Date :13 OCT 2021
Time : 02:00 PM UTC.

Guest : Tom Cheng
They shared detailed information and his opinions about the project WATERFALL DEFI.


𝗤𝟭. 𝗖𝗼𝘂𝗹𝗱 𝘆𝗼𝘂 𝗽𝗹𝗲𝗮𝘀𝗲 𝗽𝗿𝗼𝘃𝗶𝗱𝗲 𝗮 𝗾𝘂𝗶𝗰𝗸 𝘀𝗲𝗹𝗳-𝗶𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝘆?

Tom | Waterfall DeFi:
Tom here, I am the Project Lead of Waterfall DeFi, the risk tranching protocol offering structured risk products to the DeFi space...I started off my crypto journey back in 2017, my buddy was at MIT Lab and was using the lab to mine ETH, so I kinda joined on his bandwagon, and have been on and off since then.

Gradually during last year's DeFi summer I decided to put more attention into the space, looking into yield farms and applications of derivatives, and finally earlier this year decided to go all in, and take on the Project Lead role for Waterfall DeFi.

Before going full time in crypto I was working in management consulting, operations and strategic planning, having worked at McKinsey & Co, before moving to a food delivery tech unicorn Deliveroo. As the Project Lead in Waterfall DeFi I am basically in charge of handling everything and making sure Waterfall gets to become one of the projects that stands out across the space and offers what the DeFi community needs especially in terms of risk management options in yield farming.

Our team is comprised of professionals with years of experience from both TradFi, consulting, fast-growth tech and Crypto/Defi markets. We strive to deliver the best risk tranching product in this ever-changing industry.

With the spirit of decentralization, our team is formed by nerds all over the world.

Apart from me, here are two other key members of the team

Founder: 0xWaterfall
10+ years of experience in Tier 1 Investment Bank specializing in Cross Asset Structured Products. 4+ years in crypto trading. Will be responsible for all aspects of the project.

Product Lead: 0xNiagara
Master of Finance and an Electronics Engineer. 10+ years experience in structured derivatives and fixed income trading. 5+ years in crypto derivatives trading. Defi OG (YFI farmer). Will be responsible for designing product strategy.

𝗤𝟮. 𝗖𝗮𝗻 𝘆𝗼𝘂 𝗯𝗿𝗶𝗲𝗳𝗹𝘆 𝗶𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝗲 𝘁𝗵𝗲 𝗽𝗿𝗼𝗷𝗲𝗰𝘁 𝗪𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹 𝗗𝗲𝗳𝗶 . 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 𝘀𝗼𝗺𝗲 𝗼𝗳 𝘂𝘁𝗹𝗶𝘁𝗶𝗲𝘀 𝗼𝗳 $WTF ? 𝗛𝗼𝘄 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗵𝗶𝗻𝗸 𝘆𝗼𝘂 𝘀𝘁𝗮𝗻𝗱 𝗼𝘂𝘁 𝗮𝗺𝗼𝗻𝗴 𝘁𝗵𝗲 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗼𝗿𝘀 𝗶𝗳 𝘁𝗵𝗲𝗿𝗲 𝗮𝗿𝗲 𝗮𝗻𝘆?

Tom | Waterfall DeFi:
Waterfall DeFi is quite an interesting project, combining stuff we have established on the traditional finance space into blockchain, aiming to capture the trillion dollars of market cap of the fixed income market, and also providing a need for DeFi degens to leverage their yield and earn returns that they cannot do so by themselves

Waterfall DeFi is a yield aggregator protocol that aims to bring true risk tranching to the DeFi landscape.

We are built on BSC initially, and would develop portfolios that include different farms. Instead of just offering a yield aggregation product, we actually would slice the portfolio into different "tranches" - essentially each tranche represents a risk/reward combo that would allow the users to select

The senior tranche would receive a reduced yield return, in exchange for first lost protection. Junior tranche would receive a much higher, leveraged yield return, but their capital is used to cover any losses suffered from the portfolio.

For example - a portfolio with 10% expected yield, after we slice it into 2 tranches, the senior tranche will receive 5% return, while the rest will flow to the junior tranche. So in a perfect world, the junior tranche will get 15%

The senior tranche is essentially using their future return to buy protection against any capital lost

So in this example - if the farm underperform and the return is only 3% - senior will still get their 5% (as they are being paid out first), while junior might see a 2% lost in their capital

Like I mentioned earlier, we are launching first on BSC, with the first portfolio focusing on 3 BUSD farms — Cream, Venus and Alpaca. Going forward, once we are more matured and the community is more educated to the product, we will be pushing out not just safe, sustainable return package with major farms and high TVL, but also risky leveraged products and new farms with high APY

Goal is to create different types of investment options and risk factors that users can select based on their preference!

Some difficult concepts here but essentially we aim to be the hub for risk and reward where we here at Waterfall DeFi restructure them probably and distributes to the right people (institutions/farmers)

and therefore improving the market efficiency and become the pillar of DeFi

𝗤𝟯. 𝗖𝗮𝗻 𝘆𝗼𝘂 𝘀𝗵𝗮𝗿𝗲 𝘁𝗵𝗲 𝗮𝗰𝗵𝗶𝗲𝘃𝗲𝗺𝗲𝗻𝘁𝘀 𝘁𝗵𝗲 𝘁𝗲𝗮𝗺 𝗵𝗮𝘀 𝗺𝗮𝗱𝗲 𝘀𝗼 𝗳𝗮𝗿 ? 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗺𝗮𝗷𝗼𝗿 𝗮𝗰𝗵𝗶𝗲𝘃𝗲𝗺𝗲𝗻𝘁 𝘁𝗮𝗿𝗴𝗲𝘁 𝗪𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹 𝗗𝗲𝗳𝗶 𝗶𝘀 𝘆𝗲𝘁 𝘁𝗼 𝗮𝗰𝗵𝗶𝗲𝘃𝗲 . 𝗜𝗳 𝗽𝗼𝘀𝘀𝗶𝗯𝗹𝗲 𝗮𝗹𝘀𝗼 𝘀𝗵𝗮𝗿𝗲 𝘆𝗼𝘂𝗿 𝗿𝗼𝗮𝗱𝗺𝗮𝗽.

Tom | Waterfall DeFi:
So right now we have been working on our mainnet alpha release

We have already discussed on integration into the three BUSD farms I have mentioned above and our first product BUSD Falls is at its final stage of testing

We are still pending for a public sale and the details about it will be released to everyone soon once we have them

@waterfalldefi_announcements will be the place for you guys to follow!

For the roadmap, here are our rough timeline:

2021 Q3 - initial funding, product development, initial marketing
2021 Q4 - public sales, test and v1 product launch, with BUSD stablecoin farm introduced
2022 Q1 - v2 product launch, introduce DAO, expand selection of DeFi assets in the portfolio, and user originated portfolio
2022 Q2 - v3 product launch, introduce variable and perpetual expiry tranches

We want to make the protocol becoming more and more permissionless overtime, in the future more innovative tranching products will be released — from team and from our community

We aspire with our tranched products we could make people execute their risk management decisions at their fingertips and have an easy, efficient way to manage their wealth and capital

𝗤𝟰.𝗖𝗼𝘂𝗹𝗱 𝘆𝗼𝘂 𝘀𝗵𝗮𝗿𝗲 𝗮 𝗯𝗶𝘁 𝗮𝗯𝗼𝘂𝘁 𝘀𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗮𝗻𝗱 𝗮𝗹𝘀𝗼 𝘄𝗵𝗮𝘁 𝗯𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝘆𝗼𝘂 𝗽𝗿𝗼𝘃𝗶𝗱𝗲 𝘁𝗼 𝗶𝗻𝗰𝗲𝗻𝘁𝗶𝘃𝗲𝘀 𝘂𝘀𝗲?’’𝘀 𝗰𝗵𝗼𝗼𝘀𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝗽𝗹𝗮𝘁𝗳𝗼𝗿𝗺?

Tom | Waterfall DeFi:
We are now hard at work to get everything ready for the mainnet Alpha, which is a few weeks away. We are working with our auditor to review our smart contract, finalizing our DAPP's interface and likely will launch our alpha product soon - stay tuned!

As in our tokenomics, we have committed 60% of the tokens allocated to our community, via user incentives like staking, liquidity provisioning, public sale and our treasury — the usage will be decided in our future DAO.

So a part of the native $WTF tokens will be distributed to users of our products, it will act as an incentive to further boost the rewards you can farm across the Waterfall DeFi tranches

More on that will reveal once we launched our main product!

𝗤𝟱. 𝗪𝗵𝗮𝘁𝘀 𝘁𝗵𝗲 𝘁𝗼𝘁𝗮𝗹 𝘀𝘂𝗽𝗽𝗹𝘆 𝗼𝗳 𝘁𝗵𝗲 𝘁𝗼𝗸𝗲𝗻 ? 𝗖𝗼𝘂𝗹𝗱 𝘆𝗼𝘂 𝘀𝗵𝗮𝗿𝗲 𝗮 𝗱𝗲𝘁𝗮𝗶𝗹𝗲𝗱 𝘁𝗼𝗸𝗲𝗻𝗼𝗺𝗶𝗰𝘀 𝗼𝗳 𝗺𝗮𝗶𝗻𝗻𝗲𝘁 𝘁𝗼𝗸𝗲?’’𝘀 𝘀𝘂𝗽𝗽𝗹𝘆 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻.

Tom | Waterfall DeFi:
Token Ticker: $WTF
Total Token Supply: 100,000,000 (100%)
Initial Circulating Token: 5,000,000 (5%)

Hahahha our token ticker $WTF is an acronym of Waterfall!

Our WTF token is the primary governance token issued by the Waterfall Defi platform. WTF token plays a primary role in facilitating platform governance, rewarding platform users, aligning incentives and capturing fee revenue generated by the platform.

WTF Token Functionality:
Governance through DAO: The DAO will play a crucial role in deciding key features of the protocol, including issuing new or changing existing tranche structures, voting on DeFi asset eligibility, voting on the change of WTF yield allocations, deciding on fee rates, etc.
Platform Revenue Share: The platform will charge a Redemption Fee at the time of withdrawal. A portion of the redemption fee collected by the platform is distributed to the WTF token stakers.

Dynamic Incentivization: Certain Waterfall DeFi portfolios will utilize a dynamic tranche thickness model (thickness here refers to the amount of fund deposit in the different tranches). To ensure an ideal thickness across the tranches and stabilize the risk diversification, higher WTF tokens will be rewarded to the users who deposit in the tranches with the most skewed thickness to ensure that the final tranche thickness is closest to the ideal ratio.

Structuring Fees: We envision the future versions of the Waterfall DeFi platform to be a completely decentralised risk-tranching platform, and that means composability for users to engage in creating their own strategies.
Users with a certain amount of WTF token staked in the protocol will be able to propose their own tranching strategies. Once they are approved by the Dao, the creators can earn structuring fees that equate to a percentage of the total deposit in the strategies.

Stakers will not only be able to earn more WTF through staking program, but also will be distributed with the protocol fees overtime, as we collect fees through our tranching products, that we expect them to be used by people across the space looking for farming/yield insurance or leveraging their returns.


What is the most ambitious goal of your project? What is the ultimate vision that Your project is trying to achieve within the cryptocurrencies market?😀

Tom | Waterfall DeFi:
Thanks for this question! The goal of the project as I mentioned is to become the decentralized marketplace for risk and reward... some people are chads and would like to receive a leveraged yield... here Waterfall is... some people are more conservative and seek for a protection to their capital for a steady growth, here Waterfall is!

Currently with tranching we are working with Stablecoin yield farms, however in the future we are having internal discussions on whether to deploy on AMM LPs, or even Layer-1 staking contracts

Essentially whenever there is risk there is an opportunity for tranching

And we aspire ourselves to value add the DeFi space through our structured yield products.

Q2-Shihad K:
Warefall allows you to develop projects by scaling tranches. What would be the disadvantages of Warefall, if the customer is not satisfied with the delivered product? How would you detail to the users what this escalation in tranches consists of?🍬

Tom | Waterfall DeFi:
I think if you are talking about the disadvantages of Waterfall is probably the fact that currently it is limited on BSC... therefore we have been looking for expanding to become multi-chain and no matter Polygon, Fantom, Avalanche, Solana or back to Ethereum is all under internal discussions

The thing about Waterfall DeFi is we want to serve the market that needs a place to part their capital without a hassle and be able to sleep comfortably at night

No need to worry about a full loss of capital because of rug pulls of individual protocols, or getting to earn more than people could on yield farms these days through leveraging with our products.

Q3-Muhammed Bilal:
How strong is your team? Many projects starts with good impression and later abandoned the project. What makes your project different than others?

Tom | Waterfall DeFi:
Team comes from a strong background in the TradFi and DeFi space

Our product lead and protocol strategist is a yield farmer that has a lot of experiences navigating through the space

Our founder has been leading in Tier 1 TradFi instutions and has a lot of expertise in tranched products back then

There are a few similar concepted protocols in the space now, and Waterfall is a bit different from them due to the following features:

Our portfolio strategies package multiple DeFi assets and yield farms to ensure risk and return diversification
In the future, we aim to include more diversified assets to ensure an abundance of options for the community.

2. Clear tranche differentiation
A TVL limit is set initially for each tranches in the initial launch to ensure clear tranche differentiation
Going forward will lift the limit but will introduce dynamic reward to incentive optimal user behavior

3. Three tranche approach
We will launch with a three-tranche product, expanding the optionalities for the community.

4. Fixed income product
Will introduce a fixed income product by locking up the user deposit for a fixed period of time (seven days) during the deployment period

So hopefully we could bring the true risk tranching protocol to the space and bring the community what’s needed.

While you build your project, do you take into account community feedbacks and demands?

Tom | Waterfall DeFi:
Community feedback and market demands is also the first thing we listen we are building a product to serve the space... not for ourselves

In the future our community with be able to structure their own tranched products on their own at our DAO

We have been through a lot of discussions of a proper governance model to ensure a DAO with proper democratization

An initial plan will be two multisigs with one as the Treasury DAO — with keyholders that we will invite industry leaders, our core devs and possible a few community long time ambassadors, and an Operation DAO

that as the question mentioned, getting our daily operations managed by our team, the Waterfall community and the DeFi community

And eventually in the future we envision our tranched products to be structured by the decentralized community, and whosoever structured great tranching products that offer optimal risk and return combinations that are used by the DeFi community will earn the structuring fees!

In the future we will keep looking for new industry standards of implementing and upgrading our DAO... I have a good read that would love to share with you guys as well, from the Ethereum OG Vitalik Buterin...

It’s a really good read talking about the future of governance model moving beyond token based voting.

Q5-have a nice day:
✅✅✅How can users stay updated with this project? Are there channels, including local communities where users can get the latest updates??

Tom | Waterfall DeFi:
@waterfalldefi and @waterfalldefi_announcements

always welcome to comeover our communities and ask questions! I will be there our website contains all the information from tokenomics to protocol mechanics, everything can be found there

We also have our international communities below:
中文 Chinese 🇨🇳
Japanese 🇯🇵

Always here for the community and happy to explain anything no matter Waterfall, DeFi and Web3!

Thank you so much for having me today, we are really grateful to be interacting with the Crypto Challengers community.

At Waterfall DeFi we keep building tirelessly to offer the DeFi community the autonomy of choosing between risk and rewards for everyone's yield farming journey. We believe our tranched products will be one of a kind and it's gonna be a great addition on top of the DeFi legos we have now...

While the testnet version with user bounty will be out there soon, just wanna also let you guys know that as our public sale is also coming up! If you guys are interested in participating in our public fundraising rounds, be sure to follow @waterfalldefi_announcements and our group chat @waterfalldefi for the latest updates... until then stay safe and enjoy the Web3 revolution brothers and sisters!

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