The Pomp Podcast - #555 Sam Cassatt as the Degen King

Episode Date: May 14, 2021

Sam Cassatt is the Founder at Aligned Capital. He is the former Chief Strategy Officer at Consensys. In this conversation, we discuss Ethereum, Decentralized Finance, Degens, Yield Farming, Asymmetric Investments, the dark corners of Crypto, and where Sam sees opportunity.  ======================= Did you know nearly 338 million dollars worth of NFTs were sent last year? And in 2021 that number is growing faster than ever. Looking to make your first NFT? Check out NEAR’s fast, scalable, low-cost, open-source platform. Learn why NEAR is the infrastructure for innovation at near.org: https://near.org/?utm_campaign=pomp  ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.com/pomp. This is a no brainer for both newcomers and crypto heavyweights - go sign up today.  ======================= With 10M+ users, Crypto.com is the easiest place to buy, and sell 100+ cryptocurrencies. The Crypto.com Visa Card gives you up to 8% back instantly, and 100% back on Spotify and Netflix. Also, Crypto.com lets you earn up to 8.5% p.a. on BTC, and 14% p.a. on stablecoins. Get $25 when you download the Crypto.com App with code "pomp". Download the App now: https://crypto.onelink.me/J9Lg/pomppodcast2021 =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Sam Cassett is the founder of Aligned Capital. He is the former chief strategy officer at ConsenSys. In this conversation, we discuss Ethereum, decentralized finance, degens, yield farming, asymmetric investments, the dark corners of crypto, and where Sam sees opportunity moving forward. I really enjoyed this conversation with Sam, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Circle. Circle is a global financial technology firm that enables businesses of all sizes to harness the power

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instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset's price history and your portfolio's performance over time and maybe the best part exodus is integrated with the treasure hardware wallet making advanced security easy for everyone you can visit exodus.com slash pomp for your free download or search exodus on the app store or the play store again exodus.com slash pomp for your free download or search exodus on the app store or the play store all right let's get in this episode with sam i hope you enjoy this one anthony pompliano runs pomp investments all views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not

treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I've got Sam here. What's up, man? hanging out in miami doing defy dgen stuff uh you know that's literally all i want to talk to you about is defy dgen stuff this world is crazy there's literally a coin right now called come rocket that is exploding uh safe moon i've lived one more person messaged me about safe moon i don't think it's safe i don't think it's going to the moon but that's what they all keep saying

uh let's start with your background what did you do before consensus so uh a long time ago i was a computer scientist and cognitive scientist. I did a lot of applied science after that. So basically did a lot of work trying to unify work on human cognition and computation. Then ended up working at an offshoot of the Johns Hopkins Applied Physics Laboratory called SensorStar, where we built like robotics and computer vision, stuff like that. And I was always trying to be at the cutting edge of science. That's actually what ended up leading me to cryptocurrency in general, because I thought that actually monetary technology was one of the cutting edges of human cognition.

So you're doing smart shit. Yeah, smart nerd stuff. And then realized that building smart nerd stuff for other big companies doesn't make that much money. And I learned what entrepreneurship was and then sort of started going in that direction. How do you get the consensus? So was into Bitcoin from the very beginning,

from the white paper stage, just from a money nerd perspective. I wish I had sold all my clothes and bought it. Did you buy any? A little bit, but I wish I had done more. But mostly just nerded out. We feel really bad for you. Sorry.

Thanks. So over time, I kind of stopped paying attention to Bitcoin, honestly, because everyone was making a wallet or an exchange or selling drugs on the internet. I didn't really want to do any of those as a business. But I heard about this thing, Ethereum. No one could explain to me what it was. and then you know I watched it and then I heard there's this guy gonna explain what it is in New

York and so met Joe Lubin at that event describing what Ethereum was immediately he said it was a decentralized virtual machine as a computer scientist I knew what that was and I was like oh my god that's gonna change the world so ended up a few weeks later joining up with Joe building consensus I was chief strategy officer there for like you know the first how big is it when you join it was me and a few other people kind of a loose group of people but it was me joe maybe like two or three other people in a room all right and what's the vision for consensus when you start uh it was to collect the smartest people around in uh that knew what ethereum was which was probably only a handful of people on the planet at the time that could actually write software um start

building basically a what we call a hub and spoke model but essentially uh started seeding the ecosystem was our goal right um it was kind of like 1991 and we know that http is going to be an amazing protocol but you know the web browser doesn't exist and the apache web server doesn't exist and someone's got to build all that stuff and we know that you know we can think of you know a social network and we can start building that and we can use that to motivate the construction of those lower layers which is what we did we you know we funded truffle and fear of metamask all the stuff that we needed to actually build on ethereum a lot of other people to build on ethereum so we basically seeded that whole ecosystem the entire time you're working there

are you getting paid in ether uh no in the in the early days uh it was some crypto uh but then eventually it became like a normal corporation we have to like pretend to like have a real account okay uh just before everyone gets all upset i feel like if we sat down everyone'd be like oh he's the ethereum guy and i'm the bitcoin guy fuck all that that's all labels it's all stupid uh what is your view of ethereum and what's your view of bitcoin today like how do you think of those two assets are they competing with each other are they two different things what are they just walk me through that framework you use i think they're driven by completely different narratives right so bitcoin you know if you talk to someone on wall street you know the narrative

they've heard probably is it's digital gold right it's uh you know not to offend any bitcoin people you know but it's a slow moving asset and that's sort of a feature not a bug right it's not going to change no developer is going to come change the mechanics of its issuance right people get mad about you know vitalik might change the way that it gets issued and therefore it's not hard money or whatever right um but you can you can rely on that narrative that bitcoin is going to stay basically what it is and it's kind of and it can be sort of a reserve asset in that sense so fair to categorize as uh if a trade-off is security versus like innovation speed etc it's choosing security over the others yeah totally okay ethereum ethereum i see as a

programmatic substrate for a new economy right it is what does that mean that was smart nerd so you know so it's it's it's it's the operating system for how what you could build on top of it which is other financial applications right or other trust-based applications and ethereum is like the fuel to that right it's sort of if the internet if http had had a money built into it or a token of value it's like that right except it's explicitly a type of financial internet and so it's the base unit of that and it's almost like it's a commodity that powers that whole thing do you think that they compete with each other or are they two separate things like how do you think about uh i think the narrative publicly is like bitcoin verse eth market cap first market cap

asset versus asset is that fair or do you think that's misguided in some cases they compete with each other right i mean it competes with each other for for mindshare right like some people are uh institutions are investing in bitcoin because they know it's going to be valuable over time they don't quite understand the ethereum narrative yet i think they will and so i do think they compete a little bit in that sense of like this is going to be a permanent and important asset but they do occupy different head spaces essentially in different market niches um they also compete a little bit or starting to compete a little bit in the application layer right like there have been a lot of people that tried to launch application

layers on top of bitcoin most of them haven't gone anywhere but it's been enough years people are starting to do it and so you know ethereum obviously is way far ahead there are other uh competitors to ethereum too that also have like added some incremental feature on top of ethereum or changed it um like other smart contract platforms yeah exactly so you know so those are it's starting to compete a little bit in those domains but in general they they're the venn diagram is not that crossing over in my mind so let's just go right at i think one of the big things that uh the ethereum community continues to say that the bitcoin community is like you guys are idiots like there's no way that's true it's this whole idea of eth is money i think the

ethereum community is like hey you guys are idiots in the bitcoin community for whatever reason around bitcoin is money right uh do you think it is money and then how do you kind of process just as currency those two assets i honestly don't have that strong like one of those religious opinions that eth is money a lot of people tweet that and it's a point of contention it's great tweet it gets a lot of it gets a lot of engagement right yeah i mean you know if you ask an economist what money is right it's something like fungible you know store value tangible or like not necessarily tangible but you know portable like it has these properties right i think ethereum mostly meets those properties i don't know the u.s dollar qualifies as a store of value but um you know

it it checks a lot of those boxes you can use it to pay for stuff right now people do pay for stuff with it um but i honestly don't think that's the most important debate right and ethereum one of the big criticisms of ethereum from the bitcoin community is that it uh it has no cap supply and the only way you can kind of estimate how much supply it'll have is by looking at its issuance over time with the new with eip 1559 like the new rollouts of ethereum and ethereum 2.0 it actually looks like it might be slightly deflationary or steady state um so you know but it's a different flavor you know there's you know x number of bitcoins right so there's set issuance obviously with bitcoins programmatic transparent all stuff with ethereum i think that is the big knock from

bitcoiners right is hey whoever can change it uh expand or contract the supply uh i think the ethereum community is like there's security related issues as to why you would do that uh and so like it's fair just to like say okay that's the line in the sand and like whichever side you agree you agree fair sure yeah like if you think one's more valuable than the other then like that's what you're gonna kind of oscillate around right yeah i mean you know they both solve the same problem uh you know i think a lot of the distinction is religious more than intellectual all right now that we got that out of the way i want you to tell me what the hell is going on in the most degenerate defy corners of the world uh and i say that so for those that

don't know there is this entire world of uh some of this is outright scams some of this is outright like moonshot ideas of like let's go take down the financial system some of it is like we just built cool technology we don't have a use case for it right i mean there's all kinds of stuff happening here yeah but uh when you think of like dgen defy slash ethereum world like what is happening what does that constitute yeah so i'll start by saying uh dgen is actually like a compliment yes yeah yeah okay we should start that's a great so you know it is degenerate and and it you know it refers to the fact that people are you know throwing lots of money around in different smart contracts and doing things that like really are fairly financially degenerate

in the normal world. But there's also a tremendous amount of value that's being created because people are creating new financial primitives and they're bootstrapping the liquidity of those primitives. I can explain what that means. But, you know, essentially what's happened is over last summer, there's this era that people called DeFi summer happened. And a lot of it was instigated by this protocol called Yearn Finance. And what they did is they really changed the game of how you can launch a protocol within DeFi, right? So one of the problems anyone has when they're launching a company

that has infrastructure involved in it is you need to get people to use the infrastructure. DeFi has the same problem where if I make a protocol for lending or I make a protocol for tracking some synthetic asset and no one's using it, there's no liquidity in the program, it doesn't work, right?

So founders need a way to get liquidity in there. And if you think about the capital markets, you know people need some of the same stuff in normal companies too right that's why we have underwriters is because they they introduce liquidity they help they help write the price you know correct the price of something when it launches and so you know you need those things you need to set the price you need to introduce liquidity you need to get the thing launching to issue the the new asset or whatever and so what urine did is they figured out a new mechanism that no one had thought of before um that people call liquidity mining um and so well maybe some

people have thought of that idea but they hadn't used it in this way to completely bootstrap some And this really just going after the cold start problem, right? Is we want to do this, but we need the liquidity or it won't work. And so how do we incentivize people to come in, give us liquidity and give them some sort of economic incentive for doing that? And then we can get to kind of scale and have the liquidity that we need. Yeah, exactly. So that actually doesn't sound so crazy when you say it that way. D-gen DeFi sounds ridiculous to most people, right? But go ahead. Yeah. I mean, the part where it gets really degen is that when people start designing these mechanisms that essentially reward you for providing liquidity, sometimes they don't know exactly how to set the issuance rate. Like they set it in the smart contract and say I put a million bucks inside the smart contract, which they want me to do, that might give me $10,000 or it might give me $10 million back as a reward. And it depends on how they

set the parameters and what other people are doing. And so sometimes you can get these really ridiculous returns, right? You're putting something in a smart contract where it's 1500% APY return, right? Which is absurd from a normal finance perspective. And that's why it's degenerate. But some of those things are scams and you lose all your money. And distinguishing those things is hard. How do you specifically know when it's a scam versus like, oh, this is just great DeFi returns? So there's a larger story there, which is, and I have an organization that works on this uh called alignment engine and what we do is we're we just uh helped launch and and service this thing called the neptune dow the neptune dow is a liquidity providing dow uh and

we have engineers that are excellent at auditing smart contracts that actually probably audited those specific contracts before uh and we can look at them and make sure it's not a scam but okay so hold on back up back up back up a liquidity dow what is that so essentially uh But people have realized, especially people on the forefront of the D-Gen game, have realized that they want exposure to this new game. And it's a new type of market participation that actually has real value and helps protocols bootstrap, much like venture helps early protocols, helps early founders. Rather than raise a seed round, you go and you get liquidity bootstrapped. You do a liquidity deal. And in fact, there's a new whole type of deal that's emerging where founders will approach us privately even and say, hey, look, we need to guarantee this much.

Will you help us out? Or we need to move our smart contracts from L1 to L2 and we don't have enough money to do it. Can you help us out? So we're kind of a new type of market participant. But essentially, it's a pooled vehicle. It's Moloch contracts, if anyone's familiar with those other DAOs, like the Lau or the Flamingo DAO or the same one. But it's a pool of money. i'm gonna laugh the whole time at the names because only in crypto but go ahead we get we

get weird but you know it's a it's a pool of money it's a pool of liquidity that we can do whatever the governance mechanism says we can do with it but mostly what we want to do with it is help protocols bootstrap their liquidity and get rewarded for it so we're almost like we're an early stage capital markets liquidity provider but we're doing it in this weird on-chain way with engineers instead of guys in a stock market or something. Okay. What's the craziest thing you've seen happen? Like the absolute most insane thing

that even people who are into crypto will be like, that's nuts. That's an interesting one. A lot of weird stuff happens. There was a protocol that launched over last summer called BASED, um and it was very explicitly a game theoretic game um you know i think their words were designed to transfer money from the the weak hands to the strong um but it but essentially

you know they had designed the mechanics such that it would go in these extreme oscillations like up a thousand percent or two thousand percent and then down to nothing and then the liquidity would get pulled out and then you couldn't sell it and then it would drive it back cup etc so like people had figured out this extremely new unheard of game that caused wild price fluctuations and actually does end up benefiting the owners over time if you hold on to this token because they've done other airdrops or whatever but um basically the emergence of a new type of financial game it's a little bit like gambling and a little bit like investing and a little bit like engineering all in one is it fair to say this is all entertainment

like literally when they create that thing based right i've never heard of that before uh but the fact that it goes up so much and it goes down so much is like almost a uh a toy right it's like one you can sit and watch and i'm sure people love watching like oh we're up two thousand percent went down whatever uh there's an economic element of like i'm sure people try to sell it at the top and buy it at the bottom and sometimes you're right sometimes you're wrong uh but then there's this other element of like it's so freaking crazy that you probably get entertainment and like talking to your friends about it yeah i mean definitely i mean that that was very much like very meme heavy like you know a little bit like gambling but it also that project specifically

i think has some real merit to it but but a lot of these things like 10 why does that one have merit uh that one sounds like a good because they keep well it was a game and is a game i think but they are launching some real stuff and they're sort of secretly doing it it's an anonymous project and they sort of slowly roll out these things but then you're like whoa actually that is a real utility platform uh no no all right so like real anonymity yeah it's it's yeah it's anonymous um and and you're seeing that a lot now right because partially because the regulatory clarity is not there to be able to launch stuff but sometimes it's like fake anonymity like sometimes it's like oh sam launched a new project he's using you know i don't know based whatever is his you know

pseudonym but like everyone knows the sam yeah and other times it's like literally nobody knows Yeah, no, this is like, nobody knows. And it's, you know, partially because it's, you don't know what's going on, right? And also, you know, liability comes from identity, right? So it's, I think we're seeing an era of a lot of anonymous founders, right? And to the extent that there's not regulatory clarity, and to the extent that, you know, people want to do things that might be beyond regulatory understanding at all, they're going to be more and more anonymous people. so um but so you know another ridiculous one is tendies that's definitely a game right it's basically a pyramid scheme and it and if you were one of the top holders then money flows up to you and it was uh in in our wall street bets uh famous for pumping like gamestop you know we like to say identify the market structure issue and short squeeze hedge funds yeah oh yeah okay there you i'm sorry i i'm corrected um so uh you know tendies is what they call money in their parlance and so tendies is like a play on that that's very explicitly again uh some of these things though

are real right and a lot of what we're doing within neptune dao is we're actually we're trying to take a long-term position in these assets and these things sometimes uh like venture capital has gotten a bad rap uh within crypto deservedly so in many cases because you know uh the distribution is concentrated uh the thing launches it gets dumped on retail uh the project suffers for that and it's it's retail investors suffer for that and uh and people think that's not a healthy distribution so actually a lot of projects launching will say we don't have a venture around there are no vcs involved that's actually that's a feature not a bug right and so when these things launch they launch with often no liquidity and they call it a fair launch there was also this

movement last summer to fair launch projects meaning that anyone can come to participate in the very beginning by providing liquidity and if you help bootstrap the thing then you're one of the early participants one of the holders and the teams don't take tokens in those fair launches or they still take tokens sometimes often no i mean i'm sure the teams have probably figured out some way to help farm it for themselves you know and that's one of the things you know we might want to do right it's like what do founders need you know like maybe we want to help them farm it or whatever but i don't think those mechanics have been completely determined and what's fair i think the market probably isn't necessarily demanding that people have no founder tokens but you know

more towards that edge not like a venture around where the founder has like 75 or something it's like the founders get like 10 right but um but essentially what's interesting for us is at the beginning of these protocols if you wanted to buy a venture style like amount an amount significant into a fund you can't do it because the tokens come into existence through this process of providing liquidity so the only way you can get these tokens is by helping them bootstrap and so and when you say uh help them bootstrap or provide liquidity are you talking about taking eth in most cases and basically providing it in some smart contract you know uh or some kind of liquidity pool and then leaving it there and you're almost earning yield on your assets and

then that's you're giving them the liquidity you're earning that yield but that yield is paid in the token of the yeah yeah essentially so it's a little bit like you know amazon credits given to startups or something they want to incentivize uh people to come provide liquidity so it's an example like let's say uh let's say i'm building a new swap like a competitor to uniswap right which is an automated market maker swapping facility um so you go to it you put one asset another asset comes out, but you need people to have staked or put in both sides of that asset pair for it to work. SushiSwap came along last summer, wanted to have that same functionality, but there's billions of dollars in Uniswap. How do you get billions of dollars in the new protocol so that people can

actually use it? What they did is they said, if you take your Uniswap liquidity and you move it over to SushiSwap, we'll start spitting out SushiSwap tokens into your wallet. And by doing that, you know, and if you calculate the yields on that, it's really high. It's like hundreds of percent or something. Right. So people said, of course, yeah, I'm going to migrate that liquidity over. And hence SushiSwap was born and that's how they got their liquidity. So I was telling you beforehand, the way that I view this has changed from a framework standpoint. At first it was everyone's saying yield, but they're not actually generating yield. What they're saying is, Sam, you know, take your liquidity out of one place, put it with me, and then I'm going to give you

yield and what that insinuates right for the legacy world is that they're going to take your assets they're going to go they're going to lend it out right rehypothecate it they're going to generate a rate of return they're going to take a percentage of that rate of return they're going to basically then give you a piece of it right so i generate 10 i give you eight i hold on to two and that's how the system would work here what they were basically doing is they just created a bunch of tokens right put it into uh treasury essentially and they said sam you should come here and give us your liquidity and when you do that we're just going to take tokens out of our own thing we're just going to dump them on you right and we're gonna give you hundreds of percent

and then over time it gets commoditized down yeah uh one the rates were unsustainable i think everyone kind of understood that two was it wasn't really true yield from like a lending or rehypothecation standpoint it was just uh the use of the tokens these airdrops or whatever what somebody said to me that i think is actually a fair point is uh wait a second that's just customer acquisition cost. Now the difference is, uh, rather than take money, let's say if I had a normal company that I raised money from venture capitalists and then I use it and I pay Facebook and Google for advertising to acquire users. Or I say similar how PayPal said, you know, $10 for every person you invite and you get $10 here, you're not using dollars or capital that you

raised. You're actually using some currency or asset or whatever that you created. Right. And so that would be like amazon saying hey here's a hundred thousand dollars of amazon credits it's not actually dollars just something they created yeah all right so all that is out there agree or disagree that that's the right way to look i i agree and i think it's also it also has the byproduct of distributing your asset and creating your asset so it's not necessarily that they have it in the treasury already and they dump it on you it's that that is the the event that generates the token to begin with which is something they needed to do they need to have some distribution schedule or logic of how that gets created so it does that for them and then

it puts the you know the the base asset of the protocol in the hands of lots of different people which people believe is a healthy distribution economically for that thing so it so it so it's like customer acquisition and it's also like some other capital markets kind of functions if we take 100 of this world and i said to you what percentage is scams what percentage is games and what percentage is real are we 90 real in your opinion five percent five percent of scams and games what's like the breakdown or 90 scams and you know five percent real like how would you from your opinion break down uh between those three buckets i think there's like a sliding scale that depends on that scares me that's your answer well you know it well it's it's a time a time

slider let's say so like when ethereum started doing this a lot of the projects that were launching were were legitimate and they were experimental because no one ever thought of this before but they were legitimately trying to do something and then you know a month goes by two months goes by everybody and their brother has the source code of that and can launch a new scam one and then that turns into 90 scams right okay same thing just happened on bsc which is uh binance basically took ethereum ripped out all the decentralization and put it is binance going to disrupt ethereum i don't think so no why not uh well you know there's a there's a small group of people that can turn off binance smart chain uh and so you know are there a small group of

people that could roll back ethereum uh not physically no i mean you have to get every or you know 51 of all the miners in the world uh or more than that even i think you could argue um but uh i don't know enough about bsc ethereum differences to know what to ask there so so bs i mean ethereum has like you know thousands of node operators all over the world that don't know each other right like tens of thousands at least of miners that are all mining it and they all have to agree if they wanted to change something right which generally isn't going to happen unless it's something really important like upgrading to ethereum 2.0 or something right um with bsc what they did is they ripped out all that stuff that makes it so that there are

thousands of uh unaffiliated nodes all over the world and they just made it some like servers that binance owns but it still is compatible with like metamask and like other ethereum like ethereum code can run on it stuff like that so so what you had was bsc launched it's much cheaper to run stuff on bsc because the gas prices of ethereum got really high uh so you could launch these farms initially there are probably some people you know building real things like pancake swap is a real thing um i've actually heard of that one yeah uh yeah it has a big market cap like it has real utility um if you believe bsc has real utility but uh and then you know and or people were saying well it's too expensive to launch on ethereum i'm going to launch on bsc and maybe i'll move

to ethereum later or something else later right so it has that real utility um and uh but then you know that's so cheap and so easy over time you know 90 of that was eventually scams i think probably is right now okay uh when you think about this entire world i'm gonna ask you for the bullish view and then the critique we'll start with the critique first and then we'll move to the bullish view uh the ethereum smart contracts like uh all the platforms that are not bitcoin what's the biggest critique or like the biggest risk so if you said hey you know uh in order to be bullish on something i also have to be the one who can like articulate the the other side of the argument the best what do you think is like the fair critiques of ethereum or like

this whole world and maybe you say there are none it's perfect uh vitalik is uh god um well so that's gonna be a meme somebody mean that um so you know i think some of the criticisms are probably rightfully around the edge cases of of trust and the things that we build into the real world for human error and jurisprudence and gray areas right like a lot of people are on this sort of kick of code is law and you know this can actually completely replace everything about the trust infrastructure of humans and the fact of the matter is there's a soft side to why humans trust each other and how they trust each other and there's a clause in every contract that says well if this contract doesn't actually specify

what to do and we dispute it, then this is how you dispute it and you go to arbitration and you go to this court and you talk to humans about it, right? So I think while we can, over time, dramatically make more efficient and faster and cheaper a large part of the trust infrastructure of the world, like court systems and law enforcement and lawyers and stuff like that, we can't totally eliminate it. So I think, you know, I think that immutability and that sort of that hard-linedness about the way it behaves is both a feature and a bug. And it makes it probably not rise up to completely replacing everything about how we deal with finance and trust. But it can take us farther than we are right now, for sure.

Okay. What's the bullish case? like is eth the global reserve currency in the future in your opinion is this the protocol on which every financial application in the world runs on yeah so um you know to yes i possibly and you know not to both yeah to both i mean either ether or something like it and you know not to talk my book right like i have an open mind uh i personally really like ethereum and i think it has the strongest case for taking that on um now that we've realized that there can be this decentralized trust infrastructure that is dramatically cheaper right and people talk about

you know the environmental impact of crypto or whatever but the right comparison is not crypto or nothing the right comparison is ethereum crypto versus like every bank building in the world every court system in the world all the miles driven to those court cases and by lawyers and police forces and all the money you spend on military to like enforce the rule of law and do you know the energy consumption of the meteor uh industry i don't but it is way too high it should be a national crisis like somebody should write about that right like they literally print physical papers how many trees get killed yeah yeah totally right i mean like just so we're very clear um being facetious to a degree but like that is the outrageousness of the argument right

is if we basically said look at how many trees the media industry is killing we should shut down the media industry yeah like people would be like that's absurd yeah like well okay then that's exactly what you're saying about crypto yeah and it's like if you don't understand that cutting down those trees has some value then yeah maybe it seems make it makes sense but it doesn't because it's really useful so people people haven't yet grokked that this could be a replacement for large parts of that stuff that we spend lots of resources on right it can replace as i was saying like the trust infrastructure all that all those police and courts and lawyers and whatever that we need in order to do business with each other and trust each other if that were uh if we could

replace all that with something cheaper and better faster that looked like the internet and that internet had a money built into it or a you know something of value built into it people get upset about the word money but if it had a native asset built into it if http if your web browser since the early 90s had had a money built into it that would probably be pretty freaking valuable um i think that's the bull case for it what are the odds that what i'm about to say is true bitcoin first digital currency right uh people want to do more with it they can't smart contracts composability etc they go in the build ethereum and then a plethora of other smart contract platforms the belief is that you can scale on layer one they don't move to layer two

scalability. At the same time, Bitcoin is layer two as well. Now that there's smart contracts on Bitcoin, smart contracts on Ethereum, they both coexist. Some people will choose to have vertical integration between what they deem is the hard sound money with these digital decentralized kind of smart contract based DeFi applications on Bitcoin. And then in the Ethereum world, people see ETH as money and they go and they vertically integrate digital decentralized smart contract you know defy applications on that ethos money thesis does that seem like where we're headed maybe um i sound like you don't agree well you know you're allowed to disagree as much as you want so you you know honestly more about the bitcoin ecosystem than i do like you know i

obviously i did because you know more about ethereum than i do so you know so i like i spent many years like pretty much only thinking about ethereum um and but that was the only thing that was doing anything like that for many years in in fairness so and anything else trying to do that was basically trying to copy ethereum right so um is it the case that people are building smart contracts on top of bitcoin yes like what makes a smart contract platform successful a lot of things one of the things is community right um another thing is liquidity you can't really fork community or liquidity um and and it's very difficult especially between the bitcoin and ethereum communities to get that cross should i ask you the million dollar question which community is uh

is uh more vibrant bitcoin or ethereum well you know uh if you like like unicorns and uh you know anime and also the future of finance ethereum if you like like steak and like ludwig von meises probably bitcoin i don't know we're both we're both in trouble that's actually a very good answer to a nearly impossible question by the way bitcoiners do like steak and uh misis so like yeah that you correctly identify they do not probably actually like unicorns uh or anime so like okay um when uh when you think about the institutions are coming right that was a whole thing i think bitcoin was kind of the first asset

that's the one everyone's really focused on institutions now instead of by bitcoin uh is your expectation that they'll eventually buy ether they'll go into you know ethereum based defy they'll go participate in all these lending and liquidity stuff uh and they'll like wall street will become dgen over time or like like what or is that all fantasy land and like they're just gonna buy bitcoin maybe they'll buy some eat and like that's it yeah i mean i think i think there's a few layers to that right they're obviously already buying bitcoin um if you looked at the last few days of ethereum uh you know it looks like somebody big is buying a bunch of ethereum i'm not sure but i don't think it's very long and i and i think it's probably already

the case that people have said okay what's the second biggest one bitcoin just went up we should have done what elon did we should have done what palter jones did um maybe this smaller one has some room to run that's already happening right um so that's easy that'll definitely happen it's already happening a little bit um the second phase of that though is d5d gen stuff right a lot of this stuff has the regulatory clarity of you know mud and the you know when they have their limited partnership agreements and they have their regulatory you know compliance guys and you know they look at that it freaks them out right and so some of the stuff that's completely decentralized there's almost no way that you could you could touch that from the current perspective

right that said i often talk to large well-capitalized hedge fund guys are like i really wish i could work on this can i work for you actually yeah so um i think i think the you know the people are the especially the the younger generations are pulling people in that direction um and there's going to be there's already so much yield there's so much money being made there's you know just like bitcoin was five years ago just like ethereum was three years ago or whatever um it takes a while for them to catch up but they're going to realize that there's so much money to be made and there's also you know the future of finance to be constructed and to be a part of and you know wells fargo their logo is a horse-drawn carriage right um they figured

out they need to do something different i'm sure i'm sure they'll figure out you know the next thing too uh it'll take time though that's actually a great point i always forget that you've thought about this before all right i know we got to go uh i got three questions to finish up you'll get to ask me one uh first is what's the most important book you've ever read the most important book i've ever read uh i think you might have asked me this before so i'll probably i don't know if i'll say the same book but uh probably a book called synergetics by buckminster fuller um well i don't think that's what you said last time um yeah uh so in terms of like it being an important book it's basically his like magnum opus of everything that he studied in science and

looking at the structure of nature and how nature informs design and if you want to essentially if if evolution constructs reality uh the phrase every any sufficiently advanced technology is indistinguishable from nature i think is true because over time evolution will wear down anything that doesn't meet certain uh efficiencies certain design patterns that nature has discovered over billions of years and this is his explication in deep scientific detail of why you see the same patterns in plants and stars and galaxies and subatomic particles and metal alloys and whatever and it's just a beautiful scientific representation of that and i think is contains a lot of the design patterns of where our species will go if it survives that was actually a great answer

great job next one's from eight sleep uh they've got thermoregulated bed basically i make it cold as shit and go to sleep and sleep forever you should not do that uh what's your sleep pattern like do you sleep a lot not a lot is dgen world you know uh allow you to sleep so it's a funny question yeah dgen world is a 24 7 world and like last summer i was probably i i would like you know uh pass off the baton to my wife and when she was getting up i'd probably go to sleep um so i sleep in short amounts uh i like it to be cold and uh but not nearly enough and i don't think i will over the next uh you know year as we build out the dgen ecosystem so usually i would ask about aliens we've already talked about it uh previously so my question to you is is it fair to

call you the king of the dgens is that is that an applicable title here i mean you know i don't That wasn't a no. I don't want to name myself that. But if you name it, I would accept it. So the king of the DGENs. I mean, DGENs, I think what I do is I bridge the DGENs, right? Because I'm in the chat rooms with teenagers that are working on DeFi protocols in the middle of the night. And I'm also, by some people's estimation, a normal business person, financial professional.

And so I try to bridge those worlds. All right, that's fair. But I'm still going to call you king of the DGENs. you could ask me one question what you got for me um what is uh what is the best answer you've received about whether aliens exist um probabilistically yes but they're also probabilistically too far away therefore their existence won't be recognized by us because we'll never be able to communicate with them they'll never be able to communicate with us for you know hundreds of thousands of years and i think that's probably the best answer

because that's the answer i believe right of like just like yeah like the you the galaxies are too big something's probably out there but we can't even get to mars let alone anywhere else so like we're never gonna know about it yeah fair enough or they're already all around us you could be an alien you could be the alien of the dj's all right where can we find people to find you on the internet uh where do you want to send the people uh probably by twitter is the best just at sam cassett um and uh check out the the neptune dial neptune dial dot xyz the neptune being the god i can't believe i'm allowing this right now all right man thank you so much for doing this we'll do it again thank you very much very cool