The Wolf Of All Streets - The Case for DeFi with Camila Russo

Episode Date: March 2, 2021

After discovering Bitcoin as a finance journalist in a developing country, Camila Russo became hooked on the idea of a decentralized financial revolution. Taking one step further, Camila honed in on Ethereum’s evolving role as the foundation for the internet of money, publishing “The Infinite Machine.” Today, her insight is called upon by experts from all corners of the crypto sector looking to understand how DeFi is revolutionizing the world of finance.  In this episode, Melker and Russo discuss a range of topics including: Ethereum’s 2.0 transition Competition and “Ethereum killers” The first-mover advantage NFTs as a crypto gateway The Bloomberg of DeFi Internet in the 1990s Ridiculous gas fees The “sure bet” in crypto Whales trading Ethereum The inevitability of bubbles Bitcoin as digital gold The basics of DeFi --- VOYAGER This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 9.5% interest on top coins with no lockups and no limits. Download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account. --- Mina Protocol Mina is the world's lightest blockchain, powered by participants. Rather than apply brute computing force, Mina uses advanced cryptography and recursive zk-SNARKs to ensure a super-light and constant sized chain, that allows participants to quickly sync and verify the network. The team behind Mina is backed by VCs such as Coinbase Ventures, and Mina's adversarial testnet was the largest public testnet outside of ETH 2.0. To get involved ahead of Mina’s mainnet, visit https://minaprotocol.com/wolf --- Matcha 0x Matcha is the easiest way to trade in DeFi. Matcha enables traders to seamlessly swap tokens using 20+ aggregated liquidity sources that deliver better prices than going to a centralized exchange or Uniswap. Connect your wallet and start today at https://matcha.xyz/wolf --- Join the Wolf Den newsletter: ►►https://www.getrevue.co/profile/TheWolfDen/members --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by Blockworks. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworks.co

What is up, everybody? I'm Scott Melker, and this is the Wolf of All Streets podcast. As crypto approaches a $2 trillion total market cap, there are two major coins that are responsible for about 75% of the market, Bitcoin and Ethereum. Bitcoin, the largest coin by market cap, is discussed endlessly, but less talked about and understood as Ethereum. Still a Goliath in the space and the central figure in DeFi, Ethereum is gearing up for its transition to 2.0, and there probably isn't anybody better in crypto than today's guest to explain 2.0 and the Ethereum case and the case for DeFi in general. As the founder of The Defiant, a highly respected daily newsletter about DeFi and the author

of arguably the greatest book ever written on Ethereum, The Infinite Machine. I can't wait to better understand the Ethereum story. Camila Russo, thank you so much for coming on the show today. Hi, Scott. And thank you so much for that very nice intro. I appreciate it. You're very welcome. Well-deserved. So before we get into the questions, once again, you're listening to the Wolf of Wall Street's podcast, where twice a week, I talk to your favorite personalities from the worlds of Bitcoin finance, trading, art, music, sports, and politics. This podcast is powered by Blockworks, the fastest growing media company in the digital asset space. Blockworks has 20 Bitcoin and crypto podcasts. I'm excited to be a part of the network. Visit blockworks.co for access to the highest quality information in the space. And if you like the podcast, and you follow me on Twitter, you should

check out my website and join my newsletter. You can do both of those things at thewolfofallstreets.io. Now to get into what's important. So Camila, you were ranked number 26 most influential person in the crypto space by Cointelegraph. I think I was like 79, which is both incredible and well-deserved. How did it feel to be only a handful of numbers away from some of the greats like Vitalik, who you wrote the book on, or even one number away from Hester Peirce, the SEC commissioner? Yeah, no, that was pretty mind-blowing to see. I was not expecting that. But, you know, I can't say I wasn't kind of proud to be on that list for sure with so many brilliant minds up there. I'm not sure I really deserve to be like that high up in the ranking, but I'm very grateful

that, you know, somebody thought it was good to have me there. I think like if this means that people are reading The Infinite Machine and subscribing to the defiant and finding value in both of those things, then I'm really happy about it. Yeah, I was shocked that I was even remotely anywhere near the top. So I even know the feeling that I was much lower. So obviously, Ethereum is such a hot topic right now. We've seen this absolute DeFi boom in the last year. And then we've seen sort of all the arguments with high gas fees and that it's unsustainable. And of course, we have Ethereum 2.0 coming up.

So there's a lot to unpack with Ethereum. I know that you are very agnostic when it comes to DeFi. You wrote a book on Ethereum, but clearly you understand the entire space. But I just want to start here with Ethereum. So why are so many people choosing to build on Ethereum if it still has these issues with speed and gas fees? Yeah, I think the reason is pretty simple. I think Ethereum definitely had a first mover advantage. It was the first major blockchain that allowed programmable money. It was the first touring complete blockchain out there. Like I say in my book, Bitcoin wants to be peer-to-peer money.

Ethereum wants to be peer-to-peer money. Ethereum wants to be peer-to-peer everything. And the way that it wants to achieve that is with this decentralized network that can not only process transactions, but it can process whatever computer program you throw at it. So this kind of very flexible layer and distributed network just gave way to developers to build all of these different applications on top of it in a way that just wasn't possible before.

Many of the earlier builders on Ethereum came from Bitcoin because they were having issues building on top of Bitcoin. I know that Joey Krug from Augur, one of the most prominent Ethereum founders, was trying to build Augur on Bitcoin first. And so he's just one of many. So Ethereum was launched in 2015 and it was just the first really smart contract platform. So it did have this first mover advantage. It's had kind of a head start at building a community. And this huge community of developers and researchers and entrepreneurs and investors around Ethereum that's been growing since 2015 is hugely valuable. And it's something that other newer blockchains simply, I mean, they just can't have. And it's this incredible community and network what really puts Ethereum, even for blockchains that may claim to have better tech that can be faster, cheaper. The reality is that people today are willing transaction cost and be where all the volume is, all the coins are, all the dApps are, than be at a ghost town at a different blockchain that may be 100 times faster and cheaper.

The question is whether, you know, how long Ethereum can keep up, you know, can maintain that lead. I mean, do you think that there becomes a time in the foreseeable future where they can be supplanted as the largest one? Or do you think that the network effect is so great and the community is so large that, you know, they really have an epically huge advantage and nobody can catch up? No, I think it would be naive to think that because someone, because a project or network or what someone has the lead that they can never be replaced. I don't think anyone in Ethereum, building on Ethereum, should be complacent. Because the reality is that the incredibly expensive transaction fees are making people migrate to other chains today. We're seeing Binance chain gaining steam and with all its problems, like obviously Binance doesn't have kind of the decentralization benefits that Ethereum has. It doesn't have the community that Ethereum has, but it is run and led by the largest exchange. So, you know, people are seeing value in in in having um even if it's a more centralized chain

having just a cheaper place to transact um so i think this is this is becoming a huge learning point for for ethereum and um and a moment of truth. Like, you know, I think Ethereum, you know, people building on Ethereum are realizing that they better get layer twos in place. They better migrate to these more scalable solutions or, you know, face people just going to other chains like Binance. So can you discuss Ethereum 2.0, what it means, why it's been so delayed and whether it will actually solve some of these scalability issues and the high fees and such? Yeah, so I think right now,

the real viable alternative or way for Ethereum to scale is layer two solutions. And so for those who might not know what they are, these are technical solutions, networks that take some of the pressure off the Ethereum main chain and take it to a second network off of the main chain. So for example, some of the transactions would happen on the separate network. Some of the computing power, some of the storage would be taken outside of the Ethereum network and onto these layer two solutions. They usually work by kind of bundling a bunch of transactions off of Ethereum and onto these layer two solutions so that, say, a thousand transactions happen on these networks very quickly and very cheaply.

And then they confirm that kind of bundle of transactions on kind of the main Ethereum chain. And so instead of having to do a thousand transactions on Ethereum, they only do one transaction on Ethereum. So that speeds up, obviously, the throughput and makes processing on Ethereum just cheaper and faster. So that's kind of the main idea of Layer 2 solutions. And there's a few of them there's um optimistic roll ups uh ck roll ups uh plasma state channels there's a bunch um so i think and the good thing about this is that these layer twos are live like all of these are kind of working they're not kind

of in their research phase like they they have been for the past couple of years. Like just now in the past couple of months, all of these have been launched. And some of the biggest Ethereum projects are moving some of their operations to these Layer 2 solutions. Synthetix is a notable example, moving to optimistic roll-ups, or part of it is moving to optimistic roll-ups.

So this is something very real that's happening today, that some of Ethereum's main, major DeFi platforms can move to these more scalable solutions. So I think the question is, this needs to happen in just, you know, with many of them moving together, because you lose some of that composability, for which DeFi is known for kind of this money Legos feature, where everything is interconnected. If you have some some of these projects on layer one and some on layer two, and even on some that are on different layer twos, this composability breaks. So that's what needs to happen now, to have a large group of these applications move to, like choose one layer two to move together and and i think this would alleviate

a lot of the the pain that ethereum users are are having today and then for so that's layer two and that's kind of the solution that's here today um i think if two is a solution that's for the next you know for more of the long term for the next couple of years like that's for the next, you know, for more of the long term, for the next couple of years. Like that's not happening anytime soon. What did happen at the beginning of this year is that staking on ETH2 was launched. So, okay, so backtracking a little bit, I guess. So ETH2 is a completely separate chain from Ethereum. It's not like a fork, like they're not upgrading the current Ethereum chain. It's a completely new chain that is being developed in parallel to Ethereum. And this

chain, unlike the current Ethereum chain, which is proof of work, like Bitcoin, this new chain is proof of stake. And so the first phase of deployment of ETH2 was releasing just the proof of stake part of ETH2. And so this is what happened this year. And anyone can go and stake Ether on this chain and start earning rewards. But with the caveat that you can stake ETH, but because transactions aren't live on the chain yet, you can't withdraw ETH. So it has a ton of risk.

But anyway, so that's kind of what's live and what the current status of ETH2 is right now. It's just a proof of stake chain where you can't have any transactions or you can't really do much with it. And then there are a few other phases in deployment of ETH2 that still need to happen. And like we've seen with Ethereum development, which is, you know, very organic, decentralized, and that's a good thing. But the bad thing of it is that it seems a little bit chaotic, where things are delayed, people have different opinions about things, things change along the way. So, you know, I, I wouldn't, I would kind of be very cautious with the different deadlines that you see for ETH2. Yeah. Right. Because we've never seen them met. I mean, waiting for Ethereum 2 is like showing up at the concert at 6pm and then the headliner goes on at two o'clock in the morning and you wonder what you've been doing there waiting for eight hours. I mean, like you said,

it's sort of just been indefinitely delayed. I think it was good to see the actual proof of stake happen and for people to be able to stake. But I think a lot of people thought that meant that ETH2 was happening. And it's just sort of, as you said, the first step. So I guess then the question is, if we need to focus on layer two solutions before that happens, how do you get a whole bunch of competitive apps to move to get dApps to move together to one layer two solution? Because like you said, you have the money Legos, but that falls apart if, you know, 20% goes to one layer two and 20% goes to another layer two, and you end up with all this sort of scattered, scattered interest. I think everyone realizes that even if they are, they may be competing against each other, they're still relying on each other to work. Like, I think it's become clear how important and beneficial to everyone this level of composability is.

I mean, the fact that users can go from trading on Uniswap to staking on Aave in a couple of seconds, you know, that's something that even if they're different projects, they're all relying on each other to work. So I think, you know, it's in everyone's best interest to move together. And maybe what ends up happening is that there are kind of different districts, you know, and that like there can help kind of connect these different applications. I don't know. I think a lot of it remains to be seen. But I think there's a lot of urgency today. There's a lot more urgency today than there was before for all of these developers to figure it out. Because A, like,

right now, Ethereum can only be really used by whales. Like, all of the kind of the, yeah, individual traders are being pushed out. Like, you need to be moving large amounts of crypto for $100 transactions to make sense. And I don't think anyone on Ethereum wants this. of crypto for $100 transactions to make sense. And I don't think anyone on Ethereum wants this. Like DeFi is supposed to be about opening access to finance to everyone around the world. And yeah, like these high costs are really defeating that purpose.

Yeah. I mean, anecdotally, my own personal experience, I use, you know, Matcha, Uniswap. I use, anecdotally, my own personal experience, I use, you know, Matcha, Uniswap. I use these things all the time, depending on what time of day and what the price of Ethereum is or how much volatility there is at any given moment. I can pay up to three or four hundred dollar fees for a single transaction. And the same transaction could be seventy five dollars twelve hours later. So you have no predictable fees. So you have no idea really as a trader, certainly how much profit you can expect or what you're going to end up paying.

And like you said, I mean, if you're making a $200 transaction, it makes no sense. You got to be making like multiple four figure, if not five figure transactions to even consider it. Another interesting thing that I realized talking to a lot of people, there were a lot of NFT creators who were artists doing small Ethereum pieces who were doing really, really well last year and now literally can't sell their art anymore because the transaction fee costs more than the piece of art that they're selling. because I was so excited to see how NFTs were really being a gateway for another type of audience into crypto. I think that's been amazing because really up until this point, it's really been traders and people wanting to speculate with tokens or at least invest in Bitcoin as a hedge for their own fiat, what's been driving people to crypto.

But now with NFTs, we have this whole new audience that's becoming interested in this space. Artists, creators who see a way of monetizing their work. I think that's been amazing to see. I think, yeah, it's a shame that these high gas prices may be putting a hold on that, but I'm really optimistic that it's temporary, that this group of people are seeing the value in owning, in digital ownership

that just wasn't possible before and i think you know we're seeing more and more people come into the space this way i mean again like also anecdotally um just the views on on our youtube channel so many people coming to the channel because of the NFT content and not so much the yield farming content anymore, which is, you know, crazy. So it's great. Like before when people said, I think digital art is going to help crypto go to mainstream. I thought that was like very kind of idealistic,

you know, optimistic view, but then it's really happening. So yeah, it's been a good surprise. Sick of paying ridiculous fees to trade crypto? It's time you try Voyager. It's hands down my favorite place to buy and trade crypto and is 100% commission free. Voyager gives you easy access to more than 50 top crypto assets and you can instantly transfer cash from your bank account so you never miss a trading opportunity. Even better, you can now automatically earn interest on crypto holdings. Currently, they're offering up to 6.5 APR on Bitcoin and up to 9.5% on USDC.

Yes, you heard that correctly, up to 9.5%. And there are no limits or lockups, which means your funds always stay liquid. Find out why so many people are making the switch to Voyager. Visit investvoyager.com or search for Voyager on the Apple App Store or Google Play Store and get $25 in free Bitcoin when you use the promo code SCOTT25. That's S-C-O-T-T-2-5. This episode is brought to you by Mina, the world's lightest blockchain. Mina is a layer one crypto protocol that replaces the traditional blockchain with a zero knowledge proof, ensuring a super light and constant size chain that allows participants to quickly sync and verify the

network. Their upcoming mainnet launch is right around the corner and there are opportunities to participate in community leaderboard challenges for rewards. Visit minaprotocol.com slash wolf to find out how you can get involved and earn tokens ahead of mainnet. DeFi is where all the excitement is, but participating in it can be a nightmare. Not anymore with Matcha. Matcha makes it ridiculously easy to create a wallet, onboard new users, execute trades, and source liquidity. The best part is that it's cheaper than Uniswap and delivers the best prices on the market by aggregating all the available liquidity and routing to the best source. My favorite part of Matcha is it offers high-level trading features like limit orders, liquidity depth visualization, gas efficiency, and more. Sign up for Matcha now at matcha.xyz slash wolf.

That's M-A-T-C-H-A dot X-Y-Z slash W-O-L-F and join the tens of thousands of traders who are already a part of the movement. I have friends who I've had trouble convincing to get into crypto. I've told to buy Bitcoin for months and years who are now aggressively trading on NBA Top Shots or whatever it's called, trading NBA highlight clips and investing in NFTs. And they absolutely love the market. So I think you're right. I think that that really might be a gateway

for a lot of mainstream adoption for the space. I just hope that it becomes more scalable and affordable for people, especially for the space. I just hope that it becomes more scalable and affordable for people, especially for the creators to be able to actually sell their work. Yeah, 100%. Yeah. So I'm curious what,

because they seem so different, Bitcoin and Ethereum, and it always comes back to this. Why is there so much tribalism in this space? And why are Bitcoin maximalists and Ethereum maximalists so at odds? I mean, why can't they both exist happily? I don't know. I think it's really, you know, it's a shame. I think for me, Ethereum and Bitcoin just serve different purposes.

I don't think they are competing against each other. I think both are extremely valuable. To me, Bitcoin changed the world. It was the first cryptocurrency, the first distributed network that allowed actual peer-to-peer value transfers without a bank in between. I mean, that's mind-blowing. And today, I think it's really cemented its case as digital gold, as this place where you can have a hedge against fiat currency, against financial institutions and central banks, and just as a way almost to protest against traditional finance and against the way that things have always been done. I think that's really powerful. And it's because of its simplicity, you know, it's like, because it's so kind of ossified, right? Like it's not changing. Developers aren't planning a Bitcoin 2.0. They're not kind of like innovating very much. And it's just, you know, this digital currency that you can trust to stay

the same, to have its 21 million cap. And that's it. It's just very solid, trustworthy thing that you can buy. And so that's, to me, that's a very good case for digital gold. And then Ethereum is completely different. It's become the layer for blockchain based finance because it is different, because it's flexible, because it has smart contracts, because it has some more dynamic group of developers that are willing to change this network to make sure that it can scale and to make sure that it can support all these applications, something that Bitcoin decided very early on it wasn't doing. There was this debate about increasing Bitcoin block size early on in its development and developers decided against it. And so that's a very different philosophy from Ethereum. And so because they are

built different, they are being used for different things. To me, Ethereum is the layer for the internet of money. Bitcoin is digital gold. So they're really not competing. I think that maybe the reason why there is kind of this maximalism is from people who believe that both digital currencies are going after the same thing. And I think this might stem from this like ETH is money meme that kind of really intensified, I think, last year. So yes, like people saying ETH is money, that more directly competes with Bitcoin on some level.

But to me, again, like not really. Like to me, Bitcoin really isn't like made to be money. Like it's not meant for you to buy coffee with it. I think stable coins are much better suited for that. So like, again, like I really don't see the point of having this, I don't know, this rivalry. I mean, I agree. It's like, you know, Peter Schiff is obviously passionate about gold, but it's like him saying, I love gold so much that I hate the internet. Right. Exactly. That's exactly, yeah. To me, they're just so like disparate. And honestly, if you're a Bitcoin maximalist and you view Bitcoin as your way to opt out of legacy systems

and you see the like, you know, the pump short the bankers, long Bitcoin memes, you would think that you would dig into Ethereum and to DeFi and understand the best way to short the bankers is to completely cut them out and create a better banking system, which to me is what DeFi is. So I want to talk more about DeFi. Obviously, we saw a huge boom in 2020, yield farming, food coins, rug pulls, crashes. I want to talk about the basics of how you would define DeFi and what the future of it looks like. And then also, I'm curious if you think that it's matured from what we saw last summer when all of those things happening? Great. Yeah. Okay. So like the basics of DeFi, like the definition is basically the ecosystem of financial applications that are being built on public blockchains. So most of this

has been happening on top of Ethereum, but there are other blockchains that are also enabling very, you know, emergent DeFi ecosystems too. And what's kind of mind-blowing about this space is that there's an entirely new financial system that's being built from the ground up. So all the applications that you see on traditional finance are being built from scratch on Ethereum and other blockchains. So things from payments to borrowing and lending to investments, automated investments, savings accounts, all that stuff, you know, trading, insurance, all those just basic building blocks that you need to transact money with. Those are being built without banks, replacing banks with smart contracts and with computer code. And it's just incredible. You know, I think the fact that all of these functions can be put on distributed networks, what it does

is that it creates a global financial system for the first time, a global and open financial system for the first time. Because up until today, traditional finance has been running on systems that weren't really made to carry value. Like all of the just like basic financial infrastructure is built on really messaging networks, you know, like Swift, ABA, ACH, you know, just like the very rails of finance.

They're not like, they're not made to transact value. They're, you know, you're really messaging your bank account number to another bank and they're processing and they're like making changes on their centralized ledgers. It's all very cumbersome. So by taking these entities out and putting these functions on distributed networks, which were built to transact value, you're disrupting the whole thing and making it so much more efficient. And also, not only do you have like the clunky centralized authorities, the banks, like you said, who have their own centralized ledger, and each transaction has to be checked, but you're also eliminating them as tax collectors, right? I mean, for the individual,'re taking, they're taking fees. Every single time your transaction goes to someone else and goes to someone else, everybody's taking their

piece and that's somewhat being eliminated here. Definitely. Yeah. So, I mean, it's becoming more efficient, faster, cheaper, or at least in theory, you know, without the gas. Yeah. i mean i mean to me it's a given that all of all of these issues that we're seeing today with congestion on ethereum are going to be solved like these are you know technical uh problems that are you know it's like when when you remember what it was like connecting to the internet in the 1990s and how far we've come along from there to me we're we're at that point where it's just like painful to use um blockchain but it's just a matter of time uh before these uh these kind of roadblocks are solved. So anyways, that's what's so revolutionary about DeFi is that it truly is a new financial system

and one that is open to everyone for the first time. And that is global because right now, these systems are built on these just like ancient clunky infrastructure. And it's also infrastructure that is gated in every country. Like it's financed with borders. Like the U.S. has its own financial system, which is different from Canada's and it's different from Mexico, even though they're right next to each other. They have their own separate system. With blockchain and DeFi, this doesn't happen. It's like you're all part of the same network. And this like literally means lowering borders, like taking down borders for

finance and making it open for everyone. So it's, yeah, it's a real kind of revolution happening with money. I love the analogy of the internet connections in the 90s. I graduated college in 1999. And I remember I got the blue iMac and it had a 14.4 modem. And like everyone thought I was amazing because I had such fast internet at a 14.4 modem that like dialed up and took 10 minutes to download a picture. But if that's where DeFi is now, and we have so many projects, can't you then sort of make the assumption that a lot of them are not going to make it much like many of the companies

that were focused on the internet in the 90s did not make it? Oh, a hundred percent. I think that's kind of a, I think you'd have to be, I don't know, incredibly optimistic to believe that all of the applications that we're seeing today in DeFi will be the same

ones that we'll see 10 years from now or 20 years from now. I think the applications building on DeFi today are setting the groundwork for what finance will be in the future. I think maybe a few of those will survive. Most of the rest will die or will be transformed. Or maybe death in blockchain works differently from death in Web2. Like, you know, these coins will still kind of exist and maybe these protocols will will be modified and who knows like maybe there's they'll have like more longevity because

they can be kind of taken over by different communities as as they go along but the point is that the the shape of DeFi will be different 10 years from now. I mean, we're seeing how much things change just week to week or day to day even. So yeah, I think that's a given. Right. I mean, people love to make the analogy, obviously, or compare it to the internet bubble of the late 90s, early 2000s. So that begs the question, who becomes the pets.com

here and who becomes the Amazons and the Googles? Are there any projects that exist now that like you're seeing, not your opinion, of course, but as a journalist that you're seeing that level of interest or innovation on that you think they could be the Amazon or the ones that really make it? Are there any that excite you on that level or you're seeing that sort of adoption? It's hard to say for like individual projects, but I think, you know, just looking at it from just like facts and just like numbers on, you know, where the interest is.

I think, well, MakerDAO has been kind of the backbone of DeFi from the beginning. I mean, you can argue that they started this ecosystem because they were the first lender-borrower. They are kind of the DeFi central bank issuing DAI and kind of setting the base interest rates. So I think, you know, and they have remained an important part of the ecosystem, even if it's like at five years old. I think like it can be considered old school. That's 500 years in crypto but it has remained relevant and it's still holding i think the the most uh total value

locked still today so i think it's it's proven that it can uh it it it it can kind of, you know, survive at least so far and innovate. And then like the top other protocols, same thing with Aave and Compound, they are concentrating the most turtle value locked as well. And they have become kind of important utilities in the space, kind of the trusted protocols where people can deposit their crypto and earn some yield without having as big a fear of getting hacked as kind of the newer players. Like they've been more tried and tested. And, you know, in the same way that we've seen with Ethereum, I think first mover advantages

matter. And, you know, they just having been in this space for a long time and having been able to keep their users money safe is, you know, it's just, it's very valuable in this space. So right now, those are kind of the top projects. So yeah, it remains to be seen whether they will be going forward, but they definitely have an important head start. Same with Uniswap. It's by far the biggest techs. It's proven to be led by a really strong team and to be able to innovate really quickly, even if it's one of the most actually decentralized projects. So I think, you know,

that speaks really well of that project as well. Yeah. Where do, I guess, as people like to call them the crypto banks, the BlockFi's and Nexo's and Voyager's, they're a broker, but Celsius, where do those fall into this picture? Well, to me, those really aren't actually defy they are kind of a yeah that like um a different category but i i've seen this kind

of meme of a c defy um like you know and and i think that that that can be totally viable going forward. Like these CeFi players who want to decentralize part of their operations or who want to create links to DeFi, I think we'll start seeing that more and more. And also I think we'll see more just traditional fintechs build bridges to DeFi. I think DeFi, you know, if it continues to grow as it has, will become impossible to ignore going forward. And like I said, it really is a better system. Like having this kind of open global network for money where everything just moves seamlessly

and you don't need to create an account and you can just transact with your blockchain wallet. It's just like incredibly, just like so much better than the old way of doing things. So I think it's just, you know, it's a matter of time before more people realize that's the case. And when they do, I think traditional finance and fintech will have to catch up. And I think they'll do this integrating more pieces of DeFi in their own offering. Right. That's what I was going to ask next. Taking it a step further past the, you know,

CDFi or CFI, as people like to call them, we have real banks, right? And we've seen, I can speak for certainly in the United States, the OCC saying that banks will be allowed to custody Bitcoin, which obviously means eventually they're going to lend against it and use it as collateral. And we've seen now that they're allowed to test stable coins instead of Swift and the other sort of legacy rails that we discussed. Is there a threat that whether it's regulators or the banks themselves sort of take a huge piece of this market share and ruin it for us effectively? I think it'll be really hard for traditional banks to actually compete with actual DeFi applications because I think there's a chance that they will create links to it.

Like, okay, maybe they will become kind of the on-ramps into DeFi. Maybe they'll start offering different DeFi tokens or open or like Coinbase does, like they integrate, for example, Compound and allow lending through Compound via the Coinbase app. I think that's more likely that that will happen with traditional banks. They'll become kind of a gateway into DeFi. But I don't see them kind of building their own protocol on Ethereum or on like whatever network ends up winning.

So I think it'll be more of like a bridge for like mainstream people. That makes a lot of sense. I've always argued that the, you know, the BlockFi's and Voyager's of the world are kind of like the gateway drug for crypto in general now because you can't get any yield in a bank. When I explain it to someone who doesn't understand crypto,

but I say you can buy USDC and get eight and a half or nine percent by simply putting it there. They understand that, right? So maybe that's a good thing that, you know, we have these sort of more mainstream platforms that allow people to get comfortable with it, because most people are not going to start yield farming, right? Yeah, no, no, and they shouldn't. Like, yeah, no, 100%. I think, to me, dollar based savings accounts will be the way that most people get into DeFi in the first and for crypto, has been people who are in developing nations with double-digit inflations and currency controls, they can get a dollar-based asset and open a deposit on compound and start earning 10% interest on that. But I think the case is as strong

for someone in a developed country that's having to pay their bank to deposit fiat currency. Like they have negative rates. So on both sides, you know, both developed and developing world, like the use case for DeFi, at least as like just a place to,

you know, store some of your your your savings uh not even all of it like I I would never you know recommend someone to go you know all in on on DeFi and put all of your life savings on in DeFi but like at least you know you you can have like 10% of your savings in in, borrowing platform and start, you know, earning a little bit more yield on your money. And I think that will resonate with a large group of people. And maybe CeFi and just traditional banks and fintechs can be a gateway for that. It makes a lot of sense. Yeah, I think that that I think that totally makes sense. So I'm curious, actually, about you individually. I mean, what made you become so passionate about this?

What made you discuss? What made you discover, I guess, I don't know, the path Bitcoin and Ethereum decide to start the Defiant, which you can talk about more and to write a book. Yeah, sure. So I guess, okay, my background, I'm a journalist. I'm originally from Santiago, Chile. I started my career at Bloomberg News. And it was, I started at Bloomberg in an internship in New York, but was soon sent to Argentina to cover the market there. And it was in Argentina that I wrote about Bitcoin for the first time in 2013. So I was covering how Argentines were protecting against inflation and currency controls and saw that there was this Bitcoin community that was really growing quickly there. And so, yeah, wrote a story on that. And then after that was always just interested in this space.

I was suffering from having to hold Argentine pesos myself. So I really saw the value of having a completely independent, sensorless money. I thought it was amazing that this could even exist. So I always kind of kept tabs on crypto. And then it was in 2017, I was back in New York, still at Bloomberg, and had the chance to cover crypto more on a day-to-day basis because there was just so much demand for

Bitcoin and crypto news at the time with the boom. So yeah, it was like I became one of the few Bloomberg reporters covering the space day-to-day. And I was just really fascinated by the space. And I had always wanted to write a book so it was like my dream growing up like my idols were Michael Lewis and Truman Capote so I was like always on the lookout for like a real life story that I could tell like in a way that was more of like a fiction novel. So after covering crypto in 2017, I was like, there has to be a book here. And so I started thinking about what the best story was and saw that there had been books written about Bitcoin

and the story behind Bitcoin, obviously, but nothing had been written about Bitcoin and the story behind Bitcoin, obviously, but nothing had been written about Ethereum. And I thought, you know, like there needs to be a book on Ethereum. Like it's the second biggest cryptocurrency. It fueled a lot of the craziness that we had seen in 2017 with ICOs. It had this really ambitious premise behind it that it wanted to be this world computer and and programmable money and smart contracts like all of this very groundbreaking stuff so to me like it was a sure bet like ethereum had already changed the story like the history of blockchain and money and even tech so to me it was like worth documenting how um it it started and like

the people behind it and the stories and everything so yeah that's how I decided to to write uh the infinite machine and yeah really happy with with how it turned out and then um I spent 2018 uh between writing my book and I'm still at Bloomberg and then 2019 decided to leave Bloomberg to really finish my book and also because I had been there for eight years so I thought that was enough time to be at one spot um and then as I was finishing my book I saw like DeFi really emerging and growing quickly and thought that nobody was doing a great job at covering the space so decided to just like start with with a daily newsletter at first and see how that went and my initial idea was that I would file the first draft of my book and I would then

do be like an independent journalist on tech and finance and have this like newsletter be like a side thing. But then like it became my full-time job. And now I've been really full-time focused on the Defiant and turning it into a media company. It's such an awesome story. So all that said, in all that building, do you have a second book in the works? What's the future look like for the Defiant? What do

you have planned as it continues to grow? So right now, like my focus is a hundred percent on, on the Defiant. I, I just grew it from one full-time person, myself, to eight this year. So it's been amazing to have full-time journalists covering the space, full-time video producers with Robin Schmidt leading the video side of things, and even full-time developers, I'm building a DeFi data platform. So, yeah, I'm so excited about launching that. It will be coming out soon. So my plan with the Defiant is to turn it into the Bloomberg of DeFi. And a lot of people, you know, it's an old pitch,

like the Bloomberg of crypto has been said over and over again. But I think what's a little bit different for the Defiant is that it's actually Bloomberg in the sense that it's both news and data. Like a lot of people who say that the Bloomberg of crypto are referring to just the data. Yeah. But being, you know, inside Bloomberg, I saw how important the news and the content side was to it. So, yeah, that's what I'm building with DeFi. I'm super excited with how that's going. And I just see, you know, I see it's inevitable that DeFi will just become finance

so hopefully we are kind of the place that people go to to find just quality information on it and then I would love to write a second book so once I'm able to just like delegate more of my my work for the Defiant I will definitely want to find time to, to write book number two, but the sushi saga. Oh yeah. The rug pull. I think that's a great name. Yeah. So, um, yeah. So with all that in mind, uh, what do you think of, you know, what's happening in the market in general? It's been, when you look back at where we were a year ago in 2020, obviously people were screaming that crypto is dead. We saw March 12th when Bitcoin dropped below 4,000. And there was really

a lot of like kind of gloom and doom in the market. But then, I mean, I guess if you've been around, you kind of expected it was possible, but most people were very surprised by where we are sitting now and seeing this grand adoption, the Michael Saylors and Tesla and everybody sort of coming into the space. A, do you think that this bull run will continue in general? Do you think that we're at the beginning or that we're cycling up? And B, seeing that Grayscale is buying more of Ethereum than is mined and they're seeing institutional interest, do you think that Ethereum is going to be a serious player in that institutional market and adoption as well?

So, okay, on the bull run, I think, you know, I'm not going to say whether like crypto is going to be higher or lower than it is today, tomorrow. But I think I just look at this space from a long-term perspective. I'm obviously very bullish on blockchain and crypto. I'm building a company based on believing that this is the future. So of course, I'm very bullish on this space long term um I think bull runs and corrections will will come um I think we'll see fewer and fewer of them as the space grows but I think we're still early and so it's you know it will happen that expectations get ahead of reality in boxing and that's how bubbles

are formed. And it's, you know, it's a volatile market. It's still small compared with, you know, stocks and bonds and traditional markets. So it's very easy to, or it's easier to see really big moves in this space. So I think it's just the nature of where the market is that we will continue to see bubbles and bear markets and corrections. I think if people are wondering whether to buy Bitcoin or ETH now or it's too late. It depends on your time horizon. I think if you're in it for the long term, then I 100% recommend owning some crypto. I think that's an easy bet.

It's here to stay. It's not going anywhere. If you want to make a quick buck, and I don't know, then I have no idea whether this thing is going to correct or drop like 30% tomorrow. So, but I'm in it for the long term. I think blockchain is 100% here to stay.

I believe it's the future of finance. For ETH, for institutions, I think it makes sense. I think institutions go for Bitcoin first because it's the largest and most liquid, the best known. I think it only makes sense, the next one they look at will be Ethereum. Yeah, and I think it's also been the case for regulators that they said Ethereum is a commodity first and then they said the same thing for ETH. Same thing with the SEC. It took them some time,

but they eventually said that ETH is not a security, that it's decentralized enough and so we've seen kind of bitcoin lead the way in terms of like regulatory clarity and in terms of institutional adoption and being bought by a big you know corporations and i think i mean we the same thing has happened with ETH. Like ETH has historically kind of followed after Bitcoin's footsteps. So I don't think there's any reason to kind of doubt that that will be the case going forward. Awesome. Love to hear it. Because I agree.

I know we're up against it with time. So where can everybody follow you and sign up for The Defiant and follow what you guys are doing? Yeah. So you can follow me on Twitter at Cammy Russo, C-A-M-M-I-R-U-S-S-O. And please subscribe to The Defiant

on the defiant.substack.com. There's also a YouTube channel. It's The Defiant, the podcast. You can find it on Spotify, Apple. It's also on Anchor where you can see all the different places it's distributed. But if you go to the defiant.io, you'll find links to all of the stuff, like all the Defiant media properties. So yeah, go check us out uh we are really

trying uh really hard to to uh keep up to date with the latest defy content in the highest quality um way possible so good luck with that because yeah no it's tough that's why i need people like you yeah no we turn around there's so much going on yeah yeah it's gonna keep you busy always like you only yeah you only need to open the define newsletter and you'll be on top of things so that's you know that's all you need to do so subscribe it is an incredible resource because it's nearly impossible on your own to even, I think, to even be exposed to 5% of what's happening on a daily basis. I'm not surprised that it's taken you staffing up eight people to keep up with what's going on in DeFi and what you're building.

So really exciting. I can't wait to see what you guys have for the rest of the year and hopefully to continue to enjoy this amazing, amazing market and growth that we're seeing this space. Thank you so much for taking the time. I really appreciate it. Like I said, it was long overdue, so I'm sorry it took so long to get to. No, thank you so much for inviting me. This was really fun. Awesome. Thanks again. you