The Wolf Of All Streets - The Monetary Model Of The Future with Ido Sadeh Man Founder of Sögur

Episode Date: September 15, 2020

Ido Sadeh Man is the founder of the Sögur token, a new digital currency that combines the best attributes of Bitcoin and stable coins. Before his deep dive into entrepreneurship, Ido was a Jazz musician in Paris. He later discovered blockchain and leveraged this technology to design a new currency, borrowing from the best aspects of Central Bank monetary policy while allowing people to store value in a safe way. As Ido sees it, national currencies are useful to nations, but SGR will best suit the global economy. Scott Melker and Ido Sadeh Man further discuss their shared music background, the difficulties of becoming a successful musician, transitioning from entrepreneurship to the blockchain, the possible death of the dollar, the change from SAGA to Sögur, living on a Kibbutz, selling your Bitcoin when your taxi driver is talking about it, money and materialism, COVID exposing our financial fragility and more.  --- ROUNDLYX RoundlyX allows you to dollar-cost-average into crypto with our spare change "Roundup" investing tool, manage multiple crypto exchange accounts in one dashboard and access curated digital asset content and services. Visit RoundlyX and use promo code "WOLF" to learn more about accumulating your favorite digital assets when making everyday purchases and earn $4 in free Bitcoin. --- EQUOS Diginex is the first company with a cryptocurrency exchange to be listed in the US. That exchange, EQUOS, has been built to institutional standards, but is available to everyone. You can trade Bitcoin and Ethereum spot, as well as Bitcoin perpetuals, and get a 5% discount on all fees, by signing up using equos.com/wolf. --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

I'd like to thank my sponsors Equus and Round the X for making this episode possible. Stay tuned later in the episode for more info. What is up, everybody? This is Scott Melker, and 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, politics, and basically anyone with a good story to tell. This show is powered by BlockWorks Group, a media company with over 20 podcasts in their network. Check them out at blockworksgroup.io. Now, if you listen to the podcast, you follow me on Twitter,

then you may enjoy my website and my newsletter where I share all my trades, charts, analysis, markets, thoughts. You can check that out at thewolfofallstreets.io. And now on to what's actually important. Today's guest is the co-founder and chairman of the newly branded Soger token, recently known as Saga. Ido, the creator, set out to design this coin by taking the best parts of major cryptos like Bitcoin and popular stable coins to develop an entirely new asset with its own vision. The result is an entirely new value proposition, which I can't wait to better understand. So Ido Sadehman, it's a pleasure to have you, man.

Thank you for being here late on a Friday night for you. Thank you for having me. It's a pleasure. Thank you. So I know that you have a really, really colorful and interesting background and that part of that is similar to mine, that you were a musician before coming to this. Can you tell me a bit more about your background and how you got here? Yeah, this is really, it's so old that it seems like a prior life.

But up until 15 years ago, I was happily playing jazz in Paris, came back to Israel where the jazz scene is not as developed, and crossed to the dark side of the startup industry. Started off managing product for a company called Odyssey that was later sold to Gilbarco, then off to consumer product with a network that tried to compete with Instagram. We got 30 million users at our peak, mostly in South America, and actually three years ago, I was ready to leave the startup scene with a vision of going back to the academia

and studying political science. And as a farewell to the VC I was a part of at the time, I took an analyst with me and we tried to write an investment thesis for the blockchain. It was early 2017. And it took me only a few days to realize that I'm not going anywhere. Political science and technology are as coupled as they've ever been.

And I'm here to stay for the next couple of decades, I believe. It's interesting. So I have to ask, what instruments did you play? So I played the flute and the sax, mostly jazz flute, Latin jazz. Now I'm resorting to my piano because I'm playing all alone from time to time, not so much. That's the saying. I mean, I've played the piano since I was five. I actually played the saxophone when I was in middle and high school as well. Never touched the flute. But whenever anyone mentions jazz flute, I've played the piano since I was five. I actually played the saxophone when I was in middle and high school as well. Never touched the flute.

But whenever anyone mentions jazz flute, I think of Anchorman, you know, Ron Burgundy and his jazz flutes. Sure, and Joe Farrell and there'll be man. There are many of them. Yeah, it's awesome. So tell me now more about what you're doing now, what your mission is. Obviously, you just rebranded, as I sort of mentioned. So let's get deeper into what you're doing now, what your mission is. Obviously, you just rebranded, as I sort of mentioned. So let's get deeper into what you've created.

Sure. It's always a pleasure. So we started Saga about three years ago, and the vision behind Saga was that national currencies were designed a long time ago to serve a mostly national economy. But we live in an age where aside to the national economies that are still here alive and kicking, we have a global economy. We are now exposed to prices and to trading that exceeds our nations. And we don't have a currency to store our value and limit our exposure to such prices, as well as serve as a medium of exchange. You know, the simple notion of being able to go down to your supermarket and buying carrots and you hold one currency and the supermarket accept the same currency and the carrots are denominated in this currency.

This all goes out of the window as soon as we go online and purchase outside of our country um you know just take a british citizen uh that's so the value of the pound decreased by 25 because of brexit when he purchases in in britain is actually fine because the economy the british economy reacts to the same Brexit, but the prices on Amazon have very low consideration for Her Majesty's Parliament decisions, and therefore such a citizen, so their purchasing power decreased by 25%. This is what we want to solve.

Obviously, Bitcoin was a big inspiration, but we believe that we're doing several things a bit differently, mostly geared towards becoming a medium of exchange and not only a store of value. So in your estimation, then, Bitcoin primarily serves the purpose as an ideal store of value, a digital gold, but it's not the best way to actually transact. And so you're solving for that side of it. So I don't want to be a prophet. I can say what I know already,

which is that Bitcoin is superior to gold in any trade as a completely uncorrelated store of value. I do believe that there are several caveats that might prevent Bitcoin from becoming a widely adopted medium of exchange. I think that one evident caveat, especially after this week, is the chaotic volatility. And the second one is a governance mechanism that makes it rather slow

to adapt to a changing reality. Some are looking at it as a feature, not as a bug. And this is understandable. The determinism of Bitcoin is exactly what makes it the competitor of gold, but it is also what makes it more cumbersome to adapt to a reality that changes rapidly. So proof of work basically hinders it from its ideal speed or use as a medium of transacting. So I don't think it's necessarily a proof of work versus... Are we back recording? Sure, yeah. So it's not necessarily the proof of work versus proof of stake

or other consensus mechanism. It is mostly the fact that it was designed not to be changed quickly or easily and to be changed only via a consensus, a wide consensus of direct democracy, if you want, the sort of direct voting. And this has many advantages when it comes to resolving the principal agent dilemma. No one can do in your name something that you didn't wish them to do. But at the same time, this accounts for a long time for taking decisions. As for the lack of ability to rely on expertise to draft those decisions. And so in this regards,

I believe that, again, it is a great feature for a store of value. It is not necessarily one for a medium of exchange that needs to adapt to a rapidly changing reality. Right. And so we have obviously a number of currencies that are sort of, or cryptocurrencies that are somewhat the flip side of that, right? That are very fast for transacting, for actually using them. They're exceptional. So where, you know, I guess we're looking for what you're building is a happy medium between both.

Is that correct? So I think that what we try to build, again, what we are addressing mostly is the volatility on one end and the governance on the other. So in terms of the volatility, you can consider that we are a bridge between stable coins and Bitcoin

because we've created a bonding curve mechanism. A bonding curve mechanism means that the currency grows as its supply grows. It is an elastic, continuous supply of money. When we launched Saga, there were zero Sagas in the world. The only way to create Saga is to buy it with Ether. And when you sell it back to the contract, it is burnt.

So actually, the markets are the ones that are determining how much Saga there is in the world. I'm saying Saga because it takes me time to get used. It's Sober and SGR. But our holders only approved, voted for the change two days ago. So I'm having a hard time parting from three years of legacy. So the only ways to create SGR is to buy it with Ether. And it means that the model can consider that the amount of SGR accounts for the amount of trust that the currency enjoys.

And so when this trust is very low, the currency is fully pegged to a basket of currencies called the SDR. It's the IMF basket of currencies, of the five most traded currencies, dollar, euro, pound, yen, and renminbi. And at this stage, Saga is really, SGR is a stable coin on the SDR.

But as the trust grows and the number of tokens grows, again determined by the market, we start to lower this reserve ratio in favor of an intrinsic appreciation of the price of SGA. So it uncorrelates from the traditional, the traditional economy, on its way of becoming an independent currency. And this allows us to tame the volatility on the way of becoming independent. That's so interesting. Yes, so bonding curves have been covered in the space theoretically, but I really believe that this is

one of the first attempts to actually build one and implement one. And this is drawing inspiration from central banks. Well, it's funny. It's drawing inspiration from central banks, but it's drawing inspiration from what a central bank should theoretically be and not what a central bank actually is. Is that correct? Yes, completely. be and not what a central bank actually is. Is that correct? Basically, what they do as I say,

not as I do. What a central bank should be doing, but not what they're actually doing. Right. This is our vision of how a central bank should be operating on two levels. The first one is that we cannot print money. We cannot print SGR. The only ability to determine how much SGR there is in the world is given to the market, which is very far from what we're seeing central banks doing now with quantitative easing, are the holders of SGR, the holders of the currency. And it means that when we changed the model a few days ago while reb of the stable coin portion of the reserve can be invested in DeFi projects. This is for them to vote. Who would be auditing the company? What banks would the reserve be deposited in? And two months from now, they would be able to vote the board out and elect a new board.

I would obviously be asking for the trust of the holders again. But this is for the holders to decide. This is not my project. I can, in two months' time, find myself home having nothing to do with the project I founded. And I'm very, very happy with it. So they can vote you out completely uh by by just because they're the holders and therefore they have the power and theoretically you could just become like everyone else who has to buy it to get a vote on what the future exactly exactly exactly so and i'm

very hopeful that that one won't happen at least not too soon. Yeah. I mean, that would be a pretty, pretty awful turn of events, but you know, I think that the nature of a project like this, obviously, especially when it's early is that people are buying it because they believe in you and they believe in the team and, and, you know, therefore probably will continue to do so for the foreseeable future. But then it still needs to be very clear that this, this project belongs to them and not to the team. And we've taken, you know, it was quite a funny journey with our attorneys who wanted, like a good attorney, to protect us from the public. And we had to change their paradigm into saying, well, everything you draft, our provisional constitution, everything has to protect the public from us, not to protect us from the public. So if you dive to the governance model and to the constitution, you'll find that it was all drafted as if we were not to be trusted.

And the public needs to be to have all all the assurances that the project is actually theirs. I mean, it's bold and it's I mean, it's genuinely altruistic because it's not like you if they vote you out you don't have shares right you only have what you've purchased because there was never anything that was printed or pre-mined or or basically anything to guarantee that you had an early stake beyond your own money and your own belief so that's almost true uh we do have a token called sgn we raised a substantial amount of funds to create saga from vcs such as Lightspeed and Mangrove and Vertex. And they didn't invest in impact investment. We created a token called SGN,

which is convertible to Saga, but it only converts to Saga when the economy grows. So currently SGN is worth zero because Saga is at 100% reserve ratio. It is really worth only what it has in reserve. Only when the economy grows to certain milestones and market caps would SGN be convertible to Saga. And not only that, we've capped this conversion rate by 15, 1.5, so that they never control

all stakeholders can be remunerated for their investment, but they can never control the economy. You thought of everything. Surely not. But this is why we created the governance system so that whatever we didn't think of and or couldn't think of because it hasn't come yet could be changed in the future by the holders of the currency. Okay, so obviously we see the future here and what your goals are and why it's important. Let's talk about what money is and why money is such a problem and needs to be fixed. Could you give us your quick rendition of your view on that? I'll try to make it quick.

It doesn't have to be. Honestly, it doesn't have to be quick because I think it's an essential topic and not one that we've dove very deep into on this podcast. And it really is at the core of everything that most of us are doing here. So I really think that the biggest hardship in explaining what money is,

is that money is nothing. It is just a reflection of a social agreement or of a social contract. And as the social agreement changes, money needs to change and evolve to meet the new social agreement. And this is why, although money is considered as associated to materialism and such,

eventually it's the most spiritual creature, if you want. It is really a reflection of a social agreement. And I think, you know, it's interesting to draw from the past. Money changed lastly when communication changed. When cheap printing was invented and people started reading newspaper, they were not only confined to creating a discussion and then trading within their village from their teacher in the village or with their folks. They were able to exchange ideas and later to exchange to trade with other people. And this was only because it was easy and cheap to print and to exchange ideas. And this is what gave birth to the nation state.

And this is also what gave birth to national money as we know it. It changed obviously ever since. But the fundament of a national currency was created there. And we had our share of the communication revolution in the past 30 or 40 years. And the scope of our trading and communication changed dramatically. And therefore, the scope of our money needs to change as well. We are now trading globally, communicating globally. We're having this call at the distance of 10,000 miles, although COVID and what have you, and money needs to reflect that. So I think that this is the biggest change that we're witnessing, and it's a very radical change.

And so I can definitely understand why it is taking time to change and for people to wrap their heads around the idea that not only governments can issue money. Right, because I mean, at the end of the day, your national currency is just your trust in your government. Exactly. It's the government that's backing it. And what are they backing it with? Well, it's not gold anymore.

So it's just you believing in that government. And I think that you can't believe in your government anymore. I think that that's somewhat becoming clear. Do you think that, how to frame this, you were obviously working on this project long before, you know, COVID, and we saw this sort of exponential money printing and quantitative easing really kick in. So that makes you sort of prophetic. I mean, you obviously were way ahead, but do you think that we're seeing any sort of grand awakening here that more people are understanding the problems with money and starting to scratch their

head and say, what do you mean? You can just keep printing it. So, you know, I don't think one had to be a prophet. I, you know, old people are not dying because they're old. They're old and they are weak. And then the most benign illness can really jeopardize them. And I think that what we're seeing is the same. It's a sclerotic system that has grew old and is struggling regardless to COVID. And came COVID and it is shaking all the fundaments of the system. But the war chest of monetary instruments

before COVID was already empty. We're living for over 10 years with an interest rate that is verging zero from the two sides of the zero. It depends on the country. And this is the main instrument to resuscitate an economy that is going into recession. And this instrument was used

and abused after 2008. And we cannot use it anymore. And then the last resort is to print money. But this is obviously not a sustainable solution. So I don't think that COVID is really changing our reality.'t think that COVID is really

changing our reality. I think that COVID is just demonstrating how fragile this reality was even before it came. And yes, I think that the biggest, you know, they're always telling you that when your taxi driver is asking you about the price of Bitcoin, that's the time to sell. So I'm mostly interested in the perceptions in the public, not when it comes to crypto necessarily, but when it comes to trust. And I think that what in the crypto industry we've been very aware of in the past years, the fact that our financial system, our monetary systems are deeply flawed, is now becoming general availability, right? General knowledge.

The trust in our systems is collapsing, not only with people that are savvy about how these systems are working, but with people that are, you know, eventually the state is supposed to provide security. This is the social contract. We will surrender some of our freedom and you will provide us security in return. And I think that what we're seeing in the past few months is that the states are increasingly failing to provide such security and therefore the trust is vanishing.

Yeah, it's such an interesting time because people who sort of believed in cryptocurrency previously, particularly Bitcoin, and saw it as this hedge against bad actors and corrupt governments, you were sort of viewed as like a crazy person, a whistleblower that you didn't know you were talking about that could never happen.

And then in this one fell swoop, all of a sudden you hear people really starting to understand these problems. With that in mind, though, the end game, I guess, for a lot of crypto people is the death of the dollar, right? They believe that it can hyperinflate like your northern neighbor, like the currency in Lebanon or Venezuela, Argentina, all these places. Do you think that that's a potential reality or do you think that that's a step too far? First of all, I don't think it's necessary.

I think that one of the things we've earned with blockchain and what we're doing in this space is the possibility for diversity. One solution doesn't need to meet all our needs. And for crypto to have a right to live and to prosper, fiat doesn't have to die. And I believe there would be those states that would manage their monetary policy better than others and their currencies would survive. And there are those who would manage it in an irresponsible way, as we're seeing in Venezuela, in Lebanon, in Turkey, in Brazil, in an increasing number of countries, and their currency would disappear at least for some time.

But I don't think that for us to win, they need to lose. It's not a zero-sum game. I agree. I agree. Yeah, I agree with that. Go ahead. So, you know,

and I think it comes also to the tribalism within our industry. We're not really living at the expense of each other. We're all experimenting in a new potential and opening this new horizon, and we'll make plenty of mistakes for sure. And some of us, some of the projects will succeed, some of them would

fail, some of them would change when they fail and then succeed. And eventually, there are many, many problems that are needing solutions. And I think that many kinds of currencies will give solutions to different kinds of problems. So what is the end goal? I mean, in theory, would you like your currency to be the world reserve currency? I mean, is that the like pie in the sky dream or do you see it as solving one problem? For us, the main problem needing solving

is providing a solution for global exposure. So if you're going on holiday, if you're purchasing on Amazon, you're exposed to foreign economies. You're exposed to foreign prices. And we can solution this exposure. And the second phase is that you would be able to pay with SGR. So not only are you not exposed to those prices, so you're holding the asset that covers those prices, but you can pay with this asset without exchanging for currencies

on the way of purchasing something. And this is obviously true for day-to-day usage, but it's also true for corporates, for institutions, for many others. If we can achieve this within the next 10 to 15 years, I'd be very happy. Considering SGR as the world's reserve currency, I think it's for the next 50 to 100 years. And I wish.

Right. I mean, it's logical. I mean, you've created something that logically makes sense and could behave that way. Then it, I guess, just becomes all of the lucky sort of serendipitous things that have to happen on the way for it to be the one that rises to the top. But it really is interesting. I'm curious. I know that obviously you're in Israel. What is the Bitcoin community like in Israel? How is it viewed? Do you think that the government has a favorable view or a negative view? And then how do the people view it? So I think like everywhere in the world, when the prices are going up, people are starting to favor it better. And when winter is coming, then the tides are changing. There is a very lively community here in Israel, very lively in all sorts of ways, in the sense that you put two Israelis together and you get four opinions.

So this is true for the crypto community as well. In terms of government, I think that the regulator in Israel is very conservative. And one of the best and worst things that happened in Israel was 2008. With a very conservative regulation, a very conservative leveraging possibilities, Israel coped quite well with the crisis and that's a good thing, but the bad thing is that this reinforced the regulatory view that being conservative is always the good approach. You see in 2008 it went well, then we should keep being very conservative. I think that the regulatory

slogan in Israel is, if in doubt, keep it out. And this is obviously not very favorable for innovation. This takes a lot of time. And actually, a lot of the projects that are working out of Israel are not really Israeli companies. Saga, for example, for regulation purposes, because we want the oversight of a regulator, because we want a framework that can adapt to those new realities, chose the UK as a framework. That's interesting. It sounds much like the United States. I mean, not in terms of the conservative necessarily,

but the fact that companies in this industry don't want to operate here. And in fact, we find that the exchanges and some of the larger players in this market can't operate here. They don't even try. Everything is blocked out for Americans, it seems. So maybe you even have a better situation still than us. So SGR is actually blocked to purchase from the contract for Americans and for Israelis. So I think this sums up pretty well our conversation. And I think that we can't expect from regulators to be ahead. This is not their role. Our role as entrepreneurs is to challenge the reality.

Their role is to provide protection. What I think we should and can expect from them and are not necessarily getting is clarity. And I think that both jurisdictions are not providing enough clarity for such projects to be taking place there. It's funny, the only thing they seem to have given clarity on is how much insane taxes we have to pay on everything that we do. They're not bothering to regulate what you're allowed to do.

They just care that you pay your taxes on it. And it's, I mean, here it's, it's prohibitive. You know, I don't know if it's the same there, but it's certainly prohibitive. I want to go back, I guess, a little earlier just on the personal stuff. So what made you leave Israel, move to Paris and become a jazz musician? So I was after a long military service. I know it doesn't show anymore, but I used to be a paratrooper. And beforehand, I was a musician.

Being a kid, I always played music. And so it was clear to me that after this rough patch and a rough time, I wanted to play. I wanted to do something that is not about operating or managing anyone, but about doing something for my soul. And my parents are French, so I'm a native speaker. It was the right time to go to Paris, study there, play there. It was a wonderful time. So you were studying music there as well? Yes. Yes, I was.

And so what kind of shows? Go ahead. Sorry. Yeah, I was studying in a jazz school that was called Le Cime, which is the first jazz school in Europe, ever established in Europe. As you would imagine, a Parisian scenery. It was based in what used to be a brothel before. Could you see yourself returning to that?

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transparent and fair with regards to fees and orders, secure and far ahead of the curve in regards to innovation. Go to equus.com slash wolf to get 5% off trading fees. That's E-Q-U-O-S dot com slash W-O-L-F to get 5% off of your trading fees. Sign up now. Someday, sometime playing music, definitely. Being a musician by definition, no, I don't think so. I think it brings a lot of stress, a lot of ego into something that needs to be detached from it. And I definitely don't want to be dependent on music for my day-to-day life because this is how you end up. You know, the epiphany that made me leave my music career is when one of my teachers

asked me to replace him in a gig. And he's really one of the best jazz flutists in the world. And he was playing a gig of music that has nothing to do with jazz. And I asked him, well, why are you playing this? He said, you know,

to make a living, I need to teach people like you and I need to play music like that. And I said, well, if he's such an incredible musician and that's what he has to do, then I'm not sure I want this life. Yeah, music, you touched on it

and I think you articulated it really well. It's an amazing skill to have, an amazing release, but it's a horrible job. You know, unless you're one of the very fortunate few who can... But you know, I think I'm... Go ahead. Definitely. But I think that a lot of what I did in music is escorting me today, because just like money,

music is a very abstract piece of work that operates within invisible rules. And money and tech products are pretty much the same. You create a new world that wasn't there a minute ago with software, and the rules are invisible, but they are very visible when you experience the results. So I think that this ability to operate within an abstract territory is common to music, to money, and to software. That's really an interesting comparison to draw. I've always found trading to be very similar to music, at least for my brain. Charting and sort of the creative, that it comes off

of me to a creative pursuit. It's almost, we were talking before about you using Cubase to record, but I find using TradingView to chart to be very similar, the shortcut keys and all those things to using Ableton or Logic or Cubase or one of these programs. And so for me, I find it to be very creative and it fills that sort of,

that void that I have from not doing music anymore, which it sounds so strange, but it really is not so dissimilar. I think I understand it. I think I understand. I wonder what would be the equivalent of groove in trading. I don't know. Making money, I guess.

I can tell you what the equivalent is to forgetting your lines on stage and not remembering what to play because i've experienced that self-explanatory oh man yeah it's really terrible so um we talked sort of a bit about regulators do you think that there's anything that can um kill bitcoin or cryptocurrency at this point i always see i don't really think so but i do think governments are probably the largest impediment i mean do you think that there's anything that a Trump tweet or something that the United States government or Israeli government could do that could stop this? No, in the long run, definitely not. Can government hurt the space?

They can, they have. They can hurt it further. Can they really revert? You know, with all the innovation in the world, the undo button, uninvent button is yet to be found. So can we have an upstart moment? Probably, but it doesn't mean that file sharing would disappear simply because it solves a problem and it's there and it can happen therefore uh it will

happen and i think that there is another thing that is positive that we're seeing and that's that governments and regulators are caught in a sort of a prisoner dilemma you know if you halt it if all governments in the world could unite and close the ability to use crypto, that would have been a big problem. But when you see the way current international affairs are being run, mostly with Twitter tribalism, the expectation that all governments will unite is ludicrous. And therefore, if one government prohibits it and makes every effort to kill it,

it only means that they're handing the innovation and the leadership to another government. And I think that this is something that many governments are pretty afraid of. And therefore, it is not happening. I think we're seeing that in the United States. I mean, I think that they're falling tragically behind in this space, certainly crypto space, but in innovation in general, you know, just because the strict regulations now largely an inability for, you know,

intelligent foreign people to come here and innovate has been somewhat stifled in the past years. And those are the kind of things in the future that could be the death of superpower, I think. I agree, but at the same time, I wouldn't be too quick to write the elegy of the United States. The United States was late to the game before in different areas, but it has a very, very strong infrastructure of knowledge

and of entrepreneurship. And so it's really a matter of decision-making. And I think that if and once decision-makers would understand the implications of this policy, then if the United States wants to be back in the game, it will be back in the game very quickly, very rapidly, and probably very rapidly would be closing the gaps that are being created. So, I mean, do you believe now we've weathered this sort of horrible crypto winters? People like to say in 2018-19, we've

come back strong over and over again. I mean, do you think that now we are sort of at an inflection point or at the starting point of the really true innovation? And I'm not talking about price. I'm not talking about the price of Bitcoin. But I mean, do you think that, you know, now we're really seeing institutional adoption to some degree and people starting to open their eyes and see how essential the technology is and what the promise is of deflationary currency and these ideas. So I don't think yet. We are approaching in the general conception of what can be and cannot be trusted, but I don't think we are there yet.

Again, the price is not the interesting thing here. I think that what's interesting really is the circles that are coming in to use and the type of usage. So even when we're seeing institutionals coming in, they are coming in for the speculation and for the volatility. They're not yet coming in because they are considering that we are providing an alternative to the existing system.

When this will happen, even in small amounts and in small numbers, this would be the next phase for me. The phase where, you know, we are seeing this phase happening in developing countries. In Argentina,

we are seeing people that are holding Bitcoin as a store of value and holding stable coins as a store of value simply because they are deprived of a store of value of their own. Whoever owned the Argentinian peso lost about 70% of value within three years. And so they're fully understanding that we're providing already a better alternative. Is it the case in the rest of the world? Unfortunately, not yet. But I don't think that we need to be surprised.

It is really about trusting. You know, I remember the first time I told my mother and father about what I was doing, and they were horrified. I was describing all the problems we had with the nation state. And this is what they were born into. My grandparents were born into. I was born into. We were born to believe in concepts.

And there is something about what we're doing that is offering a radical view of radical change to this concept, and it takes time. Yeah, you're saying you cannot trust the institutions that you were taught your entire life to trust. Yeah, I'm saying those, and you know, I'm not saying it as a libertarian. I'm not saying we need to annihilate them. I'm only saying one thing.

Look at those institutions that once functioned and provided a lot of advance to humanity. Are they functioning now? Are you feeling that your representatives are representing you? Are you feeling that your central bank is storing your value? And if the answer is no, then we need to start looking for how to mend it, not to destroy it, but how to provide a sort of assistance to it.

I believe that the state has not done its role and it's a part of our past. I do think that it sorely needs to change. It's interesting you touch on the fact, you know, you said two things there that were interesting. One of them you're solving, right? Is the central bank representing your interest? Obviously not. You have a solution for that. But are our politicians, is our government representing us as the people? I think most people can obviously say no. And that I think is a much more difficult fix and can't be changed by new money, right? No, but I think it can be changed by a lot of the things

that blockchain brings in the sense of representation. I believe that blockchain is eventually a governance technology. It's not a financial technology. Bitcoin, from a technological standpoint, Bitcoin can be better implemented using a technology that is 30 or 40 years old in terms of scalability and whatever. The only thing that could not be implemented without blockchain and decentralization is the decision-taking mechanism. What qualifies as a transaction? What qualifies as a protocol? Who controls the protocol?

And how is this protocol changing? And these are all governance questions. It is a financial governance question or monetary governance question, and therefore we're using it for finance. But we can use it for many other things as well. The ability to create a contract between people, a representation contract, without having a central governor to this contract, could come up to be a part of the solution of the trust crisis we have with our institutions. How so? I mean, can you expand on that? Like, you know, practical examples of how we could use it to better the process.

This is a rabbit hole. I love a good rabbit hole. I always go. We've got time and the hole is deep. Go for it. So I like to look at Switzerland as a model and as an example, because it is extremely fractal and extremely liquid. You have in Switzerland mechanisms that are very similar to consensus mechanisms in the form of referendums.

So you have direct democracy. Whenever it comes to fundamental questions that are not about expertise, but about the fundamental core values of the Swiss society, then the government is obliged to turn to the people and get their consensus, not via representatives, etc. And this is providing a very good form of trust. But not only that, what we're seeing in more and more Western societies is a fragmentation, a social fragmentation. And the ability in Switzerland to create those cantons,

to create a very, very thin level of federal agreement on what it is that we need to agree if we share a geography, right? The territory. Having a common army, building roads, etc. is in the federation, but all the rest is left to the cantons

and to the communes. And this allows the creation of very small circles of agreement that are very tight, not as fragmented. And I think that this is something that is accountable for the stability

that Switzerland is experiencing. We're always looking at Switzerland and saying, well, it's green and it's beautiful and they have great chocolate and this is probably why it's so peaceful. No, it is also very peaceful. If you think about it, Switzerland is three different peoples,

three different nationalities, three different languages, surrounded by countries that just up until 50 years ago wanted to devour it, and still it has managed not to go to war, not to go through tremendous crises. And I think that a part of it is a governance system that is fractalic and is reflective of the society. I think that if we could achieve the same with blockchain, one can imagine, for example, that education,

most of it now taking place online i don't know how it is in new york now but in israel we're going back to quarantine next week for a month with no education system everything done remotely one would imagine that my son would be able to study with your kids although you are in the states and i'm in israel and that we can create a sort of education governance system simply because we share the same core values and that we can vote on what would be the curriculum of such an education system. And this can be done by technology without the central government. We will probably not share a ministry of education, but we can share a virtual contract,

a virtual smart contract, allowing us to vote and allowing us to implement a social contract for education between people that are sharing the same value, whether they are in Kiev, in Afghanistan, in New York, or in Tel Aviv. there. I mean, there are versions of that, not with the consensus mechanism, but I had a guy you may know named Didi Taihutu on the show recently. He's famous for being the Bitcoin family. He sold everything, went all in on Bitcoin and has traveled the world basically evangelizing. But there came a point where his kids had to go to school and they're all over the world. And I believe it was called Galileo. I don't know, but it was some sort of homeschooling program that's international. And you sign up and

your kids, you know, they're in a classroom with children all over the world. It has no location base and it's something similar to what you described. So knowing that that exists and then taking it a step further and saying the parents, you know, or the families actually decide on the curriculum or the path, you know, based on consensus makes so much sense. And, you know, it would be really interesting to see that. And I think that we're seeing a lot of systems, as you said, go online. I mean, you and I are on a Zoom call right now, right? We could be doing a business call right now instead of being in the office. So I think that that is the future. And maybe that COVID has actually in some ways been the silver lining is that it's going to push us more towards those sort of situations.

It's funny where you can go ahead. Yeah. I was just thinking that we're using the word blockchain and it doesn't necessarily mean what we think it means for me, the revolution is not blockchain for me. The revolution is the ability to provide a social contract, a technological online social contract that is not prone to gaming and that does not depend on a government or a geography.

Blockchain is just an instance of such a contract. Bitcoin is just an instance of such a contract. But I think that if you ask me what Bitcoin mostly brought to our life, it's the understanding, this epiphany, that those things that were always provided by governments can be provided otherwise as well. We used to, we were all born again, we spoke about it, to a reality where a government is the only issuer of a currency. And here comes a technology that allows the issuance of a currency, not by a government. I think that this could be then abstracted to many layers of our lives,

where governments can do the job they're great, where they cannot um you know just think of social of of uh of climate change how can a government deal a national government deal with a global problem it simply can't we've seen that yeah um yeah it's it's really it's a really really good point so but that said so obviously we all were taught to trust our governments and trust our currency. I would argue, and I've had this conversation with others that, you know, now the replacement of governments is large corporations at this point, right? I mean, large corporations probably have more control potentially than governments. And now we've seen both governments and large corporations start to move towards current digital currencies as well. Obviously, Libra is the big example.

Facebook, I think most people can agree that maybe Facebook's not the ideal person to control our money. And now we have countries moving towards digital currencies which have their own concerns. So I think we can all agree that the national currency system is somewhat dying and needs to be replaced. How do we prevent that replacement being worse than the original? I really think that, you know, if we move from governments to corporates, we're running from one burning house to another and possibly to a worse one. Because with governments, we are still having the ability to elect

them. And I think that changing democracy for plutocracy would be a very, very bad idea. And the problem for me is not with Facebook as Facebook. Facebook has done many great things and we're all using it. The problem is with the structure of a corporate. The structure of the corporate is built

to provide, to generate value for shareholders and to be accountable towards shareholders. And shareholders and currency holders are not the same. Right. So if we are to hold the currency, but the incentive of the corporate would be to enrich the shareholders of Facebook,

then we are in a system that is misaligned to begin with. And I think that this is a very weird corporate. So we cannot draw any dividend from the corporate. And the board of the corporate can be elected by the currency holder. And I, as a founder, don't have any right just because I founded this corporate. So we took a corporate, but we took all the elements that are misaligning the incentives out of it. Hopefully, some days, you know, corporates are something that we were born into as well, but they didn't always exist. The concept of borrowing, of limited liability, is a rather new concept.

And I think that what we would eventually need is a bill to create a new type of organizations, something like a sovereign society, a decentralized sovereign society, where something similar maybe to a technological co-op, which I think makes more sense than a corporate for the issuance of a currency. We need a technology-based kibbutzim, right?

We need kibbutzes for blockchain. So I was actually raised in a kibbutz. I spent most of my childhood in a kibbutz. I'm not sure that a kibbutz. I spent most of my childhood in a kibbutz. I'm not sure that a kibbutz is a good idea. The communist side

of a planned economy, it's a great dream. The idea that no one holds anything and everything is shared, and the base premise that everything takes what they need and gives what they can is a very noble cause, but eventually when it meets human nature, the base premise that everything takes what they need and gives what they can, um, is

a very noble cause. Uh, but eventually when it meets human nature, it tends to malfunction. And, and this is the, the, the sort of most of the kibbutzim in Israel. Uh, it's a totally separate topic, but are they, are kibbutz is somewhat, um, dying. I mean, I spent a lot of time in Israel in the 90s. I actually lived on a kibbutz for a summer when I was doing an archaeological dig, which was funny because I thought I was going to be Indiana Jones. But in the end, because I was the one American, they just made me move heavy rocks and wheelbarrows all summer in the middle of the desert. It was a kibbutz barkei

right there near Hadera. And even at that time in the 90s the desert. It was a kibbutz bar kai right there near Hadera. And even at that time in the 90s, they were saying, you know, the kids grow up on the kibbutz, but they leave. So the kibbutzes are dying because, you know, the younger generations aren't staying to control them. Is that the reality? So most of the kibbutz are not dying anymore simply because they morphed and are privatized. And many people of my generation are going back to the kibbutz.

Most of those kibbutz who had the courage to change, to understand that private ownership is not a bad thing and that initiative and entrepreneurship is what can make the kibbutz succeed. In those kibbutz, they are flourishing, but they have changed dramatically. The sense of community, of shared value remains, but the Bolshevik elements of the kibbutz are long gone. Which, I mean, that makes a lot of sense in modern society. And I think the kibbutz are long gone which may i mean that makes a lot of sense in modern society and i think the kibbutz like uh fundamentally was formed out of need you know at a time when the way that the country was developing the threats from the outside and and the geography i

mean what if you're gonna build something in the desert there's just not many ways to do it you know i guess but it's interesting and it was an incredible experience for me to have, you know, lived on one for a summer and to, to see that, um, it's just really hot. They used to throw a man, throw us out there in the middle of the desert. I'm telling you, I just had a wheelbarrow all summer. All I did was move rocks and dirt. This hasn't changed. It is still very hot in Israel.

I live in Florida now. So now it's just hot and wet at the same time. So, yeah, but going back, I mean, talking about the corporations, it's interesting because, I mean, they're like governments, but with more of your data. I mean, it's really, really scary. I think they're a much bigger threat. People worry about their privacy with the government, but your privacy with Google and Apple and Facebook is a much bigger issue. Although, if we move to central bank digital currencies, I do think that the privacy of your transactions, the beauty of cash, the good things about it do completely disappear. I mean, do you think that that's a threat? So, first, to the first part of your statement, I think there is another menace from corporations,

and that is that you cannot vote to replace them. They're not represented. Corporations are existing under the premise that you're purchasing out of your own volition and that if you are not pleased with what you're getting, you can go elsewhere. If you tell me where do I go elsewhere from Facebook, I'd be very happy. I don't know where. To WhatsApp or to Instagram, back to the same Facebook, I guess.

And the same goes for Google and Amazon, right? So you're not really free to go. You're not protected by competition. And at the same time, you're denied from the ability to actually impact from within by voting. As to CDBC, yes, definitely. Many states have passed rules that are prohibiting banking services to be coupled with product and other services. But when it comes to CDBCs, this is really coupling the two, right?

And privacy is a problem, but it is not the only problem with CDBC. It's a sort of patch. You know, when I lived in Paris, my first time in Paris was in the 90s, and they didn't have internet. They had a service called Minitel. It was a sort of a weird machine that had a quasi-internet in it, very, very limited. And then they were about 10 years behind everyone with the internet because they always tried to patch this machine into becoming the internet of France instead of understanding that it's a whole new thing. And I think that CDBC is just like this Minitel. It is patching old fiat currency into an era or into a technology that doesn't belong why would the

central bank use blockchain i didn't hear of any central bank wanting to decentralize the monetary policy committee i don't think that if the federal reserve would issue a digital dollar it would mean that we would participate in a consensus of determining the interest rate then why use blockchain there are better technologies to digitize money, centralized money, than using blockchain. Other problems, if the bank is offering a CDBC, who would be the custodian? Would they be able, as a citizen, to open an account with my central bank? If I am, in times of crisis, how would it not promote a run on the bank on commercial banks? Of course, if I can hold my money with a central bank with the base of money, why would I hold

my money in a fractional reserve bank when everything is in crisis? So this is really about, you know, a thought of a three legged chair that I don't think is thoroughly thought. And this is why I think we're mostly hearing of central banks discussing CBDCs but not actually issuing them. I mean, it seems like doing it would be a benefit to them and not to us, certainly, for all the reasons that you just said. They want your tax money? Just take it away from taking out your wallet digitally and don't even ask I mean yeah it's you can't hide cash in a mattress

if they have access to it and it's digital so really gives you no the flip of the coin is that if they are printing money like they are now instead of buying bonds with it they would be able to distribute it as a sort of Friedmanian helicopter money, right? That would be a much faster way to do stimulus. I mean, the way they did stimulus in the United States, there were reports, obviously, they first they did the, you know, they talked about digital dollar, but first they did the wire transfers to anyone whose information they had. Then they started sending physical checks. And apparently when that wasn't good enough, they started sending these debit cards to people. Um, and they came in like a generic packaging that looked like junk

mail. And so people like widespread articles that people got it and they threw it out before even opening it. And even if you opened it, it came with like some, like, this is your money gram card. And it didn't even say it. And then they were encouraging you, basically, you could only use it to spend, you know, to, you couldn't put it in your bank like the other people could, or you could do it $500 at a time. I mean, it's just absurd how broken it is. And even it's like, even when they wanted to give people money and help them, our government is too big and slow to actually do that effectively. I mean, it's so broken. Yes, it is struggling.

But again, I don't think we constantly blame them. And I don't think that they are to blame. It's the nature of the beast. Right, society has changed. And its institutions need to change as well to meet the new reality. So, what's the future

for Soger? I mean, obviously, you've touched on the fact that in the very near future, you'll have a lot more votes and be making more decisions. But, I mean, scaling out, what do we see coming? So we've also changed parts of our monetary model so that this decorrelation of the bonding curve

takes place quicker, introducing an incentive for early adopters to join the currency and to become a part of the solution. What I expect is that Sogor, the next one or two years, would mostly be used as a store of value because it has a very particular nature. It is a part stablecoin and a part volatile commodity, right? And it's always liquid from the start.

You can always sell your Sogor back to the contract or buy SOGR from the contract. So I think that it is really well equipped to deal with the realities that we are experiencing now. We're very happy with the choice of SDR. It's just a matter of looking at how the dollar fared in the past few months. We started, we launched Saga. The SDR was at $136 per SDR.

It is now at $142, not because of us. Yeah, because the dollar's weakness. The basket was designed, exactly. And the basket is designed to diversify and to mitigate some of the risk of any particular currency. So I think that this is really our time to shine. We've waited to provide solutions for a market in these conditions. And we are hoping that our solution would be trialed and successful in mitigating some of those problems.

And where do you buy it? So you can buy SGR directly from the smart contract. The smart contract, again, is a bonding curve. It's a market maker. You can also buy it on BTIM Global, on Liquid Global, on several other DEXs with partners such as Celsius and Simplex. With Celsius, you can also deposit your SGRs, currently still SGA's, and earn interest. And we're looking to expand that to many other DeFi projects.

It's in your C20. And we will be announcing very shortly a few more exchanges that are listing SGR. And so, yeah, the places to buy it are growing very quickly. I'm proud to say, actually, that Celsius is our newest sponsor on this show, and I absolutely love what they're

doing, and I think they're amazing for those very reasons, is that they give you so much flexibility on what you can stake, how you can make money money and how you can do it. And a great community as well. When you buy it on an exchange, just from, uh, from the opera, I guess, from the standpoint of how it works, does that then purchase it from the smart contract or is the, you know, how, how does it, what, how does that actually work if you're buying

it on an exchange and not directly from the smart contract? So if you're buying it on an exchange, it means that someone bought it from the smart contract. And then it's a secondary market. And then he's offering it on the exchange. Right. It's secondary, like an exchange should be. Yes. Yeah. Exactly. So that's exciting. Sorry, there are many more elements to the monetary model,

but again, this is another entire rabbit hole. There is a price bend that eventually grows so that instead of buying from the contract, people are driven to buy from exchanges because the contract has a bid-offer spread. And so people are coming to the contract only to adjust the supply of money. This is another central banking instrument that is put to use in our industry.

So who on your team understands the ins and outs and the very small details of monetary policy? So our two experts, our chief economist is Barry Tuff. Barry used to run the reserve department and later became the head of the markets operation, the Bank of Israel. And Barry still is a senior advisor to the IMF, mostly to developing countries that wants to stabilize their currencies. And Ron Sabour, chief scientist, who is a quantum physics PhD that has reconverted. We have an advisory board. When Barry came on board, Barry initially joined us as an advisor,

but he was very fearful that we're building something so innovative that it doesn't have comparables, and he wanted to have sounding boards. And this is how we started to create an advisory board, and we were very, very blessed to have Professor Jacob Frankel, who was the governor of the Bank of Israel. And up until a year ago, the chairman of JPMorgan Chase International. Professor Myron Schultz, who I believe doesn't need an introduction, the Black and Schultz model. And Professor Dan Galay, one of the two inventors of the VIX, the volatility index, just to name a few of them. And their job was mostly to attack our models, and attack they did. They were very diligent at it.

And this allowed us to defend the models and to embed them. Wow, I think in the future we should lead all conversations with that group, because it's, I mean, it's incredible. And it, well, you know, in this space, I think that people's default assumption is that these projects are kind of like, you know, fly by night or that, you know, 99% of them will go nowhere. And then when you understand how deeply you have,

how deeply you guys have thought about all of these issues and, and down that rabbit hole you have gone. It's, it's really, that's quite an impressive resume and group of people. Thank you. I, you know,

I, I never opened by it because I think that the proof needs to be in the pudding. Of course. So yeah, I'm, I'm considering myself very, very lucky to be entouraged by such a group of people.

But eventually, is the pudding good or not? And I believe it is. Right. So many of these projects, though, and rightfully so, the innovators are in their 20s. They're late teenagers. They're very young. But that doesn't work when you're creating monetary policy, right? And that's really what you're doing. That works when you're kind of coming up with an innovative new technology, but when you're reinventing money, you have to have people who have spent a lifetime thinking about that. And I think that what's beautiful about the team is that you have a combination of both. So our technological team

is very young and very enthusiastic about technology. But we also have the expertise, the experience of people that have led monetary policy for decades. And they are open. you know, Barry, for example, joined as an advisor and was so thrilled by this new possibility

and this new technology that he decided to come and work with us as a chief economist. So this is something beautiful to see, this inter-generation collaboration. I think it makes you a very unique project. I know that we're up against it with the time, but I wanted to touch on one more thing, this massive DeFi craze that's obviously happening right now.

I think obviously it has its issues and a lot of it is money grabs. But you've sort of touched on the fact that governance is really the key to all of this. And that's really the innovation of the blockchain and consensus and governance. And I think it's interesting because those were not terms that you heard thrown around ever in 2017 and 2018, maybe by the people who are really in it. But now I think because of DeFi and all these governance tokens and the idea, that's actually becoming the spotlight of blockchain and cryptocurrencies.

So maybe, I love your thoughts on it, but maybe that's really the main upside of this huge DeFi craze. I think this is definitely a big upside. And I think that the jury

about where DeFi is going is still out. But if there is an upside that is definite, it is the awareness to governance, you know, up until a few months ago, governance discussion were considered to be a meta discussion. There is the real thing. And then there is the governance.

Uh, it's, it's the meta. Uh, and, and I think that governance is, is really core. And I think that governance is really core. And I don't think that it is different

than our previous discussion. It is about people understanding that what really matters is how much they control the stake they have in a project. And this is about governance. Governance has become a word that is not very sexy, simply because

we grew used not to trust our governance systems. And here we are offering new governance systems that one could trust and where one could actually participate and it can actually be thrilling it can actually be even fun and so I think that governance is is definitely the awareness to governance in our industry is definitely on the rise and rightfully so yeah as long as you're not putting all your money in sushi's or yams or whatever the the food food yield farm of the day is. I think that that is definitely the silver lining. So after this, where can everybody keep up with you personally

and then follow the project and get your updates? So IDOSDH on Twitter. That's for me personally. Soger Currency on Twitter, Facebook, LinkedIn. Soger Currency, SGR, Telegram group. And subscribe to our newsletter on our website. If your community keeps changing your name, you're going to have trouble on social media with everybody keeping up.

You're going to have to buy every single future domain and get all the Twitter names. Yeah, we don't intend changing it again. In short, we started in Switzerland and then we migrated to the UK where there is a company called Saga Leisure, a huge tourism for the third age company, but they still believe that someone might confuse the two and we agreed to rebrand.

And Saga is actually the plural for Saga. So we're in the same neighborhood. I didn't know that. See, I learn something every single day. That's cool. That's very cool. Well, thank you so much for taking the time. And like I said, I know it's a Friday night for you, but really valuable information.

And I think that what you're doing is noble and I really hope that it works. It really does, as you explain it, sort of, you know, address all of the issues as opposed to just part of them. And it's a rare project that does that. So I really hope to see you guys come out on top. Thank you so much, Scott. It was a real pleasure. I enjoyed the conversation very much.