DeFi By Design EP#12: The Institutional Wave with Qiao Wang

Transcript

welcome to d5 by design where we talk all things blockchain and cryptocurrency while striving to educate empower and enrich what's up guys real quick break here to tell you about the d5 by design podcast sponsor ave ave is a non-custodial trustless decentralized money market protocol which is leading the d5 charge we know of it as the workhorse of d5 with their a tokens allowing you to earn interest on about 10 or 20 d5 tokens by using app.auve.com again that's app.aubie.com or just avee.com and then you can get redirected to the protocol basically what you can do on ave is you can earn interest

by putting your assets into the protocol as a supplier right as a lender and then you can also borrow against your assets using them as collateral to long or short tokens earning interest when you do the borrowing as well so you can actually earn interest by supplying and borrowing assets on ave so check out ave.com give it a try and see what it's all about we use it all the time then yeah that is our d5 by design podcast sponsor ave thank you very much guys and let's get right back to it [Music] what's going on guys welcome to d5 by design episode 11. we are here with a special guest chow wang chow has been a twitter presence tweeting away

his twitter following has definitely been growing over the past few months a lot of takes on d5 and markets and all sorts of stuff and we've been in a really interesting market right now rob it seems like over the last few weeks there's just been all sorts of bad news cute coin hack uh you got the usa cracking down on bitmex all sorts of stuff going on um how you feeling today rob yeah man i'm feeling good i'm feeling hype for the future you know chow said something really interesting before uh you know we'll get to more conversation in a second but it sounds like everyone's fearful everyone's kind of worried you know regulators are clear in house they're going after mcafee they're going after bitmex there's blood in the streets but from what we know that's the time to buy right so

we won't get into too much speculation on prices today but i'm still here we're still around i'm excited for the future to say the least so i'm excited to have chow on today's podcast and i followed him on twitter for a little while and now we're talking face-to-face so i'm excited to hear his thoughts on the markets and everything d5 and crypto how you doing today ciao good how are you guys good good good good good yeah man yeah staying alive and staying alive staying alive [Laughter] back at the white house with no mask on here we are 20 20 here we go [Laughter] oh yeah yeah um hey so a little brief intro from what i know

uh and i'm sure what the audience knows you've been trading for a while in and out of different markets crypto and all that stuff talk a bit about you know your background if you will um and kind of what you're up to nowadays yeah i've been involved with the crypto community for many years back then i was uh professionally i was a quant trader so traded you know us equities cash etfs derivatives uh futures i did that for uh almost 10 years but you know crypto has always been a important hobby of mine but early 2018 was when i you know started building full-time in this space in the crypto space um was part of the founding team i'm sorry which is a crypto data and research company and uh you know grew the company to about 20 people i spent a couple

years there but earlier this year i transitioned out and since then i've been pretty much managing my own money and also leading the define lines i don't know if you guys have heard of the d5 lens but it's basically like an alliance of various d5 startups vcs legal experts and especially trading firms right so they come together and provide mentorship liquidity knowledge network to uh d5 startups so i've been working on that for half a year now so that's a little quick background by myself and still you don't have a paid group yet what's going on [Laughter] when paid group man i mean honest i mean the saying goes if you can make money trading why would you uh

why would you do a pay group right i mean like i'm i'm just happy to provide my opinion and thoughts uh for free uh on twitter and through like i used to do a lot of long-term long-form writing as well but i don't do that anymore i'm a little bit too lazy nowadays but i spent a lot of time on twitter and sharing my ideas uh for free i think the roi of sharing your ideas uh with the public with the general public is way way higher than starting a pay group to be honest so that's that yeah yeah i've always thought about it like uh i've heard the same thing you know why would you share your ideas when you're making money on your own to me it's about making friends you know whether that's in telegram groups or on twitter you know that those are

people you share your ideas with and uh you can build together right and kind of choosing your friends wisely is definitely a important thing to do when it comes to investing and life overall and just you know creating your own ecosphere uh in a paid group you know you can definitely channel some important thoughts but it doesn't have the uh the back and forth that i see in a lot of discord groups and a lot of telegram groups so yeah i'm not really a member of too many pages that anyone i think that they're a bit too short-term oriented that's that's the thing that gets me is it it's a lot of short-term thoughts a lot of short-term trades a lot of short this short that make a lot of money fast

and i think chad can tell us like your thesis as far as investing trading it's it's got to be around the long term right like like your idea for yeah for creating a powerful system and whatnot no i mean you can make money across the entire spectrum right from sub one microsecond all the way to one decade time horizon you can make money across the entire spectrum but the point is i guess you know on the on the pay groups right like the short term trading number one there's a lot of slippage like you if you follow the pay groups pay group leaders i mean unless you trade bitcoin which is fine like there's very little slippage right but if you trade the [ __ ] coins then um you know the leader is gonna get in the position

before you do and they're gonna incur a huge amount of market impact especially if you're behind your 50 other peers in the in the pay group then you're going to incur huge slippage that's number one number two like the short-term trading especially when it comes to like pure technicals right like by technicals i mean like your decision is entirely based on price and volume then that stuff can be automated so like why would you spend so much time like watching charts all day if you can just automate your entire trading i mean i say that because i have algo trading background i know for a fact that everything that you can chart can be automated right can be programmed so you know programming the strategy is much more fun to be honest

for myself right than like watching charts all day obviously like if you do long-term trading the charts sometimes they're they could be useful i guess because for long-term trading and investment you need to combine a combination or combine a variety of factors not just like price and volume right you have to combine also that with fundamentals so the technical part of of long-term trading isn't that important and therefore if you do try to program it then it may not be that statistically significant but anyway my point is um you know you can you can you can make money uh during the entire entire spectrum of investing in

and trading i personally do accommodation like i like long-term investing and i like short-term trading as well but my short-term training is just automated yeah yeah i mean the fundamentals outweigh the technicals as you said in any sort of long-term thing but it can be tough to hold long term in positions i mean i would imagine that you have a you know a longer term idea for all the default coins or the ones you know that you're a fan of and seeing the market for the past few weeks you know it kind of it busts in people's balls it's like ah crap here we are um dum dum dum dum dum you know what is your view on not just the market in d5 but kind of where

the long term goal is or where the long term thought process is for the d5 market like you know what do you think it's trying to accomplish you know like how is it going to happen if you will over time i mean as things currently stand let's be honest uh d5 is is a [ __ ] casino it's a global casino it is what it is right like you know people talk about banking beyond bank but that's not happening right now but it doesn't mean that it won't happen um every great thing that has ever happened in in the history of technology started as as some kind of toy right and d5 currently is a toy and um you know smartphones computers personal computers all these things started as

very very expensive toys and we saw that in the last few months right like in yield farming you know in all these [ __ ] coin swapping all that stuff it was very expensive like the ethereum gas was very expensive these were like very expensive toys for only a few people and by a few people i mean like maybe a few thousand people right like that is the daily active user number for for d5 but as time goes on as we improve the technology the underlying technology the scalability and as more entrepreneurs come into this place especially from like wall street like there's so many like wall street people coming to d5 nowadays we're going to bring the cost down and over time these products can be used by people who need you know actual financial product for their you know

day-to-day life or for like entrepreneurship right you know there are things that in d5 that are you know that currently look like toys that i'm super excited about in the long term are things like undercollateralized loans right that people can use for for starting their business right they're also things like um synthetic assets right you know providing access to people all around the world to high quality assets like especially like u.s equities or gold or bonds or something like that right like these these things are super super exciting in the long term but as things currently stand there they're a global because you know that's that's how i view uh this market and it's going to take a while to ultimately get to the uh or reach our goal of banking the unbanked

or whatever goal a long-term goal you have for d5 it's going to take 5 10 20 years and it's not surprising if you look at the history of bitcoin right bitcoin started 10 years ago and to be honest bitcoin is still it has vastly exceeded my expectation within 10 years but it still took 10 years to get to where we are today where you know a bunch of macro investors are finally piling into bitcoin and then corporations and then family office and the hedge funds are are buying bitcoin it still took 10 years so you know defy you know for the same reason it could take a while yeah i'm super excited to see where the concept of synthetic assets can take us i think we can really get access to markets that people might not even have

seen because they're just you know a couple layers deep and then after playing with these toys you know for for a little while we'll kind of discover what can be a market and then use those financial instruments in all sorts of creative ways that that's really what i'm excited about the the apy and the yield forming you know it sounds like you're maybe not as hype on that long term i'd like to hear your thoughts because i i've heard vitalik himself say you know the rates that are present in d5 they're eventually going to just scale down to the rates that you know we can get at any centralized institution so i'm curious do you agree with that um or do you see kind of a more extravagant solution that d5 can

solve with respect to apys you know maybe including synthetic assets or not just when with respect to yield farming yeah i mean uh of course the api is going to go down i mean it has been going down and uh right now it probably reached it almost reached a single digit percentage right and you might continue to go down the the thing is in the long term markets are fairly efficient if you have like a 50 api with very little risk then money is going to pile in and we saw that over the last few months with usdt growing like there has been a tremendous usct growth and i think a lot of that has to do with your farming and also wptc rapid tc right same story rap ptc took off when

yield farming took off a couple months ago so all these you know yield farming activities are not going to be sustainable or i should say the yields are not going to be sustainable that's for sure but at the same time you know the yields are not going to go to zero because there's still risk involved in these yield farming activities right like smart contract risk especially in the case of anonymous pseudonymous projects there's a non-zero risk so the yield has to reflect that risk so it's not going to zero right it might stabilize around five or eight or whatever i don't know and by the way the yield also depends on whether or not we're in a bull market or bear market so in a bull market the stable point yields can can get

fairly high and in the bear market the yield on bitcoin and ethereum can get relatively high right and the reason for that is in the bull market people leverage usdt or stable coins to buy bitcoin ethereum and other crypto and that pushes the yield on usdt up whereas in the bear market people have to borrow bitcoin ethereum and other crypto in order to short them right so that will push the the yield on bitcoin ethereum up so there's a lot of factors that go into this but long term i mean yield will probably go down a little bit more i mean but this again this can take many years right but long term it might go down slowly but it's not it's never going to to zero it's never going to like a u.s treasury kind of yield yeah the

this the 10-year bonds or whatever it is are just ridiculous right now every like other week i'll i'll get a screenshot from my dad of it he'll be like yeah check this out check this out i'm like oh man here we are yep i uh i put a tweet out on defy site the other day actually might have been yesterday it was like um so if no one's buying crv where does all the yield come from um and i'm genuinely curious what you guys think about that because really curve had provided so much yield to the market with their token launch and obviously it's just gone down extravagantly just because of the inflation and of how iron farms it and dumps it farms and dumps it right but there were some people who were buying crv tokens because

they thought it was going to go up because it was curved finance because it was curved it was great but really those people were the yield for what iron was getting their users and other platforms were getting their users so if the entire market knows that crv is always going to go down if that's the case now that's a bold statement but that's been the case then where does the yield come from for curve do you guys have any ideas on that like how does how is that going to work like who is buying curve right now crv token rob do you want to go or yeah i mean i i can try to take that so as far as i know there is still an amount of total value locked that is kind of like adhering to their

bonding curve as far as i know and then because of that it's producing a yield from the people that are you know taking out loans and contributing to the pools on curve i might not have the best understanding of it but you know there is still some yield and and that's kind of what chao was talking about i think where you know right now we're in a bear market people aren't really leveraging their stable coins so that total value lot is going down but um there are still people that are lending and borrowing on that platform and that's you know where the yields come from albeit still you know much lower than it had been in the past that's my understanding yeah i mean a

couple months ago i mean to rob's one like the vast majority of yield came from these farm dumping these uh governance tokens it was by far the vast majority of the yield now that part i don't know what it is currently it might be like 10 of the entire yield i mean or organ i have no ideas or the magnitude so the vast majority of yield currently comes from margin trading right so leveraging a stablecoin and uh for for margin trading that's it that's where the yield comes from and over you know the last couple years the yield on margin trading have been uh fairly consistent right like i mean by

consistent i don't mean like it stays at eight percent but it ranges from like i don't know maybe three to like 15 or something like that the reason why i know that is because that's the yield that you get on the centralized otc desks right before this all this yield farming mania that was the only yield that was out there for people for people to grab and that was the yield that comes from margin trading so as the yield farming mania dies the yield on d5 should also be in that range right it should be consistent with um the uh the yield that you get on otc centralized otc desks for margin trading which currently might be around eight nine ten percent yeah and i think if if that is what

the yield or apy is like if it's in that range eight ten twenty percent even close to fifty or a hundred for some new projects then they'll be able to have a chart that doesn't look like curves but from everything that i've looked at and every farming experiment essentially that's launched there's been the people who get in really early then there's a pump of the asset where the ap wise get shot up and then more people find out about it they hop in and start farming and then it's just farm and dump farm and dump farm and dump and then it just it continuously goes down now there has been an exception to that a few of them recently there have been experiments with uh deflationary yields so basically you have a token in it every time there is a liquidity provider on uniswap

uh and this is this is how core did it which absolutely just went nuts basically they lock your lp tokens up forever so basically you can't get any of your lp tokens anymore so effectively those core tokens that you put in there are now gone like they're burned so that supply is gone and so that idea might come about more but yeah i'm kind of wondering if this token distribution mechanism of farming like whether it's a deflationary or a low apy or high like i get the fair launch idea but i'm not sure if that's ever going to actually work out because i mean the farm and dump idea is just like it's it's too appealing for people who just want to make short money and invest their funds back into ethereum or back into other coins that they would rather have

like this idea of fair launch farmed distributions to me i mean it sounds all good in paper but so far it really hasn't worked out i don't think how people have wanted it to yeah yeah i um i don't know it's interesting and then you've got um the whole core thing was interesting it's been a bit of a journey so a bit on the mental side if you will how do you child keep up in terms of keeping your mental straight and mind kind of on the game like what's your routine or um you know how do you keep yourself apt to you know stay on top of everything in the markets out of the markets just how do you stay you know on the ball for other entrepreneurs out there other people who

are trying to build you know what this is a very good question i i don't i don't have a routine or anything like that it i just have so many interests you know obviously primarily in crypto but also even outside of crypto in macro and stuff like that i just follow whatever that i'm interested in to be honest the reason why i said this is a really good question is because it's actually impossible to keep track of everything in d5 or it's even impossible to keep track of everything for one given project to be honest there's just so much happening like yeah we're in a bear market but the fundamentals are actually improving people are still building the tvl have been going up even though the prices have been going down and so it's not possible to keep track

of everything so i guess my advice i mean if you're a trader investor my advice is pick pick your game pick the game that you're good at it's impossible to play every single game but that's the nice thing about about crypto is there's so many games you can play and you only need to play every game you just need to pick a game that you're good at and then stick to it be really good at it that's my advice for investors and traders but when it comes to builders entrepreneurs it's it's different like traders can switch their attention every other week but founders they cannot do that they have to pick one game like they have to pick one project one vision and really stick to it for many years right like we can see it from from the uh all the blue chips that

uh in d5 that really rose to prominence in this cycle these are projects that started in the last cycle right it took them many years to build synthetics uh ave is from like 2016 or something right it used to be called east land same thing with maker yeah same thing was with maker and and synthetics like it's synthetic raised money in 2017 or something like that right so it takes many years to build a really good product uh but it's worth it consistency and determination is what matters and how do you you know manage that when it comes to different asset classes because that's one of the things that i i've kind of struggled with personally is you know not not just capital wise but like effort wise and focus wise

you know spreading myself too thin across different markets and different asset classes you sound much more experienced in the trad and legacy markets you know do you kind of play the market cycles do you focus on you know things when they're going up that's when you kind of play that game or you know are you more focused on one game in particular and then you know sticking to that whether it's algorithmic in the short term uh more intuition in the long term you know what what's your spread like between legacy markets crypto and these d5 casino games uh well currently i'm probably 90 in crypto but the thing is i mean again this this

split really changes over time i don't really know but earlier this year i was so obsessed with macro because of covet and all that stuff i felt like i had an edge because i understood covet better than the vast majority of of the market and and i was really obsessed with the macro and that's how i missed the first 3x in d5 right dfi actually did a 3x before this summer um so i missed it but i guess i did decent decently well in macro but then at some point micro just became boring with all the qe all the money printing like policy right like right now the macro is entirely policy driven if you

understand if you know what washington is going to do next then you're going to make a killing i don't have i don't have an edge there um so i i switched gears uh i guess in the summer back to uh back to crypto and the first thing i saw was to be honest i was earlier this summer i was still skeptical about d5 i was long-term bullish but i didn't know that it was going to happen this soon right but i just spent you know my entire time digging into dfi and and play around with the products and then i realized holy [ __ ] this thing was real i mean it's still early but it's definitely real and with the compound yield farming you know i saw that it was probably a uh inflection point

at least in hindsight it's an insane inflection point for the entire device space and especially the yield farming casino game i guess the main point is you have to know when to play again and when to stop playing you have to know whether or not you have an edge that's more important than playing the game itself to be honest like picking the rag into play is more important than playing the game itself i feel like i you know i've been following crypto for eight years i i like to think that i have an edge in this market i understand this thing better than the rest of the market yeah i i like to think that just understanding what defy is and having used some protocols and just understanding that

this market even exists in the first place like not just crypto because i mean everybody knows you know that crypto exists but just knowing that yield farming is a thing and that you could you know and that these coins exist that we just mentioned like that to me is still an edge now it might not be an edge in a year or two but i feel that the timing of one's entry and exit into these games as you're saying is the biggest edge and picking the right one and yeah it almost feels like this is crypto 2.0 or something like that i think i saw one of your tweets you made a bold claim that um that being in d5 pre-2021 is like um a once in a decade opportunity yeah i

mean it just for me d5 is one of the very few uh crypto narratives that's worth uh watching in the long term because d5 actually makes sense why does it make sense well since ever since bitcoin you have some value you have a frictionless way to uh to store and to transfer value on a global distributed ledger right and that's bitcoin now the logical next step is basically think about how to swap those values right how to clarify those values how to lend those values how to borrow those values how to transfer the risk of those values on this global distributed ledger and

that is exactly what d5 is right it's just a very natural next step so i tweeted about this but if you understand bitcoin there's absolutely no excuse for not understanding dfi it's really the same thing it's just the logical next step i perfectly understand why people would be skeptical of you know let's say nfts or or dowels or you know some other narrative i mean again i'm bullish on these narratives but i can see why people are skeptical but d5 is the most obvious narrative it's just a natural next step so it's absolutely worth paying attention to this space in the long term even if we're in a in a bear market yeah i mean we definitely said the words bear market a few times

already and i mean it's been like a few weeks and it's crazy how the cycle has has moved so quickly from the summer until about a month or so ago and then until now yeah i mean that like they'll be your bank thing it started with the you know obviously like the genesis of bitcoin and now it's moved all the way to this and yeah i mean if if this narrative is gonna work and this idea is is gonna work d5 has to work basically it has to um be able to you know do that you know it's got to and one thing that there's a lot of people on twitter that i haven't mentioned is this idea of of retail retail traders retail investors retail this i don't know my take on retail is like it's here and it's not it's there it just kind of goes where the where the

money flows but obviously things change when retail enters the markets from your experience you know what has been the the main drivers of retail obviously massive price appreciation but aside from you know that what has been the main driver of retail and you know what do you think changes when retail enters the markets right like what dynamics change whether it's on the technical side or the fundamental side well the main driver is tour upon price appreciation period there's no other driver other than the possibility of making 10x in your money i mean the question is when will retail enter again

right i don't think retail is entering again yet i think they might enter once bitcoin breaks 14k and then 20k i think there will be a qualitative change because 14k is is basically the resistance uh or the high the local high uh from last year right is it last year probably last year or end of uh maybe a year and a half ago and then 20k was the top uh in in 2018 end of 2019 2018. once we break these like psychological points retail are gonna come in i think the thing with the next cycle is um people talk about bull market in the bear market but i think it's very

important to distinguish a bull market in bitcoin and bull market in the rest of uh crypto because i think the market currently is very much bifurcated there are actually two different markets very distinct two different different markets there's the bitcoin market and there's everything else bitcoin is a macro play the the digital gold narrative is spreading like a wildfire among the macro investors whereas the rest of crypto is all venture they're all venture beds right even even the the d5 blue chips they're still like very risky right it's looking at their price action so um i think there are actually two different markets and the we're currently in a probably in the d5 bear market but bitcoin i think we're in a

multi-year bull market and so um retailer probably the vast majority of retail are probably going to i don't know pay attention to whatever rises the fastest um unlike 2017. 2017 the retail they had to buy bitcoin first in order to buy the altcoins but this time it's different because you know from from coinbase from from robin hood uh the retail can directly buy the altcoins without having to go through go through big one so uh this dynamic is different from last time and we might see this dynamic in this cycle and again it's very important to distinguish the bitcoin bull market and the rest because i think this upcoming bitcoin bull

market might be the first one where institutions lead retail because in the last few cycles bitcoin has gone through like three or four cycles and it has always been retail first but for the first time bitcoin is liquid enough for re for institutions like family offices and hedge funds and corporations to buy a large amount of so they may be leading retail this time and they're buying like crazy right now and rita are going to pile in after 14k and 20k so a little bit more to that point as far as bitcoin being uh i guess as far as bitcoin having sufficient liquidity for institutions now whereas that might not have been the case previously

first example that comes to mind is microstrategy you know buying half a billion dollars in bitcoin andy and i were talking about this the other day and i i know the phrase sell side liquidity crisis is kind of a meme right right but you know in a sense it seems like that that could be a very real concept where there is plenty of liquidity but that liquidity can evaporate very quickly if these institutions that are you know planning for the long term we talked about long-term investing and how you know obviously that takes a different mindset than some short-term investing these institutions are certainly playing for the long term do we see some sort of a liquidity crisis

and i don't mean that as a mean but but some point where bitcoin you know miners can only mine bitcoin so fast they're putting bitcoin out on the open market you know pretty much daily but once institutions start scooping up a large portion of that supply do you think there is a point where demand kind of outpaces the mining rate of bitcoin overall and is that really like a sell side liquidity crisis in that case no meme intended um it's a very hard question for me to answer i know institutions are buying some some very large institutions are buying i don't know the total amount right like it's impossible to know maybe

uh maybe mike norrigan knows how how much people are buying because he's connected to all these people who are buying but i have no idea and by definition a price rise means supply outpaces uh or sorry demand outpaces supply right i don't know i think it's going to take a while 2017 was a sales liquidity crisis right the run-up from 1020. by definition that was a sell side liquidity crisis we're not there yet but we could get something like that i i guess in my mind it is kind of a separate concept between fomo which really seems uh retail induced rather than something like a liquidity crisis which could be more institutionally induced and

you know you already mentioned that you believe institutions could lead the way uh when it comes to the next bitcoin market or the next bitcoin cycle so yeah it is just a matter of kind of a wait and see but if institutions do lead the way and they kind of scoop up all the liquidity and then retail induces fomo that i i don't want to provide anyone with you know too much yeah we're we're getting a big heart on here [Laughter] no but you're not wrong though like i mean if the institutions are leading i mean i mean that's what it seems like too because your average friend isn't talking to you but bitcoin isn't asking you that i mean some people are definitely trying to get in and whatnot but there isn't this strong need but it almost feels like every week there's some sort of new institution

that's buying grayscale is updating their portfolio with another 100 million added a new all-time high on aum like it's just like it's i mean that's kind of how it's supposed to be you know that's kind of how it's always been i mean not how it's supposed to be but how it's always been it kind of makes sense that you know they would leave now as far as that market goes the institution and the retail because all all that leads to is the institution just completely just having to show this all to the retail and then they just dump all over everyone's faces and that takes us to the zero sum nature of crypto not only is there rug polls scams anonymous people um projects that are just absolutely just getting wrecked left and right there's non-stop shillers there's everything um and this comes with all markets but

you know obviously in nascent ones like crypto it's more prominent so how do you feel about the zero-sum nature of markets right like as a human being on this earth with a universe of people who are all kind of you know one being well one species right how do you feel about that idea of zero-sum markets of and and how trading comes into that and how really like when we're trading markets and investing someone loses if you win right and so how do you feel about that and then on the end of that question do you think there's any positive sum games in d5 like is d5 introducing any sort of positive sum whether it's air drops or yield farming or anything or or is our markets only zero sum i mean all markets by definition for me

are zero sum in the short term right in the short term if someone wins someone loses but it doesn't mean that all markets are zero sum in the long term right i mean i don't think bitcoin is a zero-sum game the ability to store some wealth in a way that's uncensorable unseasonable that's that's positive sum because that's really like bitcoin does something that no other asset can do in uh previously right so bitcoin is not it's not zero sum d phi well short term i guess it's somewhat zero sum um and the fact that uh the vast majority of activities in dfi are pretty much speculative activities right like all these d5 products are primarily serving

trading activities like even like obviously the units office is for trading but then all these lending platforms they also serve margin trading or yield farming and the insurance right currently it's serving the the uh the traders who need to insure against or the yield farmers uh against the collapse the the platforms that they farm on you know d5 right now is by and large zero sum but it doesn't mean that in the long term it cannot become positive sum right uh the uh the under characterized landing that i mentioned before that's vastly positive sum the ability to borrow money to start a business to start a venture that's the cornerstone of capitalism it's not zero sum at all

um hopefully we'll get there but you might take a while yeah yeah and under collateralized loans andy and i have a friend over at maker down and i always press him on when is maker adding these under collateralized loans how what are they going to look like because that that goes into kind of my belief system on just i mean how messed up the the credit score system is especially in america i'm not sure you know how it exists kind of in the rest of the world but that that does seem like almost the next logical step after what what we're working on now and what crypto is building on yeah that's what acropolis is working on hello well i mean it's coming but it's it's the sparta thing they have like under collateralized loans with a

like a credit-based dow that effectively allows people to take those loans using and other people put up the funds to kind of make the loan collateralized if you will and so they you basically trust somebody else to do it for you i mean that's super positive something like that is a is a ecosystem that will work until there's a defector you know who says screw this i'm not paying this back um and i was reading this bankless post i think that i think uh it was either ryan or or david hoffman who wrote it about the malik idea and how there's this greed and this badness of human coordination that is causing um like like for example all these rug

pulls et cetera et cetera and you know they're arguing that ethereum could be a social coordination mechanism that basically tries to slay and eliminate the ability essentially to uh allow humans to wrong each other which kind of comes back to zero some idea one little kind of off-tangent thought is i think the uniswap airdrop was positive some i mean there's no way to argue that they basically just gave people money that like that was positive some at its very like at its very core yeah yeah um i i wouldn't argue with that i i do think uniswap has some positive some aspects for sure it'll be interesting to see because you know and then lose value yeah did some people miss out and then you

know buy the token and lose the token and then any price appreciation from there you know is that zero sum probably but i i agree with you the the aspect of air dropping i guess someone could argue that you know uniswap could have you know been sold to private equity maybe uniswap is losing that value and that's how it becomes zero sum so i think there is aspects there but as far as the general public and the community i i would agree with you that it is positive some and yeah especially with what acropolis is building and i i think urine has some insurance mechanisms as well decentralizing credit to me seems like the next logical step and that's going to incorporate a lot of insurance mechanisms

because there is an aspect of trust when you have un under collateralization that's lacking big time right now like the insurance that's underwriting um i'm sure you're aware of this i think the there's a hundred million dollars that's underwritten by nxm or or nexus mutual right now versus like you know 11 billion in d5 locked yeah yeah it's quite a bit um yeah well we are about out of time here we got a few minutes left rob something for you that i've got is uh a d5 narrative for for the masses you know a slogan a tagline you know making it easy for them ciao feel free to chime in here as well like what what

do you guys think about that like what what concept uh can can bring the masses to the idea of d5 you know like what is the concept there so i'll kind of play off uh something that chow mentioned earlier on how bitcoin was the first narrative and the narrative around that was be your own bank well now what defy enables is an individual you know any someone anyone they can be someone else's bank and they can lend and they can generate all the interest and all the profits losses that any other banker institution would generate so it's not too creative and it kind of you know i kind of stole bitcoin's

narrative but i'll go with a narrative for d5 be someone else's bank you know you don't have to be just your own you can you can help someone else kind of facilitate their uh their own banking as well ciao um i generally agree with that narrative uh but i think it will take a long time to play out i just want to be like very honest with myself and and the audience like retail doesn't care about decentralization retail doesn't care about banking down bank retail doesn't care about you know uh you know freedom of spending your money and all that crap i think retail cares about his money so what is the short-term narrative i think it's the yield

it's the eight percent yield that d5 can can offer that's what's going to bring the retail into into d5 and i think the eight percent even though there's some counterparty risk there right it's still very well priced the risk reward is still better than putting your money in the bank account earning like 20 business points per year so the risk group the risk-adjusted return of of d5 is still very attractive right now i think that's what's going to bring um retail into into d5 in the short term yeah and i assume you're speaking about stable coins which is also a concept that has been i think is more is going to bring more people in than crypto itself than bitcoin or ethereum is like

yeah instead of having your money in a bank just put in these stable coins and then you can earn this apy through it and there's quote unquote no risk obviously there's a bunch of risks but there's no fdinc or fdic insurance and all that stuff but that that idea of of the yield i think i mean obviously for people who want to make money is is there and that's something that uh i think people in d5 almost take from like a bit for granted just like that ability to put some stable coins into um a protocol and earn five percent a year like i mean man like if you have any sort of yeah like you could start a hedge fund on that yeah like yeah you're going to outperform like 90 hedge funds you could raise a million

dollars and start a damn hedge fund on that like i mean hell that's actually really interesting so ciao do you have any interest in that do you want to start your own firm or your own fund or is that just too much it's too much i don't like dealing with lps to be honest yeah unless they're like super smart and understandable understanding lps i'm pretty happy with just managing my own money right now but um maybe at some point yeah we'll see there's a lot of risks that come in with that yeah indeed well chow uh that's about all that i got it was an absolute pleasure rob do you have anything else that's on your mind i'm i'm brainwashed no no it's uh it's been a great time talking to you guys um i love what you said about the stable coins i i do think that

it kind of provides the need for retail and what i mean by that is in previous cycles you know bitcoin we saw fomo and it's because oh it was really the narrative all these other people are getting rich besides me i need bitcoin and i think that's paralleled in in institutions maybe for the next cycle and all these other institutions are engaging in a deflationary asset what the hell am i holding on to 500 million dollars of cash for it when i'm losing two percent in inflation um so providing that need you know people want to make money maybe that's the narrative short term but it's got a product market fit people need a need to really enter the market and take the initiative um so when we see state-owned stable

coins or state-backed stable coins and uh there's no more cash maybe that takes 20 30 years but i i think that kind of engages people in it and it pushes them over the edge into well now i need to learn about crypto and bitcoin and and stable coins whereas before you know i want to make money um maybe this is a good place to make money i'll go look into it getting people into the need category i think is uh really what pushes them yeah yeah other than that that's all i got wait shout out real quick um that news today from the uk government about banning derivatives and

any sort of exchange traded notes in the uk um as far as i guess i mean ftx and etoro and and those exchanges goes kind of your thoughts there but also more importantly on synthetics and even like open on and stuff like that you know what's your take bullish bearish bad good like i mean i've seen i've been in telegram a bit today and people are kind of going nuts about it um yeah what do you think about that i haven't um looked look into details and i'm not a regulatory expert but it's definitely an issue i mean everything that had that happened over the last week right with uh with this uk thing

and the bitmex all these things are threats for d5 founders they need to take this very seriously they should have taken this very seriously a long time ago but they should definitely take this very seriously now and unfortunately one of the things that i'm really excited about in d5 is is the synthetic assets which i mentioned at the beginning of this podcast but you know bending derivatives is is bearish on this sector right because these synthetic assets are derivatives that represent on some underlying assets right so i mean you can also make arguments that this is bullish in some in some ways i mean for everything that happens there's always some pros and cons right i mean the the

the bulge part of this is um i do think that derivative market in crypto is way too crazy like 100x leverage people don't need 100 x leverage in fact i don't think people need leverage at all to make money to make a lot of money like you may need like maybe fifty percent leverage that's it that's what warren buffett did when buffett only needed like maybe 100x or not 100x 100 so 2x leverage in his lifetime to make a killing right you don't need that much leverage like that that much leverage is for me it's detrimental to the market it's what happened in march with all this deleveraging on bimx that caused bitcoin to crash from like nine thousand to three thousand within a

day or something like that um leverage is bad like you know among all the regulators around the world i think the derivative regulators are the most beneficial to uh to market to the healthy functioning of the market you know there's a reason why these cme futures are not offering 100x leverage they're regularly heavily regulated by the cftc uh in terms of how much leverage how much margin they can provide to uh to traders and um so i can see arguments for this this event but uh they're also there's always pros and cons yeah yeah i mean i'd be lying if i say i

didn't get wrecked on bitmex at one point i mean i think everybody did it's kind of a rite of passage i mean that happens yeah all right guys well yeah that was awesome um good stuff and yeah thanks for coming on ciao i really appreciate it obviously guys we did talk a bit more about trading and markets on this one so just beware that we are not advisors this is all for information and education there's no advice here there's no financial advice uh we are amateurs in this game just having fun and learning so please be aware of that other than that thank you so much joe for coming out rob it was great you guys killed it likewise i appreciate it thanks guys take care thanks for listening to the d5i design podcast

until next time d5 slate team you