Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto ‘mainstream.’ Exchange lightly edited.
This week, senior reporter Stacy Elliott spoke to Luis Schliesske and David Liebowitz, the co-founder and growth manager at Gelato Network. The web3 project, which launched in 2018, just closed an $11 million Series A round last week. The bots they build allow for automation in a way that most smart contracts don’t support. One of their most popular bots allows users to place limit orders on Uniswap, guaranteeing buy and sell transactions only happen at a specified price or better.
After getting what they consider a head start in the automation space by launching during the bear market that followed the 2017 ICO boom, the Gelato Network team has seen new competitors enter the space. Here they talk competitors, their most popular bots and what’s next.
Before we talk about some of the bots Gelato has built, let’s get an explainer out of the way. What is Gelato and why does web3 need it?
Liebowitz: I would compare us to AWS Lambda for smart contracts – we’re visual and what I like to describe as general-purpose automation in the same way that Ethereum is general-purpose computation.
So with the theory of [Ethereum co-founder Vitalik Buterin] uses, he basically says any computer program that can be created will be on an Ethereum virtual machine. So that gives, like, infinite design possibilities for Gelato. Any function within those computer programs that can be automated will be.
We consider that a huge, really wide mandate on what use cases to build on top of Gelato in the same sense that any application can be built on top of Ethereum. Like you see DeFi, DAOs, you see different tools. With Gelato, you can have different use cases built on top of the network and basically have them plug into a decentralized network of bots.
Gelato Network tackles automation in a few different ways. Walk me through some examples.
Liebowitz: We got a grant from Aave to do collateral protection on Aave positions. We also work with Instadapp to refinance maker loans. So basically, with those, if your health factor gets too low, then with the Aave position it basically sells their collateral to pay off the debt so you don’t get liquidated and refinances your loan into Aave or Compound or wherever you can get the best rate.
Another one – this is probably my favorite one – it’s a Uniswap V3 manager called G-UNI. It was built for market makers to use, not really average users. So, you know how put positions are in ticks that are NFTs? So we kind of took the same mindset as Uniswap V3, and how they did it, but built a wrapper that auto compounds that piece. It wraps the NFT in an ERC-20 token so it’s compatible with other protocols. It basically turns Uniswap V3 into V2 again.
One of our final tools is a general-purpose automation tool for the general-purpose automation layer. We call this PokeMe. It’s simple, like an If This, Then That service. We’ve seen people use it for things like auto-compounding, auto-harvesting. All different types of yield aggregators use it for that.
How do these connections happen between Gelato and the protocols for which you’re building automation bots?
Liebowitz: We’re an unbiased, general framework for automation. And so there have been times where we make a proof of concept to show protocols what we’re capable of.
An example of that is Sorbet Finance. That’s basically our own platform for limit orders. So we built that and were able to integrate it with QuickSwap, which is the biggest [decentralized exchange] on Polygon, and SpookySwap and SpiritSwap, which are some of the highest TVL [automated market makers] on Fantom.
Where’s your competition coming from? Are smart contracts getting smarter or are other companies directly competing with you?
Luis Schliesske, Gelato Network
Schliesske: Definitely the latter. We were alone with this idea for quite some time. I think part of the reason is that we started in the bear market, when not too many people were paying attention. We also went a bit conservative. We didn’t, you know, launch a pump and dump token or something like that.
Slowly, very slowly, we started getting some traction. And then the dynamics changed a bit. For example, Chainlink now tries to do the same thing we do. I think, to be honest, they just saw an opportunity here as well. After they got to know us and work with us, they just probably saw it as an adjacent market to theirs and also want to expand into it.
Liebowitz: I would kind of compare Chainlink getting into the automation space the same way that Instagram decided to do Reels after TikTok. TikTok really carved their own lane with their whole video app, the whole structure of it, their algorithm. And then Instagram saw an opportunity and even though they weren’t native to reels they came in with their own version of Reels and basically did the same thing.
With Gelatto, we carved out own lane with deep automation protocol and have been here for years. And it’s only recently that Chainlink and others announced expansions to offer more automation.
So what’s next for Gelato?
Liebowitz: Soon we’re coming out with a UI for people just to deploy their own unique rules. So let’s say you’re a strategist and you want to basically run your own unique strategy and you want other people to be able to get involved. We’re building a UI where you can make your own unique strategy and act as the quote-unquote manager of it. So that’s something we have coming out soon.
Welcome to The Ask, where each week Crypto Investor interviews essential voices doing the work to make crypto ‘mainstream.’ Exchange lightly edited.
This week, senior reporter Stacy Elliott spoke to Luis Schliesske and David Liebowitz, the co-founder and growth manager at Gelato Network. The web3 project, which launched in 2018, just closed an $11 million Series A round last week. The bots they build allow for automation in a way that most smart contracts don’t support. One of their most popular bots allows users to place limit orders on Uniswap, guaranteeing buy and sell transactions only happen at a specified price or better.
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