Asked by: Mia, ChainCatcher
Answered by: Julian, Co-founder and CEO of Aperture Finance
As the total transaction volume of the Aperture Finance platform soared to US$2.3 billion and the number of users exceeded the 240,000 mark, it gradually became the focus of the crypto field's intention track.
On April 13, Aperture Finance announced that it helped users rebalance $66 million in liquidity positions in a single day, of which the Base network exceeded $38 million, and all data hit a record high. Currently, Aperture Finance has helped users rebalance $1.8 billion in liquidity positions.
Aperture Finance said it has combined AI and Intent to create a new chatbot based on the underlying Intent infrastructure. The chatbot allows users to "declare their goals" in natural language and achieves more efficient execution and pricing through a solver network.
Recently, ChainCatcher interviewed Julian, CEO and CEO of Aperture Finance. Julian has worked as a senior product manager at Amazon Kindle, Netflix and AWS. He holds a master's degree in simultaneous interpretation from the Monterey Institute of International Studies, an EMBA from the Haas School of Business at the University of California, Berkeley, and is also the VP of the Asia-Pacific region of the Blockchain Association of the Haas School of Business at Berkeley. In addition to being an entrepreneur, Julian is also a member of the North American Writers Association and the American Translators Association (ATA). His translations include more than 30 books such as "Rebirth" (a work by Stephen King [US]) and the "Diary of a Wimpy Kid" series.
Perhaps it is because of his experience in dealing with words, in interviews, Julian always uses examples to introduce the novel concept of intention track in a way that is as easy to understand as possible.
Julian described the intent framework as Doraemon: The intent framework can be seen as a flexible and open system that automatically selects and executes the corresponding solution based on the user's needs. This concept is similar to the plot in Doraemon, where Nobita has various needs and Doraemon can always take out the right props from his pocket to meet him. In this metaphor, Doraemon's pocket is equivalent to the intent framework, and the various props correspond to the solvers in the framework.
From translator to Web3 entrepreneur
ChainCatcher: Your background is quite different from many entrepreneurs. Why did you join the web3 industry’s entrepreneurial army?
Julian: My experience can be described as drifting. I crossed over from a liberal arts student to an entrepreneur, but this also reflects the characteristic of Web3 that lowers the threshold for entrepreneurship. I originally studied simultaneous interpretation, and after graduation, I interned at a United Nations agency. In 2012, I joined Amazon to be responsible for the localization business of the Kindle Chinese market. I worked at Amazon for 3 years. At that time, I was relatively idle, and I also did some translation work in my spare time, such as translating the best-selling "Diary of a Wimpy Kid" series and Stephen King's horror novel "Rebirth". Due to the industry pressure from outsourced translation and machine translation, I began to learn programming and move towards the direction of product manager. At that time, the mainstream was still computer-assisted translation (MAT). Automatic translation content was only for reference, with human translation as the main and machine translation as the auxiliary. Translators and computers could coexist peacefully. Now ChatGPT is really taking away the jobs of translators.
Later, when Netflix was preparing to enter China, I moved to Netflix as the language manager for Greater China, responsible for localization work, and participated in the work of licensing some films to iQiyi, such as "House of Cards" and "Day and Night". In 2018, as Netflix gave up the Chinese mainland market, I chose to leave.
ChainCatcher: Then it switched from Web2 to Web3?
Julian: Strictly speaking, that was the time when Web2 regressed to Web1. At the end of 2018, we faced challenges such as graphics card failure and rising electricity prices. We wrote scripts to automatically troubleshoot and dynamically adjust mining strategies. We also explored ASIC mining machines and FPGAs. However, the sharp drop in the price of coins and the high electricity prices in California made it difficult for the mining farm to continue. Later, by chance, I teamed up with another friend to set up a Chia mining farm, but it also ended up being unsustainable.
Later, I joined AWS as a product manager, responsible for bringing American training videos to China, but the slow progress of the process made me lose my fighting spirit. According to the speed of Web3 project entrepreneurship, 2.5 years is enough to complete the two projects from financing to exit. Later, we got financing from American VCs before leaving.
After leaving the company, my partner and I found a stable and profitable algorithmic strategy, and raised funds to establish a private equity fund during the epidemic. However, as the scale of funds grew, compliance risks became prominent, so we disbanded the fund and turned to exploring decentralized finance (DeFi), establishing Aperture Finance, focusing on volatility hedging strategies. Although the original intention was to allow more people to share the dividends of cryptocurrency, we still have to follow the rules of the crypto due to regulations and user thresholds.
ChainCatcher: When Aperture Finance is established, financing should be a big challenge, right?
Julian: For a startup, whether or not it can get financing is a watershed. Our three partners are elites from large companies, with backgrounds as senior programmers at Google and computer masters from Stanford and Cornell, but the road to financing is still full of challenges. It is still difficult to make up your mind to start a business full-time. In 2021, although we are stable in a large company, we are confused by the opportunity cost of starting a business. Our DeFi investment strategy has considerable returns, but entrepreneurial risks still exist. So we issued a military order: if we can raise $2 million before Thanksgiving, we will start a business full-time. Fortunately, we successfully raised funds, which is how we came to Aperture today step by step.
Intent to enter the track
ChainCatcher: From starting your business in 2021 to now, you have fully experienced the great turmoil of 2022. What is this experience like?
Julian: It was a roller coaster experience. We were the first company in the entire network to propose a volatility hedging strategy and successfully implemented it on the Terra chain. The TVL exceeded $120 million within three weeks of the product launch. At that time, Terra was in its heyday and our products were also highly sought after. Sequoia Capital and Tiger Fund jointly wanted to invest $10 million in us at a valuation of $150 million. But when we were about to complete the legal process, the Terra chain collapsed and we lost the opportunity. Professor Wang Defeng said that if you still don’t believe in fate at the age of 40, you have poor understanding. This time it may be destiny.
To make matters worse, the collapse of 3AC and FTX added two more tragic strokes to 2022, and the market completely turned from bullish to bearish. At the same time, we saw many peers in operating strategies, such as Friktion.fi and RoboVault, declare bankruptcy, and the situation was miserable.
ChainCatcher: Did you consider closing the company at that time?
Julian: When the company got into trouble, our partners did not formally discuss closing the company because the investment funds had not been exhausted and they still wanted to work hard. After understanding the industry, we realized that we could close old projects and start new projects to give back to investors. In June 2022, our DeFi product was offline due to inapplicability. We transformed and built infrastructure to provide automated services for strategies to cross bull and bear markets.
ChainCatcher: Is this the prototype of Intent-based Infra?
Julian: There was no intention at that time. We created a concept called "Composable Automation", which can be translated as "buildable automation". The core concept is the same as the intention, which is to build and automate according to user needs.
Whether users want to build a staking strategy or a liquidity mining strategy, our platform can quickly provide ready-made modules. At first, this concept seemed avant-garde and unique. It was not until June 2023 that the "intention architecture" was widely recognized by the market. We were quickly adopted by Paradigm and became the first intention network to be productized because we developed it a year in advance.
AI and intent architecture merge
ChainCatcher: So, what exactly does intent architecture mean?
Julian: The intent architecture can be seen as a flexible and open system that automatically selects and executes appropriate solutions based on user needs.
This concept is similar to the plot in Doraemon, where Nobita has various needs and Doraemon can always take out the right props from his pocket to meet him. In this metaphor, Doraemon's pocket is equivalent to the intent architecture, and the various props correspond to the solvers in the architecture.
When users express their needs through platform interactions, the intent architecture analyzes these needs and automatically selects the most appropriate one or more from the available solvers to execute. These solvers are like Doraemon's props, each with specific functions that can solve specific problems. Users do not need to understand the specific working principles or details of the solver, just put forward the requirements and let the architecture handle it.
The openness of the intent-based architecture is one of its key features. This means that new solvers can be continuously added to the architecture to expand its functional scope. As the number of solvers increases, the architecture will be able to meet more and more user needs, thus achieving a transition from reality to "magic".
In practical applications, intent architecture may involve complex algorithms and data processing technologies to ensure that user needs can be accurately understood and the best solution can be selected. In addition, the design of the architecture also needs to take into account factors such as ease of use, security, and scalability.
ChainCatcher: Are there any known examples of intent?
Julian: Strictly speaking, intent is not a new concept, but the public understands it from a new perspective. For example, when you go to Uniswap to exchange coins, you may see that the exchange rate is within a reasonable range and confirm it directly. You believe that it gives you the best exchange method, and it does so. If you click on the details, you can see that your transaction may be divided into several small transactions. This is the optimization it makes for the user's default intent (finding the best path to achieve the best exchange rate).
This is the intention at the currency exchange level, and many intention projects have further extended this direction. However, this is still at the application level, and the greatest potential of the intention architecture lies in the infrastructure level, not only for exchange, but also to meet the various intentions of users in all aspects. For the same vision, Anoma is to achieve it by building a new public chain, creating a new world, and inviting all parties to rebuild. We are relatively conservative, focusing on efficiency, and reintegrating various protocols together through the intention architecture within the existing ecosystem.
ChainCatcher: Aperture focuses on "AI-enabled intent architecture", what are its specific applications?
Julian: AI has a profound impact on our products in two dimensions.
First, at the user access level, taking currency exchange as an example, basically no one will do a full set of analysis for a single exchange, counting various solutions, including cross-chain, to find the best rate and time solution. This is exactly what the intent architecture is best at. The user only needs to express "I want to exchange 1,000 USDT for ETH at the best rate", and we can compare all solutions through the solver.
The most direct way to express intentions is to use natural language and communicate through text chat. We have created a dedicated IntentsGPT based on ChatGPT, which relies on powerful AI.
Another place where AI is used is in solver selection. When our intent network has multiple solvers that can handle the same intent, we use AI to select the best solution. For example, when Nobita wants to go out, Doraemon has two gadgets, the Anywhere Door and the Bamboo Dragonfly. How to choose? AI can handle it.
ChainCatcher: What will the ultimate user experience of Aperture intent architecture be like?
Julian: For ordinary users, receiving Airdrops often encounters problems such as missing out, phishing risks, or website congestion. On our platform, users only need to connect their wallets and tell IntentsGPT: "Please check and receive all the Airdrops to be received at my address, and ensure that the operation is carried out at the best rate." Our system will automatically complete all the steps for you.
For strategy users, they can also simply say to IntentsGPT: "Please analyze and open a liquidity position for me on the trading pair with the highest profit for the day." Our system will provide you with a one-stop service from calculation to execution. Through natural language, users can easily complete a variety of tasks here and enjoy better rates than manual operations.
Currently, IntentsGPT and the intent architecture are officially launched, and we are not far from realizing this convenient vision.
ChainCatcher: You mentioned before that Aperture is the only project in the current track that has launched products. What is the current user status and future development plan?
Julian: Aperture’s current intent tools are available on 9 major EVM-compatible chains. So far, the total amount of intent transactions has reached 2 billion US dollars. There are currently 200,000 independent users, with more than 8,000 daily active users, which can be said to be recognized by DeFi users.
Each intent network is like an independent e-commerce platform, with its own characteristics, but they are similar. The competition in e-commerce ultimately depends on the brand and quality of the merchants on the platform. After the platform is established, the competition is about who can expand faster and find better brands to enter.
The same is true for the intent-based architecture. The intent-based architecture is an open architecture. One more solver means one more function. So our first launch gave us a first-mover advantage, but to maintain this advantage, we need to continuously add new solvers. The development speed is too slow for our internal team alone, so we cooperate with projects such as Propeller Heads and Enso Finance to let them develop solvers for us. At the same time, we will also open it to the community so that community developers can also develop solvers themselves.
ChainCatcher: This e-commerce example is very inspiring, but if brands enter the e-commerce market too quickly, quality control may not be done well. Did you have this concern when adding solvers?
Julian: The complexity and interconnectedness of intent architecture will inevitably have a certain impact on security.
We divide solvers into several categories: one is the official solver, which, as the name suggests, is developed by Aperture itself. We are most confident in the security of this type of solver.
The second category is second-party solvers, which are solvers provided by partners. We will audit this category and provide whitelist permissions.
The third category is the third-party solver, which is the solver provided by community developers. Our token will play a core role at this time. When a third party deploys a solver, it needs to pledge a certain number of Aperture tokens. For example, Zhang San wants to deploy a transaction-type solver and pledges $5,000 worth of Aperture tokens, with an order limit of $50,000. Here we multiply a different coefficient according to different scenarios, and this coefficient is determined by the potential maximum loss. If the order fails or malicious behavior is found, the deposit will be deducted as a penalty and the user will be compensated. If a solver successfully completes the transaction, it can earn transaction-related fees, thereby incentivizing the solver to optimize the algorithm.
ChainCatcher: Besides the need to stake tokens to deploy solvers, what other functions does the Aperture token have?
Julian: The core of the token accountability mechanism is the deployment and staking of solvers. In addition, our tokens have multiple uses: they can deduct transaction fees, unlock advanced features, and participate in governance voting.
The intent architecture is designed to bring convenience and quality experience to users. For this reason, we will charge a small fee based on the transaction amount. If users use tokens to pay or pledge a certain amount, they can enjoy a fee discount. For special functions that consume a lot of resources, we set a token usage threshold.
In terms of development decisions, in addition to following the internal development roadmap, we also attach great importance to community participation. Community members can decide how tokens can incentivize developers through proposals and voting, such as integrating projects or developing new features, thereby jointly promoting the rapid development of the platform.
