Bankless - SotN #32: Does DeFi Fix This? Cameron & Tyler Winklevoss (GME, Gamestop, Robinhood, Melvin Capital)

Episode Date: February 3, 2021

🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/​ ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI​ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/​ 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/​ ----- 💪BECOME A BANKLESS PREMIUM MEMBER: http://bankless.cc/membership​ ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave​ 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini​ 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith​ 📈 KWENTA - DERIVATIVES TRADING WITH INFINITE LIQUIDITY https://bankless.cc/kwenta​ ------ SotN32: Does DeFi Fix This? Cameron & Tyler Winklevoss ($GME Gamestop Short-Squeeze, Robinhood, Melvin Capital) We bring Tyler & Cameron Winklevoss, founders of the Gemini Exchange and crypto-visionaries, to the Bankless State of the Nation. We do a deep dive into the market craze of the Gamestop ($GME) Short-Squeeze, r/Wallstreetbets, and what it means for the DeFi space. Topics Covered: -r/WallStreetBets -Robinhood Retail vs. Institutional Elite -Media & The Establishment -Is Traditional Finance Broken? -DeFi's Big Moment -Gemini Updates Cameron & Tyler Winklevoss had a heated appearance on CNBC last week to discuss the events of the Gamestop Short-Squeeze in the context of populism, the inequity of the current financial establishment, and cryptocurrency. Their argument centers on the relationship between censorship and centralization –problems that don't exist in the crypto landscape. The $GME craze has been the epicenter of a growing protest against the institutional elite – this protest inherently calls for decentralization and distributed power. DeFi fixes this. Brokerages like Robinhood having the power to limit trading based on a phone call is a war cry to adopt permissionless transacting. Cameron describes how this is an example of the people becoming disillusioned to the monopoly of modern money. The media establishment has vastly underestimated and vilified these "internet amateurs." The Winklevi discuss how a money-making opportunity turned into a movement demanding institutional change, flaming the fires of broken trust after events like the '08 collapse. Public forums like Twitter and Reddit have become powerful tools to organize the masses, and the sentiments seen here reflect cryptocurrency's value propositions. The big question remaining is how these events and arguments can serve as a rallying point for DeFi adoption. Cameron & Tyler are optimistic about DeFi's solutions to increasingly relevant and urgent problems in our current system. ------ Relevant Links: Tyler Winklevoss on Twitter https://twitter.com/tyler​ Cameron Winklevoss on Twitter https://twitter.com/cameron​ Gemini Exchange https://bankless.cc/go-gemini​ ------ Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/​ Visit the official Bankless website http://banklesshq.com/​ Follow Bankless on Twitter https://twitter.com/BanklessHQ​ Follow Ryan on Twitter https://twitter.com/ryansadams​ Follow David on Twitter https://twitter.com/TrustlessState​ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

Hey guys, welcome to State of the Nation. David, we are at episode number 32. How are you doing today, David? Absolutely fantastic. So much is happening every single week. It seems like it's just a new week of even more stuff. And last week was no exception. And it looks like this week it's going to be even more crazy. David, we just had the Winkle Voss twins on and we're about to get to that conversation with them. They were on CNBC last week. I had to actually get a free trial of CNBC to see that full interview. But it was. straight fire. They were dropping crypto truth bombs on the CNBC reporters. And I'm not sure if they knew what to make of them. This is going to be like the, this is kind of the crypto native sequel to that interview. And we're talking about, of course, GameStop and everything that happened as a result of the GameStop news and the price action. Yeah. GameStop is, of course, one part story about a financial story. But it really, it's much more than that. It's a, it's a, it's a, it's a,

cultural story as well. It's a populist story. There's a stories, there's topics of censorship and deplatforming to be had. The legacy markets are showing to be disenfranchising to people, the people, the masses, whereas, you know, defying crypto is supposed to be this inside out, every equal playing field's platform. And I think people are coming to terms with that. And I think what I see Cameron and Tyler trying to do is trying to promote that. We see Elon Musk coming to and adding Bitcoin into his bio. Everyone is, you know, rumoring about what is Elon Musk up to. There's really so many different stories to be told here.

So we got the Winklebyon to help us tell those stories because, you know, they have one foot in the legacy world and one foot in crypto. And they do it both a great job just being on platforms like CNBC and then also like bankless. Yeah, absolutely. And a quick disclaimer, Gemini is a sponsor of the show. And of course, the WinkleVos twins co-founded Gemini. That is not the reason we had them on the show.

We brought them on the show because they are dropping straight fire about this GameStop issue. If this is your first day of the nation, we do it every Tuesday. Generally, it is streamed live at about 2 o'clock Eastern on Tuesdays. It comes out on the podcast the next day. We've got some other things going on in the bankless nation as well. Jeremy Aller podcast, he of course is the founder of Circle, and they are behind the USDC stable coin. really interesting conversation there.

And then we had Brian, and then we had Brent Johnson talk about the crypto milkshake theory, the dollar milkshake theory rather. And then we ask his thoughts on crypto. That's coming out next week. So lots of hot content in store for you. But David, we want to get to the interview fast today. But before we do, I want to ask you the question. I always ask you at the front of these episodes.

What is the state of the nation this week, my friend? The state of the nation is assembling. We are assembling. Okay. So here's how I got this to this one. We have, first off, the Wall Street Betts subreddit, which is like the focal point of this entire story, grew by like, you know, 6x or 10x or something at size. Like people just flocked into that, into that subreddit. Then we have, you know, plenty of people talking about how this, this is a bulk case for specifically Ethereum, specifically D5.

We have Soldier Boy coming in and mincing NFTs. We have Elon talking even more. about Bitcoin, talking, putting Bitcoin into his bio. It really seems to be that this very wide, diverse set parts of the world, they're all coming together to like kind of focus in on crypto. I don't think the Wall Street bets subreddit really is kind of privy to the crypto conversation so early they're still focused on shorting or buying GME to the moon. But I think once all the dust settles, people are going to really understand that like

the reason why there's censorship, the reason why there's, you know, discrepancies between how retail and hedge funds are treated as financial players and markets is because that these markets are inherently unfair and unbiased. And the only way to get out from under the influence and oppression of these poorly structured markets is through defy. And I think that these people are all assembling under this defy banner. Well, assembling is interesting where it reminds me of like that scene at the end of the end game where it's like Thanos and then it starts with just like Captain America and then suddenly the other Marvel superheroes beaming and you see Black Panther and Spider-Man and all of the rest. And it's like the established

traditional financial system is kind of like Thanos. And it's this diverse group from Reddit online communities to retail, even politicians are joining the fray against kind of what's going on in the traditional financial system and the perceived unfairness that is happening. So, David, that is definitely the topic for today's state of the nation. And we're going to get right into that with Cameron and Tyler Winklevoss in just a minute. But before we do, we want to tell you about our fantastic sponsors who made this episode possible. Synthetics is Ethereum's decentralized derivatives liquidity protocol. What does that mean? Synthetics is a platform for creating and trading synthetic assets, which are assets that are priced via an Oracle rather than

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We have Tyler and Cameron Winklevoss here. They are the founders of the Gemini Exchange. You know them as crypto advocates. They are crypto visionaries for sure. They were also involved in one of those social network projects back in the day. But that is way less important than what we're talking about today, which is crypto. Cameron, Tyler, welcome back to bankless guys. Thanks for having us.

Yeah, thank you, guys. Well, the timing is, I think, particularly appropriate because I feel like the conversation that we're about to have has just, hit Main Street in a way that it never has. I just watched the interview that you guys did with CNBC last week. It was like I had to sign up for the free trial because they pay well that. I mean, they have to cancel that later. But I was laughing the entire time because you guys were just spitting fire. I don't think that the interviewers knew exactly what to do with it as you were pushing back against this establishment narrative. And they kept focusing on the game stock stock itself, the GameStop stock itself. But is this more than about GameStop share price?

What is this whole thing really about? Yeah, I think it's so much more than just a stock. I really think it's ultimately about censorship and people controlling people, right? The establishment kind of controlling. And I think this is kind of where one of the interviewers kind of got very defensive when I sort of when I suggested that like a people have been told like you can't go outside you can't go run your small business and now they're being told you can't trade um and you know I think people are just being tired of being told like you know you have permission to do this you don't have permission to do that and the power is is held by a very few hands whether it's a very few governors, whether it's the Robin Hood trading app and the few people, the big customers,

like a Citadel leaning on them, people are sort of tired of being told what to do. And I think it's a huge catalyst and eye-opener for defy, Ethereum, Bitcoin because they are permissionless and no one can make a phone call. No one can lean on the CEO of Ethereum or Bitcoin because there's no such thing. So it is open, it's permissionless, it's credibly neutral. So all of these things that we keep seeing happening are not like the deplatforming and stuff can't happen there. So I think people are just they're exhausted, they're tired, they're fed up, they're fighting back. And I think it's a great catalyst for defy Ethereum and ultimately crypto.

Yeah, I think that's right. I mean, at its core, it's much bigger than a stock or a ticker. It's really a protest. And it's a lot of individual traders who historically have been sort of derided and spoken down to, whether it's unsophisticated or, quote, retail or day traders or hobbyists or what have you. And quite frankly, the irony of this particular situation is that they're the ones that. that played the better poker hand. They saw this potential gamma squeeze sitting out there in plain sight.

It was an airtight theory. Melvin Capital, the hedge fund that got run over and lost something like 53% in the month of January, the majority of which was a result of the game time gamma squeeze, was asleep at the wheel and or didn't sort of probabilistically take into account, count the chance that a lot of individuals on a Reddit, a subreddit board would coordinate a gamma squeeze. But it was sort of sitting out there in plain sight and very clear what was going to happen with a smaller cap stock that was heavily shorted. And to be clear, it's not like Melvin Capital was short selling or hedging a position. I think that Game Stock was something,

something like 50% more short than outstanding float of shares. So this was a really predatory type trade that was the only goal was to completely drive GameStop into the ground. It wasn't to sort of hedge risk. It was to just decimate this company that's already sort of a sitting duck in the middle of a pandemic, probably hasn't been able to operate many of their stores for months or the foot traffic has been very limited. I think they employ something like 15,000 people. So this was a direct attack to pile drive a company. And Wall Street Betts crowd saw that behavior and took the other side and won. And that's, you know, that's obviously the battleground, but it's way more than that. And I think the Tyler's, you know,

earlier comments, this is about people saying, look, we're fed up and tired of needing permission to move our money, to spend their money, to use our money. And that's really the ethos of sort of defy and permissionless finance at its core. And I think, you know, there's a modern money monopoly. And it's been in place for, for 100 plus years. And I think that's what's fascinating about defy is the permissionless nature. And so as we sort of saw this this playing out, I think it is a huge sort of advertisement for defy. And when we first got into Bitcoin in 2012, I remember the Cyprus bail in 2013. And it was this moment where basically the banks and Cyprus became insolvent. And instead of doing a bailout, they did a bail in where they took a haircut

of any depositor who had above 100,000 euros, you just lost all of your money. So let's say you had a million euros, 900,000 of your euros just got taken by the government called a bail-in. And that was a huge catalyst that sort of, I don't think many people saw, but Bitcoin had a really big bull run at that point because people saw firsthand what, was possible and realized that their money isn't safe. And I think the last, you know, in the U.S. executive order, the, I forget what number it is that FDR did in the 30s that basically confiscated, you know, gold holdings among citizens.

The problem is that we have amnesia and people sort of forget. You go to Wikipedia, you can dig these things up. And if you look at like the Bitcoin subreddit, it sort of floats around. But nobody, you know, really remembers that or was around back then. So it takes these moments like the GameStop moment, the Robin Hood, where they literally shut off one side of the market. I mean, if that's not manipulation, I don't know what it is. And the excuse that, hey, we needed to post more collateral at our clearinghouse, fine, then just do full. capitalized trades or fully funded, you know, shut off the margin piece or shut off both sides.

Imagine, you know, in the Super Bowl, which is going to happen, I think, in a week or so, if for one quarter, you know, one team said, hey, you can only play defense, you can't score. All you can do is prevent, you know, Tom Brady from scoring over the next quarter. That's what happened on Friday. And people are just outraged by that. And I think that there needs to be a lot more answers, but really the answer is defy. At the end of the day, you can go in and try and re-architect the existing system, work with that establishment, work with the suits, or you can say, wait a second, we can just build all of this in a better way, permissionless over in defy. Let's get to work. Well said. These are all topics we're going to dive into

during our time with you guys. We're going to definitely talk about the systemic risk, definitely talk about whether this is Defi's moment in mainstream and how Defi can solve these problems. You know, maybe the first thing to touch on, though, I was very struck in the CNBC interview that the establishment really doesn't understand this Wall Street Betts online community. They just dismiss them as amateurs, as greedy speculators. Barbarians. They've been called barbarians before. So this is a thing. And there's almost like this patronizing aspect when you keep here repeated on Main Street.

finance media, this will all end in tears, right? Yeah. Like, as, as if. And it has for Melvin Capital. Well, okay. So, like, what, what doesn't mainstream media and the establishment finance understand about these Wall Street Betts style online communities? So, look, I think you're absolutely right.

We've been gassed by the establishment in the centralized media complex. the way they described these investors, as you said, as amateurs, rookies. But they're the ones who actually acted like the pros. And Melvin's the guys who acted like the amateur rookies, right? They didn't understand the gamma squeeze as much as these rookie guys. Also, look at the rhetoric of how they describe the behavior of the investing. It's very pejorative. They attacked the stock.

They raided this company. When they talk about hedge funds actually attacking stocks and rating companies, they use euphemisms, like going short, betting against. So we're so, we've been so conditioned to think the opposite of what it was actually true. So I think that's a huge problem. And we all fall victim to it. We've all been like indoctrinated. But like it's actually opposite day. What they're saying about the Wall Street's bets crowd is actually what they should be saying about the hedge fund crowd and vice versa.

The other thing is that like when you look at the way the system set up in terms of like financial sophistication, the proxies that the SEC rules use price out the little guy. And we know from our experiences in crypto that money is not a great indication of sophistication. I guarantee you the Wall Street Betts crowd understands cryptography, hash functions, how to assess an investment in crypto a thousand times better than the folks at Melvin Capital or Citrone Research or 0.72. I wouldn't be surprised if they don't even know how to work a computer in those hedge funds, right they're like just not tech shops and the wall street bets crowd are probably like e-gamers super fluent with computers um their whole lives and engineer and kind of coders and so like you'd want

if you wanted to like bet behind someone in crypto or whatever you would do them yet because of the rules they're priced out of all of these great opportunities so retail never gets to look at Uber or Facebook as it's private because you have to be accredited to get into the funds that get into these companies. So by the time they get it, it's dumped onto them after the IPO. So the whole system is rate. I mean, that's just one example of the little guy like demographically getting priced out because they're not sophisticated because of the size of their wallet. And they never have the opportunity to increase the size of their wallet because they can't, they don't have the permission to invest. So it perpetuates the little guy staying the little guy and the big guy is getting all the

opportunities first. So it's total bullshit and people are waking up to it. And as soon as the little guy starts winning, they change the goalposts or they call time out. We need a break, you know, rain delay or something. I've never seen a hedge fund stopped in the middle of making too much money. Oh, that hedge fund's just running away with it. like George Zoros is making too much money breaking the pound. Let's stop him. Let's de-platform them from a Bloomberg terminal. You know, like they de-platform the Wall Street Betts community from Reddit, from Discord,

you know, because of they weaponized the community guidelines. You know, they took some screenshots or something and said, oh, this is, you know, whatever. I don't see any of the way we've been, the Wall Street Betts community has been treated. I've never seen that ever happened. to an institution, a hedge fund, or any, any suit. And I think that is what's so outrageous. And we still don't know what happened. No one satisfied with the answer.

I've asked all the people I can think of to ask, people in crypto, people in capital markets, people who just should know and nobody knows and like it's a week later. So, you know, anyway, yeah. Yeah, and I would just add, By the way, I don't think they got D platform from Reddit. I think that might have been the channel went private, but Discord definitely pulled the plug or the cord, if you will, pun intended.

And I'm sure there's a lot of other folks trying to figure out how to unplug these guys as well. I also kind of the paternalistic sort of terminology, like we're settling this to protect like the traders and things like that. And you see a lot of the talking heads they get up and they're like, well, there's going to be tears at the end of this and bag holders. And who's to say that, you know, the Wall Street bets folks aren't sending a message and are fine parting ways with their capital and incinerating it in the process. I know that I've personally given to a lot of

GoFundMe pages to help support restaurants and businesses during the pandemic. I don't expect to that money again. And it was a donation, right? And I'm just trying to support. So who's to say these folks aren't who actually walk into GameStop and our customers aren't trying to support a business so that a predatory capital like doesn't try and drive it into the ground and create a self-fulfilling prophecy? How do we know that they're totally, we don't know that, you know, we're making an assumption that they aren't totally fine, you know, just supporting. Right.

It could be their version of a GoFundMe page for GameStop. And like I was saying earlier, many of them might even be employees of GameStop that have been furloughed during the pandemic because GameStop can't open as a business. And it's a sitting duck. And then so they're sitting at home. They're trying to trade and save the company. Maybe they work for or patronize and actually shop at. And they're told, you can't do that.

So it's like, how do you, how do you win? You know, and I think that is like the fever pitch. That's the outrage. And the public support is so unanimously in favor of Wall Street bets, except for, except for over at CNBC. And the only reason that is because they lionize and idolize the in the celebrification of, if that's even a word, of these. hedge fund managers because the hedge funds pay their advertising. The hedge funds butter their bread. And that's why, you know, when they invite them on, they, they're like talking up to them. They're looking up to them. And they're, they're celebrating them despite the fact that they've

never innovated in their life. They never created anything. And these are the same folks that almost killed Tesla, right? They almost like put the nail in the coffin for Elon Musk, the greatest entrepreneur of our generation. He's trying to save our planet with sustainable energy. He's trying to get humanity to Mars. And these folks almost got him. They are parasites. They provide very, very little service. It's highly questionable. The fact that you could short, you know, more than the float, more than there are shares of a company is completely toxic, completely destructive. And the only reason at CNBC that they support it is because these folks pay their bills. They, you know, and that's the issue.

And that's, I think, what you saw when that, when John Ford, the interviewer went off the rails. You know, he was getting so defensive because I was striking a nerve, you know? Like it's sort of like. Tyler, he was, he used this term. He said that you were like almost fomenting populism. Is that fomenting populism what you're saying here? I think everything I think was a fact. I mean, if facts are populism, then I guess so.

But, you know, populism, again, it's like it feels. Outraised. Sorry, I was going to say like, but that alone feels like talking down to people. you know it's like oh you're the little guy you're the individuals you don't know any better let us tell you how to think let us tell you how to think about a stock and invest your money let me tell you what's good with good for you and people are tired of that you know and nobody does this better than Hollywood celebrities they talk down to people they tell them how they should think what they should believe in and that's why i love when rickie jervais hosts the globes because he just calls an honor he's just like

all right like take your award thank your god thank your agent and fuck off like that was one of his jokes and it's like it's so true everybody's sitting at home like yes like okay stop talking down to us um and that's why um you know the ufc ratings um you know when meryl street gets up there and it's sort of like you know it's called the arts it's not called martial arts ufc has like 10 times more ratings than the golden globes or the Oscars because of the the arrogance and sort of the hubris and people are just tired of it, you know? I think it's a worthy conversation to talk about how much this became about something else other than the money and it immediately became about a message or a movement more than it was

about, you know, some Wall Street betters, you know, making a bunch of money, right? I've been following the Wall Street Betts Forum this weekend and there's so many like memes and just like, you know, cultural tidbits that came out of that community. that was all about, you know, of course, like talking about like not selling in diamond hands. And diamond hands is like a meme that they've generated for people that don't sell the stock. Because if people don't sell the stock, then Melvin Capital continues to like burn money. But like much of the conversation around people who had bought GME, bought stock and became very wealthy, turned to not being about the money, but instead being about the message, right?

many, many people I saw were posting screenshots of them turning like $10,000 into like a million, 10 million, like some crazy amounts of numbers. And they would make one of my, one of the famous, one of my favorite memes out of that space was like this cartoon drawing of this girlfriend begging her boyfriend to sell so they can be millionaires. But then the, the, the boyfriend is like, no, it's about the message at this point. No, it's about like, it's about sending Melvin Capital into it into the ground. Why do you guys think that this is, turned in such a in such a because we also talk about the the oh eight financial crisis people talk about this is like just getting back for the oh eight crisis why do you guys think that people were so

prepared to turn this into a cultural message over a money making opportunity well i think it's probably a lot related to the sort of the trust that's been broken and and we saw it you know in the financial crisis a lot of risk taking by banks and then those same people who sort of perpetuated this crisis got bailouts and help from the government for the most part. And nothing's really changed. And I think now sort of there's this tool where people can actually sort of get together and send a message. And I think the pandemic obviously exacerbates everything because tensions are increased. and we see a lot of small businesses getting decimated.

You see sort of technology companies accruing a ton of value over the same period of time. So there's this like tail of two cities. And I think that, you know, it's just sort of the latest manifestation of sort of discontent in protest. And I think that now, you know, there's places where you can protest. I think Bitcoin is a protest. If you don't like what's happening with the Fed, if you don't like what the government's doing, then don't buy bonds, don't hold dollars,

go into Bitcoin or go into Ethereum. And Ethereum is, you know, defy is literally re-architecting major financial services. It's obviously pretty nascent and new, but it can't be underestimated or stated enough how powerful this is. that you can go into defy post-collateral and get a loan permissionlessly.

And there's no sort of credit check. They're not going to look at who you are and look at all of the things that a bank might find and try and block you from getting that loan. And I think that that is huge. And so now, sort of technology, I guess, is sort of meeting protest, if you will, in the sense that in 2008, you know,

Occupy Wall Street was sort of the protest against the financial crisis. There wasn't a Bitcoin. Bitcoin, from what we can tell and what we've read, came about to the backdrop and the financial crisis. If you look at the Genesis block in 2009, it talks about, you know, a chancellor on the brink, second bailout. It's clearly making a reference to the crisis. And so now Bitcoin exists. So we can go into things like Bitcoin. or Ethereum to protest before you really couldn't. And your hands were tied and you could pretty much march, you know, but you couldn't actually vote with your capital. You could really only vote with your feet or protests and kind of do it in that sort

of neat space forum. Now we can just do it really, really easily with our wallets. One thing I want to ask is we still haven't finished this story, right? the Wall Street bets, Robin Hood, Melvin Capital story still playing out. Yet there are, there's more and more talk about how like it, perhaps this, it wasn't, you know, a phone call from Melvin Capital to like the CEO of Robin Hood to tell them to halt trading. But it was instead about Robin Hood's perhaps like insolvency and able to pay

massive amounts of capital that they weren't expecting to pay. And so perhaps, perhaps we don't know where this story is still unfolding. But there were perhaps more legitimate reasons as to why, Robin Hood halted the buying yet not the selling of stocks, specifically of the GME stock. But to me, that just brings up an even bigger question. It's like, why do we have, why does one, if one hedge fund and their over levered short position against GameStop, why does that having systemic risks in the economy? Like, what's you guys this takeaway message from there that like we actually have to start

to tinker with like our ability to make and make buys? and sells or else if we don't will collapse the economy. What does that tell you about the state of things that we are in? Well, I think the truth is we probably don't know and we're still kind of learning as things unfold here. Why that message, which I think was delivered by Robin Hood's CEO on Clubhouse at 10 p.m. Pacific. So 1 a.m. Eastern on a Sunday or Monday morning, why it took days to sort of get that clarification out.

You know, at the worst, it's just a horrible management of a crisis that literally impacts almost all of your users. You know, could you have, I think the trading was halted on Thursday morning of last week. So why not at 8 a.m. say, hey, guys, look, we've got this issue. We've got to post more collateral. and these are the steps we're doing and these are why we're doing it. None of that was made clear for days, which is definitely a head scratcher on one level. I think the other point is...

It also doesn't explain like halting the entire stock, right? Halting only one side. And it doesn't explain why they couldn't just halt margin and make it full reserve. because there's no capital issues with the full reserve trade and the settlement. And I was just going to add the other issues like, you know, certain groups can lean on certain groups and there's like indirection. And so maybe we will never really know what the what the true story is.

But I think it goes back to the inherent problems with centralized system. it only takes one or two phone calls to sort of put pressure on a certain group who then leans on another person that then says, hey, oh, by the way, we need $3 billion worth of collateral, like, you know, surprise at 3.30 a.m. you know, on the night before a market open. You're not going to see that. Cameron, just to break that down. So like they probably only clear through one organization, right? So all it takes is a few, like the head, like I don't believe that Citadel called them directly, right?

They're too smart for that. They and others would call the clearing organization and be like, lean on these guys. And because they have literally one clearing organization, they have no choice, you know, but to listen. So the equivalent would be like a hedge fund calling the blockchain or the miners and be like, don't push these transactions through. through or stop the blockchain. We can't clear the Bitcoin transaction to the theme transactions. That's what happened. In the name of risk and consumer protection, of course.

Yeah. And disorderly markets, which means, which is code for markets we can't control or markets that are moving in a way that we, that are not beneficial to us. But like, that's what happened, right? And that's the thing is like, when you think of the blockchain, that could never happen. That's the beauty of it. that is the vulnerability that this saga has laid bare with respect to centralized finance. A few people make the decisions.

It's the same thing with centralized media. A very few people control the media. I was having launched with a friend and he was like, yeah, the media basically reports to three people, Rupert Murdoch, Salzberger at the Times, and Jeff Bezos at the post. So three people have tremendous influence, right? And finance is no different. Like the banks, even if you read the chapter in Bitcoin billionaires where we go around and we're trying to place the shards in different security deposit boxes around the banks, we actually had to like be very careful and low key about our identity. Because as soon as someone, and this happened a few times, they're like, oh, Winkle Boss twins, they'd Google us.

they'd see we're involved in crypto or Bitcoin. And they would, even though they're not allowed to do this, they would come up with reasons. They're not allowed to ask you, what are you putting in a security deposit box? They're not saying, like, is that a shard to a Bitcoin private key? They're not allowed to ask you like what you're putting in there. But they would just mysteriously come with the reason why the box was no longer available or why we had to close a box that we had already opened. Because and some of these were regional.

banks, but all of the banks, because the banks are too big to fail, they really kind of like report up to obviously the Fed, but a few of the bulge back of banks have all the power and position. And Bitcoin companies and crypto companies, when Bitcoin became crypto with Ethereum in 2013, always got our bank account shut down. It is still a big deal for Gemini, which is a New York trust company that's regulated to win a bank relationship and open a bank account. Every time we do that, it's like a big deal because we don't have that many. And historically, that's been, you know, what is for any startup to open a corporate bank account to receive fiat is pretty trivial. But that's like a huge thing if you're

in the cannabis industry or are in the crypto industry. And so as soon as you start seeing that and realizing that like a few people say like thumbs up, thumbs down on you. And it's the same thing with loans, right? Like, um, I'm privileged enough to get a bank account anytime it want to qualify for a mortgage or whatever. That is not the case for most people in this country, definitely not in the world. Um, and the stories are horrible, right, about people getting discriminated against for so many reasons, the color of your skin, you know, whatever. And that's the beauty of defy is the code doesn't discriminate. The smart contracts don't discriminate. They will take your money. If you send the right amount of ether into Ave or whatever,

you know, maker Dow, like no, there's no person being like you qualify, we're going to an investment committee. And that's what people are waking up to is that like you can actually get access to credit, like these basic financial services that make or break whether or not you can, create wealth for yourself and your family, generational wealth for yourself or your family. And if you can't get a basic loan to start a business or mortgage on your house or even a place to store your money or access to getting your money into like the financial markets, which is for most people is very hard, then you don't even send a chance, you know? If you want to live a bankless life, you need to get a monolith defy five.

Visa card. Monolith is a one-two punch of both an Ethereum smart contract wallet and an accompanying Visa card that lets you spend the money that you have in your Ethereum wallet everywhere where Visa is accepted. When you swipe your monolith visa card at the grocery store or at a restaurant, it actually makes a transaction on the Ethereum blockchain that spends some of the money you hold in your monolith wallet. It's insanely cool and it's one of the best tools out there for living a bankless but still normal life. Monolith also offers on-ramp services for getting your fiat money into the world of Defi. So it's trivial to top up your monolith card if you ever need to, and your deposited money goes straight into your non-custodial wallet, so your money is never

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order to gain yield and all of those same assets can also be borrowed from the protocol if you have deposited collateral. Here you can see me getting a 200 USDC loan against my portfolio of a number of different defy tokens and ETH. I'll choose a variable interest rate because it's a lower rate than the stable interest rate option, but I could choose the stable interest rate option if I wanted to lock that interest rate in permanently. One of Aves's V2 features is the ability to swap collateral without having to withdraw your assets. Trade the money. on uniswap and then deposit them back into AVE. AVE does all of this for you all in one seamless transaction. So you don't have to repay loans in order to change the collateral you have

backing them. Check out the power of AVE at AVE.com. That's AAVE.com. You know what's so interesting about this and what you guys are saying because we absolutely want to get to decentralized finances being part of the solution here. But it is just the, I guess the way FinTech in particular, platforms like Robin. have been positioned to us and positioned to you like the millennial generation or, you know, Gen X or even Gen Z. Democratizing finance was really how Robin Hood has positioned itself, giving everybody the ability to go buy and sell a stock.

But we found out last week that that's really a lie. This is not democratizing finance. This is putting lipstick on a pig of an otherwise broken financial system that's not credibly neutral, that's tilted in favor of the big interest and the hedge funds, and that is not democratic, is not for the people, is completely a permission system. Can you talk about that a little bit more about, I guess, maybe the lie or the untruth of the current apps that we use today and the current financial system that we use today? Yeah.

Go ahead, Karen. That's definitely like the rub, right? is that it's one thing if a place says, look, we're just a brokerage house and we're going to let you trade here. But it's really all of the marketing and the diff between reality and what they're actually doing, I think is what really is bothersome. So when they say, hey, we're a free app. Trading's free. It's actually not free. and whenever you say an app is free, really what that means is that you are the product. The user is the product.

I think you guys have some experience with that, right? You guys would know. The true customer of Robin Hood is Citadel who buys all of the order flow and trade data of the users who trade on Robin Hood. It's the same way social media works is it's free. The users are actually the product. They create all this value, share all this personal data information, that information is then taken and sold to the advertisers who are the true customers of that platform. And that is really one of the key distinctions.

It's not about the people. It's about the customer in the case of Robin Hood Citadel, in the case of social media, the advertisers. And I think that is one of the sort of the big realizations. And what is also kind of fascinating is Citadel in 2004 wrote a letter to the SEC, urging them to ban the practice of payment for order flow, basically saying, look, we think this is anti-competitive, we think it's a huge conflict of interest between the broker and the customer. We don't think it does right by the customer, the user of the platform.

And then, of course, you fast forward today and Citadel buys all the order flow from Robin Hood. And so there's a bit of going to more detail as to why that is disadvantageous for the users. Like, why is, how are the users actually being leveraged as a product in that scenario? So I'll tell you, okay, so in Cameron, correct me if you disagree. But payment for order flow, so at Robin Hood, the users are not. trading against each other, right? Their counterparty is actually one counterparty. It's Citadel. Robinhood doesn't charge any fees to you because they, you directly, but you pay, you get the price that Citadel provides you. So Citadel pays Robin Hood a tremendous amount of money to

interact with their customers and they give their customers, Citadel, turns around and gives the Robin and customers a very bad price. So the diff of what Citadel pays Robin Hood and the way they make up for it and more is they just give you a poor price. When you're a buyer, it's a higher price than it should be. When you're a seller, it's a lower price than it should be. And Robin Hood just a month ago settled charges with the SEC that they misled customers. and then actually customers were not getting the national best bid offer, best price,

which is a regulation that is required for broker dealers to provide for their customers. So they were getting below the reg NMS standard of what the price should have been from Citadel. So they were allowing the funds to front run retail, basically, is what you're saying. Well, that's the other issue. Is it not only does Citadel give you a crappy price to make a ton of money on the spread of what the price actually is, right? They just take that thing. They have all of this information. And I had to look at this a little bit closer to front run all of the order flow, all of the information.

So whatever's happening over Robin Hood all of a sudden informs them what's happening everywhere else in the market. And they trade against that. So there's tremendous unfair advantages. for Citadel. They're just, there's like if the price, if the stock is, let's say,

10 bucks and you're trying to buy, they give it to you for 12, right? So you buy two bucks higher. But then they know that you're a buyer in the market. They know how many buyers because there's all those people. Like they know how many buyers, how many sellers.

And they can react to that at another exchange or with another brokerage house. And so this is just like highly controversial. and even Citadel itself thought so in 2004. We found a letter that is posted on the SEC website. I tweeted this morning. It's like eight pages where they go in depth in how this is controversial, unfair to the customer in 2004. And now they engage in this controversial behavior

that even they themselves was, said it was controversial. That's exactly what. they do today because it's so gosh darn profitable. But going back to just sort of going back to the mission statement and the marketing of Robinhood, I mean even the name Robinhood, right, conjures up, you know, it harkens back to the fairy tale of, you know, stealing from the rich to give the poor. And that's, you know, they're doing the the exact opposite or democratized trading, anything but, let the people trade, except for when GameCoc moves too much. And basically, that is, I think, also, like, it's not FinTech, it's really,

it's fin marketing. It's centralized finance with a different paint job. There's no new engine, there's no better chassis. It is literally a brokerage house that is mastered marketing and really bullshitting. And they've been called out. And as Tyler mentioned, there's an SEC enforcement. And we'll see sort of what happens in this latest episode. But it's just over and over breaches of trust. Oh, hey, we got caught red-handed. We're really not about the customer. We're about ourselves in building up this, you know, business to then sell order flow to Citadel. And the list sort of goes on and on. And it's really, at the end of the day, centralized finance with better marketing and a, you know, better pay job.

It should be called the Sheriff of Nottingham. And this is one of my issues with a lot of Silicon Valley companies is, or like the style of Silicon Valley companies is like heavy marketing, right, heavy growth and kind of misleading marketing, you know, I don't think people are feeling, I believe other brokerage houses did halt some of the trading too and maybe did the same thing as Robin Hood. But like they weren't out there saying commission free trading. We're all about the little guy. This isn't about the rich getting richer, you know, and so the double speak and the hypocrisy, is a big part of it.

But the other issue here is it like these companies, Citadel included and Robin Hood have been fined at least multiple times. But the fines are always worth it for them. It's a slap on the wrist. Yeah, it's like a speeding ticket

to a billionaire. Nobody goes to jail. The fines are like a small rounding error to the profits they make. So any rational economic actor, if they don't, if they're unscrupulous and don't have ethics, will happily take that trade. And that's what people are also realizing is that like the penalties aren't large enough. Nobody's going to jail.

08 crisis was created by the bankers. The bankers always land on their feet because the bankers are the owners of the Fed, right? The Fed's like a hybrid public, private situation, right? the board of governors is, I believe it's a, you know, government appointee, but the banks are the stakeholders and the Fed. And you guys have talked about this before, the cancel in effect. You know, the money comes to them first. They dump it into asset prices. They quickly move it around. And then by the time it works its way through the economy to everybody else, the Wall Street bets crowd, they've had to suffer through and endure higher prices. And so it, it, it,

perpetuates the inequality. It's inflation for all, but purchasing power for a few. You know, the classic, you know, the other recent example is WeWork, right? It's sort of masqueraded as a technology company, even though shared co-working space has been around since Regis created it, I think, in the 70s. It was obviously much more modernized. At the end of the day, though, it was just co-working space. And, you know, that has all this ethos about community and we, the people, or whatnot. And then, of course, you find out the CEO was self-dealing and basically leasing buildings to himself. He trademarked the name we for, you know, and then sold it back to WeWork for six or $7 million. He eventually, like, stepped off that when he was called out right

before the IPO. And at the end of the day, it was sort of a lot of smoke and mirrors. And the person, the people that got hammered on that would be like sort of the employee equity holders who got smushed down when the company has to refinance. The VCs will do probably fine. And they'll be okay. But you have all these employees that put, you know, all this time into this company. And just the diff between what you say and what you do, which is, obviously the definition of integrity in a lot of these companies is quite large, really large. And I think that's ultimately why people get so frustrated and outraged by it. And I think that I guess this is sort of another strength of defy and crypto is that there

aren't mouthpieces. Satoshi, not knowing who Satoshi is, is such a strength. seeing that day by day, Satoshi will not be going on CNBC. And if Vitalik decided to retire and go to the Bahamas tomorrow, Ethereum will be just fine and D5 will be just fine. And that is such a big strength. And even in the early days, we sort of felt that. But then these things happen and you realize that how kind of critical that is.

There isn't a person or a figurehead. that can become politicized or sort of de-platformed or censored. It's just not possible. And that is going to be a theme we're going to see more and more of. And it's what makes DFI exciting. Okay. Well, we're going to get into DFI. Just a quick PSA for bankless listeners.

Guys, don't buy crypto on Robin Hood. All right, just don't. If you don't have the ability to withdraw your crypto, to an Ethereum address or a Bitcoin address, you don't own it. They can delist trading on your crypto, just like they delisted buying or selling GameStop stock. So don't do that. Go to a real exchange.

Guys, let's talk about this in your CNBC interview. I don't think the interviewers knew what to make of this, but you said that the energy from this Wall Street bets thing was going to be pulled into defy. You called this the beginning of the end of centralized finance. You said things like on Ethereum, that would never happen. I loved like the reaction from the host when you said things like that. But let's talk about this. Is this going to be a big moment for Defi?

Does Defi fix this and will crypto absorb some of the energy of this movement? How does it play out in your minds? Yeah, I mean, it was definitely a GameStop is, I think, a threshold moment. And I don't know, like, Defi, you know, it's still a fight on sort of the turf of the original, the establishment. And ultimately, rather than sort of running uphill against the establishment, I think a lot of people, that energy pours into Defi, where it sort of doesn't so much just fix it, but it's no longer a problem, right? there is no establishment to deal with or centralized counterparties and things like that. And I think it is a very, it's where it's all going. I mean, defy is sort of the end game and it's where it sort of stops.

And I think a lot of this energy pours in there because of this. And there's going to be more and more examples along the way. But I think this is definitely one of those moments where people are understanding. just like when you see the money printing at some point you know your people a lot of people are going to step back and say what is these dollars actually worth and I think people are realizing that wait I don't really have full control over the equities in my brokerage account I actually don't really own these things I mean I do technically but it can be the the goalposts has dependencies carpet yeah the carpet can be pulled and stuff like that so I do think

that this has turned on a lot of light bulbs for people with respect to defy. Yeah. And one thing, so I've gotten DM from people questions. You know, how do I move my crypto out of Robin Hood? Is there any way to move it without selling it? And the answer is no, as you pointed out, which is super scary because it's stuck. and you have to convert it to cash. That's actually a taxable event. So if you have it, let's say if you have Bitcoin at Gemini and it goes up, you know, 10 times or something and you want to move it to Coinbase,

you can do that without having to sell into fiat and you don't have to pay taxes. If you had to sell that into cash, that conversion moment, you'd have to pay taxes on those gains, then re-buy back Bitcoin, wire the cash out of Robin Hood, and then re-buy Bitcoin on Gemini or Coinbase. So again, it's a terrible experience for the user. It's literally everything they market is the opposite. I was reading Mark Cuban's tweet the other day about how all the margin fees that Robin Hood gets for, you when you lend a stock goes to them.

So there's actually like they're like a terrible brokerage house and the deal is terrible for people. It's just snazy marketing and the power of a simple, easy to use user interface and user experience. But like everything else is like completely against the little guy. So that's just another another. there's when people start to look under the hood they're just sort of horrified at how how used and abuse they have been by by Robinhood and even even done the fact that like

they thought they were buying crypto when in reality when when you know they they weren't and when they tried to leave Robin Hood they you know it's like they they were stuck in jail and and they had to like break out of jail. And so it's these walled, closed gardens. You know, the deplatforming of Discord. Deplatforming was a big scandalous news story, you know, a couple of weeks ago. And now it's sort of like business as usual. Like when shit goes bad, like, you know, the establishment just turns around and de-platforms you.

Privacy was like this hot best button issue, right? with Facebook, Cambridge Analytica. And then all of a sudden, deplatforming is just like table stakes when things don't go the way for these companies or the establishment or whatever. And it's a really dangerous slippery stove. I saw a friend talking about like the parlor deplatforming, right? And a lot of people, most people are

for the Wall Street Betts crowd and are upset that they would get the platform maybe from Discord. But that's exactly what happened to Parlor, you know, and they were for it over there. And now they're not for it here. And I don't know the details, right, of what happened. But I have heard that, like, as much of the violence or some of the Capitol Hill stuff that I completely disagree with, like, violence is horrible, should be condemned on any level. But that was organized as much or more on Facebook and Twitter as it was in parlor. So there's sort of a double standard. There's sort of hypocrisy. And when it suits you over here,

that's okay. But you got to be careful because that can also be used in another situation where it doesn't suit you. And so I guess it's just a slippery slope. And I think people are also wising up to that and sort of the precedent. And of course, like you can't make, you can't make the call to Ethereum. You can't make the call to Bitcoin. So that's the power of it. And this is really waking people up. I want to ask a kind of a general directional question because I have just,

there's a bunch of different things that we can that we've talked about and then we can talk about. And one of the, one of the things I want to get to is like we all talk about, you know, Ethereum fixes this, D5 fixes this. But you can't actually buy GameStop on Ethereum. Ethereum, right? And actually, interestingly, the Wall Street Bet's subreddit is actually relatively anti-crypto. We made a post in there asking if any community members wanted to come chit-chat on bankless, and our post got removed because we used the word Ethereum. And like I said, like you actually can't buy, you can't buy stocks on Ethereum. That's not what Ethereum does is something else.

Yet at the same time, we have people like Soldier Boy minting NFTs on Ethereum, and we have Elon Musk with Bitcoin in his in his Twitter in Twitter bio. So like things definitely seem to be moving. Yeah also seems all things also seem to be just kind of going in a totally different direction. How do you guys? I guess this is more of a 2021. What do you guys see coming question?

How do you guys see these different, you know, dynamics coming where some people are adopting Ethereum, Ethereum, but is it also isn't ready to support like the massive amounts of trading activity that one would expect out of like some, some, you know, a hedge fund and Wall Street beds. Like, where are you guys seeing all these people come into Ethereum, come into DeFi, come into Bitcoin, yet also not really be like having the tools to mimic their legacy markets experience? Well, I think that there's definitely synthetic stocks already on Ethereum in some form or capacity.

A handful, yeah. I would imagine that that is going to only increase quite a bit. And obviously the sort of defy is in this sort of position where you're going to get more in centralized finance in terms of like, you know, ability to trade. It's an easier user experience today, right? You have to be kind of motivated to get into defy and access these newer projects and things like that. But that will change dramatically. The same way the internet, connecting the internet in the 9-10, was a much different prospect and experience than it is today.

So the on-ramps are going to become easier, better UIs, and eventually be on par if not better. So it's a very sort of new technology and space that I think that is part of it. So it's not going to happen overnight. And there's still going to be people who focus on ease of use and say, you know, I'm willing to deal with that and take the risks of a centralized platform.

and I can just live with the fact. You're going to see many, many people that will be in that camp, at least today, but eventually it'll all move. For the same reason, you know, a lot of people were totally fine with AOL being their internet experience for many, many years, and quite frankly, some people still use AOL email.

But eventually it became really clear that the open internet, at least at that time period, was 10x better, and that Google offered a much better search engine and that Gmail is a much better male client and so forth. And so it won't happen overnight, but it's going to happen quicker than people probably think. And then look, some people, I think in the Wall Street Betts crowd are really focused on sticking it to the establishment on their turf.

The establishment isn't in DFI, so you can't really do that. So potentially a synthetic eventually is going to be linked to the underlying in C-Fi. So there may be some interesting dynamics there. But if your goal is to stick it to the man in C-5, then that's going to be where you're going to play. But I think that the majority of people really want better tools. They want permissionless finance ultimately. And that's the direction they want to go in, right?

You can sort of protest and keep marching on C-Fi, or you can just go build the next frontier and say, look, we're just going to reimagine this whole space. And I think that's where ultimately the motivation of most people are. They're just going to say, this is just better. We're not going to worry about this old dinosaur. We're not going to try and re-renovate AOL. We're just going to go over here and build on this new frontier. So I think that's where it goes.

That's the end game. But I think in the near term, there's going to be a lot of turf wars. And we're seeing that with silver right now. And so, you know, there's some people who say, look, like, not so fast, like, let's finish the GameStop protest, so to speak. And so there's this division in the community on what the right time is and where the focal point is. what fascinates me about the silver squeeze or the potential is, you know, it's unclear who's on like the short side of silver and who the losers are there. I think likely there's precious metal deaths at banks that are probably short silver. And there's other people that we probably

don't know about. And I'm sure there's people, hedge funds that are long silver and would benefit on a silver squeeze. But all of that said, it's unclear necessarily. And it probably, there will never be like a clear winner or a loser. But what's fascinating is that there's likely, there's a hypothesis that there's much more paper claims to silver than actual underlying physical silver. And nobody really knows who has what or what claims are, you know, to silver. and it's incredibly opaque. And so even if a small percentage of people start buying physical silver and or paper and they force delivery where people have to actually come up with the physical silver, it could be really, really dramatic. And we're going to learn just how real the market is.

and what's kind of mind-blowing. So I think if there is a squeeze, then the next step will be to turn to the gold market and say, how real is this? How much paper versus physical underlying is there? And Cameron, isn't it like one of the important things to explain is that a lot of people might buy like a silver futures or a gold futures.

And they don't actually take delivery in the underlying asset, they take delivery in cash or they keep rolling it. So if a bunch of people say, hey, I'm actually going to buy this silver paper and I'm going to take delivery of the silver, then people have to find the silver and actually deliver it and deliver the asset and cough it up. And there could be, they could, they could fall short of it. If there's more paper than there is actually silver in the world or gold in the world, then people will be sitting there waiting for the delivery and it won't happen.

Right. And so testing the hypothesis of like how much paper is out there versus the physical underlying, I think is fascinating. And if it does happen there, I think the next stop is gold. And then that gets, has huge ramifications because any country that is sort of de-dollarized and heavy on gold or central banks that have big gold holdings, they could be in trouble, right? If it's proven that there's way more paper and nobody really knows. And so then it ultimately goes to crypto because blockchains actually fix this. Bitcoin fixes this.

Ethereum fixes this. This is just a story of insolvency left and right. It's like, does Melvin Capital, you know, Are they able to come up with enough GME shares to cover their shorts? Like, no, because there's 140% short interest. You know, is there enough silver in the world to cover all of these paper contracts for silver? Perhaps not. What I'm seeing the left and right is like there are so much financial engineering and so many contracts that need to be fulfilled on top of the underlying that there's a quote unquote run on the bank or instead it's a quote unquote run on GME or a run.

on silver or a run on gold. The patterns here are fascinating to me. Right. And everyone looks at crypto and says, that's not real money. That's not real. Like when the centralized system is completely mythology and illusion, nobody actually knows. And we might actually find out, like, yeah, do the assets and the liabilities match up with silver or gold or GME? We know that like GME is, yeah, the fact that you can short more than there are shares is such a farce. But that's like the real financial respectable world and crypto. Like we know the float of Bitcoin, you know, like there's no more, no less and everyone can point to the blockchain or everyone can point to the Ethereum blockchain and see what ether is there.

And like when you send an ether, it actually settles on the atomistic level. Like I actually get it. There's never a question of my mind. that's the power that people are, are understanding right now. And with open finance, of course, all of this is out in the open. It's completely transparent to everybody.

What strikes me about this whole thing and what you're saying is basically, so if folks weren't totally following it, Cameron and Tyler, what we're talking about is this Wall Street Betts crowd is essentially going to the next asset that it thinks is underpriced or that there might be some hedge fund shenanigans

going on and taking that out and happens to be silver. Yeah, this is a very healthy market forces thing. And you'd think that the capitalists at CNBC would be all for market forces correcting the market and bringing more integrity to these markets because that's what the Wall Street bets crowd is trying to figure out. And look, they'll be successful if they find there's some shenanigans going on. They might move from silver to gold and then eventually find their way to crypto. So here's the interesting thing to me is if I am in traditional finance, I'm part of the

establishment, I am a hedge fund. I might be shaking in my boots. I might be like re-evaluating all of my positions. And I might be logging on to Wall Street bets and trying to figure out what this Reddit crowd is going to compounds on next because I could be the recipient of some of that energy. And if I've got some like bad positions outstanding, if I have some skeletons in the closet, I'm shaking in my boots right now because I don't know if they're coming after me next, which is actually pretty healthy, I think. This is restoring some sanity to the markets quite possibly. Yeah, I mean, it's like a penetration test.

They're like stress testing the system and like they're like the ultimate auditor. And I think that the the movement into Dogecoin is really fascinating. Because I see it more as a as a protest. It's like as much of a protest as like Satoshi creating Bitcoin in a way in the backdrop in the wake of the 2008 crisis. It's like we're going to build this other system. And going to Doge is like, you know what? Like we're tired of people telling us what money is. We're tired of the modern money monopoly and you being like, you can trade here or you must use this currency.

And the people are saying, we determine what the currency is. If we think it's cigarettes or stones or shells or doge coin, well, then it is. And it kind of goes to the Austrian Chicago School of Thought of like money being emergent and what, you know, free market forces, not coercive like fiat currency and emerging based on what the people all agree and say it is. And it's sort of like a reaction to like, you tell us who can't trade, you tell us we have to do this. No, no, no.

Like we make our own rules. And there's like, and you see it everywhere. It's sort of like people are realizing like, wait, I don't have to sit in New York, L.A. or San Francisco until I retire to move to somewhere else. I can actually work remote. I have autonomy. I have sovereignty. You know, like we're learning so much about like our freedoms and our independence, you know, whether it's like working remote or like what money might be.

And people are just reacting. And I think it's all related. Yep. No, that's that's those are all. I agree with all those points. And I think that, you know, Fiat money has has a tremendous, uh, sort of tailwind from the legal. protections and requirements and obligations to pay your taxes in U.S. dollars as a merchant to accept U.S. dollars. Crypto has none of that. And so it's truly emergent. There's no government authority saying you must or you need to use this. In fact, a lot of them are saying the exact opposite. Like, be careful, watch out. Don't do this. It's scary. And it's truly emergent and organic money in that respect. And I think that that is really fascinating. And money is ultimately in the eye of the beholder. And so if people determine that Dogecoin is money, I guess it's money.

You know, if they believe it, if enough people believe it and are willing to accept it and use it, then it's money. And that's one of the hardest things I think people have with, you know, crypto, Bitcoin, Ether is like understanding what where's the value? How do you value this thing or intrinsic value? That's like another great sort of classic traditional finance buzzword to try and like value something or discredit, you know, but there's no there's no intrinsic value in Bitcoin or Ethereum. Really? There's no cash flow. There's no cash flow. And and I think all of that is sort of being dispelled quickly in short order. But it is really interesting. And the Wall Street bets, those message boards, I think, grew by six million people in the past week alone. It's pretty

staggering. And I guarantee you some of those people are definitely hedge fund suits and people who are going in there and saying, okay, what is going on here? And incorporating it into the risk models and say, hey, wait a second, we better not, you know, overshort a stock because, you know, we could, you know, get on these guys' radars. I mean, it's one thing to sort of hedge and, you know, have a point of view. It's another to sort of go 50% over the float. And that's, that's the predatory, you know, element that Melvin engaged in that everybody got so worked up about. Guys, David has called this event the starting pistol for what could be next with decentralized finance. The people are certainly waking up.

I don't think your message is populist. I think the cantalone effect, the money printing, I think that the banning GameStop from Robin Hood, that fuels populism. The people want these outlets and they shouldn't be deplatformed from their social media channels or from their financial system. Guys, I don't think this is the first time that we're going to have you on in 2021 because hopefully you'll come back because there's just so much going on. It has been an absolute pleasure to have you. You want to end with this. I know Gemini is rolling out some cool things. David and I are on the waiting list for a new Gemini credit card.

Can you talk about what you have in the works with 2021 and when David and I can look forward to getting that credit card in our wallets? Sure. Yeah. We're really excited about that. And I think that it really struck a court. I mean, we can sort of tell from kind of the activity on Twitter or the DMs I'm getting or even just text messages from friends. People seem to be really excited about this idea of being able to earn crypto when you spend your U.S. dollars. And really, it's almost like a transfer, right?

and investing while you spend. And it's a behavior that we all have, right? We're all used to swiping our cards or Apple paying into or Google pay or what have you. So there's like no change of behavior. And it's a really easy way to start stacking sats and or whatever crypto, whether it's Ethereum or that Gemini support. So it was really interesting. And we think this is this this could be very much like a mainstream moment, a way to onboard a lot more people. And kind of demystify and sort of I think one of the biggest questions we so a huge misconception is people don't understand that

you can buy a fraction of these coins. That's still people don't understand. It's not how early we are. That's crazy. Yeah. So it's like, Berkshire Hathaway, when people see the Class A, they're like, I can't buy $400,000 worth of one share of Berkshire. And I think a lot of people still literally see 30,000 Bitcoin and say, I'll never own a Bitcoin. I guess I'm going to go elsewhere or Ethereum at $1,400. I can't afford that.

And the truth is, as we know, you can buy a fraction, right? So it allows people to sort of get in with little bites. And I think that that's really helpful. And then the other question people have is like, well, when do I buy? Is it going to retrace? Is it going up, down, whatever? Of course, you know, it's impossible to time these things, even if you're professional and this is all you do all day long. So it takes away that question and it just becomes like a reoccurring buy order, really. And I think those two things are really powerful and they're captured with the credit card moment. And so, yeah, we're looking forward to launching it soon. Well, I think my favorite feature about this is that it is selling dollars for, I mean, for me, for buying Ether, right? Whenever I swipe that credit card, dollars, I'm selling dollars and I'm buying Ether. So I'm demonetizing the dollar and I'm monetizing the Ether by putting the Ether onto my personal balance sheet.

I think that's a great feature. I'm looking forward to swiping that Gemini Credit Card. Yeah. And the cool thing about that is that it's up to 3% back, right? So you could get ether. So you go to Best Buy, you get a flash screen TV or something. But I think 3% of ether long term could easily be worth more than the TV itself in Fiat. So you're getting rid of your cash is trash.

You're investing in your future, your financial independence. And that, like, you know, little bit of ether actually has a chance to appreciate to being worth more than the purchase itself as opposed to getting airline miles would just encourage you to, well, hard to travel right now, but encourage you to spend, go somewhere and spend more. It's super inflationary. They're super inflationary. I mean, or these gimmicky points where like it's so black box, like, what's the market cap? they're centrally controlled, AMAX can just print more. It's the same issue with like the silver market. You know, we don't really know how much there's there are.

So these these things, you know, it's like it's like GameStop. You can short more than actually exist or how many points are there? What are they worth? What's the exchange rate? It's a total joke. And it's not, you know, super productive for the consumer, but actually turning transforming spending into investing in your future is so much more constructive. Absolutely. Well, guys, if you've gotten one thing out of this, it's definitely to stay tuned to what's coming with this GainStop thing. This is definitely the starting pistol. And also, if you're using a fintech type of platform, beware of deplatforming. Get going with some crypto-native exchanges and crypto-native tools. Move your funds. Don't buy crypto in places like Robin Hood where you don't actually own it.

guys, thanks so much for joining us on bankless and sharing this story. We are looking forward to seeing how 2021 develops. Thanks so much for having us. Thanks for having us, guys. I appreciate the conversation. Absolutely. Guys, risks and disclaimers, of course, crypto is risky. So is defy the assets we talked about are risky. You could lose what you put in. So is traditional finance, though. It has some censorship risks as well that crypto doesn't have, but we are headed west. This is the frontier. It's not for everyone, but thanks for joining us on bankless.