For the 13th part of Unhashed, I reached out to Ocean Liao, the CEO of Moma Finance - a project working to produce, manage, accelerate and aggregate the lending markets. During my discussion with Ocean, he shed light on a multitude of topics going from his journey into crypto to the importance of risk control in lending platforms and how to implement it. Q1: Welcome to Unhashed. What’s your story behind joining the crypto space? Answer: As early as 2013, through a circle of very close friends, I began to understand the existence of Bitcoin and its unique mixture of mathematics, economics, sociality, and its sophisticated yet simple business model captivated me instantly. Over the years, I learned about Litecoin, Dogecoin, and many other first-generation digital assets and blockchains. That’s when I began to feel that if I had to build something in this space or else I might end up in huge regret. So, a few friends and I developed an ASIC mining chip for Litecoin. Later, I continued to build a mining machine and participated in the earliest hydropower mining in Chengdu. I am considered an industry veteran. In 2017, we started to do some community and R&D work around public chains. The largest community on EOS “Gravity” is our product during that period. During the bear market that began in 2019, we launched our community App “Lichang”, and acquired over 1 million registered users. In 2020, DeFi began to rise, and we discovered the direction we really wanted to go in the future. It also happened to be something that could fully utilize our existing resources. In October 2020, we initiated “Moma Protocol”. Our goal is to realize a DeFi product that can provide a solid, infrastructure-level protocol that would support the growth of DeFi. So far, the journey has been rewarding and we have received support and participation from like-minds from all over the world. Q2: We all have heard about flash loans, zero-collateral loans, and so on, in the DeFi and crypto market. But, what’s the concept behind overcollateralized loan structure and why use it? Please explain to us how this structure works and also how it is more beneficial than a zero-collateral loan. Answer: I think that over-collateralized loans and flash loans, such as mortgage-free lending methods, have their own application scenarios and their own advantages. They will jointly provide more complete loan liquidity solutions to users in need in the future. The characteristics of smart contracts are destined to be a simple but extremely effective loan liquidity solution without human intervention. The over-collateralization and proper liquidation mechanism can ensure the security of the principal of the system and the best possible prevention of bad debts, under the circumstances with no human intervention. Flash loans also cleverly utilize the characteristics of smart contracts to complete uncollateralized loans within one single transaction, which is very innovative but also has its limitations in some use cases. It can be said that in most cases, over-collateralized loans can provide the right solutions, but flash loans are more suitable for ultra-short-term arbitrage scenarios. Again, take what you need. Q3: How does basing the security of a lending protocol around whistleblowers pan out? How is this a sustainable practice in a decentralized system? Answer: Risk control is the core of lending platforms. Trying to design a decentralized solution that could be an effective supplement to the existing centralized risk control system is a must for DeFI. The "Whistleblower" mechanism, which we have implemented on our platform, is an attempt at to allow everyone to participate without permission. "Permission-less" is one of the core design philosophies of DeFi; whether it is the production, lending, or risk control aspect, DeFi projects try to design systems and mechanisms based on this principle. How we implement the concept of Whistleblowers is that we allow everyone on our platform to become a whistleblower by staking our native tokens, MOMAT. Different platforms may implement different mechanisms, though. Now the next question is why would users want to participate? Well, exactly why they participate in so many other in DeFi: incentives. They can earn incentives by price marking and risk reminder issuance tasks. With incentives to earn, capable users can participate in the usability of the entire system. This will not only improve the risk control capability of the system but also make the entire system more decentralized, thus increasing the user's participation and engagement level. Q4: For risk management, what do you think is the best way to evaluate the governance and smart contract risk of a crypto asset? Also, do you think will a rating score to assess the associate risk react to the asset’s volatility in the external market? Answer: When evaluating the governance risk of a digital asset, it is important to first focus on the degree of centralization of its governance and the number of token holders. If the token is held and governed by a single institution, the score on this dimension will be lower. The evaluation of the risk of smart contracts can be mainly based on the length of time the smart contract exists and the number of transactions generated in the smart contract. The longer the secure subsistence time and the greater the number of transactions, there’s certainly a lower risk associate with the smart contract. Although there are always risks associated with any online, I think that these two metrics are a smart way to assess the credibility of a smart contract For the management of the risk rating database, we can combine this with a "whistleblower mechanism". Whistleblowers can help detect and mark the impact of the volatility risks of digital assets, so the risk level of the assets can be accurately and sensitively reflected. Q6: Lastly, Moma Finance recently partnered with NFT Stars. Please illustrate how the advent and growth of NFTs can improve DeFi lending. On the other hand, how can long-tail assets create liquidity for NFTs? Answer: The development of NFT will not only lead to the expansion of digital asset application scenarios but also greatly increase the types and composability among the different types of digital assets. In fact, how to provide lending liquidity to NFTs is also a very interesting challenge because it involves very different pricing mechanisms and clearing processes, which is also one of the functions and goals that we will implement in the future. The development of NFT technologies and concepts will also bring many innovations to DeFi lending platforms. For example, we can use NFTs to record user credit points to achieve credit loans with less collateral. Disclaimer: The sole purpose of Unhashed is to unhash (decode) information about projects innovating using blockchain and cryptocurrencies and share it with the community. The does not have any vested interest in any of the projects covered herein. Not that this article shares any, but still, taking investment advice from strangers on the internet is not a wise thing to do. writer

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