8 - How to go Bankless

Transcript

[Music] welcome to bankless where we explore the frontier of internet money and internet finance this is how to get started how to get better and how to front run the opportunity this is ryan sean adams i'm here with david hoffman and we are here to help you become more bankless david this is going to be an awesome episode this is kind of the culmination of all of the groundwork that we've laid across the last seven episodes because we're going to get into the actual practical

tactics the how to go bankless today uh so what are we gonna cover man yeah where all of our previous episodes were theory this is applied banklessness this is applied science and so this is where the rubber meets the pavement so that we're going to talk about very specific things that you can do that make you a bankless person and we're going to talk about why that is important what that means for the individual and then also very specific strategies that you can take uh crypto and especially ethereum evolve very quickly so we're gonna do our best and make this a timeless episode uh but there's always new things on ethereum there's always

new money legos and so we're gonna probably have some version of this episode you know over and over and over again but this is the first one this is the big one so i'm excited about it absolutely and it kind of teased up some some other practical episodes tactical episodes to come i you know the next three episodes we're actually going to talk about the three most important defy money protocols that we think bankless listeners should be aware of in their journey and we're going to do a quick drive-by of some of those those protocols but this is going to be structured we hope in a way that helps you really embark on the journey in a way that makes sense because we're first going to start with the why the goals then we're going to talk about making a weekly

level up plan a process to continue improving and becoming more bankless we're going to talk about the things that you can do actually implement and then we're going to talk about how you measure the outcomes so really excited to have a practical episode today but before we get into the practical let's talk about a few big picture things that are going on so one thing that i just became aware of and when listeners hear this we're recording a week before so when listeners hear this this will be the previous week but it feels like the final boss has emerged again in cryptocircles when we talk about the final boss we're usually talking about the government a crackdown of some sorts or uh murmurs of a crackdown and this

time it was a report that the this ominously named orwellian named financial stability board called the fsb it's a group of central bankers it's a report that they put out on tightening up the regulations of stable coins like usd and then maybe potentially prohibiting those are their words the decentralized ones like possibly a die now this is just a consultative report of course so it's a recommendation by central bank consultants to the central banks of the world but it carries some weight i mean there are there are the 20 g20 countries uh on the list that are advisors to this uh these

recommendations are going to be read by all of the central banking powers of the world bank of japan the fed of course the euro central banking system and this is a quote that that i kind of picked out from one of their rules uh recommendations about the governance of stable coins they recommend that central banks implement the ability to require an arrangement to be governed in a manner that facilitates effective regulation and supervision okay so far including by prohibiting fully decentralized systems prohibiting fully decentralized systems my translation of that is central bankers at least this body

they want to roll their own centralized digital currency they want to possibly prohibit other options bankless options decentralized options so they can continue to control you and stay in power again this is not necessarily being implemented it's a recommendation but it's definitely a disturbing possibility i mean how does that strike you david like what do we do if there's the final boss emerging again and there's some kind of a crackdown on the decentralized money systems that we're all using in our everyday lives there are some parts about this story that just stick out to me uh mainly the

name of this organization the financial stability board which to me is pretty oxymoronic as if you could have stability and finance together you know finance is a commitment to not having complete stability right like the the way finance works is you commit to some sort of volatility so like the name itself just is oxymoronic and then they follow through in that nature with with prohibiting fully decentralized systems like that's a moxie moronic statement you also can't do that and so i'm i'm already skeptical as to the people who are making these decisions on this board and how educated or informed they are about

the about the advice they are giving now when it comes to regulations it's definitely it's something we should all be remembering that that things like usdc which we pin as you know totally centralized and permissioned uh it's it's still far more free than any other alternative that we have found uh before crypto right so i mean ryan if maybe you can go to coinbase and you know deposit your dollars and mint usdc and and circle and coinbase know who you are because you've kyc and so they know that money but then you can send me that usdc and i don't necessarily have to have kyc'd with coinbase or circle or

whoever that is in stark contrast to something like paypal where you can't pay me through paypal unless we are both kyc'd and so this new structure is kyc at the fringes but totally uh anonymity in the center and that is probably one of the big issues that uh that the fsb is concerned about uh the the the lack of mapping on to the old old system um in terms of of auditability transparency and kyc information yeah it absolutely is and and you're right about the name i mean there's there's a lot you can get away with when you name your organization the financial stability

board and you talk about the threat of crypto stable coins as a threat to the financial stability of the world you know governments tend to couch it in in such a way so that they can get policies done that they want to get done in including surveillance policies like the ones you're talking about the good news here is um of course this is just a recommendation so it's not something that's necessarily going to be ruled out of course central bankers are going to keep it in the back of their mind and you know if if crypt if they perceive crypto as a threat uh they they may um pop it back up and and roll it out in some way but

the good news is it's very difficult to take down these decentralized systems they are structured in such a way that central bankers and central authorities cannot take them down without taking down the fabric of the internet itself um that's certainly bitcoin structure that is also ethereum structure as long as there are individuals around the world who are independently running nodes the network will continue to run so i also think it's um you know it's it's it's something that even though the government may want to um take down crypto at some point in the future if the final boss gets angry

they won't be able to which is a nice property and hopefully what ends up happening is um they throw up their hands uh and just let it be and uh think about how they can actually use it um for for some of their purposes and for the good of the world as governments have kind of adopted other open protocols like internet protocols tcp http that sort of thing so that is the hope uh and that is upside but it is something that we should keep in the back of our minds that the final boss could pop up and uh and try to knock this thing down a peg or two at any point in time over the next decade uh david another thing that has kind of

been on my mind i was going to ask the bankless community this week but i'm curious your thoughts what's something that you've changed your mind on in crypto yeah there's so many different things that my ideas have changed about and that's kind of it's kind of hard to say because if there's never any one black and white moment where you have one opinion and then you have the other opinion but over time there's definitely been a trajectory of a change in thoughts i definitely value proof of work more than i did previously i definitely value a hard capped currency or at least the potential of one like bitcoin uh in contrast to one that doesn't have a hard cap things like this

i've i've become more more open to um as for one specific thing that i have very vehemently swiveled on changed my opinion on is the nature of centralized assets inside of of maker dow or permissioned assets in maker dao i i used to think that we should only have you know trustless permissionless assets in maker dao but i think i i view maker dow now as a a permissioned centralization risk filtering system uh and so all of the assets that are inside of maker dow that are permissioned like like you know tokenized real estate or or usdc or or bonds anything that's

going to be permissioned i think maker dow what we should view maker dow as is a a risk filter for you know things like permissioned risk or centralization risk and so that's okay to me absolutely yeah those those are definitely um you know good good shifts in your mind i think it's important that we as a bankless community keep our minds open uh to new things that emerge and new evidence that emerges and don't become kind of close-minded with the way that we are viewing these structures everybody in this space is constantly learning it's really important to re-evaluate assumptions let new information in and i think the best thing that folks can actually do to sort of test their

assumptions and test their theses on things is to actually use these systems for uh themselves a lot of you know crypto has been about speculation you know buying an asset uh just because somebody tweets about it or a youtuber told them so or they think it's going it's got it's gone up 30 in a you know a couple days so they think it's gonna go up another thirty percent don't do that use the systems that is the best way to be an informed investor in this space if you know you haven't used it like why are you trusting someone else to tell you that it's such a great system and that is definitely a focus of what we're doing in bank list going on the the journey is active requires

active participation there are many other money verbs besides just hold so go use those money verbs use the systems that we're talking about that will make you a more informed investor and open your eyes to the possibilities here so uh david before we get in man we should talk about our sponsors u.s listeners i want to tell you about rocket dollar do you have a 401k or an ira chances are it's jailed inside of your brokerage inside of your schwab account you don't have good access to crypto the crypto you do have access to charges a premium price if you're buying eth inside of a schwab account you're paying 5x the price of spot don't do that it's a complete rip off you need to exit your crypto out of retirement

account jail out of brokerage jail rocket dollar can help you do that so they can help you create what's called a self-directed ira self-directed 401k they help you move the money from your brokerage to a designated account where you can actively invest in crypto assets like ether and bitcoin and then you can also stake them in a tax sheltered way break your retirement account out of jail use rocket dollar go to rocketdollar.com and grab the code bank list to get fifty dollars off a subscription to their service rocketdollar.com with the code bank list to get 50 off this episode is going to be all about financial independence using crypto

tools on ethereum go to xerion.io because a lot of the things that we're going to talk about in this episode you can access from xerion's interface xerion is the front page to the defy ecosystem so all these different tools like uniswap 0x kyber compound maker dow they're all integrated into the xerion front end so instead of going to each and every individual d5 protocol that we talk about on this podcast instead you can just go to xerion you can do all the different money verbs that ryan talks about here you can hold your assets in your wallet and get a display of what

you own inside of xerion but then you can also make choices like to lend or invest in uniswap or bancore pools you can lend out your dying compound you can go leverage with fulcrum all of the good defy applications on ethereum you can access inside of xerion so it's a really great bankless tool and it's going to be a really important component of strategies that we talk about in this episode so check them out at xerion.io all right guys let's get to the goods this is how to go bank list this is the beginner's guide this is the intermediates guide this also touches on some advanced concepts but we want to have i want you to have a framework for approaching this and i think it all

starts with the why it starts with defining why you're going bankless why you're here and then using that to create some goals but let me ask you david why are you here why are you going bankless why are you into crypto ethereum and bitcoin i'm here in the crypto space for my independence i believe that crypto offers me tools in order to become completely independent from the world around me um the the way that at least the u.s economy and definitely the rest of the world to some extent as well the way it's structured is to really really take away your freedoms and your independence so student debt credit card

debt a mortgage you know a car loan loans are a way or or debt is a way to reduce your freedoms and reduce your independence and and banklessness and crypto economics are inherently debt-free phenomenons right so like if you have a vault with maker dow it's fully collateralized so even though you owe die you're never in debt and that kind of structure is found throughout crypto and so crypto as a system is a very freeing system not only is it a an anti-debt system but it's just an internet native system that that owes no homage to any single you know nation state or economy and so it's about being

a sovereign individual it's about being your own person it's about personal finance and freedom uh if you owe no mo if you owe no money to anyone else and if you hold your own assets in your own ethereum wallet rather than in a bank you are a free person and that that is it's it's a weight off of your chest it's a weight off of your psyche and this goes down to the heart of what it means to be alive in my opinion uh and so you know it's using these bankless tools like uniswap is is this exchange but it's this freedom tool uh and so is compound and so is maker dao and all of these applications on ethereum are freedom tools where you get to opt out

of whatever coercive system that you may find yourself in and use these bankless tools in order to you know claim your independence i mean this is why our ancestors went off west you know on the east coast things were stagnant there was already an upper you know class that sort of ruled things but a a group of individuals and increasing numbers decided that there was more opportunity for them out west there was a gold rush going on there was some payoff and there was this sense of adventure and most importantly there was this this independence this feeling of independence and freedom the ability to kind of you know start from scratch with all sorts of new

opportunities um there's also a lot of danger in going out west you know you ever play the game oregon trail where you know like people get dysentery and they break their legs and they die um going on the bankless journey is kind of like that but the reward is freedom it is independence you know there there is another group a personal finance group that i kind of identify with and i know we have some of the bankless community who who do as well uh it's called fire um so you can look up fire f i r e uh you know there's subreddits about it and fire stands for financially independent retire early so the goal of fire is basically to

break down those those shackles they recognize as well that if you're employed you owe debt to somebody if you have credit card debt or student debt you are not a free individual so their objective is to pay off those debts as soon as possible create a little nest egg for themselves be super savers so have a long term time horizon and retire early and their definition of retirement isn't going to like florida in a golf cart in a golf course and you know just doing nothing all day it's actually getting the ability to do what they want no longer being a wage slave um i think that's a reason that i'm in crypto that's a

reason that a lot of us are in crypto for the upside quite frankly for this ability to achieve financial independence by seeing something that other people don't seeing this massive opportunity for returns uh you know being in a position to to go out west and realize this opportunity and and this is why staking on ethereum excites me so much uh because you know i i don't want to be a wage slave but i will gladly provide my services for payment to ethereum because that doesn't make me a wage slave to ethereum right like i still get a paycheck of source i still get dividend payments staking is this alternative gig it's this alternative

job and it's very it's a very passive job and all you have to do is provide your capital but you get a paycheck for your services and your work towards ethereum and so as somebody that is looking for financial freedom staking offers me an income source that is independent from from any other employer or financial institution absolutely all right so so that's probably the the you know the first thing folks are are looking for um in terms of the why the second thing is this it's the ability to upgrade their skills um you know i think of this a little bit like going bankless and learning these d5 protocols learning how to use neath address it's obscure stuff it's geek stuff right but it's a little bit like

learning web design in 1997. um yeah i i was just a kid at the time but you know i picked up some skills and um some older uh guys i knew they were getting jobs you know any any kind of job that they wanted driving like nice cars and high salaries just because they knew some html and um this was because there was this recognition that the entire world all the companies of the world all of the projects of the world all of the ideas of the world that would end up on the web and there was a high skill set demand for people who knew the technology knew how to build these websites knew how to build uh this

future going bankless is like learning web design in 1997 you're picking up all of these skills that will pay off will be in high demand if this crypto thing takes off in a big way which we think it is you're front running the opportunity uh in a way and uh by the way it's incredibly engaging and interesting uh work while you're doing it so it's it's it's mentally stimulating stimulating and fascinating at the same time you're picking up skills that you know front run the the job and career demand so out of these two things i think um a lot of folks going bank less end up with

with two high level goals your goals might be different your mileage might vary but you know the first goal is to really increase your crypto money when we talk about crypto money we're talking about ether and bitcoin we talked about that a bit in episode one and then the second thing we're trying to do when we go bankless is get better at going bankless and becoming more bankless and leveling up on our skill set so those are the two goals you might have sub goals under that but you know start with the why you're doing this and then make sure you get some actionable measurable goals out of those our goal when we're talking about what we're trying to achieve in in going bank list for the rest of this episode is increasing your crypto money and

becoming more bankless and in order to achieve that goal you have to start with a process you have to have some sort of weekly plan this is almost like a um a workout rate yeah absolutely because this is not an easy thing uh we're going to lay out a potential path for people to go completely bankless and be independent but that doesn't mean that that path is easy uh not like not trading not leveraging being responsible is it's it's not something to just scoff at it's actually a hard skill and being consistent and doing following your plan every single day requires mental fortitude and and willpower you know

there's going to be one day where you think that ether is about to moon so you go 4x on dydx and that's not bankless that is not financial independence that is that is fun and games and that's a fun game to play but when it comes to being self-sovereign and financially independent it takes responsibility and time it takes that time and we're going to talk a lot about those subjects in this episode yeah absolutely and for those of you don't know dydx is a place where you can like you know margin long uh some of your your assets like eth so it's basically you're betting your eath and if things don't go your way on the bet then you end up losing it um so

that's not something that is conducive to you to necessarily meeting your goals you have to have discipline you have to have a weekly plan and a process in order to meet those goals and i think one other thing is that is most important i you know probably break them down into into two areas the first is you um set aside a portion of your wealth whether that wealth comes from a paycheck or whether you already have some investments and you you put some skin in the game you start buying crypto money assets i'm not saying everything all at once you of course have to allocate based on your your own personal position

but i think it's really important you know number one to have some skin in the game with that skin in the game you'll start paying more in attention to this entire landscape and um you know you'll have the crypto money assets that you need to actually leverage this new financial system the way you should so you know what's when people ask you know what should i buy and when to buy of course none of this is is financial advice um but um you know it's it it's really important to buy assets that you think will accrue monetary status and monetary value we think those assets are probably going to end up being ether and bitcoin

there might be others that come along but you don't have to worry about them right now and the second thing that you want to do is a dollar cost average in so if you have the paycheck it's things like taking a portion of that paycheck and buying a little bit of crypto uh each and every week each and every paycheck each and every month however you split it up um you know don't go all in at once uh don't be reckless don't be crazy uh there's there's a lot of risk here of course but having an increasing amount of skin in the game i think is uh is super important the second thing you need to do is start leveling up each week so tap into the resources

that will improve your game learn about new protocols start using these crypto systems we're going to get into that i think for the remainder of the episode but you got to have a plan going into this thing that you know is weekly and where you're constantly continuously leveling up um now the world of crypto is a bit different than the world of fiat bank accounts because there's a storage aspect to crypto that's required so when you buy your crypto on an exchange like coinbase um they actually own it and you you don't actually own the crypto yourself you don't have physical possession what

you have is an iou for the crypto until you take it off that exchange and start storing your own keys so we should talk about that because i think that's an important you know area for folks who are going bankless to do some research on which is how to custody their crypto assets how to store their private keys you know should they keep it on an exchange or should they should they research something like a hardware wallet what do you think david yeah it's really compelling to keep your money on exchange because that's just what we are used to um but we have to remember that these exchanges are just crypto banks they are just a new form of a banking institution and you know every

new year brings these uh crypto banks closer to the the traditional banks that we that we know like coinbase is now offering savings a savings rate on your usdc that you hold with them they offer like a 1.25 or something uh and so you're not bankless until you pull your assets off of the exchange and you hold them yourself uh this whole crypto revolution stands on the shoulders of seizure resistant assets when you hold bitcoin in a private key or you hold ether in your private key no one can take it away from you unless they figure out where your private key is and your private key is something relatively easy to hide and control which means that no

one can take your crypto and so if you hold it on an exchange that is not true and so learning how to safely and responsibly store your crypto is really important for becoming bankless it is the foundation of what it means to to be bankless and there's a number of different ways to store your crypto and we should be clear um we we don't want you or expect you to do this overnight so when when someone asks you know how do i get into crypto how do i start where do i store my keys the answer is always buy crypto from exchange dollar cost average in to you know money assets like ether like bitcoin and keep it on the exchange for

a while right but don't stop there then level up so you understand how to actually take custody of your crypto you know so level one is keeping it on exchange but don't stop at level one get to level two where you are actually cussing your own crypto and you know maintaining your private key do it a little bit at a time make sure you know what you're doing before you you trust your your self-custody process and holding your own private keys because the thing with with crypto is of course it's it's like it's like it's a bearer asset so it's it's like cash or it's like gold if you lose it it's gone forever you can't get it back

um so it's important that you level up sufficiently before you decide to self-custody but if you're going bankless if you're on the journey you've got to make that leap at some point you know and where should they leap where should folk where would you direct folks if if they're starting with an exchange but they want to start self-cussing their assets and becoming more bankless where should they go david it really depends on if you want to hold your assets on your computer or on your phone and if you want to hold it on your phone i highly recommend argent wallet it's the wallet that i use on my phone argent has done just a fantastic job making the ui and ux really easy to understand and follow through

and it gets the added benefit of being a non-custodial wallet and so you know coinbase has their own wallet that you can use on your phone but that's that's still a custodial wallet uh argent wallet is non-custodial which means you are the only person holding your funds which means you are being bankless and you get access to some of the cool financial services that we're going to talk about later in this episode such as unit swap compound and maker and it's all in all in the argent wallet and it's very easy it's the wallet when i you know tell my friends and talk to my friends about crypto and so while i tell them to download and it has you know relatively complex things that you can still do so it's

it's a great hybrid beginner and advanced wallet if you want to store your funds on your computer metamask is my personal wallet of choice it's a little browser extension that you can put inside of chrome or brave or safari and it is the main way for interacting in d5 i would say this is an intermediate level way of storing your crypto funds but still you know still relatively easy and it is if you are interested in doing financial activity on ethereum with all these d5 protocols uh then the meta mask might be the wallet for you while it's like argent well it's like metamask they are great for doing things in the bankless money system particularly with d5 protocols uh however there might be a

portion of your crypto and a larger portion of your crypto assets that you want to put in cold storage so this is you know not attached to the internet at all it's kind of the crypto assets that you're planning to buy and hold uh for the long run and you want them as secure as possible so this is a bit less like a wallet if we're using it in old world paradigm and more like a vault that you keep in you know a deep dark place in the basement right and to to do that to put assets in cold storage you might want to take a look at hardware wallets so uh there are two primary hardware

wallets crypto wallets on on the market there are a lot of others but the the main ones that are used are the ledger crypto wallet and the trezor crypto wallet these plug into your computer a bit like usb drives but they stay detached from the internet and provide a more secure way to store your crypto for the long run now before you get to that you know that might be more advanced level so we've moved from beginner to intermediate to advanced before you get to the hardware wallet phase make sure you understand how to back up your hardware wallets and how to restore those hardware wallets in the event that one gets lost and also make sure that you know people in your

life somebody in your life has the ability to access those wallets if something were to happen to you in some way so there's more thought that needs to go into cold storage but that would be another way to to store your crypto assets yeah so a common way to do this is you just store your private keys in a fireproof safe maybe you store that safe in your house maybe you store that safe in you know your family's house somewhere else but you can also do both uh and so you can store your private keys both in your house and your family's house so you have redundancy so if your house burns down then then you can still have access

to your private keys if you want to take this even one step further and this is for people that are storing a lot of value instead of having one cold storage wallet what you can do is you can make what is called a multi-sig a multi-signature wallet and that is simply doing the same thing twice where you have these two sets of private keys and when you combine them that actually opens up a different wallet and so this one wallet is actually controlled by two private keys or you can even have that number go you know as high as you want three private keys for private keys it's up to you your matter of security and this is the most advanced level this is the 401 level of security it's it's

really cumbersome it's not for daily transactions that would be really annoying this is really for your crypto that you want to set and forget and just have in deep dark cold storage and so the way that this works is that when you make a multi-sig wallet you are creating creating a private key and then splitting it into two different private keys and then only when you combine those private keys are you able to access the funds that are on a multi-sick wallet gnosis is an ethereum team that is working that has produced the big multi-sig wallet that everyone uses uh and so that that would be for those bank list listeners that are looking for that level of security that is where i would

recommend to go to set up your multisig it's not what you recommend to your mom but it is what you do if you want to have the maximum level of security for your funds absolutely and you know we will do entire episodes on each of these topics as we said this is kind of a drive-by of all of the things that you want to start thinking about and putting on your your list of of level ups all right so um we've talked about buying crypto setting up an exchange getting your first d5 wallet storing your keys now once somebody is there let's say they have a argent and metamask all set up uh what should they do first so the way i have my personal wallet set up is i have

my cold storage wallet and then i have my mobile argent wallet and you know sometimes i spend all my money in my mobile wallet i pay people for dinner i do whatever with it um and so i need to top that up and so i'll open up my cold storage wallet and i'll send some eth to my argent wallet and i'll send that back and forth and so that is something that you should really get comfortable with doing you should have your spending wallet your cash wallet and then you should have your cold storage wallet and you should be comfortable sending money between those two things and not just ether but also tokens and so ether is something that you you will need in both wallets because you need ether to send tokens

but you should also have some dye in there too at least just a little bit even if it's just a couple pennies just because it's good to to know how to send a token and how that is different from ether and so i would say the first thing that you should do is you should put some ether in both wallets and you should put some dye in both wallets and send it back and forth just so you get really comfortable with your system yeah absolutely um that's a great place to start and then you want once folks get more advanced where can they go from there if you want to get a little bit more crazy you can open up your first vault uh and so this is starting to use ethereum's financial applications the the the tools that you need to go bankless uh and so what a vault is is a

part of the maker dow system where you deposit ether so you deposit a hundred dollars worth of ether and then you can mint new dye based off of the value of that collateral and you can you can mint up to 66 of the value of your ether as new die uh don't go all the way up to that number that's very risky you need to stay a little bit lower than that uh and so it's a it's a nice way to learn how these crypto systems work and it's it's definitely one of these magical moments i think we all remember the first moment where we minted die from our ether and we were like wow i just made money the the ability to mint new money based off of your collateral based off of your ether is is a magical moment uh and the fact that

you can then send that die around and pay people for things from the money that you just minted is pretty crazy i mean it was a magic moment for me it's basically what you're doing is you're using some collateral so some existing value in this case heath and you are creating a loan on top of that um you know when i've done loans in the past like a mortgage for instance right that requires tons of paperwork right lots of different signatures lots of different a banking relationship all of these things what you're doing when you're opening a vault is you're actually creating a loan through a protocol no bank required i mean that's why we call this whole thing bankless is because we are replacing these very basic functions like paying

like borrowing like lending like earning interest with protocols themselves so you can do that if i'm not mistaken right inside of a wallet wallet-like argent right david or you can also do that with the metamask extension in your browser yeah that's totally right and and that's the cool thing about ethereum because and specifically composability on ethereum is your wallet is always one transaction away from being able to access services like this now not all wallets support all financial activity but opening a vault is pretty core fundamental feature of ethereum and so it's typically integrated in most every wallet and so yeah you i i have my own vault through metamask but i also have

one through argent wallet and so you can choose what you do how you see fit again the more value you use you might want to shy away from metamask or um or argent wallet just because it's a little bit hairy to have your funds on your phone um but it's always up to your personal preference one thing we should mention is of course each of these protocols has a risk so when we're talking about borrowing from a protocol or even using something like die if you're just getting into this and don't fully understand the risks of what you're doing just play with small amounts just just test out the open financial system before you kind of you know start start a ten thousand dollar

uh maker vault and um you know start living off of that um make sure that you know what you're getting into before going into it so just you know start with test amounts if if you don't know what the risks are and you don't fully know what you're doing but another thing that folks can start doing we've talked about paying we've talked about borrowing is they can actually start to lend out their assets and earn interest so this is almost like a money market savings account automated by protocol one of the coolest things i think you can you can do with your die for instance or with your eath is to lend it to a protocol like compound can you talk about compound and maybe the the die savings rate which is

which is sort of related to that starting with a die savings rate when you mint die you are pulling out a loan and there is an interest payments that you are committing to when you do this and this these interest payments can fluctuate up and down based off of market dynamics now who do you pay that interest rate to you pay it to the maker dow protocol and people that are not minting dye but they still own die so they bought die off the secondary market rather than minted it they can come and submit it to the die savings rate and people that have minted die and odai are paying fees to people that are have bought that diet and are supplying it into the dsr

and so if you there's two sides the two sides of the same coin it's people that owe die and people that have lent die to the maker dial protocol and so if you are interested in generating a savings account the dsr is something for you and that's what compound does as well these are two different systems that offer you different uh returns on of on your die now with the dsr you're lending your die to the protocol and so this is what the maker dow team has called the trust free rate you aren't actually trusting anyone with your dye no one is on the other side borrowing that dye you're sticking it in a protocol and compound somebody else is borrowing that dye so there is a little

bit more risk there there is another human at the end of that system compound offers you a higher interest rate to compensate for that increased risk uh but there is risk at the end of the day uh and so it's really up to you what you want uh if you and the really the parameters to pay attention to is how much you are doing how much you are lending if you're lending just a couple hundred die a couple thousand die uh you probably do not have that much more risk in compound than the dsr but the the big risk for compound is for high liquidity individuals people that need a lot of economic bandwidth for example if you are lending you know perhaps up

to a million dollars through compounds you might not be able to withdraw it all at once it might take time to withdraw it and that's simply just because of the way that compound is structured and one thing to realize about these interest rates whether it's in the die savings rate or in compound is that they are variable interest rates so they fluctuate over time i think lending die to the die savings rate is a fairly close equivalent to a savings account say in your bank because there's very little risk involved beyond the risk of of holding die which which does of course have some risk as david was saying um but these rates fluctuate right now as we're recording the rates are actually very low i think the die savings rate is you

know zero percent uh compound might be a little bit higher and that's because when eth is in a bearish cycle so when heath price is dropping then these savings rates tend to drop too we'll talk about this in future episodes so don't worry about the mechanics of it for now um but when eath is bullish the die savings rate tends to go up and on average over the past you know uh many months i think six months or so since the same's rate has been active it's actually yielded quite a bit of a higher interest rate so 5 you know 10 that might be the more normal range but

it can vary on a week to week basis just like a savings account does so we've talked about earning and lending now um what about investing david there's some cool protocols in the bankless world for that what should we talk about here yeah so there's different ways you can deploy your capital on ethereum to generate a return uh and and at the end of the day this conversation will always start with staking but right now staking is not here yet and so if you are trying to get a return off of your ether and off of your die there are different things that you can do a very common one is you can add liquidity to the uniswap eth die exchange

and what that means is that you take an equal amounts of value of dye and eath so like if ether is a hundred dollars and you have ten ether so you have a thousand dollars of of ether then you submit uh all of that ether plus a thousand dye into the uniswap pool so equal amounts of value and what you are doing is you are allowing traders to come and um buy your ether and sell sell you die or vice versa they take one and take one out and put in the other an equal amount of the other and then you get a little bit of exchange fee on top of that which is 0.3 percent and so this has been a very common way for people who want exposure to ether but also want to have a decent cash balance to get a

return on both and so in times of high volatility high trading uh there's the returns inside of the uniswap are are pretty pretty great uh and so it's a way for like if ether goes you know up to from 100 to 150 to 80 to 100 you will actually have more money than what you started with because you were collecting the exchange fees all along the way yeah and i definitely think uniswap itself being a liquidity provider on it deserves an entire episode and we're going to get to that in the next couple of weeks so stay tuned for that guys um you know another way you can invest and this is quite popular in the bankless community is to buy something called a set

so a set is think of it like a an etf say in your in your brokerage um it is a kind of composable asset that you can purchase which underneath itself uh is a collection of other assets that are robo-traded according to some algorithm so you can buy sets that you know will split your 100 of your investment across 50 ether and 50 bitcoin or you could buy a set that will trade based on various indicators it's a way to essentially remove the emotion from your crypto trades and to accumulate more crypto money uh without actively

trading yourself and the the performance on some of these sets has been really good over the past couple of years relative to just holding bitcoin or holding eth so that's something to to check out too and probably deserves its own episode as well if you go to tokensets.com explore you can see this awesome matrix of all the different sets that you can can purchase and then their performance across time so it's pretty transparent so you get a pretty nice report as to what sets have done well and what sets haven't now there's you know every single day is its own little data point and that can change as time goes on so don't just go to the set website and buy the set that has done the best

previously because that does not mean that it's therefore going to do good moving forward you have to understand that just being the leader now doesn't make that set therefore the leader tomorrow you know something else that's fun uh david have you ever used the pull together no loss lottery oh yeah i love it i i think it's great i i always keep a few uh pulled together tokens in my wallet just in case uh i strike gold yeah i love it because um if all of the stuff that we've talked about sounds a bit too advanced or a bit too complicated for you at this point i mean pull together is is perfect for uh newbies and a perfect way to test the d5 protocol without doing very much more than having a metamask account so it's basically

um a way for you to deposit some crypto so ether or die and be entered into a lottery system the the tickets are drawn once a week i believe uh you can you can not you don't lose your funds so it's a no loss lottery so basically they generate the prize money based on the interest that they receive from investing these the the proceeds into various d5 protocols and so you don't lose your balance but you have an opportunity to win some prize on a weekly basis and in just a few clicks you can deposit into pool together and then get set up to have an opportunity

to win some money on a weekly basis it's a really cool way to to start on d5 protocols and it also just is a great example as to what crypto economics can do a no-loss lottery is very well supported by the way that crypto works and so it's it's i think it's something that will onboard a lot of people that don't really call themselves crypto people because they are interested in a lottery that they can win but they don't can't lose uh and so i think that's a pretty interesting feature of the crypto ecosystem yes and when you graduate to intermediate level as well one of the things on your list should be to get a ens name david can you tell us what an

ens name is yeah so if you go to google.com you're actually going to an ip address and there's a bunch of numbers and it's very hard to remember what those numbers are but everyone remembers google.com and so that's the dns system the domain name system ens is like dns but for ethereum and so i have an ethereum address it's a long string of letters i don't know what those letters are but if you send me eath or die to davidhoffman.eth it'll go to that address and that is something that everyone should set up because it just makes life so much more easy it's if if ryan i can just tell you hey you know send me some diet at davidhoffman.eath and i just told you

that right now there's no way i would be able to communicate my ethereum address i would have to copy and paste it and send it to you and ens is a really crucial piece of infrastructure that allows uh you know just ethereum to become more usable and it's it's something that everyone can do it's a permissionless system uh and i highly recommend it to to everyone if you download argent wallet you will get a free ens name you do have to pay for these things because you know there's a limited number of names so we have to the the ens team does have to charge to make sure that one person doesn't just use all of them uh and if you download argent you'll get your your own argent ens name so my argent ens name is

trustlessstate.argent.xyz uh and and so you can get one of those there as well yeah it's basically like so you know your your traditional bank account has an account number this is a human readable name for your account number it converts into a domain name and you know last episode david we were talking about all these scarcity mini-games that exist in the ethereum economy well these e s names all of them end with a dot eth there are a scarce number of human readable names that are that exist that are out there it's very similar to domain names like you know there's a scarce number of dot coms so if you believe in in ethereum and you believe in the future you want to snap up some of the good ones particularly you know maybe your name

uh or your other short names that might be desirable in the future because there is a scarce limited amount of ens names to go around and if this turn this thing turns into the internet everybody's going to want one every company every project everybody's going to want an e-ness name of some sort in order to name their bank account in this bankless money system i snagged i was fortunate enough to snag rsa.eth which is my initial which are my initials uh so i was really excited about that and as long as i pay the renewal fee you know you you have access to it uh forever yeah i was really close to buying david.eth but it was 13 and i i couldn't part with that amount

of eth i couldn't do it so somebody else has david.eth so while we're talking about money verbs and d5 protocols here's one you absolutely have to check out this is a lending and borrowing protocol called ave what does it do you can put dye into it you can put eth into it it will take your dye it will take your eat and it will transform that into an interest-bearing asset this is a great way to level up in the bankless money system you can also borrow from it we were talking about you borrowing from various protocols at a variable rate but this allows you to obvi allows you to borrow from it at a fixed rate so you know exactly what you're going to pay from one day to the

next in one month to the next developers you've got to check out their flash loan protocols groups like defy saver have integrated these into their protocols into their applications and created a lot of value go to ave.com and deposit crypto to start earning or borrowing that's aave.com try it out on your bankless journey you might find that your bankless account is storing more value than your bank account but you still need to buy things at the grocery store you still need to go out and on friday nights and if all your money is in the crypto world well you're ahead of the times but you still need to

live your life and that's where monolith can help you out the monolith defy card is a way to keep your funds in the bankless universe while still being able to buy things in the real world the monolith visa card is accepted wherever visa is which is like the whole world and it lets you use your die as it's supposed to be as money as a way to pay for things so go to monolith.xyz and check out their d5 card check out their rates the defy card is a smart contract wallet which is something that we definitely have to get into as to what that is on bank lists but it's a really cool way to protect your funds and still be able to use them so go to monolith.xyz and get your divi

card today all right so we've we've hit on a lot of things that people can start doing inside of the bankless money system a lot of these money verbs there's still so much to talk about we haven't talked about how to preserve privacy we haven't talked about how to do you know some of your favorite activities like buying margin on dydx or getting a crypto visa card or doing all of this in a tax sheltered account but stay tuned bankless listeners we will have episode episodes on each of these topics in the coming future maybe just to tie things out let's talk about the the last element of the bankless plan the bankless journey which is measuring the outcomes so we talked about the two

goals which is increasing your crypto money and becoming more bankless but how do you measure those things i think the crypto money goal is pretty simple it's are you increasing your eth denominated wealth or your bitcoin denominated wealth every single month not your fiat denominated wealth because that will be very volatile and that will go up and down because money printer just went bur exactly so what's more important in the bankless lens on the world is that your alternative bankless money is going up in their denominations not your fiat money and this this applies of course if if you're like us and you are thinking

about the system for the long run for the three-year time horizon for the five-year time horizon for the 10-year time horizon this is not advice for people who are trading on crypto narratives this is advice for the long-term believers in this system you've got to increase your crypto money and that requires increasing your east denominated and bitcoin denominated wealth the second thing you need to do is check in and to see if every week you've become more bankless than the last week have you learned a new skill do you have a new money verb that you can now do in this bankless money system we actually have a level up guide that we've published on bank list that i'll include in the the show notes those are some things you can take a look at uh to you know see how you're progressing

which new skills you've picked up a really good way to test your bankless knowledge is to try and explain it to a friend not all friends or family members are gonna care about crypto so that's a little bit of your own challenge that you'll have to figure out but you really know something when you can answer your friends questions and you can do that in a way that's that satisfies them that satisfies their knowledge uh and so grab a bankless buddy bring somebody along do this with a friend friends don't let friends go about this alone so find your nearest most tech savvy friend introduce them to bankless get them an argent wallet send them some dye send them some ether and then talk about why this is

important talk about why it's important to have and own ether and bitcoin right after money printer just went bur talk about fairness talk about being your own sovereign individual uh and you know grab a crypto buddy absolutely we level up as a community that's the best way to go about doing it so just to summarize if you want to go bank-less you got to start with the y you got to set some goals you have to have a weekly plan to create a process for this you need to start doing things that is important this is not just about holding this is actually about using the d5 money system as it is developing and you want to measure those outcomes as well so let's talk about actions it's really just to set up those goals and implement a plan

then plug into the resources that are available we've got a list of articles that we can include in the show notes that we will include in the show notes talking about the bankless money portfolio what that looks like talking about how to dollar cost average into crypto the bankless level up guide will be included there as well and then you want to create your weekly routine we hope that includes subscribing to this podcast subscribing to the bankless newsletter program getting into a routine of learning about this new landscape and leveling up next three episodes we're going to dive deeper on a few things david you want to give us a taste yeah so a lot of the d5 protocols that we talked in this episode

we're going to give a whole entire episode too and that's just because cryptoeconomics is an endless rabbit hole for each and every protocol and so in the next three episodes where we are going to bring on the experts for every single d5 protocol maker dow uniswap compound the big three that we have today and and every other d5 protocol that comes into the bankless world where we're going to bring on an expert to talk about that d5 protocol and to really go deep and really get the a very basal level understanding of what these things are basil i like that you use that word david nice word let's talk about let's finish this out risks and

disclaimers guys everything we've talked about today all of these money verbs are risky make sure you're only playing with test amounts if you're just starting out and don't understand these risks eth is risky d5 is risky you could lose what you put in but we're headed west where opportunity awaits where there's bandits along the way opportunities to win your money and lose your money this is the frontier it's not for everybody but this has been episode 8 we're glad you're with us this has been how to go bankless