AD Derivs. Podcast (Ep. 72) - Guillaume Lamber, CEO and Founder @Panoptic

Speaker A: Hi everyone, and welcome to the Amber Data Derivatives podcast. I'm here with Guillaume Lambert, who is the founder and CEO of Panoptic, a defi options protocol. Guillaume, how are you?

Speaker B: Hey, Greg. Very good. And you?

Speaker A: Doing great, Doing great. So you just recently launched. Very excited about that. I definitely want to jump into all the details of your Defi options protocol, especially because there's a lot of interesting aspects that, you know, you don't get with regular options, uh, that Panoptic offers. So, uh, definitely want to chat about all that. But before we jump into the protocol, maybe you could just give us a quick background about yourself and kind of how you found yourself building, ah, Panoptic.

Speaker B: Yeah, of course. Thanks. Thanks, Greg. So we had, um, another podcast, I guess earlier last week. But overall, uh, my background is that I come in from a totally different world and options. I was in academia. I was actually an assistant professor in applied physics at Cornell University. So doing the very typical route, PhD postdoc faculty position, um, the prospects of getting tenure and staying at the same place forever did not excite me too much. And, uh, life happened. And then again, I, uh, decided to give away my lab and just move to do something totally different. And again, this is building an options protocol. Overall, I'm still using a lot of the same approach that I use in my research, which is kind of a lot of math, lots of modeling, lots of kind of analysis. And the blockchain makes it very easy to see everything that's going on. Uh, and I always tell people it's the same problem, whether it's math applied to physical systems. I was looking at bacteria and biological systems. It's the same math whether you apply to cells and background and price. So overall I'm still in my element and just doing something slightly tangential to what I learned. But overall, it's still the same, uh, approach. Overall. This is what I've been doing for the past year, uh, and a half, full time and otherwise. I was thinking about these ideas over the past three years already. So again, as soon as Uniswap V3 launch, these ideas kind of started forming. So now we're at the point where we've launched last year and then finally we can all, uh, trade and kind of see this in action.

Speaker A: Yeah, fantastic. And it's funny because a lot of the smartest quants in finance are physics background people. So that's pretty cool. It's a path that has been done before. Um, so real quick, were you attracted to the crypto side of it or the derivative side of it. Like what really called you when you decided to make the move away from academia into crypto finance. Defi.

Speaker B: Yeah. So again, I've always been at the forefront of kind of new advances in technology. I learned about Bitcoin, it was fine, but didn't excite me as much as when I learned about Ethereum, kind of creating programs that run on their own. So I was an early DEFI adopter with maker and Uniswap V1, deployed a few Uniswap V1 pools myself. Uh, and it's kind of one aspect of it looking at different protocols. Uniswap V2, maker AAVE. So that was kind of one aspect. But at the same time I was also trading options in TradFi. So I like um, Tastytrade a lot because it taught me a lot about kind of applying again that background of mathematical physics to some extent to finance. Uh, it's very advanced, but they make it very simple for many people to understand the mechanisms. You learn more by using these heuristics and trying to kind of solve differential, uh, equations. So at the same time was also trading options on regular stocks. These two kind of worlds combined together because it was an LP and Uniswap V3 trying to figure out how to make money. And just by studying it I realized, oh, it looks a lot like selling put options or covered calls in kind of this different way of not necessarily having an expiry or not necessarily having something that is kind of a market maker. It's a weird way, but through this, uh, I guess personal growth and research, I was able to identify Uniswap and my activities as an LP had a lot of links to options. And uh, initially that was kind of a cool research project, but eventually it got to a point where we say, hey, we can do a lot more than just study it. Maybe we'll build something out of it. And that's kind of how Panoptic started.

Speaker A: Yeah, that's fantastic. And so when we jump in their protocol here, so you know, a lot of people know options from the central limit order book style of trading that you see in TradFi. You mentioned Uniswap. It kind of alluded to Pan options and what they look like, but really was the optionality component really from the impermanent loss that LPs on Uniswap can essentially sustain. If for example, they provide liquidity to some PEPE coin versus USDC and then PEPE drops to zero. Uh, you're basically short some sort of straddle like uh, risk. Is that kind of the idea, the baseline idea that you really saw the optionality component in Uniswap or was it something else?

Speaker B: So it's um, the sell side of an options is what you do when you're a bit more advanced. But when you want to kind of sell covered calls or sell a put option, there's gamma risk that exists. And what you described with a meme coin happens a lot more frequently than say a stock like Apple. But you still have the same risk, meaning that if you sell a put option and the price goes to zero or very low, you are kind of obligated to buy the option at the elevated price and you likely will sell it right away and kind of realize that loss. So the risks of UNISWAP LPing with implement loss is just a different way of repackaging it than gamma risk that you see in TradFi. So the optionality uh, that people are typically um, taking advantage of is buying options. You have the right to buy or sell the stock at a specific price but in Uniswap is on the sell side. So it's not quite as obvious. But you also now since you're selling you're obligated to sell it at the limited price when the price goes down or obligated to buy it at a lower price uh, when the price goes up. So that's kind of the flip side. Selling options is for advanced traders and I would not recommend anyone doing option selling if they haven't kind of traced it out. But if you look at Defi this is the first thing that people do. They aped into the LP side of meme coins. You had um, I mean the, the, the, the yield farming back in the days of Defi summer. But a lot of folks were do selling options like these options like instruments without knowing much but they made money maybe or not there's a lot of uh, incentives that went over get towards that. But it, it's just a different way of getting the same exposure as setting an option. And that's kind of the starting point right? Liquidity is setting an option. Why don't we make the interface m look more like an options uh interface than what liquidity provisioning interface is for what it is currently for Uniswap.

Speaker A: Yeah, that's really interesting. So when Uniswap launched a lot of people saw okay, I can collect Uniswap trading fees by essentially quote unquote being a market maker, an LP liquidity provider to a pool and then what I Don't necessarily realize is I'm taking this option like risk from impermanent loss through being an lp. So how does uh, Panoptic and Panoptions work in relation to Uniswap? Like this?

Speaker B: Yep. So the first step is we are integrated into Uniswap and if you set an option through Panoptic, it is actually creating the same position, that uh, an LP position on Uniswap. So liquidity does move into the Uniswap collects the same fees as the Uniswap LP position. So it's actually identical whether you provide equity in Uniswap or sell an option on Pronotic, you get the same risks, same returns and everything is exactly the same. Where Uniswap doesn't uh, necessarily allow you to do the next step, which is buying an option. We allow people to buy options by shorting an LP token. So once that you sell options, you can sell them to the protocol. It's an LP position that is created and now someone can short that instrument, they can borrow the content, the instrument unwraps its content and now we have to pay it back at some point. But if you go through the math, you borrow something and you have to pay, say you borrow um, I don't know, 5,000 USDC, you have to pay back one ETH. And as the price goes down you now are getting the payoff of buying an option. So the missing link, Maybe that Uniswap LPs are kind of facing is that you cannot buy an option, you cannot shorten LP token. And if you do this now, you can create a spread as opposed to a naked option. You can create an iron condor as opposed to a straddle or strangle. You can use the risk management strategies that option sellers can use to offset the risk, cap your max losses. Or if you want to be a speculator, you just outright buy a call option on PPE again and if the price moons, you have this uh, gain. But at the other side is always this seller. So opening up the two sidedness of the market, not just selling options and providing liquidity, but borrowing and buying options is what kind of uh, is enabled by Panoptic.

Speaker A: Yeah, that's fantastic. So just, just let me recap for anyone who might be new to Uniswap. So when I an LP on Uniswap, I get a uh, receipt which is a token that represents my share of my LP position. Well that token has a short option like uh, risk profile. Now before people could, could not necessarily buy or Transact directly with the LP token, there wasn't a market around it. But if people wanted to buy optionality could only really buy the token against a pool, which is essentially assigning the risk. But now with Panoptic there's a new market around the LP token itself. Now you mentioned something like Iron Condors and things like that. Is this where like Uniswap V3 comes in when there's like liquidity walls and liquidity concentrations and therefore I can essentially short the LP position of the liquidity concentration at a certain price level thing like something like that?

Speaker B: Yeah, exactly, exactly. And through our interface we try to abstract a lot of this kind of nitty gritty away. Because if you want to buy an option you just say this is the strike I want in terms of Panoptic is just some range from say 2000 to 3000 uh, price. You buy this strike, if you sell, you can sell it at a different price. And you can only do this with Uniswap V3 because of the concentrated liquidity. But the users will say I want to buy this option, sell this option. It has a strike, it has some kind of delta and gamma, um, risk profile, but it's managing Uniswap LP position on the backside. But the front side is very much like an options protocol. So the Iron Condor or the Spread or there's a bunch of funny named options, all of those. If you go on a trading interface again like Tasty trade that I use, you can trade those by buying and selling options at different uh, strikes. You can do the exact same thing and we, we help people even through like preloaded strategies to create those multi legged strategies. But create an Iron Condor, create a Jade Lizard, create a spread straddle. So it's, it's very, very much like an options protocol, an options trading interface if you want. But we're using this AMM slash, uh, protocol on the backside to realize these kind of options.

Speaker A: Yeah, that's really interesting and something that I've noticed on the user interface, I mean you guys back out the implied volatilities and things like that. Uh, as an options trader that's always something fascinating to look at, especially because we're opening up the, the pool or the range of assets for which we can do this on. So there's kind of new optionality and new markets being created and essentially theoretically anything that has a Uniswap pool can have some sort of Panoptic option on it. Is that right?

Speaker B: That's correct. And if there's no Uniswap pool. We allow users to deploy a new one. So the beauty maybe of Uniswap back in the day, five years ago, is that you can create a market for any asset. You don't have to wait for Binance or Coinbase or any other centralized exchange to list your token. You can do it yourself. It takes you 15 seconds right away, uh, you can deposit and create a pool. And that led to Meme Coins now and all of the maybe, uh, expansion of trading. But at the core is this permissionless nature. You want to create a market for uh, an asset? Yeah, Just do it. It's very, very simple. So we approach options, uh, in exactly the same way. You want to create a market for a token. You can create an options market on top. No one can stop you. As long as there's decree, as long as there's trading. This will have its own internal oracle, this will have its own internal liquidity. And you can actually create uh, again, even now we've launched uh, two weeks ago and people, we don't even create the pools ourselves, but people like created pools for Pepe, for uh, um, Harry Potter, Shiba Inu, Sonic 10, and I'm butchering the name now.

Speaker A: Yeah, I know that token.

Speaker B: Cold even. Um, Cow, which is a cow swap, a new token that launched a few months ago. You can create options market on top right away. No need for waiting for Deribit or cme, God forsake to list it. You can do it for all tokens.

Speaker A: Oh, that's fantastic. And one of the other pools that I saw, which is a very liquid pool on Uniswap is uh, wrapped Bitcoin versus wrapped ETH, which has been a quite the trade in 2024 with the underperformance of ETH and the wave of memes of disappointment in ETH that have come along behind it.

Speaker B: So you have a directionality. You think the ratio is going to keep going down or up. You can trade an option on it. And it's a very natural way. You're trading the ratio too. So this is pretty unique. Even though, say Deribit has, um, ETH and BTC options, we do eat options denominated in btc.

Speaker A: Yes.

Speaker B: Or if you want, you can flip it. You can do BTC options denominated in eth. So it's no pair has any preferential treatment. So that's a unique trade. And if you are a holder of both, that could also be a unique hedge as well. You don't have to trade like four times to get the same one. So, but yeah, the, the permissionlessness, it has some decent amount of liquidity, decent amount of trading. I think I, I purchased a straddle on that one myself. Nice betting on, uh, any movement outside of that range. And, and, and also the, the, the one thing that is, and we can talk about it, you touched on the iv, but now there's a market for iv. If you think the IV is too low or too high, you can actually trade it, which is something you cannot do for most assets. Now, certainly not digital assets, but even stocks and options on, on these regular quote unquote tradify assets, it's hard to trade it unless there's a lot of demand. So here we have a very natural way of trading volatility or if you think it's under, press other prices, I'll be a trade for that. So it's a unique and open way to create again, uh, options trades on all of these assets.

Speaker A: Yeah, yeah. That's fantastic. Very exciting to see that. So typically in traditional finance, if I think ball is too high, um, and I'm selling an option, usually that either translates in a higher theta decay because Vol is not the gamma cost is being outweighed by the theta income if you're short the option. In, uh, Panoptic, are the options, um, expiring at some point or are they non expiry options? How does that component work?

Speaker B: Yeah, exactly. And you talked about theta and gamma. So all of the Greeks have an analogous, uh, quantity in panoptic. But the one thing that is unique as you mentioned, is that it's a perpetual option. It has no expiry. And if you know options, it's going to take you a while to kind of wrap your mind about it. Because typically you buy an option, set an option, you have some timeline and the decay is that normally the extrinsic value goes to zero, uh, intrinsic value goes to zero at expiry. So it's very, very concrete. And you understand there's a timeline. In our case, there's no expiry. And it's not because we want it to be kind of fancy that it works better without an expiry. We're dealing with perpetual instruments. Adding an expiry makes the protocol a lot more complicated. So back to uniswap. You can provide equity and hold this for three, four years. Some positions are still on from like the first few week of few weeks of unis swap. In that case, they sold an option that's still alive, I guess four years later, same thing for us. So an options trade does have some implied volatility, uh, component. It does have some uh, risk, but there's no time or pin risk or anything that is kind of maybe exploding as you approach, uh, expiry the same way that you see it for drawing traditional options.

Speaker A: And so let's just say that I am a short D option. What is the sort of the incentive to be short the option if I'm not collecting time decay? Is it just the fees?

Speaker B: Uh, yeah. And maybe also the best analogy that I can think of for perpetual options is perps or perpetual markets. On kind of most tokens normally you had quarterly expiries and they also had like contango and backwardation that made the real price different than the actual futures price. If you shrink this so that every hour or every minute you have an expiry for per, you just pay the funding rate constantly as opposed to paying it over the span of whatever, a quarter. So a perpetual op, a perpetual futures is expiring very frequently every hour of every day and you pay continuously the funding rate. In our case, the options have a similar system. They don't expire in a sense because they are rolled forward every block. And if you are in the money or in range, you pay a little bit more, a little bit as an options bearer per block. And if you are out of range, you pay nothing. But it's a similar system. We shrink the expiry down, you hold it for as long as you want, and if you don't want to sell it, you just stop selling it and it stops. But the fees would be your options premium and your theta, uh, is really how much fees you collect per day or per hour. And that's a very, very kind of distinct way of approaching this.

Speaker A: And then for really far out of the money sort of concentrations or the analogy as strikes, how does that work? Because let's just say I lock up, I'm an LP, but I'm LPing the concentration zone of 10k to 2, uh, hundred k on Bitcoin. Um, how, how does that work in terms of fees? Do, do I collect fees? Or is it so far out of the money that essentially there's no trading fees that, that occur.

Speaker B: Yeah. So in a uniswap pool, uh, and you provide equity, you have to choose a range. And the wider it is, the more diluted your liquidity in some ways. So as long as you're in range, even though you do from 20,000 to 200,000, you'll be dead smack in the middle, almost you collect fees every time there's a trade. So as long as you're within the two boundaries you collect fees. So the wider you are, the more diluted it is. The theta, uh, if you want is smaller because you kind of have a bunch of liquidity outside of the main trading place. So effectively a very wide LP position is like a leaps or long dated option in tradfi that has a tiny, tiny amount of data but you hold it over a year so it does compound to the whole value. So in this case it's a similar system very very wide options that are in range or like a year or a month or maybe like a long time from expiring. And those that are very very narrow, you can be very very narrow. It's like an option that's traded whatever an hour from expiry on a Friday night. In that case you get the pin rest that you may want to seek. You get a lot of the convexity right away, but it's a narrow one. It's going to stay in range for a certain time. And it really so again the I wish saying it's a per auction that never expires but it has some time like some expiry components to it. And the way that we present it on the interface is that you're TRA trading monthly options or weekly options or daily options, even zero dts. But they don't expire, they are daily forever every day they get pushed forward one day uh, until you stop them. So as long as you're in range as, and then if you're very narrow price will move out of that range very quickly also. So you'll stop earning anything if it leaves that range. So it's a different way to approach this. But if you're comfortable with uh, more passive management and you don't have to be on top of it 247 you can have again Elites that you sell and look at it every few months and that should be fine.

Speaker A: Yeah, that's really interesting. Uh, that's really the Gamma profile that we're used to with normal options where Gamma is highest, near expiration at the money and very far dated options and far out strikes have very little, little Gamma. Um, and so it sounds like if I have a very wide range, I have a very diluted Gamma profile essentially. Uh, and if I have a very tight range right where the market is, I have a high Gamma profile. And what we're seeing here with the uniswap sort of payment profiles and panoptic options is that same Gamma profile. So that's very, very interesting.

Speaker B: Yeah, you have Gamma profile on the kind of notional exposure, but you also have the Theta aspect of it because you make more fees if you're very concentrated. So this similar relationship between Gamma and Theta is still there, but uh, it's a bit less mathematical. You don't have black scholars yet, I guess for Panoptic options. But again, it's all about trade offs. Very wide, low, theta, very narrow. Hi Gamma. Hi Ted as well.

Speaker A: That's fantastic. So kind of looking at the protocol itself, um, obviously you guys have had some, some really notable investors behind you guys, such as Coinbase Ventures and some other big names. Um, maybe you could just talk a little bit about that. You know, how many, how long has the process you launched a couple weeks ago. How long has the build roadmap have been in place? And you know, did you guys raise any funding for this or if so, um, was a series seed.

Speaker B: Exactly. We did a couple of uh, seed rounds if you want. So I had initially had the ideas this was kind of a summer project. Didn't think much of it, but then, uh, it was just me also with a pen and paper. And then over time again we had a partnership and then incubator also helped us kind of get started, but it helped us realize, oh, this could be a bit more. So we did and one funder is a seed round in 2022. Uh, Coinbase Ventures was part of it, but also Uniswap Labs Ventures was there. Jane Street. Uh, so people recognized this as an idea. Again, we had the backing of Uniswap as well. And then this allowed us to kind of start building. Uh, the more we built, we also realized that this could be a much more kind of expensive expansionary type of protocol. Uh, because we set out, created white paper, set out to create something, but now we added a lot more features. We can do kind of cross margining. We're like feature complete with options protocols, with options trades in tradfi, which is kind of uh, unheard of if you think in terms of what the features are. So we had a second round to kind of push us forward. Uh, and then uh, we had um, I mean Greenfield was a lead investor, but we also had a, ah, lot of folks participating into that. We did a Echo round as well. I don't know if your listeners are familiar with Echo, but it's a crowdsource type of round.

Speaker A: Oh, cool.

Speaker B: It went very well. Yeah, we sold out in a couple of hours. People are excited about the launch. This was in November, uh, I guess so right before launch as well. And uh, it's not quite ico but it's like very, very much the crowd people can actually participate in the way that VCs were only able to do it. So it's kind of bringing back maybe some of that upside to the, our supporters and also those that have been kind of backing us for the past uh, again two years, two years and a half. But yeah, finally we're at a point where we can launch. We have even like a year on Runway in terms of what we can achieve. But overall it's just going to be kind of uh, at this point rubber's head of the road. I always felt it was like the end of the journey, but it's just the beginning. Now we have to distribute, use and then have people kind of uh, participate. Overall we're pretty unique in terms of what we offer. We can offer options, we're going to offer perplex protocol, we can do some lending within the protocol. So overall it's very, very uh, unique. It's all on mainnet as well, which is not something you see often kind of launching on mainnet. But overall this is, this will all go for in the beginning. And making options work on mainnet means it works everywhere. We don't have to kind of do any trade offs or any compromise. It's going to work everywhere. So that's kind of the journey. We'll Launch on layer twos in Q1. Now we just want to kind of uh, do a first few weeks or months to kind of see what works, what doesn't. Get to a point where we can get a lot of traction in terms of the options traders but also the perpetrators, the retail users and then kind of go from there again on the layer 2s as well.

Speaker A: Yeah, that's fantastic. And so while congratulations on also having Uniswap be a backer because everything's so integrated. So if I'm just a traditional Uniswap lp, is there um, you know, is there like an incentive or a reason why I should or should not just essentially you know, take my LP position and package it up into Penoptic is how does that work?

Speaker B: Yeah, so the main incentive is uh, the risk profile is much better. Meaning that you can either buy options to reduce your impermanent loss.

Speaker A: Mhm.

Speaker B: Or you can just let it ride but make more in terms of fees. Uh because if you sell an option in Panoptic and someone buys it from you, they pay you more an extra amount if you Want so you can make and we can do it live. But people have been trading, selling options, buying options. Some of those might have been kind of Uniswap, uh, LPS. But if you were two weeks ago, if you started with two positions, one in Panoptic, one in Uniswap, you probably make like 25% more in terms of fees on Panoptic because of the demand for buying. And we're doing a lot of research, we'll read a piece on that. But there's going to be a loss versus Panoptic type of measure. If you stay in Uniswap, you kind of aren't tapping into that extra return because someone can buy the option from you. Naturally they have kind of the opposite, but they pay you more. Uh, but that's kind of the first way to say, even from a just pure numbers standpoint, makes more sense to have this two sided market dictate the revenues or the returns as opposed to just waiting for the pool kind of um, to generate the fees. And also we have a points program. This points program also rewards Uniswap LPs. In the past, if you yourself or your listeners have tried Uniswap LPing and if you're still doing it, fine, convert your positions to Panoptic and make more money. But if you haven't done it in a while, we give you a boost of points in terms of kind of the incentives. So you will be making more uh, with that wallet because you came back to the Uniswap ecosystem if you want. We reward that type of kind of uh, behavior because again we want to help our users, we want to make them more profitable. Going just the traditional route, uh, with Uniswap was very difficult for most to make money. Uh, now we hope to make it easier as well and have the incentives again to push people to do so as well.

Speaker A: Yeah, that's fantastic. And that's really been kind of a neat way for protocols to launch. And essentially Bootstrap liquidity is doing some sort of like point reward system. And then eventually if you guys ever launch a token or something like that, usually those things are kind of linked. So that's a pretty exciting development, no doubt. Um, on the Uniswap side of the world, have you guys been very close in collaborating with them in terms of like keeping them updated on what you guys have been building and things like that, or has it been sort of still separate even though they're investors?

Speaker B: So we've been very close to the Uniswap foundation too. So they gave us initially, also my own research back in 2021 was funded by a small grant from the Uniswap Foundation.

Speaker A: Oh, that's great.

Speaker B: And then we were kind of, uh, from the seed, very, very kind of early grant to the seed rounds to the launch. Like, we went through the whole motion with Uniswap's Uniswap foundation support. So they've been extremely happy with the progress, uh, very early backers as well, but then also helped us with the distribution. They put us in touch with designers and people kind of in the, in that field. So overall, uh, foundation was great. We have, uh, been in touch with the Uniswap Labs team. We've known about Uniswap before, maybe a year before everyone else, uh, because it turns out that we work on Uniswap V3, but we're able to convert the code to also work on V4 as well.

Speaker A: Oh, cool.

Speaker B: When Uniswap V4 launches, which they say it's also very soon, we will also be able to do options on all the pools on Unsoft before all the hooks. So we'll be kind of the liquidity management option side for all of these new, uh, pools. So overall, they also were able to help us with kind of integration, onboarding. So overall it's been kind of a good journey. They see us as a way to make LPs, um, maybe more profitable, but also diversify what LPs can do in a way that if they focus on swaps, we can focus on LPs and kind of everybody's going to be happier, uh, as well with that.

Speaker A: Yeah, and it's kind of interesting because obviously options, being long options, is interesting to speculate and trade, but it's also, at its core it's like an insurance product. And so if I wanted to be an LP for, you know, esoteric sort of assets, um, being able to hedge out some of that very tail risk, uh, now you're able to do it with Penoptics, so it actually strengthens the potential user base, uh, of Uniswap. The way that I see it. Anyways. I don't know if you agree with that statement.

Speaker B: No, that's true. And then, yeah, it was a bit more. It was all naked options, or at least like fully covered, but it was much more difficult to manage before. And. And you ask an options trader that's experienced and you don't go all in with your portfolio selling naked puts or naked calls.

Speaker A: Right.

Speaker B: So, yeah, I do definitely that. Um, the DeFi native users are probably the best user base to do options trading because they are sophisticated. They've known about all the strategies they can optimize Pendle Finance yields with um, again all the different protocols composable together. So even with Panoptic, they can certainly use PanOptix the best way it can be used, which is risk management insurance, making sure you don't kind of uh, lose your shirt doing a trade. So you still can gain the upside of being an LP in a very volatile pool, maybe 200 IV. But then you can have a, a insurance policy that makes it so that you don't lose kind of all of it if the price goes down.

Speaker A: Yeah, that's fantastic. And so outside of price risk, another sort of defi thing is smart contract risk. How have you guys kind of thought about smart contract risk? Have you guys done some audits or anything like that?

Speaker B: Yeah, of course. So this was maybe the reason we got delayed a bit more than we thought in 2014. Uh, everything is fine but we went all out in terms of audits. We did regular audits with OpenZeppelin and Abdk. We did bar sourced audits with Karena and also Cantina and uh, I think we did four crowdsource audits. We had to do it in sections because the protocol was so huge. So all of this went well. Same thing with ABDK and OpenZeppelin was mostly manual. But to get huge audits the last thing we did as well was create an invariant testing suite. And uh, invariant testing is something I recommend to every protocol founder. Now it's almost overpowered but what it does is it looks at your smart contracts and you can create a random sequence of calls with random inputs for hundreds of millions of uh, sequences chosen ah, at random. So what that did is that it explored all aspects of the protocol in a way that no human being could think about and was able to kind of change. Most of these calls went nowhere. But the few that could push the protocol in one way or another was able to uncover slight issues in terms of sometimes the low, uh, decimals token, something. There's a roundup like you can round up by one. But that means there could be a larger impact down the line or you can have a. We have liquidations as well, which is going to be, was a larger part of the audit as well. But liquidations could happen in a weird way if you don't take care of all the, all the scenarios. So overall we're able to push this for three months. Did a lot more uh, Auditing through uh, like the MM testing allowed us to find a few issues. We did more editing to fix that. So I would say that the last one which was auditing the whole code base, we got no uh, issues in terms of the Cantina audit. So we had one low and they had to give us back the money because we had no medium or higher. So overall this is the state we want to be in. We had probably hundreds of people looking at the code. Final state is that there was no issues worth fixing. So overall it was uh, the best place for the code to be and that's why we launched again. The last audit was in early November and then we launched mid December. And that definitely is the thing that kept me up at night because okay, yes, we can do all of this but this is going to be work, working, but it's going to be safe. And then we did everything we could to be as safe as we can. And I'd say probably you can say that again. Uh, no issues were found and last one, which was kind of unheard of for the Cantina team as well. So we're very proud of that.

Speaker A: Oh, uh, fantastic. Well that's great. Well Guillaume, if someone wants to learn more about Panoptic and sort of explore uh, sort of the options that you guys offer, where can they go and where are some good places?

Speaker B: Yeah, so we have the docs, of course, docs, Panoptic xyz. This is kind of to get a good understanding of the whole protocol. Uh, we are doing a lot of research internally. Again I'm coming from a research background. Uh, we have two full time researchers that are doing some interesting research pieces as well. We did one lately about the uh, Deribit implied volatility and the Uniswap implied volatility during the election. And you can see some uh, of course trends that match. So options on Deribit are treated at a much higher, bigger size than Uniswap. But overall they matched. You had spikes, but you had some discrepancies which were unhedged, unhedable now or you cannot arbitrage, uh, make arbitrage trades on those before Panoptic. Now you could of course, but it showed that the Uniswap was maybe less efficient because you didn't have this kind of extra venue for trading. So a lot of our research is coming from that. We had to get Nathan and Amy, two fantastic researchers. We are publishing also this on our Twitter. We have a research space as well. And for those quant, uh, that know and understand Options, you certainly find your fail of kind of the high level research. But at the same time on Twitter and on our kind of um, more like announcements, we also try to onboard more users. So uh, we stay in touch with Twitter panoptixyz, the main page as well. But yeah, the, I'd say that, yeah, that's why we like you guys as well. So a lot of the data and the uh, analysis, it's hard to do in tradfi. Some of those data sets are hidden or too massive for anyone to run on their computer. The beauty is that now it's all available on chain. You can actually query the blockchain, see everyone's trades, see everyone's uh, story and then kind of understand a much clearer picture of what's happening. Uh, because it's all public and transparent there.

Speaker A: Ah, uh, fantastic. And before we close up here, uh, Guillaume, I'd like to just ask her a couple more personal questions and, and then kind of see where it goes from there. So, um, was there any books along the way that got you into options, uh, when you made your transitions from academia that you found, um, very good?

Speaker B: Uh, not really. Again, I didn't have time to read books. I have two young kids at home. So again, all white papers. I know, I know, yeah, white papers. Of course. A lot of the theory and the um, math comes from statistical mechanics in a weird way and kind of textbooks that I learned even during my research. There's a few good books that are written by physicists that kind of talk about this like a random walk down Wall Street. So there is a lot of the uh, overlap between physics and math and finance that I didn't know I understood until I kind of came into the world of options. So I came in with that very, very uh, bare bone like tools, the metal type of knowledge about options without again understanding with options. But yeah, um, I do listen to a lot of podcasts but then not much books.

Speaker A: Oh, okay, cool. And then uh, what do you like to do for fun outside of work?

Speaker B: Oh yeah, I, I like to go outside and work. Uh, I, I, I walk a lot. I also run a little bit. Uh, I moved to a house now so I have yard work. I can very, very uh, Zen like experiences. Uh, but yeah, and I like to travel too, quite a bit. Again, even with kids we find a way to make it work. So, so I was traveling to Canada of course over the holidays, but overall, uh, we were able to travel to um, yeah, a few places. I went to Singapore as well. And uh, so overall traveling. Yeah, exercising. Keeping a clear head is kind of what I like to do as well during my free time.

Speaker A: That's fantastic. Yeah. I just went to Singapore for the first time not too long ago and the flight is long, but it's beautiful once you're there.

Speaker B: Yeah, fantastic city. I loved it.

Speaker A: Absolutely great.

Speaker B: We did a, um, food tour as well, so the food is amazing. I know you're from Chicago and Chicago had a great, great food scene. Uh, so I lived in Chicago. We became foodie, me and my wife a little bit. But yeah, same thing with Singapore. Great, great high quality food, uh, high quality restaurants. We enjoyed it quite a bit.

Speaker A: Uh, that's fantastic. Well, Guillaume, thank you so much for coming on. Congratulations on the launch. Very excited to see where Panoptic goes and excited to look at all these new markets.

Speaker B: Of course. Thanks a lot, Greg.

Speaker A: Absolutely. Thanks, everyone. We'll see you next time.