Unlocking Capital Efficiency in DeFi with Project 0 feat. founder MacBrennan Peet

GM, GM. Welcome to what's going to be another fantastic episode of DevNTell. So if you didn't know, DevNTell is a 30-minute podcast held every week allowing founders, hackers, and anyone in between an opportunity to come on the show and showcase what they've built. And today, I'm ecstatic to welcome MacBrennan P, who is the founder of Project 0. So if you didn't know, Project 0 is your DeFi-native prime broker, allowing you to borrow against your entire portfolio, regardless of what venues you use. So if you stick around for today's episode, you'll get to meet MacBrennan, learn about Project 0, and how you can get started with the platform today. All right, let's get into it.

GM, GM. Welcome to the show, MacBrennan. I'm ecstatic to have you on, man. My pleasure, my pleasure. And yeah, I guess before we get into everything Project 0, would you just like to give a brief introduction about yourself?

Yep, my name is MacBrennan Peet. I've been in tech and finance my whole professional career, which is basically like close to 10 years now. I enjoy, yeah, a bunch about, I've worked in HealthTech, in like, in HFT, in, yeah, a bunch of DeFi stuff, and I've been in traditional finance. And so I think like the culmination of like tech and finance leads you to crypto, and so that's why I think I've ended up here.

Yeah, and you have quite the tenure as a founder as well. I saw the list on your personal website. That's quite the list of things you've been into the last decade or so. Just curious, how did you get into technology? What kind of gravitated you to go there?

I think I was just very curious as a kid, you know. It was just, yeah, just messing around on the internet. Like I remember watching, well I remember watching Bitcoin when it was like 200 bucks, or it just hit 200 dollars. I thought that was crazy. I would get a daily newsletter on Bitcoin and just like what's going on. I would be on a bunch of hacking forums, like I was that type of kid. And then yeah, I tried like, I started trading stocks like before it was even legal, and yeah, you know, just, that was what I deeply enjoyed doing, so just following curiosity, yeah.

This is the way, this is the way. I mean yeah, curiosity leads you most of the time to extraordinary places, especially in tech. And I mean obviously like we mentioned before, you have quite the list of companies that you started or helped co-found that got acquired, got aqua-hired in some cases. Just curious for the founders and aspiring founders watching today, what are some key takeaways and lessons you've learned over the years that you'd like to share with the audience?

Yeah, I would say also be curious and follow your curiosities, because if you're working on something for long hours that you're not intellectually curious about, it's going to be a massive uphill battle. So it is fun when you actually enjoy learning about the things that you're, you know, you're hacking on. And so I would certainly recommend that. And then yeah, try to find like the most impressive people that you can find in your specific domains. And especially if you're early in your career, I would advocate like traveling to be in proximity to that. You know, there's always hotspots for certain things. So proximity is good because you know, you get to go to in-person stuff and I remember I did that when I was building like one of my, my first venture-scale company, it was like during COVID and I like flew out to LA on a whim. And at that time a bunch of people were in LA that were very relevant, and that was a big turning point for me. So I would also advocate that to people, like get out, go meet people, and make sure you really enjoy what you're doing and you don't just like see a gap in the market that you kind of like don't enjoy at all, yeah.

Yeah, I mean it's very hard to compete with someone who's having fun at what they do. So yeah, definitely, definitely you want to go mingle and find the right people to ensure like you have the proper springboard for success, 100 percent. And yeah, I guess during your time as a founder and you're going through all these motions, eventually you end up co-founding Project 0. You want to give us an elevator pitch of what Project 0 is?

Yep, so DeFi has hit this inflection point where there's a bunch of venues now that aren't going anywhere and sort of are very established in the functionality they provide. You know, there's lend-borrow venues that are pretty solidified, there's perks venues that are pretty solidified, interest rate derivatives, spot trading, etc. And for anyone who uses DeFi, it's extremely multi-faceted. Like when you go and you use these products, you're using two, three, five, ten, you're never just using one. Because like one can't fulfill everything that you need, and that's just finance. Like if you're a finance power user, you're also just not using one single primitive, you're using a host of things a lot of the times. And so the problem arises for the any like real DeFi user is that the minute you have your capital on more than one venue, so maybe you have it now on a borrow-lend in a perk venue, you run into capital fragmentation. So now like let's say you have a 100 dollar portfolio, you have 50 bucks on the lend venue, 50 bucks on the perk venue. Now if you need to borrow, you gotta go like choose which venue you want it from, you gotta make sure that venue has borrowing ability in the first place, especially against like the collateral that you're using. And then in this in the example I just provided, maybe you can borrow like 35 bucks from one venue. But you have like a 100 dollar portfolio, so you just like borrowed essentially like 35 percent of your collateral, like that was really inefficient.

So what Project 0 does is it looks at your balance across the venues you're using and gives you unified borrow based on that. And in doing so it can kind of give you much better a few things. It can give you better risk, better rates, it can give you better risk in the sense that let's say you're long on venue A and short on venue B and it's the same asset for example and you're actually like delta neutral. Venue A will view your position as riskier, venue B will view your position as riskier, and neither venue knows you have like an offsetting position on the other venue. And so they're both going to restrict your borrowing ability. But when you view these positions together, it's actually you know when the market goes up or down your net position kind of stays the same. So you can actually borrow more, for example, through Project 0. So that's like a case where you could get both better risk and better rates. You can get better UX because now you have like essentially one single place you can plug in on the app layer, plug in on like the development layer to manage your portfolio, and you get better capital efficiency. So now like instead of getting like 35 percent on your collateral, you can get like 80 percent, you know 90 percent. So this solves like a bunch of different things for people who are using more than one venue, which happens to be like the majority of DeFi users.

Interesting, interesting. And yeah we'll double click into the details a little bit as we go. But just curious, did you run into a problem like in your exploratory days of DeFi where you're like oh damn, I actually wanted to like invest in something but I had collateral locked in on like this this venue and then I couldn't actually use it where I wanted to? Like yeah, what was the triggering moment where you're like well, I need to solve this?

Yeah, a while ago, worked on like a perp like funding radar product which was which was multi-venue. And so you run into capital problems there where we were just funding rates essentially or funding yeah rates. So like you know if you're long here and short here, maybe the funding rates on the product are in a way where you can be like delta neutral but still be capturing you know really incredible yield on the products, but you run into capital fragmentation when you do that. So that was multi-venue and there was like these huge divergences across venues in terms of funding rates. So that was one example. I've now become like more I like I mean core to the product and sort of the progression of the product, I'm a big fan of interest rates and interest rate derivatives and so there's also this capital fragmentation problem there because perps have gotten much more sophisticated, algorithmic, like there's still a lot of like point and click stuff you can do with funding rates which is kind of cool.

But yeah, I mean like for anyone who is performing any sort of multi-venue rate trade, carry trade, or basis trade, you have capital fragmentation problems. And so this would essentially enable you to do that multi-venue and then also like lever up on that position and recapture that delta you know over and over again. In doing so like bringing better efficiency to the markets.

Gotcha, gotcha. Yeah I mean this sounds like very interesting and I'm curious to learn how it kind of works under the hood. If you can share any details, is it mostly just like all smart contract based or like how does it work?

Yeah. Yeah so that's the other thing that's that's super cool is this is permissionless, open-source program. So we allow you to deposit into any like third-party program for example. And we do this in a very lightweight approach where we just essentially add self-custodial account in between you and like let's say you're depositing into Kamino, for example. Kamino has like a 10 percent yield that you want to capture, and then on P0 for example you can borrow an asset with like maybe it's the same asset or maybe it has a similar market beta for 5 percent. So now you have a 5 percent delta that you could theoretically like lever up, right? So you know, I deposit into Kamino through this self-custodial account. The reason we insert a self-custodial account in between, and that's self-custodial to you by the way, but the reason we insert this account in between is so that if your position becomes unhealthy we need our liquidators to be able to liquidate your position.

But deposit into Kamino, I'm earning 10 percent yield, borrow on P0 against that Kamino position at a 5 percent yield. So in order to do that, P0 has its own credit pool. This credit pool has you know like 250 million supply to it, and about 100 million borrowed. And so the borrow now comes out of this P0 credit pool. Very similar to like how like Aave mechanics work. So this borrow comes out and then if you want to if that ends up pushing up the rate, lenders can just lend directly into the P0 pool. And then it's just all you know along an interest rate curve based on utilization. And so you can borrow against that Kamino deposit, redeposit into Kamino, borrow you know and just loop that up. So that's how it kind of works in a nutshell. Right now we just have spot products. We'll add very soon like perp products and interest rate products because that enables like a better ability to like capture this basis.

So for example, like let's say you short a perp on Drift, SOL perp on Drift and now lend SOL spot on Kamino. So now potentially you're capturing like the funding rate in you know up markets on Drift as well as the lend rate on Kamino and then you can loop that combined position. Stuff like that I think is super cool, yeah.

Yeah, that's DeFi gymnastics and it sounds yeah, sounds very innovative and yeah, it definitely is solving a real problem. I mean DeFi is great, but then once you really start getting like past just that first like I created a wallet and then I I pushed some money somewhere to earn some yield, you're like oh this is actually a little bit more complicated than than I bargained for, right? So it's great to hear you guys are focusing on really pushing the boundaries here and making DeFi better for all. And you mentioned it I guess slightly when using the word program, I think Project 0 is exclusively on Solana if I'm not mistaken, correct?

As of right now, yep. Yeah, just curious like what was your driving decision of starting on Solana? Like what drove you to start things there? Yeah, so what Project 0 is in a nutshell is essentially like this programmatic prime broker. And so the hardest thing about building a prime broker is building the risk engine. And one of the ways you can de-risk the risk engine or just make the risk engine easier to to model and execute on is building it on a foundation that's fast, predictable with like low fees essentially.

So if you're collateralizing like fast moving products, like maybe you're collateralizing derivatives, you need to be able to do complex math very fast. You need to be able to liquidate very fast. You need to be able to know that you know your fee is going to be pretty stable and set so that you know because if that fee jumps that like eats into the profitability which eats into like the capital efficiency of like and and liquidating that position becomes harder. And so a really good way to de-risk a lot of this is building on a fast, cheap, efficient engine. And Solana's like really great at that. So our risk and liquidity engine is native to Solana. Now like we can collateralize any sort of we can collateralize anything.

So I would love to collateralize like Aave positions, I'd love to collateralize Hyperliquid positions, and that's completely possible. And it's actually like not a big jump from what we're doing now. But even when that happens, for the time being like our risk and liquidity engine is going to stay on Solana, yeah.

Awesome, yeah, Solana is certainly driving the DeFi action, at least like this this past year from from what I noticed. So yeah, I think it's only going to get better and more and more folks are going to start getting or diving in into that side of the world, exploring exploring kind of beyond the EVM ecosystem. But yeah, I guess in that in that same vein, are there any chains or anything you can kind of give some alpha on that might be supported by Project 0 in 2025 or beyond?

Yeah, no, I I would love to there's a few things that I'm like interested in. Aave and Hyperliquid are like top two essentially. So right now there's a ton of deposits in Aave earning like safe awesome yield and Aave is a great product. But if a trading opportunity comes up on Solana and they want to trade something, right now what they would have to do is like withdraw their position or borrow their like against their position and bridge it over and then like trade it, which is just a total nightmare. And so most people don't, right? Like it's just like all right, I guess I'm missing this. Or they'll break up their portfolio, right? They'll be like okay, I'll keep you know 100 dollars in Aave and then I'll move 100 dollars over to Solana that I don't want that won't be earning yield and that's also like a terrible trade-off.

So what we would love to do is yeah, is integrate Aave so that you could have if you if you just want to be in Aave and then strategically have capital for trading opportunities on Solana, you can have 100 percent of your deposits in Aave and then you know new token comes up on Solana and in one click you could just borrow against that on Solana. So there's no bridging involved, there's just one click, you got capital on Solana, you're ready to go after something. Because like Solana's also just where a lot of like trading opportunities originate even if there's a ton of passive capital on Aave and EVM, right? So this solves that. And then when you're done you can just repay your borrow and you're done. Again there's like no bridging, there's two clicks essentially. So yeah, I would love to have that in a good spot in next year.

Same goes for for Hyperliquid. Now Hyperliquid's different because what the things that enable this cross-chain stuff to happen is like a cross-chain messaging protocol, so it would involve like bridging, like us us working with bridges behind the scenes. You know, this could be completely abstracted away from the user, but I still need to you know from our program needs to be able to effectively collateralize your position permissionlessly on Aave and so it needs to constantly understand the value of that position if that position should be liquidated etc. So yeah, I bring that up because last I looked with Hyperliquid it's not super mature with like bridging between Solana and Hyperliquid. Now bridging between Solana and mainnet EVM is you know there's lots of options and we would build redundancy on top of that with probably our own systems. But that would just be the missing step. And then everything else would be pretty easy.

The other thing we'd want to have is native liquidators to the chain that we're adding. So see yeah if if like we're adding Aave for example and you know you have 100 bucks on Aave and you borrow 90 bucks against that on P0 and then your collateral on Aave goes down and now you're approaching like 90 dollars and you need to be liquidated, we'd want to have liquidators like sitting ready to go on EVM to take over that position. And and liquidating on P0 is permissionless, it's open to anyone, so anyone can do this as well, any profit-motivated actor. But we also like just to make sure we have our own internal liquidators for redundancy measure. So those would be the two things that would be different if we were adding Aave, which is really not that difficult, yeah.

Promising. And you mentioned that the project is open source or maybe some parts of it are open source. Are there any opportunities for developers watching today to contribute? Maybe they are like oh, I want Hyperliquid, I'll just go build it for you.

Yeah, no, I would love that. We actually just hired a big contributor to P0. So yeah, everything's open source. Even like our liquidators are open source. We're in the process of some like just moving some code around essentially and some of the newer code is it's just it's not as easy to find right now, but I'm happy to point people to where our code is. Like we'll have an up and functioning P0 GitHub relatively soon. Right now a lot of the code work is done under the Margin Labs GitHub. But but yeah, yeah, everything's open source and I'd love to work with more contributors. Yeah, we just hired one of our biggest contributors.

Awesome, awesome, that's great to hear. Yeah, I mean you never know if you keep contributing to one of your favorite projects, like you know that company is is that is watching, right? So if you end up doing a great job, it's very likely you'll get hired. So it sounds like that's what happened here. And yeah, sticking on the developer theme, are there any SDKs or APIs either available today or in the plans for people to be able to programmatically interact with P0?

Yeah, we have SDK and an API, and we've put a lot of like resources now into refining our API. We just have more and more asks increasingly for stuff on the API side. So we've both, yeah, and more tooling is coming on the API side, specifically like more tooling around like a bunch of important data stuff involving the program. But yeah, we have both, yeah. Excellent. Is there a public documentation around it, or?

There is. We're also like right now improving our docs. Like right now we've been referring people to like an MD file for a lot of recent stuff, so we'll fix that. But but yeah, if there's anyone like even trying to get in touch on or just missing it, you know like we have it in certain spots but it's hard to find, I'm happy to point you in the right directions and we will also just make it clearer on our side so that people don't need to jump through any hoops, yeah.

Beauty, beauty. Great to hear. And yeah just curious, I'm sure this type of thing would be ripe for like an AI agent or somebody somewhere must be thinking oh like is there an MCP server somewhere I can hit P0 with to get like autonomous agent going? It's like, have you kind of seen that hype come into the P0 space or have you been thinking about AI agents at all interacting with the platform?

Yeah, I actually think about how an AI would interface with P0 quite a lot. I haven't seen a lot of that happen from the outside yet, but there's a lot of things that I've like some some ideas on. One of the areas I think is a good example of this where AI would be cool is we just launched a new like strategies page. So one of the cool things is P0 surfaces interest rate trades, carry trades, not yet basis trades because we don't have derivative venues integrated yet but soon basis trades that literally are not possible anywhere else because you can collateralize one venue and borrow against that collateral on another venue. Which to this point has not been possible in DeFi.

So this opens up like really fast fascinating trade opportunities and we turn this into a strategies page on P0 where we surface this and then you know if you use leverage, these these yields widen. And I think there would be some cool AI tooling here where you know you come to the strategies page and you have certain opinions or preferences on the market itself and that can be used as like a filter for how you view strategies. Like maybe you think Bitcoin is going to go straight up for like the next month or something. You can find strategies that bake in that preference and instead of showing you like oh you know there's a 30 percent yield carry trade here you can make with like 5x leverage like maybe that yield is far greater if you're also like if you think Bitcoin price is going to appreciate dramatically.

So that would be pretty cool, but but yeah, that's how that's like V1 of how I think like AI could be used to improve essentially the user experience and people like opinionated people coming to use P0.

Exactly, yeah, yeah. I mean I mean this can be its own podcast in itself really. But trading is all psychology and it's like everyone is kind of betting against what everybody else is kind of going to do. So yeah, it's yeah, it's another rabbit hole in itself. But as we're coming to time here, in terms of Project 0 and how people can keep up to date with all that's going on there, what's the best way for people to do that?

Yeah, we're pretty active on Twitter, so it's just project0, the number zero not ZERO zero, is like our handle. I also just mainly tweet about Project 0, so my handle's MacBrennan, my first name, underscore CC. Those are two good spots. We have a blog which updates along like bigger announcements, so that's blog.0.xyz. Our app and website is just zero, the number zero, .xyz again not ZERO just single number, yeah those are good spots, yeah.

Awesome, and we will link all that for everybody watching and listening today. And with that, MacBrennan thank you so much for taking the time out of your day to come chat with us today. It was really cool to learn about Project 0 and yeah I'm I'm keen to see it continue to evolve here over the next year to come. Thanks man, appreciate appreciate you having me on. My pleasure, my pleasure anytime. And with that, I just want to wish everybody a very happy Friday, happy weekend wherever you may be and we will catch you here next week for another episode of DevNTell. Until then, have a good one folks. Cheers.