🎙 "Having Legal Tender in a Currency You Cannot Control Means You Cannot Print Problems Away:" Mariano Conti
In this week’s episode I speak with Mariano Conti, the former head of smart contracts at MakerDAO. Mariano knows the value of having permissionless and uncensorable currencies first hand —he started earning in Bitcoin in 2014 in Argentina because pesos wou...
In this week’s episode I speak with Mariano Conti, the former head of smart contracts at MakerDAO. Mariano knows the value of having permissionless and uncensorable currencies first hand —he started earning in Bitcoin in 2014 in Argentina because pesos would instantly lose value and it was hard to get dollars. When he learned about Ethereum he went all in and started working at Makerdao before DeFi was even a thing in 2016. When Dai was created, he was one of the first to take out a collateralized loan against his ETH and used that loan to buy a car. It must have been the first DeFi loan used to buy an actual physical thing.
The crypto space has come a long way since with an entire financial system built out of money legos and this week with a huge milestone of El Salvador becoming the first country to adopt Bitcoin as legal tender.
Mariano talks about this historical moment and why it’s significant that it was a Latin American country to take this step. But he’s also cautious about what’s next, saying that he doesn’t expect many countries to follow suit as El Salvador had some very specific characteristics which made it easier for it to adopt Bitcoin, which other countries don’t have —namely, the fact that it was already dollarized. He also wonders whether it would have been better to adopt a stablecoin instead of Bitcoin.
Still, to Mariano, that doesn’t really matter as it will be the people of Latin America and elsewhere who will adopt crypto -- regardless of what governments say.
The podcast was led by Camila Russo, and edited by Alp Gasimov. Transcript was edited by Owen Fernau and Dan Kahan.
🎙Listen to the interview in this week’s podcast episode here:
You’re a paid subscriber, which means you get the full transcript below. Subscribers also get exclusive access to The Defiant’s Discord chat for the community, here’s a new link to join.
Mariano Conti: I studied engineering. Been a developer most of my life, very interested in computers, technology. I was born in Argentina, but I used to live in Mexico City. I came back to Argentina around 2011, right about the time when capital controls were coming back to the country and it started a slow period of economic decline. It was already happening, but it kind of exacerbated it.
I was working for a digital agency in 2014. I was supposed to be getting paid part of my salary in dollars, and we couldn't find a good way to do it. My boss asked me to fly to Miami and get a bank account in USD. That was extremely common. I wouldn't do it. I didn't have the time. The government had one exchange rate in USD, the official one, and then we had a parallel one, an informal exchange rate. And, of course, the government wanted to take your dollars and exchange it at a very bad exchange rate. So a black market of sorts was created. I had no good way of doing that, of protecting my savings.
“When we found Ethereum we said, oh, programmable money, the possibilities are endless. We slowly tried to join the community, the ecosystem, and we found Maker in 2016. I was lucky to start there as a developer back when there was no DeFi, no anything, it was just a few teams building and figuring out what could happen.”
And my boss said, how about I pay you in Bitcoin? And down the rabbit hole I went. I investigated. I said, okay, sure, pay me in Bitcoin. That was 2014. So that was my first foray into crypto. We discovered Ethereum in 2015 and went all in. we figured that was the next, you know...We were using Bitcoin as what it does best, storing value, but nothing else.
When we found Ethereum we said, oh, programmable money, the possibilities are endless. We slowly tried to join the community, the ecosystem, and we found Maker in 2016. I was lucky to start there as a developer back when there was no DeFi, no anything, it was just a few teams building and figuring out what could happen. When I joined Maker, we were like 10 to 12 people, and it would be a year before releasing single collateral DAI. To me, marking the beginnings of decentralized finance, right?
So in a nutshell, my journey through DeFi. I stayed at Maker for four years, up until August 2020. I helped with the oracles, helped with single multi-collateral DAI. It was probably the best period of my life. And then after four years, I said let's try something different and I became an angel investor in the ecosystem. I help out projects when I can, and I'm just a fan of Ethereum and DeFi and this community, and just try to stay active and around everybody.
CR: Great. So let me go back to a few points you made. First, you started earning in Bitcoin around 2014. and I think there are many people listening who might not have all the context of what was happening in Argentina and what is still happening in Argentina that made it attractive to you to be paid in Bitcoin. So what's the situation there for normal Argentinians, and also people in other Latin American countries like Venezuela, that makes Bitcoin attractive?
MC: The first one, of course, is inflation. I'm going to describe what's happening today, which is still very similar to what was happening in 2014. But I don't remember the exact numbers in 2014. So right now in Argentina, we have around 50% inflation. The government says you can buy $1 with 100 pesos. But that's a made up number. That's a made up exchange rate. The actual number is closer to 160.
This is due to forced capital controls and things like that. I cannot legally buy more than $200 a month for savings. Anything other than that, and I have to go through different tricks and market things. One of the things that I can do is buy DAI, or USDC, or LLC to protect my savings. That is what so many people in countries like Argentina do. They just want to protect their savings against depreciating currency. And what they do is try to acquire dollars. That is mostly the easiest way that somebody can protect their savings. So they buy dollars, and the government does the opposite. They try to prevent normal citizens from buying dollars, because they want to have a strong local currency.
“I cannot legally buy more than $200 a month for savings. Anything other than that, and I have to go through different tricks and market things. One of the things that I can do is buy DAI, or USDC, or LLC to protect my savings. That is what so many people in countries like Argentina do. They just want to protect their savings against depreciating currency.”
It is always a tug of war, right? The government prevents the people from purchasing dollars, and people find ways to do it. So Bitcoin was the perfect way, even if it was volatile. And it still is. It gave me a way to denominate savings in something else. And the transparency, relatively speaking, the ease of transferring to somebody anywhere in the world, that became attractive too, at least talking as an Argentinian, a country and people who were at first very technologically-minded, and have always been looking for alternatives. So, that's why there was a big Bitcoin community early on, a big Ethereum community, a big DeFi community in Argentina. Because we're always trying to protect our lives’ work and our investments and our savings accounts.
CR: To people who maybe don't know my own story, I lived in Argentina as well during this same time when you were first earning Bitcoin, between 2012 and 2016. And to me, it was crazy how it ingrained in society, the dollar concept and this parallel exchange rate. Like, there was the official exchange rate, but everyone knew that was just a made up number, because you couldn't actually buy dollars at that exchange rate. You had to go to the black market and go to a much higher exchange rate.
And it was just such a normal part of Argentine culture, the black market, which is actually the blue market. It's called ‘Dollar Blue’. Like taxi drivers, everyone you talked to knew the exact exchange rate for the dollar on any given day. It's that kind of prevalent part of life. I'm wondering if that's been the case with crypto? I know back then, when I was there in 2013, Bitcoin wasn't so well known. It was part of this niche group of people, but it wasn't like taxi drivers were talking about Bitcoin. Is that different now? Has it gained more adoption?
MC: Not as much as I would have liked. But what actually has captivated a lot of people's minds and airwaves are stablecoins: that we do see a lot in the papers, on TV, even around the city plastered on walls everywhere, exchanges. Yeah, I don't go out a lot, but I've seen I've seen a lot of stuff for exchanges and others that they specifically talk about stablecoins. Why? Because they’re coins pegged to the US dollar, and like I said, it's another way for us to acquire dollars. And just like you said, taxi drivers, they would know exactly the exchange rate and things like that.
Now, a lot of people are using stablecoins for the exact same purpose. When you come into some money, you want to exchange it for dollars because holding pesos, you're losing money every day. If you go to a bank, you can only legally get $200 at the somewhat official exchange rate. But other than that, you're left to acquire them in the ‘blue market’. People have been using stablecoins more and more. You know, Maker, the big, big push to make its way to Latin Americans, especially Argentina.
“Now, a lot of people are using stablecoins for the exact same purpose. When you come into some money, you want to exchange it for dollars because holding pesos, you're losing money every day.”
It's not my favorite, but a lot of people use USDT, especially on cheaper blockchains other than Ethereum, which may not be as decentralized. But I can’t expect somebody here to pay fees of $100 a couple of months ago. So yeah, people have found stablecoins, and they use them, and they save them, and now, slowly, they're also earning, yielding them.
The First Collateralized Loan
CR: Interesting. I definitely want to touch on this point, given the big news today with El Salvador and Bitcoin. But I also want to go back to something from your story. You were earning Bitcoin, then you discovered Ethereum, went all in on Ethereum, so that means you asked to be paid in ETH rather than Bitcoin?
MC: I was still getting paid in Bitcoin, if I remember correctly, but I was exchanging almost everything for Ether.
CR: And then when you started working for MakerDAO, I want to hear your story but I haven't included it in my book. So Mariano was one of the first, if not the first person to actually take a collateralized loan on Maker and buy something with a stablecoin, with DAI. And that's basically this concept of collateralized loans, and borrowing is the foundation of how DeFi is built today. I think that this is just such an interesting piece, so can you tell it?
MC: Sure. So when I joined Maker, everybody was being paid in Ether and in MKR while we were working on single collateral DAI--a stablecoin that, what it did was, you would lock a certain amount of Ether to a smart contract and you could borrow some stablecoin denominated in USD, that we called PSI, against it. So very analogous to a mortgage, you would lock in something of value, which was Ether, borrow PSI, and then you would repay it at a later date along with a little bit of interest. And this was all done via smart contracts and Oracle. It worked great.
We launched it, I think it was November 2017. And immediately, everybody at Maker started getting paid in PSI. Even a previous version, an alpha version, we were already getting paid in that. But there wasn't a big market for it yet, the market had to be created. Around February 2018, which was some three months after, I decided to buy a car. And of course, I wasn't very liquid and I didn't want to sell my Ether, because that's what I believe in. So I locked up some Ether in single collateral DAI, like minted that amount of DAI.
It was a very different thing back then. I believe I had to trade the DAI for Ether on-chain: there was no Uniswap yet, so maybe Ether, Delta somewhere. Then I had to exchange the Ether for Bitcoin, and then the Bitcoin for pesos, because there wasn't a big market in Argentina yet for Ether. So I might have gone through Changely or Shapeshift, or one of those services. But, long story short, I managed to get some physical pesos, and I used them to purchase a car.
That was, to my knowledge, one of the first use-cases in the real world. I didn't go to a dealership and say, hey, here's some DAI. It wasn't quite like that. But the end result was the same. I had my car and then with my salary, I repaid the loan over a few months and I took back my Ether collateral. And that became a famous story within DeFi, and I'm extremely proud of it. Because now it's very common to do, but back then it was still quite novel.
“I believe I had to trade the DAI for Ether on-chain: there was no Uniswap yet, so maybe Ether, Delta somewhere. Then I had to exchange the Ether for Bitcoin, and then the Bitcoin for pesos, because there wasn't a big market in Argentina yet for Ether. So I might have gone through Changely or Shapeshift, or one of those services. But, long story short, I managed to get some physical pesos, and I used them to purchase a car.”
CR: It's an amazing story. And so early on, even before we had DeFi. This word didn't exist when you did that. So that's pretty cool.
MC: Yeah, you’re right.
Legal Tender in El Salvador
CR: No Uniswap, wow. So I want to link that to what happened today in El Salvador. El Salvador approved Bitcoin as a legal tender. It's a huge deal, right? El Salvador was using dollars as its currency, and the bill itself is really interesting to read. The President said, we've been using dollars, but so far we have 70% of our population that doesn't have access to financial services, so we need a currency that's digital, that's more accessible. And that's why he proposed to make Bitcoin the legal tender of the country. This is huge. This was just approved today.
So as someone living in Latin America, with your story of earning in Bitcoin and ETH and dealing with all the issues in the region, I’d love to hear your thoughts on this development. Like, how important is it and what do you see happening? What are some of the consequences that you think El Salvador will see us as a country?
MC: Yeah, I was there yesterday along with probably half of crypto Twitter listening to the Twitter spaces, first with the President of El Salvador's brother and then the President. They were talking about it as the bill was being voted on. So first off, it is a very big deal. Bitcoin started 2009, 2010, and 11 or 12 years later, you already have a sovereign state making laws about it, saying it's legal tender. It is huge. I think it legitimizes some of the things that we do in crypto every day.
When I discovered Ethereum, I mostly left Bitcoin behind because as an engineer, I just find the theory more interesting. There's more to do. Bitcoin has what people say is the soundest economic proposal. There's only going to be 21 million. We don't change things as much as Ethereum does. So they have that Bitcoin is money thing, a store of value. To me, I think it's going to be difficult actually using it as legal tender, as a medium of exchange, just because we've all tried to use it, and it is not simple to use. Ether as well, it's complicated to use as a medium of exchange. It's a currency that fluctuates a lot in value.
“And just from experience as an Argentinian, I think El Salvador would do a lot better, since they're already dollarized, with things like stablecoins and easier payment methods, and giving everybody, all the unbanked, a hardware wallet. I know that's probably even more utopic than what they're offering.”
I was very lucky that I started in 2014 and my time horizon was years, so I got to see the currency go up a lot. But I know a lot of people who went through my exact same story, only they began earning in Bitcoin in 2018. So they caught the highest price, and they saw a crash of 80-90%. So I think we need to realize what Bitcoin and cryptocurrencies are good for.
And just from experience as an Argentinian, I think El Salvador would do a lot better, since they're already dollarized, with things like stablecoins and easier payment methods, and giving everybody, all the unbanked, a hardware wallet. I know that's probably even more utopic than what they're offering. But you know what, let me try to stay optimistic. This is truly a big day. Our magical internet money is hopefully legal tender in El Salvador. I think it's an amazing thing, it's going to pave the way for everything else that's coming. It legitimizes what we're doing. But I still think that it's going to be complicated, right?
I read the law. One of the things says that every merchant is going to have to accept Bitcoin. Everyone was up in the air, like, oh, this is anti-libertarian because they force us. And I was telling guys, this is Latin America, this will probably take years, you know, they're going to say, okay, you have five years to be able to do it. And I've seen that everywhere. It's like new technology comes in and everybody's forced to accept it. Then in practice, they can't do it. So there can be extensions.
I don't think if I go to El Salvador next year I'm going to be able to, like the President said, go in the tourist spaces to buy an ice cream with Bitcoin. And even then, how would you do it? Using Lightning? I haven't seen anything interesting come out of Lightning. It's a complicated technology to use. So that's what I would say. I'm happy that it happened. It's going to be a trend, but I don't know if Bitcoin is going to be the right way to do it.
CR: So do you think that El Salvador will be a good experiment for other countries to look at, and maybe they'll say, okay, crypto was the right decision? Maybe it makes transactions easier, maybe it improves access, but the implementation of actually using Bitcoin for purchases, for pricing items, for making small transactions in-person where you need to wait for a confirmation, which I don't know how long it takes, minutes…
MC: Yeah, usually 10 minutes, probably less. I've used it once a long time ago.
CR: Okay. So, using the Lightning network, which is very cumbersome, maybe other countries will look at this as a case study and then take it as a lesson learned to maybe say crypto was the right decision, but maybe not Bitcoin. Maybe a stablecoin will be more suitable as legal tender for an entire country to use than something as volatile as Bitcoin or even ETH, right?
MC: Yeah, ETH is volatile as well. And a country like El Salvador, where their currency is already the US dollar, I think is prime for something like a stablecoin. On the other hand, it would be so good having countries have some of their balance in a public cryptocurrency. Give me a Bitcoin, give me an ETH that I can go into a block explorer and see what they're doing with the money and where they're spending it.
We often talk about crypto where we can pay, we can use, and we forget that one of the main things is transparency. That we have an open ledger that everybody can go in and look and see what happened. And who better to abide by an open ledger than a lot in the Latin American government.
“It would be so good having countries have some of their balance in a public cryptocurrency. Give me a Bitcoin, give me an ETH that I can go into a block explorer and see what they're doing with the money and where they're spending it.”
CR: That would be good to see. Yeah.
MC: You know, we could keep them more accountable.
CR: Definitely. And that brings up a good point though, this really forces El Salvador to become very responsible fiscally. Well, the dollar already did that. But in general, introducing something like a currency that's not managed by the country's central bank forces that country to become very responsible because they can't just print their way out of debt, and print their way out into giving social programs because they don't control issuance. So it effectively takes that power out of local governments. They can't have monetary policy anymore. That takes a lot of courage for a President to say, okay, we won't be having any monetary policy, we won't try to affect the economy with issuance or rates or anything like that. I wonder how that can even work?
MC: At least internally, the guy still has the military and things like that, so he's going to keep order inside his country. I want to see what happens of course. And I don’t want to talk about things that I 100% don't know about. But with El Salvador being already dollarized, he doesn't even have that for the past almost 20 years. Since it was dollarized in 2003, somewhere around there. It certainly will be an interesting experiment.
You know, in Argentina, we had something similar, but not quite. In the 90s, we also dollarized the economy but we still had the Argentine peso. It was just pegged 1:1 to the US dollar like if it were a stablecoin. But like a bad stablecoin, the peso lost its peg with the US dollar, and it went from being 1:1 to maybe 3:1 or 4:1, and now of course, 160:1.
But they're different situations, because here we did have a second currency. And from what I understand, in El Salvador, they don't anymore. That's why I don't want to get too much into things that I don't understand. But like I said, I think it's interesting, having legal tender in a currency that you cannot control, you cannot print the problems away. So it is exciting. It happened really fast also. Where, today's June 9th when we're recording this, it's a Wednesday, the laser eyes was what, on Monday?
“...I think it's interesting, having legal tender in a currency that you cannot control, you cannot print the problems away. So it is exciting. It happened really fast also.”
CR:I think Sunday. But it happened over the course of a couple of days with the President going on Twitter, being all about Bitcoin, proposing the bill and then passing the bill. It was just a couple of days. It's crazy.
MC: From a couple of people from El Salvador that I talked to briefly, that also tells you that he is a little bit of a strong man inside his country. He has, I believe, a supermajority in Congress. And some of that may have been the typical Latin American strong man tactics of not quite dictatorship, but I'm going to do what I think is best for my country, and I don't really care how I do it, I'm going to get it done.
Adoption From the Ground Up
CR: That's a good point. I hadn't thought of that. You're right. It was really quick and it does highlight how much power this President has to have in the country. So together with El Salvador, a few other Latin American politicians also came out with different announcements. In Mexico there was a proposal for a legal framework in Bitcoin, in Argentina a congressman flashed laser eyes on Twitter. Paraguay, Panama, Brazil, Colombia, each one had some sort of Bitcoin or crypto-related announcement. It looks like El Salvador really started this wave of Latin America adopting crypto or wanting to. So, what are your thoughts there? How real is this new wave? Do you see other countries following suit, or is it just for publicity? What do you make of this?
MC: I think it's mostly for publicity. The few that I've seen, I went to a couple other websites, I looked at their Twitter. I saw what their political affiliations were and I'm not hopeful. I think for most of them, it's just going to be, hey, I'm jumping on the Bitcoin bandwagon, the laser eyes, and here, look at me, and then I think mostly it's going to fade out. But the good thing is that Latin America is going to adopt crypto more, and you know a lot of these stories. Latin America has already adopted a lot of crypto in ways that are meaningful and respect the cypherpunk ethos that Satoshi believed in.
“Latin America has already adopted a lot of crypto in ways that are meaningful and respect the cypherpunk ethos that Satoshi believed in.”
To me, yeah, sure, these are all great news and oh, yeah, congressman from Argentina put laser eyes. But that to me does absolutely nothing, does absolutely nothing for me. On the other hand, the tweet that we saw the other day of somebody renovating their house because they sold the UNI airdrop, that to me means everything, and that to me means crypto adoption in Latin America and elsewhere.
“To me, yeah, sure, these are all great news and oh, yeah, congressman from Argentina put laser eyes. But that to me does absolutely nothing, does absolutely nothing for me. On the other hand, the tweet that we saw the other day of somebody renovating their house because they sold the UNI airdrop, that to me means everything...”
I saw students in India who were able to pay for university out of the UNI airdrop, the POOL airdrop. There’s so many now. Gitcoin, now that is incredible. I'm a friend of Kevin's and I donate every round. But let me tell you, that's going to be a huge, huge business. I never tell anybody what to do with their money. But I did tell a couple of friends, keep this one please, if you can, keep it because it's going to be huge. Those are the things to me that signal real adoption. Everything else, sure, it's nice. I don't think it's going to happen in Argentina.
In fact, like I told you at the beginning, this is a country that puts restrictions on commerce, it puts restrictions on free trade, it limits what their citizens can do. And Bitcoin and cryptocurrency are the exact opposite, right? They're freeing. They're meant to give you more choices, to be transparent, to let you transact with anybody, to let you save in whatever you want. And it's not compatible, at least with the current government, in Argentina, right?
And in a few other countries in Latin America as well. It's like I see somebody putting laser eyes and then voting for all this restrictive economic loss in my country, it's not compatible. And I don't believe that you're doing this for anything other than publicity, because I've seen your voting record. And just for this podcast, I tried to research a little bit.
“It's like I see somebody putting laser eyes and then voting for all this restrictive economic loss in my country, it's not compatible. And I don't believe that you're doing this for anything other than publicity, because I've seen your voting record.”
I looked into blockchain in Argentina, not at the federal level, but the grants, things like that, I found a couple of websites, one from the city of Buenos Aires, something called the Blockchain Federal Argentina. And first off, I couldn't understand exactly what it was, and then I discovered it's just like a fork of Geth. It's like a private Binance, but run by somebody from the government or maybe a third party. And that is all that I discovered. And then I said, I cannot take this seriously in a country where you know, Open Zeppelin was founded here. I don't do much Bitcoin, but RSK was founded here, it is big.
MC: We have Decentraland. There’s so much Bitcoin and Ethereum and DeFi community here in Argentina. And then I go to these websites, and I don't see anything like that. I don't see anybody who's talked to even one community member here, a founder of one of these companies. So, crypto and government, I don’t know. At least in Latin America, at least in Argentina, I don't think it's going to happen. The adoption is there, and growing every day.
CR: I totally agree that crypto adoption is going to happen from the ground up. It's going to come from the people, from the communities there. It's going to be a grassroots movement. It's not going to come from the top down from the government allowing people to use this technology that's supposed to be permissionless anyway. We don't need Latin American governments to allow Latin Americans to use crypto and DeFi. Like they can do that without their permission. That's kind of the very point of this, right?
MC: Exactly. And that is what makes this technology powerful. And that's also what, at least to some countries and some governments, they find scary. So, of course, they're going to regulate it as much as possible and then we'll see. I think what's happening in El Salvador was unique because of the country, the current economic situation. The stars aligned. I don't know if we're going to see things as quickly in other countries, I might be wrong. And even in El Salvador, it's very different passing a law, and then having to get millions of points of commerce connected.
“...even in El Salvador, it's very different passing a law, and then having to get millions of points of commerce connected.”
One thing I did like, they asked the president and he said, anybody could use their own wallet. I thought that was good. Then other things were a little bit murkier. He said there was going to be 150 million treasury in USD, and that was going to be used to buy BTC from merchants who didn't want to take on the price risk and I would buy in Bitcoin, and it would automatically be converted to US dollars, and they would have a fund to do that. But then he didn't mention what they were going to do with the fund, if they were going to keep the portion in Bitcoin. But we’re already making futurology about something that happened last night. That’s going to be good to follow.
Current DeFi Market
CR: Definitely, no, I agree that all of the specifics around El Salvador made this easier. The fact that it already wasn't using its own local currency, that it didn't have its own monetary policy that it was using the dollar. So between using a currency that's being governed by the United States and using a currency that's governed by a network of nodes, it's a leap, but it's not as far-fetched as having a country with its own currency do that. So maybe this was the transition from having that happen someday.
But like you said, in the end, meaningful adoption will come from the people themselves, not from governments. I completely agree, especially in Latin America which tends to be, and it's getting more and more centralized and authoritarian, unfortunately. For the last few minutes, I want to talk about the current market in DeFi. You're very tuned in, obviously, so I'm really curious about your thoughts.
There was a huge rally for most of the year, and now we're seeing a huge correction, especially in DeFi tokens, ETH has held up a bit better. Are we going into a bear market? What does that bear market look like compared to 2017? Do you think this is just a small correction before things start to recover again? Like what are your thoughts on the current market cycle?
MC: I honestly don't know. I am not a trader. I can never time the market. That's why I usually just hold and don’t worry about things. I thought that this correction wasn't going to be as bad as it ended up being. Even though I know nothing, I looked at the ETH chart inside go parabolic and said, this is unsustainable. This is way too much hype.
But even then, I didn't sell much there because like I said, I can never time it. And to me, my horizon is years. And what we're building with decentralized finance, I honestly think it's a revolution akin to the internet. This is all the buzzwords you can think of, the internet of money. And the price, if we assume out in the future enough, I don't think it's going to matter. I think we're building tens of trillion-dollar industries. So, it might take a while for the world to realize what we're doing to maybe escape this hype of everything, this rallying insanely and then just crashing. So maybe we are entering a bear market, maybe we're just correcting. I don't know.
“...my horizon is years. And what we're building with decentralized finance, I honestly think it's a revolution akin to the internet. This is all the buzzwords you can think of, the internet of money. And the price, if we assume out in the future enough, I don't think it's going to matter. I think we're building tens of trillion-dollar industries.”
I honestly don't look too much at prices. I do a little bit more now that I technically don't have a job. Back when I did have a job, I seriously, I didn't know what the price of Ether was every day, I was just coding, and I hope that a lot of people are doing that. Working on the next big thing, instead of worrying too much about price. I know people that are leveraged and things like that, so they do have to look at price. Me, I'm not, so I don't have to. I don't have to worry about those kinds of things. So I don't know, unsatisfying answer, I'm sorry.
CR: That's perfect. Yeah, I think that's the healthy way of looking at this. If you believe in this, you're in it for the long term, you don't look at prices every day. You know that DeFi is the future of finance, internet of money, etc. And it's a revolution that takes a long time to build. And we're so early that very few people have caught on to what DeFi even is at the moment.
MC: I think I mentioned this somewhere before, but I used to read Scientific American, my dad was subscribed. And my favorite part of Scientific American is a section called 50, 100, and 150 years ago, because the magazine is over 150 years old. And in every magazine, you will see that they have that. They have sections where they show what they were talking about in Scientific American 50, 100, and 150 years ago. And it is eye opening.
You will get things like quotes from the Wright brothers about their prototypes failing and people not believing in it yet, and you get writings of the discovery of DNA, things like that. And to put it into perspective, that section, we're not going to see anything about blockchain there for 40 years, right. And we're not going to see anything about DeFi for 50 years. So that's how early we are.
When we say we're early, we say it right. But with that analogy, I hope that you really believe that we are indeed incredibly, incredibly, incredibly early. And so I try not to worry in the short term, of course, yeah, I loved it when ETH was at 4k and there were green numbers all around and everybody was happy and the memes on Twitter. I prefer those to the bear market memes. But my time horizon, like I said, for DeFi, is decades.
“ I loved it when ETH was at 4k and there were green numbers all around and everybody was happy and the memes on Twitter. I prefer those to the bear market memes. But my time horizon, like I said, for DeFi, is decades.”
CR: Agree. Okay, and then to wrap up, what gets you excited? And this is more for the short term. Things that are getting built right now, this year. What are some of the most exciting or interesting trends or projects that you're seeing?
MC: So I got into the NFT hype train a little bit later than most. And I have to say, I'm absolutely enthralled with it, and getting deeper and deeper every day. So I'm very interested in things like that. You know, I'm a part of PleasrDAO we have four of the biggest of NFTs around. And something that excites me is fractionalizing NFTs, community ownership. Of course, DAOs, decentralized organizations, the way people can come together over a weekend on Telegram, with a few open source tools on top of Ethereum, they can have a DAO with a treasury and start coordinating towards a goal.
The fact that a DAO is pretty much a company with a bank account just on the blockchain and that excites me, way too much. Human coordination on top of the machine coordination and consensus that a blockchain gives you, that to me is one of the most exciting topics I can think of. And, of course, everything around DeFi. DeFi is, for those who have been around as long as we have, we think of DeFi as our baby, right, we saw it being born and now taking its first steps, everything that happens there just excites me.
“The fact that a DAO is pretty much a company with a bank account just on the blockchain and that excites me, way too much. Human coordination on top of the machine coordination and consensus that a blockchain gives you, that to me is one of the most exciting topics I can think of.”
CR: Yeah. It's been awesome to see it grow so fast, and in so little time. It's just been what, three years tops, and it's already like a fully-fledged financial ecosystem. It's incredible. And so tying back to DAOs, and what we were talking about before with Latin America, I think that's an interesting link to finish things off. DAOs will be an amazing vehicle to empower communities in Latin America to organize, and deploy capital in countries where this isn't so easy, or it isn’t allowed, where people aren't allowed to do whatever they want with their money. Now, DAOs offer an alternative to this.
MC: That is true, that is true. And yeah, of course, they could be used. And that is to me, always, is going to be the first use case. Doing the opposite of what the government wants you to do, especially to protect oneself from bad economic policies. I will always be a champion of that and on the side of that.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Spread the word and share!