll be some disclaimers around like hey just heads up you are going to lose all of your money here this thing gets hacked every single time right um you know and so so uh those are the types of things we've got to balance sure sure is there a world where like um maybe I'm like there's like 18 different pers Platforms

in crypto and maybe I'm coming in with size maybe I'm like actually going to like kind of nuke the order books if you put me into one order book so maybe you is there a world where you actually kind of like spread my order across three different service providers backend service providers so here's here's maybe a similar answer but for a different use case right which is um let's say you are you have size right let's say you have $10 million and you are um borrowing Stables against eth right right there's probably four or five different places

where there's enough liquidity um that you can do that you know comt uh but the apy fluctuates right and it may be that there's an opportunity to offload a mill or two of that to arbitrum because of reasons or or optimism or Bas or blast or whatever um you probably can't take the whole 10 Mill but maybe you can offload 20% of it because there's enough of a delta in the interest rate that you're paying that it's worth it right so that exists right you've got all those venues you as the

user can opt into which ones you're okay with right and you might say listen cream Finance no thanks I don't want that I don't want cream Finance on blast right um but I'm happy to do maker I'm happy to do sky right I'm happy to do a I'm happy to do Moro um any of those are fine I'm happy to do liquefy right uh sorry liquidy liquidy um and uh and so um I've got liquefy on the brain anyway it's long story um so so I'm happy to do liquidy I'm happy to do these things these are all cool right um and so you

opt into that and then the system having got your optin can actually optimize for you within those constraints right um and you can set some kind of threshold where like if the apy Delta increases by more than 10% then rebalance right and it can do it for you and you know you just need to work out what the cost is in terms of moving the funds around and you can kind of pre-authorize all of that stuff because it's in your account that you are the only one can sign a transaction for it and then you

basically say Within These constraints these things can happen right it's like an intense based system and it can rebalance for you so you could imagine you've got a pers position open to answer your your question directly and some new pers protocol pops up and you're like well if the funding rate is less than x I'm willing to offload up to 10% of my thing or maybe there's a farming opportunity or whatever it is right and so you know that system can monitor your positions and rebalance them for you in real time very easily

and the reason why we can do this and other platforms struggle to do it is because if you want to do all of that on chain first of all it's almost an intractable problem it's not quiet but it's close to it right um we don't have to do it all on chain because we know we've got your pass key we know signatures we know you can pre-authorize and opt into all these different things and so we can rebalance things for you in real time using our backend to construct a transaction with your pre-authorization to then send the transaction on chain it's just a better

system right but it requires you have a platform like a full stack application that can be censored right right yeah that's the trade that's the trade right and so you know what's the what's the downside then right okay you opt into that um it's rebalancing everything's going great and then the moon decides that they hate crypto right and they're going to come in and they're nuking all the AWS you know uh um data centers that uh are doing crypto

stuff right and AWS goes all right we're shutting down any crypto things and you know lights go out all crypto's off right um if that sort of thing happens what can you do the answer is you can still get out right right you can go there's an escape hatch that you can go directly on chain and you can hit a button and it doesn't require I could get hit by a bus it doesn't require anyone at infinex managing this you can just go directly on chain pull your money out what's the downside you don't get that your magical rebalancing apy

machine anymore right um now I'm of the view that you know similarly to Uber right um demand is the best thing that you can possibly do in an adversarial uh regulatory environment creating demand demonstrating that there is retail demand for a thing and that there's utility for it is the best defense that you can muster for adversarial Regulators um and my view is

that we haven't done a great job of that right that's actually a mistake we we tried the education thing and then we kind of had this Epiphany oh no they're trying to kill us okay and then we went from they're trying to kill us to what's next right um more education doesn't work if someone's trying to kill you right the answer is build an army right become unkillable right and the only way we're going to become unkillable is if we have 10 million people that are doing onchain transactions every day and you go to try and censor that thing and those 10 million people are going to

have a conversation with whoever's trying to censor it right 10 million people who feel like you're attacking their home exactly yeah can we talk about some of the uh Secret Sauce the the technology that infinix has in 2024 that really has unlocked some of the um opportunities that infinex is building uh you mentioned pass Keys uh what What's some of the the cool things that when people use infinex that they'll be exposed to that really unlocks this experience I mean the probably the biggest thing is it is a platform right um it is not a normal defi application where you just have this narrow strip of

utility right it is a platform where you can do all the things that in and of itself is quite different right um from from most of what we've seen in di um we've seen aggregation platforms before where you know they try and aggregate a couple different things but this is like fully featured we're giving you all the stuff right so every every single Financial tool that defi has to offer will be there is it in the platform exactly and and will be in the platform either directly or in an aggregated fashion you know where you have your

agnostic to what the best uh place to get yield on your eth is right it will find it for you now you may have a preference to not go somewhere you're like I don't want to do this thing but everything else on the list I'm fine with just no cream Finance right okay cool opt out of that enable the other ones and it will do the work for you right um and so you know turning up to a platform and saying oh wow I didn't realize I could do X right I've got this token you know whatever that token may

be I didn't know I could stake it who knew that gtool existed right for a binance user they've got sa on binance and like you know maybe they got an email six months ago offering to stake it for them but they didn't see it or like you know means they don't know what that means it was weird and like so there's a discovery problem exactly yeah so so there's a thing where it's like we're going to give you all of the things that you want in a single platform right and the amazing thing for defi if you if you you know kind of take

that to its logical conclusion is that a new defi primitive doesn't need to build demand side right and build distribution for whatever it is doing right um especially things like a novel instrument it's kind of insane that someone's like oh we've built this new vix protocol and then they're like and we're standing up our own interface and hoping that people come and use it please come depos take your money out of

this other interface and deposit it into our interface Madness it's it's utter Madness only enthusiasts would do that and even enthusiasts are over it right even enthusiasts are like honestly this is dumb right so if as an Enthusiast I turn up and there's a little Banner that says hey there's a new Bitcoin vix token and I'm like oh cool okay like and maybe it's only you know one in 50 people notice or care right but it's there I don't need to stumble upon some new interface right so that's the primary thing is that we will be a distribution

channel for all of the things in dii for all of the chains all the protocols we'll be there um the other thing is that if you have a platform like that that can communicate with you you and this is madness honestly but no one can communicate with D5 people the amount of time like it happened to me literally two days ago someone posted a message in a telegram group being like hey um is Kane in this telegram group because I think I found a

thing on chain that he should look at right and like it turned out to not be me but it's like the fact that it wasn't me was actually worse because now we don't know who it was right it's some person with an ens that did something 4 years ago or whatever and the money is still sitting there and someone was like Hey I stumbled across this thing like you've got money sitting there that's crazy no one knows how to get in touch with this person right right like if that were on infinex you'd be getting an email or a push notification or a banner when you logged in being like hey by the

way you left all your money in cream Finance you might want to take it out right like so there's there's an element of um Discovery and you know having a platform that has the ability to communicate that is monitoring and knows what you do um and and you know can tell you hey there's a new airdrop right like the fact that you know I mean bankless does this right and I think it does a good job of notifying people of aird drops but like that should be a feature in a platform it shouldn't be a standalone product right and it kind of