 Yota is a serial entrepreneur whose talent for developing effective ideas and solutions has resulted in successfully growing five companies with three successful exits. In 2012, Yota relocated to Silicon Valley and was an early investor in Bitcoin. Yota has worked with Nobel Prize-winning economists, the founder of the Jobs Act, a former SEC chairman, and the founder of ESA. Hey everyone, it's Rachel Wolfson here, senior reporter with Cointelegraph. Thanks again for joining us for a very special AMA Today. Today I'm joined with Yota Regev. He is the CEO slash CTO of Quantum Finance. Hey Yota, how's it going? Hey, Rachel, good to be here. Thank you very much for having me. Yeah. Thanks again for joining us. Before we get started, I want to remind the audience to please ask your questions in the chat. Yota is here to answer those. Yeah, without further ado, Yota, let's just get started with the AMA. First question that I want to ask you is, why do crypto projects have a high failure rate with the inability to scale even if sufficient funds are raised? Oh wow, it's very straightforward based on the history of the startup industry. I will give you some income from what's going on in the past so we can understand what will look like the future. So in the startup industry, 95% of startups fail, right? They're doing C, they're doing kind of pre-A, they're doing A, they're doing multiply round and they're still failing, right? And when it's come to a crypto project, the situation is very hard, even harder than a startup because if you remember, sorry, 2017, people used to raise best on napkin, right? White paper, hundreds of thousands, oh yeah, hundreds of mills of dollars. And then on 2019, there is tens of mills of dollars, but then investors want to see more a prototype, right? In 2021, project raised millions of dollars, but then investors want to see not just a prototype but also want to see some community around that prototype. Probably we're going to see project raising hundreds of thousands of dollars, but then investors probably will want to see a proof of success, they will want to see income stream, they will want to see some tier one VPC on board, stuff like that, that in other words, it's looked like the demand what startup need to perform before getting money is become to be more and more like the startup industry, but how much money is getting, you also start to look. So it's a big issue for a project because after it's doing a pre-launch, you cannot go after six months or let it go on the market. You cannot say, hey, my token is trading, let's conduct another 50% discount in order to raise another money. So in other words, it could be a great team, it could be a great idea, but the idea that the project cannot keep the light on, it cannot keep pressing money, it can put them out of business. That being said, there is another issue, when projects start and raise money, then the next step they invite exit strategy for the investors. So if there is no equity and the investor give up on the possibility to see any kind of liquidity in the near future, they start to dump the token even below the price that they purchased the token at just to get out, and that can bring the token into a position that it cannot recover from. And on top of everything that I just said, there is one more thing that is very important, real estate market, stock market, crypto market, they're very alike, they're all going to have cycles, bear market, bull market, bear market, bull market. It's going to stay here and it's part of the game and it's supposed to be like that, but what is not supposed to be like that is why projects that burn in 2017 died before 19? Why those that have been burned in 19 die before 21? I mean, how many died during that going div into the bear and never recover up from that? And that's the big issue that we facing. Everybody helping projects to go into the market. Nobody helped them to stay in the market. Right. Yeah. Great explanation. Um, let's talk a little bit about the bear market and how the impact crypto projects today. Do you think that crypto projects that are trying to raise funds or build within the bear market are doing anything wrong that may be impacting their success? Oh yeah, absolutely. I think, I think, uh, since, um, projects that have a lot of team token, treasury token, they cannot conduct another pre-sell. Uh, so the only thing that everybody is doing, but absolutely everybody. Um, and it's a big, big note to do that. Everybody doing the same thing, which is called stacking. Now what is stacking? Let, let's face it. Stacking is basically a stupid idea that you go to your current investors, current holders, and you say to them, Hey, do you mind not to dump today and hold for another 30 days, 60 day, 90 day, maybe even a year. And I will give you a little bit more free tokens. So after the stacking will be over, you and your friends who will rest to the bottom, who is dumping first. Let me just give you more ammo so you can shoot me down even faster. Right. I think there was a senator, uh, in United States, they used to say back then that if you find yourself in a hole, stop digging. And I think the only thing that project have to do right now is try to do stacking in order to reduce cell pressure. But what they're really doing is just kicking the can down the road for future day, and then it will come like a big boomerun. Does that make sense? I know. I mean, that, that makes perfect sense. I love how candid you are about it. Yota, clearly you're very passionate about this. But no, I mean, it definitely, you know, it needs to be said because we are seeing this right now. Um, but let's talk a little bit about what a decent model involves and how that's different than a launch pad. Yeah. So basically, like I said before, everybody tried to help project to go into the market. So the word launchpad is well known. Everybody, you know, ICO, IDEO, anything that starts with I standing for initial offering, right? But nobody's helping project to stay in the market. And that's where basically scale pad is coming in, right? So scale pad is standing for how to take a project that is in the market, which doesn't matter if it's in the market for one day, one hour, a lot of liquidity, a little bit of equity. As long as it's in the market, it's good to go. And the next step after the launchpad is basically to create PDO, which is standing for post-dext offering. I can even share my screen for a second just to show here. Can you see my screen? Rachel, Rachel, can you, can you hear me? I can hear you. Nope. Oh, okay. So the post-dext offering is basically standing for a post and not initial and it's designed for existing project. Like I said, after the launchpad, after they already launched somewhere. And the main idea, if I'm going here into the platform, the main idea is that every person, every project that have a token, team token, treasury token, and actually not just a project, actually every person, because if you're a real investor and you have a lot of token or you're a developer and you have a lot of token, even an advisor that have a lot of token and you don't want to dump into the market, you don't want to hurt the project. You can utilize the PDO in order to find a way for exit. And I want to explain you how it works. So it will be kind of a clear idea of what's so cool about it. So the way that the PDO works is that you open a PDO and you offer for people to buy directly the token from you instead of going to Pancake Soap, Sushi Soap, any kind of dex. By the way, PDO is not a dex. It's a layer on top of any dex that is out there, even if it's a brand new. It's not a dex, it's a layer on top of that. So if you have, for example, some kind of a project, all right, let me look in just to demonstrate that. If you have a project and you want to basically find a way how to increase liquidity, how to increase the token value and how to raise money as you go, right? Basically what you need to do, you need to come to the PDO and I will show you example how it's looked like. So I want to open a PDO. I will take a token as an example. One of, let me choose a token that I have a pilot here to show you. Let's take a bakery, right? So let's take the smart contract for bakery. I will go to Coingeco, I will pull the bakery. Smart contract, obviously whoever have smart contract already know is smart contract address. And then the way that it works, I put the smart contract address and then I choose the text that I want. I can choose if I want to basically create PDO based on fixed sale or doge sale and I can basically run the PDO all year long as many years as I want. There is no limitation. It's not like IDO, ICO that you have few days, few weeks with fixed price and then when it's going to the market and start to trade here, the price basically coming. I will choose this date and the price coming from the market basically directly from the pool. So every time the pool go up, go down, it's displaying the same price, so basically it's followed with the market. And then I can even do building, stacking, for example, instead of doing buy my token and then go to stack it, I can combine them two and I can do 365 days or I can do even 30 days or 60 days instead of offering 10% or 50% I can even offer 180 over 30 days, which is exactly 50% like one year. And I can do other features and then I can choose what to do with the procedure coming in. I can choose to take it to the liquidity pool. I can choose it to buy back tokens for early investor from the damper shield, which is another project that we have. If we have a time, we'll talk about it or I can do cash out, for example, 1.5%. In that case, I will choose, let's say, the cash out just to show example, how it's look like. And once I deploy the PDO, what will happen? Pay attention that I didn't put a logo. I didn't say how much the token works. I didn't say anything. I just basically come with my token and open a PDO because it's completely decentralized. It's not allowed to any person to basically add information. And once you have the PDO here, you see it's live and I can see all the information about the PDO. I can see what's the offering. If I want to check the project, what is all about even though it's already live? So I'm supposed to know that project. It's not about to go live. It's already live. I can go and check White Paper and I can check website and I can check even how much liquidity this project have right now in the market. So all the information is in front of me. Now, what's the big deal? What's going on here? Why it's so unique and so different and it so can change the game? Because if somebody have poached out there and it's live on Pankaswap, SushiSwap, any kind of decks that means that most likely every day the project have buy pressure and sell pressure. You have to have both. Obviously during bear market, you have more sell pressure than buy and the other way around during the bull market. But every day you have to have both. Otherwise the price will go all the way up or all the way down. Now, I will give you an example. If somebody go to buy this bakery from Pankaswap. Let's say I go to Pankaswap and I want to buy this back token. So let's choose. Here we go. That's the back token and let's put for a second door so it will be easy to understand. So if I want to buy this token, let's say I want to deploy $10,000. Pay attention. How many tokens I will receive? I will receive $26,370, right? But look, the price in the market is $3,700. So I'm losing when I buying from Dexas and that's because of the slippage. Every project that have pools and user come to the pool to buy the token, they're losing for the slippage. Not only that, look what will happen if I will push $10,000 to this pool on Pankaswap. 36% price impact. You know what that means, Rachel? It means that the community and the project will not going to enjoy for my $10,000. That means that some boat going to do fund running because there's 36% price impact and it's going to steal the money. So when people buying the losing and the community losing because it's not really appreciating the price, it's just been stolen again and again and again by boats. Right? And the main idea is that if I want to buy the token from the project directly, I can come and buy from the project, from the video. So in other words, it's like hijacking all the traffic from all the Dexas. I don't really creating people to buy. They're already about to buy. Somebody is already about to go to Pankaswap to buy. So why to buy from Pankaswap and not buy directly from the project, right? When you buy from the project and you inject your money, you will get for your $10,000, you will get the same price. There will be no slippage. And 100% of that money will be injected to the pool with no fund running attack, which means it's going to increase the value of the pool. Like 50% will increase the value of the pool and the other 50 will be used to increase liquidity. And guess what, Rachel? The liquidity, the LP will be given to the project, not immediately, 30 days after the stake-in will be over. So there will be no front, no ramp pulling. But in other words, the project will have a sustainable liquidity. It will own its own liquidity. So it doesn't make sense to buy directly from Dexas token if the project offering from you to buy. Now, I will show you an example how let me choose a project here. I will show you if I'm investing in the project, what happened to the project, right? Let's pick a project. Let's say I go into this project, okay? I will put money in and I want to show you what will happen. So they have 100% go to the liquidity pool, right? So look over here on this project and let's choose, right? So you can see over here that is right now 2504, do you see that price? 254, do you see that? Now, let's say I want to put money in, right? So let's say I want to put, let me put 100, which is a small change, right? Just to show you how the price change in real time, right? So if I'm pushing that money to buy, first I will not have a slippage, but then what will happen in real time, the price will increase, the money will go to the pool, increase the pool, create liquidity, will boost the project. So me as a user, I'm benefiting, no slippage, the community enjoying from price appreciation and the project enjoying from basically more liquidity. Everybody win-win from that situation, right? So I will show you here in a second how the price increase instead of 0.254 we'll see what will happen. Boom, you see, it's increased and then it's going even higher, you see? So that's what's happened. Every time, instead of doing stacking, you're coming over here and you're doing building stacking that benefits you and everybody and it's better than the current stacking in the market. Got it. Yeah, that's a great presentation. Thank you. Sure, the audience, I just want to remind you guys if you guys have questions, please send them our way. It's really interesting projects that I look out for questions. Are projects already utilizing this model? Say it again, you're breaking up. Are projects already utilizing this model? Are they already participating in this PDF? Yeah, there is some projects that start together. We just right now doing a soft launch. The soft launch is right now, as we speak and in the next few days, we will do a hard launch but right now project is still coming in and basically open, it's free. You can open basically your PDO. You only basically pay percentage based on how much you sell. So it's performance-based. If nothing happened, you don't pay anything and it's available for every person, project, investor, developer, anybody that have token and it doesn't want to lose to the token or it doesn't want to lose to the market or it doesn't want to hurt its own project. It can utilize the PDO to keep increasing the liquidity, the token market and also raising at the same time some money into the team to keep the light on. Yeah, was it intentional for you to do this launch, the soft launch during the bear market? I mean, you know, there's bigger opportunities. It's very interesting question because I love the bear market because the bear market basically is like a desert. Nobody wants to play ball, everybody gets hurt and the desperate to get water, right? Everybody needs help. And if you're building a project that is all about helping and what is better time than actually the bear market to helping project. And I want to show you why users, investor, should basically invest in another project during the bear market using the PDO. I want to show you something that is designed based on quantum finance model, which is a very brand new concept that we bring into the blockchain. It's never been done before. So if you can see my screen, do you see here something called Secure Future? You see that link? So Secure Future is amazing because what is Secure Future? Secure Future basically said to you, listen, instead of go and injecting real time your money into the pool and get this API that this project is offering right here right now and the money will increase the value right here right now in the pool. Instead of that, if you have second thought, if you don't think that it's the right moment to invest in the project, maybe the market is not the right timing. So you can come to the Secure Future and you can basically put your money here, right? For example, you can put it here and what will happen is that your money will not be inject to the PDO, it will not inject to the pool. What will happen, it will go to work, it will go to compile it, it will go to inference, it will go to Venus, which is exactly the same place that you send your money to work during a bear market, right? You want to get as much as best API that exists with the low risk that is possible. So instead of sending your money again, we hide that net again. So instead of sending that to Venus, you basically send it to Venus through the PDO, through the Secure Future, so your money is over there. I can show you here that if you basically want to see the transaction, you can see that even though I invest to the PDO, my money is in Venus right now, right? And what that mean? That mean that I'm simultaneously, simultaneously holding to position I invest in the project, but I didn't invest in the project and I can change my mind and make the final decision in future date. In other words, Rachel, imagine yourself that someone said to you, listen, there is some guy called Zuckerberg, very crazy guy, he want to raise a lot of money and you have crazy idea to build something called social media online, but you don't have to put your money in play, you don't have to risk it. You can put it on the bank, get return and we'll keep the ticket for you. And if in the future we'll become to be a unicorn, we'll let you to collect that ticket like you invest in the ground floor. So the secure future, which is best on quantum finance model, it'll allow you to invest without investing, it'll allow you to keep the ticket, keep the EPY, keep the reward, but on the same time, stack your money in safe place that you put it anyway. And in future date, before the PDO is running out, before the time is kicking in, you can basically say, do I want to stay with Venus and take the EPY from whatever they're offering over there? Or I want to collect this winner ticket, the lottery ticket. I want to go after this project. So in other words, if there is people that thinking the Dutch coin is going to be whole around in the next bull run and they want to buy into the deep right now, they can basically use secure future to buy their forever token. And if they change the mind, they can still stack with Venus and compound. And if it's booming, they can jump back on the lottery ticket and collect that basically a grand floor position. It's never been done before. Nobody brought into the blockchain quantum finance solution that allow you to hold two position on the same time, like investing without invest. Mm-hmm. Yeah, it's super exciting. Audience, just to remind you there's a question. It is a really, really, really interesting question. So I want to ask you about the challenges in terms of smart contract vulnerabilities or issues because you've seen a lot of acts and scams and things happening to projects today. So Yota, what are your thoughts on that just with the safety of the platform? So let me tell you stuff about what... I know that not everybody is technical person, but I want to put some ground rule for everybody to understand. If somebody building a smart contract, regardless to us, everybody, any project out there, and you have privilege owner, right? Like the owner have the right to upgrade the smart contract, the now have right to upgrade the smart contract. That's mean that there is a door for someone to do something. Now, first thing that I could do is see if somebody have privilege and then you try to see how can I get into that door? How can I sneak in? Now, if you don't have a door, let's say Uniswap build a smart contract that is not a regrettable, which means nobody have the right to change that, not even Uniswap. If they want to change that, they need to relaunch a new smart contract and ask everybody to withdraw all the liquidity and move it to a new one. So if you want safe protocol to invest in, do not invest in protocol that have basically a credible position because maybe you don't have the knowledge to understand where the back door is and how safe it is. So it's better to go first thing first after protocol that they're not a credible, so they're basically more secure and PDO is not a credible. Got it, okay. Also, let's switch back, Yoda. I can't see your face. I can only see your screen share because I'm gonna take a question from the audience and it would be good to see, okay, there you are, hey. Okay, so go positive is asking, how can we invest in PDO finance does that, I don't know if they're talking about the platform itself or just the projects on the platform, Yoda, do you know? Let me answer both. So if somebody want to invest in project that's on the pad, you just need to come to the PDO and invest in the pad. And if that person thinking that you know other project and you want to invite them in, it can go to the PDO, I will quickly share again my screen, you can go to the PDO and basically connect his wallet and generate a unique affiliate. So it will allow him to invite people, invite project people to open a PDO and then he will get rewarded every time that basically working and generate income, he will basically get rewarded for that. Another option is apply for licensing. So we are B2B, we are infrastructure company, we're building stuff as infrastructure. So basically our main model is basically to allow people or qualified partners to have their own PDO. They can call it whatever they want with their own color by few click, they can design it as much as they like, they can even collect any fees that they want. And we have a lot of partners that already lined up. For example, we have DEX tools that they have six to 12 million user a day apply to get the licensing for the PDO and other partners. So the main idea if somebody want to utilize the PDO, the scale pad in order to turn it into an income stream, it can be an affiliate or can be a licensing fee. Now, if somebody want to invest in the project, our project, basically we used to have a pre-sell only for existing investors. We didn't want to open that for new investors, but we may consider if it's a good partner with added value, but that being said, we will do some public offering done the road which is comply with the regulation with a new concept called IBO. We'll do a different session AMA on the IBO because it's blowing my brand new concept and it will allow people to invest in project in a new way that is compliant with regulation. It's not a security and the risk been removed. And we will obviously open a PDO for own PDO. So soon there will be PDO for on token PDO and people can even buy directly on the ground floor with or without the secure future that I mentioned. Got it, okay. I also wanted to ask you about how does PDO ensure that discount tokens are not dumped? And I know that we've got a screen share to show the Dumpershield UI. Yodi, do you want to elaborate on that while we also pull that screen share up? Sure, sure, sure, I will even share my screen again. So Dumpershield is another technology that we created on quantum finance. And it's very interesting technology because it's also containing a quantum finance solution based on game theory, like the prison dilemma theory. I will quickly explain you what that means. When today project doing airdrop or presale or public sale or anything that end up with discount token, usually they want to lock those tokens from some period of time, right? Like longer time, shorter time. And then what happened is that usually it's end up very badly for everybody, right? Everything is tanking. Now, why is that? And the reason for that or the answer for that is because what is called the prison dilemma. The prison dilemma is a game theory that says that if I'm going after vesting and you're going after vesting and let's say after 12 months or six months or 30 days we both supposed to release to the market, right? It will be available to sell our token. I'm thinking to myself and you do the same, should I hold because I think somebody else will hold so it's benefit the project and everybody will enjoy from or should I dump because I think you're a mean person and you're going to dump before me on me. So I should be quickly finger going and dump before you. And you know how it's end up all the time, right? It's like rest to the bottom, right? And that's the ugly story of every vesting that exists out there today. That being said, imagine yourself a new word that you can basically put vesting without vesting, right? You basically can engage with liquidity during the vesting time. And what's cool about it, not only that there is basically decentralized seed that allow people to basically go ahead and sell the tokens to other people without even even if they don't know them but imagine to yourself, I can not show it right here right now because it's coming soon but imagine to yourself that there is a something called gateway and the gateway, this is the gateway. So the brilliant everything about the damper shield gateway basically set you if you have a token and you're behind the damper shield, let's say for 12 months, you don't have to wait 12 months for the gate to be open. You can basically engage with liquidity during the vesting time. So hopefully by the end of the vesting time the sell pressure will be reduced or maybe there will be no sell pressure anymore. And I will quickly explain you how it works. So imagine to yourself that me and you behind the damper shield and we both want to sell our token. So we're coming to the gateway, we say, we want to sell, you say, I want to sell. And what really happened is that me and you need to vote how much discount we're willing to give to a buyer. Let's say we agree to give to a buyer 10% discount below whatever the market is, right? So what that means that every person can come into the gateway, deposit native token or stablecoin and buy our token with 10% discount. And then you can go to Uniswap, Bank of Swap, Binance, wherever the token is trade and sell it over there immediately. And whatever leftover that you couldn't sell it can return back to the smart project and get his money back. So first thing for that buyer, it doesn't have a risk because it can get the money back and doesn't have a risk, right? But the gateway is very smart. It will not allow me to sell as much as we want and give buyer the privilege to buy as much as you want. You're basically going to check every day how much the appreciation of our token was versus yesterday. So if we have let's say token worth one dollar and from yesterday to today, it's increased to by 10 cent. Let's say dollar 10. So that's mean the gateway will allow people to buy token with discount in a way that they can only dump the market by 50% of yesterday appreciation, which mean to dollar zero five. So every day it will check how much appreciation being incurred and it will allow a little bit dumping to take place every day, but the graph will keep going up and up and up for until the end of the vesting time. So in other words, you're engaging with liquidity but you don't dumping the price as you do it every day. And by the end of the vesting, maybe you don't need to engage with liquidity anymore. Everything maybe you even want to buy more because everything's so boomed. Right, yeah. Super interesting stuff. We're actually running out of time. So Yoda, my last question for you is what can we expect next from Quantum Finance? Wow, we have so exciting stuff that we're about to bring into the market. Some of them will be Q4, some of them will be Q1 next year. So for example, we're going to introduce first-of-the-kind insurance for LPs from dumping. Can you imagine yourself? Everybody know that if you have insurance, you cannot protect something that's about to happen. So you cannot ensure that there will be no sun tomorrow because we know that there will be a sun in the sky tomorrow. So nobody can ensure you that there will be no dumping because we know that the market go up and down every time so there will be dumping no matter what. But imagine yourself that it could be decentralized insurance to protect LP from dumping, right? So that's really blowing my mind. And on top of that, there will be a technology that we will introduce that allow people to buy Metaverse land and basically NFTs and music and game, but without ability to be exposed for downside. Imagine that you can blindly go and buy whatever the heck is out there, but without the exposure of the downside. That's never been seen before. Everybody said to you, if you put your money to work, you need to take under consideration that you say bye-bye to the money first because there is a risk to lose it, everything. But what if quantum finance can allow you to basically remove the risk and not engage with any kind of a downside, right? Or imagine yourself a scenario that you can invest in any crypto market project or imagine the crypto project, no matter who they are, without discrimination, without checking the white paper, without checking the team, without try to understand who they are. Imagine yourself that they can raise money by click of a button, right? Anytime, even during a bear market. And those investors that invest, imagine to yourself that they don't have exposure for any loss, right? So I know that what I'm saying right now, it doesn't make sense how it can happen, how those stuff can play when we know for sure that investment in vaulting risk and there is nothing free and risk is always there. But again, I want to remind you that until today, everybody built technologies and smart and track with the logic of binary code, right? A one in zero, true and false. Nobody ever built any technology and bought it into the blockchain with quantum finance model that allow you to basically hold multiple position and invest without investing or see the future first and make decision later, right? So the stuff that we bring going to blow minds and again, it's either going to be worth nothing and it's going to change nothing or it's going to change everything. Everybody that going later on will say that was fun and it's never going to go back again after that. Yeah, exactly. Well, hopefully this is going to change a lot and I'm looking forward to our next AMA and I'm looking forward to hearing more about quantum finance when the time comes. We're actually out of time now. So I just want to thank the audience again for joining us. Thanks for your questions. Just a reminder to subscribe to our AMA channel. We do these to our YouTube channel. Sorry, we do these AMAs all the time. Yoda, it's been a real pleasure. Thank you again for joining us. Did you want to say anything before we sign off Yoda to the audience? Maybe how to get in touch with you or is there a Twitter? Yeah, I mean, if somebody wants to get in touch with us we have social media but they can also look me up on LinkedIn. And yeah, and maybe the first will be with you. Yeah, awesome. Cool, thanks again guys. Thanks everyone for joining us and we'll see you next time. Bye. Cheers, bye-bye.