Contents
Hiro customer Lucidefi built one of the first DEXs on Stacks to go live on mainnet. The DEX, called Stackswap, is poised to serve retail interest in Bitcoin DeFi and tightly integrate with Lucidefi’s DeFi market forecast technology. Stackswap will also enable easy token creation and a launchpad for communities interested in building on Stacks, with the goal of broadening accessibility in token creation for Stacks users.
I hope you enjoy the Stacker Chat and interview transcript that outlines the capabilities, inspiration, and vision behind the Lucidefi team, including their DEX and market prediction forecast built with Stacks!
— Gina Abrams:
Hello, and welcome to the builders' series of Stacker Chats where we connect with the amazing founders building their own stacks. My name is Gina Abrams and today I'm excited to be joined by Sungmin Aum, founder of Lucidefi and Lucidefi product Stackswap. Stackswap is a decentralized exchange (DEX) and token launchpad that is live on Stacks today. Sungmin, I'd love to start by hearing a bit about your background and what brought you into the Bitcoin and Crypto ecosystems.
— Sungmin Aum:
Thank you, Gina. I used to do AI research and my research interest was in program generation and black swan event detection and they are still my interests. I've gotten into blockchain because I thought it would be the best place to test and develop AI driven governance as loss can be implemented in code. I think once the DEX business stabilizes, automation of governance will be one of our main R&D focuses.
— GA:
Fascinating. Thank you. I'd love to hear more about all the capabilities of Stackswap.
— SA:
Besides being a DEX, we are a token launchpad on Stacks. We allow users to create tokens and list their tokens with just one transaction. So you don't need to be a coder to be able to list your project and publish a contract on the mainnet, which is probably very simple for a lot of developers, but there are some who are not that familiar with coding, and still would like to participate in the Stacks ecosystem. We basically lower the barrier of entrance for the larger masses.
— GA:
Absolutely. On that note, this token launch pad really allows non-technical folks to quickly launch a token. I'd love to hear a little bit more about this area of focus among the many and why this is important for network growth.
— SA:
Clarity is the smart contract language for the Stacks Blockchain. It's still not widely known despite its beauty. So if someone with no programming experience would like to quickly become part of the Stacks ecosystem, for example, someone who would like to launch a CityCoin in his home, that person needs to go through a lot of pain.
By providing a token launch pad we’re lowering the barrier of entry into the Stacks ecosystem dramatically, which I believe is vital for mainstream adaptation for Stacks.
— GA:
Excellent. Thank you. What kinds of arbitrage opportunities are you seeing for this Stacks ecosystem? What are some early anecdotes, some customer feedback that you're seeing?
— SA:
Stacks is probably the only major blockchain with a smart contract capability that could trigger native Bitcoin transactions. This means we can really bring DeFi on the Bitcoin network and I believe that entails a whole another era for the financial system and entire world. Stackswap is going to lead such an era.
There is another thing to consider. Many are aware of how successful CityCoins has been for the past couple of months if you look at MiamiCoin. When cities or other community coins are launched on Stacks, the only way for someone to acquire that CityCoin is by betting on an auction. That's called proof of transfer lite, unless the token is listed on a centralized exchange.
Stackswap can not only make the launching process quick and painless, like I mentioned before, but also provide a spot market right away so people can have a wider variety of channels they could use to acquire the community coins. This effectively gives birth to an arbitrage opportunity right away between the spot market and pox-l (proof of transfer lite) mining, which may lead to further innovations on top of the Stackswap.
"Stacks is probably the only major blockchain with a smart contract capability that could trigger native Bitcoin transactions."
— GA:
Thank you. Now Stackswap also offers really advanced trading tools for folks across the Stacks blockchain and other chains. Can you talk a little bit more about how that came to be in and what it offers?
— SA:
So simple functionalities, such as stop loss and take profit orders, which are essential for trading, unless you can stay awake 24/7 or have an excellent AI trading on your behalf, or generally not available on DEXs. It's great to strictly stick to the idea of decentralization, but what is the use of it without users? Right.
So we have been working on the [Lucidefi] trading platform that offers essential and advanced trading tools, such as market forecasts, over-indexes on various blockchains. Stackswap being our native DEX will enjoy much more direct integration with [Lucidefi] the moment we see enough trading volume.
— GA:
Awesome. Thank you. Now we've covered a lot of ground here, but I'd love to summarize it and recap. What features do Stackswap and Lucidefi offer that really set it apart from its competitors?
— SA:
Well, I say the biggest is the market forecast. The core founding members are professors and PhDs in AI. We had been fascinated by Black Swan event detection for years and had realized just recently that the DeFi market does not have something like the weather forecast, but it is in dire need of it. I can afford the risk of getting caught in the shower and getting wet without an umbrella, but I still check the weather forecast during the rainy season. But then I realized there is no market forecast I could rely on, even though I cannot afford to risk my Crypto life savings.
So as I mentioned briefly earlier, we've been building a trading platform (Lucidefi) around the forecast algorithms. Once the market matures just a little bit, we're going to bring it into Stackswap directly. You're just going to kind of see the weathercast, so to speak of the financial market that they're being exposed to. So at least you could be prepared for what might happen other than just being blindsided all the time.
"I can afford the risk of getting caught in the shower and getting wet without an umbrella, but I still check the weather forecast during the rainy season. But then I realized there is no market forecast I could rely on, even though I cannot afford to risk my Crypto life savings."
— GA:
Sounds incredibly useful. So we've covered a lot of functionality for the project. Can you share a little bit more about how it works under the hood? Your experience with Clarity and maybe tools like Clarinet and also the Hiro Web Wallet, anything along those lines?
— SA:
Yeah. So the Hiro Web Wallet is the only thing the users would need to interact with Stackswap.
We were very grateful that [Hiro] developed Clarinet because it saved a ton of time developing smart contracts.
You could deploy and test right away, very quickly. Among the functionality of Clarinet that I loved the most is called Clarinet Integrate, this command that you can use and it just has this amazing dashboard with all the nodes that runs, which could take many, many minutes if I were to do it myself. And it's just, they're awesome. And yeah, saves a ton of time and makes the dev process much more fun.
"We were very grateful that [Hiro] developed Clarity because it saved a ton of time developing smart contracts."
— GA:
Thank you. You also have an incredible team already. Can you share a bit of background on the process of building the team and the journey thus far?
— SA:
Okay. So the core founding members, we met at school as labmates almost 10 years ago. And we have all been, like I mentioned, just fascinated by this Black Swan event detection for years. It's just such a difficult, but essential problem to be solved, right? And we basically have the same interests, we were eating together all the time, studying together. And SOSV, our shareholder, helped us to expand our team with seasoned professionals from all over the world. But I feel like it's more like fate because the old and new members basically all share similar interests and value systems. We just clicked right away and it was scattered all over the world. And there's some of the team members that haven't actually physically met, thanks to COVID. But you know, we're in sync all the time, not just the business matters, but also the personal life too.
As I mentioned, like last year, we've noticed that the DeFi market actually needs something like a weather forecast. We have seen enough evidence that our proprietary algorithm is far beyond any published results. So we have been building a trading platform around it. Then in the spring, Trevor from Stacks accelerator, suggested that we create a DEX on Stacks and we thought it would be a great fit to our existing product that we've been developing because the trading platform on top of a DEX and DEX they just connect together. So we just went ahead. So it's been a few months.
— GA:
Awesome. How was your experience in the Stacks accelerator?
— SA:
Oh, it was excellent. We've learned a lot of insider tips, especially things related to fundraising that you just cannot get from anywhere else. The Stacks foundation through the accelerator also gave us and is still giving us great support to move our business forward as quickly as possible. They’ve got a lot to do at the Stacks Foundation, right? So the Accelerator plays a role to connect us to everybody that we need to be in contact with and make those meetings happen very quickly and just effectively.
— GA:
Now we've talked about Stackswap is actually live on mainnet, but I'd love to hear a little bit more about the next steps for the project and what's on the roadmap ahead.
— SA:
First step is to create enough liquidity, which will probably be solved soon. Then we're going to integrate the advanced functionalities on both trading and DEX operation itself.
We want to be laser focused on DEX operation and launchpad before we move on to other DeFi building blocks, such as loans and other stuff. We're waiting for atomic swaps to mature so that we can seamlessly connect Stackswap and other DEXs on different blockchains that have repped Bitcoin and other markets to expose a user, a greater opportunity with the arbitrage market. So that's the near term goal.
— GA:
Great. Thank you. And so a couple questions on the broader ecosystem at hand. What do you think is holding back some of the larger institutions from entering the DeFi space and how does that play into the longer term vision for Stackswap?
— SA:
I think institutional players generally show up after enough market size is created by the individual retail investors, right? So Stackswap seems to be the go-to place for the Bitcoin related DeFi. And I believe we will create a market size attractive enough for everyone, very soon considering the size of the Bitcoin market cap. The Stacks blockchain plays a foundational role aligning us to get there. So yes, very simple. Individual retail investor first, then institutional market, then the market becomes competitive enough for everybody.
— GA:
Absolutely. And you've talked about sort of the market size of Bitcoin. Is that the main thing that drew you to build the Bitcoin ecosystem?
— SA:
Yeah, I did mention it briefly earlier. There are a couple of projects in DeFi related to Bitcoin, right? I mean there's wrapped Bitcoin on every single major blockchain that has anything to do with DeFi. But Stacks has it by itself with this proof of transfer algorithm and with direct interaction with the Bitcoin network and actually moves around Bitcoin the asset by the way it works. So it is possible for stacks to smart contract to create native Bitcoin transactions and vice versa very easily, which kind of makes it true Bitcoin DeFi.
From the interviews that we've been conducting over the past year, there are still large numbers of people who were early, like Bitcoin holders. They're really not moving their Bitcoin asset into DeFi because they just don't feel comfortable. It's not Bitcoin, right? So this is what I think. Stacks is as close as we can get into turning Bitcoin into something that supports smart contracts. So yes, potential to be able to tap into the Bitcoin holders, that was the biggest attraction first.
"Stacks is as close as we can get into turning Bitcoin into something that supports smart contracts."
— GA:
Awesome. Thank you so much. Now, how can folks get involved in and follow along and support Stackswap?
— SA:
So by talking about it and using it, we are currently in the process of recruiting the initial liquidity providers. And once it's done within a week or two, we'll have a full scale launch. So come and try and help us improve Stackswap together by giving us comments via our telegram or Discord channels.
— GA:
Excellent. Thank you so much for taking the time to be on #StackerChats Sungmin. Are there any closing thoughts you'd like to share with our audience?
— SA:
Stacks is still young. So it will be a group effort to build a seamless DeFi experience. I would urge everyone in the Stacks ecosystem to actively participate and force the new era of finance together with Stackswap. Thank you.
— GA:
Terrific. It absolutely is a group effort, ecosystem effort and we're so excited for everything that comes next for Stackswap. Well, thank you so much for everyone tuning in. That's a wrap for this episode, make sure that you're subscribed to the Hiro YouTube channel for more interviews like this. Thank you so much. ⬣
