The internet of money is being built with blockchain technology and without banks. We call it DeFi, short for Decentralized Finance, and this is where you can hear the builders and users of this cutting edge world tell their stories first hand. Hosted by Camila Russo.
Justin Blau, better known as 3LAU, is a DJ who frequently plays at all the major festivals, he produces his own successful tracks, as well as remixes for pop stars like Rihanna and Katy Perry. He became interested in blockchain technology because it can provide a means for fans to provably to own and digital content and for artists to better monetize their work. He believes this innovation has the potential to revolutionize the music industry.
In this week’s episode I interview Fred Chesnias, the CEO of Atari. The video game company now has a token and plans to release a wallet and even an exchange. The token is an erc20, which Atari hopes will get used across any game, not just their own. With the token, users will be able to buy Atari NFTs, which include wearables to make a fashion statement in the metaverse. Fred believes blockchain and crypto can be a way to make it out of poverty, even leveraging video games themselves, reselling avatars and in-game items.
Beyond blockchains he also talks about business; Chesnias was able to take Atari out of deep financial stress and turn it around. He gives advice to founders and business owners going through difficult times. One of the three main lessons he learned was to oversimplify. Listen to find out what else!
In this week’s episode, I speak with Robert Sharratt, managing director at CrescoFin, a Swiss-regulated crypto firm which wants to become a bank alternative. He says Cresco’s objective is to replace banking with code. And while that sounds revolutionary, he’s the first to admit he’s in a “boring business.” He’s not building a yield farming platform that can get you 1,000x yield. He’s building a savings account that’s backed by real-world assets like invoices, for users to deposit fiat currency in exchange for returns of about 3%. Instead of Yolo-ing into untested smart contracts, he’s offering a product that’s insured by Lloyd’s of London. While this may sound a lot like trad-fi, Ethereum smart contracts are used as the one source behind it all.
In today’s episode I talk with Jeff Garzik, the Bitcoin core developer turned DeFi builder. Jeff comes from leading Bloq, a blockchain infrastructure company focusing on enterprises. As much as decentralized finance is exciting and groundbreaking, he believes its lacking professionalism. Jeff believes DeFi needs to be easy for retail users and for institutional users, not just for crypto natives. With that goal in mind, Bloq is launching Vesper, a decentralized protocol for users to gain passive interest on their crypto. The innovation relative to other yield bouncers, is that users can pick a risk level and the protocol will invest in different strategies accordingly. It both competes with, and uses Yearn Finance. We also talked about what’s next for DeFi, and how he believes the space will trend towards “hybrid finance,” where traditional finance will progressively adopt this infrastructure to become more open and global.
In this week’s episode I speak with Stefan George, the cofounder and CTO of Gnosis. Gnosis is one of the OG Ethereum projects. It was founded in 2015 by Stefan and Martin Koppelman as a prediction market platform on Ethereum and it’s now an ecosystem of financial applications, with a decentralized multi-sig wallet, called Gnosis Safe, and a decentralized exchange. Most recently, Gnosis announced it will join other DeFi projects and launch a DAO, where it would transfer a large chunk of the ether and GNO tokens in its treasury for the community to manage.
This treasury is sizeable at around $100M dollars, due to the rising price of the 250,000 ETH they raised in a 2017 ICO. And this stash has been the core of a dispute with one of Gnosis token holders, hedge fund Arca. Arca claims the Gnosis token is trading below the value of the Gnosis treasury, and so they have proposed that Gnosis buy back their tokens at a value that’s between the current market value and the value of the treasury —or the book value.
Stefan argues the GNO market cap is miscalculated because it’s not counting the actual number of tokens in circulation and should be higher. He also says the Gnosis DAO should drive more value to GNO holders.
In this week’s episode I speak with E.G. Galano, cofounder of Infura, an infrastructure provider for Ethereum and other blockchains. Many Ethereum applications depend on Infura to run their nodes, and it became apparent why that’s problematic recently, when the service provider was having trouble connecting to the Ethereum blockchain, causing much of DeFi to break down. E.G. dives into the recent outage; he goes into what went wrong and what Infrua is doing to make sure it doesn’t happen again. He also talks about DeFi from the backstage perspective of an infrastructure provider, and what he says might get you feeling even more bullish on this space.
This weeks podcast episode is with Mona El Isa, the co-founder of Melon, a decentralized asset management protocol. Mona tells the story of how she started her career at Goldman Sachs trading equities, derivatives, and all kinds of financial instruments, for a decade. She then went to work with one of Goldman’s hedge fund clients, where she managed a long-short portfolio. With all that experience and $20 million dollars from a seed investor, she ventured on her own to launch a hedge fund —but failed. The time, costs and administrative hassle were too much to handle even with an investment of millions, which in that world, is actually pretty tiny. She came to the conclusion that the next step for her would be to build a blockchain-based protocol so that nobody would have to experience what she did when trying to set up an investment fund. A platform that made the process so much cheaper, faster and easier, that anybody could become a hedge fund manager. That’s how Melon Protocol came about.
In this week’s episode, I speak with Illia Polosukhin, cofounder of the Near Protocol and Fernando Martinelli, co-founder and CEO of Balancer Labs. Near is one of the up and coming Layer 1 chains, Balancer is a prominent DeFi protocol and application on Ethereum that will now also be on Near and other blockchains. As for Near being labeled an “Ethereum Killer” Illia says Near is “not trying to kill anybody.” He thinks finance is just a stepping stone for all the use cases enabled by blockchains and that Near can be the place where those consumer apps are built. Fernando says DeFi will live on many different Layer 1s, but he sees the space expanding into less than 10, not hundreds of chains. He remains very bullish on Ethereum and is betting on a flippening with Bitcoin in the near future, which Illia agreed would be “totally possible.”
In this week’s interview, I speak with Sam Bankman-Fried, co-founder and CEO of crypto liquidity provider Alameda Research and derivatives exchange FTX, and with Anatoly Yakovenko, the creator of the Solana blockchain. Bankman-Fried, recently announced the launch of Serum, a DEX built on the Solana blockchain. SBF has become known to be a ruthless trader, but he argues he’s simply using DeFi protocols for what they were made. For Anatoly, the end goal of Solana is to find the fastest and cheapest way to scale cryptography so that people are able to have ownership and participation in the applications they use, and so that the financial system can become more open efficient.
This week’s interview is with Trevor McFedries, who is behind Lil Miquela, a 19-year-old aspiring pop star with almost 3M Instagram followers, striking deals with Clavin Klein and Prada. But what’s more surprising is that she’s not human. She’s a computer-generated, character. The company that Trevor co-founded, called Brud, created her image and life story. It’s only fitting then that Lil Miquela, who lives in a digital world, will start to leverage digital tokens.
[Note: Trevor says in the interview a Miquela drop on SuperRare would happen on Oct. 30 or 31, but they’ve since changed the date to November 17. So you’re still on time to participate.]
The founder of Summa speaks to The Defiant about why he has become disillusioned with decentralized finance. Stories of financial inclusion are much rarer than stories of somebody raising hundreds of millions in a token sale or people throwing money at the latest yield farming protocol. Still, he’s encouraged by the fact that it is much easier to launch a financial service than it ever has been before.
In this week’s podcast episode I interview Tor Bair, the founder of Secret Foundation, an organization which promotes privacy-preserving technologies, with a focus on Secret Network. Secret Network is a proof-of-stake, Cosmos-based blockchain, which has the capacity to process private transactions and, notably, private smart contracts.
Tor says that for Web3 to develop into the open and permissionless system its builders want, privacy should be at the core. His biggest fear is that in a Web3 future, intead of having single corporations control our data, governments will have the same access too. Without private blockchains, Web3 could devolve to enable surveillance capitalism, where auditability is weaponized. Tor talks about the technologies that are being built today to stop that from happening.
I interviewed Simon Taylor. Simon has the rare quality of being very knowledgeable about decentralized finance but also about fintech. He is the co-founder at fintech consultancy firm, 11:FS, and he previously led blockchain research at Barclays. He also leads the excellent newsletter Fintech Brain Food. Simon points to a world where fintech and defi start to converge. All the capital and users in the traditional finance will have to bridged into crypto at some point and that bridge can be fintech.
Hello Defiers! In this week’s interview, I spoke with Gavin McDermott. He's an investor at IDEO CoLab Ventures, the venture arm of design firm IDEO, and he’s one of the creators of Fair Launch Capital. While the name might suggest otherwise, Fair Launch Capital isn’t an investment firm, or at least it’s not a traditional investment firm. Instead, it gives startups no-strings-attached funding so that they can afford security audits and launch their projects in a safe way. They’re asked to consider paying it forward by returning at least the same amount they got but ideally more, to fund the next project.
The idea came after the team saw that many founders in crypto were feeling forced to either sell tokens before their platform launched or raise venture capital as one option to pay for audits, or release their projects without the proper security checks. Gavin is hoping fair launch capital provides a viable alternative to venture capital, even if it does end up disrupting his fund's own business model. Since the group unveiled this new funding mechanism late august, the term “fair launch” has taken a life of its own, becoming a gold standard for any new DeFi venture.
In this week’s episode, I spoke with Dan Elitzer and Clinton Bembry, who were part of the founding team of Yam. Yam Finance is an experiment in rebasing cryptocurrencies, plus token incentives, plus full on-chain governance, plus a DAO-like treasury managed by token holders. It’s also testing the power of the emoji and opened the flood gates to meme-based DeFi tokens.
Dan and Clinton tell me the back story of how this crazy project was created, how the group loosely coalesced in a chat group and from there it was just 10 days until launch. They talked about how the project blew past all their wildest expectations, and about the absolute terror of having hundreds of millions of dollars flow into the unaudited code they had pushed into the world.
This week’s interview is with Jeff Zirlin, aka Jihoz, growth lead at Axie Infinity. Axie is a digital game built on Ethereum, which involves cute animals going to battle against each other and taking control of your digital assets. The big vision is that as we increasingly live our lives in the digital world, digital assets will become more and more important and applications like Axie Infinity, will become more than just games, but places where people work and socialize. The key value that blockchains and NFT tokens add to this picture is that we’ll be able to actually own these assets. There will be no company or centralized entity able to ban an account and take their assets away.
Hello Defiers! In this week’s interview, we chatted with Grammy Award-winning DJ Andre Anjos, aka RAC. Many have seen cryptocurrencies as a way to decentralize the financial system, thanks to the innovation of digital scarcity. RAC says that digital scarcity can also help disrupt the music industry. His experiments have so far showed how distributed networks can be the underlying infrastructure that helps artists can sell their creations directly to fans; how tokens on open markets can help more accurately price goods and help them benefit from secondary trading of their products; and now how digital assets can help strengthen communities.
Stani Kulechov the founder and CEO of Aave. When we spoke Aave was the second-largest DeFi protocol, but in the days after our conversation, it rose to overtake MakerDAO and become the DeFi platform with the most assets held in its smart contracts, at over $1B in digital assets. It’s been an exponential rise for Aave, which launched just eight months ago and in that short time was able to climb the famous Defi Pulse Total Value Locked ranking to the top. It’s done so pushing DeFi forward by driving innovation in interest-generating tokens, flash loans and delegated credit lines, which are all lowering the barriers of entry to users from all corners of the world to access financial applications. We also get into all the recent yield farming craziness, which he wishes was more restrained.
Santiago Roel is partner at ParaFi Capital, one of the most active investment funds in DeFi. Before going full crypto, Santiago worked at JPMorgan’s investment banking arm, and then invested in fintech and software at a venture fund. He now uses his more traditional VC frameworks to analyze open financial protocols and finds that even by those metrics, DeFi comes out ahead. We also talked about the seemingly crazy new DeFi meme tokens and Santiago says to not underestimate their value. Maybe part of the reason traders are pouring millions into these tokens comes from the human desire to connect with others.
In this week’s episode I speak with Alex Masmej, the first person to raise money by selling tokens not linked to any project, but linked to himself, in a sort of self-IPO. Much like shareholders taking dividends, Alex token holders can have a share of the entrepreneur’s future earnings. The money raised has helped him cover living expenses as he plans to move from Paris to San Francisco and start a tech company. He’s willing to try almost anything and see what sticks. In one of his experiments, he let ALEX holders vote on his daily habits, which is how he came to run 5km almost daily. Most recently, he announced token rewards in exchange for holders to add liquidity to exchanges where Alex is traded. We talk about how to better align token holders' incentives with his own, what mainstream personal tokens may look like, and the Black Mirrorish quality of it all.
Andre Cronje is the developer of the yearn platform and YFI token. There’s this sort of mysticism around Andre: The solo genius builder who relentlessly releases code even if it hasn’t always been properly audited or tested. The DeFi wizard capable of turning a token which he himself claimed to be valueless to be worth thousands of dollars in a few days. He talks about the actual paralyzing fear that comes with building money protocol, the huge responsibility he feels, and how finger-pointing has caused him to quit the space before. But he says the drive to continue innovating has helped him overcome that fear and keep building.
In today’s episode, I speak with Polychain Capital founder Olaf Carlson-Wee. He was already telling Wired magazine about programmatic finance back in 2016, so it’s no surprise Olaf is very excited about the growth and promise of DeFi. He thinks smart contracts are enabling different ways of organizing people and capital, turning traditional corporations into internet sovereign corporations. He believes that given a compelling underlying product, liquidity mining will be an incredibly effective mechanism for accelerating network effects, which will be applicable to many different types of business models even beyond financial services.
In this week’s epidose I speak with Bette Chen and Ruitao Su, who are building DeFi on Polkadot. While most of DeFi is being built on Etheruem, here is the team creating an entire new financial infrastructure on the decentralized network built by the Web3 Foundations and Parity Technologies —which was founded by Ethereum co-founder Gavin Wood. Their project called Acala, has been mostly known for its stablecoin, but they’re also building staking derivatives —a token that’s a derivative of staked DOT tokens and can be used in DeFi— and a DEX. Each one of these pieces is a huge undertaking on their own, but this ambitious team is making all of them at the same time.
In this week's episode, I speak with Lasse Clausen, founding partner of 1kx, one of the most active venture funds in DeFi. A typical VC question in the traditional tech space is it a 10x? Is it 10 times faster, better, cheaper? This concept has been dressed up very nicely as like, often with grand statements about making the world a better place, but really, Lasse says, VCs are subsidizing a market takeover. The real question they're asking is, can this become a national monopoly, where users are so locked in, that they have no choice but to use the product. Lasse thinks crypto will crack this system open and that the paradigm shift is so big that there will be some networks that are really 1,000x improvement over the status quo. That's why his fund is called 1kx.
This week’s interview is with Vansa Chatikavanij , the CEO of OMG Network. The Bangkok-based project formerly known as OmiseGo has spearheaded research and work on a scaling technology for Ethereum called Plasma. Scaling solutions will be key for Ethereum and therefore DeFi, to continue growing. The network is already at capacity, and gas prices are getting prohibitively high, especially for complex DeFi transactions.
In this interview we talk about OMG’s beginnings, the changes the project went through from conception until shipping, realizing that marketing should come after the project’s launch, and the different Ethereum scaling solutions. Most interesting to me is Vansa’s big vision of global value transfer as a basic human right and how she wants to help make that a reality.
In this week’s interview, I spoke with Brandon Iles, the CTO of Ampleforth. Brandon is a former Google and Uber software engineer, and built his first crypto app together with Coinbase CEO Brian Armstrong. Today, he’s trying to rebuild the way money works.
For its huge ambitions, Ampleforth is a relatively little-known project. It wants to create an entirely new category of monetary assets — one that doesn’t have Bitcoin’s gold-like fixed supply, it doesn’t have Ether’s oil-like utility, it’s not fiat-backed like USDC, and it’s not collateralized like Dai. So what is it? It’s a token — AMPL— whose value comes from having a price which moves in a predetermined band, thanks to a smart contract which automatically contracts or expands its supply. The end result is a token that trades at close to $1, the 2019 US dollar, to be precise, but Ampleforth doesn’t like to be called a stablecoin —you're about to find out why.
We also talked about the project’s recent liquidity mining program called Geyser, where traders can earn AMPL by supplying liquidity on Uniswap, and how for Brandon, the dizzying activity around these schemes is proof of DeFi’s success. Brandon also discussed the project’s roadmap, from being used as a way to diversify collateral in lending platforms like Maker and Compound, to denominating debt obligations, to very far out into the future, replacing central bank issued currencies.
This week’s interview is with Michael Anderson and Vance Spencer, co-founders of crypto venture fund Framework Ventures. Michael and Vance live and breathe crypto. The live together, work together, and spend all their time analyzing crypto startups, and actively participating in the protocols they fund. It’s how they’ve become some of the deepest thinkers in the space. They talked about how the emergence of token-based business models in the past year has been a breakthrough for crypto, legitimizing the space as a new asset class. they discussed how they determine whether a protocol will accrue value.
Vance believes new developments in decentralized exchanges this year will drive 10% of centralized exchanges’ liquidity. Michael believes the hot new thing, governance tokens, are akin to early startup equity. They also talked about why they love the philosophy driving SNX and discussed why the underdog mentality of LINK Marines is bullish for Chainlink. But first, we’ll start with how they got into crypto in the first place.
This week’s interview is with Aragon co-founder Luis Cuende. Aragon is a platform for users to create their own decentralized autonomous organizations. DAOS are organizations that have as much of its operations put into code as possible, and have smart contracts execute those operations. Owners hold tokens of the DAO, much like owners of a company hold shares, and make management decisions by voting with those tokens. They’re as transparent, immutable and secure as the blockchains they run on. Aragon wants to make it easy for anyone to build these futuristic companies.
Cuende started this project in 2016, at a time when most had given up on these organizations after the crash of what’s likely the most well-known DAO so far, called The DAO. The space has recovered and in the past year, thousands of DAOs holding millions of dollars have flourished. The dream of more fair and open organizations, which anyone can access and create, is back at a time when the world seems to really need them. People are losing trust in institutions and crypto can provide an alternative. But Cuende says he’s saddened to discover the space is nowhere near ready.
In this week’s interview I talk with Alexis Gauba, the cofounder of Opyn. Alexis and her team built the first decentralized options market, on Ethereum. These instruments give investors a tool to protect against market volatility and Black Swan events, like hacks, bank runs, and big price crashes. In DeFi the risk is especially high, which explains why Opyn has taken off since its February launch.
Options are a key piece in traditional finance and make up the most liquid market in the world, with contracts representing trillions of dollars in value. Opyn contracts are not quite yet, and even if notional volume grew five times in the past month, it’s still under $40 million. But if DeFi ends up overtaking centralized finance, we could be witnessing the rebirth of this monster-sized market. The difference is that this time, everyone can access it, and anyone can build their own financial instruments on open sourced protocols.
Alexis shares more about how Opyn was born, the project’s traction, the next markets the team plans to add and what innovative projects devs are building on top of the protocol. She also gives a peak at what Opyn V2 might look like.
This week’s interview is with Sergey Nazarov, the cofounder of oracle provider Chainlink. The way blockchain applications get their data has proven to be crucial, as failures in those systems have been at the core of many of the latest attacks in decentralized finance. He says developers are currently underestimating the complexities of building data aggregators and oracle systems and says, the only reason these dangerous patterns are not as discussed is because the losses have not been Mt. Gox level. In this conversation Nazarov makes the case on why the Chainlink platform is meant to help avoid those risks. We also talk about the main trends he’s seeing in the space, Chainlink’s plans for the coming months, and his vision for a more decentralized future.
This week’s interview is with Fernando Martinelli, co-founder and CEO of Balancer Labs. Balancer Labs is an AMM with a twist. Instead of liquidity providers having to deposit tokens in a pool at a pre-determined ratio together with a more liquid token (usually ETH), Balancer enables users to create token pools that have any ratio they want between their tokens. They can use any combination of tokens, and can even exclude ETH. The pools automatically rebalance when tokens’ price change, so that the same ratio is maintained. This way, liquidity providers are effectively creating something like a tokenized index fund, or ETF, in which anyone can invest. On the other side of the protocols are the liquidity takers, or traders, who can exchange tokens from these pools, or “ETFs.”
Traders pay a small fee, determined by liquidity providers, which means that unlike in traditional finance, where you have to pay ETF providers to trade index funds, you can create your own fund and get paid for it.
Fernando explains how Balancer works, and gives the scoop on what’s coming up next, which includes, an interface for non-technical users to create their own token pools, a Balancer token to be launched in V2, liquidity provider rewards using this new protocol token, and plans for decentralized governance. He also talks about Balancer’s business model, the steps it took to ensure the protocol is safe and the level of control the team has over the protocol —which he says is basically zero.
Emin Gun Sirer is a Cornell University computer science professor who has been deeply involved in the Bitcoin and Ethereum communities from the very early days. We talk about how he got started in the field, building a cryptocurrency long before Bitcoin. Gun, as friends call him, then turned his attention to Ethereum, notably catching the bug in The DAO, but failing to alert the community about it.
After years scrutinizing existing blockchains, he’s back at making one himself with AVA, whose testnet launched two weeks ago. He explains the inner workings of this network, the first built over the Avalanche protocol, and how it can process several thousands of transactions per second at latencies of under one second.
He also talks about his plans to release a subnetwork called Athereum shortly after the AVA mainnet launches in July. Athereum will be almost identical to Ethereum; it will replicate its smart contracts and assets, and ETH holders will hold the equivalent amount of ATH. Sirer says the intention is for Athereum to serve as a safety net in case something goes wrong with ETH 2.0. If this sounds like Ethereum’s old friend wants to bring on some serious competition to the second-biggest chain, that’s because he is. Still, he’s quick to highlight he wants Ethereum to succeed and that he’s not after Ethereum dollars, but rather after money flows that are outside of Ethereum.
Hello Defiers! This week’s interview is with MyEtherWallet founder and CEO Kosala Hemachandra. As the head of one of the most popular Ethereum interfaces, Kosala has a unique perspective on how the global pandemic has impacted activity. He also shared how coronavirus has disrupted his own life, and talks about what it’s like to run a company from his bedroom at his family’s home in Sri Lanka, on opposite timezones as the rest of his team. He also talks about how crypto was built for crises, about the importance of building a decentralized product —if it’s custodial, it’s not worth it— and what he believes the future of digital wallets will look like. Lastly, he told me about MEW’s next big projects: a DEX.
In this week’s episode we talk with Daniel Wang, CEO and founder of the Loopring protocol. The exchange built on the protocol launched a little over a month ago, with the goal of providing a non-custodial platform, meaning it allows users to keep control of their funds, with similar performance in throughput and cost as centralized exchanges. There’s mind boggling technology with funny names behind this protocol —zero-knowledge proofs, Snarks, Starks,— which Wang demystifies and explains.
We talked about how scalability is a relative and not an absolute measure. To him that means Ethereum 2.0, an upgrade meant to increase the tractions per second on the network, won’t magically solve all scalability issues and Layer 2 solutions, which take part of applications’ data and computation off chain, will still be needed. To him though, users’ security is the wholly grail, and Ethereum is the best place to get it.
Wang also lamented lack of accessibility to Ethereum dapps and dexes in China, and talked about Loopring’s plans to launch a smart wallet geared for the Chinese market which will hopefully help solve this problem.
These are some of the key topics we discussed:
Loopring origins and having to give back most ICO funds
The team’s decision to go all-in on zero-knowledge proofs
The protocol’s tradeoffs: more centralization for faster and cheaper transactions
Why users should use non-custodial exchanges instead of centralized trading platforms
Lack of access to Ethereum dapps in China and smart wallets as the gateway to mass adoption
Ethereum dapps scalability issues and Layer 2 solutions with Eth 2.0
In this week’s episode we speak with Rune Christensen, the founder of MakerDAO, the largest lending platform by assets in decentralized finance and the issuer of the Dai stablecoin. Rune has been in crypto since 2011 and is no stranger to volatility and crazy market conditions. Still, last month was the most shocking for him yet. On March 12th, MakerDAO’s mechanism to heal loans that become under-collateralized broke down amid the market crash, allowing one trader to run off with more than $4 million in free ether. He calls it Maker’s toughest test yet, and he believes the protocol passed it.
Key things we talked about:
MakerDAO’s plan to hand control to its community and dissolve the Maker Foundation
MKR auction and token whales
The decision to add centralized collateral to back Dai
Whether Maker will add Bitcoin as collateral and create a euro-pegged Dai
Collateral holders who lost 100% of their funds in the March 12 crash
Rune’s long-term vision for DeFi and Maker, as an enabler for financial inclusion