Noble: Solving Crypto's Liquidity Problem, One Chain at a Time - Jelena Djuric

Sebastian Cuchillo introduces Jelena Djuric, CEO of Noble, a Cosmos chain focused on stablecoins and real-world assets, highlighting Noble's issuance of around $350 million in USDC and its own stablecoin, USDN. Jelena expresses enthusiasm for the stablecoin market, which has grown to over $250 billion, driven by clearer regulations and significant company announcements. She addresses skepticism around stablecoins, asserting that recent legislative changes, particularly the Genius law, provide a solid legal framework for stablecoin issuance as payment instruments, encouraging innovation in legacy payment systems.

The stablecoin market is projected to grow significantly, with Citibank estimating it could reach $1.9 trillion by 2030. A shift in institutional sentiment is noted, with 83% of investors looking to increase their crypto exposure due to the yield potential of stablecoins. However, Jelena emphasizes the importance of understanding yield sources, as they can vary significantly. Noble positions itself as a neutral infrastructure provider for stablecoin transmission, collaborating with MZero for stablecoin issuance rather than acting as an issuer itself.

The regulatory landscape for yield distribution is still developing, with current yields ranging from 4% to 5%, mainly from treasury bills. Noble aims to enhance on-chain yield through its composable yield strategy, allowing programmable yield distribution. The USDN stablecoin is over-collateralized by short-term treasury bills, with yield managed by the M0 protocol. The relationship between the Noble dollar and T-bill yield is discussed, noting that holding the Noble dollar results in forfeiting T-bill yield, which is instead distributed to a boosted yield vault. Users can invest USDN into this vault for yields of 15-20%, supported by a high deposit ratio in the points vault.

Insights into the Cosmos ecosystem reveal that Noble, launched post-UST collapse, has faced challenges despite some liquidity entering the space. While the app chain thesis remains strong, the performance of native tokens has been disappointing due to a lack of retail demand. Jelena emphasizes that Cosmos is not dead, citing its robust foundational stack, but highlights the need for improved performance of native tokens. Noble is set to launch an L2 on EVM, utilizing various bridges for liquidity routing.

The conversation touches on broader market dynamics post-UST collapse, where a bear market transitioned into a bull market driven by meme coins. Cosmos has shown its capability to build effective app chain infrastructure, yet major ecosystems often see activity and liquidity concentrated among a few products. The comparison between Cosmos and Linux illustrates the challenge of value capture for token holders, a problem also faced by Ethereum with its rollups. Potential solutions for value capture include licensing fees for commercial use of the technology stack.

The introduction of the Noble App Layer, an EVM L2 using Celestia for data availability, is discussed. The decision to build on EVM as an L2 rather than Noble L1 stems from the need for innovation in the Ethereum ecosystem and the demand for smart contracts. Performance benchmarks indicate that the EVM app layer offers faster block times compared to Noble Core. The speaker expresses enthusiasm for collaborating with the Celestia team, praising their robust software.

Noble Core operates on a proof of authority model, which is deemed more suitable for stablecoin-centric use cases than a proof of stake model. The anticipated launch of the app layer is seen as a pivotal moment for Noble, marking the integration of DeFi into their ecosystem for the first time. The Noble token will serve multiple functions in the new L2 and DeFi ecosystem, acting as the base fee token for the app layer while allowing users to pay fees in stablecoins that are converted to Noble tokens on the backend.

Looking ahead, substantial growth in the stablecoin market is predicted over the next three to five years, with the emergence of various purpose-built stablecoin chains. Noble is envisioned as a key player in transforming payment infrastructure for traditional entities entering the stablecoin space, serving as a router of activity and an origin chain for minting and redeeming stablecoins. The discussion concludes with an acknowledgment of Noble's performance and future plans to expand consumer-facing applications.