Bankless - 14 - The DeFi Exchange | Cameron & Tyler Winklevoss

Episode Date: June 1, 2020

Episode: #14 June 1, 2020 Cameron & Tyler Winklevoss on Bankless! The mainstream world knows them as Zuckerberg's bane from "The Social Network" but the bankless world knows them as multi-faceted entrepreneurs, early believers in crypto, and the founders the Gemini exchange. Whatever you think you know about the Winklevoss twins you have to admit...these guys have an uncanny ability to see the future. So what do they see in our future? Future of crypto? Future of DeFi? Of the world? They bridged technology to our social lives. They bridged crypto to Wall Street. What bridges are they building next? Is Gemini the DeFi-friendly bank we've been waiting for? We cover: How Cameron & Tyler "see things" early What the Winklevosses first saw in Bitcoin The evolution of crypto banks JPMorgan is banking Gemini!! Big Banking vs Big Tech Is Gemini DeFi friendly? Why the Winklevosses are ETH whales What's the next crypto-sized opportunity? Will the Winklevosses turn Gemini into a bridge to DeFi money protocols? Listen to the episode and decide for yourself! Note: David and I skipped our Big Picture chat this week to get straight to the Winklevoss convo but we're releasing our Big Picture chat in a special Bankless episode coming to you on Wednesday June 3rd! ----- Tools from our sponsors to go bankless: Ramp - the fiat onramp for DeFi (mention Bankless!) Monolith - holy grail of bankless Visa cards Aave - money lego for lending & borrowing Multis - bank your business without a bank (1 mon. trial!) ----- Resources discussed: (News) JP Morgan Banks Gemini (Article) How to Bank your Businness without a Bank ----- Episode Actions: Look at DAI trading pair on Gemini Download Bonus Bankless podcast on Wednesday! Give Bankless at 5-star review on iTunes ----- Subscribe to podcast on iTunes | Spotify | YouTube | RSS Feed Leave a review on iTunes Share the episode with someone you know! ----- Don't stop at the podcast! Subscribe to the Bankless newsletter program Visit official Bankless website for resources Follow Bankless on Twitter | YouTube Follow Ryan on Twitter Follow David on Twitter

Welcome to bankless where we explore the frontier internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman and we are here to help you become more bankless. David, how are you doing this week, my friend? Doing really good. Just came out of a fantastic interview with the Winklevoss twins. Getting the Winklevoss onto the Bankless podcast was an absolute black.

and picking their brains about how they think about this space, where they think the space is going, and also where Gemini is going, was it really insightful. Really tip of the hat to the Winklevoss twins to building a really awesome exchange, and in my opinion, building something that is going to be really successful and crucial infrastructure into the future. Ryan, what did you really enjoy about this interview?

Well, look, I think it was cool because, you know, who hasn't seen the social network, right? it kind of felt like we were interviewing celebrities in their own right, but now the WinkleVos twins are big into crypto and have really developed a compelling exchange offering. But I like this because we were able to ask questions that I think a lot of people in crypto haven't asked them. So talking about defy, talking about bankless, at one point we brought up the subject. well, how can defy, how can crypto banks remain neutral in this space? Will they become just like the traditional banks if given enough power? And they had a good answer to that.

I think one of my big takeaways, really, from this conversation is they see Gemini as being a bridge, almost an interface for money protocols with Bitcoin and Ether being sort of the first of a set, but then also die. They seemed open even to integrating the die savings rate and possibly compound protocols like Avey down the line. They seemed open to that. And when you brought up the protocol sync thesis, they nodded their heads, yes, basically. Yeah.

I think the protocol sync thesis is going to be a very reoccurring question for all incoming guests on the bankless podcast. And it was really exciting to hear their appreciation of that thesis. And so in the Bitcoin space, we often see Bitcoin banks, things like BlockFi, things where you deposit your Bitcoin and you get some banking services. And I think Gemini, and behind the scenes, what I think is kind of going on is there's a race to become the Defi Bank, right? So we talked about what would it take for companies like Gemini to be compliantly integrating something like a Maker Dalwalt or any sort of other financial services based on. the protocols found on Ethereum. So that's really where we end up in this conversation,

but we go through and kind of get the history of the Winklevoss twins. Ryan, you did a really good job expanding on the metaphor of them building out their rowing team in the town that no one had a rowing team in and then using that as an extrapolation for how the Winklevoss seemed to be ahead of the curve. So really fantastic interview. In fact, it was such a great interview that we have decided to cut the big picture segment out of this particular episode, and we will be releasing that as its own standalone episode on Wednesday. There was a ton of stuff that has happened in the Ethereum and

Cryptospace, and me and Ryan go on for almost an hour talking about it, and so we didn't really want to have a two and a half hour long episode, so we broke that part of the episode out and are releasing it as a standalone episode coming this Wednesday as a bone. episode. So stay tuned for that, a little extra bankless content coming your way this week. Before we get into the interview, though, let's talk about our sponsors. Our first sponsor is Monolith. If you guys have your assets inside of Ethereum, but you also want to live your life. Monolith for our European customers might be the product for you. They have their defy card, which is a Visa card connected to a smart contract wallet on Ethereum so that when you go

to the store, you buy your coffee, you buy your groceries, you swipe your monolith card, and then your dye gets deducted out of your smart contract wallet, sold for dollars, and then you make both a transaction on Ethereum and a transaction on the Visa network. Really crucial infrastructure for people that want to live a bankless life, but don't really want to compromise and be that weird friend that doesn't have any real money. Real money. I like that. So you can download the app at monolith.xyz to get your bankless visa card today. And then you can get some of the world's economic activity placed onto the Ethereum network.

All right, guys, I am super excited to introduce you to our next new sponsor, Ramp. What is holding crypto back? It's really getting Fiat into the crypto system. That's what's holding DFI back. The problem is a new user has to create an account with an exchange to buy some crypto. have to wire funds, they have to go through a whole bunch of steps. What's holding Defi apps back the exact same thing? Users drop off in the sign-up process, and it really limits the Defi market to hardcore crypto people, but no longer. Ramp solves that. Ramp has a delightfully easy

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And check it out. R-A-M-P dot network. Mention bankless and check it out. All right, guys, let's go ahead and get right into the interview with Cameron and Tyler WinkleVos of Gemini Exchange. Okay, we are in for a special episode today. David and I are here with Cameron and Tyler WinkleVos. They are the co-founders of Gemini, partners at WinkleVos Capital, rowing Olympians. They were involved in the original idea behind Facebook. You may have seen them in the social network. These guys have done a lot, including C, Crypto, Extra, Early. My first question, Cameron, to you is how did you get at WinkleVos on Twitter before Tyler, man?

It's a great question. The simple answer is Cameron WinkleVos doesn't actually fit. Twitter doesn't give you enough space for that handle. So we figured someone will take Winklevoss better be one of us as opposed to someone else. Yeah, nice. Tyler, do you ever ask if you could share that account or is it all Cameron's? It's definitely Cameron's. A lot of people sort of taunt me on Twitter and say, oh, why did he get it and not you?

And I guess because, like, yeah, Cameron's reasoning, my name fits by default and his doesn't, which I think is actually the cooler thing, but I guess I guess reasonable minds can disagree. So, okay, so speaking of reasonable minds, we want to start here because something that I think is super fascinating about you guys is, you tend to see things early. Like, that's been the case. So seeing Facebook before Facebook in the early 2000, in the early aughts, pretty incredible, but also seeing crypto before, and Bitcoin specifically, before most of the population saw it.

Like, back in 2012, my first question is, how do you guys see these things so early? Like, is there a recipe? Is there a formula? Can you teach us how to do it? this? You know, it's an interesting question, and I think we've definitely asked ourselves that before. And I think part of it comes down to just a lot of curiosity. And we tend to approach problems with a total beginner's mind. So we don't have all these like preconceived notions or ideas or assumptions that we bring with us when we're evaluating a new thing. And that was

definitely true with Bitcoin when we found it in 2012. And it was also true of social networking in the early 2000s. Most people did not believe that people would be readily sharing information and photos online. It was not a popular concept at all. In fact, most people online were using avatars to basically cloak their identity or have some level of privacy. So this idea that people would be themselves and really want to establish their online identity and link it to their real world identity, that was novel. And I think we just thought that, you know, we believed in that concept that your real world identity will eventually be mapped onto your online identity. And it was definitely not a popular belief at the time. but we we sort of you know it made a lot of sense I guess instinctually to us and we we sort of shut out the

noise in that regard because if you look around everywhere else people are always looking for for identity and belonging in a group whether it's your college you're an alumni of the university or a high school or sports team so it felt like that's pretty common human behavior that's existed forever, why would the online world be much different? And so we weren't, I guess, distracted by a lot of the noise out there. Do you guys think that's a problem? Like, is that why people miss Crypto? I've heard so many stories about, you know, people seeing it and reading an article in 2011, 2012, and then just dismissing it at the time, picking it up maybe later. We even saw like Goldman released a report today where they talked about,

Bitcoin being tulips, you know? Our favorite analogy, we're back to the tulips again. Yeah, that was like eight years ago. Is that the problem? Are people, you know, traditional finance and people who dismiss crypto, are they just not looking at this thing with a beginner's mind? So I think there's a couple things at play here. One of them is absolutely, people are not approaching it with a beginner's mind and sort

of this carte blanche and open thinking and ability to say, okay, wait a second. This is a totally new area. What are what are the what's the promise behind it? What is the inherent benefits or whatever? But stepping back, why do people not approach problems with the beginner's mind? And I think a lot of that could be because you became the master of the universe in something for decades in the traditional world of finance. And you're forced to basically disrupt yourself and challenge all the things that you hold dear and that you understood and you have to reinvent yourself and it's costly and time consuming and takes conviction and effort and a lot of people just don't want to effectively disrupt themselves and reinvent themselves

and those that do and are willing to kind of challenge that over and over again are the ones that are able to see the next wave, the next future. So there's a lot of that behind their inability to, you know, see the promise here or unwillingness because you have an existing franchise and customer base and you people like what they know. So I think that's a large part of it. It's also why you see crypto, this sort of the breakdown on the believers versus a non-believers. A lot of it is just an age thing. And not because people who are older can't get these ideas, but because like Cameron said, they've acquired this experience, this skills, they have an asset that all of a sudden may not be relevant in the new world order of crypto.

And so whenever you talk to a millennial, like they're totally bought in. you never convince a millennial about Bitcoin because ultimately they have very little to lose. If you're 18 in high school, just out of high school, even a college student, you have like negative to lose, right? You have, you have like student loans. So it's not like you built this whole career and you have like real estate and mortgages to uphold and, you know, this whole life in this system that you all of a sudden have to give up. So that's definitely part of it. Why, you know, I think why a lot of people don't get it. I think, believe it or not, people, a lot of people are inherently pessimists.

They don't see maybe the new opportunity or they're not motivated by it. We've always been motivated by increasing choices, you know, in creating new alternatives. And this kind of goes back to even our days in high school. There was actually no crew team at our school. Our next door neighbor went to boarding school. He's a little bit older. Learned how to row and was successful. And we heard about his exploits.

And we decided, like, we were tall. We knew we kind of had the build. We didn't really know what that meant. But just like someone who's tall knows that maybe they could be good at basketball, we understood that being tall might be good at rowing. So we found a rowing club, started rowing, found this amazing coach, really liked it. and then went to the headmaster and started the team at our school. And effectively, we manufactured this opportunity for ourselves to become athletes in a certain way that didn't exist.

And it's simply because we asked the question, like, why doesn't this exist? There's plenty of water. There's actually a rowing club 30, 45 minutes away. All of the elements are here. We can do this. And, of course, we manufactured, we traded that opportunity. We joke that it was very much our first startup. We rode in college and then rode in the Olympics.

That never would have happened if we had accepted the world around us and the options that were available to us. And so, I don't know, like, is it thinking outside the box? But we really were, like, curious and like Cameron said, and we wanted greater choices. And we just didn't accept. We asked the question, didn't just accept what was there. and we've continued to do that, whether it was social networking.

Hey, we go to school in Boston, and there's so many universities, there's so many students, yet we're coming into our junior year. We don't really, it doesn't feel like everyone's in their bubble, and everyone's busy, and we want a better way to connect with students. So we thought there was like a better way or possibility, and social network was that sort of way to express it. And then taking that further to money, when we saw this idea, we didn't dismiss it like skeptics or pessimists.

We're like, okay, what is money today and what's wrong with it? And what is this thing? And why does it have merit or doesn't? And like, we weren't completely sure at first. I think Cameron said to me, this is either complete bullshit or the next big thing. But let's take a look. let's at least like take it seriously and give it some credibility because the smartest people in the room are are so passionate about it. They're putting every penny of their life all their

time. And so that dedication was was really interesting. And we we decided to look more, which isn't saying that much, but I guess it's a lot more than most people did. That's some great background with you guys. And the story of how you got, started the rowing team, I feel like is a preamble of what's to come or what came with Gemini. So before we get into Gemini, maybe you guys can illustrate what you saw in crypto that really brought you into the world of crypto. And maybe some of your preexisting beliefs about the world, like were you guys Austrian economics? Or did you believe in the Austrian school? Did that change your mind coming into the crypto space?

What did you see in crypto and how has that changed you guys now that you guys are in the world? So we both actually majored in economics in undergrad at Harvard. But I think that it wasn't really until, at least for me personally, when I saw Bitcoin, when I really started to challenge my understanding and belief of money. And I think we look at Bitcoin from a lot of different angles. And I'm not sure if it necessarily all fits under one school of thought. There's elements of a lot of them in there. But I think the store of value properties are clearly, obviously, very important.

If you're trying to create a hedge to fiat currency regimes, which on average, have a lifespan of 27 years. And people who live in the U.S., we never really challenged, you know, the idea of the dollar. It's what we've known. It's been a very pretty good medium of exchange and store of value for a long period of time. But that's not true of many and most parts of the world. And so fiat currency in general, creating alternatives like stores of value are very important. to protecting people's value.

And then there's the elements of censorship resistance and all these other interesting ideas around payments that Bitcoin comes along with. So I'm not sure if there was like one thing for us, but we love the idea of like a new system that is essentially enforced by a cryptography in math and incredibly transparent and open. there's no inside baseball with Bitcoin.

There is no sort of Federal Reserve behind closed doors, people making decisions, and then explaining to the rest of us what's going on. It's all open kimono and open source. Now, it's not necessarily the only system, but it's amazing that that system and that opportunity at least exists. in addition to the, you know, previous system. You know, it's really interesting you say that. So, like, something that resonates, I think, about your story and how you approach things

like philosophically and, you know, escaping your meme bubble and disrupting yourself and all of these things. But you also seem to think in, like, non-zero-sum games, like win-wins, right? So a lot of people in crypto, I think, are here to disrupt the state and tear down the existing system. But I get the sense that you guys are a bit more. along the ethos of, well, like, this system is new and different. It's not necessarily going to completely disrupt the old traditional system, but we're going to create this new system in parallel

that's going to have its advantages. So it's a little bit like rowing, right? When you're growing up, you added rowing to the roster of other sports that were offered in your community. It didn't take away from those other sports. It provided a new alternative. Is that how you see it? Yeah. I mean, look, we didn't start the rowing team to discerning. to destroy the football team. We created it to create more choice, more independence, and more opportunity. And I think the same is true with crypto. It's another system, another choice, another opportunity.

And interestingly, if you actually spend a lot of effort trying to destroy the previous system or the existing system, you're actually, you know, reducing one option or a choice. you're reducing a system or eliminating or trying to eliminate a system that a lot of people still use. And plus you piss off all the football players and they could be on your side. They could be good rowers. Exactly. Exactly. Yeah.

And you'll see some athletes will change sports like that. Just like a lot of people in Wall Street are leaving Wall Street to join crypto. So, you know, did email disrupt completely snail mail? No. You know, and sometimes you have to actually physically send something through mail and email doesn't quite work. So, you know, I think we view crypto as, as like a new color as opposed to like trying to be better at red, a better red or something, a different shade of red.

and, you know, the, the, the, the, the, the, like, gold, for instance, I mean, people, yeah, this, this, this, this is versus them. I think the zero-something is definitely not our, our style. Just like the argument that gold disrupts a, you know, a share of Apple stock doesn't make a lot of sense to me. Like, do we really believe in a, in a world where, you know, gold is the only asset or the only, uh, currency like gold can be currency but generally people have shifted to to fiat currencies and and it's been a currency and money has been this 10,000 year old experiment and ultimately there's so many different ways to express yourself there's so many different definitions of money and crypto is just the latest iteration of it but like um if bitcoin if bitcoin disrupts something it's gold or if it takes away but i think it's very hard to be all things to all people. You know, at least, you know, you have to be, I think focus is super important.

And I think ultimately assets and what they do and how they perform is very specialized. Like if you look at the, go to the Olympic Village and you'll see how different, different athletes are. The physiques, the sizes, the shapes, the tall, short. You know, LeBron James is the best basketball. player in the world, but Nadi Akomenici was maybe the best gymnast of all time. They're the world's best at what they do. They're both athletes, but they'd be terrible at each other's sports. So I think, I think there's a, there's a big spectrum of like, of assets,

of currency, of money, and it's hard to be everything. So in Bitcoin, there is a wide spectrum of people that have different stances towards, you know, authority or the state, right? Like you have the ultra libertarians who want nothing to do with the state and believe in crypto-anarchism. But I believe what you guys are saying, where there's this zero-sum games between Bitcoin and legacy systems. And there's actually room for more people to kind of have one foot in both camps. I see that reflected in the ethos of Gemini, where you guys are, very strongly making your brand about how Gemini is like a very compliant, very regulated following the rules type of financial institution where people who are perhaps maybe nervous

or scared about crypto can start to actually look at the Gemini company and see a lot of familiar features there. Can you guys talk about the ethos behind Gemini and if that reflects reality or not? Sure. That definitely, I think, is a good assessment of what we're trying to do. And we grew up in the wild west of Bitcoin, the early days. When it was a Bitcoin world, we bought a lot of Bitcoin on Mount Gocks, which famously imploded a few years later. Thankfully, we weren't injured in that implosion. We, you know, when we purchased coin, we pulled it off exchange shortly thereafter, never really wanted to be exposed. to the counterparty risk of an exchange being run by two Frenchmen in Tokyo that was a pivot

from a magic, the online gathering exchange. It didn't feel like safety and soundness was a core principle of Mount Gox. And through that experience, we said, look, as amazing as this technology is or might be, if we can't build and earn and maintain trust in this new asset class and demystify a lot of the things that are, you know, that people have questions around, then it's never really going to go mainstream. And I don't think you can point to a market, a viable thriving market anywhere in the world that doesn't have some element of thoughtful regulation. It just doesn't exist. maybe, you know, some people have this view that it's perhaps possible with the right incentives, but we just haven't seen it.

And so when we started thinking more about, okay, how do we really get Bitcoin mainstream, we thought about investing in an exchange and ultimately decided that we should just go build one. because most people were thinking about the problem from a technology lens or solely from that narrow perspective, saying, you know, I can build a matching engine that's more reliable to Mount Docs and has more uptime. But there's a lot of key considerations, one of which is security, of course, and we've always sort of operated with a security-first mentality with Gemini. And then there's a big piece around compliance and licensing. And you can't get a bank account or get banked as a business if you don't have licensing and a compliance function.

And those are hard problems that are not a lot of fun to solve for, but are really necessary and important to getting a license and also to a large number of people who want to enter the space of crypto. So I guess the way to sum up the ethos of Gemini is we started by asking permission, not forgiveness. We went in the front door of regulators engaged with the New York Department of Financial Services and decided we want to pursue a trust company license in New York, not just for institutional customers, but also for individuals, the entire spectrum. And we want to create the highest bar of compliance and regulatory oversight available at the time so that people, when they enter this new asset class, which is kind of a scary thing for a lot of people. And I think a lot of people stayed on the sidelines, like they understood conceptually and they loved Bitcoin, but they didn't think there was a safe way to get involved. And that's a fair assumption when you look at the history of, you know, behavior in the space. It's been a lot of, unfortunately, there's been a lot of hacks and problematic behavior that doesn't engender trust. So we really said, you know, we've got to help correct this narrative and let's see if we can start building and maintaining trust with people.

Yeah, I think a lot of people who came later to the space and, you know, even memory fades, but people forget how crazy it was back in that era of 2012 and 2013. I mean, most, everybody was dismissing crypto as this tool for drug dealers, basically, right? You know, Silk Road. Yeah. Like, it was. We didn't even, we didn't even, we didn't feel comfortable going public with our investment for about six months. Right. It was embarrassing. It was embarrassing. We're like the moment someone says, oh, you guys own Bitcoin? What are you like into like, you know, elicit activity and drug dealers and Coke Road? I'm like, no. That's not, it's not what it's about. I mean, like listeners here, like who are new to crypto, I mean, the largest crypto exchange in the world was formerly a magic the gathering card exchange and just pivoted to crypto. Like that's where we were back in 2013. Right. M.T. Gox. Gox. is the, you know, the acronym for Magic, the Gathering, online exchange. That was the basic, I think it was the only, I mean, there was probably other exchanges at the time, but it was about 95% of Bitcoin, USD volume. And they actually had a lot of other fiat currency pairs, too. That was the price discovery mechanism of Bitcoin for years, and was the main ability to source back in 2020. It's pretty amazing.

Yeah. Yeah. And it was also like if you, people knew storing Bitcoin and Docs was super difficult. And if you actually, this is a shameless plug, but if you pick up a copy of Bitcoin billionaires, there's a chapter that goes through of how we actually stored a lot of our Bitcoin on paper shards and different banks and safety deposit boxes. and this whole sort of mission impossible type endeavor. And we just knew that that was like not feasible for most people. There's just not that many safety deposits in the world or in the country.

So we had to make it easier and more secure. Yeah, yeah, absolutely. I mean, this is really a process of you guys making the infrastructure to go recruit the football team, you know, to rowing, basically. That's what you're doing with Gemini. And it totally makes sense. Hey, guys, just want to pause the interview real quick and talk about our sponsor, AVE. AVE is a defy lending and borrowing platform with some new cool features that you might not be used to compared to other borrowing and lending applications on Ethereum. First and foremost, the feature that stands out to me the most is their fixed interest loans.

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Okay, let's continue the interview with Cameron and Tyler. So there's this evolution, though, in exchanges that we're starting to see. You know, and we call sometimes exchanges crypto banks. And they're really turning into full service offerings that are doing more. They started out as a custody and trade. But now they're starting to tackle some of the other money verbs like staking, for instance, or like lending and borrowing. And some of them are even going like, you know, the Binance 125.

X margin option that you can trigger. How do you see these crypto banks evolving? And is that Gemini's path too? Are you going to start essentially offering more of the money verbs? And you bring you folks to crypto that way? So I think long term, I think that is one of the most exciting parts of crypto and why I think ultimately we're in this space and we really are super passionate. it because when you look at the world, there's a billion plus unbanked people out there.

In this country alone, there's millions of unbanked or underbanked individuals. And if the banking community and system could bank them, they would. And there's a lot of problems around identity. That's part of the issue is how do you identify and authenticate and verify an individual because that's obviously an obligation and requirement. I think ultimately we're headed in that direction. And, you know, Gemini started out as a very straightforward sort of spot Bitcoin exchange, buy, sell, store. And that actually involves multiple businesses under sort of one roof because in the typical world of equities, for example, you've got your brokerage, like in E-trade, you've got an exchange like New York Stock Exchange.

you've got the DTCC, which clears the transaction, and then you've got a custodian like State Street. There's about four major custodians, State Street being one of them, Bank of New York and J.P. Morgan and Northern Trust. And these businesses are well over hundreds years old. And so in the existing equity market, you have all these sort of pieces split apart. In crypto, one of the cool things that I think most people don't quite realize is we've been able to build Greenfield and imagine and actually collapse or sort of integrate the full stack, at least on the side of virtual commodities like Bitcoin and whatnot. So we think there's a lot of interesting efficiencies there. It also makes it kind of challenging to say what we actually are. We often say, oh, we're a Bitcoin exchange, but it's really a lot more than that.

And so I think the right word is platform. We are effectively a platform and we will be adding a lot more services over time. And I think we'll continue to do more and more services that look and feel like a bank. Now whether we actually become a bank, that's an open question because there's a whole new regulatory regime. that is involved with providing banking services, but there's a lot you can do with a trust company. So this is really interesting because I have some mixed feelings about this. I think folks in the bankless community do as well.

So on the one hand, what we love is the fact that you guys are going and recruiting the football team and bringing Wall Street traditional finance closer and also protecting users, making it easier to buy lots of people aren't going to self-custody, as you said, they need an easy fiat on-ramp. At the same time, there's a worry in the back of our minds that the crypto banks could start to become a bit more like the traditional banking system that we just left, right? So not necessarily Gemini, but we look at things that maybe Binance is doing. And there was a recent fork on the Steam network, and it seemed like Binance and the leaders

of Binance got involved and actually made some decisions as to which fork they were going to support. And it was really a political decision, essentially. And some folks on the fork that lost ended up losing their steam tokens. So what's your take on that? How do we make sure that the new crypto banks of the future don't become like the old ones? How do you maintain neutrality in a crypto exchange like Gemini? Yeah. So I think it's also, you know, I'd start first by saying finance is unregulated. I'm not aware of any licensure they have. So there isn't a sort of a stakeholder with oversight ensuring that a company or organization does what they say they're doing. They're effectively auditing or providing an additional assurance to that. So it's

hard to, it's definitely not an apples to apples comparison. And I think a lot of people sort of, they don't quite understand that difference a little bit. And that is one of the major benefits to regulatory oversight is that we have somebody who's verifying, and we also have legal obligations around our customers and consumer protections and privacy. With that said, I think that it's important. What's interesting is a lot of people got into the internet through AOL, America Online, which is effectively a closed system, a walled garden of the internet. And AOL did a phenomenal job of onboarding millions of people into this crazy new cyberspace world.

and then people eventually, they sort of migrated beyond AOL. AOL did not keep up with the times, and it was, you know, for many reasons, the internet moved. It's become more closed over time, right? It's sort of, it's open, then it gets closed, then it sort of opens. It seems to be closing again. And I think innovation tends to push, you know, open again. again. And I think we're now, that's what we love about crypto in many ways, is that Bitcoin offered a blueprint to decentralize the world. And so we're going to see projects, especially

around Web 3, that are decentralizing, decentralized services. So what I think is, and perhaps to go maybe a little more specific to your question or the thought, is that a lot of people, you know, will onboard into crypto into an exchange like Gemini, and they'll be perfectly fine and happy with that. But there may be people who start with Gemini and move into a more defy world. And it's also possible, you know, we are very interested in defy

that we continue to move in that space as an organization as well. So I think that you're going to see a lot of evolution and taking a snapshot today is not going to be reflective of where we're going to be in five or ten years from now. Yeah, and I think another thing to note is the different needs of different people, customers. There are engineering tradeoffs between a decentralized exchange and a centralized exchange. You just couldn't have the volume, liquidity, and price discovery. today at least on a dex as you could on a centralized exchange so the big market makers the big

high frequency algorithm traders are used to centralized finance and Wall Street is really it's the street in in downtown New York City is really symbolic Wall Street's actually a bunch of servers in a parking lot in New Jersey right now and every inch that the server moves closer to the exchange matching engine matters and it's probably like you know centimeters matter kind of thing and so but the more decentralized you get the less speed and less of that performance that you have to it's a trade off and so like there's been a movement in capital markets and finance over the last quarter quarter century to actually move things together for that performance.

Obviously, that comes at a cost of decentralization. So going back to sort of like, is there one currency to be all currencies? You know, is Bitcoin can it be everything to everybody? And right now as like an exchange custodian platform, it's hard to be everything to everybody because of these engineering tradeoffs and the different needs and demands of customers. So I think there's like a future where there's a couple of different versions of Gemini. And if you really need like the high performance and you love the regulated, centralized part, then we'll have a staff for you. if you want to, you know,

decentralized the clearing and settlement part or the custody, then there may be like a hybrid stack and going to the other extreme, there may be like a pure play decentralized stack. So I think there's a future where you may see different versions of Gemini, and it's sort of like depending on the customer, pick your adventure. And this is how I sort of think about like the Gemini dollar, which is a centrally issued and regulated stable coin versus, let's say something like Dai, which is a

decentralized algorithmic stable coin. If you're JP Morgan, you may love and think that die is super sophisticated in the future, but you may not be able to do business or handle a stable coin that isn't centrally issued and regulated by a regulator, you know. You just need to know the counterparties. And so they're different, there are different things. They're both trying to be stable, value mediums of exchange and in decentralized finance on the blockchain. But depending on who you are as a customer, your compliance department, your needs, like one may just be an I started a few. Yeah, Tyler, since you mentioned J.P. Morgan, I got to ask.

So Jamie Diamond a few years ago made the statement that, you know, Bitcoin and Stulips, it was a fraud, it was going to crash to nothing. Captain of the football team, right? Now J.P. Morgan is actually banking Gemini and Coinbase. You know, that just happened, I think, this month. How, is that a big deal? Or, like, beyond the headlines, is that a really big deal for traditional finance to essentially start servicing and working with crypto exchanges?

It is, in our opinion at least. So the process of opening a bank account with J.P. Morgan took over two years, which included extensive due diligence of our compliance program. We had to go through risk committees, reputational committees. And ultimately, what you saw, there was a Wall Street Journal article that we got, the banking relationship is the culmination of two years in the making. And sort of going back to Jamie Diamond's comments, like, look, really smart, brilliant people get things wrong all the time.

You know, none of us are perfect. We sometimes make mistakes that way. But I think it shows how good of a leader he is that he was able to, you know, look at the technical merits of crypto, ultimately get it. and get behind it. Or even if he, you know, I don't know if he's what his public statements have been, but even if he doesn't,

he allows people in his organization to get it and to understand, and he lets them run with it and get to the future. Yeah, it definitely would seem like a big deal to us and to those on the outside, sort of traditional finance plus crypto exchanges and that bridge being built. You know,

I've kind of somewhat joked in the past that, and I just used the name Coinbase, but could be Gemini. Coinbase is either going to get acquired by an Amazon or JP Morgan, right? So all I'm saying there is that I feel like big tech is going to enter this space in a big way, and so is big banking. How do you kind of look at that with stable coins and Libra entering the market and then you've got traditional banks? You guys have bridged both worlds, social networking in the early 2000s and now crypto and sort of on the banking side. Who wins? Is there a battle between big tech and Libra and big banking like the JPMorgans of the world coming?

And if so, who wins? Well, it's a really interesting insight that you have. And I think what we're going to see is crypto is really an intersection between finance in many ways and technology and cryptography. And a lot of the existing financial institutions, they don't have a technology game. They don't have technologists in the organization who could build out platforms. And so the likely strategy may very well be to partner and or acquire the technology that you can't otherwise build. And it does make sense for a large financial institution to be looking at companies in crypto. But it also makes sense for big technology companies to be looking at companies in crypto.

and it will be interesting to see who ends up doing more M&A work and maybe they're both competing. You have these two different sectors competing on the same companies, which is obviously good for price discovery and those companies to have more suitors running after them. But we're seeing that intersection. And we saw that intersection with technology and other places like, music and movies. And so it took iTunes to come along to basically solve the

recording industry of America's problems when it came to digital piracy. They really struggled to move from the physical formats to MP3s. And this goes back to what we were talking about in the beginning around

beginner's mind and willingness to disrupt yourselves. The recording industry and all of the record labels were unwilling to accept the future and the reality. And to the point where they didn't just not accept it, they fought it. And they fought it aggressively for a long time. And technologists need just moved ahead of them. And so you had Napster centralized piracy.

Then you had Kazaa and BitTorrent, and it goes on and on and on. and it was always, you know, a step ahead of the actual recording industry. And it took a company like Apple, which is, you know, famous for always challenging the status quo to say, you know what, there's a better way to do this. There's a fair way to do it. And when they invented iTunes and created songs all a card for a dollar apiece and it was fair, consumers were like, you know, I will pay for something. something that I feel is fair that I'm not getting ripped off. I don't actually want this piracy experience. I don't feel good about that.

Most people don't. We do want to support artists, but we also don't want to get, you know, we don't like highway robbery. So I think that you saw that intersection there. And then with streaming and movies, Netflix, Apple TV, Amazon Prime, Hollywood, the biggest buyers of content in Hollywood is big tech. Who would have thought that, right? You know, you go to Sundance with a film and there's three people that, you know, there's three groups that are important. And they're not from Southern Los Angeles. They're, you know, Southern California, Los Angeles, though they're all now building, I think, studios down there and they're going to have big, big

presences. So I think that finance, that, you know, what you're saying about this intersection of finance and technology is going to happen in a big way. I mean, it's starting to happen. But I think over the next decade, it's going to get really interesting. Going further on that note, we've seen a lot of, you know, tech companies try and become banks in a way, right? So Apple just has the Apple card now. Starbucks has a billion dollars in loans from their cards that have balances on them,

all these different tech companies are turning into banks in a little bit, in a little bit of a way. And then likewise, all these banks are trying to become closer to tech companies. And turning to defy, defy is really this perfect split between finance and tech, where all these defy teams look like Silicon Valley startups, but they're building out what you would find in the legacy financial world. So as we're opening up the defy can of worms here. So as we get down into that further into that rabbit hole, how do you guys think that defy and crypto exchanges like Gemini intersect into the future? So I think, you know, starting off what you're saying about banks and technology companies, I think, you know, we work really well in concert together.

as we were mentioning just shortly before, we're super excited about our partnership with J.P. Morgan and the fact that they're banking us. Banking is their core competency. It's not our core competency. Our core competency is obviously crypto. And I think that centralized exchanges in defy, there's going to be a lot of great sort of partnership and working together in that. that area. We just listed die on the Gemini platform. We're super excited about it. That's obviously a fundamental building block. So we think, yeah, we think we think we think it's awesome and we want to start, we're starting by supporting projects and then continue to look at like how else we can integrate with projects or into that space. It's obviously a newer space. You know, it's almost reminds me where Bitcoin was many years ago, but super exciting to see all the smart people and

teams moving in there. Yeah, so I'll just throw out there. So I feel like we've had a lot of Bitcoin exchanges and Bitcoin banks, right? And you guys pioneered one of them. It feels like right now, and I think I speak for the bankless community, and certainly David feels this way, too, we want a defy-friendly crypto bank. So a bank that's a bank that, is going to start onboarding the masses to DFI protocols. And Gemini listing Dye is a fantastic start to that because Dye, of course, is an algorithmic crypto-backed, open finance, a stable coin. Is that going to be you guys?

Is Gemini going to be the DFI friendly bank for us? Well, we're certainly not going to be DFI unfriendly. But we, I think it's totally possible. We want to support DFI projects. We want to support Web3 and all of that exciting promise. And so we're going to be working hard to continue to support that. And it's sort of hard to predict what that might look like a year or two out from now because the space is evolving and moving quickly.

But we think it's a very important system in the crypto world, but really in the world in general and what's going on there. And so another project that we just listed on Gemini's link and bringing real world data into the blockchain. And there's so many interesting applications around that and building smart contracts with parametric information. So, for example, an insurance contract where a lot of times people buy flood insurance and you can set it to, if the, tide, for example, rises to this level, the insurance pays out. And it may or may not actually destroy the building or whatever you're trying to insure. But because you've picked an objective thing, there's no question around it, so to speak. And it's a very kind of, it's an efficient

way to price insurance and make a determination after the fact. But if you don't get the information into the blockchain, then it doesn't really work. So putting that information into the blockchain and defy and smart contracts is super exciting because then you can just write contracts based on objective information. So there's all kinds of possibilities. It's really, quite frankly, unlimited and endless. And sort of going on to that theme, a lot of times we think about. of Gemini as a protocol company, or rather a bridge between the old world of finance and the new world

of finance. And I think a lot of people don't understand how hard it is to speak to these protocols, the different signing algorithms, like understanding deposits, withdrawals, blockchains, they all have their own communities. Sometimes there's forks that are planned. or sports that are unplanned, just a lot of different things happen. And if you list and support a bunch of different tokens for custody and trading, you have to be up on current events of all of these different blockchains and networks.

And the idea of like a bank being able to attract the tech talent to be able to interface with these protocols is really hard. And some of them have tried. Some of them don't. They try and partner with companies like JPMorgan, you know, partners with a Gemini, right? Or builds a relationship with Gemini. We also have a relationship with State Street to actually be the software subcustodian provider for them and their clients. And they actually, I think, hired a bunch of blockchain or engineers, maybe 100, 100, 150 people to do this mission and decide, like, hey, this is not really core to what we do.

do, let's let the tech companies do that. We'll take care of the banking. So these massive companies, State Street is the second oldest company in the country, I think it's 225 years old, have tremendous distribution networks in customer waste is built in. And so if we can connect those portals to our bridge or portal into D5, that's incredibly powerful. The other thing that people don't quite realize is that when you're a bank, it's very hard to grow at the speed of tech or at tech multiples. And in fact, like, if you have like more than 20% like a year over year of growth, the regulators find that suspicious. It's dangerous

when a bank grows too big. And the FDIC, who's the backstop insurer, so the OCC and the Fed, both regulate, but the FDIC as well is really the final gate to get through for a banking charter. You really wouldn't get the green light if you have like tap growth multiples because it doesn't really, it's an odd bedfellow with the concept of growing a bank with safety and soundness as your primary principle and objective. And that's ultimately what this is, what bank regulators are concerned with is safety and sadness of institution. So running fast and breaking things and moving at the pace of innovation is incongruous with being a large financial institution.

So there are so many different variables. It's very hard for a zebra to change its stripes. And I think a lot of people don't understand these distinctions and how specific they are to different players that maybe overlap but cannot play the same role. So I think that like big finance is better off partnering, collaborating with tech companies. Conversely, like it's hard for big tech to come in here because they live in a world that's completely unregulated. If you look at the like GDPR is sort of like these things are coming down, but social media companies, there's no regulation.

If people are upset about Cambridge Analytica or these things, like there were no rules broken. You could disagree with philosophy or like that's on how I would run my company, but they didn't do anything wrong in the eyes of the law. Whereas if you are actually regulated like a bank, like GDPR is not like a new thing because you've been doing that for forever. Like you've been KYCing people, you've been having their personal identifying their PII information and protecting that like it's sacred for a long time. You've understood like data and data protection. So building a business that's like basically completely unregulated with respect to information and data. And then coming in and all of a sudden having to like bolt on KYC is probably like also,

more difficult than it sounds. So like once you get in motion, you build like these, this philosophy, like growth hacking, run fast, build, you know, break things. And then you have to sort of like have the, the act a little bit more like a regulated company. I think that's also very difficult. Gem and I, we've been, we've been trying to marry both from day one. We joke, we've got, you know, a hoodie on one side and we wear a suit on the other on the other side. And we've been trying to marry the ethos of like Silicon Valley tech shops with East Coast like financial markets and regulation and threading that needle. Other companies that have had to do that and I think have done that quite well, for instance,

might be a square. They're Silicon Valley visionary company led by a visionary leader. But they also have money transmission license. They just got an industrial loan bank charter. So they've straddled both worlds and quite well and quite effectively and built something great. And it's much easier to start from day one saying we're going to have that formation and that's going to be like our DNA. then to come from, you know, one far side of the field or the other far side of the field and make your way into the middle. I want to bring up a subject that me and Ryan have been chewing on a lot recently.

This is a thesis that we have, which we've been calling the protocol sync thesis. And the concept is that, you know, blockchains, things like Bitcoin and Ethereum, offer these credibly neutral protocols for everyone to use massively scalable found all over the world. and all the good reasons that we love them. And institutions or companies or services like Gemini, but also others, can tap into these protocols and use them as they see fit for their benefit. And just using Bitcoin and being an exchange on top of Bitcoin

as they may be a very early example of this. But with DeFi and Ethereum, Ethereum is like this protocol of protocols, right? And what we call DeFi apps are really just, individual protocols on top of Ethereum, each one offering its own a level of credible neutrality or dependability that centralized companies like Gemini can leverage to better improve their product that they offer for their customers. So you guys just listed Dai, which could be perhaps viewed as the protocol sync thesis where things, companies, centralized companies can leverage dependable protocols on blockchains like Bitcoin and Ethereum.

And because they're dependable in the same way that the internet is dependable, because you can depend on die being there, it's a good business decision for you guys to offer die and die trading on your website. The thesis is that centralized companies like Gemini or crypto banks at large will use more and more of these protocols over time. And the more dependable, the better. And so, like, if this thesis is correct, we would predict that in the future Gemini might list, or might make available the die savings rates.

So not just having die on the platform, but also being able to put it inside of the Maker Dow protocol and get an interest on it. And then we could go even further. And, like, maybe you guys just build out an interface for the complete MakerDAO protocol, not just including vaults, but also governance. And then there's so many other protocols that we could also talk. talk about it as well, like compound, AVE, any type of protocol can just be built and have an interface built on it by an exchange like Gemini. And that makes Gemini a better exchange.

It makes Gemini have more better products for their customers. So how do you guys feel about the protocol sync thesis? And do you guys resonate with that future? I think it's a very smart one and I think it's correct in many ways. And I think that the more that we can offer to our customers, the better. And I think the more customers we can offer to a protocol, I think it sort of benefits both sides or all parties involved, if you will. And I think, you know, it's almost like this, this you can create, the internet was a hard place to navigate pre web browser and pre sort of search. And so the more tools and experience you can give people to navigate these protocols, the better. And if you can create a good experience, because I think one of

the challenges with a lot of the projects out there is it's like so hard to interact with them. And that's just because it's early, right? It was hard to interact with Bitcoin eight years ago when we found it. It was really tough. You had to be highly motivated to to go buy it and then you had to be motivated to figure out how to store it and that's of course changed dramatically in a short period of time and I think the same is true

with Defi and and Web3 so I agree and a lot of that resonates with us yeah I was I was gonna joke like it sounds like I feel like you've been sitting in some of her roadmap brainstorming meeting that's judgment but But definitely love that.

You know, obviously, like, phase one of crypto was buy-sell store. But I think earn or use, you know, all these other use cases have to, like verbs, if you will, have to happen and have to be a part of the Gemini story. And so, yeah, it's really hard to interact with TCPIP and SMTP. But then people build applications like Gmail on top of it. And if Gemini is this application that can onboard people and help people in a user-friendly way, interact with these protocols, whether it's earning money, which is a great, it's a great environment, right, to have the die savings rate or something like compound because we're zero net, we're zero interest rates right now in fiat world land and potentially going negative.

So but you know, I love this idea of like, yeah, like what we're talking about here is protocols and plug into protocols. Self-driving cars, like the Internet of Things when it arrives, like really arrives, it will be able to plug into a protocol like a self-driving car, but it will not be able to open up a bank account with JP Morgan. And so my prediction is that one day, Gemini may be, may have more customers that are actually not humans. but actually machines. Now maybe a human has an account and sub-accounts off of their account

where they run their fleet of self-driving cars. But ultimately, like, we'll be like K-Y-seeing machines because machines need protocols and interact with protocols and can do micro payments on the blockchain. When, you know, cars on the road, it wants to pay another car to move ahead of it. that's going to happen in the protocol world. It's not going to happen in ACH credit card, you know, Fed Wire banking system.

And so that's the world that Gemini's the future that Gemini's built towards. And we're translating between the old and the new. And we want to bring people into that new world. Because ultimately, like, I think that is just undeniable of the future. Gemini as a bridge to money protocols, I've got to say is a really compelling vision for where you guys are going. Part of that bridge that you've brought in the past is obviously the user experience, you know, that's kind of the Fiat onboarding, that sort of thing.

But it's also been the regulatory aspect of it, the regulatory clarity. This year, Defi just passed a billion locked inside of it, right? So that's not an insignificant amount. But that is definitely not the institutional money yet. So it seems a little bit like you guys made the analogy to it's like it's kind of defy's like kind of like early bitcoin in that the institutions aren't yet comfortable with it. What kind of regulatory barriers are there to say, you know, depositing something in compound through the Gemini interface? What sort of legal barriers need to be overcome there? Before we sort of get there, I think that's an interesting point of how you sequence people getting into crypto.

nobody's first I don't think anyone's first foray into crypto is like I'm going to go buy some dye I think it's like really simple right it's like I heard about Bitcoin I've been hearing about it for 10 years oh my gosh the Fed is printing so much money maybe it's time to inoculate myself from the money printing disease like I buy the Bitcoin gold thesis like okay let's buy some and when you know, a hedge fund like Bridgewater, AQR, they're going to go to a regulated institution or path to dip their toe in. It's a big toe because it's just huge money. But they're going to try and they're going to start with buying Bitcoin.

And then you have to bring them along, right? But nobody like people like you experience crypto. It's hard to explain it. Once you get into Bitcoin, you feel it. You get comfortable. And then you say, what's this ether thing? There's this evolution of people getting in. And we need to meet them where they are.

If you're Bridgewater, if you are a massive hedge fund, you're used to calling up State Street or something like Straight Street or you do business in the regulated world. So we have to get them bridge from where they are to start getting them in. And then one day down the road, I think they can. get behind die they can understand it they're very brilliant sophisticated people but i think it's important to focus on like the the initial battles that we have to win first i also would just add that um it's possible that defy you know the the the elements of defy are really attractive to individuals

who otherwise can't get access to the existing system and so um a lot of institutions you know, they have access to U.S. equities, but there could be people in the unbanked population, for example, who don't have access to U.S. equities, but some synthetic contract on D.Fi all of a sudden gives them that access. So it's something that they need, but it's not relevant to a large institution in the U.S. or Wall Street. So I think that's probably, it could very well be a story, where the people who need it really, really gravitate towards it at first. And I think we saw that with Bitcoin a lot. Most of the world was like, hey, I'm okay with gold.

I can buy a gold ETF, and I don't know if I need this new store of value. And so it's, you know, ironically started off as a very retail individual-based market. And it's one of the few asset classes, maybe the only asset class in the world, where Wall Street will be the last person to the party. On a recent interview you guys did, I believe it was with Camila Rousseau. You guys talked about your ETH holdings, which everyone in the Ethereum community was surprised and happy to hear that they are sizable, according to what you guys said in the interview. Maybe you guys can give us your guys' value accrual thesis for ether the asset. Sure, yeah.

I'm actually surprised a lot of people might have missed that. Maybe we've never talked about it before. I thought we had. But either way, yeah, we do own a lot of ether and have for a long time. And I guess our thesis stepping back is really, Ethereum is this amazing decentralized computer or operating system, for lack of a better word. And like any operating system, it provides an environment.

where you can run applications and creates this sort of unbounded opportunity of building. So that was our initial, like, you know, aha moment. This is really, really interesting. Yeah, like Ethereum, when it was launched and we looked at it, just the smart contract aspect, the turning complete nature, you know, Bitcoin's digital gold, it seems. like ether was going to make a really good run at digital oil, you know, to use the metaphor. So incredible community, again, very passionate. And it felt like a real project.

So we were very big, we are very big supporters and have been for a long time. And we're actually, I think the first U.S. regulated exchange should actually list Ether. for trading in custody back in 20, maybe it was 2016, so even before the ICO craze. So, yeah, big fans of Ether and have big, big Holdings as well. Yeah, it's really cool. You know, David and I are from the tribe of, you know, eth as money as it's starting to be used inside of its ecosystem as a collateral and as economic bandwidth. that it's starting to accrue this monetary property too. It sounds like you guys are seeing something similar.

But I want to ask this, and this can kind of close it out for us, guys, because you saw rowing in kind of your community growing up before anyone else did. You saw Facebook and social networking before anyone else did. You saw crypto very early as well. What are you seeing today, like now, that other people aren't? Like, because we want to buy it, whatever it is. Yeah, we could tell you, but no. So I think one of the things that I would say in response to that initially is also sort of the time horizon of seeing things and then determining, you know, the lifespan of that particular thing.

So when we look at social networking, it really, it's sort of peaked. And at this point, it feels like the centralized social networks are pretty well baked. And they're growing probably at the pace of the Internet at this point. And so is there a lot more to do there? I'm not so sure. Probably not. But I think when you look at crypto, I would draw more of a parallel to the Internet in the late 90s, early 2000s. And we're still 20, 25 years into sort of that modern experience where the Internet was commercialized.

And I don't think there's any sort of stopping or slowing down, so to speak. So we're 10 years-ish into the crypto experiment. And I don't think, you know, I think it's literally just getting started if that were in like the preface of the novel. And there's so much to be done. I don't think that, you know, there's going to be any shortage of ideas. So the space as a whole, I think, is so early and really unbounded. And I don't know if that's, it's a pretty broad answer, but I think that it's important to know when certain innovations or trends have effectively peaked and there's not much more to do. And I think crypto hasn't even gotten started.

But I think generally like sticking to the big things that are, that makes sense on a conceptual level, we've talked about Ethereum. Like, is there going to be an operating system for the decentralized world? There will probably be more than one. In generally, like centralized operating systems on systems, there's a handful of them. And in the case of Ethereum, the more apps and the more vibrant, that value tends to accrue into the protocol and makes it more valuable. That's a pretty easy concept to wrap your head around. on a macro level. I think when you look at Bitcoin, you're looking at a digital gold thesis, and gold is 10,000 years old. So we're year 10 or 11 into the next, what, 10,000 years,

you could stay in Bitcoin for your entire lifetime and there's still stuff to be done. So these are super, these aren't applications on, on, you know, the internet that, that have become sort of mature and saturated. When we're talking about crypto, we're talking about an entirely new network effectively or internet, like these sub-internets. And so I think that we try to focus on the really big pieces, and we think that there's work to do for 100

of years from now forward. Yeah, it feels like we're still in the very much like the infrastructure phase. If you go back to the internet, everyone's sort of like on a dial-up modem right now. There isn't really fast like T1 or whatever T3 lines. We're going through the analog like phone lines or people like at home can pick up the receiver and screw up your interaction and like all of a sudden. You're winning, like, I was an hour long, multiple hour long, 80s. Mom, stop picking up the phone.

Oh, my God, yeah. Like, it was just, it just was crushing. And then you lose, ultimately. She doesn't understand what's at stake, you know, in these, in the games like this, in these war games. But ultimately, when the success of a project, right, like CryptoKitties effectively DDoS is the Ethereum network. That's like my mom picking up the phone and my age vampire's game.

That's kind of where we are. And we haven't really had the massive application adoption use case moment. You could say that maybe Bitcoin is the first use case and speculation or investment is it. But it's got to be so much more. So focusing on what are the important building blocks to go forward to like set the stage for that moment. So Ethereum is decentralized compute, maybe file coins to centralize storage. What other building blocks do we need, die maybe one of them to go forward? And lastly, I'll say that I'm very interested in just we purchased, Gemini purchased, acquired Nifty Gateway, which is an NFT.

platform. And I think that, you know, the first incarnation of crypto as we know it was, let's create decentralized gold. And then maybe we can bring stock certificates or utility tokens on the blockchain. And they ultimately, we're going to bring art and collectibles on the blockchain. We all grew up collecting baseball cards, comic books. Some of us graduate into, you know, collecting very expensive art at some point. And I think there's going to be a push for that. And ultimately, I think it's just like being long human behavior. It is human to express yourself creatively through art, collectibles,

and also to be a consumer of that. And I really like that. The other thing I'd like to see is sort of the fusion of e-gaming in crypto. E-gaming's so big, but it's also so walled garden. It's like the most exciting fastest growing sport area in the world, yet it doesn't seem like, and it's like it's so everyone in that world, I think is totally into crypto or would be. But it doesn't seem like we brought it together.

but I'm sure we will but when that happens when it has like the Twitch Canon or the e-gaming Canon comes over to blockchain then it's just a again it's like a whole another step up I'm glad Tyler sort of narrowed it in on those two particular areas because they I think a lot of times we look at innovation and and we focus on

the things that aren't as fun. And a lot of times innovation just comes about through people had a lot of fun through gaming. It starts out pretty casual. And then all of a sudden, you're like, whoa, this is transformative, and it's touching everything. And I think e-gaming is one of those areas where there's all these kids that are just having a lot of fun, but they can't really get their identities or, you know, a shield or a sword out of the game. But if they could get it, onto a blockchain, that would really be a very interesting thing. And I think a lot of, you know, it's possible the next wave of crypto innovation is around gaming or art and collectibles. And it's

just sort of fun stuff that doesn't have a high threshold of like require a super high threshold of trust. You don't have to convince someone, hey, put like a super material amount of your life savings into this new asset instead of gold or whatever, you're basically telling younger people who live online have like incredibly important, their online identities are super important. And you're saying, hey, like, do you want to collect this online thing that's scarce and verifiable? Of course. Like, why not? Why wouldn't I do that?

You have to convince them. You have to tell them why they shouldn't do that, not why they should. And so sometimes adoption comes through those avenues that you least expect. And here we are focusing on the synthetic S&P on DFI. Like how is that, you know, how are we going to get people into that, which we will. But sometimes the side door or the indirect way, we may indirectly onboard an entire generation through crypto, not through the concepts of open finance or open defy or whatever, but through this casual fun way.

And I don't think it's a coincidence that magic the gathering, you know, Malgox was the first exchange. It sort of kind of makes perfect sense that you start out as this exchange for a card game and it kind of moves into crypto. And we may see that again. So it'll be interesting. Yeah, absolutely. I mean, it strikes me that the key innovation of Bitcoin is this innovation around

digital scarcity. And you heard it here first, folks. So the Winklevosses think there are multiple waves of that innovation to come. So kind of like there was a web one and there's a web two. we're just in crypto one and a ton of opportunities are left in crypto 2.0 and 3.0. I do think that Gen Z will be all over the NFT use case, digitally scarce games, as you said. They are more passionate about this stuff than even millennials. So it'll be exciting to watch.

I want to say on behalf of the bankless community and our listeners, Tyler Cameron, thank you so much for coming on. We learned a lot. We will look to Gemini for the development. around DeFi. We're excited that you're adopting Di. And we'll look forward to more innovation coming from me in the future too. Thanks so much, guys. This was really, really fun and enjoyable. Really appreciate your time. Yeah, thank you so much. Awesome. Thanks, guys. Thanks a lot. Cheers. So action items, guys. There aren't currently many places to buy Dai today. You can buy it on decentralized exchanges. Coinbase also has a good order book. You should also check out

Jaminize order book. They recently added die. It can become a great place to purchase it. So check that out as an action item. It's currently trading over a dollar. When it trades over a dollar, there can be some arbitrage advantage for you. So check that out. Also, second action item, what we want you to do is listen to a bonus podcast we're coming out with on Wednesday. So this is Monday when you're listening to this. This interview with Tyler and Cameron went so long. We covered so much material. We didn't get an opportunity to talk about the big picture items that we love to talk about on a weekly basis. So we're releasing that in a special bonus edition of bankless that will be coming out Wednesday. And finally, David, we need those five-star reviews,

right, man? We always need those five-star reviews. That is how we get the bankless gospel into as many people's ears as possible. So if you think that more people should listen to Bankless, which I hope you do. And if you don't, please let us know. Please go to wherever you listen to podcasts and give us those five-star reviews so we can show up higher than all those crypto podcasts that came out in 2017, got a bunch of listeners from people that left, and then are still kind of sitting there after they haven't produced any content for years. So if you think that Bankless should show up higher than them, please go to iTunes. Please go to wherever you listen to your podcast and give us those five-star reviews. That's asked, guys. Take us to the top of the charts. Now, risks and disclaimers, of course,

what we talked about was risky today because crypto is risky. Defi is risky. Even crypto banks like Gemini cost to your funds and there is risk associated with that. So be careful out there. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.