DeFi by Design EP#1: Introductions & DeFi Now

Transcript

welcome to d5 by design where we talk all things blockchain cryptocurrency and strive to educate power and enrich what's up guys i'm rob welcome to d5 by design we're gonna be talking about d5 and everything crypto i'm really excited to be on this podcast this is episode one but andrew and i have been talking about crypto and now d5 more recently so i'm really excited to start up this podcast how's it going it's going well i'm andrew guys what's going on this is episode one so bear with us for uh anything that we say do or talk about but we are here and we are excited both of us has definitely been in the crypto space for a while rob maybe just a little longer than i

have going back to 2016 2017 times you know obviously with that big bull run all that good stuff and you know we've kept the close tabs on all this stuff as we're extremely interested in it being young guys and now this whole industry of d5 has really blown up almost in our faces we can only imagine what it's going to do to the entire world at storm once it gets going and right here our mission is to educate empower and enrich as a part of the d5 slate movement and today we're going to keep this one real short uh talk about what's been going on in d5 as of recently what it is and where we are now i'm so i'm actually looking at a website it's called defypulse.com a super cool website as of today there is 2.04 billion dollars locked up in d5

protocol which is absolutely insane rob yeah yeah it's pretty crazy how it's just boomed over like the last few weeks there was a few days where anything going on in crypto is all about d5 and i have a card up too i'm looking at curve which is a d5 protocol and they actually got a spike of a few million dollars a few weeks ago and i think it's really interesting because you know people with a lot of money are dipping their toes and just really testing out the water in this market and it's grown along with the people testing it and i think this really is the beginning of a larger movement in d5 it's really starting to grow and this is where people have had their eyes set on for quite a while in this industry yeah most definitely i mean one of the

cool things is starting back in april of 2018 so almost two years ago now or i i suppose a little over two years ago there was about 100 mil locked up and now there's two billion so what we're seeing right now is exponential growth uh just yesterday it was a little under two and now it's at about 2.05 so 3 billion is next but really we're looking at 10 million next as this should be going exponential pretty soon because of all the news and all the hype and the impact that it's made now the main protocol that we're seeing right now is the compound protocol currently they have a dominance of about 33 so what this means is of the 2.04 billion dollars that are locked up in d5 protocols compound has about 32 percent of that so they have quite a bit and they are actually on the argent app

as well so uh argent is a great wallet in case you don't already have it what you can do on there is you can buy ethereum with extremely extremely low amounts of kyc as well as you can send and deposit a theorem there to buy coins on kyber which is a decentralized exchange as well as put them up for liquidity on compound currently compounds got to be my favorite that and lend which is also known as ave are great and essentially how those work is you provide them with some sort of funds on argent it's ethereum or the other d5 coins and basically you're able to earn an interest rate for providing your funds as liquidity obviously there are some risks to this but i'm really liking what compound and ave are doing right now yeah man it's exciting because d5 really

just stretches into so many different bounds like you said they have wallets they have coins and what i'm really interested actually is the different governance protocol that a lot of these d5 coins are starting to implement and a lot of them are kind of modeled after proof of stake you know it's based on how many coins you have and that's how much voting power you have but what i'm interested in is the different proposals and the way that these coins are governing in an open source way and i think it's going to be really interesting to see how these different governance models affect the coins price the different you know revenue streams that that protocol might be seeing and the incentives that are delved out onto each of its customers i think it's going to be really interesting to see

which governances prove the most effective and then how we can implement those into other aspects and other protocols yeah no most definitely as far as these protocols go especially with compound in particular they uh their compound token now i'm not sure if our audience understands this but what we have here with the compound is we've got the protocol itself so there's a compound protocol which is a protocol where you can lend and borrow coins you can earn rates right it's all ran on ethereum right but with the compound token all that is currently is a governance token so the compound token has absolutely zero use case to this day except to vote on proposals for the compound protocol now you correct me if i'm wrong robbie

but i believe that is all that it's for so with that being said i think there might be a bit of price inflation here if you will on some of these coins because theoretically the the value of the compound token it's to be voted on or to be used to vote on proposals on the network while that is very important and it does have that use case the token itself does not actually earn you any money it is not an interest bearing token you know if you use it to lend out then it can be but just the token itself so one thing that i'm interested in is seeing how these protocols can incentivize their users to hold their tokens right like in a staking manner now i believe kyber network is launching some sort of staking for their token

it's kind of like an interest or a dividend bearing platform that i would like to see come for um for mostly just because i'd like to see a little more reason for us to hold some of these tokens aside from just a massive price increase because like coins like oh they've gone up like i don't know two thousand percent in the last six months which is awesome but what does holding obvi really do for you and the answer is unfortunately not much in terms of actually owning a token that has a use case so i'd like to see and i think that's what we're all kind of kind of hoping for and betting on by buying these coins at these low prices is that in the future they will be interest or dividend bearing coins so that the platform itself actually pays out the holders

which is like an incentive mechanism to hold the coin in addition to them instituting the governance aspect i'd like to see some more use cases and incentives from the protocols to the token holders to increase their desire to hold the coin instead of just a pump and dump and massive price increases yeah yeah and that brings up a great point because a lot of these people that are lending and borrowing and being incentivized by receiving that compound token you know they have the compound token in their wallet but i doubt and i think this is verifiable i doubt that a lot of people are actually going and voting on proposals so it seems like you know there is a already a limited use case and the people that are gaining the token and you know

receiving it for the volume that they're doing on that protocol they're not even utilizing it for that use case it's mainly utilized for speculation and i think that is evidenced over the last like you know week or two we've seen d5 points really fumble like they they have a short term top i think but like you said that the prices of these coins are pretty over inflated because there's not much use case they're mainly just the security right now that is getting you know a lot of anticipation and a lot of excitement and that's generating the rising value of the coin so i completely agree i don't think governance is going to be a sufficient use case for these coins

to sustain anything like the prices that they're seeing right now yeah and with that being said now i feel like we're very early so we're seeing this and we're going to see prices much much higher over the coming years so we might have a bit of a skewed idea but there's no question that these governance tokens are going to need to adopt some sort of incentive structure to keep the holders holding and i think you're completely right man um as shabby as it is to admit this i do own some comp tokens and there are no i have not used them at all for any sort of voting however i've seen a very interesting article by my friends over at the bankless hq and what they've done is they have established a need for protocol politicians so what this is is these are people who

could be just any guy like near you who are established to create proposals to vote on proposals and to kind of be the voice of the people if you will because i think you're right you know if we've got you know 10 million holders for example 10 million wallets or even 500 000 wallets right you know the majority of those people aren't going to be voting right but if they can contribute they're revoked right just to a protocol politician who they are in line with with a few clicks of a button right then i think that it's going to take all the stress off of them for having to actually think about it and make it much easier for the protocols to grow so it's going to be really interesting to see how we can form these little groups almost like oligarchies as weird as that is within the

decentralized world to be the politicians if you will of these protocols to make it easier for the people who are owning them to vote and to and to basically give them their true use case because for the most part the things that are currently in the proposals and being voted on are far above the average joe's head in terms of intelligence in blockchain and knowledge of the supply structures and the lending and all this kind of stuff so i'd be curious to see how those protocol politicians end up panning out and you know maybe one day we could be one yeah yeah that sounds cool definitely you know collecting the people's opinions and putting that into the protocols proposals i think would be really beneficial because you

know a lot of these people they have the coin they but they can't vote or they don't vote for some reason and i think that shows just like you're saying all of the friction that's there between the coin and its use case so it's going to be interesting because to actually improve on that the proposals need to get implemented so it's kind of a loop there because you know the features that you're talking about that should be implemented ultimately need to get proposed and then they need to get voted on and approved so right you don't have you know that those people voting in the beginning then it's going to be tough to get you know any type of momentum and uh positive effect with that governance

yeah no 100 and it's going to be big especially like you said in the beginning right now for people to step up and be willing to look into these proposals and vote on them and act on them truly that's going to be big for them to grow in the right direction because ultimately it's up to the community at this point like especially with these protocols like compound and whatnot it's out of a developer's hands they have on their website literally like we did our part now it's time for you guys to do your part and take us where we need to go based off of the community now obviously it's not that simple but essentially these protocols are are basically ran by the community um and so in order for them to work um in the longer term the community has to be active and they have to be incentivized to want

to vote and i think that that brings us back to our point of giving the token holders a little more incentive to be active in the voting and to be active on the platform yeah and i think that's the beauty of open source is you know like you said the developers did their job they brought that idea and they made it into a reality and now it's up to the community to actually make that protocol successful or or generate you know the type of interest that would be needed to continue the life of that protocol so yeah it's really interesting and i think that i'm going to switch gears a little bit but i think that's a great segue into prediction markets and specifically augur they use a decentralized oracle which actually sounds a lot like the protocol

politician that you were explaining and if you've ever noticed augur's ticker it's rep rep which actually has little to do with you know auger it's you know obviously that it's not a spelling or anything to do with the name so rap actually stands for reputation and the more rep you have this is again the incentive for you know making bets and and doing volume on auger you're incentivized with rep and you're actually granted more reputation so you're given more weight in that same type of like expert or you know protocol politicians that you were explaining you're given that reputation in a particular sector

in a particular field so i think augur is doing a really interesting job of how they govern their coin and i think prediction markets are really the next step for d5 yeah i like those a lot i mean it's super cool how you can vote on anything you can create markets for anything essentially i was looking at the gnosis one the gno there's all sorts of there's stock market predictions there's donald trump predictions there's sports predictions there's there's all sorts of stuff and it's only going to grow and i mean wow i've got just so much to talk about as far as the d5 apps go i mean i would love to just break down a bunch of them over the next few episodes and just kind of introduce how they work

especially like the automated asset management ones the uh pricing savings accounts ones those are super cool um i really like that uh but we're gonna keep this one shorter we are going to be creating a bunch more podcast we're going to be introducing people and interviewing them in the space people who we know personally people who are big online um protocols all sorts of stuff all d5 and crypto related um if you have any suggestions we'll happily answer those in the comment section or um in a direct message rob what can we wrap up with as far as the next few episodes an idea of our trajectory and kind of where we're headed with this yeah man i want to get

you know as many uh knowledgeable and informative people in the d5 space on this podcast as possible we might broaden that scope out to you know just cryptocurrency in general traders you know maybe some more traditional finance to get you know a little bit of a taste of what's currently around us but yeah i think uh engaging with those knowledgeable people you you had a great idea maybe we could do a review of these different defy apps and wallets you know to just spice things up as we go along but yeah i'm really excited for d5 in this podcast i think you know i'm going to learn a lot as we're going through this and i hope the audience wins a lot too

yeah for sure i'm looking forward to that you guys can also find a bunch more content we will link this on the defense like twitter and the sub stack we will have a bunch of blog posts on there every single week tweets um this podcast some trading analysis all sorts of good stuff there as well we'll keep this all tied together and moving forward so i guess that about wraps it up for the first episode that's about all that i've got and i'm looking forward to doing a full-length one on our next one and really breaking it down alrighty guys bye guys catch you later you