Tech Brew Ride Home - (Bonus) What Is DeFi? With CoinDesk's Brady Dale

Episode Date: October 17, 2020

I don’t think I’ve made any bones about the fact that I blow hot and cold on crypto. Sometimes I grow frustrated that it always seems to be a lot of sound and fury, ultimately signifying nothing. Or at least, not amounting to much that touches normal people’s lives. I dunno if that’s a fair way to look at crypto or not. But at the same time, there is no single corner of tech that has more activity, that has more passion and energy and, just pure, crazy creativity. Lots of people in crypto have adopted my book about the first half of the Internet Era because they hope it’s a guide for how, just when everyone has written off a movement, that’s when it finally breaks through. And I’ll admit, that’s why I keep my eye on a space. That’s why the activity around DeFi has caught my eye. By some measurements, this is crypto actually being USED, in a tangible real world way, and in volumes of activity we’ve never seen before. Is DeFi actually fulfilling the original economic promise of crypto? What, the heck, is DeFi? What is it doing? It’s hard for a knucklehead like me to get my mind around. So, I sent out the bat signal to Brady Dale of CoinDesk to tell me, what the heck is going on with DeFi? Brady's rough history of the DeFi movement Brady's explanation of Yield Farming Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Tech Meme Right Home. I'm Brian McCullough. I don't think I've made any bones about the fact that I tend to blow hot and cold on crypto. Sometimes I grow frustrated that it always seems to be a lot of sound and fury, ultimately signifying nothing, or at least not amounting to much that actually touches normal people's lives. I'm not sure if that's a fair way to look at the crypto space or not. But at the same time, there's no single corner of the tech world that has more activity, that has more passion and energy. and just pure crazy creativity than crypto. Lots of people in crypto have adopted my book about the first half of the internet era

because they hope it's a guide for how just when everyone has written off a movement, that's when it finally breaks through. And I'll admit, that's why I keep my eye on the space as well. That's why the activity around defy has caught my eye. By some measurements, this is crypto actually being used in a tangible real-world way and in volumes of activity we've never seen before. Is Defi actually fulfilling the original economic promise of crypto? What the heck is Defi?

What is it doing? It's hard for a knucklehead like me to get my mind around it, so I sent out the bat signal to Brady Dale of CoinDesk to tell me what the heck is going on with Defi. I've said, I always joke that these weekend bonus episodes are more for me than for anyone. Like, you know, get somebody smart on to talk about something, and just be like, well, explain it to me. I'm dumb. But in this case, I really don't know this stuff.

Like, this defy stuff came completely out of the blue for me. So when, okay, when I actually Google, what is defy? I get an explainer from Coinbase. And this is what it says. It says, defy is short for decentralized finance, an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries. First question, Isn't that what crypto was always supposed to do? Like, isn't that the promise of crypto from like the Bitcoin white paper? Sure, but it's just going further, right? I mean, you know, Bitcoin started off the idea of disrupting payments.

You know, just two people anywhere in the world could do a payment between each other. And they didn't need, you know, a PayPal or a visa to make that value transfer. And, you know, I think the idea always was why stuff. there, but, you know, that was a big enough problem to tackle it first. And then Ethereum comes along and makes it possible to put smart contracts in a blockchain. And then you can do a lot more. So now you can do like loans and futures and all kinds of crazy stuff. So, so yeah, that was always the point. It's just that this kind of became a category. And it's one that really so far is unique to Ethereum unless you count just payments on Bitcoin. Right. So that's,

it's mostly on Ethereum because Ethereum allows you to, you know, build actual applications on top of its blockchain or whatever, right, including smart contracts. Yeah, and yeah, well, that's the main thing is the smart contract, right? Like, I talked to Joey Krug a while back. You know, he's a Pantera Capital now. He was the creator of Auger, which is the prediction market, which hasn't been a huge success or anything, but it's still an interesting, you know, early experiment. And when he first started building prediction markets, you wanted to do on Bitcoin.

And he was, you know, there's a scripting language on Bitcoin. you can do stuff. He was pretty far along, but then he met Vitalik, and Fatalik was like, just try what I've built. And it took him like a weekend to build on Ethereum what he had spent, like, you know, much longer than that. I can't remember exactly what he said,

but a lot longer than a weekend on Bitcoin. You know, it was just so much easier. So, because you wrote a piece that I'll try to remember to put in the show notes about like the whole history of how this all started. Like so the current mania right now is basically from the summer. I think defy is up to nearly $8 billion in crypto assets committed to various projects. But it goes all the way back to what, 2017, 2018 or something?

I mean, I feel like, yeah, I feel like, you know, you could debate the beginning. But I feel like the realistic place to say where it all starts is when MakerDAO launches in December of 2017. I mean, MakerDow had been a project for much longer than that. But MakerDAO came out. And, you know, MakerDAO's initial purpose and what everyone sort of knew it for for a long time. was this idea of creating dye. And die is this decentralized stable currency? It's a stable coin.

So die tends to be worth about a dollar. You know, sometimes it's 97 cents. Sometimes it's $1.3. But it tends to stay much more stable than most cryptocurrencies do, which is nice. And that's all people really knew that it was for a while. But it was always more than that. And the world sort of became aware of that later. But the way it makes these dye, it's kind of a crazy thing.

But if your listeners are curious, they can Google the credit theory of money. It sort of fits into that. But the way they make these dye is they, you put in some Ethereum, so you put in $150 worth of Ethereum, you can borrow up to $100 worth of dye. And it just creates the dye. The dye is created with the loan. It didn't exist before. If nobody had any Ethereum and MakerDAO, if no one had borrowed anything, there would be no dye.

All die is just created by making a debt, and you can't get your eph back until you return that amount of dye to it, which sounds nuts, but it works. You know, it's just like kind of how taxes began. You know, government made these coins, fiat currency, and they said this is what you can pay us in taxes in. That's what you've got to do. And so it made the coin worth things other people. And so it's sort of the same thing. So maybe I'm going back backwards here. But so functionally, the difference is that, you know, going back to the beginning of Bitcoin, it's all about payments.

But by having these smart contracts, it's just payments on a ledger, but now it's evolved to you can do things like debt. You can do things like actual exchanges where there's no functional middleman to the exchange. Because it's a smart contract, it can run basically autonomously. Yeah. Okay. Is it deeper than that? Again, I'm coming back to asking for like a layman's explanation for how, for how functionally defy works.

So, I mean, it's a lot of things. I mean, honestly, everything that you know of in traditional finance, someone is trying to or has already built it on Ethereum. And I guess the big difference in every case is the way they all tend to work is someone put software that will do things onto Ethereum that they don't, it varies, But a lot of times they don't really own it. It just sits there on the, it just sits there on the blockchain. And for people to be able to borrow from it, people need to deposit money into it.

And so people will just, like, this is how compound works. So compound is a money market. And compound is, and we can get, we can explain this, but compound is probably the thing that instigated the real craziness of this summer. It's the one that kicked it off. But so compound is a money market. And the way it works is if I've got ether, you know, rep or, you know, rep, or, you know, any of a number of cryptocurrencies, and I want to make a little return on that, I can just dump it into compound permissionlessly, and it'll just remember, well, you doesn't need to remember, it will give

me back some tokens that represent what I've put in there, and it'll have some stated return I'll get, and that's a variable return based on the market, but those tokens will, you know, I can recoup what I'd put in any time by putting those tokens back in, burning them and getting my stuff back out. And because that money is in there, other people can also permissionlessly borrow it. So they can just, so they can show up and borrow some money. And they also have to put some kind of funds in. But, you know, say what they want to borrow is basic attention token. And what they have is Ethereum.

And what I want to deposit and earn money on is basically an identity token. Then if I deposited some, if they deposit some Ethereum, they can borrow an equivalent amount in my basic attention token. And that's all just run by the smart contract. There's no company like looking at these people and approving them or doing applications. it's just like you've deposited this much, that allows you to borrow this much, and you've got a wallet and you can do it.

And that was compound? That was compound, but this idea of, and this has been the big theme, and this is kind of what's driven a lot of this speculative mania, is all of these applications, basically, rely on people dumping assets into them. So, you know, liquidity. They, you know, they need,

liquidity. They need people. I was going to say, so what, what you've been describing is liquidity mining. That's what, okay, go ahead. Well, what I've been describing, this is a funny distinction. What I've been describing more is what you describe as yield farming. So, okay, okay. Well, all right, all right, stop, stop, stop, because if I'm confused, then, all right. So give me the two definitions. So essentially what you said before was that it really took off this summer with things like liquidity mining and yield farming, uh, taking off. Okay. So. So, explain definitions of those two. So just before that,

just what I was really saying is all of these things work because people like entrust money in them to get some small return. And so that's been going on for kind of as long as MakerDAO. And they trust the money to, again, not any centralized anything. They're testing it to the bots to essentially the autonomous execution of these contracts.

So it's essentially kind of, I know this is probably the worst. analogy, but is it kind of like the bot trading that Wall Street has been doing for 15 years, 20 years now, where essentially it's like you don't have to set the triggers that like, okay, this will happen. It's just I put it into this contract and it automatically tries to get a yield for me or do things for me to earn me a little pennies here and there. Well, on this simplest level, nothing's trying to do anything special. You know, you're just throwing some money into comp. Comp has a stated return for that.

That's variable and you just get that. It's more like a savings account, right? So that's on the simplest level. And so where the idea of yield farming came along, so all of these different applications, whether it's uniswap or compound or synthetics, they all need people to dump money in and hope of return because they need liquidity for other people to like borrow or use in various ways.

That's how the economy works. So the idea of yield farming is there's starting to be enough of these and the yield started to be good enough on enough of them that it became lucrative to be smart about moving your money around. So that was the farming. It was just like every day, a certain number of people would wake up in the morning and they would just go, oh, you know, there's a better return on curve today. I'm going to move my stable coins out of Uniswap and move them into curve. And that's what yield farming was. And kind of during that period, back in the background, sort of speaking what you were talking about

a second ago about sort of the bots looking for the best thing, this guy, Andre Cronier built this thing called iron finance or urine finance that started to kind of begin to automate that. It was a little bit of a, it was a robo advisor for yield. That was early on in the spring. People didn't really know. It wasn't very well known then, but that's kind of what he started working on. So then when liquidity mining kicks in, so what that is, is there's all this pressure on these different companies who are building these things to kind of be owned widely and controlled

by a ton of people. So they're sort of, you know, as the regulators say, truly decentralized. And so what compound decided to do was it decided to give control of its protocol, the thing it had built to its users. So it created this token, and the team held a bunch of the token, and the investors held a bunch of the token. But it turned over a ton of it. I think it was like 60% of the supply of the token, this governance token that controls changes

that happened to the compound smart contracts. It said, we're going to set up this giant pool. And for every block of Ethereum, we're going to distribute a certain amount of it. And the way we're going to distribute it is we're going to distribute it proportionally to, I think the way it was at the beginning is sort of the highest yielding pools, the pools that have the most demand, both on the borrow side and the lend side. That was really crazy thing. And so they gave this token called comp to people who were supplying liquidity to comp and also people who were borrowing. And the idea was it was a way to distribute control of the protocol to people who were going to actually use the protocol, both the borrowers and lenders, right?

So, you know, I wrote all the stories going out to this thing coming out. You know, I understood it. I thought it was cool. Compound Robert Lester. He's a really smart guy. He's a really well regarded in the space. Everyone thought this would be a popular thing. Okay.

And so just a quick moment here. So that's liquidity mining. So the difference in your yield farming and liquidity mining is yield farming. Our Zoom connection got interrupted here. So this is probably a good time to break for sponsors. No worries. Well, literally the easiest way to pick up the edit is you said, well, that's yield farming. The difference between yield farming and liquidity mining is that you get a new token. So that's the big difference. So yield farming is just you're getting your normal return like you would get on a savings account. With liquidity mining, you know, take the case of compound, you either deposit some money or you borrow some money and you just get this comp above and beyond it. And what would, was crazy about comp is there was so much pent up demand for it and also such limited liquidity at the beginning that like people went crazy for it. And it shot up to as high as like $323 per comp.

And, you know, it sort of sat for a long time over 200. Now it's more like around 100. But, but you know, just to put that in perspective, the price people were expecting for this stuff when it came out was around $40, which was still been good. I mean, it's free money, you know. But it went vastly higher. And what was especially crazy about it is it was so, valuable that if you had a lot of money, so you could afford a deposit a lot and borrow a lot, you could actually make money borrowing money without doing anything. Because the comp that you earned from your loan would be worth more than whatever interest you were accruing on the loan. And that didn't last super long, but it was a thing for a while. So, you know, it was this real

crazy free money moment that was happening. And that just, this is what happens and always happened in crypto. If someone has a good idea that gets people excited, then lots of people start to imitate it. So that was the beginning of the real, that was the beginning of DFI summer is when comp released the comp token. I think that was June 15th. Yeah, I'm looking at my DMs and like, you were trying to turn me on. I got to, I got to be faster on the trigger when you're trying to warn me that there's free money opportunities out there. I was like, yeah, yeah, yeah. I'm not paying attention to that right now. Okay, I don't know that I understood any of that, except I understood the fact that that's crazy that it's like oil going negative like it did earlier this year. Okay.

some more explanations of terms. So what is, what are fungible tokens? Well, I mean, all money's fungible. Okay. So I think you're thinking of non-fungible tokens. Okay, gotcha. The flip side. So yeah, that's the whole thing. It's just like, you know, one Bitcoin is a good, another Bitcoin. So non-fungible tokens, that's kind of getting sort of the end of the story. But, but NFTs have been this promising thing on Ethereum for a long time. And the idea of NFTs is just you can have like a provably unique item. And so that, that was, you probably heard about Crypto Kitties. That was a big thing at the end of 2017.

That's, that's kind of, that's nearly the OG crypto, um, NFT. Really the one before that is Cryptopunks. But, um, but you can do a lot more things with NFTs. It's just, it's just a thing that's, that stands alone on its own. And so it can be really silly stuff like CryptoKitties, but it can also be more serious stuff. So like, you know, you can, you can, like that thing I told you about yearn, they have a little bit of an insurance program that they do where you can insure the funds that you stick into it. You can get an insurance policy on it basically. And because those policies have a lot of variables to them, you can't really do them fungibly.

And so they have NFTs. Another thing we're seeing is NFTs for like a bill of sales for, you know, shipping around certain regions of the world. That's a thing people are working on. But the thing people are really excited about with NFTs is NFTs for gaming applications. So you know, you know that there's a big economy for buying items in popular video games, right? I mean, that's well known. So if you had a, if you had like a Fortnite, for example, that was built on crypto and was sort of a crypto-first Fortnite, a thing you could do is the company could come out and say, like, look, here's this skin we're making.

It's the golden tiger skin or whatever. There's only 2,000 of these skins. and that would be provable. You could verify it in the blockchain, and there would be no way that a company could ever make 2,000 more suddenly because that was useful for them to do. I mean, they could do it, but it would be like a new edition, and that would all be clear,

and the second edition wouldn't be as worth as much as the first. So it's a kind of, it's a way in which people can have, like, real digital property, and some of those things got to be pretty valuable, and so people started to use financing to own them, to get their hands on them, and that became a new interesting area for, for DFI to sort of later this summer. All right, one more that is absolutely gobbly gook, but that's what you're here for. Explain this Uniswap sushi swap thing.

Sure. Yeah, that's a really great one to talk about. So it also, it's important because Uniswap really speaks to one of the most important things that has happened in crypto this year. So, you know, you mentioned at the beginning that this idea of a decentralized exchange where, you know, you're exchanging, you're changing your coins with people with no one in the middle. That's always been the thing that's been really desired in the crypto world. The truth is exchanges are really complicated.

And so it's hard to actually do that in a way that works well for people at this stage and the technology. We'll probably get there soon. But Uniswap had this insight. And really, it also, credit where credits do it. It also largely goes to this other company called Bank Corps, which really got there first. They just did it in a way that people weren't as excited. about, but Uniswap set up this, this robotic market that's called an automated market maker,

an AMM. And what the robotic market does is you basically just put equivalent amounts of coins into a smart contract. So say that, you know, you want to have a market for Ethereum and USDT, which tends to be worth a dollar, it's a stable coin. If Ethereum were worth $300, you would put in one Ethereum and you would put in 300 USDT. And then what that would mean is that pool, would always say, you know, we will sell Ethereum for 300 USDT or we'll sell, you know, one 300th of an Ethereum for 100, one USDT. And so you can just come to this pool and the pool will be the buyer and seller on both sides. And what's what the theory was was that the market would work in such a way that these automated market makers,

you know, they were always the buyer and seller in every trade. You didn't actually trade to the person. You just traded with this robot on Ethereum. it would tend to be at the true market price, just trading with it. And that turned out to be true. That turned out to work pretty well. That turned out to work really well. And so a part of what makes you to swap work well is, again, liquidity.

So the prices are a lot more accurate when there's a lot of money in the pools than when there's just a little bit of money because you just get a lot more slippage. I could explain that, but it's probably not worth going into. The point is it's just it's good to have a lot. of money in there. And a part of the way they incentivize that is they shave off, I think it's like 0.03% of every trade, and that just stays in the pool, but that's earned by everyone who's put money in. So your money is slowly growing over time with every trade if you supply funds to a uniswap pool. Okay. So what that means is, and this is a part of what we talk about in defy as composability,

if I throw a bunch of money into uniswap pool because I want to earn that little return, the way I account for that, it's not like a bank where I make an account, I have a login and whatever, none of that stuff in Ethereum. I just put it in from a wallet address and it sends me back tokens that account for my deposit. And I could give those tokens to you, I could spread it around, I can do anything I want with them, and they still will be available to withdraw for anyone who has. Most people don't do that. They hold on to it themselves. It doesn't matter. But the point is, Uniswant became one of these sort of, it became one of the elite

products in Defi. And the big thing that was weird about Uniswap was it was, it was like the only one of the elite defy products that hadn't released a token. And people were like, why, why aren't they? This is, this is where growth comes from. And it's it and there's nothing, again, Uniswap, the company that built this thing, makes no money off of any of these trade. That little 0.03% that's being shaved off. That goes 100% to the liquidity providers. They don't get any of that. They haven't made a penny off of their product so far because that's just how, you know, things roll in Ethereum. So everyone was just like, what's going on when they have a token? So this dude, nomi chef, this this anonymous guy comes along and he just basically forks most of Unaswap's code because this is, you know, it's all in public. And he says, well, I'm going to give a token for people who use my automated market maker. But here's what I'm going to do first. Before I launch it, I'm going to create these pools. And if you stick your tokens that Uniswap gave you, your liquidity provider tokens, if you throw them in my pools, I'll start feeding you my token ahead of time before we even launch. You'll get my sushi token ahead of time.

And then when the time comes, we'll take all those liquidity provider tokens that everyone has dropped in. We will redeem them on Uniswap, pull them over to Sushi Swap, and then we'll kick off this new, this competing automated. market maker. And so that was what a lot of people called vampire mining because he was rewarding people for giving him another protocol's liquidity provider tokens. And he was doing it so that he could hoover up all their liquidity. But a bunch of crazy things happened after that. So this was like, to me, this was like the final countdown of the defy summer. This was like leading up to the climax, right? So prior to sushi swap announcing itself, there was like $250 million in liquidity in Uniswap, which was, you know, that's a nice amount of money.

And it was working very well. People thought it was a key piece of infrastructure. Everyone was quite happy with it. That was enough money for it to do what it needed to do. But then sushi swap comes along and people just start plowing tons of money into it, like so much more because they want to get those sushi tokens, right? So by the time the migration happens, there's well over a billion dollars in Uniswap at that point. So vastly more than there's ever been before.

Then the migration happens. There was a whole other minor drama in there I could spell out too, but it's not worth going into. Then the migration happens. They pull all the money over. But the crazy thing happens that by the end of it, sushi swap pulls $800 million out of uniswap, which is nuts. But at the end of it, Uniswap still has like 500 million. So it's like, I don't know, like for a hot minute, sushi swap definitely had more liquidity for sure. But Uniswap came out of this attack with double the funds it had ever had before because it just brought all this attention to automated market makers and their value.

And of course, the more money is in them, the better it works. And Uniswap always had more markets. So it continued, even though it, you know, got wrecked by having $800 million pulled out of it, it continued to have more volume than Susha Swap. Then Sushi Swap couldn't sustain its high, you know, token giveaway forever. And so they lowered the token rewards after a little bit. And then money just started leaving Sushi Swap super fast, started to go back to Uniswap on some level. And then kind of the crescendo of the whole DFI summer was Uniswap does finally release a token to its users that, you know,

it especially reward, and it does this sort of like long-term vesting schedule, kind of like what compound's doing, but it also kicks it off with this initial air drop that nobody saw coming. A ton of tokens went to people who had done liquidity providing to it, who had given it funds to work with, but the really wild thing could happen. And the thing that made it really the climax of the story is everyone who had ever touched Uniswap, you know, if you'd ever just made a single trade on it, you never even tried to make a trade and the trade had failed, but like you had, you had touched the smart contract, every single one of those people, got 400 uniswap, which if you sold it quickly was worth like $1,600. It was wild. I mean, this was just like an unfit, this is one of those unforgettable crypto moments, you know, like, I mean, you know, everybody I know who played around an Ethereum at all like got got this payout. It was just, it was, it was, it was nuts, you know, and it just, it's one of those uniquely crypto things. And it was one of those things that really spoke to the fact that I feel like this is,

this is a time. Things aren't going to be like this again. You know, this was like one of those moments where you were there or you weren't, you know? Right. And that's kind of what I think was special about the summer. So you said it's the crescendo. So where are we now? Like is the crazy, the Wild West is over, but there's still an incredible amount of volume and incredible amount of activity in all of these DFI projects?

Yeah, I think the, the wild, easy, super exciting. things have really kind of died down. You know, Uniswap is still paying out, uni to people who are providing liquidity. Comp is still providing comp to, compound is still providing comp to people who are putting liquidity into it. All of these,

all of the serious projects that kind of were the early adopters of this liquidity mining idea are still, you can still liquidity mine on them and there's still money to be made. It's just not as lucrative as it was. And I think the broader retail community, well, they A, got

burnt by the because Ethereum became so popular this summer, the gas fees got to be crazy high. Like when you got that uniswap pay out, if you wanted to actually sell your uniswap, you probably spent 50 or 60 bucks in gas fees to make the sale because just the traffic on Ethereum was so intense. So I think that the the buzzy boom is over, but I think most people agree the craziness proved out that this is a real business. I mean, you know, borrow and lending money has always been a, you know, that's always been like a real thing, you know. Well, that's so, I'm going to, let's end with two things. And this first one would be confirm if I'm on the right track here or how far off the track I am. So when I finally got

convinced that this is interesting again was because it was like, okay, at first, at first, as I said, my thought was, well, but isn't that what crypto was always supposed to do, essentially provide decentralized financial services? Well, But no, is it just that now the promise, like, because again, I got jaded by, you know, three or four years ago. Everybody, oh, we're throwing things on a blockchain, we're releasing tokens or whatever, but it's for making ice cream and crap like that. But actually doing the, the dirty work, the sausage making of moving money around is what the entire banking industry has been good at since, you know, the Renaissance. So is that what's interesting here?

that whether or not these people that are successful now, the compounds or whatever, are the winners. It doesn't matter. But it matters that we're proving out that these sort of sophisticated things are possible and can work. I think that's right. And really the thing that I encourage everyone who is skeptical of this stuff to do is like, buy a little ETH, you know, whatever amount is affordable for you.

I don't recommend anyone to be anything crazy here. This is not investment advice. This show is not investment advice. This is really, it's not. not it's just to have the experience buy a little leaf you know go to like compound say or a of a which is sort of a competitor does a similar thing deposit it then borrow a little money just to do it and have that experience of just doing this through a wallet without giving your email without doing a credit check any of that stuff and be like yo i just borrowed seventy five dollars no one knows my

name like it's it's crazy like once you once you have that experience and then if you do that like pop over to Uniswap, change some of that money, turn into something else, buy some weird token with it for a hot second just to see that you can do it. Have that experience of doing these decentralized transactions. It's so nuts once you've done it. This is just a very different sort of world than the one we're used to living in. And it's also, but within the crypto space, again, what got me back turned on to this was like, that's a real thing.

Lending money is a real service. providing insurance on products is a real business. So again, these are real financial products. These are real banking and financial services. So I guess the last question is, what did we say? This is from my crash research on this, that there's something like $8 billion in assets committed to defy right now,

we think roughly, you know? I think it's more like 11. I didn't look today, but I mean, it was well over 10 for a while, yeah. All right. So then, you know, in my research on this, I'm seeing all of the hype tweets and things like this and people talking about, you know,

it starts as a trickle and then it can explode fast and look out banking industry. So is that the potential here is that if we're getting really to the moon about this, this is how the global banking system can be disrupted or replaced? I mean, it could be. You know, who knows? I mean, the thing that I'm hopeful for is that this experience of being able to get money and borrow money will be something that in places where banking doesn't work that well, like here, people can start using it. And, you know, we hear accounts all the time. Like MakerDow, for example, sort of the leader, sort of the pioneer here. You know, they do a lot of international work. They say people are using other places. So, so that's where I'm hopeful. But, you know, I don't know that we, I just want to see it sort of like become a real industry that's like sort of a part of. semi-regular life first and then we'll worry about completely upending everything. Right, right, right. Okay, so then actually, because you just made me think of that as a real final question. And I know that this is a bad analogy too because obviously Coinbase is a

centralized exchange or whatever. But is there anybody yet that is, Coinbase allowed norms to go on and tinker with Bitcoin and buy some Bitcoiners. Is there anybody that is setting up shop to try to be that sort of like mainstream friendly consumer facing coin base for this sort of thing where hey you want to lend some money to whoever your daughter's getting married or you know that sort of thing is there anybody yet in that space i think i mean i think they all want to get there you know it's just these are some weird tools to put together first they need to make everything work well right you know um one example i feel like it's sort of the obvious place to begin that is sort of aiming to be super consumer friendly is I think this staff called Dharma, which is really, I mean, they do a few

things, but the basic thing they're known for, it's just a crypto savings account. And you just, you get, you get die on there and, and it'll, it'll definitely beat your regular savings account. Like, by far, you'll get a, you'll get a much better, much better interest rate off of Dharma by saving die, then you'll get from your bank, which is paid like 0.01% or whatever. I was going to say, it's not hard to beat a bank savings account. It's like, it's a lot better. I mean, I think that you like, six or seven. You know, so it's like... Again, that's a real thing.

That's a substantial, meaningful thing as opposed to we're throwing ice cream on the blockchain or whatever, you know, all that crap that we use. Well, Brian, can I say one thing on that topic? You actually caught me on a good day. So, you know, I came to CoinDest to cover ICOs. And my thing on ICOs, you're talking about sort of the ice cream on the blockchain thing, you know, scaling the tokens to fund these things. You know, I have always said, like, look, there were a lot of garbage ICOs, but most of the money

that went into well-intentioned projects made by people who had a decent idea and intended to build it. And today, like actually today, when we're talking, you know, on Thursday, one of the very biggest ICOs, it raised, you know, over $200 million for this to centralize kind of Dropbox and Cloudflare Filecoin, you know, it went to Maine that today. And people are pretty excited about it. You know, you can argue about whether or not it's a product that we need, I actually think that their argument for why the world does, you know, is pretty compelling. But, you know, ICOs left a bad taste in the mouth of the world. But a lot of that stuff did come to fruition.

And today, happy the day, we're one of the biggest, most looked forward to projects. You know, it's live now. And so that era wasn't all a waste either. Well, it's the Chris Dixon thing of the future is always a toy until one. day it isn't. And if you're not paying attention, you've missed the boat that it's no longer a toy and it's deadly serious. All right, Brady, listen, I don't know that I, if you asked me to sum up what you just told me, I could do it. But you're my absolute go-to for trying to explain all this stuff. So thank you so much for doing your best to explain why Defi. It's been the Defi summer. Yeah, my pleasure. Thanks for having me.

plug anything here and check you out at that coin desk and uh yeah yeah coin desk is the main place and you know i'm on twitter at brady dale those are kind of the two main things uh but you know a lot of good stuff by other people than me on coin desk is always going to check out that and occasion well at the very least in the show notes i'm going to have the yield farming explained and your sort of history of the defy summer experience yeah good uh all right thank you so much yeah thank you