Camila Russo: Laying Bare the Story of Ethereum #358

Transcript

this is epicenter episode 358 with guest camila russo hi i'm sebastian and you're listening to epicenter the podcast where we interview crypto founders builders and thought leaders on this show we dive deep to learn how things work at a technical level and we fly high to understand visionary concepts and long-term trends if you like epicenter i'd like you to pick up your phone your ipad or your mac right now and go to epicenter.rockslash apple so you can leave us a review on apple podcast

is the easiest free way to support us and it really helps people find the show and establish epicenter as the leading technical podcast in the crypto space and i'll tell you a secret i also love reading them today our guest is camila russo she's an author a journalist and the founder of the defiant a newsletter and podcast about the d5 space she recently wrote a book called the infinite machine which tells the story of ethereum from the very beginning to today and it's a fascinating read i had pre-ordered this book many months ago totally forgot about it and i received it while i was on vacation and i read it as soon as i got back i really loved this book for a couple of reasons uh one it's an accurate account

of the entire history of ethereum from the very beginning to today through you know the white paper the early days of ethereum vitalik going out and finding co-founders to the crowd sale to the ico boom and all the stories that happen in between and the other reason i really like this book is because it's if you've been in the space long enough it's such a trip down memory lane like reminding you of like a simpler time in the blockchain space to some extent so if you hadn't read it go and buy it and you'll blow through it in like a day or two she's also the co-founder of the defiant which is a newsletter and podcast about the defy space she puts out the newsletter every day

which is really impressive not that there's an absence of content to talk about in d5 but you know it is a feat to be able to write a newsletter every day so we talked about the book obviously in the process of writing the book which was also really fascinating and we had a conversation about defy and we looked at what's happening in the d5 space at the moment all this exuberance that we see and discussed whether or not we think there's actual value being created here and what the prospects might be for the future since we're on the topic of defy i'd like to mention algorand and the platform that they provide that is purpose built for defy in fact all the primitives that you need to build sophisticated d5 applications are built right into the layer 1 protocol i'll tell you a little bit more

about that later on during the interview but for now here's my conversation with camila russo so i'm here with camila russo who is an author now but a writer and uh the founder of the defiant which is a newsletter a podcast a youtube channel about d5 she's very present on twitter as well and very present also at ethereum and crypto conferences so thanks for joining me today thank you so much for having me excited to be here i just finished reading your book a couple days ago i thought it was great like it was like a really interesting and kind of fun read you know for since i've been in the space i was around the time that ethereum was

launching and everything so it was like cool to go back and you know think back about those times and it was just like a nice walk through memory lane i guess in a lot of ways so it was kind of fun but we'll talk a bit more about the book during our conversation here but first sight let's talk a little bit about you and share with our listeners a bit about your background where you came from and how you got to where you are today my background is obviously in journalism before going full-time the defiant and you know writing the infinite machine i was at bloomberg for eight years covering markets so you know i started um with an internship in new york with bloomberg then they

sent me to the buenos aires office to cover argentine markets i mostly focused on the currency and debt then i spent their like four and a half years in argentina then i asked to move to madrid where i covered european stocks which wasn't so exciting after covering the crazy argentine market so i took the chance to move back to new york when they opened this new team called markets live which covered like macro markets real time you know that's really when i started to cover crypto day-to-day i had written about bitcoin before in argentina in

2013 that's where i wrote kind of my first story on bitcoin and when when i became interested in crypto but you know i was in new york in 2017 covering markets and so you know i had kind of remained interested in crypto since i first wrote about it in 2013 so i took the chance to really you know start focusing on crypto with the boom there was just like insatiable appetite for bitcoin stories from bloomberg readers so that's kind of how i got into the space and then end of 2017 i decided i wanted to write a book on the history of ethereum then early 2018 i got the deal with harper collins and just started kind of focusing on

writing the book almost full time and yeah then 2019 i left bloomberg to finish the book and also because i wanted to be more independent and then june 2019 i founded the defiance so yeah that's where i am let's talk a little bit about you mentioned you're from argentina and that you started covering bitcoin in i guess 2013 so quite early what kind of activity were you noticing back then in argentina in terms of bitcoin use and how has that evolved in your view since then just one small clarification and i'm actually

from chile from santiago oh i'm sorry no that's okay but yeah so i was covering markets with bloomberg in argentina you know the reason why i pitched this story on bitcoin when i was mostly you know writing about argentine bonds and effects was because like a big part of of what i was doing was like the big story was inflation in argentina like there was 25 inflation and the currency controls which you know this was christina fernandez second term and like two days into or like a few days into her into her term she decided to like ban all dollar purchases so that was kind of

like a big ongoing story and so i was covering you know the different ways that argentines had to protect against inflation and currency controls and so that's how i got to bitcoin like a colleague said hey like check out this like weird digital currency that's gaining steam in argentina i saw there was like a bitcoin meetup with like over 100 people uh going and so i said okay so this is like a real thing i spoke with you know some of the people leading exchanges there you know just some like bitcoin holders in argentina and asked them why they got into bitcoin in the first place and

you know it just like really opened my eyes that there was this possibility of having a completely independent money that didn't rely on central banks and financial institutions and couldn't be influenced by government and there's like this active kind of argentine community within crypto and it's because they it's very easy to understand the value proposition of cryptocurrencies when you've been living through that kind of economic mismanagement with your local currency all your life i lived through that as well like i was um earning my salary in argentine pesos so as soon as

i got to argentina like the first thing i was told by my bloomberg colleagues was when you get your salary you need to exchange it for dollars or else you're gonna lose money and so i was doing that and then you know just dealing with all the the hassle of of having to kind of you have to like pay your rent in dollars because property owners weren't taking pistols and it was just like all like a big hassle to be living with that high inflation i went to kind of that that same process of like discovering bitcoin and just like getting it right away and i reported for this particular story and it was like hard to convince my editors to actually

take it like it was like really early for bitcoin and bloomberg was like not really covering it and so half of my editor just didn't really understand what it was the ones who had heard about it really thought it was like some sort of scam like so it took like effort to convince them to actually take this story in this context of you know hyperinflation and you mentioned that at some point it became illegal in argentina to convert pesos into dollars even in this context it was hard for you to convince your editors to write about this alternative currency that would allow people to

essentially have more freedom with what they could do with their money yeah because you have to kind of like put yourself in the shoes of a bloomberg editor they're like sitting in new york the readers are like from very obviously like traditional markets they're not investing in crypto and so they're obviously serving those readers who they'll understand buying dollar bonds from an argentine investor's perspective or you know buying some sort of argentine stocks or something to protect their savings but that's kind of as far as they would go like they to venture outside of like the traditional assets and and consider that this like really new currency that's not

backed by anything other than its own system that could be kind of a legitimate viable investing alternative was like really hard for them to understand even outside of our you know of argentina or places with you know high inflation it was hard i mean even i'm here in france and i remember you know for years and even now i mean i had lunch with someone yesterday who was still with whom you know i had to explain with crypto was and this is in 2020. it's hard sometimes to kind of like think back to those times and how difficult it was to explain these concepts to people like it was just so novel like i said i think it's easier when you're in argentina and you can understand how

hard it is to deal with inflation and it's a little bit kind of mind-blowing that somebody can tell you what you can and can't do with your money i don't know if i hadn't lived through that it i think it i would have like a hard time understanding it as well but it's it's not like some like abstract concept because it's like it's something that people are were already doing like a normal average person was already taking whatever they could save and buying dollars with that like it's something that every argentine does and so far for the government to one day just say you can't do that anymore and the options are literally gone you had the option in your online bank

account one day to take your pesos from your local account to your foreign currency account and buy dollars just like online and that like from one day to the next is just simply not there and if you went to a bank and said i want to buy dollars they just like wouldn't sell them to you it's really mind-blowing if you're sitting in the u.s and you've never had an issue with your bank you never had kind of this crisis where the bank tells you no your deposits are locked in or you never had double-digit inflation you never had currency controls like you have you trust your government you trust your financial institutions it's even harder to understand why

cryptocurrencies matter so and at bloomberg i was like dealing with people who you know they're like bread and butter is covering the traditional market so it was just like even harder when you moved to the us then you were covering crypto there in the us as well what was the reception there of course you know it had been some time had passed like crypto had gotten more into i guess like you know people's minds what were your editors views on crypto and how is it being covered by that time it was completely different so i was in the markets live team which like i said it's like a live blog of like running market commentary

and we were a small team and like people in the team had freedom to write about whatever seemed interesting so i started to write posts on bitcoin and there was like talk about a bitcoin etf at the time so i was writing about that about like icos and my kind of the managing editor for like markets noticed that i was interested in crypto and at the same time there was like rising demand for stories on on bitcoin and crypto so this time it was the other way around like my editors came to me asking for more crypto coverage so that was um a big change like it was i think a

reflection of bitcoin becoming more recognized like more accepted as like an actual investment and you know just like recognize that it's not a scam like it's a an actual legitimate thing which some editors might be more skeptical than others but in the end like they saw the value of covering it so that was a big change from 2013 so they they came up to me and and asked me to you know help with crypto coverage on just like the wider bloomberg news not not just for the vlog so i started i divided my days with like i i need to have at least two posts for markets live in the morning and then the afternoon

was just to write about crypto so i had kind of those two jobs when did you first hear about ethereum in 2017 covering crypto for bloomberg the first time was when i wrote kind of one of the first stories on icos for bloomberg and i remember just like trying to wrap my head around what these things were it's like bitcoin but it's different digital currencies and anyone can issue them and they're on top of this other blockchain called ethereum and you know i was coming at crypto coverage from like um a market perspective so i didn't have like a lot of technical knowledge about

how blockchains work or crypto works or anything i i understood kind of the value proposition of bitcoin from having it covered like in argentina back then but that was my extent of knowledge about it so it was like writing that first ico story was i think when i i started looking at ethereum for the first time and then just like as i kept covering the space and for the rest of 2017 i started to learn more and more about it and understood okay ethereum is a blockchain like bitcoin but why it's valuable it's because it's it tries to be more flexible than than bitcoin and that's why it's easier for people to issue all these different tokens on top

of it and so you know that's kind of seeing all of this kind of frenzy around icos and these tokens and this like millions of dollars pouring in i was like there's something here you know um this kind of decentralized way of raising money and ethereum is kind of the platform enabling this back in january we interviewed steve coquinos and sylvia mccally of al grand and during our conversation we talked about how algorithm's unique design makes it easy for developers to build sophisticated applications on their platform so what's great about algorand beyond the fact that it's fast it's secure

it scales and it has instant finality is the fact that they've designed a layer one protocol with primitives that are purpose built for define so what that means is that they've taken some of the most common things that people do with smart contracts and they've embedded them right in the system right in the layer one so things like issuing tokens atomic transfers well these are built into the layer one and smart contracts are first class citizens on all grant so with these essential building blocks at your disposal you can build fast and secure define apps in no time to learn more about what algorand brings to the table and how to get started i would encourage you to check out algrand.com epicenter that lets them know that you heard about it from us and it takes you where you need to go

to learn about their tech and with that we'd like to thank al goran for supporting the podcast point do you does one say i'm gonna write a book about something like that's never something that's ever crossed my mind or i think a lot of people's minds what point you do you decide to write a book and then what is the process i mean forget about the process of writing the book but like what's the process of figuring out what kind of book you want to write because you could have written this book in you know all i mean it's very kind of you know descriptive account of what happens it's mostly in in the third person you could have written a fiction uh you know you could have written a first-hand account of your interviews what was the process for

the creative process i guess of like figuring out what kind of book you wanted to write for background i always wanted to to write a book like that's been kind of a goal of mine forever i got into journalism because i like writing i guess like growing up one of my favorite books was in cold blood by truman caffordi and i think you know that was the first time i realized wow you can write about real life like non-fiction in a way that reads like a novel and that idea to me was really powerful because going into journalism and especially business journalism which is usually so dry

i found that okay stories can make these very kind of complex dry concepts come alive if you tell them in the right way and so getting the the example from uh truman capote and then especially michael lewis i saw okay wow like this is a really powerful way of speaking about non-fiction and obviously i love fiction it's it's what i personally read the most but i just thought you know if i was ever to write a book i would want to provide like value to readers by bringing something from the real world and making it colorful and read like a story

because i just thought you know there's like so many interesting stories in the real world you know that need to be highlighted so like why should i like go and invent another story from my own imagination when there's already so much to tell in real life at some point i guess like i think it was probably when you get into the bloomberg internship they give you like a list of recommended readings and i mean one of them was michael lewis books i think it was liars poker and so when i read that book i was like okay like i need to find a story that i can pick up and tell like michael lewis does for his books so i was like always on the lookout for that like what can be a story that i can tell

in this way like in a something i can make into a non-fiction novel and i think with crypto was kind of the first time that i thought okay this is it like this is where i need to find my story to tell sorry i meant to say when i said fictionary i meant to say like a dramatized version of it like something a little bit more like um of course you could make a fiction of of the story of ethereum but like uh something akin to the bitcoin billionaire's book right where it's like this kind of more dramatized version of the facts but like the way you wrote the book is like this very kind of factual account that it reads like a novel it does read like a story but it's like this very factual thing based on your interviews based on your conversations

when you're reading it you really get the idea like this is how things happen this is exactly what happened yeah i loved the bitcoin billionaires but you know reading kind of the forward where the author says you know some of these things were fictionalized there's always like that kind of question in the back of my mind as i was reading the book like okay did this conversation actually happen yeah yeah and it's like i don't love that to be honest like i love the book but i i think it's just a personal preference that i wanted everything in my book to be as factually accurate as possible i don't want to make this interview entirely about the book but like i'm just curious about the creative process that goes into writing a book like this

and there are passages in the book where of course there's conversations right you're citing people you're citing conversation you're citing skype exchanges or things like that and so she interviewed this person and this person gave her the account but like how does he really remember exactly what he said well then there must be some kind of like you know this is the account of what that person said that they thought they said at the time i mean so it might be a little bit stretched but like generally it's sort of like an account of what happened based on people's stories right definitely yeah as accurate as possible and i think kind of the way to make sure i'm not straying too far from from reality is just to verify to make sure i'm not using just one person's version for

example a conversation so getting both like everyone's accounts that who were involved and just like contrasting that and the process involved many interviews and just making sure that everyone involved in a situation or conversation was interviewed and i got their side so in that way i could kind of reconstruct uh what happened one thing that's interesting about this and like you came in to the space or like i guess you came into ethereum a little bit later so like around 2017 you said and you've now become like this personality

in the community like you have your podcast you have your newsletter you get this youtube channel you speak at all these conferences it reminds me of neil strauss and like what he went through when he wrote the game so like he went into this kind of wanting to understand this community of like pickup artists and then by doing so he himself became a pickup artist and like well known for this thing and like you went into this wanting to write a book about ethereum and then you became like this kind of personality within the theory of itself and like obviously like more of a journalist in the space did you anticipate that by writing this book you would kind of like become this personality and like go and build the defiant and be like a voice in the community or was that something

intentional no i could have never anticipated anything of what happened later with this book the reason for writing it first and foremost was kind of achieving this lifelong goal that i had of reading a writing a non-fiction novel and then my plan was to after writing the book to just like continue doing journalism like i thought you know this book will be great in kind of i don't know like cementing i guess my journalism skills my writing skills like just adding to my like profile or whatever just as a journalist right and as a writer not not like as someone in ethereum and my original plan was once i finished

this book i would go on freelance and you know my what i wanted to do was just write more kind of magazine type stories and start writing like tech and like finance features for different magazines and then like see what i i wanted to do i mean i always had wanted to like start my own media company or just like my own venture at some point so that was like still in the back of my mind but my original plan when i left bloomberg was finish this book and then freelance and freelance in like general tech and finance like not specifically on ethereum so it wasn't part of the plan but i think you know as i was

researching and like i was like in the ethereum community and all these hackathons and conferences and just talking to people i really saw this like d5 ecosystem kind of blossom and for me it was just fascinating what was being built and it just seemed like a huge opportunity to cover because nobody was doing a great job at it i thought so i just saw that opportunity and i was really fascinated by what was going on so i would have covered it you know anyways but i also just like always wanted to have my my own thing as well so i thought you know i'll start with a newsletter and see how that happened let's get into the nitty-gritty here so

give us some juicy anecdotes like what are some kind of interesting stories that happened on the sidelines that you know you could share that you know aren't covered in the book but are like kind of like meta things that may have happened or one story that i had to cut from the book was you know that i think is really interesting but it just like i had so many characters that my editor was just like i'm getting lost with all this like you need to cut some people out i had like in the ico part of the book i had peter mccormick's story what's the story so his story is that he got into the space because he he started trading tokens and it's funny because now he comes off

as this like big like bitcoin maximalist but he came into the space kind of trading ethereum tokens and and you know obviously bitcoin but just like writing this ico boom and i don't remember how much money he actually had at the top but it was a large amount like i don't know say a million dollars or don't quote me on that but he started out with a relatively i think i've heard the story before also like where he had quite a bit and lost quite a bit yeah he refused to sell and then just like lost it all and in that process you know he started because in the beginning he was just like trading coins and i'm not really learning about crypto or anything but in the process of like

the crash he started to actually learn and understand more about bitcoin and and his family and friends were always like asking him to teach them what was going on and that's how he initially started i think it was initially a newsletter and then then became a podcast and so that's how he started his business and now obviously like his main business is his kind of communications media company and so i think you know it's it's a fascinating story of you know going earning all this money or getting all this money from tokens losing it all but then just like still being able to build an actual business out of it that was like one interesting story that i i was like

really sad to cut and had to kind of leave in the editing room are there any other stories that you had to leave out there are so many people involved in in ethereum i mentioned a lot of them in the book and you know there were you know names i had to cut out but that was just like a big piece of the book that i like a chunk of it that i had to cut out another anecdote is um my interview with joe lubin but the first interview i had with him was really weird like it was really hard for me to get him talking i know what you mean having interviewed joe a couple of times and you know he's great and everything i love talking with joe but like he's a bit hard to read sometimes that's for sure yeah it was so tough and and i was just like

so intimidated by it because all the the interviews or like most of them were like super easy like conversations flowed and i always began the interview by just like asking the person to go back and just like tell me basically their life story like i was you know really looking to learn about the person not just what they did on ethereum but just like understand them and be able to kind of convey their personality and kind of their backstory so all the interviews started in this way you know just like tell me about your childhood like you how you were brought up your family like all of that and joe i think it was like the wrong approach with him uh because he's a

like more private person so he just like closed up at the beginning of the interview he's just like why are you asking me this yeah i could see how that might go a bit awry yeah i mean that's one of the things i like to book the book is like there's so many people in crypto like we know so many of them we see them on twitter we meet them at conferences et cetera but i think one of the most fascinating things about the people in crypto are their background stories like because there's just so many fascinating ones and one of the things i love about doing this podcast is like asking that question we usually ask at the beginning which is how did you get involved in this and you know a lot of times people have similar backgrounds but there's sometimes there's like these little

nuggets of people that how did you end up here and that was one of the things about the book that i really liked too is getting to learn about some of the background stories of people that i for whom i didn't really have the background story like i said at the beginning like i thought it was a really great read you know i wasn't like in the weeds of ethereum from the beginning but i was following it you know pretty closely and you know hanging out at the lane office once in a while and you know like getting to meet some of the people early on i felt like i kind of knew this like as i was reading the story like oh yeah i remember that i remember this right like there wasn't anything that was particularly kind of surprising i would have wished that you would have

went more into the kind of like the juicy details or like some of the background stuff that like people didn't really know about or may you know you may have been revealed is this something that was intentional were you trying to like protect people or were you kind of mindful of like not disclosing too much or yeah i think you know i i definitely tried to my best to get like all the main parts of the ethereum story and uncover as much as possible and i think maybe you know if if you're obviously like in ethereum and and like involved in it maybe a lot of this stuff isn't isn't surprising but you know i i would hope for for most people in crypto that

weren't as involved in ethereum they they didn't really know like all the all the backstory but you know about kind of the more like juicy like backstories and and stuff like that like i said like i i really followed really the like bloomberg standards with this story so if there was like some like sort of gossip that i i heard from from one person and they didn't want to go on the record and like nobody else would verify on the record or like somebody would kind of hint that that was the case but not really provide any evidence i i wouldn't include it you wrote a book

as a journalist yes yes there you go yeah i really wanted it to to be kind of like airtight you know like that nobody could come at it and be like this is wrong like what you know like my my biggest fear was that somebody would just like take down the book and like and ruin it because like they had some issue with if anybody has an issue with the book i want to be able to kind of defend it and be like here are five on the record interviews that i did backing this up like the here is the documentation backing this up so i guess like that's why maybe you didn't have like all the gossipy stuff one part that was like totally new to me

was the whole part about the house and like i didn't know about any of that like what i mean i kind of knew that there was a house at some point but like i didn't know who was there and where do you mean it searched for them the house and so yeah let's uh switch gears a little bit and talk a little bit about ethereum and defy uh of course it's a very you know hot topic at the moment i guess one could say yeah you know how would you describe the arc of the ethereum narrative and how that's changed over time and what is the current ethereum narrative you know if there is kind of like a canonical narrative yeah it's interesting i think the narrative of ethereum like i guess when it first

launched it was meant to be the narrative was like world computer right kind of this extremely flexible platform for developers to build whatever they dreamed of and that included like all the crazy applications it was like name an application put blockchain on it and this is what we're building on ethereum so it was it was just like full of crazy ideas then you know 2016 was more about obviously the tao and and just like decentralized organizations and the narrative was more uh kind of focused on that and then i guess like in 2017 it was icos and just like

this decentralized way of raising money through tokens that you know would later be added to these different applications and platforms mostly as a kind of like payment currency within the platform and then kind of that narrative got or like icos got a really bad name because not many of them delivered obviously like many were scams and regulators came in and then there was this market crash and people lost money so nobody wanted to have anything to do with tokens and icos then i think you know 2019 the narrative started you know went from ethereum in the bear

market which from the outside just looked like a barren land um you know like there wasn't a lot going on at least like on the surface if you went to like hackathons you would see there were more like builders and activity than than ever but like around defcon 4 like that kind of time yeah yeah and then you know there was like a new narrative starting to rise from kind of the ashes which was decentralized finance and i think that's been the narrative so far and it's kind of um evolution of icos i think icos were maybe the the first iteration of defy because you

know raising money is still a financial application but now instead of having just like one uh financial application or financial service being built on ethereum you have a whole kind of ecosystem of financial applications so i think that's kind of the main narrative now um and obviously there are other sectors being developed on ethereum games reputation i guess like identity you know other things not not just finance but i think finance has you know definitely kind of taken the majority of attention and not just attention but

also usage of ethereum if you look at kind of applications and tokens coins taking up the most gas and transactions they are related to d5 there's also a bunch of like scams in the top gas users but you know so so yeah i think you can definitely kind of say that it defy is the the main narrative on ethereum right now yeah when you spoke with all the people that you interviewed for the book and yeah i'm thinking specifically more specifically i guess of like the people who were there at the beginning the co-founders like the early team and everything what was your impression of their impression i guess of how

things had gone like did you get a feeling that they were okay with where ethereum had landed which is now this kind of crazy defy space like this kind of degenerate farming as people call it were there any regrets or or is like everything kind of fine and this is the way things should be like what was your sense of the the general yeah impressions about where things had taken us when i spoke with the kind of early co-founders i spoke with them in like 2018 early 2019 maybe like d5 really hadn't taken off when i

did those interviews and you know this like d gen variation of defy is even like more recent so you know i i wasn't like all this stuff hadn't happened yet so i you know i i wasn't able to get their their opinions on all that but like in general i think you know their their views on ethereum you know thinking about kind of what charles said what anthony said what gavin said vitalik you know they they were all like hugely proud to have been part of the project of like the early kind of founding team um you know even you know charles and gavin

who went off to to do to build their own blockchains they were all like very proud of what ethereum had become i think you know at that time anthony was a little bit kind of um disappointed uh you know it was like i interviewed him in the middle of the bear market he he was kind of investing in all these other tokens and like layer ones or or looking at them so obviously he was he was very proud to have been part of the founding team but i got a sense for him that he would have wanted more for ethereum but then i i i talked to him recently for um a consensus event

uh conference and he was like now i'm like more bullish than ever so he he came around so yeah i think you know for for everyone it was like yeah an amazing project to to be a part of and everyone was kind of happy with how things had had turned out for for ethereum but like for for gavin and charles they were kind of yeah happy to see how far ethereum had come uh since the the early days but they're also kind of trying to do something better at the same time i'm curious what you know being so connected and and defined like reporting on d5

what do you make of what's happening in the space and is it something that coming from you know having reported what's what was going on in argentina and and covering sort of the excesses of global finance do you think that yeah like what's your position on the d5 space and the exuberance that's happening in d5 right now so i think you know what's happening in in the defy space to me is it's really encouraging to see that there is an alternative financial system being built with using these um decentralized

networks uh taking out intermediaries i think it's really amazing that these protocols are not disrupting yet but like laying kind of the foundations to to disrupt or to try to replace at least for some people traditional financial services there was a column by ian lee from ideo in in the defiant yesterday which really laid it out really clearly and said bitcoin and ethereum allowed kind of the finances base layer to upgrade because we've been using kind of the the same infrastructure for decades and like centuries even like

money's been transacted in kind of the same way for years and years and it's hugely inefficient like it's we're using networks that are not meant to to carry value and now with with with blockchains uh public blockchains we we can have this kind of global network for money and so bitcoin and ethereum were able to upgrade the like base layer infrastructure of money but now with d5 we're getting to kind of the application layer of financial services and you know having a more more open more transparent financial services than

we have today so it's obviously very early days and and there will be huge kind of improvements and a big evolution from where we are today but it's two years old and i think the progress so far has been amazing i mean we have ways to exchange and and swap tokens in a decentralized way we have ways to land on the deposit assets and gain passive interest ways to take out collateralized loans in a permissionless way and all these more kind of exotic use cases like you know this like no loss lottery

and like yield hopping and all this you know more crazy things that you couldn't even do with traditional finance so i think that's amazing um it's hugely encouraging i think you know with the recent speculation um with yield farming and like all the meme tokens i think that's kind of the nature of the space which is open and permissionless and so you know people will experiment and we'll try crazy things people will try to take advantage of others like humans are motivated by greed i guess making money and that's what they'll do and it's because this space is open and permissionless that

this is happening i think you know hopefully people involved in defy so far are more or less i would think more experience in in dealing with cryptocurrencies like i don't i don't think just like mainstream people are getting into yield farming right now i think the space is is still small and still very niche that you don't see kind of like you know kind of this cliche of like the shoe shining person or taxi driver talking about defy and that's a good thing because it's so risky right now so i think hopefully people risking their money in these united crazy uh yield farming experiments

know the risks that they're taking and if if they do and and they know there is and and they just you know it's their money to do what they want so i wouldn't like judge all the djinn farmers for experimenting and i think in the end what we saw with icos is there was a huge inflow of capital and also talent to ethereum and you know some people left when when the bear market came but many people stayed and a lot of the big projects in indify and ethereum today came out of that boom so you know if we happen to have like this huge d5 fueled bubble i believe that it will be a net

positive for for ethereum and and for decentralized finance in the long run as well i mean i have different points of view about this and you know i think you kind of sum a lot of them up but you know my position is that i'm fascinated by the experimentation that's happening in d5 i'm fascinated by the sort of permissionless nature and these new financial instruments that people are just like coming up with out of thin air i think like liquidity pools and all these things are super interesting and like the yield farming and all that stuff i mean at some point it gets you know even for someone who's you know in crypto it even gets complex right and like it's really hard to grasp but it's nonetheless interesting and it's like an interesting technical and philosophical thought

experiment to think about this stuff and i love that part of it when i think about the actual tangible things that are happening though i question the actual value that exists in d5 and so like however you want to you want to count it like there's you know like ethereum and d5 combined is about 50 billion in market cap today or something like that you know how how much of this is overpriced in terms of like the actual value created and you could say the same about bitcoin you could say the same about like other cryptocurrencies but like since we're talking about ethereum and since like ethereum is kind of the place where everyone's kind of investing their money right now and there's lots of

speculation happening you know that's the one that i'm mostly concerned about and in the best case scenario you know ethereum and crypto does take over a lot of the financial infrastructure that exists today you know if you if you listen to guys like jim bianco uh you know they'll say that you know it's possible that you know in the future we have a crypto reserve currency and that would be great right like i mean i think that would be great but in the worst case scenario what ends up happening is that we have all these very financial instruments that are even more complex than the ones that exist today and that are reserved to a very small elite of people that are able to

understand them and manipulate them and create them and we end up with you know even more inequality than that exists today and you know that's maybe very far out you know this would be like 100 or 50 or 100 year prospect but um like the um totally uninhibited free market i think you know probably would produce something similar to what i described like this this kind of very dystopian future and yeah i i do worry about that and and when i see what's happening in d5 like i do questions of the value that that is actually being created and you know i think vitalik was kind of you

know vitalik when when he kind of called this out you know in during the ico boom i thought was it was very um noble of him to call it out and say like okay how many unbanked people have we unbanked or have we banked and do we deserve all this all this value you know yeah i don't know what the point of that is but i guess it's just uh just to kind of you know take pause sometimes and to to really think about what it is that we're creating and what what do we want to create and i think like most people in the ethereum community are well intentioned people and like perfectly you know smart people uh but you know the when one is creating a tool or a new financial instrument should also consider you know this kind of human aspect right

like what were people gonna be using this for and what's what's the point of this right the difference that i see with icos is that there is actual value being created like it's not just like tokens flying around going from one bag to the next um like there are actual working products and project protocols behind underlying these tokens you know take something like compound finance which on one side yes there is speculation and people are taking collateralized loans to borrow crypto to buy more crypto and speculate but the other side of that trade

is people depositing their you know part of their savings to earn passive income like passive interest and i think you know financial systems across the spectrum work because of speculators on one on one hand and non-speculators on the other hand like you need speculators to create activity and liquidity and to allow kind of this a fluid transfer of of value and on the other hand there are non uh speculative use cases and that's happening in indify as well i think it's hugely valuable to be able to for anyone in the world to be able to

have a dollar based savings account gaining interest from people in argentina like i said who simply cannot buy dollars to be able to freely buy die and put it in compound or buy sea die and start gaining interest on that on their savings people in venezuela the same and not just people in emerging economies but people in in developed countries where you know interest rates are zero or negative and you have to pay the bank to store your money uh they can also see use from from this so i think you know there's definitely speculation but there's real real value being created and i think you know it would be hard to create a

more unequal financial system than what we have today with with t5 just because of how it's structured i think you know the current financial system one is fragmented in geographies like each country has its own financial system and it's closed off to the rest so you already have like because of its very architecture you have like casts of financial systems where you have like the developed nations the us is its own kind of economy and people from outside can't really access those markets in like d5 or like an open economy it's a global financial system that anyone can access and the fact that it's permissionless

like you don't need to ask anyone to to use these applications so i think just like by their very architecture they should create a less unequal financial system and and i really you know i see it that i feel that it would be very hard to to have something worse than what we have today with traditional finance obviously it won't be perfect like there will be whales people controlling large amounts of tokens and you know having more control over protocols and you know using it to vote in their way and we'll have all those problems um but it would

still be a lot better than what we have today like right now yeah like there are like governance whales in uh in compound but right now like you can't even have that option with the bank you use like you cannot participate in governance it doesn't matter if you're a whale or not you know so i i think you know i i really i'm encouraged with where this is going even if there is speculation i do see actual value i i certainly hope so so after the ico boom you know we met we talked a little bit about this earlier you know regulators kind of came in and started clamping down the icos and and you know that now icos are much more structured like security tokens or as

utility tokens and you know there's like some regulatory arbitrage going on there but at least in europe like it's pretty clear-cut like what is a security token offering and what is not and i think also in the us do you sometimes worry that the exuberance that's happening in the d5 space at the moment might you know tip off regulators to to what's happening in in d5 and they might see it as you know this is very kind of dangerous speculative environment and and start heavily regulating what people can do in d5 regulating say things like stable coins making them illegal for example what are your thoughts on like the risks that this exuberance might be the demise of

of defy i think that that is a really kind of valid concern to have because effectively you know regulation is what killed icos and i think you know right now defy is small enough that maybe it hasn't kind of caught a regulator's eye and also there i don't think a lot of like mainstream people are are involved so not not there's not a lot of risk of just like knowledgeable people in in crypto losing money uh so that's kind of protected the space a little bit but i think it's only a matter of time really for regulators to really you know start watching the space i think you know there is certainly a

risk that regulator reaction could dampen activity and defy i think you know steps that teams indeed fire are taking to decentralize themselves as much as possible might protect them somewhat but i'm skeptical that it's kind of the kind of you know like perfect solution to to like regulatory risk i i think it can help you know to have a decentralized organization and and like token holders controlling a protocol because in the end if you want to go after someone like how do you decide who you should go after uh so i think you know

maybe that does offer some protection but in the end you know i think regulators can't say transacting in stable coins is illegal right and then what do you do like maybe and and you know as we've seen the way that regulators work is dealing with kind of the the bridges from crypto to the real world so they so maybe you can kind of continue using d5 but you can never really cash out or you you you can't kind of transfer that to us dollars or your local currency so i think those are kind of the the ways that regulators can come in

but the other kind of argument that i've heard from like lawyers in india is that the the us is being more open to crypto innovation because they don't want that innovation to go elsewhere so i think you know there's a lot of lobbying for this from from crypto people talking with regulators being like this is going to happen and it might as well happen in the us and not elsewhere like if you really start clamping down on this industry you'll get you know really kind of brilliant developers and entrepreneurs go

outside of the us to build this so i think maybe that's that's one way that defect can be protected i i don't i don't know what's the state of the you know ongoing or you know impending regulation in the u.s um i'm one of the staff members of the the french association for the development of crypto assets and um we work closely with the industry here and you know we we've been following and working with uh european regulators on regulatory regime that's coming to europe and i don't know how much i can talk about this uh yet but we got a draft of the regulation that's coming that will be presented to the commission

shortly and it does not look good for stable coins uh in europe and um you know of course this is just like a draft that's going to uh you know be presented to the commission then it has to go through the entire like legislative process et cetera but um you know stable coins would definitely get a big hit uh here in europe and if that if that happens then then it becomes very difficult for you know regulated exchanges to um to deal with stable coins you know one of the one of the things that this could signal though however is um is that things really go decentralized right so then you you basically have more decentralized exchanges more decentralized platforms and so like the trading happens there and then you know maybe centralized platforms are able to trade in each or you know some of the layer

ones but most of the other the rest of the activity happens on the on decentralized changes uh hopefully we can do an episode with that one when we know a little bit more and when we're able to talk about it more but wow that's so interesting to hear so would they would they regulate kind of centralized exchanges dealing with like offering stable claims well if if like let's just take a hypothetical here where stable coins or some some sort some types of stable coins are are illegal then then regulated exchanges would not be able to to list them right so if you have like a type of staple coin that's is illegal in the in the eu then

obviously exchanges would have to do the list right yeah so then you would have to go through like say ether in a regulated exchange in in europe and then take that ether to unesco for example yeah okay and then bike through there yeah i i guess i mean yeah it's kind of early to tell but wow and do you think people would be like liable for just holding stable coins on their like decentralized wallet i don't know i think that's hard to do right yeah i think that's really hard to do but you know but then yeah i mean projects could also be held liable right if you create a stable coin uh that is that is illegal in europe or in any

jurisdiction for that matter then i think you you can be held liable um for for issuing that stable coin and making it or issuing that asset and making it making it available to um to people in that jurisdiction but yeah i mean that's it's still very like early early information that we have yet to really digest like we just got this like a couple days ago and so we're still like reading through it yeah right i wonder how they would uh view that like um so say somebody you know creates a stable coin and it's not based in in europe but obviously the stable coin is available everywhere in the world like how do you regulate that it's like because people in europe can access it then yeah yeah that gets it gets tricky then right like

it gets tricky then like who is the issuer what is their responsibility to those who are holding it do they have to do kyc when yeah it's like it gets really tricky then when you're talking about it at the acid level i do want to talk about the defiant a little bit before we wrap up uh so yeah tell our listeners you know what is the defiant and what is it about and and what can people learn at the define sure so yeah like i said earlier i started the defiant in june last year after seeing all this activity and decentralized finance picking up and not a lot of good coverage around it so i started it as a daily newsletter you know i i said

i'll just have this medium for communicating all the latest like most important developments in in defy and my goal would be just to kind of explain it in simpler terms because everything is so complicated and provide additional analysis um with it that's kind of where i started and i said i'll try to keep it to a daily newsletter if not you know i'll go to a weekly one but in the end it was like more than enough for me to keep on doing the daily and so you know i started doing it just like not not really knowing how i would do it like i had never done something like

that it was it was really scary to be putting something out there without the bloomberg name at the time yeah um like i had always been kind of like protected by that and now it's just like my own name writing without an editor so that was super scary uh but you know after like the first few issues i started getting really good feedback like it started really kind of growing quickly without any marketing other than my own twitter so that was really exciting to see and it just like motivated me to just uh keep going and so i added um a podcast because i was already doing a weekly interview for for the defiant and recording it so i was like i might

as well just do a podcast with this and then recently i started a a youtube channel and the idea with a youtube channel is to bring kind of defy to a wider audience just like make it more digestible um because right now the newsletter is is more kind of for people already who already know something about d5 like it can get very specific at times so the the youtube channel really wants to get at that kind of broader audience and yeah i've taken on um a small team of contributors who write for the defend very frequently so it's really turning into a small media company and my my goal is to grow it from here i get

your newsletter i think i may have listened to one or two of your podcasts i didn't know about the youtube channel and as i was researching this i like looked up the youtube channel and it's like some really good content there and it's like really well produced and like high high production quality i think you're working with you're partnering with another project to do a lot of this content but it's like it's really well done like it's at the you know vox level type content yeah it's great yeah it's amazing it's amazing what robin can do i mean this partnership has worked out amazingly like robin from from harmony came like he we met because he was shooting a documentary last year and so he

interviewed me for that and then he came up to me and said hey like i we want to do d5 content at harmony so like what do you feel about partnering up for it and so basically it's it's like a sponsorship it's like harmony is sponsoring my videos for youtube but instead of kind of paying me like the sponsorship money amount they're producing the video with robin yeah so it's really worked out great yeah it's it's fantastic it's uh congratulations i mean as as someone who has a small media company uh and you know knows about the the struggles of having a small media company i think you're doing like really fantastic work and how have you um i know i think you have sponsors on

the on the newsletter uh and you're also selling like through sub stack i'm also curious you know kind of a meta topic here but you know what's been your experience with monetizing the content yeah so for me you know when i saw the defiant really picking up on growing i realized this can be my full-time job like i was thinking should i keep doing this on the side and and and do like freelance work but then i i decided you know let this be my my full-time job like this is going to be my business and so i started with you know substance makes it very easy to add like paid subscriptions to it so you know one day like late last year

just decided to turn on like paid subscriptions and my ideas to still kind of have most of my content be free but to have like a group of subscribers receive added value so like some one one newsletter um a week has kind of blocked off content that's just for subscribers they also get like a full transcript of my podcast and they get access to a like subscribers only discord channel where kind of we chat about what's going on so so yeah that's what worked out well and then earlier this year i started kind of getting

emails from from d5 companies wanting to sponsor the newsletter and so i saw that as like okay this is like another way to monetize a newsletter so yeah i started kind of accepting sponsors for the newsletter it's helpful to have that um journalism background because for me it's just like very much rooted in how i i think about media that there needs to be kind of this chinese wall between sponsors and content so like i will never take payment for the content itself in in the newsletter when people like want to pay for like content in the newsletter it's

clearly marked and separate from the rest of the content like this is a sponsored post and it's written by them like i'm not writing it so you know i i thought about this for a long time like should i take sponsors like is it gonna kind of ruin or like taint the defiant um but i think you know i'm happy with the the balance so far because i i obviously have or i think i have maintained and like improved the the quality of of the content and just like really have kept it separate with with the sponsors and you know it's really making this a viable business and i'm i'm just like really happy to be able to do this full time and where would you like to see it in

the next say five years or where you hope to see the defiant well my my big vision for the defiant is for it to become the bloomberg of the open economy so i i want to be kind of a trusted place for decentralized finance and yeah just like the open economy in general you know finance taos nfts like all of that and just you know provide quality journalism and content and also like data and information about the space cool well thanks so much for joining me today where can people find you and where would you like to send our listeners to yeah on i'm active on twitter my name on twitter is kami

russo c-a-m-i-r-u-s-s-o and yeah you subs you can subscribe to the defiant at the define dot stop stack dot com and you can find my book on amazon uh if you search for the infinite machine there so yeah it was a great conversation really really happy to to have come on thank you yeah and actually i'm looking at you get your book in the background and someone was uh someone on twitter was asking what is on the cover of the book and i think i know the answer and i think it's a unicorn but it is it is uh yes okay yeah yeah it's it's like a pixelated picture of a

rainbow and unicorn okay there you go the secret's been unveiled thanks camila thank you so much thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home or alexa device you can tell it to listen to the latest episode of the epicenter podcast go to episode tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us guests or other podcast listeners you can follow us on twitter and please leave us a review on itunes

it helps people find the show and we're always happy to read them so thanks so much and we look forward to being back next week you