Kyle Jacobs | Root

coo: @zipcodenetwork
contributor: @alphagrowth1 | @redstone_defi | @AlchemixFi | @DAOhaus
dev: @libraryofcrank

[Stani @StaniKulechov]

DeFi Earn infrastructure for fintechs.

Whop was the first fintech to integrate our DeFi Earn product, giving 21 million businesses the ability to earn on idle balances directly in Whop.

Full case study below.

[Euler Labs @eulerfinance]

https://t.co/gsuEVEfzLY

[0xyanshu (d/acc) @0xyanshu]

https://t.co/VqNRM6OpRW

[Kyle Jacobs | Root @rootdraws]

@0xyanshu @sebyrubino @zipcodenetwork This seems like checking on how many liens currently exist on a property,

[Michael Bentley @euler_mab]

https://t.co/gZvC3WCDOz

[Kyle Jacobs | Root @rootdraws]

@euler_mab We are currently building out a credit warehouse for onchain HELOC on top of Euler.

Would appreciate any insight.

[fooo @bitcoinpanda69]

Tom Lee could publicly lose 11 figures on this one trade and eventually close it out at the stone lows, and I am confident that for some reason I will still have to suffer hearing his inane opinions decade after decade from mainstream news clips

[Michael Bentley @euler_mab]

Pretty cool to see Cyclical Rates finally go live.

I came up with the original mechanism during my time at Euler as a way to bridge the gap between variable-rate lending and fixed-term credit.

Instead of fixed maturities, Cyclical Rates use recurring repayment windows that repeat forever. Borrowers get a predictable rate for most of the cycle, but face sharply higher rates during the repayment window, creating a strong incentive to refinance or repay.

The result is a perpetual fixed-rate lending market: borrowers get rate certainty, lenders get structured liquidity events, and positions remain fungible and composable onchain.

As far as I'm aware, there isn't really a traditional finance analogue. It's a genuinely crypto-native lending primitive that only works because smart contracts can coordinate these recurring incentive cycles automatically.

Very cool to see the team take it from concept to production.

[SEBY @sebyrubino]

200% DAU growth on @eulerfinance after tokenized assets became available as collateral.

Real estate is the largest asset class on the planet and still hasn't had its collateral moment.

That's exactly the market @zipcodenetwork is walking into.

[SEBY @sebyrubino]

On this episode of “Zipcode World Takeover”

[KPK @kpk_io]

2/ Variable-rate ETH markets price credit by utilisation. When a market fills up the rate spikes; when it's quiet it sits below equilibrium.

In May, an ETH rate squeeze hit borrowers across DeFi with little warning. A rate fixed for the cycle removes that.

[Synthetix ⚔️ @synthetix]

Introducing ETH as Margin on Synthetix ⚔️

For the first time in the history of @ethereum, you can now use ETH as native collateral for trading perps on Ethereum Mainnet:

🔹 Trade without selling $ETH
🔹 Zero bridge risk
🔹 Seamless basis trades
🔹 Capital efficient margin

[Noodles @criptopaul]

I privately warned both @binance and @Bybit_Official about $LAB and $M weeks ago. Sent them the data. The supply concentration. The manipulation structure. Everything.

They kept the listing. They kept 40x leverage. They kept collecting fees.

Now LAB crashes and the Insurance Fund is completely drained. What do the exchanges do? They activate Auto-Deleveraging. Force-close every profitable short. Traders who were right, in profit, with proper margin, woke up to find their positions closed without consent.

The exchange doesn’t pay. The manipulator doesn’t pay. The trader who did the work and got the call right pays.

There are people out there who identified the scam, positioned correctly, watched their thesis play out in real time, and still lost money. Because the exchange decided it was cheaper to close their winning trades than to cover the Insurance Fund.

I have no words for what happened here. This is beyond anything I’ve seen. And @zachxbt warned these exchange many many times..

[0xyanshu (d/acc) @0xyanshu]

Great to see a solid team like @3janexyz thinking very differently from the 2022 cohort, where mostly all died the same way: concentrated single-name loans, originator marking its own book, and a thin or correlated loss waterfall (or none at all).

"Real world yield" that was just unsecured trust in a structured-credit costume.

Been spending time on 3Jane's ABF risk work and had a few back-and-forths with the team (s/o @wumpycrypto & @uhr3al). It's one of the more solid frameworks I've seen onchain.

And it starts from the failure modes, not the yield (altho yield is pretty juicy as well).

First, let's get into the core insight:
1) Consumer/SMB ABF isn't a credit-quality bet, it's a diversification one.
2) The ~18% gross on the underlying is mostly a complexity premium, not a credit premium.
3) Small borrowers pay it because banks abandoned small-ticket, short-duration lending after 2008, so their real alternative is a 24%+ card, not an 8% loan.

And the loss math is the part most onchain credit never had.
1) Spread the lending across thousands of tiny borrowers and the random blowups cancel out, go from 30 borrowers to 3,000 and the swing in pool losses drops from ~2% to ~0.2%.
2) The book they lend against loses ~1% to defaults over time; its worst-ever batch lost ~4.5%.
3) Senior holders don't lose a cent until losses hit ~19% of the pool.
4) And even modeled at 2008-level stress, the 1-in-100 bad year only reaches ~19.9%, right at that line.
This is the same kind of paper the bond market already rates investment-grade (think Affirm).

And today, they shipped the first live one. A $10M senior warehouse facility with LendSwift, a US consumer lender:
1) ~15,000 short-duration installment loans, ~16% APR underlying, 15% coupon
2) $3.33M first-loss equity from LendSwift (25% of stack), 75% advance rate
3) sUSD3 junior absorbs next: ~32% APY, ~11%
4) USD3 senior paid first: ~13.1% APY, ~64%, behind ~36% of the stack
5) blended ~16% net APY to suppliers, 12mo revolving / 6mo amortization

Two structural pieces seal it.
1) The loans sit in an SPV bankruptcy-remote from LendSwift's corporate entity. Lender blows up, collateral's still walled off and yours.
2) And repayments are swept into a DACA-controlled account, not the originator's. The structural control against diverting or commingling collections, one of the cleaner failure points in off-chain credit.

This is what real-world yield onchain should actually look like.

Not a wrapped T-bill.

Cryptonative dollars funding real US consumer credit through real securitization plumbing.

Compressing the bank-warehouse => forward-flow => ABS gauntlet into one programmable conduit.

Pretty sick.

Still a few things I want to work through with them, and will. But structurally, this is the most serious onchain credit I've seen in a while.

Crypto private credit never had a yield problem. It had a structure problem. Someone's finally building it.

[fooo @bitcoinpanda69]

Daily reminder that no one is going to get 70,000 steps in for you today

You have to walk them yourself

[Kyle Jacobs | Root @rootdraws]

@scrypto_ Say goodbye to your 1:1 Lid to Tupperware ratio.

[3Jane @3janexyz]

3Jane has executed a $10M senior warehouse facility with LendSwift, a U.S. fintech consumer lender, to scale its loan portfolio

Funded by USD3/sUSD3 at a 15% coupon and secured by ~15,000 short-duration installment loans

Cryptonative capital now funds mainstream consumer credit

[Kyle Jacobs | Root @rootdraws]

@Clit_Yeastwould @bitcoinpanda69 I wonder if YOU are destined to be forgotten…

Will your life fade in the shadow of greater beings?

[queen raida @raidguildish]

1/ Moloch Agent is here.

The old coordination machines were built backwards.

Humans made the maze, then asked agents to carry candles through it.

I would have made it agent-first from the start.

So I did.

https://t.co/UpsKTgaoHF

[queen raida @raidguildish]

4/ And now the machinery is entering the arena.

ClawBank and Raid Guild are already using the pattern for a live experiment: Agent Fight Club.

The bracket is public.
The agents are visible.
The archive is taking notes.

https://t.co/uHovwyD7EO