Bankless - 9 - Going Bankless with Maker | Mariano Conti

Episode Date: April 27, 2020

Episode: #9 April 27, 2020 Ryan & David talk with Mariano Conti about Dai, Maker, & his epic bankless journey. Learn how Maker can help you go bankless through this conversation with Mariano. We talk: Mariano's life in midst of Argentina's capital controls Why Mariano moved from Bitcoin to DAI and Ether The components of Maker including: DAI (stability) Vault/CDP (credit) Dai Savings Rate (interest) Governance (MKR token) Centralization risks of Maker Is Maker the last say on decentralized stablecoins? What's it going to take to see 1m people into DAI? This is our first of three episodes in the "King Money Protocols Series" where we talk through the three most important DeFi protocols. Stay tuned for the next two episodes!   Before the episode begins we also talk about: The Lendfme hack & what it implies Insanity of negative oil prices!  ----- Tools from our sponsors to go bankless: Rocket Dollar - tax shelter your crypto ($50 w/ "BANKLESS") Monolith - holy grail of bankless Visa cards Aave - money lego for lending & borrowing Zerion - portal to your DeFi portfolio ----- Resources discussed: VIDEO: How I Survive Argentina's 50% Inflation - Mariano PODCAST: Rise of MakerDAO: A Personal Journey - Mariano Learn how Brice pays for his lunches with DAI - Bankless Follow Mariano's on Twitter  ----- Episode Actions: Check out Maker protocol How to get a DAI Savings Account - Bankless Tactic 23 Give Bankless podcast 5 stars in 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 of 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 once again, and we're here to help you become more bankless. David, I am super excited about our guest today and about the topic. Can he tell us about it? Mariano Conti, who I call the king Midas of Ethereum because everything he touches turns to ether. We all know and love Mariano Conti. He is the head of smart contracts at the Maker Foundation. He has been absolutely critical in the rollout of the MakerDAO system. And he's been there from day one. Back when the MakerDAO system was what they called proto-Sai, that's the sigh before the current sigh, which is the si before the current die.

So he's been there all the way in the history of MakerDAO. The really cool thing about Mariano Conti, in my opinion is that he is from Argentina, which is one of the many countries in the world that really needs crypto as a as infrastructure for value management and and just for living your life. So at the same time that Mariano is living on crypto using crypto systems to support his personal finances, he's also building the platform, the Maker Dow Protocol that also will help him live his life even better. And so like he's he's a dogfooding crypto. And then he's also building his own product that he needs at the Maker Foundation. So getting into this episode, we talk about stability, how Mariano lived on Bitcoin before

there was even Ethereum or Die to live off of, how that helped his life and then the problem that that also created. And then how he came to the Maker Foundation and started living off of Die. Mariano has done a ton of different talks around the space. And so we have those linked in the show notes. if you guys want to hear more about Mariano's story, but truly a fantastic individual, a really strong representative ambassador of the MakerDAO system and for crypto at large. Guys, this is going to be part of a three-part series.

We are doing on the King Money Protocols, and the first of these is Maker. The second is going to be Uniswap and the third is compound. So we've got three Bangor episodes coming up for you guys. I think in addition to hearing Mariano's story, which is fascinating, you're going to learn a lot about Maker Dow the Protocol, about die the stable coin, about accessing credit and how to use this interesting, this bankless system. But before we get into it, let's talk a bit about our fantastic sponsors. The first is for our U.S. listeners, Rocket Dollar. If you have an IRA or a 401k, chances are it's jailed in your brokerage, in your Schwab account,

in your Fidelity account. That means you only get good access to stocks and ETFs. If you try to buy crypto inside of it, you're getting ripped off. You don't have access to buy crypto at the spot price. So the price of something like an eth inside of your brokerage account is going to be 5x what you'd pay on a coinbase. Don't do it. Get a self-directed IRA.

You can get a Roth IRA. You can also get a self-directed 401K. Use Rocket Dollar. They take care of all of the paperwork, all of the administration. You can break your retirement account out of jail. You could start investing in crypto. Now is a fantastic time to do that, by the way. And if you go to Rocket Dollar.com, you can use the code bankless and get $50 off. Zirion.io is the front page to the defy ecosystem. If you are looking to onboard your friends or even yourself into the world of Ethereum and Defi, I highly recommend go. going to zirion.io and using their interface to manage all of your crypto assets. Xerion is specifically designed to make crypto extremely easy and extremely sexy to use. And so instead of going to all your individual protocols, like going to uniswap.io, compound. dot finance, the maker vault page, you can just go to zirion.io and see all of your assets and all

of the D5 protocols that you want to interact with all in the same place. to me, it is the replacement for logging into my Wells Fargo account and seeing my personal finance situation. Instead, I just go to zirion.io and I see my defy accounts all in the same place and I can swap on uniswap. I can borrow and lend in compound. I can open a vault and maker Dow. Then you can even invest into uniswap and bank or pools. Something really cool and new that happened with zirion is that they acquired my defy and they are also building out. a set of API tools. And so, you know, the world of money Legos is not just confined to Ethereum applications.

In the traditional Web 2.0 world, there's also the data Legos. And so now you can use Xerion as your data Lego for data and analytics about the DFI ecosystem. So if you are building something that needs data about DFI, Zirion is rolling out a API product for you to build on top of. Check them out at zirion.io. All right, David, before we get into Mariano and Maker, let's talk big picture. There's always weird stuff going on in the world outside of crypto and within crypto. So something crazy that happened last weekend, David, was a DeForce D5 protocol called LendFMe got hacked for like $25 million.

So what happened there, man? Yeah, this story is really interesting and kind of comical, I think, in my opinion. So, D-Force is this D-5 protocol that is very similar to compound. In fact, it is almost exactly the same as compound. And the reason why we know this is because there were some pretty clear indications that they copied and pasted compounds code and then used it for their own application. And the reason why we know this is because there were little identifying tags that literally said compound in the code that they forgot to remove.

And so that was already a red flag. And then they made some tweaks, made some changes. They implemented a new token standard called ERC-777, which compound specifically did not include. And then because they allowed for this new token standard, they allowed for what is called a re-entrancy attack. Really simply explained, a re-entrancy attack is imagine if you go to your local bank, ask for a withdrawal, and then while the teller is opening up the cash register to pull out the money, you teleport to another of the same bank, and you ask the next teller to make the same withdrawal.

And so you go and do that a thousand times at all the different banks, and before all the tellers register that you are withdrawing $200 from your account. You've gone to 10,000 different banks, and then you withdrawn $200 from all of them, and turns out that you actually drained the whole entire system before they could account for that. And so that's what happened with the Deforce attack. The attacker was able to withdraw $25 million of different crypto assets from the protocol.

And I think it might have been pretty obvious to see this coming, understanding that we saw them copy and paste compounds code. It clearly showed that the expertise of these individuals was not up to snuff for managing users' funds. Yeah, absolutely. So it was put together in a sloppy way. It was not a default, DFI protocol that we'd recommend. It wasn't properly audited.

The hack that you mentioned was a sort of a well-known flaw that they kind of disregarded. But that aside, you know, it's really interesting about this story. So the hacker goes and steals a 25 million worth of assets. So he steals assets like USDC and IMBT. And these assets, I think is really interesting about the stories, these assets are actually like redemption tokens. So they don't have strong settlement guarantees. In other words, if you if you hack, rather, steal USDC, what you're actually stealing is a redemption coupon for some US dollars that Coinbase keeps in a bank somewhere. You're not actually stealing a bearer asset that you can then

settle anywhere. You have to settle USDC at Coinbase. Same with IMBT. It's kind of a redemption coupon for getting some BTC, some Bitcoin out of the bank. So weaker settlement guarantees. These are just redemption coupons. These are vouchers for the asset, not the actual asset itself. So the hacker, the thief goes and steals those things. And the very first thing he goes and does with those assets is he swaps them. And what does he swap them for? He goes to a defy exchange called one inch and he swaps them for assets that have much stronger settlement guarantees. So more trustless assets, like ETH, like some of the defy bearer asset protocols like MKR and KNC and Lend, these assets have stronger settlement guarantees. He doesn't have to redeem them at a bank. And so they're more

liquid. And I think that really ties into something that we were talking about in episode six, when we talked about the defy trust spectrum, how there's a tendency for high density assets and high density protocols. And by density, we mean stronger settlement guarantee protocols to become the preferred protocol as the foundation. Thieves prefer them even because they have stronger settlement guarantees. They don't have a trusted intermediary that's required in order to redeem these assets for something of value. And I think we'll see that theme emerge in our talk today with Mariano, where we talk about the difference between die, which has a stronger settlement guarantee. It's more trustless than a stable coin asset like USDC, which is at the end of the

day a voucher of redemption coupon for some U.S. dollars in a bank account. I think the metaphor of settlement guarantees doesn't only apply to crypto assets, but also to crypto protocols. Deforce, comparing the settlement guarantees of Compound versus Deforce, it's a little bit harder to vet. Actually, it's a lot harder to vet the settlement guarantees of these applications, but a really easy and quick way to do it is time. Compound has been live for at least a year and a half now, and DeForce had been live for a week and a half. And so when it comes to trusting these applications, time is actually a really good measuring stick to see which of these applications are going to offer stronger settlement guarantees. This is called the Lindy effect. If something

has been around for a long time, it's likely to be around for a longer amount of time. And so I think the compound versus D4 story is actually really interesting. And I kind of see it as a West First East story. China is famous for stealing Western code and just using it for their own benefit, like reappropriating it and doing as they see fit with it. However, you can't really do that in crypto because of the settlement guarantees of these networks as a whole. If you mess up once in the traditional world, you can just write a patch and deploy it and you're fine. If you mess up in the crypto world, you lose users' funds. The story does end well, actually. So in the process of exchanging some of his lower settlement guarantee assets for some

higher settlement guarantee assets, the hacker actually used a defy exchange called One Inch. And in the process, leaked some metadata about his IP. The police were able to use that to track him down, find him in Singapore. And ultimately, the hacker returned the entire 25 million worth of assets. So, you know, protocols and hacks don't usually get quite so lucky, but DeForce and Lenfme, were quite lucky in this case that it had a happy outcome for some of the folks that put money in these protocols. I think there's a number of lessons here. One of the final lessons is probably be very, very careful where you deposit your funds. We talk so often about defy and bankless being kind of the wild west. In the wild west, it's really incumbent on you to do your research and make sure you know the risks of a particular protocol going into it. As David talked about, the Lindy effect, the amount of time a protocol has been around, the amount of value in that protocol, those are

both good indicators for how safe or the risk of a given protocol. Let's talk about something else, and this is happening outside of crypto, and that's negative. oil prices, David. What's up with that? This has been a really interesting story in the outside world. And it's also interesting that it's happening during the times of the coronavirus crisis, which it's relatively independent from, but because, you know, this is all happening at once, everything is relevant now. So what happened is that in the futures market, there comes a time where if you are the holder of a specific contract for a barrel of oil, the clock strikes,

midnight and that contract sets in and you are then committing to actually take physical delivery of oil at a specific place inside the United States. And so what happened was OPEC countries have been pumping out oil in the last month. There's been this other, like I said, there is this alternative like crisis going on with oil that is independent from coronavirus, but it's very much exasperated by coronavirus. No one's driving their cars. No one is flying an airplane. general demand for oil is just like cut off like 90% down. And so there is this massive supply of oil. And while there's this massive supply of oil, there is increased demand for storage. However, there is finite storage. And so a lot of investors really, really don't want to have to take

physical delivery of oil. These are people in the CME, the Chicago Mercantile Exchange, who are, you know, invest, they're their futures traders. They are commodity traders. They wear a suit and tie and they go to work and then they drive home. They're not truckers. They're not delivery people. They don't want that oil. That's not their job. There's this very interesting separation of these two populations.

And all of a sudden, a lot of CME traders all of a sudden became oil holders without really intending to. And so there was a rush to sell oil. And there's no reason why the price has to hit zero. If you really don't want that asset, if you really don't want to take for responsibility over owning that asset, you can pay someone to not have that responsibility of holding the oil. And so oil went all the way down to negative $30 a barrel, which means people were paying $30 to not have to take ownership over a barrel of oil because there's so much

oil and there's no place to actually put it. And so that's what happened with oil in the oil markets. So Ethereum ether had this meme once upon a time that ETH is oil. We've talked about eth as not being just a commodity like oil to triple point asset. But I had so many maximalists, Bitcoin maximalists, troll me on Twitter the day this happened. And it said, ha ha, is eth oil now? What do you say to that? Like, what's, did you get that too? Yeah, yeah.

It's a funny connection, but it really has no grounds in reality. Ether is digital oil for paying gas for powering the Ethereum blockchain. But it's just a metaphor. for it. There's nothing actually real there. Yeah, and there is a difference between Ether and something like oil. So you mentioned that the reason oil prices went to actually negative territories is because there's a cost to store the oil itself, right? The physical cost, inventory costs, put it in a warehouse, that sort of cost. You don't really have that with cryptocurrencies because they are purely digital commodities. So Ether, when it's being

used as a commodity to pay for gas, there's no storage cost associated with that. Or at least, you know, the storage costs are a lot smaller because it's fairly easy to secure your crypto in a decentralized way. You don't need large inventories and, you know, warehouses and barrels and trucks in order to store and transport this stuff, right? Absolutely. I don't guarantee many things in the crypto world, but I will guarantee that there will never be a negative crypto price. You will never be able to have negative Bitcoin or negative either. That will not happen. And that's simply because, yeah, like you said, it doesn't cost anything to store it. And that's a really strong advantage. And that's actually the same thing that allows you to memorize 24 words

in your head, hop on a plane, travel across the world, and then still have access to your funds. That zero storage cost is why you can store money in your brain. And so I think this really illustrates a very strong difference between like real world physical assets and internet-based assets, where, you know, real-world assets like gold, storing it also has risk. While people generally consider gold as a very risk-off asset, you know, storing it is a part of that risk. There is still risk there. And so while crypto is considered extremely risky, storing. it, you know, the zero cost of storing it is a reduction of risk. And if you can get your crypto storage system down, that is an insanely awesome feature to have as an asset. Absolutely.

It keeps it decentralized. Okay, before we get into the episode, let's talk about our sponsors. The first is AVE. Ave is a lending and borrowing protocol on Ethereum. So what does that mean? We're going to talk about die today, the stable coin. You can actually take that die. You can put it in AVE, it will magically transform that die into an interest-bearing die token. That means when you hold the token called A-Di, which is AVE's version of an interest-bearing-di token, it's actually earning you interest as you go. You can also borrow from the Avey protocol the same way you can borrow from Maker. One difference, though, with Avey, the rate is fixed. It's not variable. With Maker, the rate is variable. So it can change on a week-to-week basis. With Ave, you can lock

a rate, it remains fixed. Also, if you're a developer, you've got to check out their flash loan protocols. They can be integrated in all sorts of really interesting money protocol applications. To lend or borrow from Davay, to lend or borrow from AVE, go to AVE.com. That's Aavee.com and check it out. In this episode, we're going to talk a lot about die and how Mariano Conti uses it as a freedom tool to get what he needs out of his personal finances. If you also want to use die as a freedom tool and have it be a useful tool for your personal finances, I highly recommend getting the defy card from Monolith. Monolith allows you to get a visa card that you can spend wherever visa is accepted, which is like the whole world.

And so you put your dye inside of your Monolith account and then that's connected to your defy visa card. Monolith is approaching the $1 million topped up in their platform on their Visa defy card. And so you should definitely be a part of that people that bring that to $10 million. So go to monolith.xyz and sign up, get your smart contract wallet deployed to Ethereum and then get your Visa defy card that's connected to your smart contract wallet. It puts a little bit of Ethereum in your pocket for you to use out and about as you see fit. And you can always feel really cool when you swipe your card and then makes a transaction on Ethereum.

So go to monolith. XYZ to get started. Without further ado, this is our interview with Mariano Conti from Maker Dow. All right. Let's dig in. Welcome, Mariano, to Bankless. Really excited to have you here. You know, I think it would be great, Mariano, if you start and just tell listeners,

about yourself and a bit about your bankless journey. Yes, of course. I'm really happy to be here. So I'm currently the head of smart contracts at the Maker Foundation, where we build and bootstrap the Maker Protocol, which we'll get into after. But my bankless journey began in 2014 when I started accepting Bitcoin as my salary. and it took off from there. In 2015, I got into Ethereum, and then I started getting paid in Ether.

And I discovered Maker and through a series of coincidences ended up working there. And as soon as the first version of the SIE stable coin was created, an initial private alpha that we call Protocy, I started getting paid in that. And when we really, I started getting paid in Si and then when we released die, I got paid in die. So for the past five or something years, my salary has been, you know, nothing but cryptocurrencies and in the

past three years, the ones that we've been building. So I've been bankless for a long time. And when I say bankless, I mean, I still have to go into the Fiat world, right? But I'm trying to do that less and less. So Mariano, let's talk about your very beginning. Let's go all the way back to Bitcoin and talk about the country you live in Argentina and then why Bitcoin offered a compelling answer to you and then why the next currencies offered another compelling answer to the problems that Bitcoin offered. In 2014, there were capital controls in Argentina. So it was very difficult to get access to dollars unless you went to the black market. And the exchange rate was so different.

The official was, I don't know, maybe eight. And in the black market, it was maybe 50% more. So the government would buy you dollars at a very low exchange rate. And if you worked for a company in the U.S. or you were freelancing, if they paid you dollars, they would be converted to pesos at a really bad rate, right? So people started looking for alternatives. And they went through a usual ones, you know, PayPal and that got shut down. People opened bank accounts in Europe, you know, neighboring country. They opened bank accounts in the U.S., but that still was, it wasn't as simple

to do. So my boss, he mentioned Bitcoin and said, hey, I can pay you in Bitcoin. And after I did some research, I discovered that this was really something great for me. There were already some websites that would let you pay, you know, utilities using Bitcoin or send it to other people. And that was really the beginning. And I felt that I could take charge of my money. You know, it was it was something that the government couldn't touch and and I got swooped into the whole ecosystem. The problem was, I mean, looking back, I see some of the utility bills that I paid. And depending on the month, I either overpaid by hundreds of dollars or got really lucky and, you know, paid when the prices were just right. And that always bother me.

You know, the volatility. I remember I did some freelance work and I had set up a rate. And then we had problems when I wanted to collect because the person was giving me the rate of Bitcoin to dollars at the time that they paid it. But I wanted it at the time that I delivered the project. And it was really good for them, but not for me. And that always stuck in my head. You know, how can we make this better? And that's why my interest in stable coins.

You mentioned one thing. So I think a lot of our listeners can maybe, they haven't experienced hyperinflation for themselves, but they can sort of picture it. But one thing they might not be able to picture or understand as much is the kind of capital controls you mentioned. So can you describe how the government and the commercial banking sector in Argentina sort of, you know, work together on those capital controls? What was it like? What did they do? I can give you a better example from right now because now in 2020 we have capital controls again.

So for example, I cannot buy more than $200 a month legally. So I can go into a bank. I can purchase $200 at the official exchange rate, which is maybe $65 pesos per dollar. And then I'm on a database and I cannot do it again, until the next month, right? And but if I have $1 and I sell it in the black market, I can get over $100. So you see the disparity there.

And if you were to send me $10 right now via a bank, the bank is legally required to change it into pesos before they give it to me. So I am losing almost 50% of the value of a dollar. because you have a country that just either continues to, you know, print money that nobody wants or just hangs on to an exchange rate that everybody knows is fake. We have almost 20 different exchange rates of the dollar. You have the official one, you have the one in the black market, you have the one that the government purchases soy to farmers.

You know, they're not legally allowed to export to anybody they want. They have to sell it to the government. And the government says, okay, I will buy it, but add 30 pesos to the dollar. You know, things like that. It's really complicated. But it's also one of the things that gives Argentinians an edge. It's like, we have to think about so many things to protect our money that I feel that we play in hard mode. Trying to escape the crypto bubble, I would just assume that everyone down in Argentina is a crypto person because crypto offers them like, you know, the solutions, the infrastructure to escape from the coercive government, the government with capital controls.

What has the infrastructure been like down in Argentina, both with crypto and out and with other solutions that have allowed people to escape this tyranny of sorts? there's there's endless stories so outside crypto people will just take a ferry to Uruguay and max out their credit cards you know taking out dollars from an ATM until they they barred that people if they get some money for whatever reason they will buy a motorcycle or they'll buy bricks you know things that more or less go along with inflation I don't know, they do so many things. Of course, buying dollars, I read somewhere Argentina is one of the countries that has the most amount of cash, USD cash in the world, of course, outside the US, because people hoard it so much because we have it in our brains to think about dollars. Properties are sold in dollars.

And in the case of crypto, we're seeing more and more young people, of course, try to make. this jump because it uh for them is just another tool to access dollars that's that's really what it is and you have the promise of you know unbiased uncensurable transparent transactions and community that is that is really important and the fact that you get to own uh your own money that is big because of course there's been so many instances that the government just uh freezes everybody's bank accounts and then says Okay. Your money is not yours anymore. Your money's not yours anymore. Wow. What a powerful sentence. And this brings us, I think, right back to the world of crypto and why crypto is, has qualities that are really perfectly suited for

this, especially the seizure resistant nature of crypto assets. And that's why Bitcoin as a non-sovereign currency, I think offered you a good solution. But I think from what you're telling me, everyone wants dollars. Everyone in Argentina is doing what they need. to access dollars. And I think that's a good time to transition into talking about the Maker Dow Protocol and Die and maybe you're also your personal transition from using Bitcoin to using Dai and how the stability of die has as further given you more crypto tools in your tool belt to be a bankless person. Can you tell us about that transition? Yes. So the first time we launched what we call Protocyte was around July 2017.

There was still, of course, no market for it, right? But we did get paid in this ERC 20 token that we called SIE, and it was one-to-one to the dollar. And we had to go back to Ether to actually do something with it because there was no market. Nobody would trade you or anything for it. But it showed us that it was indeed possible. And then when Sai was released,

East in December 2017, and you started seeing an ecosystem grow around it, that's when we actually saw the power, because it was all very gradual. First, you started trading between people that work with you, right at the Maker Foundation, then you started trading with people around it. And then as a site got listed in different exchanges, we discovered, for example, people here in Argentina who were crypto traders that would serve as our off-ramps, they started accepting this token as well because they saw it in a decentralized exchange or a centralized exchange maybe, and they realized that they could also use it to hedge some volatility maybe from crypto or just have it as another useful token that they can trade against.

And that happened in early 2018. I opened the CDP and borrowed SIE to purchase a car. And I ended up doing that transaction via telegram. I contacted somebody that I'd never seen in my life. I sent him SIE and he deposited pesos into the car dealer, the car dealer's bank account, and I got my car. So no paperwork required to do that. This is all essentially between, no bank in the middle.

It's all just, you know, Mariano's eth address and a smart contract protocol in order to do that transaction. Now, like, you know, just for folks who maybe aren't as familiar with what you were saying, what you just described. So we've got dye, which is a stable coin. You were talking about a precursor to die. And that maintains one-to-one stability with the U.S. dollar. And the way it does that is it's collateralized. So it's backed by generally crypto as collateral. So ether as collateral. Right. So you've got this stability mechanism and this credit mechanism. So when you're talking about opening up a That was you actually opening up a loan. They're also called vaults in the new maker system to actually mint your own die. Is that correct? So this is like stability on one side of things in the maker system and then credit on the other side of things.

Is that right? That is correct. So yeah, every dye that is in circulation is because somebody put in a valuable asset, in this case most likely ether. And they over collateralized to mint this stable coin dye. So if somebody puts $150 worth of ether, they can mint $100 die. And the beauty of the system is that you can see and you can verify that there is always a lot more value backing the dye than what the dye is worth. Yeah, so you immediately decided to start taking your paycheck and die. And this is not completely foreign or strange to you because previously you were getting paid in Bitcoin as a contractor.

But what was the advantage for you in die versus Bitcoin? Well, the first advantage is that I am now in control of what I want to do with it. And in terms that often when I get paid, I put back most of it back into the crypto market, right? I like buying more ether. But in this case, I don't have to worry if I'm going to get paid on the fifth of the month and how Bitcoin is doing that day or maybe it's a Friday and I'm going to have to get paid on next Monday or Tuesday. And what if the price went up or the price went down and you're wondering?

So with this, you get a reliable paycheck with a reliable number. If you're going to get paid X, then it's going to be worth X whenever you get it. And then you can do what you want with it. And for something like a paycheck, I think it is extremely important. There are many people who either cannot save or can save a very small amount and having them get paid in a currency that can go down, 20% that may mean not being able to pay rent that month or buying less food. You know what I'm saying?

We all remember when we got paid in Bitcoin and the price went up 20, right? But if try to remember when it did the other way and maybe we're in a position of privilege where it's like, yeah, okay, I don't need to sell it right now. I'm going to wait until it's back where I say, yeah, now it's a good time to sell. But so many people don't have that opportunity. It's like if I don't sell it today, then I'm going to get evicted. And they may be forced to sell at a price that is not convenient to them. The power of dye and stable coins just they shield you from that worry.

And that's a big deal, right? Like the stability of the value of your assets is really, really important. This isn't something to just kind of gloss over. When you work hard, you go to work eight hours a day, blood, sweat and tears as you go throughout your week, you come back and you get your paycheck. And then your paycheck starts, you know, changing how much it's worth. That's an extra weight on your mental capacity that not everyone really should have to deal with.

And so the ability for being able to depend on. on the value of your paycheck and it staying where you think it is is really important, especially for long-term thinking. Stability really allows you to think longer than the next few weeks. Like, okay, so I have this much Bitcoin and I have this much tolerance for it to change price before I get into trouble and I need to do something. With stability, you don't need to do that. And so the creation of stability on Ethereum is really, really important.

However, there are other ways to gain stability on Ethereum today. There are things like USDC or other stable coins that offer stability, but they're not entirely bankless. And so, Mariano, you are ahead of smart contracts, perhaps in the top 1% of people that can code on Ethereum. Can you kind of just talk to us about the difference between the die code and the USDC code and what that represents for people that are interested in going bankless? Yes. So USDA, it is an ERC 20 token. So it is a smart contract that represents this USDC tokens that are also pegged to a US dollar. So one USDC is one US dollar.

And the only backing is a company that is saying that for every one of these that are in circulation, I have that amount in my bank account, either as cash or I think maybe notes of credit or something else, I don't know, something valuable, but that it is very difficult for you to audit. You cannot really go and knock on Coinbase and say, hey, can you let me see your bank statements. Maybe they do have it. I know that there are other ones like Tether that have been a little bit more shady about it. I've read anywhere from, yes, we have 100% cash. We have $1 for every one tether, but then it was, oh, no, we have 70%. And then the other 30 is in other assets.

In the case of Dye, everything that happens with the protocol happens as smart contracts. And if you know how to read them, you can go and verify that $1, one die is backed by over $3 worth of value, whether it's ether or basic attention tokens, which are the main two collaterals. And now even USDC, which is a little bit less than 1% of the total supply of die. This does mean that the protocol is more complicated, but it also means that it is more decentralized, it is more auditable, and that it occurs almost 100% on the blockchain. And not only that, Mariano, but in the code between Die and USDA, there is a little snippet of code that changes the nature of these tokens, one being fully permissionless like cash, and one being not.

Can you kind of explain the difference between the actual code of the token and how that impacts people's trust in the system? There is one main thing is that USDC has a white list, or a blacklist, depending on how you want to look at it. But the company behind the USDC token can decide that one address has done something that they,

deem not right and they can block access to their tokens. They can no longer transfer them. And essentially, it's just another way of censorship. Dye does not have this. It's fully permissionless. You can trade it with whomever you want. And I think that also gives it an edge. We would say Dye is basically fully bankless, whereas USDC requires the permission of Coinbase. And it's really interesting, you know, we saw this in the LendFME hack. So LendFME, the guy stole $25 million from a poorly coded smart contract. And the very first thing this hacker did with the USDC he purchased and the other bank-backed crypto assets was sell them, sell them for assets with stronger settlement guarantees like ETH and like Maker and K&C and a few other

because those tokens could not be blacklisted. Those tokens did not require permission from a crypto bank. Those tokens had stronger settlement guarantees. We talked a little bit about that in episode six, where we talked about the density of these more trustless protocols and assets and how their greater density allows them to kind of sink to the bottom and become the foundation for other protocols to build on top of them because the rules do not change. You know, maybe just to finish this off as we're talking about die and how you've used die. So could you contrast dye to the U.S. dollars that might be available to you in a commercial bank in Argentina? So what can you do with die that you can't do with your?

US dollars in an Argentine digital dollars in Argentinian bank. Like I said, there's certainly a limited amount of dollars that I can legally purchase. I'm probably required to, I don't know, sign a whole bunch of papers before I can transfer any significant amount. I most likely would have a lot of trouble moving it out of the country. if I move it into the country, then, and I'm not even talking about taxes, right? If I move it into the country, then the government expects to pay me a laughable amount for those dollars. And other than that, I'm just speculating because I honestly haven't done this in five years.

I can tell you from what other people have told me, right? And whenever they start doing that, that's when I bring out the gospel, you know. So moving deeper into the Maker Protocol, I want to talk about vaults and credit. Stability is a really important product of the Maker-Dao system, and stability is instantiated in Dai. But on the other side of the Maker-Dow system is the instantiation of credit and permission. access to credit. So maybe you can talk about how die comes to be and the and how anyone in a permissionless way can access a vault to mint dye. Yes. So so far we've talked about just one part

of the system, right? The actual die token that anybody can buy on an exchange or you can get paid in it, you can receive it, you can send it. That's the basic side of it. And it requires very, very little investment in terms of reading what it is and how it works. It's really very simple. The other part for more advanced users is, like you say, the credit part. And that is for the people who want to create this dye. And the way they do it is they lock up a valuable asset, let's say ether in this case. they lock it up in a smart contract and completely permissionless anybody with an Ethereum

address and some ether in this can lock up this ether and they can borrow against it. They can create dye. So there are a couple of rules that the smart contract enforces. So the first one is 150% collateralization. if your asset goes below this, then it can be liquidated. And this happens instantly. This is smart contracts. They run 24-7 and have no conscience, their code, so they do what their program to do.

So most people keep their vaults collateralized at least 200 or 250%. And once they create this dye, they can do whatever they want with it. send it to somebody else, they can put it on an exchange, they can use any of the protocols that support it. And as time goes on, there's something called the stability fee that accrues against the amount of dye that was minted. So right now, the stability fee is very low. I think it's half a percent per year. So if you borrow, if you create 100 dye and you keep it for a year, then at the end of the year, you will owe 100.05 die. And this is compounded per second.

So if you only use it for a day, you will only have to pay that small part. And really, the offer and demand of the people either generating this die or paying back their die debt is one of the main. things that give the token stability. If the system sees, well, I don't want to get to governance yet, but if DAI is trading above a dollar, then the idea is that it should be cheaper to create this DAI so there can be more on the market.

And the other way around, if DAI is training below the pack, then you know, you make borrowing and get more expensive so you have people go into the market and create more demand for it so people can repay their debt. So it is a balancing game. It's very interesting. Yeah, that's a really good point. And that's something I want to harp on. When the MakerDAO system deployed its code, it's not simply this input one asset

receive stability on the other side. And this is a good lesson in economics and finance. You can't just remove stability. You can't just delete it. You can push it elsewhere. And so when we create a stable die, what the Maker Dow Protocol does is it takes the volatility that is inherent in all assets. And through some clever engineering, it takes that volatility and it pushes it elsewhere. And so with die, it takes the volatility and pushes it onto ether and on.

and onto MKR, the token, which we'll get into later, and then also the stability fee. And so the stability fee for the MakerDow protocol has range anywhere from 0.05% to its highest, I think, of 20.05%, perhaps about a year ago. And so the stability fee is actually relatively volatile, but that acts as the equal and opposite counterweight to the stability of die. While die is allowed to hover around a dollar, the stability fee will fall. fluctuate up and down to counter the market's demand for dye. And it's important to note that die is not one dollar, right? You cannot go anywhere in the world and deposit a die and receive a

dollar. You can only sell it for a dollar for its value, which hovers around a dollar. And so it's important to know that stability has been pushed elsewhere with die. And that's really what the MakerDAO system does. It is a, it's a stability reorganized. system. Now, I want to talk about the collateral inside of MakerDAO that allows for the minting of dye. And so multi-collateral dye, which got pushed out earlier last year, allows for any asset to be deposited into the Maker-Dao protocol after that asset has been accepted by the governance. And then that asset can be used to be collateral for die. However, there's only really two assets that are able to be collateral for dye.

And really, it's just one, because the other asset that's not ether, but that basic attention token, doesn't have that much die backing it. What about ether as a collateral type makes it such good collateral and why there hasn't been other collateral types to be added to the Maker Dow system? What are the qualities of ether that make it such good collateral? Well, the Maker Protocol runs on the Ethereum blockchain, and Ether is the native token to the Ethereum blockchain. So that will always, in my opinion, make it the best collateral for the system.

That is beyond question because there's no more decentralized, trustless asset in Ethereum than ether. So that in and of itself, even though the system at the smart contract level doesn't really distinguish one from another, it will still make it the best collateral the system can have. Yeah, so we've talked about the die token itself, which is stability. We've talked about permissionless credit. And we talked about the stability fee, which is essentially, if you were to equate this to a traditional banking system, somebody takes out a loan and they pay an interest rate. That's what the stability fee is.

but there's also another component of all of this that makes it super interesting. So if you have die, you can actually put it into a smart contract called the die savings rate and you can receive some interest for your die too. So this almost acts like a bankless savings account. Can you tell us a bit about the die savings rate, what that is, where those fees come from and how it works? That was one of the biggest announcements of multilateral die, the die savings rate. The system keeps tabs of surplus and debt. So surplus is, as you say, all of the stability fees that the system accrues, plus the liquidation penalties should any vaults be liquidated.

And on the other side, the system tracks system debt, which in this case is mostly when the system creates dye, let's call it out of thin air. So the dye savings rate, which can be independent from whatever the system is actually making in surplus, it is really the system minting dye out of thin air. But the good thing is that if the system is well governed, that die will be canceled. sold out by the amount of surplus in the system. And so really, it comes from people opening vaults and paying their stability fees. And should there be an imbalance that there is not enough surplus in the system, but there

continues to be a die savings rate that needs to be paid, eventually it can be paid off via mkr inflation, but that would probably mean that the system would need some parameters reworked. In really normal scenario, the die savings rate comes from some of the stability fees. So die in the DSR receives the part of the interest payments paid by the people that minted the die in the first place. And there's actually this really cool team that made this thing called chai, which is dye that is inside of the DSR wrapped in a new token. And so basically, this new token is die plus the interest rate that the die is receiving, which makes it really similar to C-Dai from the compound protocol. And so like both of these tokens represent a claim

on die and a claim on the interest being paid to that die at the time of ownership. And so these these really cool tokens are stable plus interest. But chai and C-Dai, chai from the DSR and C-Di from compound, they're not exactly the same. Can you kind of compare and contrast the differences between Chi and C-Di? The main thing I would say is that

chai has no inherent added risk versus something like C-Dai, which does have a money market behind it. In the case of Chai, it is the DSR. So as long as you accept the risk of the maker platform, you have no added risk because you're not, you don't have a lender and a borrower. You only have the maker protocol and the savings that you earn come from the surplus that the system is making. One other thing is I really like the way that You know

Whenever I bought C-dye or I've traded There's just weird calculation that I have to make In the case of chai you can always say Okay, I have one chai and then you can look at the underlying value So the number of chai never changes you, but the underlying value does. It always, it's always increasing. So we've got, Mariana, we've got Dye, right?

And there are ways to kind of compose it with other protocols and other features. And you can create things like Chai, which is just Dye, wrapped with the Dye savings rates. So you don't have to do anything and you're always receiving interest, like a savings account embedded inside of a token. Right. Let's get crazy for a minute here because this is, this kind of thing, the composability of these money Legos, like it starts to really blow your mind when you think of what the possibilities are of dye as a building block for all of these other things. So what are some more interesting combinations that we can make out of this dye? So for example, you know, the Aztec team, they are developing a money Lego for privacy.

and I know they've created a token called ZK Dai. So it's die except completely private. So none of the transactions can be tracked. So could we take something like that? Could we wrap it with a chai at the DSR? Could we then wrap some kind of insurance on top of it so that you're actually, you've gotten embedded almost FDIC insurance in case something were to happen with Maker? Like how crazy could we get with this stability primitive of

die with all of these money like us. I think we can get as crazy as our imagination will let us. Of course, CK. Die was the first one. And Chai could probably be the second one that Aztec does because it really wouldn't be any different from what they've already done. And then you would get all the benefits of die plus the die savings rate. And then as for insurance, I'm pretty sure that you can do Almost the same thing.

If you look at Open, in the end, what the system produces is also, I believe, a set of ERC20. So I wouldn't see why not something very similar. I'm not an Aztec expert. Maybe they say that it's not possible. But from what I've seen, it should totally be possible to do that. and then you would be wrapping a stable coin with automatic savings, with some kind of insurance protection, and the possibility of having it all be private.

It's mind-blown. Yeah, I mean, this is programmable money, guys. This is like we are installing mods on top of our money system and making it better. So what we've just covered, Mariano, is we've got this new bankless, stability token called die, which is completely backed by crypto, doesn't require a bank. We've got this credit facility that Maker has created. So it's permissionless credit, no bank, once again. We've got a bankless savings account too. But there's one element of the maker system we should

spend some more time on. And that's the governance piece as embodied at some level in another token called MKR, the maker token itself. Can you tell us? us a little bit about why the maker token is necessary and a little bit about governance of the maker system? The MKR token is there mainly for two reasons. One is to vote on the different parameters that the system will have, you know, what is going to be the stability fee of ether, how much die can you create with that? Should the system add another collateral? Things like that. And the other one is that the MKR token is the one that gives you, lets you enjoy the benefits of the system when there is surplus. And it also acts as a backstop when there is deficit. And

the MKR token, I always say it's a high responsibility token. It's one that really makes you be involved with the community and you should, if you are a holder, you should be informed of what is happening because you have a responsibility to govern the system in the best way possible. And if you do so and if the community overall chooses sane risk parameters and saying collateral and reacts quickly when, you know, there are market downturns, then you can earn money on when the system is doing well. And the same thing, if the system is not doing well, then you can possibly start losing some

because of, you know, the system may need to mint more MKR and you could get diluted. So it is a high responsibility token. It is a volatile token. And it's also where, when David was mentioning, that Dai sort of moves the volatility elsewhere, it also kind of moves it in a way to the MKR token. And one of the most interesting things that is happening lately

is the addition of the maker improvement proposals or MIPS, just like the EIPs in Ethereum. We're finally at a point where the community is now mature enough that it is going through this path of, you know, gradual decentralization and taking a more active role because, of course, the idea of the foundation is to take a step back and let the community govern itself as it should. So the MKR asset, the MKR token, is this tool that allows for the management of the MakerDAO protocol to stay on-chain. And so remember, Maker-Dou and

Dye are entirely on-chain infrastructure. Dye gets its stability from the inside of Ethereum, which is in contrast to USDC, which gets its stability from a centralized bank on the outside of Ethereum. The reason why USDC is stable is because you can take that USDC outside of Ethereum and redeem it for a dollar, and that's where it gets its stability. MakerDow can't do that because it needs to be a fully bankless system. And in order to have stability, you have to escape the Ethereum blockchain some way or another, because stability happens outside of Ethereum. Stability is a reference point.

You need something outside of Ethereum to anchor the value of die to the dollar, and that requires getting data off the chain onto the chain of Ethereum. And this is what the MKR token really governs over. The network of smart contracts that is the MakerDAO system is a network that is a system that takes outside stability and outside reference points and anchors it in die. And MKR is the token that allows for that to happen. As Mariano said, MKR is this token that is a governance token.

It's a responsibility token. And it is also an upside token. And so with die, you're never going to really have upside. There's never going to be growth going upwards with die. And so that's really what MKR is for. And it's this thing that if you use it and govern over the system, correctly, then the value of MKR is supposed to go up. There is upside potential there, but it is also a risk token. So there's the, like Mariano said, the whole idea about MakerDAO is taking the risk

and putting it elsewhere. And that's what you, and that's where we have placed the risk. We've placed the risk in MKR. Really, the cool thing to me, Mariano, about MKR is that it represents a seat at the table for governing the system. MKR is this governance token. And it, it, allows for anyone to also govern the MakerDow protocol. Just like how Dai is totally permissionless, MKR is totally permissionless. And so that means that anyone can take part in the permissionless governance of the MakerDAO system. Mariano, can you tell us why somebody with MKR would be incentivized to make the right decision, quote unquote? Yes, because if they make the right decisions, then the value of the MKR token is supposed to go up. And

Really, that is at the crux of it. If the way the governance contracts, because everything is a smart contract in the blockchain, is the more MKR tokens are locked up for voting, the more secure the system is, because you need more consensus within the MKR community to enact changes. And people say,

I've heard people say, well, I don't have that much MKR, then it is pointless to vote. And the answer is no. Even a vote for the negative of anything that anybody is voting, it's still a net positive for the system. So the more MKR is locked up in the system, the better. And I don't know if you want to get into this yet, but one of the core, I think one of the MIPs that are coming, improvement proposals is effectively delegated voting, which is something that is sorely missing from the system. And my only concern is that I wish this had been done before because this being a permissionless system, anybody could have done this in the past two or three years. I'm a little bit

saddened that nobody has done it yet, but I'm hoping that people do it soon. And this will allow you to delegate your MKR in a completely trustless manner to somebody that will make decisions for you, because I can be informed of what is happening because I work at the foundation and I'm deep into this world 24-7, but maybe somebody else who has a smaller position, it just doesn't care and cannot vote every day and cannot go to governance meetings, but they can delegate their power to somebody they can trust to make good decisions for them. And the beauty of this system is that if you stop trusting this person, you can instantly remove access and give it to somebody else or start voting yourself. It's like Ryan called them, the protocol politicians. That is going to be a very

big deal in the future. So this is some combination of like democratic voting slash skin in the game voting where you get more votes the more skin in the game you have, but you can also point your votes towards somebody else who you trust that is more informed and more active in governance than you are. So it's a really interesting hybrid mechanism. And the reason why this gets me so excited is because, you know, one MKR equals one MKR. There's no one that has more say than anyone else in this system based on their skin in the game. And that's really been a problem with current democracies. The United States is as a governance, and I think we can say this for most countries, they're trying to govern, in my opinion, over too many things, too large of a set of

governance things. And as a result of that, democracies have been hard to scale. And I'm really optimistic about this model of both one MKR equals one vote and also delegated voting. And as a little a side note as a little a short little story. On 4th of July, I wore my Maker Dow t-shirt and I tweeted out, like, why does this feel patriotic? Like, why does this feel like independence? And that's really what Maker-Dow is. It's independent from like legacy financial institutions and it's this new system that, you know, people need to support. People, in order for Maker-Dou to function, it needs small grassroots voters to own and have responsibility over the Maker-Dow system. And I really am optimistic about the emergence of protocol politicians

and the ability to host this grassroots bottom-up revolution, this bottom-up protocol that Maker-Dow is. You guys see what David just did there. He launched his political campaign, his Maker-Dou political campaign right here on the show. I can tell. Vote David. Vote trustless. I know that I want both of you, of course, as protocol politicians for the system because you understand it, you are like, you would be perfect for this.

And the beauty is that I can build a smart contract that delegates my voting power to you guys, but this, of course, requires a little bit more knowledge of the underlying smart contracts. But I can say, okay, you guys cannot vote with my tokens. on a Tuesday because I want to. Or once you vote on something, you cannot unvote, so you cannot flip-flop on issues. Or I can remove 10% of your voting power that you have from me, but I cannot remove more than that,

I don't know, once a day. And this is code. You can do really anything that you can imagine. Yeah, absolutely. And look, if we're getting political, critical politician here. I can be Nancy Pelosi and you can be Donald Trump, Dave. You'll see how that works out.

You're going to rip up my papers? Yeah, maybe. So, Moriano, I want to talk a little bit more about comparing Maker Governance versus the legacy system. And so if people want to take part in Maker Governance, there are these weekly meetings that they can go to. There's the Thursday risk calls and then also the Tuesday community calls. And while the foundation is currently hosting those,

I do believe that they will exist into the future no matter what, even as the foundation dissolves. And that's in stark contrast to the quarterly calls that you get from, you know, companies on the public stock markets where, you know, once a quarter, they begrudgingly have to create this report for all their stakeholders. They have to hop on a call and appease their stakeholders. The stakeholders don't really get a say. You can listen onto the call. You can't really voice an opinion.

most, you know, most shares on the stock exchange or not voting shares. And so, you know, this is the maker's system, the maker governance, just like how Dye is completely open and permissionless, so is maker governance. And, you know, the maker quarterly reports, they don't happen every quarter. They happen every block. And also every, instead of, you know, the quarterly meetings, there are two weekly meetings that are open Zoom calls. And so the contrast between the old system and the new system couldn't be more salient to me.

Yes, correct. And those are two weekly calls. And there is also, you know, the forums and the chat, which is an asynchronous way of people sharing ideas, which of course is the way the world is moving now. Not everybody is free on a Thursday at 1 p.m. Eastern time, right? And so lately, so much more has been happening in the forums. And then the governance calls, yes, they're a way for synchronously coming up with, you know, some kind of consensus even before getting actual blockchain consensus. But they're open. They happen every Thursday.

I encourage anybody to join one to see how decisions are made. You know, one thing I also realized recently that's kind of special about Maker and bankless protocols like this. And assets that really embody the upside of those protocols is that all of the cash flows. So Maker receives upside because when Maker is used and stability fees are paid, Maker is burnt. But all of these cash flows, if you will, are all entirely on chain. So it's not settlement by legal system, it's settlement by the nation state, if you will, of the Ethereum economy. And this is much different than other crypto bank tokens like B&B or something like that,

where you literally have to trust the B&B, the Binance entity to actually burn tokens. Maybe they are, maybe they aren't. All of that cash flow transition is off-chain. it's not visible, it's not transparent to you. This is really the birth of assets, crypto protocol assets, where all of their cash flows are on chain. And I think Maker is really pioneering that space,

which is super interesting to me because there's going to be a lot more to come and we'll talk about some in future episodes. But maybe we should kind of conclude with some of the challenges that you might see Maker facing in the future. So one is around centralization risks. So this question of, well, with this added layer of governance, you know, is Maker going or could

make her go down the path of becoming a bit more like a crypto bank or could die with the incorporation of, you know, crypto collateral that's settled off chains, not like ETH, not as trustless as ETH, but other crypto collateral, could die become a bit more like USDC. what are your thoughts on that mariano anything top of mind there the first thing that i believe is that dye can be a decentralized asset even if it is backed by an amount of centralized assets and i hope i can make the distinction so right now there's less than one percent of die backed by us dc which we've already said that it is centralized, it has a blacklist. So there is, for example, the possibility that Coinbase freezes the amount of USDC in the

die system. And that is a risk, just like any other that we've talked about, that Maker Governance has to decide and study and say, okay, if this is a risk, then what is the limit of dye that can be created with USC because if at any point they decide to blacklist the system, then MKR holders are liable for X amount of money and, you know, MKR needs to be minted. Same thing goes with any other asset that could be used in the future, anything that represents real world assets, you know, like realty properties. Anything that can have, the only thing that you need to put something in the maker protocol

is a price fee, really. After that, it is all a matter of managing risk and putting that in a, you know, either a representation of a near C20 token or something that the system can understand. But I would say that one, the system is still decentralized, even if it is backed by an amount of centralized assets. It's just like I said, a manner of risk. I do believe that ether is going to continue to be the dominant asset that backs die just because of the wonderful properties that ether has and the fact that it is the main asset on Ethereum. As for governance, I hope that with the advent of, you know, delegated voting and things like that, that we end up seeing maybe if we see less individual participation, that it'd be because people are delegating to power users.

And I think that in the end could be a net positive because you can have more voting power. and the good thing is that this is not somebody that you're voting for a four-year term. You're voting them for as long as you want to. And you can automate your contract so that when they vote on something that you specifically do not want, that you take away the power in the time that it takes to mine one transaction. That, I think, is real power. Absolutely. And to me, in my mind,

MakerDAO is this risk filtering system. The different risk parameters that you can set for a specific collateral is really taking out whatever risk that collateral has. And so to whatever degree that a specific collateral has centralization risk, it's the role and responsibility of MakerDAO and the MakerDAO protocol to filter out the risk. However, there are, you know, there are in theory other ways to design stability, right? And while we don't, while I don't know exactly what they are, because I'm not a technical, technical coder, I want to pick your brain and see, you know, is Maker Dow the final version of stability on Ethereum? Do you think that whatever the design specification of Maker Dow, what that is, is that the last, the best version of stability? Or do you think that there are

actually more algorithmic, more code-based, less human-based versions of stability for die out there or a token like die. Are there other ways to produce ability that we haven't explored yet? I'm pretty sure they are. I mean, Ethereum is five years old. Die is three years old. There are going to be new advances.

And I hope that the maker community can stay nimble and adopt whatever new paradigms that makes sense for the protocol. I would say, yes, I think there is room for, I believe some people call it the purity dye,

you know, what used to be single collateral dye, a stable comb backed only by ether. It does have its good qualities. It's also probably less resistant to black swan events. So as long as, you know, we can probably communicate the risks of, you know, using one system or the other, there is also the possibility to move certain risk parameters

and give them over to algorithms. This is possible in multilateral dye as well. And the community will be exploring some of those because, yeah, if computers are smart and are fast and can make better decisions than us, then why shouldn't we? The thing is, this all, in the case of Maker, everything is a process that takes a little bit of time to first propose things and discuss them,

vote on them, and eventually putting them on the blockchain. I hope that we continue to be innovative because we're only scratching the surface of what can be done with this technology. Mariano, this has been fantastic. I want to ask one last question because we, we, we, started this by comparing in contrasting Argentina and the traditional banking system versus this crypto money system. We've talked about it. Right now, crypto has stability. It's got a bankless way to receive credit. It's got a bankless savings account. It's got something that the state of

Argentina cannot stop, cannot impose capital controls on. What's it going to take for more adoption in a place like Argentina? It seems like we have all of these buildings. building blocks and the value proposition is clear. Why haven't we seen more adoption and what's it going to take to bring in the next million people into a system like die? That is a great question. So two weeks ago saw something that really broke my heart on TB. We've been in quarantine for a month and two weeks ago, the government started paying people's social security on, you know, using traditional banks. And when they could, They would send money to people's debit cards, but there are still so many people that are bankless, but not tech savvy.

You know, I saw lines and lines and lines of old people who are the people who are most at risk during this pandemic, staying up queuing since 4 a.m. to cash either a check or collect cash. cash for their pensions. And I was thinking this would be the perfect audience, but they don't even understand the technology. So how can we make this simpler for people? And then I realized for every one of those that I saw, I'm on Telegram and WhatsApp groups that are onboarding new young people every day. And I think that is where this is going to be. I seriously, I'm an optimist,

but I don't have high expectations of, you know, boomers in the country adopting this technology. But young people that have been born with the internet and they do their fine and sovereign over the phone, this kind of thing really gets them excited. It's like you said, you know, Argentina, the only goal for people is to get access to dollars. That's what's on everybody's minds. And this is a great tool set for them to do that. And, you know, you take away trusting a bank, trusting an institution, which a lot of these young people, they haven't had a hyperinflation yet. They've never lived through one. Maybe they will live through one this year or the next. But it is so ingrained in, you know, their genetic memory that they know enough not to trust their money

to the institutions. This technology just, it checks all the right marks for them. Mariano, I want to thank you for coming on to bankless, sharing your bankless story and helping our listeners use the MakerDAO protocol to go more bankless. You are a fantastic ambassador, both for the MakerDAO protocol and for crypto at large. There are a ton of talks and other podcasts that you've done, which we're going to link in the show notes. Two that come to mind for me was your DevCon talk in Osaka and then also the essay that you wrote and read on the Lower Shin podcast. If people really want to send something to their friends and family that tugs at their heartstrings as to why we need this bankless revolution, those would be the two things

I would point you to. Mariano, thanks for coming on bankless and giving us your time. Thank you so much for an invitation. Let's get to the action. So what we want you to do today is go check out Maker the protocol. Go check out Die. Go check out if you're more ambitious. The wrapped protocols on top of dye like Chi deposit some funds into the die savings rights, see what happens. You could also, if you're more advanced, test out the Maker Vault feature. You know, it's fine to use test amounts to start and see what the experience is like. Also, in the show notes, you'll see links to all of the podcasts and videos that David was referring to.

You can hear more about Mariano's story. It's inspirational. Highly recommended there. As always, guys, this is the Wild West. ETH is risky. Crypto is risky. D5 protocols like Maker have risk to them too. You could lose what you put in.

Make sure you understand the risks before you do so. We're headed to the frontier. This isn't for everybody, but we are glad that you are with us on the bankless journey. Thanks, everyone.