The extended version of our 15-minute fundamentals interview with Hazard from Rook. In this interview, we break down Rook's operating model and learn about the drivers behind the data you can see on Token Terminal's charts. We discuss MEV, Keepers, business model, tokenomics, treasury, etc. Tune in for the latest on Rook and the plans for its future with the project's CEO Hazard.
"…for the last few years that everybody’s been learning about MEV, nobody has been talking about… where does the MEV come from? We hear that "a billion dollars of MEV has gone to miners" — well, where is that coming from? It’s not coming out of thin air. It’s actually coming out of users’ pockets, applications’ pockets, their liquidity pools, liquidity providers...
"...this is inefficiency in the blockchain. It’s leaking out. This is not something that’s commonly understood, and that’s something we have to overcome: this idea that the MEV is just kind of 'here' and around. It’s actually coming out of users’ pockets, and applications’ pockets.
"Once people understand that (many developers are aware of this, but not so many users) they kind of have a claim on this value, then they’re much more interested in… "oh, what do you mean? Oh, I can get it back if I use this protocol?" - hazard [11:50-12:50m]
"…they can monetize in a way that's responsible for the network and for their users… it’s not eating anybody else’s lunch. This is value that belonged to them to begin with. And it actually makes our blockchains stronger — and our markets more efficient — if they’re able to capture this value." - hazard [13:00m]
"We... have a trading app that’s been quite popular since we launched it in April. It’s at app.rook.fi, and it allows anybody who wants to trade on the blockchain to trade through this network of keepers just like you would on 1inch or Matcha, basically. [...] You don't pay gas, you don't pay a fee. Actually the system pays you a fee...because your trade is going to create MEV." - hazard [14:52m]
"We also have a lot of protocols that have been working with us to start integrating directly... into their smart contracts. [...] So they can relay some of their transactions through the protocol and start to develop these cash flows and MEV protection. [...] Every team we've talked to has been so excited by this, because this is the first time they've been able to actually do this." - hazard [15:57m]
"We are very proud of our treasury and the way that it's been managed. [...] This is the long-term fund that's going to ensure that the protocol can be developed to a level where network effects are taking over, and it's able to create this self-sustaining ecosystem that it aspires to. [...]
"We very deliberately emphasize risk-minimized assets and also management-minimized assets, because we recognize that DAOs are not ideal for agile management of hair-trigger positions and high-risk complex instruments." - hazard [22:05m]
"We really want to make sure that you actually receive all of the value that you’re due. And we know that value is more than just covering your fees and making sure that you don’t get front-run… It’s not enough to give you free trades. We want to pay you the fair value that’s discovered in a credibly neutral way — this auction process — for your orders." - hazard [26:00m]
"I’ll bet that most of the listeners here have not used Rook — probably haven’t even heard of Rook. […] We’re building something that every single person that uses a blockchain would be happy to use. Something where you just do what you’re doing every day, and money comes out of it. Money for you, that you weren’t getting before… that’s the kind of product you dream of. And it’s actually good for the network. There’s nothing up our sleeve." - hazard [27:20]