Staking-Farming-Security for beginners

Transcript

yes mike oh good welcome welcome it's time thank you uh very nice to meet everybody thanks for being here i'm juliana i work for a company called it's encrypted i am let's say a recent developer i joined ethereum ecosystem in 2017 and i've been building code from a lot of talks and conversations with senior devs and architects and that was always my interest in ethereum always to speak with the ones that build this this amazing ecosystem this talk today came from the aids organizers the acc organizers it's focused for beginners so no question

here is uh supposed to if you think it's too much don't worry i'm here for you i hope this can be very interactive and valuable to all of you so you're very welcome to just raise the hand and ask any questions we're going to cover a lot today we can do a lot in our ecosystem so there are many topics i will take some time in the beginning to talk about security then we take some more time about staking and managing the ethereum network running a validator or doing liquid staking and then finally we're going to finish with what we can do with defy does anybody here has any special

requests of something you would like to hear because i even like built dowels before so any subject that you were particularly more interested okay so let's do it with what i got for for all of you so ethereum the market cap is impressively uh grew by five six times and not only the value of where eath is worth but the amount of transactions and usage of the network you probably faced a bit of congestion in moments that you had to pay very expensive gas sometimes and today i'm very happy that we have so much of this road paved about so many

different applications and protocols that are interacting with this big lego ecosystem so this is just for you to notice that during the small spike of 2018 there was a lot of value locked but not so many of the applications that we do have today and thanks to that spike in value as well came a spike in hacks and people stealing other people's money so security is a must for anybody who's interested in ethereum it's being part of our ecosystem is to have that extra careful in any kind of interaction with the network the hackers got very specialized so there are just a few

thing or two that i suggest that people have as good policies to always double check before you do any kind of transactions there's a lot of space here in front and in in the back again you're also very welcome this is gimma from ethereum developer sao paulo as well so it's always very nice to have experienced devs around the room so today we are in an ecosystem of exactly 140 billion dollars it's a lot of money it's a lot of applications and it's i'm not here to explain how we got there but what can we use out of that so this is the amount of heat in circulating supply so it's 121

million ethereum a lot of it's being burned on a regular basis but we are starting the this talk about security how can we protect because anything we do in ethereum we will spend gas we will interact with smart contracts and we will give that click of permission to spend our eat so i prefer to do one screenshot don't worry i can share that all in twitter with you guys i use the handle it's encrypted on twitter i couldn't get the it's encrypted so i mean it's encrypted number one but this is a screenshot of everything i could think about metamask can i strongly

invite my more senior experienced friends to also add more value those are things that i'm doing right now to any transaction that i do the first was to connect your hardware wallet it's okay to lose a hundred dollars yes 200 300 it's not cool but the more we do bigger trades and bigger interactions we have to have the policy of using a hardware wallet for that i don't care if you use ledger if you use trezor whatever you use you can easily integrate with metamask it's just one extra button click where you would have the permission all the pop-ups will give you what you

have to do to get that integration you obviously know about how secret you need to keep your 12 words so i'm not gonna talk about that again but as long as you always understand that the 12 words are also very very preciously valuable so don't never ever take a screenshot or a picture and save it on your phone of those 12 words you either memorize it write it on a piece of paper or everybody has different techniques about how to do that metamask has many advanced features i try to reach the metamask teams and the hackers are always using what people use the most that's why i focused here on speaking about metamask but one of the

things that we do is we do interact via metamask which is a google chrome extension in the websites and one thing we can do is activate this auto lock timer and give them only a few minutes of like okay as long as i'm here like moving my cursor and my mouse it's fine but after a minute or two you can please disconnect my metamask so the website or if you're logging out or if you're like going for a coffee or something happens you're not again leaving your metamask available so just in case a hacker finds ways to get into your browser your google chrome browser which is very usable and hackers go for what people

use the most so please activate that and lower that to the amount of minutes that you think it's okay five maybe two minutes maybe one minute as long as like you know that you always have to add your extra password on that just good policy okay nothing mandatory here just a thing or two that you can tweak and um have it done another thing is that metamask allows you for every site you will see connected sites and to my surprise the first time i clicked there i had over a hundred websites that i was interacting obviously i'm a heavy user of ethereum i do connect many taos i do vote a lot i do liquidity mining i do like any kind of participation so i did

have interacted with so many websites before and that is also like still available so you can always go there and go one by one and click the the trash bin and remove that so they're not kind of like having access to your browsing history anymore one you can once you connect again you give them permission again but when you're not connected it's been six months that i don't go into this i don't know ref or lottery that i tried ages ago it's okay like when i go there again i give permission again so just saying that it's something you can do and also uh something i never used but when i googled about security is very

important many smart contracts that were hacked before there is something that you can do with a tool called revoke dot cash this is a revoke of your keys so uh the smart contract does not have access to your keys anymore so the revoked.cash happens in more extreme cases in cases that people already had projects that were hacked and the last thing i would say every time you click on metamask before you do any transaction it will first give you a screen you will be interacting with this smart contract

99 of my developer friends they do first click on the contract and go to etherscan on etherscan they check is this actually the contract and how can you know are people interacting with this contract very often because once the contract has been hacked they flag it and that's something that the community is very close and and they announced to to people that hey this contract is in warning mode now don't click on that so always you have the choice before you click the final okay go twitter scan check is this really the contract i want to how much dollar worth of value is is in this contract who are the holders oh i see

this and that wallet interacting with that contract so you always have the choice to just give that extra verifications first those are my tips about security does anybody have any other extra out of the box that you guys do that you think are valuable was it nice enough those tips so just that extra attention we are not in a rush we don't need to immediately click yes there's nothing silly hi everyone i'm netra i'm also really passionate about helping people stay safe and i love this

this is very very well done i have a very silly one that i use which is just bookmarking your often used sites because if you forget you usually just google it and you never know what folks are putting up there and you know using different spellings etc absolutely precious advice precious precious advice and i think like we don't check the or double check the spelling and yes hackers are diverting like sometimes it's a dot io but they do have the same website dot com or dot whatever and and you click and you go to the wrong link which the front end they do magic they do exactly the same linear color gradient shapes and forms so it looks like you think you are in the

website of the project when you're interacting with a complete different front end it's just a mirror so phishing attacks are very common emails i strongly suggest everybody here to once every six months change your gmail passwords please everybody uses gmail for everything how long ago was the last time you changed it so let's keep some good policies of security in general and always before you click any link see where which url is it really going to direct you and any kind of access so the hardware wallet is a great one because you physically have to give permission with like your hardware wallet which is a a great tool so that's what i think it would be very

valuable in terms of of security now we move to staking staking is actually what makes ethereum secure safe it's very important for a network to have their nodes the more nodes the more validation that we need to check the transactions and then the more we stake we create an ecosystem way more decentralized i'm a big advocate of decentralization and we have to understand that the more nodes we have doing security the more robust our network will be so staking is a key important ingredient of ethereum today

we have over 13 million each staked and those validators those nodes are the ones doing uh the security of our network i would like to invite you to visit dune analytics they they have this um website let me see if i can click there so apparently i did an unclickable link can we just do i this is the first time i don't do a google drive uh presentation just give me one second great

it's okay can you guys see my screen yes great i'm not connected to the wi-fi long story short i will leave this link to you guys if i cannot click links in this presentation i'm very very very sorry but i suggest everybody to go to dune.com hildeby uh is one of the wizards in dune and he did this eat two deposits so you can see in different graphs and and how is the the network valued i really apologize for that for not being able to click links but if to deposits you will see how our network is behaving today

i think if you give me like one minute i will connect with the wi-fi locally i think it will be a better experience for all of us i'll go on with the staking but today the biggest liquid staking provider in in ethereum is lido is a protocol that focuses just on on doing liquid staking what is liquid staking is when you don't want to run your validator you can get an lower amount of heat to run a validator you need 32 eats which is more than a hundred thousand dollars it's a lot of money to just have it just to do security so lido allows you to put any amount of eats smaller

amounts or even 50 dollars and you can stake with them we created the monster with lido as well we created a problem called concentration so lido today has way too much eat in their uh staking as a validator over 30 percent of our network is using lido and that is a problem if people hack or corrupt lido they control the network because they control a very important big steak so this is a is a great solution but also if we can use other ways to do liquid staking it's also a great choice for the first time after almost three

years in ethereum i was invited to devconnect in amsterdam where i could speak with many many developers and i had the mission of running my own validator i wanted to be part of this network and do the security and one of the advice that other senior devs gave to me was to look at those guys from rocket pool they are doing something very fantastic which you can put less heat and run your own node from home it's different than running an aws instance and and putting up a machine running linux you can buy your own hardware and do uh some liquid staking sorry some validator so with only 16 eth

which at the time unfortunately was way more than what it's worth today but i could have run a mini pool so that was one of the most interesting things i did and something that i can say it is technically difficult but not impossible and because i have full support of rocketpool uh security guys i was able to do that so i think it today we do have some other ways to participate in ethereum ecosystem by doing uh running our validators and once you run the validator you get another extra level of knowledge of what's going on actually with ethereum clients with what

is going on in the network in terms of congestions and you can direct your own transactions to your own node which is very very valuable and um let me see if i can get this fixed can someone help me to connect with the wi-fi can i'm gonna ask a two-minute break so i just connect with the wi-fi perfect excuse me guys like yes

this was not planned but how's the face so far yep any questions so far no questions so far hi i have a question on liquid staking which relates to what you just said before about having your eat or whatever token on your cold storage if it's on cold storage can you stake it or not the answer is no you cannot but you can opt to receive your rewards that go straight to gold storage

so you really need to give those 32 e's in the case of rocket pool 16 each so they are staked so you're giving permission for them because you're you're doing part of the security right so you're putting some skin in the game let's say like that so you're almost like part of the network this is how you prove like you're honest enough so they can leave your code storage you can stop your validator at any point in time and get it back to code storage but the answer is at the moment you are doing validation no the the heat is not in your cold storage and that's when it comes to understanding your own computer becomes your code storage

and one of the most precious advices i had i will show some pictures later but is about how do you make that computer in your house isolate it from the wi-fi of your house but you also depend on whichever liquid staking platform you're using if you do liquid staking not running your own validator then you're giving them permission then they they do have your eat with lido what you have you get a token bag called state eat so you don't get eat back you get st eat back and then you have a different token than your eat so you gave one it's with them until you don't need it

anymore so you're earning some rewards as long as you don't need that's the liquid steak is all about you get some rewards for doing that but then once you have it back you have state eat back and then you're gonna have a different price to convert back to eat so it's not guaranteed that it's gonna be one-to-one anymore which is a an issue okay clearly but i suggest liquids taking for money that's idle you know if it's doing nothing why not get some rewards you can also do liquids taking a rocket pull and there are other providers i strongly suggest uh rocket pools by the level of security all that ability that those guys went through the technical level of the team and i mean

they they are today like a big success so you can put uh smaller amounts with that let me see if i do have wi-fi i do have wi-fi can they see yes i can see now the website but not the page there you go super thanks i do that all the time with google's lights it's not that i'm a beginner like technical issues is usually not a problem in my presentations but this is the first time i wanted to do something animated on a mac so i'm not using my

regular presentation super thanks for this display or probably my computer is already super protected i don't know we're accessing the internet good and old wi-fi thank you so much so here is uh that dune analytics that i was showing you you can see at live moment how much is deposited today so out of all the ether circulating supply only 10 percent is doing validation so only 10 of all the heat being used in our world is there to protect the network so that's something that i really encourage people to

uh try to explore more and so this is uh just so you can see today lido i said around 30 it's 31.27 and that comes to a big concentration problem and once you have one party having 31 of your network this can be an issue so far so good but the whole talk in amsterdam at devconnect was about client diversification so this is my next part of the conversation so this is lido again strongly suggest it's a great provider rocket pool another option um

and then here are uh some articles that you have all that on twitter but the problems of significant risks on the merge and what can happen in terms of abuses of proof-of-stake so this is a very well-written documentation by the defiant it's an article and they mentioned this this report about how can validators be corrupted and anything that that can happen so the whole talk is about decentralization so i'm here to insist if anybody has any kind of questions about running a validate or willingness to one day become part of our network don't be shy

don't be afraid it is technically intensive but the journey is worth you will learn so much and you will be part of uh of us protecting the network i think it's a it's a very valuable way to enter ethereum so back to the presentation um today there are 406 thousand validators which is quite nice quite a lot and this is the beacon chain i love to call the beacon chain the admin chain which is this chain that will coordinate all the validators so this is some live data of the amount of eat that state so you can always go to this website becon chair

dot i am and you uh once you run your validator you will be able to have all kinds of statistics of your validator and rewards and all that at the beacon chain so i'm sure that if this is for beginners those are names you don't hear in the marketing so often so beacon chain is a very important one another important one mentioned by the ethereum foundation which is very important is this website called clientdiversity.org it's almost like they had this amazing team from prismatic labs that had the client implementation a client is the the how can i say is the code that will speak with the network so the client is this implementation that will connect you

with ethereum and um this client made in goal golang the language was also very successful but more and more people were using that and again it creates a problem of concentration risk so now they're pushing for other languages and other implementations to be used so today you have either hyper ledger bazoo you have nimbles you have lighthouse and you have prism and this is live data i was very impressed the first time i saw that in amsterdam was about 54 if i'm not wrong of the prism client which is the golang implementation and now the lighthouse is taking around 30

i personally run nimbus by suggestion of also like a very senior cyber security expert so it's also that was my choice but again you have to pick a client once you run your validator and you have some different options than prism and geth which is where the majority of the clients of each 1.0 or each one are running they are still using get so yes i just wanted to show the importance of client diversification clientdiversity.org and this is the conversation i when i first heard this guy talking about client diversity in amsterdam and that's when i got the okay it's time i have to do that i cannot

wait anymore how can i buy hardware what kind of machine do i need to have to run ethereum and to my surprise some people are even running an ethereum node on a raspberry pi it is possible it's not the most convenient and not the most wonderful thing in the world but you do need some ram you do need some terabytes of storage and you do need a computer with a good processor i got an intel i7 i got a 32 gig which was not necessary i got way more than than people suggested they say that 16 is more than enough don't waste too much money the biggest restriction is actually what will make your validator

earn more rewards is your wi-fi network so if you have a fast wi-fi that fast wi-fi will provide you to like process more transactions so it's not about the power of the microchip of your computer or the ram but also about the wi-fi speed that you have with your provider and wi-fi can be very expensive in some countries like in brazil unfortunately your even operator can disconnect you if you have some big spikes so you got to tell your network that yes i will be running a client expect some big spikes please don't kick me out of the network because you can be slashed and slashes costs you reputation and money

and you lose rewards if you're slashed too often then you're cut out of the network so please let your wi-fi provider without really you don't need to do a big kyc and things like that and that was the first time i ever opened the computer and i actually like was doing the hardware myself so it's not something out of the world it's super cool it's almost like changing a bike tire for the first time you gotta learn whenever you have a flat tire at some point you gotta learn so this is how you actually get the terabytes and the hardware installed so i just wanted to share that if i can do it you guys can do it as well so don't think it's uh something super complicated and uh something you cannot do yes

you run across any tutorial that you can share or like yes and i will share with you guys that's why you're here so this is uh d5 for beginners there's many tutorials the documentation of rocket pool was pristine clear so i strongly suggest that always always ask for a neat developer friend people around those technical conferences are here to empower others this is our mission so don't be shy to talk to strangers because strangers are the ones that are going to give you a lot of very valuable advice i spoke with a guy in amsterdam he's like yeah i'm not a very technical guy i'm a lawyer i'm like dude you've been running a validator for two years like you know much more than i do about hardware so he was giving me like some precious advice

and this is me installing fiber optics in my house and getting like the fastest wi-fi so literally i wanted to see how the internet gets to my place so i even took the guy like i followed the route so if i ever have any kind of problems i know how things like get started and it's quite interesting so the hardware journey is also something suggested iric decided to run on debian people can run on windows or mac or different operational systems debian it was for me people can do run on docker so the best suggestion was to have a docker compose yes you will need to interact with the terminal with cli and all that but step by step and linux

has a lot of documentation for decades online so you will find print screens and stock overflow and and questions so don't be shy that's how you learn the most and this is actually the documentation of rocketpool let me see if by clicking here now i can go to the link long story short uh rocketpool docs so i just open here rocketpool.net and that's where you will find the documentation on top so here's like how you can do liquid staking or run

your own node you get different rewards based on on your choices and obviously you put more or less heat you can run a full node with 32 each or you can run um mini pool what they call like it's not a half note but you only put 16 each and rocket pool is even progressing to other solutions that likely in the future we're going to need less heat to stake so this is coming up i cannot promised how and when and if but we can maybe expect that to come soon under rocket pool so all the way down you will see here the the documentation so staking it 2.0 staking

how it works node operation introduction so there's like anything you click it will just guide you to the docs.rocketpool.net and then step by step every single detail how do you run you first run a test net yes are you afraid to lose your stake well because i mean you can have troubles with the pc and stops working and then you can eventually lose part of your stack isn't it the most important thing that i need to watch out for is if i do have electricity and wi-fi at the moment the way i set up my computer like the computer is running itself so the node is constantly it's almost like can you

tell a calculator to stop doing calculations like so if you don't have an electricity for some couple of hours it happens it happens it happens then i'm out so as long as i try to fix the problem as quickly as pro as possible so don't be shy things happen it's it's something that is possible to happen uh what the network does not want is to have constant validators with constant problems so if you're always on blackout mode then obviously after a series of blackout modes then you might be slashed but it's not something that uh we're encouraging people not to join because maybe one day in life they can go on blackouts so it's uh it's not the

the purpose i was never slashed i was never slashed so i cannot tell you like how does it work but basically you are invited like a few times via like some sort of uh raffle you're selected to do some sort of proposals and then this is all automatic this is all algorithm it's not that i manually need to vote right but your validator has the code that will do things accordingly so if you're running the proper client and meaning like like you have ios or android they always keep the newest version so you must be sure that you're also always running the latest version because that's when they

fix bugs and things like that so as long as you're always updated you're okay if you're outdated but still validating it's also okay right but you don't want to be running a client that was like set up three years ago right now the network is already evolving so just some level of maintenance but i would say once a month i i do double check or as long as you have on beacon chain and rocket pool many alerts as well telling you that a new version is online so you have the choice to migrate in the first hour in the first 48 hours in the first week as long as you you notice like i gotta do that it's almost like you have a bill to pay like you can delay but at some

point you gotta pay so this is um rocket pool documentation and finally we move to farming eath farming is uh something that a lot of what this generation of degens and uh people that are into ethereum are now doing they are farming they're using the power of decentralized finance defy to earn money and today there is around 75.6 billion dollars worth of money in and this is also reflecting a lot of the pricing conversations and and things

like that how i started with farming and liquidity providing i can say in the beginning of 2020 people spoke about uni swap okay i gotta do some how so i just put three hundred dollars there eat against die didn't take a look at that a year and a half later i'm like okay let me see what happened and i lost my eat and all i got was 600 die then the price of eats went to sky and then i learned something about impermanent loss so what is farming farming is one this is a very interesting book that i suggest everybody to read that i read a bit late

but this is the heart of defy so this coin gecko tutorial they have two versions there was one for beginners and the advanced one and you can understand what most protocols are doing so what is farming farming is when you give your tokens to a liquidity pool you expect people to trade your money it's almost like you're getting to a casino casino has no money you want people to gamble and to use it the more usage there is the more trading fees you accumulate the more liquid the market is the more people like do buys and sells the more you get a percentage of that buys and sells so when you do liquidity

providing that's exactly what you're doing you're giving your uh tokens to a liquidity pool nobody says liquidity poor people says lp lp token alpito so if you ever go to a discussion and people are talking about the lp token is it fungible or not it's like can you get when you give your token to a pool you get almost like a certificate in the form of a token so that's what advanced people called lp token so you get that representation of the stake that you have in a pool so if we get a pool of 12 people and each person puts a proportional amount i have 1 12

off that pool back so it's almost like i get a token that says this is 112 off pull xyz right so this is what an lp token is and you can do things with that lp token you can stake it somewhere meaning that lp token has value because it's a representation of a physical asset that you let the casino to play with it i say casino but it's an exchange it's a decentralized exchange and the proper name is automated market makers right when we participate in any market we do have order books

and to have order books we have a series of buyers and sellers each one with different quantities so when you give some sort of quantity for that order book people are going to use that so when i say people is a smart contract so your counter party is a smart contract so this is actually what you do when you uh put your tokens into a liquidity pool and those are today one of the biggest amms automated market makers so there is uni swap on one side there is curve there is balancer there is sushi swap there are many different exchanges in thousands of new chains now let's say five six chains so there is a lot of the

the evm ethereum virtual machine that's getting compatible to other chains so sometimes you have uni swap running on polygon you have curve running on our bedroom so you have those uh front end running on different chains right so i think the best way to make this workshop very handy and hands-on is actually by showing you not to be shy to use one of them so what we can do in defy today we can borrow and land our tokens so let's say if i have i don't know balancer token i

can then bring this to ave or compound and then get some value out of that so i i let them have my token again you're going to be signing matamas transaction you're going to allow whatever protocol have it to access your tokens because you're giving them the power to use your tokens to then release some collateral back to you right so this is the borrow and lending process that allows so much of leverage to happen in our ecosystem right so you have a token then you allow this platform uh to generate some value you can borrow money because you have a valuable asset let's say if you have a valuable

car you say bank hey i have this vintage car you you can keep it on your safe i'm not gonna drive it on the street but if you can give me a hundred thousand euros so i can use it then you have my car whenever i can pay back i say here's your hundred thousand euros per plus interest and then give me my car back so your asset is your token right so the whole principle of borrowing and lending is understanding that you're giving an asset in the form of a token some tokens are more valuable than others some release more lending value capacity so obviously without saying the name but some coins

are not really worth much garbage so they might not give you any lending value whether some other tokens do have a very strong history of being a secure very usable like if you have eth in your in your wallet that it can generate you some usdc or some tokens back and then you can do whatever you want with that leverage so you get another token right you can always revert the transaction so every time you go it's allowing signing authorizing and then you get a different token in your wallet so you see now you have zero eat and something else so

it's not that you lost your eat it's just that you eat now it's not your property technically anymore that protocol holds it for you now you have that state representation of it and you can do other things and this is the principle of leverage as well so you can then generate money out of doing that derivatives evolved a lot so there are some synthetic tokens some perpetuals futures options and many things that we can do in the regular traditional financial world that i was doing for 15 years of my life and i don't want to be part of that world anymore but today we do have that in forms of smart contracts in in forms of protocols that we do

can interact how i suggest any beginner to start is start with little mainnet will be costly in terms of gas fees but mainnet is very secure because way more nodes are on my net protecting mainnet so maynet will always have way more liquidity so when you want to do something you want to go to a bank that people know all over the world so let's say i go now to ecuador anybody here from ecuador nobody from ecuador if you go to any bank in ecuador and you see citibank and banco de los agronomos de ecuador for example which one do you think you would

trust more so sometimes it's about the one that do have more capitalization and that comes in terms of market cap that's why i was showing you those billion dollars worth of those are all locked in ethereum they're not in solana they're not an avalanche they're not in other chains so i'm being very purist here and saying like when you make financial decisions you have to make uh decisions based on where liquidity is and you don't want to end up in a very small party you want to go to a big party where you can get out anytime without like a very small door of not being able to exit and that would be my last slide i can always go to uni swap or curve and then

try to show you this front end any suggestions or any links particularly you would like me to see um showing you guys this is all for you this is a workshop yes hi uh assuming i'm sorry if it's a very basic question but assuming for for most of us the the main currency that we uh earn and we spend is still usd or euros um it seems that there's such volatility on cryptocurrencies that you know the five percent or six point three percent that i might be making sticking my eth is is is very low compared to the risk that i'm taking you know just from the

volatility of the assets and i i think the same can probably be said of the of the yields and and other um type of you know investments i could be making so could you talk a little bit about why people do this you know i understand you might want to stake because you want to be part of the ethereum revolution but you might you might do that you know and buy a computer and and spend the price of a computer but maybe not put your life savings at risk just for that so can you explain why people do it why people do it i think like why people take some risky decisions each person has a different stomach level for risk as you just mentioned risk is perceived in different ways but risk is volatility

to me if you ask what's risk is what is my delta what is my standard deviation i look at statistics when i look at risk how much can i make and how this asset performed over time crypto is very young we don't have 10 years of history like we could easily get the s p or the nasdaq from ages ago right so it's very hard to access risk so the risk taking level is by assumption way higher because we don't have historical data to compare we can expect but i cannot say that ethereum is likely to perform like this

or like that in the next year because this past year it only fluctuated 10 or 15 percent i cannot say that because it is still very volatile so why are people taking this amount of risks of speculation the whole entire planet started speculating so much more during the pandemics from robin hoods of the world more retail investors so i see that phenomenon as the democratization of finance more people are being able to buy smaller stakes and be part of that with fifty dollars with ten dollars you can speculate on that token obviously

nobody's gonna get a lambo in with putting a hundred dollars in that it's not we're out of this this scenario that people are making promises on twitter and doing a lot of marketing so a lot before you interact with any protocol is understanding who are the developers building it what is it that they're building what is the value proposition of their token what's their token economics a lot of the times you get their token and you stake it and you can stake for four years now i want my money back i can't i locked so i understand the consequences of locking your token for four years means i trust that project long enough and shout out

to curve because that's exactly what i did i did stake my tokens for four years in a project that i see long term value majority of the people they want that 15 minutes when i get millionaire and get out so it's very important before you get in is how fast can you get out when liquidity shrinks and when the party finishes and when the djs are not there and the lights are over so when you access risk you have to understand how will i get my money back and do i need my money back because if i need my money back those are my life savings am i actually going to play with them all

uh being a wealth advisor for so many years like i can say this is not financial advice but i was a financial advisor for such a long time people do have different life cycles and stages of life when you're on your 20s and we all did that i think like when i was an intern i got all my salary money and put it in options and i was selling puts without really knowing and like i was doubling my money until i lost all my money like this quick so you learn about options in the hard way but it's very it's a great uh school as well because you understand that all the amount of the premium that you're putting you can lose so if you put it all your life savings

you have the chance to lose all your life savings i once had a client that came to me and said but what do you think about the put strike 17 versus the put strike 18 i said listen i'm not talking to you i'm talking to your stomach right now if you had 60 chances of losing all your money for 23 or 20 of chances of losing all your money for three dollars which one do you prefer you your stomach and you tell me there's no right and wrong you have according to this volatility 20 chances of losing it all or 60 chances of losing it all that's why this one pays more

right because your level of risk is higher so the same with crypto right so if it's worth or not the journey i strongly suggest like try your validator try to run like i know so much more about wi-fi and networks and and how those protocols work and every hack that happens you go and you investigate together you want to understand who's exploiting and how the the hack was exploited that knowledge nobody can take it from you and i think it's very very valuable i have a friend that says like you pay gas as tuition fees so it is tuition fees sometimes you lose your money you pay a lot of gas just to see you see i was right so he told me like i i bought a token that uh he was like it's a scam

i'm like no it's not you can see i understated like great you once take it now can you convert back to usdc like i don't know that's how you see if it's a scam now convert it back to usdc and then i converted i paid like a lot of gas like seriously the network was congested i spent so much money but then i had usdc back and then he's like okay now good now you got your profit now you can put some of your profit so when i re-entered a new position i re-entered with way less i'm like yeah maybe he's right maybe i'm being too aggressive at this time so even with years and years of financial expertise we do take sometimes like some decisions based on the hype and fomo and and it happens so don't blame

yourself uh for for doing sometimes wrong decisions but cautious on how much and and all that and i can say that like at the end of our life cycles as well people on their 60s 70s when they're about to retire i thought that that's when they would be most careful and no uh that's the elderly or very very high risk takers they do want they didn't make money and and now like they cannot lose much they probably have like 10 more years in life so they they just have a higher risk appetite and that's very curious so excuse me the long long answer i hope it helped but it's risk-taking can happen in different

markets it's crypto is just a different highway oh thank you so much julia i thought that was so well said and i have a follow-on question so um you were asking um i'm not sure if you were asking about staking or about participating in liquidity pools um i have never uh i'm really now i would love to run a node and i thought found this so useful but i have actually participated in liquidity platforms and um one way that i did it um just again for it's not financial advice but for because this is about learning and sharing experiences one way that i did it to make myself feel more comfortable and have what's called a better health factor at least on ave is i actually put ethereum to

as a collateral and i borrowed back ethereum so basically there's if ethereum goes up then my ethereum that i borrowed also goes up and if it goes down it it also goes down right so that's different so basically it was a way for me to not have that much volatility in comparison right so i wasn't depositing ethereum or usdc and getting um the the other one but so my question to you julian because it is a question is uh what what do you think about that because there are sometimes incentives just to put down collateral and then you're actually it's collateral you're not using um so you could even put down usdc and then borrow usdc and then you you might use that usdc on chain and then you earn a little bit of

interest six months later you take it out so i mean what do you think about a strategy like that i think this is like very very curious that you put a token to get the same token back what a strategy that is right and it helps you to have that sanity that you're just following one asset which a lot of the portfolio management the more tokens you have the more volatility moments you have like a bigger portfolio to watch out for and when you convert it back you have to do like 10 different token transactions and swaps when you have just one or two way easier as well to to manage that so plus points to you on that i like to have fewer tokens that you watch out for instead of having like diversification because we do have a lot

of uh intrinsic market risk as well because the whole market fluctuates ups and downs and when they correct they also like go heavily so when you have a token or two your exit strategy is um is quicker what i would say in terms of opportunities right in terms of that value is always mathematics how much percent am i making by having this collateral what can i do to learn with this collateral that i got if it's ethereum good but you're probably going to do something with that ethereum are you going to stake how much is the rate or yield expected in the future to earn that so if you paid 8

and you're gonna get three percent like doesn't make any sense why i have to pay eight when i can only earn three but if you borrow at a rate of three and you can earn eight good but you're not earning eight as a flat rate you that eight is fluctuating tomorrow might be 7.95 the other day might be 7.7 so you have to watch out constantly like any portfolio you have to constantly monitor it some people don't want to monitor they just want to close their eyes and forget it which is a strategy as well but then don't blame yourself for not watching it or put some alerts just put some alerts

like if this yield is below this amount or if that rate that i'm borrowing then spikes now i have a problem because i i was only paying this amount to borrow now i need to pay much more to borrow the same amount so it's all about that equation so you need to do the mathematics and calculate as well the gas how much is percentage is this gas representing right a lot of my transactions they do happen on sunday mornings sunday 11 o'clock i don't go out on a sunny day with my family i don't do anything exciting because i'm doing transactions when the guests store the network is way less congested means

california is already asleep europe is already awake but not really very awake at 11 o'clock in the morning so the the network is way cheaper uh in terms of way usage and then you obviously have some bots and all that so when you have like an nft auction happening gas prices can go to the roof so yes consider the gas always as part of transaction costs because everything we do cost gas and yeah that monitoring of the equation if it's interesting obviously you will borrow for two three percent and if you can possibly earn 25 but don't think one year it's going to

be 25 and how those rates go low when you enter a liquidity pool liquidity pools are incentivized right so they have zero liquidity they need to bring people to the party so they almost need to pay people to come to the party so they pay what let's say we're going to give you 80 percent apy or you're going to give you 200 apy the moment people start entering the party they said like good now we have some cushion of liquidity now we're not going to offer 200 300 it's very expensive for a protocol to spend that much on everybody in the party it's almost like it's open bar for everybody no the last ones are gonna probably get the coca-cola and the

cheapest beer but they're not gonna have your premium i don't know champagne i was gonna say vodka but you don't do that so long story short is that those ap whys they shrink as liquidity gets in that's the purpose they incentivize so liquidity goes to the pool and as liquidity migrates the incentives go low meaning apy goes low so if you said yeah i was borrowing at three percent and now i'm getting 245 great now i'm only earning 80 you're still good because you're borrowing at three percent but at the moment you're only earning one and a half percent it's not economically anymore to borrow money at the cost that

um you will pay you will receive less and then you have to close your operation or like stop or just migrating pools and that's what djents do day and night they just go from highest apy to another highest apy and they just like spend days and nights on twitter just looking for highest apy so highest apy highest risk there is a cost of that why are they paying 200 million thousand percent like wormhole happens right a lot of people saw that wonderland and everybody's saying this is safe this is secure and a lot of people went there i was very entitled to i passed that website two or three times while the ap

wise was very very high i almost put like ten dollars or something but i'm like let me wait and see now i didn't get the hundred thousand percent let me see what happens with the others so give yourself also permission not to experiment not to have the fomo please like not because everybody's doing that you have to do you can also exercise some cautious not being extremely cautious and never do anything no we do learn it's experiences we do lose money don't blame yourself too much i guess everybody here went to a very sad depression mode after the price is corrected it's normal it's human we're not machines we're not bots so it really happens

yes are we thank you very much for joining if you have any questions find me on twitter [Applause] thank you i use it's encrypted number one please follow me on twitter because i have like 10 followers maybe my mom and family and i'll share the presentation and you can ask her your question