Improving Public Perception and Trust in DeFi

Transcript

thank you guys for your patience we had some issues with connectivity one of these speakers will be online with us so we continue with the topic of improving public perception and Trust in defy and uh it will be a panel after the panel if you have any questions please feel free to ask them and let's give a round of applause to uh Julian butulay who is going to be online for Enrique Ernst Martin durka Danielle uh oh sorry instead of Daniel we'll have will harburn from Reno CEO of Reno uh meet them on the stage please [Applause]

[Music] yeah okay all right uh hello everybody my name is Martin I'm from Quan stamp I'm the head of new initiatives at Quan stem and my role is to moderate this panel together with me I have Frederica I have well and Julian is online uh so maybe let's start right away uh can I ask the panelists to introduce themselves maybe starting with Frederick yeah yeah hi I'm I am one of the co-founders of gnosis I also host a a podcast named epicenter

and I am here for our things D5 awesome uh I'm will I'm one of the co-founders of rhino5 which is a uh all-in-one D5 platform for accessing D5 across lots of different uh chains makes it easy and safe to do that and before this I worked on early decentralizers exchange projects and also at centralized exchanges thank you and Julian hey guys so my name is the CEO of state capital we invest in a space it's a family office but we also build a bunch of different products in the defy space such as stick dial Blackpool red news I'm also

involved in early days in curve Finance yeah beautiful thank you very much so this panel is supposed to be about trust and public perception of D5 so I think that the very clear opening question is if we were to characterize the current state of trust and public perception for defy how would we do that what do we think about you know where we currently stand for during care oh this is a loaded question it is um every single question will loaded here um I think it depends on kind of which public you're talking about right so basically like The Wider public um like you know who who think you know cryptocurrency in and of itself is kind

of CD um obviously that they won't look favorably on this and I think from within the community there is a much more nuanced View and so basically there is um good reliable worthwhile defy and then there's like the casino defy and I think it's it's it's a spectrum right okay interesting well um so I think I think that's true and I think as a whole many people in this in our space wanted to say oh look last year C5 failed and D5 is here to kind of you know solve those problems I think personally until very recently I really underestimated The Trusted issues um so for example we we ran a very big

series of user interviews on Rhino Phi uh basically the first half of this year uh and the single biggest factor that came out was just how big the the distrust is now of defy um we saw people who basically would say to us oh we came onto your site and even the fact that you're offering yield basically we elect we aggregate yield from different deep opportunities things like are they some that are a bit higher risk but even the fact that you offer you killed means it's a scam like that that's the level and we saw all this continually come through very minor things which we didn't even think about people just assume it's a scam now and so I think the default assumption is that everything in D5 in crypto may be wider is a scam and you have to work

very hard to kind of overcome that thank you uh I will actually get back to this topic of you know what happened last year and how this failure of C5 kind of uh implicated uh the public trust in D5 but uh Julian if your ever does because the screen just went black [Applause] perfect so uh what do you think about the trust and public perception of defy at this current moment well I think unfortunately the the Trust In Defy is highly correlated to um big influencers in a space that I've been building uh centralized products

such as centralized exchanges um that built and those and faster too they use crypto and we're able to distribute those products to a large scale of uh of of retail in a space and when they failed then the public and and all the people in the D5 space or outside defy they believed it was a failure of the technology and the blockchain in general so unfortunately I think we as a community tend to um pulled a lot of trust in people running this project but don't necessarily use the technology to a certain extent

to make us safe yes defy never I mean blockchain never failed so far since the creation of blockchain and for example Italian and those projects that are built in a decentralized way such as I don't know IV curve and Etc never failed so it's really about the people that are building on top of this technology that make the community and the outside community of D5 believe that it's dangerous to use this technology which is actually the opposite so you mentioned that Ave never failed right uh fair enough they never did but there are many D5 projects that actually did fail and suffered security incidents

in the past so do you have an opinion on how the failures of these other projects project on defy as a whole yeah I think it's a matter of how long you've been in the space and what is your appetite to risk compared to um the speed of the thing that you are building because if you look into the space a lot of people the project that I feel like quite young product that want to position themselves in the space and capture market shares which is understanding um understable but at the same time they

take more risk than and then security level so at some point they fail in vague news when we cover I would say a majority team and more than 90 of all the products I've held are young project because they feel pressure to position themselves in the space with having a huge amount of tvl or sufficient TBR to justify the product is good and also volume and and being able to be capturing fees so the problem is always in order for you product to be adopted you need to show good numbers but in order to shoot the number to show the numbers we need to have a certain appetite degrees and it's are you able to buy them are you able to cover if

something happens because being fully audited it's not actually a good reason for the product not to fail a project that has a high probability of not feeling or being hacked is a product that's been there for a long time and also fully audited so yeah it's tough for new project to not fail because in order for them to not feel they need to to together people need to show good Traction in order to show the traction they need to go fast so in this community you need to look at who's been building for a long time who's been pulling Security First rather than actually formal and what we call uh Devon Park you know which is really dangerous and as shown a high percentage

of of wrecked awesome thank you very much um so I would like to stay on this topic of adoption for a little bit uh when it comes to D5 projects right what drives the adoption the most is it the technology is it the user experience or is it just the pure numbers of the apy or APR that you know people see on the website and say oh I have to be making that right now what do you guys think open question to any of you uh honestly I think especially at the moment we are now I think it's different from a year ago it is uh I think it's all of the things you mentioned but for the basic reason of building trust so a good user experience gives the team the confidence

that because I think I think the the thing to understand is most users of D5 do not have the knowledge of which projects are safe which are well audited um they are going very much on the indicators that they can find elsewhere and so if the user experience is good it's likely it's much more likely that the protocol itself is well designed and well thought through if the user experience is bad or has bugs you probably are going to anticipate that the protocol itself might have bugs um if there are lots of other users it's much more likely that it's going to be safe and so all of these indicators are part of building trust and I think the the key for onboarding now is very much get people to use a use it with a small amount of funds get confident with all

these different indicators before they come with a larger amount a year ago I think it was different in that people were much more happy to take larger risks and assumed and sort of gave the benefit of the doubt to new protocols now there's sort of no benefit of the doubt and I think that affects everyone including the top protocols was because I think many newer users coming in still don't you know they don't know that maybe RV's been around for so long they're still evaluating it in the same way that they'll evaluate anything else okay Frederica same question what drives that option in defy and what if which of these aspects are actually important or harmful when it comes to public perception and Trust yeah so I think we kind of we have to differentiate between

adoption by people who are already in the space um and adoption by people um who are who are coming into the space in you and I think especially for the I mean basically the former I don't really want to talk about them too much because it's a very limited pool I mean if you if it actually comes down to it's a couple of thousand people right I mean it's it's not it's not that many and uh many of them are actually um mostly airdrop Farmers to be honest so people who actually use it as a financial product in and of itself that's really really small uh group of people so basically I think how to drive adoption I think we mostly have to look

at how to make um this a easier to to use and be more appealing to the mainstream and um yeah I think there are like several ideas I could kind of share with you but maybe maybe it's also uh so I actually have a follow-up question in here so uh RV as you know developers of D5 actually doing this right because uh you know you mentioned the uh UI and ux uh well and I just recalled when based money came out right that's like you know back in the defy spring uh I first went on the website and it's giant skull jumped out and it started flashing at me I was like and I should put my money in this

seriously are you guys serious so uh yeah do we as the community actually behave properly so that we Foster trust and public perception or are we you know this like small circle of people who kind of likes to have fun and we are just having fun because everybody in the circle gets it I think as Frederick was saying I think there are a few thousand people who wanted and still want maybe to play those games with their money and you know see if they can can mess around and make a lot of money ultimately I think the whole purpose of device should be to create an alternative Financial system to the traditional Financial system that can be for a much wider you know hundreds of millions of people to

use and trust that they can put their savings into to escape from inflation and that's not going to be using those kind of things so it's almost two different products that we we have had the product of these kind of scary random games that people find fun and accelerating to play but it's an entirely different D5 infrastructure that we then are now trying to build which almost those two sort of are at odds because the former sort of scares people off and like for good reasons uh and puts people off from using that sort of newer trusted DFI infrastructure which maybe like has benefited from the experience of learning from that stuff but actually is targeted at a very different target audience um and I think one of the big

differences will be the assets that are in it so things like real world assets inflation resistance stable coins and other things but that's very difficult to communicate when we're trying to do both things at the same time okay well I want to stay with you for a little bit uh longer you mentioned you know the events in the centralized finance that happened last year right where I presume you were kind of uh getting at uh the crash of 3ac and Alameda and FTX and you know problems of Celsius could you maybe you know shed some light on these events and uh elaborate on how you think this has impacted defy right now and how it brought us to you know where we currently stand um I mean I think there's different sides to it like on the one

hand uh I think personally it was just the the biggest shake-up of trust in the space that's happened so far I mean constantly the space has been plagued by these kind of things but the fact it had such wide media coverage the fact there was so much trust into FTX in the traditional media and institutions just I think completely sets us back a lot like many many years um I mean I don't think it's you know it's I think it's I think of course we've all spoken about this for the last year but that is something which defy also then has to combat because in the in the majority of people's eyes it's all one blockchain system um and there's not much we can do about that apart from just really slowly try

to rebuild confidence so after all these incidents one of the opinions that I've heard uh you know in the general public was well centralized Finance is clearly suffering from some issues and so that's why we actually have D5 but D5 just has to get back to the first principles the decentralization the trustlessness right so that nobody can rockpool and similar stuff so you know one of the opinions was that this was actually positive for defy and we would uh encounter in an uptick in the public perception of defy uh Julian this is actually a question almost directed at you uh do you think that this opinion implies or would you say no this is nonsense

I I would say that I had this um opinion um like years ago but The Narrative of today is saying that defy is there to completely remove change replace or the traditional Financial system and offer people and alternative I don't think this is true and I think for example the story about dowels organization and different things we realized ourselves that there was a reason why the Greek the Roman and those people civilization spend thousands of

years trying to come up with a system that is a good governance and ourselves believe that we found out that Dallas was the solution to the society problem but then today most people they try to not mention Dallas and try to remove the term of those and it's the same in defy space I don't think Defy is there to replace the financial assistance I think and I would like to see because 99 I mean it's a sarcasm statement but 99 I would say that 99 of population worldwide I cannot remember the passport of Facebook so I can tell people not your key not your money and this is completely wrong 99 of people don't even know how to mine as a passport so how

can you ask them and force them to manage their own key I think the financial system traditional Financial system as features products and things in place to guarantee and protect people for example you have lawyers you have notary you're so Insurance systems you have things in place that can guarantee people to be safe and this is not by 100 I mean Define your Ledger in your pocket or having under your Matlab that you will make those people safe because then you have people that will not on the door of someone and Etc I think solution uh the use of of course knows it's safe uh secure Enclave I can't abstractions all different things that can

the plug in the traditional Financial system so I would like to use my banking I would use revolut I would like to use those existing tools but under the hood I need to know if there's the system are using blockchain technology because then it makes the system safer and also it protect people from the outside attacks and inside attacks so I would say that the narrative was if I will disrupt D5 will be placed as I heard in the panel right now but this is I think this is all wrong what I want to see is how can traditional Finance use the tool of today that is being built in the centralized finance and this is where

you will see large-scale adoptions and also where those things will be usable safe and distributed long larger scale of people worldwide it is the only way so you have ux and UI but ux and UI it's good in traditional Finance we have the technology in defy but we know the ux and UI so what about the emergence to you and for the first time we think about okay how those traditional Financial products can use the technology that we've built today to provide this technology to larger scale of people to be safe and so they don't get a red pool they can withdraw funds whatever they want we have the technology in place today that can make this possible

very interesting thank you thank you uh Frederica Julian mentioned uh the role of daos or daos in general so uh he also mentioned gnosis right so you are affiliated with the gnosis Dao what is your opinion about the role of daos in the current world of defy and their perception from the people who do not even know what Dao is um I think it's really difficult to kind of speak about the Dao as a monolithic um thing and everyone knows what it is so I think Taos can be very basically Dao is just offer new tooling how to coordinate with people you don't necessarily have to know and I totally

agree with Julian that basically the current incarnation of dials what we see today and they suffer from a whole host of problems right so basically voter fatigue um you can't am I am I okay I'm back fantastic um so voter fatigue um people don't care to vote so basically even on important votes um uh turnout is super low so basically that gives you lots of room for kind of governance attacks where basically people attack the system by using it in the way that it was designed to do but not in the way that it was intended to um and then um you have things um uh like a Dao uh basically uh I mean so basically a lot of people take Dao to

mean that no one is in charge and I think this is a fundamental misunderstanding to me that was just make it more transparent how um kind of decisions are made and which people our entities actually make these decisions um Taos also have um an attention problem so basically if you look at um the amount of votes that some Towers go through basically it's like it's like a 20 hour per week job to kind of keep up with it and obviously that's a nightmare for kind of people who want to participate in it but who's for whom it's not their primary job to do to do that um so basically I think we have to come up with better ways of kind of managing

this attention problem and super interestingly back in the day there was a project called Dao stack and they actually they had it right at that point so basically they kind of said okay what what's really the scarce resources attention and we kind of we need to price that in and basically people need to pay and make a deposit if they kind of want to bring a vote and then basically if people if it's boring and it falls through basically people are basically it's kind of like just um putting an incentive layer on top of it obviously the space in which you can do it the the possibility space is huge um and I think we need to experiment with this I think kind of bringing back some of um the more complicated models that we've seen in the past that kind of

didn't make it um uh you know as compared to the fairly simple uh compound style Towers um I think kind of bringing them back and having some of these elements introduced into the Dows that we use today I think that'll be awesome but I think what Dao is actually intend um to um to change is that to actually even partake in the discussion um for most organizations today that is severely gate kept and I think um making that open and accessible to wider audience also increases your

talent pool um and basically yeah you need you need good mechanisms and the mechanisms today are not satisfactory but I I wouldn't kind of I wouldn't kind of throw the entire idea of a Dao out uh it's kind of like yeah that would be my very long answer no no yet if if I can add absolutely I do think I do think that you cannot add douse without a core group uh a core group of people building and drafting divisions of the product that I'm trying to build so my point is what we've seen I haven't seen maybe Bitcoin and that's it that's the only the only exceptions but I haven't seen

any project in the space that I've built from start as a Dao and I've been success successful because at some point the interest and that was a good point obviously said uh Frederick is that at some point the interest of all the people that potentially have ownership of those tokens in the Dow will be against the long-term so she's got the liking Kevin was you have been people accumulating governance power in the project but did not necessarily incentivize for the long-term future success of the project so Dao's it's a major problem except if you have a core team that know how to drive the vision of the project

so it's a very good thing if it's used as a product a feature and not as a entity that trying to behave as a call call principle of the product of the company thank you Julian opportunity to respond otherwise I will switch gears a little bit here no I'm I'm super happy with what Julian uh said I think this is uh this is true you always need a dedicated group of people who kind of drives things for me it's just important that it's permeable kind of who this group is and that people can come in and go out and that is not set in stone and they see that the area the barrier to entry is just a lot lower than it is today awesome uh I will move over to will and

I said it I would like to switch gears so the Switching gears I would be interested in your personal experiences with D5 do you guys yourself have a project that you've trusted and we're absolutely wrong and if not do you have another project that you admire so I I think I won't say something where I was completely wrong but I will give a quite a recent experience um which was with multichain.org which is a bridge experience and so uh I was using it I didn't I think a couple of months ago uh for the first time uh at least through the UI and had to go through quite a difficult experience in terms of trusting it uh I hadn't

realized it was the same as any swap which was it rebranded from uh ended up having to you know thinking that it looked too good to be true because the fees were so cheap for a bridge so of course naturally start googling what is this how's it work um eventually used it and then so which which took quite a long time of probably about half an hour of trying to build trust uh and then found that it worked and used it with a larger amount of funds uh a couple weeks you know now a couple weeks later lots of after going through all the effort to trust it there was news articles about maybe their their sort of Founders had been arrested in China or it stopped it stopped working for lots of routes so it I think that's a example where as even as

someone who's worked in this space for six seven years it's very difficult to trust quite a well-known project and then once you do actually you find out there's potentially other issues there must have been some centralized elements that can now be have now stopped working because someone's been potentially arrested it's I think that just illustrates that even for us in this space it's you know like it's there's a very it's very difficult to trust things now okay if you were to very quickly because we are short of uh sort of short on time in here to give one advice to any of the you know sort of projects that you've sort of referenced uh what would that be well for me for me I think it's that we should stop trying to make defy dials everything we're doing fun because it

being fun it doesn't correlate with it being safe and being able to onboard millions of people into it um we should focus on unfortunately trying to make these systems more boring and actually I think some of the stuff Frederica spoke about with Dao stack for example I think it's the same endows the the projects that we're trying to do it well which might have been able to be used by many people were too boring so we just ignored all of that stuff and went back to the old models for the last sort of bull run because it was more fun for the the small number of people who are playing in the space now so I think the advice is be more boring beautiful Julian same question were you at some point terribly wrong about a project as an investor as a you know private user

as anybody um yeah multiple times but I would say for example three years ago when I first started making news I want was one of the biggest opponents of criticizing like guys that were criticizing uh FTX and I made a video with fake news and I and I asked Sam this is not possible that you can beat me on some um Arbitrage and some Market they've been here for a long time what is coming this farm and I made a joke that this phone must come from retail the video is online you can check but still there I

I said okay it doesn't matter we'll still use FTX and so the point is at some point influencers and influencing in the space is so true so strong that even yourself can you can avoid some conclusions and and passive Netflix a multi-chain and then a unicorn and any swap those things I since the guy that was involved in this project is quite well known Dentistry for almost 100 percent Rock pools and all the projects failing for me it was really clear that at some point the project will come to conclusions of either having some big issues so I would say major project in the space

you should always listen to your uh the godsend if there is something that is fishy we need the community to investigate we need the community to loudly talk about it and not believe this is just okay and we let it pass um so yes the product I felt is the big one a big example I cover it I called it but still I continue using it so it's uh it's it's difficult yeah it's kind of stupid but because it was a major major player in the space so you can you always ask yourself is it possible too big to fail but today you still have a major player in the space and I've been trying to call it out and every time you

mention it you have people attacking you for calling out behaviors and things are happening that are unseen so you can it's it's there people just need to open their eyes but they start to ignore it because it's too strong too powerful so it's not possible that this happened so we have to be careful yes and then the second question was about products that I believe Julian where I I apologize I'm getting a signal from the organizers that we are running out of time so second question without an answer uh same to you Frederica my apology we are out of time so you know I will not give you space to answer I would like to thank all the panelists for the time thank you very much thank you for your insightful opinions thank you audience thank you guys bye-bye

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