CEO Matteo Coppola on FluidTokens’ Vision

Cardano isn’t often the primary place folks search for DeFi innovation. But initiatives like FluidTokens are starting to problem that assumption, focusing on fundamentals like decentralization, charge stability, and long-term scalability.

That imaginative and prescient begins with Aquarium, FluidTokens’ system for making Bitcoin usable inside Cardano DeFi. It introduces Babel Fees, which permit customers to cowl transaction prices with any Cardano Native Token—together with bridged Bitcoin—with no need ADA. Then there’s Midgard, a light-weight roll-up designed to hurry up transactions whereas nonetheless relying on Cardano’s base-layer safety.

In this Q&A, we communicate with FluidTokens’ CEO, Matteo Coppola, about what they’re constructing behind the scenes—from a brand new lending protocol to a broader imaginative and prescient that touches Bitcoin, real-world belongings, and extra.

Building Where It Counts—Why Cardano Is More Than a Home Base

BeInCrypto: Building on Cardano is usually missed within the Ethereum-dominated narrative. What strategic benefits has Cardano provided FluidTokens, past the same old speaking factors round charges and uptime?

Matteo Coppola: Ethereum had the first-to-market benefit within the sensible contract economic system, and its Account Model was due to this fact used as the usual for a few years. Cardano as a substitute retains the unique Bitcoin structure, increasing it to permit correct UTXO sensible contracts. 

Now that the final web3 neighborhood is dealing with the restrictions of the Account Model, UTXO-based blockchains can present a greater different, all correctly related by Cardano. 

Cardano affords FluidTokens an all the time on-line sensible decentralized setting that may correctly bridge belongings amongst UTXO blockchains similar to Bitcoin and any Layer 2 that anchors its safety to a UTXO Layer 1. 

Additionally, Cardano has one of the vibrant communities, the place its numbers will not be made by bots and wash buying and selling however by the genuine curiosity of actual folks.

FluidTokens has been a number one DeFi ecosystem on Cardano since 2022. It is presently the one ecosystem that has deployed actual DeFi protocols on Bitcoin layer-1, so it’s a no brainer to maintain supporting and bettering Cardano.

BeInCrypto: The Aquarium Babel charges mannequin introduces a special mind-set about consumer incentives. What led you to design it this fashion, and what sorts of consumer conduct are you hoping it encourages?

Matteo Coppola: Blockchain is a core a part of any Web3 stack—however finish customers shouldn’t be burdened by the complexities of transaction constructing or on-chain settlement. The expertise must be easy, safe, and clean. 

This is unattainable if the consumer has to personal and handle ADA, the native foreign money that Cardano accepts, to execute transactions. For instance, how can a mean particular person know the place to purchase ADA, how to not get scammed, the right way to do an annoying KYC on a centralized change, how a lot to purchase, and the right way to ship it to their non-custodial pockets? All of this have to be averted if ADA isn’t needed in his day by day operations.

Aquarium permits customers to pay transaction charges with customized tokens, similar to stablecoins, in a totally decentralized means. An open market supplies ADA to sponsor transaction charges in change for a specific amount of one other token, permitting provide and demand to be met and simplifying the consumer expertise. 

Aquarium can even allow Bitcoin customers to execute DeFi operations on Cardano with out the necessity to personal any ADA, formally enabling Cardano as a DeFi layer for Bitcoin.

BeInCrypto: Midgard performs a task in FluidTokens’ method to scaling. How does it match into your broader roadmap for increasing entry to DeFi whereas staying aligned with decentralization?

Matteo Coppola: We are constructing Midgard in collaboration with Anastasia Labs to resolve the Cardano fast-finality and low-fee points that you simply inevitably meet when on any correctly decentralized blockchain. 

On Midgard, our DeFi merchandise can grow to be extremely aggressive with conventional ones, empowering real-time buying and selling, online game economies, and day by day retail funds. 

Combined with Aquarium babel charges, the consumer expertise begins to grow to be fairly near the previous conventional system whereas maintaining probably the most elementary side—decentralization.

BeInCrypto: FluidTokens is rolling out a brand new lending protocol. Can you stroll us by means of the core thought behind it and what particular issues you’re aiming to resolve that different protocols haven’t addressed but?

Matteo Coppola: The new FluidTokens lending protocol has been designed in a extremely modular technique to accommodate a powerful variety of various kinds of loans. The goal is to use a special taste of lending to make sure all consumer classes discover what they’re searching for on each the lending and the borrowing sides.

Lenders, whether or not non-public people or establishments, can customise all the pieces from rates of interest and liquidity phrases to installment buildings, oracles, collateral varieties, liquidation settings, and even non-obligatory mortgage expiration. This stage of configurability makes it simpler for them to fulfill their extremely particular necessities.

On the borrowing aspect, customers are in a position to navigate simply amongst a plethora of various affords and even request particular loans to seek out the very best offers worldwide. All of that is wrapped in an intuitive consumer expertise with intensive automation to make the whole course of as easy and environment friendly as potential.

Bringing RWA and Bitcoin into Cardano’s DeFi Game

BeInCrypto: Real-world belongings (RWAs) have grow to be a buzzword in DeFi, however real-world traction remains to be restricted. From your vantage level, what must occur—technically and regulatorily—for establishments to interact meaningfully with on-chain collateral?

Matteo Coppola: The Web3 area permits entry to markets which will usually be out of attain, whereas the fractionalization of RWAs creates alternatives for gamers of any dimension. 

Traction is proscribed for not less than two primary causes: older consumer generations are inclined to nonetheless use conventional web2 platforms to purchase digital belongings, and clear laws about RWAs remains to be absent in lots of nations.

In reality, because it typically occurs, the regulation lags behind technological progress, and establishments should adhere to strict compliance, lacking out on RWA alternatives till an RWA-friendly iteration of the regulation is launched.

At FluidTokens, we’re working on our DeFi merchandise anticipating the route of this business, enabling RWAs of any kind for use as collateral to get protected and rapid liquidity.

BeInCrypto: FluidTokens has expressed curiosity in bridging DeFi with Bitcoin. What’s the pondering behind that route, and the way do you see Bitcoin contributing to a extra interoperable DeFi ecosystem?

Matteo Coppola: In 2024, FluidTokens launched a technological framework known as BitWeave to create correct DeFi protocols on Bitcoin L1 with out the necessity to bridge belongings to different blockchains. 

The annoying concern is that on Bitcoin L1, you continue to need to face lengthy transaction occasions and charge spikes that typically could hinder your DeFi expertise. Additionally, the consumer expertise extremely relies upon on the restricted Bitcoin scripting language.

Therefore, it turns into essential to have a safe layer with extra expressive programmability, the place sensible contracts will be executed on the UTXOs that include your belongings (BTC, Runes, Ordinals, and extra). 

As it seems, from a cryptographical perspective, the most secure and most trustless technique to bridge the massive Bitcoin liquidity into the DeFi world is thru a UTXO blockchain similar to Cardano. We are actively working on this side, contributing options to the options which were proposed to this point.

Moreover, from FluidTokens’ perspective, we needed to unify our ecosystems, which presently exist on Cardano and Bitcoin, to simplify the consumer expertise. In a perfect Web3 world, any BTC holder ought to have the ability to join their pockets and take part in DeFi protocols incomes yield with out realizing that there’s a trustless bridge and that he’s presently on one other chain.

What DeFi Needs Now and Next: Privacy, Integrity, and Purpose

BeInCrypto: As DeFi evolves, the stress between privateness and compliance is intensifying. Where does FluidTokens draw the road, and the way ought to the business take into consideration privateness amid growing surveillance?

Matteo Coppola: DeFi has the distinctive capability to exist amongst all potential levels of privateness and compliance. The core thought we should all the time observe is to guard our digital belongings accepting compliance procedures solely when they’re strictly needed. 

For instance, a peer-to-peer economic system ought to totally shield privateness and freedom, whereas to borrow stablecoins from an institutional supplier, we essentially want to stick to anti-terrorism guidelines and settle for a KYC process. To enhance the scenario much more, Zero-Knowledge proofs enable to show KYCs and KYBs with out disclosing the precise private data. 

On prime of that, blockchains like Midnight can cover all of the transaction particulars permitting companies to be privacy-compliant and shielded from rivals’ on-chain evaluation. This is why FluidTokens can be constructing on Midnight: the customers, the companies, and the establishments can discover the right means to supply and borrow liquidity, scaling the alternatives on web3 with out compromising their enterprise mannequin.

BeInCrypto: On a extra private observe—what sort of management do you consider this subsequent chapter of DeFi calls for, and the way are you shaping FluidTokens’ tradition to fulfill the second?

Matteo Coppola: In the previous crypto years, now we have seen many fraudulent Web3 firms that sacrificed ethics and respect in the direction of the neighborhood in an effort to extract all of the potential worth, FTX, for instance. 

Now as a substitute, we frequently see all the key gamers being extremely aggressive, providing yields with tokens and derivatives which can be protected till the present goes in the appropriate route. Still, they’re truly a fortress of playing cards the place one mistaken motion on the base can provoke a basic collapse. 

The new form of management that DeFi wants is manufactured from consultants who actually care about decentralization and honest monetary alternatives, the place the provided options remedy real-world issues and facilitate a world monetary world that isn’t uniquely manufactured from memes and questionable digital currencies. 

At FluidTokens, I push the workforce to work and struggle to attain Bitcoin’s unique imaginative and prescient of a good, accessible, safe, and clear monetary future.