Can AlphaGrowth Fix Cardano DeFi?

Peter interviews Bryan Colligan and Eric Waisanen from AlphaGrowth about the Cardano Prime proposal, the missing DeFi infrastructure on Cardano, how liquidity incentives could work, and what transparency the community should expect before treasury funds are committed.

Key Takeaways:
- AlphaGrowth says its Cardano Prime work would begin with a deep audit of Cardano DeFi infrastructure, applications, and liquidity gaps.
- The team argues Cardano needs coordinated DeFi primitives, including stablecoin liquidity, money markets, DEX depth, bridges, and oracle infrastructure.
- AlphaGrowth points to prior work with ecosystems such as Compound as evidence of its ability to attract and structure DeFi liquidity.
- The proposal includes phased work: audit and planning, protocol buildout and integrations, then marketing and incentive campaigns.
- The interview covers KPIs, reporting, community oversight, and why treasury funds should be released with accountability checks.
- Peter pushes for detail on timelines, execution risk, UTXO-specific challenges, and whether this can realistically move Cardano DeFi by year end.

Links & References:
AlphaGrowth Cardano Prime Proposal
https://link.learncardano.io/RKWXyB

Bryan Colligan: Founder & CEO
https://link.learncardano.io/XbzA78
https://link.learncardano.io/xyZcQo

Eric Waisanen: Head of DeFi Operations
https://link.learncardano.io/JnyEpE

Website: https://learncardano.io
X/Twitter: https://x.com/LearnCardano

Disclaimer: This content is for educational purposes only. Nothing constitutes financial advice.

DISCLAIMER: This content is for informational and educational purposes only and is not financial, investment, or legal advice. I am not affiliated with, nor compensated by, the project discussed—no tokens, payments, or incentives received. I do not hold a stake in the project, including private or future allocations. All views are my own, based on public information. Always do your own research and consult a licensed advisor before investing. Crypto investments carry high risk, and past performance is no guarantee of future results. I am not responsible for any decisions you make based on this content.

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Episode Transcript

Speaker 1 (00:00):
All right, guys, I've got this really awesome interview with
Ourpha Growth here and apparently they're going to come into
the Cadina ecosystem to fix a lot of our defive problems.
And I think a lot of us have an idea
of what our problems are, but having a third party
come in to tell us what they really are is
kind of useful. And they've got a Treasury proposal coming

(00:23):
up here. It's a big ask and I think we
have to dig into the details here of the background,
what they're going to deliver, and what our problems actually
are before we can release those funds. I have Brian
and Eric joining me from the Alpha Growth team here
to talk through all of these things.

Speaker 2 (00:41):
Gentlemen, welcome to the podcast. Good morning, Peter, happy to
be here, Thanks for having us on.

Speaker 1 (00:46):
All right, guys, First off, a lot of the people
in the Cadana community have absolutely no idea who you
guys are. We've just been teased through these various posts,
and we want to know who we're dealing with here
if we are going to vote on this Treasury proposal
for a Cadino Prime, which is from what I understand,
what it's called we've got to know who we're voting

(01:07):
on here, So could we get a really good overview
of what you guys do in the DeFi space and
why should we be talking to you right now?

Speaker 3 (01:16):
So Alpha Growth we've been around for six years since
original Defie summer.

Speaker 2 (01:20):
The net net is is that chains we.

Speaker 3 (01:22):
Have like a change, and ecosystems we have a very good,
strong thesis on how they should kind of look at
their ecosystem. There's a lot of chains that do a
lot of different things. Cardono in particular has an amazing
community longstanding. However, just until recently, some of the key
infrastructure pieces weren't available. So some of the leadership in

(01:45):
the Pentad broad Circle usdc X to play a pith
in layer zero and bridge technology. When you kind of
bring those pieces of infrastructure in, it starts to create
these unlocks. So at our core thesis, we believe that
there's kind of three different ways that chains and ecosystem survive.
One is kind of looking at the chain as a

(02:05):
holistic hedge fund ecosystem like a venture capital firm that
has to invest in very particular places and then start
to use their balance sheet as leverage to earn yield
on its own treasury. But more importantly, everybody that holds
ATA and everybody in the Cardona ecosystem can start to
earn yield products from organic yield in the volatility of

(02:28):
the price. So we've been doing this for about six years.
We've helped out probably our best deal to date and
was helping out Compound. Brought over eight hundred and fifty
million of TVL to Compound, and we've helped out Uni Swap.
We've helped out Kava near Saga Aurora, a couple other
protocols and chains as well. And in the DeFi ecosystem,

(02:50):
we've probably given you a grant or an incentive spend.
So I think we were coming up at like sixty
or seventy million dollars of incentives grants across like two
hundred protocols.

Speaker 1 (03:02):
Now, wow, right, Gosha, big big numbers. Indeed, now you
mentioned some of those infrastructure things that we needed, such
as USDC, PITH and whatnot that've come through the PENTAD recently.
Did you guys have anything to do with those those
particular protocols being brought over to Kardana zero zero, okay,

(03:23):
absolutely none. It's just interesting to understand why those particular
ones were chosen. I thought it may have had some
reason to be better connected through you know what.

Speaker 2 (03:36):
Your great choices. Yeah, they're great choices. I think, go ahead, Yeah.

Speaker 4 (03:41):
They are great choices. It's actually through some of those
partners that we were introduced to some of the teams
behind Cardono they recommended us, which is humbling and nice,
but I mean we're not the only capable people here.
There are a lot of capable people in Cardina leadership currently,
and they understand that there's missing infrastructure. So they're trying
to cross off a checklist like, hey, we do need
a ridge, Hey we do need a you know, canonical

(04:02):
on off ramps table, and we do need some kind
of oracles to get advanced D five primitives, you know functional.
And so while they're going through the checklist, which is great,
like we would have loved to have been there to
help advise and show the pros and cons of different options.
I'm sure they were doing that independently, but part of
those relations are what have you know introduced them to us,
and you know, they went through an RFP with eight
or nine different companies and they did choose us to

(04:25):
move forward. And help them continue to advise on continuing
the development of the DeFi ecosystem. But we're not storrty
from scratch, which is awesome.

Speaker 1 (04:31):
All right, Okay, that's good to hear. Now, Brian, you
mentioned that eight hundred and fifty or so million for
compound bring that over to their protocol.

Speaker 2 (04:41):
What was the strategies? Like, how did you do that?

Speaker 1 (04:43):
You just caught up a couple of mates and said, hey,
can you put some little qutty in here?

Speaker 2 (04:47):
Like what how do you just do? Just two friends?
Just two friends?

Speaker 3 (04:51):
I called and they you know, to put on the
cop No you got good friends? Yeah, No, it's you know,
straight to the jugular. I think that there's a couple
of different plays, but the DeFi mallet is back right,
So there's a couple integrations that were a majority of
the TVL came from, maybe about like forty.

Speaker 2 (05:10):
Percent of it.

Speaker 3 (05:11):
And and we'll do the same similar campaign for and
tactics for the cardown and ecosystem. Just really simply put,
there's you know, there's more ATA across centralized exchanges custodians
in the world than there is in DeFi obviously, right,
And so how do you create the structure products and

(05:31):
lending facilities and DeFi style mechanisms that you can kind
of just plug into a centralized exchange into c FI
and then have the ATA go to work within the
DeFi ecosystem. So that was that was a very large
structured play. A great example of this is a Coinbase's
investment into Morpho. So most of the TVL that comes

(05:53):
from Morpho comes from Coinbase earn product, and that earned
product accounts for like more than half of their TVL
with in the Morpho ecosystem.

Speaker 1 (06:02):
Right, Yeah, I had no idea that those mechanisms were
working the background for Coinbase.

Speaker 3 (06:08):
So when you when you invest on coinbase, earn on Coinbase,
which is like, you know, one of the largest suchialized exchanges,
you effectively are investing in Morpho. And so even if
the users don't see it, it's defying the back SEEFI
in the front. Coinbase obviously obviously earned some nice, you know,
nice tasty commissions.

Speaker 2 (06:25):
On that as well.

Speaker 3 (06:26):
So the users aren't getting the best yield per se
within the DeFi ecosystem, but they are getting outsized yields
then they would normally get in return. So in a
very simplest view. If we just do like one or
two things, it's that. But now we have to build
all of the structured products, all the DeFi primitives that

(06:47):
work in coordination. So you know, it doesn't matter if
you build the fastest car in the world, you still
need a driver.

Speaker 2 (06:54):
And that's kind of what we're here to do.

Speaker 3 (06:56):
Like, so you bring in circle, you bring in you know,
layer zero's coming, those.

Speaker 2 (07:01):
Types of things. It's like if you build it, they
will come. Sort of.

Speaker 3 (07:04):
You still need the campaign, you still need to actualize.
You still need to like rev the engine and have
drivers that drive the action and TVL in a particular way.

Speaker 1 (07:14):
Okay, gotcha. So how is this going to work for Cadana?
What's your plan here? I read through the Cadana Prime
and you've got like a three phase process to get
us to this point. Can you took us through this?
What you guys are going to do for us?

Speaker 2 (07:31):
Yeah?

Speaker 4 (07:32):
You know. End goal is have at least minimally viable
no limiting agent DeFi where every possible vertical or at
least every necessary vertical is covered so that we could
beget you know, better USP based products. We start with
phase one, you know, a deep, deep audit for all
the infrastructure, all the apps. We have a very good
idea of where it needs to be. We need to

(07:53):
get a completely holistic idea of where things are so
that then we could come with an improvement plan. If
we've got apps in the right verticals that aren't at
a point where they're going to be interoperable enough, not
quite where they're going to facilitate velocity well enough to
grow organic APR, then we're going to give them an
improvement plan and ideally a grant to go with it.
So like, hey, here's what we need you guys to build,
here's why, here's how, here's some funding for it. You know,

(08:16):
a big chunk of this proposal is for ecosystem grants.
And if we aren't convinced or the pentad or operating
group or overseers in Cardono don't agree that maybe in
the ecosystem app is capable of begetting the trust that
institutional LPs are going to need, then we'll talk to
some of the other bigger players in elsewhere DeFi and

(08:37):
give them a grant to come move into the Cardono
Ecosystem Rebuilding UTXO and just make sure we have all
the verticals covered, so big, big, big audit on our side,
as well as action plan on how to get from
where we are to where we need to be. Then
Phase two is doing the building handholding all the different
teams working on them with integrations. Make sure their bridges
are proper. If we're working with Midnights off or privacy,

(08:58):
make sure those integrations are going well well. It's a
lot of beady handholding, making sure that everybody's on the
same page, has a source of truth to go to,
go to. And then finally, once we have everything built
to a point and audited and at a point where
it's ready to showcase so the world, then it's coming
forward with a marketing spend, with an incentive spend and
bootstrapping TVL, getting tokens, launch on chain, getting like native

(09:22):
asset issuans, and then winning trade routes and just growing
growing TVL, growing velocity.

Speaker 1 (09:26):
This is a lot of work, guys, This this, this
is seriously a lot of work for the DeFi protocols
and for yourselves to put in the groundwork and the
infrastructure that's needed to make this all happen. What what
is the time frame of this? What? What what's what
are we going to expect in like six months time
end of the year. People want you know, numbers go up.

(09:47):
Now we're hurting in this bear market. To see you know,
alpha growth come in and actually change things around this
year would be absolutely amazing.

Speaker 2 (09:54):
What are we looking at?

Speaker 4 (09:56):
What we're Yeah, we're looking at starting the TVL bootstrap,
starting like the rollout of the final version of you know,
first final version of Cardno DeFi around the end of
the year, and that that has assumptions baked in that
people can build in UTXO fast enough that we can
work with all the parties fast enough. So far, we've

(10:16):
had a very pleasant experience dealing with the PENTAD and
other operating groups inside of Cardino ecosystem. So there are
unknown unknowns, but we do have experience doing this kind
of stuff, and we do think that we can get
through audit in the first month or two, that we
could get through the builds and you know three four
expedited months, and then by that time we're ready to
start rolling out with distribution partners and pushing through you

(10:38):
know liquid funds and deployment funds and distribution partners and
start you know, making carodno DeFi gradio.

Speaker 3 (10:44):
Yeah, I think thenknown unknown is the UTXO. We can
get it down to three months. Our goal for the
six months before the end of the year. There's probably
four or five protocols that we need to get up
and running, and then multiple integrations in between those protocols
so they work smoothly together. That's a protocol is like
job is to is to you know, in defy. The
number one thing a protocols can do is basically selling leverage.

(11:06):
So first you have to advertise the leverage, you have
to understand the leverage, and then it has to like
work in coordination. Right, So you can't you can't build
a money market up to a billion dollars if you
only have like ten million dollars of dex liquidity. It's
just too risky, right, So you have to build these
things in coordination. You can't if you don't have like
a CDP that basically earns off the velocity of the

(11:28):
ATA price, then you effectively are leaving money on the table.
You're leaving TV at the table. Like user transactions utilization.
We talked to one chain that we were doing an
analysis with about eighty percent of the transactions of the chain,
and it's a very popular chain, comes from just arbitrage
between the price movement because they have such a large

(11:49):
amount of TVL, so about eighty percent of their revenue
for the chain. Essentially, it comes from having a massive
set of TVL and arbitrage market makers coming on from
central exchanges to rebalance the decks, to rebalance the CDPs,
to rebalance the money markets. And so if we set
it up properly, there's just this reoccurring revenue source from

(12:11):
from now until forever.

Speaker 1 (12:14):
Sounds good, sounds like a decent plan. I like where
everything is going now, Brian. You also mentioned marketing a
little bit earlier as well, and like you said, also
a lot of these things have got to work in tandem.
What's the plan for this? How are you going to
hit the marketing for DeFi? You know, I feel like
sometimes I feel like DeFi has had its time. You know,

(12:37):
it's it's we've had DeFi summer. We didn't see like
a second resurgence of it. Retail is kind of disappearing
from the field at the moment and being replaced by
institutional investors. What is the marketing landscape going to look
like for this?

Speaker 3 (12:52):
Yeah, so basically activations I could go through like the
standard list of things, you know, videos, podcasts, k wels.

Speaker 2 (12:59):
This still work.

Speaker 3 (13:00):
So there we we do some investments and I talked
to a portfolio company yesterday and you know they brought
in like over like twenty million TVL on a forty
thousand dollars spent, Like that's impressive, Yeah, KOLs, Will that
be sticky?

Speaker 2 (13:15):
I don't think so.

Speaker 3 (13:16):
So we have this, we have this challenge with mercenary
capital in crypto and so the different activations. What you're
what you're really trying to do is like limit tests
through all of our marketing spend. So my background is
performance marketing. If you know, like row as and you
know these different types of terms like go straight to

(13:37):
the jugular. But effectively every spend, every KOL, every channel
has opportunity, cost and a limitation. So we know that
a certain partner is good for about ten million TVL.
We know another partner and it doesn't matter if we
spend you know, one hundred thousand dollars or three hundred
thousand dollars, they're pretty good for ten million TVL. The

(13:58):
next partner might be good for twenty the next one
might be for fifty, So they always have these opportunity
costs and limitations, and you know, we have the experience
and we know how to spend and basically one of
the things that we do is like we cut off
the spend. So you put in a spend for a
month or two, you cut it off, you see the
retention rate, and then you do it again, so then

(14:21):
you understand kind of like how much is going to
get activated and how much is going to retain. It's
not like just a consistent spend spend spend, right, So yeah,
it's just performance marketing channel testing. And there's probably like
like eighty channels that eighty campaigns that we can run.
There's three or four that I know are going to
work and just like from historics, and then there's going

(14:44):
to be some Cardono specific places that we need to
go to. So you know, we're looking in Japan for
particular activation campaigns as well because there's a large, large community.
So that'll be new for us. We haven't done a
Japan specific campaign for but so we'll have to learn
and we'll make some mistakes, but we'll iterate to the

(15:04):
to the rate conclusion on you know, how to spend efficiently.

Speaker 1 (15:09):
Well, I think some regulations are changing there at the moment,
so it might be more attractive to pull in some
of those Japanese investors and EIGHTA holders, So fingers crossed,
it might be really good, I should play.

Speaker 3 (15:22):
I was there for a month last year and got
really deep into the crypto laws and yeah, they're they're
pretty harsh, like something like fifty percent tax rate right
now on crypto. And then there was like very very
there was like one bank in the entire country that
you could interact with blockchain and cryptocurrency, so they kind
of have like a lockdown on it.

Speaker 2 (15:42):
So that'll be an interesting one.

Speaker 1 (15:43):
Good luck with it. Good luck with it. The Japanese
yen is fluctuating a lot. I've had the spending a
lot of US turret treasuries to prop it up, so
it's which is I don't know where it's going to.

Speaker 3 (15:55):
Go, which is really really good for some of the
stuff that we're building in DeFi, So if interesting in
a best case scenario, Volatility is our front right. Volatility
is the is the mechanism that pumps and makes APR
within DeFi. The higher the APR, the less we have
to spend, so that like getting in like a Japanese

(16:16):
end stable coin on the coundarda ecosystem should be one
of the integrations that we look for for.

Speaker 2 (16:22):
Especially for on ramps and off ramps.

Speaker 3 (16:24):
Just having like having like four x no counterparty between
the usdc X and the Japanese use en token organically
will will generate a lot of yield on chain.

Speaker 4 (16:36):
And with things like CDPs or money markets doing carry
trades off of Veta directly. I mean, the Japanese are
very familiar with carry trades, with the you know, the
en carry trade, so might be able to shape it
and wigs they're more comfortable and familiar.

Speaker 1 (16:48):
Wow, guys, all right, this is going to be very interesting.
So I'm really excited about you guys coming on board
and you know, playing around with a lot of this stuff.
The community is going to ask about KPI's transparency reporting
and all that. That's that's all given when it's especially
coming from treasury funds. What are you guys doing in
terms of reporting, Well, what KPIs are you going to sets?

(17:10):
Like what type of transparency will we see or we
just give our aid away and not get any of
that type of reporting back.

Speaker 4 (17:19):
We are a third party, you know, at least previously unbiased,
a party coming in here to help Steward and already promising,
you know, really cool ecosystem. We are not coming in
as a hostile takeover. We're not coming in saying you
guys don't know what you're doing and we're the only
ones who do. We were you know, headhunted, tapped on
the shoulder. If you will buy a lot of the
Cardino teams, that that shows us. We know our position.

(17:40):
We've worked with doos a ton. We're not asking to
store the money. We're not asking to hold the funds. Instead,
we're working to set up an operating group of you know,
pentad and community members who are trusted by the community
to oversee everything, to hold the money, to give us
distributions and disbursements according to the prop you know, after
three four months, if you guys aren't happy with the
direction things are going, you can pull back like seventy

(18:01):
five percent or more of it of whatever spence haven't
been done yet. So yeah, transparencies are front. We wouldn't
have gotten this far in DeFi in crypto working with
a lot of the biggest names if we were stealing
if we were, you know, acting in some way, shape
or form shady. So we you know, we run barely
run our businesses on chain. We're used to that. I mean,

(18:22):
I'm a privacy MAXI. I love the idea of Midnight
and offering that to applications, but ourselves, Yeah, we'll do
quarterly reports. I mean the milestones we have in place
in the prop right now are like to move on
from one phase to the other. We need some kind
of like public facing document and like proof of work,
proof of direction for not just the operating group, but
for the entire community. We're down to come on your
show as many times as you want and answer tough

(18:44):
questions and take tough criticism and feedback, because that's also
what begets a lot of the best ideas. And the
goal from this isn't to have adequate DeFi. It's to
have you know, a viable, high enough flowing DeFi to
beget the future applications that are going to show off
the usp of UTXO of Midnight, of you know, more
of the you know what everyone's wanted from Cardono that

(19:05):
you knew it was only possible in Cardono that we
think is being held back from the lack of addressable
market that we can fix. So yeah, we're transparency as
our friends. You know, I liked working in environments where
the our cameras everywhere because that protects your job instead
of you know, like, oh, what's that guy doing. It's
like no, no, no, if somebody attacks me, you can go
to the camera and prove that I am doing my job.
That's how I feel about operating on chain.

Speaker 3 (19:26):
I think the first conversation we had was can you
bring a billion dollars a TV out to Cardono?

Speaker 2 (19:32):
And it was like it was like.

Speaker 3 (19:34):
Gulp, Okay, So we were like, let's let's roll it back
and let's get you know, the good baseline and a
good foundation. And I think over you know, the trajectory
that we planned, it goes like over a course of
two years. I think that's a tanable, right, but it's
not We're not going to put it to year plan
in and ask for you know, enough funds to support it.

Speaker 2 (19:54):
It's you know, try before you buy.

Speaker 3 (19:57):
This is a this is this is a large investment,
but it's also something that's kind of evergreen. And so
if we hit our KPIs when we hit our KPIs
the first KPI is like, great, what do you think
you guys can do in six to nine months? And
we have twelve months to do it a little bit
of wiggle room. But then the number that we came
up with that we were confident with was two hundred

(20:18):
million tvl as as the target in a six to
nine month and then we have like three months of
wiggle room, and so within that then there would be
an even greater plan to double down and triple down.
You know, some of the USP in Cardona is very unique,
but there's also like these games within the crypto ecosystem
that are very popular. So right now the most of

(20:40):
the retail activity is within prediction markets and perpetuals, right,
but that's that's the narrative to sure today. Right there's
there's inklings of like AI compute on chain that that
are starting to like become part of the narrative, like
within this AIA revolution. So there's there's there's basic things,
there's things that we can look at from a what

(21:01):
is in vogue right now, and then there's things that
will happen within the next twelve months that we'll be
able to capture the narrative.

Speaker 1 (21:08):
Really interesting, guys. I'm so excited to hear all these
things that you guys are telling me and that chasing
that narrative thing. I've got like a five part series
around AI and Crypto coming up next week, so I'm
pretty excited about that as well. So definitely a lot
of good stuff happening there. First, guys, We've covered quite

(21:29):
a lot here and I'm sure our listeners will have
a lot of questions, so they'll be leaving comments down below.
Can I feed them to you guys for a follow
up interview? Yep, great, fantastic, So everyone remember leave questions
down below. Drill these guys. We want answers for everything
that we ask here. But in regards to just wrapping

(21:49):
up this interview, what else do we need to know?
From this point? I'll point people to the Kadano Prime proposal,
But what are some highlights what's really important that the
listener here need to take away with them tonight?

Speaker 4 (22:02):
I'm going to say that I've seen some you know,
comments and feedback about like, hey, we should just take
all of this money and use it to incentivize TVL,
the kind of the reason behind the price, and in
this ask is we're saying that with the small percentage
of this proposal that goes towards direct incentives, we should
end up getting the same TVL increase as if you
guys just took this entire amount and yeaded it into

(22:23):
distribution partners. And the number behind that, the advanced SAD
I'll say, is like, kind of the market average for
TVL increase per annualized incentive spend is fourteen to one,
and historically we've been around forty to forty two to one,
So we get about three x returns on TVL and
twelve x returns on like how sticky it is compared
to industry average. And so the goal of this, you know,

(22:46):
first two phases is really doing like a one time spend,
a one time build towards getting things so that you
don't have to max spend for every TVL you bring
in and keep spending really hard or else it doesn't
get sticky and that's in the infrastructure so that it
ends up significantly cheaper. And we should be able to
prove that during this proposal, and especially once we get

(23:07):
to the INCENTIVI the incentive spent, so anyone can say
it takes money to make money. I hate that phrase
because people, you know, say that right before they just
waste a whole bunch of money. We're trying to show
that with metrics that like, literally, you do this, spend
and now the four million that you spend towards incentives
or so is going to be worth twelve million in
incentive spends. But then that's going to continue for any

(23:29):
incentives you do in the future, any activations you do
in future applications. So we want to really really show
you guys, like, no, you are spending money in a
way that saves you a ton of money.

Speaker 1 (23:37):
That's really cool. Okay, guys, thank you so much for
joining me on this podcast and taking us through the proposal,
what you guys have been doing, your history, your reputation,
and what you're going to deliver for the Dona ecosystem.
I'm looking forward to a follow up interview to see
how things are progressing and to answer community questions, et cetera.

(24:00):
I said, thank you so much for joining me on
the podcast, joining us up beater pleasure awesome. And for
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in the next video.