Tony Cai, co-founder of Atomic Finance, discusses building sound finance for sound money on the Bitcoin network. They also touch upon market updates, the Sam Bankman-Fried trial, relationship dynamics, crypto market status, the impact of events in Israel, the current state of the bond market, building DeFi tools on Bitcoin, the development of financial instruments on the Bitcoin blockchain, and the contrasts between Ethereum and Bitcoin.
Atomic Finance aims to provide non-custodial DeFi options for Bitcoin holders through its mobile app, offering conservative income strategies with options contracts.
Bitcoin has untapped potential for building financial tools through its programmability, and Atomic Finance encourages more experimentation to unlock this potential and reach product-market fit.
Deep dives
Atomic Finance: Building DeFi on Bitcoin
Atomic Finance is a Bitcoin DeFi company that aims to build sound finance for sound money. They offer a mobile app where users can earn returns by selling upside on their Bitcoin through covered calls. Their focus on options contracts offers a conservative income-generating strategy for Bitcoin holders. With a peer-to-peer approach, Atomic Finance utilizes discrete log contracts (DLCs) to enable smart contracts on Bitcoin. DLCs are on-chain, transparent, and verifiable, making them a secure and private solution for financial instruments that depend on real-world outcomes. Although still in beta, Atomic Finance has experienced significant interest from Bitcoiners looking for non-custodial options within DeFi.
Demand for Transparency and Non-Custodial Solutions
The rise of DeFi in the Ethereum ecosystem has shown the demand for transparency and non-custodial options in the world of finance. Bitcoin, as programmable money, offers a similar potential for building financial tools, yet the current landscape is mostly centralized and custodial. Atomic Finance aims to bridge this gap by providing an alternative for Bitcoin holders who want to use DeFi tools without relying on third-party custody. With DLCs and a focus on transparency and security, Atomic Finance attracts crypto-natives and encourages more experimentation with Bitcoin's programmability.
Exploring the Boundaries of Bitcoin's Programmability
While Ethereum has a thriving builder culture and a variety of dev-friendly tools, Bitcoin's programmability has been less explored. Atomic Finance emphasizes the need to push the boundaries of Bitcoin's programmability and encourages more experimentation. By bringing back the spirit of innovation and inviting developers to try different use cases, Bitcoin can potentially reach product-market fit beyond being a store of value. With its decentralized ethos and powerful scripting capabilities, Bitcoin has the potential to serve as a DeFi layer, opening up new avenues for financial applications on the network.
The Intersection of Traditional Finance and DeFi
As the DeFi ecosystem evolves, the question arises of how it intersects with traditional finance. While traditional finance institutions are not yet fully embracing DeFi, the demand from crypto-native customers may drive them to add support for crypto assets and non-custodial solutions. This could potentially bridge the gap between the two worlds, providing traditional financial services with the benefits of transparency and programmability offered by DeFi. The key lies in building trust and demanding transparency, enabling a symbiotic relationship between traditional finance and the DeFi ecosystem.
Alex talks with Tony Cai (Atomic Finance) about building sound finance for sound money. Alex also talks with Beimnet Abebe (Galaxy Trading) about markets. And Alex and Phineas talk about news from the Sam Bankman-Fried trial.
This episode was recorded on Wednesday, October 11, 2023.
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