Digital Ownership: NFTs Will Undoubtedly Resurge, Declares Origin Protocol

They want to try and become early adopters to learn. The best way to learn is to jump in and practice. There are many experiments, and many people are trying to understand their impact and potential uses. There are many different ideas and variations, asking, “What if we use it this way or that way?”

Sometimes experiments succeed, sometimes they don’t, and that’s okay. We should encourage this level of experimentation. Today, we see a lot of hype has subsided, and discussions about NFTs have become quieter. Maybe people got carried away in the hype and frenzy, but this does not rule out the possibility of NFTs returning in a more practical and useful form.

TheNewsCrypto: Despite platforms like OpenSea, Rarible, MagicEden, and Blur, you decided to create your own NFT marketplace, Origin Story, to provide a market for creators and businesses. Why does the project need its own marketplace?

JF: Origin Story’s core is to provide a unique showcase space for individual collections. Think of the difference between Amazon and Shopify, or luxury brands like Louis Vuitton not selling their bags on Amazon. Instead, they maintain a custom website specifically for showcasing and selling their bags and other products.

The idea is that these NFT creators don’t want to get lost in a sea of unrelated items. They want a unique home where they can control the user experience. That’s the core idea behind Origin Story; we’ve created a white-label experience for people to buy and sell NFTs and build unique homes for their collections with various unique elements.

TheNewsCrypto: Origin pioneered the concept of revenue-generating stablecoins, launching Origin Dollar (OUSD). What makes it different from regular stablecoins?

JF: One factor that sets them apart is their revenue-generating capability. When you hold stablecoins in your wallet, you don’t earn anything. The Federal Reserve indirectly depreciates your currency through measures like quantitative easing. Therefore, in such an environment, holding stablecoins long-term is not advisable. Revenue-generating stablecoins like Origin Dollar or OETH allow you to earn yields, effectively increasing your held assets.

TheNewsCrypto: What are the threats or risks associated with revenue-generating stablecoins?

JF: There are several risks to consider for these asset classes. Understanding how the system works and what you’re getting into is crucial. Comfort levels with certain types of risks may vary.

One non-existent risk worth highlighting is counterparty risk. In traditional finance, when you hand your funds over to a bank, they typically lend out your funds multiple times, potentially jeopardizing your access to them. In DeFi, loans are over-collateralized, minimizing this risk. If funds are unavailable, collateral can be sold to compensate you. Thus, there’s no counterparty risk, and it’s a one-to-one collateral system, much safer than traditional fractional reserve lending.

Instead, a primary risk in DeFi is smart contract risk. Origin takes extensive security measures, including audits by top companies like Trail of Bits and OpenZeppelin, and operates a rigorously tested infrastructure managing billions of dollars.

There are always residual risks. The industry still faces hacks and vulnerabilities, so developers and users need to take these risks seriously. Assessing protocol security often involves considering its operational history and assets managed. Origin has been operating since 2020, managing billions of dollars, providing a trusted transaction record for users.

TheNewsCrypto: Facing attackers and exploiters continually leveraging the same technology to exploit smart contract vulnerabilities, what advice would you give to protocol creators to strengthen the security of their platforms?

JF: There are several critical security practices to implement. First and foremost, try not to reinvent the wheel where possible. You can leverage tested codebases. For instance, if you’re launching something new, adopt methodologies used by mature projects like Uniswap, Compound, or Aave. Their code has stood the test of time.

However, there are inherent risks in copying code. You might overlook certain aspects. For example, some copied Compound’s code without realizing vulnerabilities when adding certain tokens not included by Compound to their lending platform. When forking code without a clear understanding of how it works, insecure elements might be introduced, leading to system failures. These oversights can lead to serious issues, as we unfortunately witnessed on multiple occasions. This underscores the necessity of deep understanding of what you’re doing, strong security practices, and comprehensive audits.

It often boils down to foundational knowledge. At Origin, we heavily rely on checklists, asking questions like “Have you considered reentrancy attacks?” with every change to the code. Each pull request undergoes thorough scrutiny before merging into the repository. We also invite audit firms like OpenZeppelin to validate every deployment on the mainnet. Implementing these practices may slow down the development process, but security should be a primary concern for our users. We have a responsibility to protect their assets above all else.

TheNewsCrypto: In the DeFi space, Liquidity Staking (LSTFi) has gained significant user traction. What unique features does Origin’s OETH token offer, and what unique benefits does it provide?

JF: Liquidity staking is a process where individuals stake Ethereum (ETH) to earn more ETH and ensure network security. Running your own validator requires locking up 32 ETH and takes time to withdraw. This setup poses challenges for the average person as it’s not very liquid, and not everyone has 32 ETH to use. Liquidity staking tokens address this by allowing people to participate in yield opportunities and reuse their collateral elsewhere. You provide your ETH to a liquidity staking platform, and in return, the platform issues you liquidity staking tokens, allowing you to engage in various DeFi activities.

In DeFi, the goal is to stack returns and increase assets. Furthermore, our aim is to maximize your yields. Therefore, we deploy staking tokens from platforms like Lido, Rocket Pool, and Frax Finance into DeFi protocols. This includes lending platforms such as Compound, Aave, and Morpho, as well as trading platforms built on top like Curve and Balancer. Any rewards received from these platforms, whether in tokens like Curve, Convex, Balancer, or Aura, are automatically harvested and used to buy more ETH, then redeployed into staking. This achieves rapid compounding without you managing positions or paying gas fees. As more funds are allocated to these strategies, the compounding effect accelerates, benefiting all users participating in this approach.

TheNewsCrypto: How do you view the evolution of DeFi governance? Can it replace traditional regulatory structures? Do you have a specific DAO?

JF: The concept of DAO governance remains an ongoing experiment, and we continue to learn challenges from it. Direct democracy also presents some challenges. It has parallels with experiments in making collective decisions in the real world, like our representative government system in the United States. We opt for representative governance because most people lack the time and necessary knowledge to make wise decisions on every issue. Sometimes, electing individuals to represent us in decision-making proves more effective, trusting that they will pay attention to nuanced choices. These are the issues we’re exploring.

The core idea is that your assets should be managed by those who have a vested interest in its success. For this purpose, we introduced OGV, the governance token for our revenue products OUSD and OETH. When you acquire OGV, you can stake it for a period ranging from one month to four years. The longer your staking commitment, the greater your economic and governance power within the protocol. This is crucial for preventing accumulation of OGV tokens, malicious voting, and harm to the protocol. Through a four-year commitment, any actions detrimental to the protocol ultimately harm the individuals involved, which is an important design choice.

This approach transfers control to those most committed to the protocol’s long-term success. Those locking assets for four years primarily influence decisions, rather than those with short-term commitments. Additionally, your commitment earns rewards. A portion of the earnings from these products is allocated to stakers. 20% of the earnings are set aside, with half used to ensure future rewards, which we call “flywheel tokens.” The other half is distributed to OGV stakers, with your staking period determining your share of these tokens.

At Origin, all our governance takes place entirely on-chain. We use snapshot voting to gauge sentiment, but any contract upgrades or changes require full decentralized governance by OGV. We also implement time locking, ensuring users have a chance to withdraw funds even if malicious behavior passes a vote before it takes effect. This is a critical security feature.

TheNewsCrypto: How do you view the regulatory challenges and pressures surrounding cryptocurrencies, especially in the United States?

JF: When you see what cryptocurrencies represent, they do indeed pose a significant threat to traditional finance and the government’s control over your financial transactions. It’s like a peaceful revolution saying, “I don’t want the government to have the authority to decide who I can send my funds to, I don’t want them to be able to freeze my funds at any time, I don’t want them to have that level of control.” Certainly, this threatens the dollar, the U.S. government, and governments globally, which are accustomed to having that power over your funds.

What can we expect? Opposition and challenges are inevitable because it threatens the status quo. On the other hand, it’s disheartening because we see it as the future. Has opposing and challenging innovation and technological progress with restrictive laws ever been effective? It often drives people to seek jurisdictions more favorable to cryptocurrencies, like Dubai, where innovative projects are thriving.

Completely stopping cryptocurrencies is nearly impossible. You can slow it down and force people to move elsewhere, but this revolution is gaining momentum. For the United States, the real question is whether it will embrace this change and lead in innovation or risk being left behind.