DeFi By Design EP#35: The Bullish DeFi Thesis w George Harrap

Transcript

[Music] d5 slate team [Music] what's up y'all real quick if you like the d5 state content on twitter and youtube and sub stack please please give us a like and a subscribe on this video on youtube and join our channel join the community we'd really appreciate it we're pumping this stuff out for you all as much as we can and we really enjoy the support and the community that we've built thank you very much and enjoy what's going on guys welcome to episode 36 of the d5 by design podcast today is a moonboy day with the in d5 markets going nuts uh a whole bunch of cool stuff

going on in d5 right now actually just as we're speaking uh there's been there's a little bug on the ave platform and it was showing this aml rule where you know your wallet was blacklisted blah blah blah you know there was a bunch of flak on twitter then all of a sudden uh stani responds to this and and says how the reason this is that's showing up is is because there are institutions who are practicing how how to do defy uh before they ape in so good news going on everywhere guys we're here today with george hurop uh george is a d5 og for sure he's been around the block in crypto uh working on all sorts of different blockchains and projects

um yeah and we're just going to talk about kind of what's going on in this cross-chain world of d5 um what we're building uh and kind of what what we expect to see happen in 2021 uh in this cross-chain world i'll toss it over to robbie hi how you doing robbie good afternoon it's a beautiful wednesday it is it is a beautiful wednesday it is may 12th uh 2021 so markets are looking very very green as andy said uh everything is pretty much up d5 that rotation is uh certainly sparking so uh we've talked a lot about the d5 flywheel and we might get into that some today but uh that's kind of the perspective on the markets is as east is going up

that money is now rotating into these d5 blue chip coins um and you know people are either practicing with d5 or they're really getting involved with it and digging deep um but we're going to talk a lot more about d5 today with george how he got into d5 um kind of what he's exploring now what what uh tends to hold his interest um and yeah everything that he's doing with step and yap so i will pass it over to george uh how's it going today george what is going on oh it's going great good to be here guys um yeah like what's happening with the the markets at the moment with d5 you got f

pumping we've got ave with aml stuff literally i i had a conversation with stani about this like months ago where i was like okay you guys getting a license in the uk is this going to interfere with what's happening in the dow and it was like no nothing uh you know will will interfere there so i mean that's good i haven't checked uh what was said but um yeah i do hope that certainly dow's remain dows and if institutions have problems dealing with it well that's their problem it's not the dao's problem that's that's my general thesis on things yeah and uh there's actually been some recent legislation uh in the u.s in wyoming which has kind of recognized daos as

their own legal entity um so i i'm not sure if uk has like a similar legal framework but in wyoming you can now register a dow as far as i understand and you don't need uh like an accompanying llc or corporation to go along with that down yeah i had a conversation with some people a while back about that or like a couple weeks ago when a news first came out like i don't know what the purpose of that is like i okay so you you register your dow and then something happens in the dow and then what you're going to bring it to a judge and then the judge is gonna uh bang the gavel and go okay uh something needs to happen because i said so

and then you'll be like well sorry bro we're just a dow uh it's just a multi-sig i don't control it we can't actually influence the contract perhaps um so i i don't like i think dows should remain doused and if you want an llc then make an llc um i i don't quite know i mean maybe i'm missing it i haven't investigated the legislation i mean hey maybe it's good but yeah i think that that there's certainly like some investors as well out there who are like look we're on we're publicly known as part of these dows and in order to limit liability we would prefer that you know it's not us personally as part of these dowels on the multisig it's like some entity so maybe this is a way for them to engage in that ecosystem and okay but i just think enforceability is

such a core thing that if you're making rules that aren't enforceable then why are you making them in the first place um that would be my my thoughts there yeah yeah um like if right like i mean i mean that gets down to it and forcibility like the judge being banging his gavel um really can't do much at a smart contract level um and you you brought up kind of like why someone or why an entity might do that to begin with um to try to i guess remove some personal liability from any of this any of the smart contract uh bugs or you know hack or just a way to be recognized as as part of a central entity to endow um

which is super cool and and i was kind of of i guess a similar perspective i you know how do daos kind of basically everyone's looking for regulation or asking about regulation and my question is kind of how how it's even possible to regulate these dows and you touched on it a little bit you know the enforceability just isn't there um but for tax purposes or or for like you know agreements off-chain it certainly seems like there should be a legal entity that can engage in these kinds of agreements um that isn't just cemented in smart

contract you know maybe that takes away a bit from decentralization but uh i i do think it's it's um useful to have some sort of uh entity that can act as the the central part of a dow um and then kind of branch out and decentralize from there i'm not sure if that's like a shared opinion um across like kind of the decentralization maximalists um but you know my understanding of decentralization has taken on kind of a a new new change as we've seen how more and more projects can provide something useful and provide value to the ecosystem

but not have you know a completely decentralized team and i think binance smart chain is a good example of that yeah i think decentralization i used to think was a binary thing um i do agree that decentralization itself is probably on a spectrum um uh because i mean you you could go into the nitty gritty and you can go okay give us an example of a decentralized system right and then people go oh proof of work blockchains uh bitcoin and uh and ethereum okay cool well you know there's been many times in my lifetime that 51 of the hash rate was owned by one entity in bitcoin um there was a thing called big gigahash.io back in the day and they had 51

for like a couple of weeks and they actually had to spin up a bunch of fake pools that weren't really the main pool as to you know uh satiate people that it wasn't all in in the control in one pool when it's like well really you're pulling the strings behind multiples it doesn't matter the same is kind of true now when you have a couple of mining entities and proof of work which if they were to collude if government would have put a gun to someone's head then hey you know maybe they could collude right so i think the the decentralization kind of discussion it gets lost a lot and people um it's people get very passionate about it but ultimately there's probably multiple ways to look at it it can be interpreted in different ways and it probably means the decentralization

itself is not binary it's not like this is decentralized and that is not decentralized it's like well this is probably more decentralized than that and i think certainly um you want to as a as an l1 chain l1 chain should be um going for greater decentralization um and there's probably a couple of reasons for that but ultimately it's up to the people who are building the the cool apps on these chains to to to go and do that it's not really up to the l1 chain itself to go and build uh different apps so you just want a neutral layer um which doesn't take sides in anything and that's what people can build on um you know that's what a protocol is essentially so i think that's

that's a necessity you mentioned regulation as well and here's my take on regulation i dealt with uh like um for the last 10 years i've been talking to various people in different regulations imf central banks i was in a room pitching uh stable coins to central banks like six years ago a bunch of them laughed at me they said that's never going to happen now look what's happening they're all they're all coming up with their own cbdc's um so yeah i mean i think these like regulation is something that people talk about because it's a topic without an answer um so you can like you can go on a panel at a conference and go ah but you see the problem is regulation

and then you can just make up some like interpretation of what you think and then that's like a valid answer because it's not like a computer engineering problem when there's like generally one answer and that's the answer whereas regulation there is no answer because it depends on whose patch of dirt you're talking about um you know are we talking about uh us regulation what about zimbabwe you know maybe they have an opinion on on crypto like why don't we follow their rules what about china what about thailand um why are we picking one patch of dirt as opposed to another what just because he lived there is that a valid you know uh moral premise for daos uh to to adhere to like oh because a bunch of people live in some place therefore we should adhere to that law

like well i don't live there so i don't want to adhere to that law and nor should i nor that's not how the world works so anyway i think um regulation is something that yeah it doesn't really have an answer it's probably pertinent to people that have to interact with governments in their own jurisdiction so i think where where it comes down to is that dows themselves i think should be neutral um they should stay neutral and they should just be out there in the cosmos executing their transactions on a smart contract and if anyone um has problems relating to regulation well that's that's that particular person's problem who lives in a particular country in jurisdiction and i think that's the sensible way to deal with it because that's how we deal with a lot of things

in the world um you know just because you have a website in one country it doesn't mean that you're subject to the regulations of you know some other country just because you have a website and it's accessible so yeah i think um it's it's probably best to be left up to the individuals to manage their individual um you know issues they might have with regulation and that's fine that's great and i implore you know places like wyoming that seem to be friendly with uh with crypto to to keep at it and i think that's um that's a good people a good um a good thing for people that live in that in that location so yeah yeah i think that's ultimately what a lot of the a lot of the building premises that are on d5 right now i mean that was one of

the things that that attracted uh me and i think a lot of others to the community is that ability to kind of be borderless uh with with respect to all sorts of commerce that's happening online um i mean that that's these uh ideologies that we speak of are kind of a shift in thinking that has come with the openness of the internet and kind of this idea of global of global unity and uh transactions happening on the global uh like economic scale more than ever um and so it kind of forces you to think about what rules and what is in place currently uh that is you know prohibiting i would say any sort of further economic growth which can be bad

um we know but in dfi's case we like to think that what we're doing here is building a better future for everybody right but the point is these rules are a bit anti uh and is it antiquated or antiquated their antique rules right they are they are meant for times of dealing with notes and checks and handbooks and banks and and tellers and um you know as these things change we we're kind of forced to adapt to what is is in the now which what is in the now is a global open world right and so that's kind of what we have with uh with the internet and web 2 and then now with web3 with all this online commerce and crypto and d5 right we're even further forced into

this realm of borderlessness which honestly excites me because i think that there's a lot of good possibilities that could come with uh kind of a world unity um more so than like old kind of rules with uh states and um and all sorts of governments and all that so all this being said george uh i'd like to pose a question to you which is what is the worst thing that you could see happen to d5 in terms of regulation right so if a government entity or some sort of financial entity came out with a regulation on d5 what would be the worst thing that you could see happen i know it's a tough one to kind of put a hypothetical out there but curious to kind of hear what you say there yeah yeah so i

think um i think a lot of these like people governments will do it uh they they will come out with laws um and they don't need reasons for the laws that are logical or anything they'll just go and do it and you know many countries will do it right and many countries will do it wrong i guess the question is what's right and wrong i think in the case of d5 you'll probably see that governments might not like people being able to transact freely with each other um because we we have laws around the world for things like currency controls and um you know all sorts of different things in argentina you're not allowed to use paypal or own u.s dollars in china you're not allowed to wire transfer above 50k um you know there's

lots of different weird rules around the world that um if governments do wake up and they eventually will and they realize that people are transacting freely they might not like it no they'll go make some rules and i think a lot of the rules you know the worst that it could be is is something like oh we're just going to ban everyone that does it or or make it legal and that's probably what they'll do but the point is again on enforceability if you have this open system which anyone can interact with and and nobody can reach in and take your private keys and force you to do something um then you can make all of the rules you want but it doesn't mean that it's enforceable in any way um and because you know everyone's sort of pseudonymous and you can make a brand

new address you know anytime you want it's very hard to say that oh this address equals george's address um and you know that's it right there because it's just a letter of it's just a bunch of numbers and letters right there's no central database there's no ability to um you know force that address to do something so yeah i i think that there will be uh there will be laws that come which are not helpful um some governments will come out with them but there will also be people that see the opportunities um and there will be governments around the world um that are and i've actually spoken to some of these at different conferences over the years of of different smaller countries that are like look we're a small country we have a small gdp

we want people to come to our country and we want to want to get rich and it's kind of like okay well you should make it easy for all of the entrepreneurs out there that are building stuff in this decentralized world make them make it easy to come to your country they can they can come here they can invest money they can set up a team they can have an office space um you know they can buy a flat they can you know buy food and whatever like they're investing money into the economy um so so there will be places which will go the other way and we'll we'll want to embrace um you know this this kind of uh thinking so i think it's great you know there's pros and cons some places will get it right we'll make it more restrictive or problematic um and then some places will

go hey we want all of these businesses to come here all these these people these entrepreneurs we're going to make it easy whatever that means i don't know but they just that it makes sense to try and do that and try and attract a lot of these crypto companies yeah and we're kind of seeing that with miami i think is a great example of that um you know not not really one of these smaller countries um but a city within a bigger country that again is trying to attract more and more um entrepreneurs founders of companies specifically in crypto um to try to just really throttle the the innovation and development um at a central level at a local level um and i think that is important just you

know getting all the way back to the conversation that we started with around regulation like you said the the problem with regulation is one that a person might have with their own local government um you know at whichever level and i think miami is starting to show like okay we're we're friendly we we don't um you know want to put kind of that that like shade over your face of uh like dark regulation um and some of the some of the smaller countries are you like you said doing that as well um to try to really get people to move there and and innovate there um so the regulation seems to be the best way to

signal to the to the entire community like hey we're friendly towards crypto come here come uh you know develop and and raise your products here um and i kind of getting back to something that andy said about uh this global uni unity concept i think that that's really important um as we kind of shift to like a collaborative mindset um rather than a competitive one and crypto is really fueling that that paradigm shift um and i think as we see more and more friendly local communities um kind of signal that that they're open for business when it comes to crypto we'll see those communities start to

collaborate with each other and maybe we can get some more real world applications some more business applications that you know can can kind of push mainstream adoption even further um you know i'm not sure exactly what those might look like but as miami starts to collaborate with zimbabwe and wyoming you know i think there could be some really interesting pairings on uh how we see blockchain and crypto used in the real world yeah i mean ultimately uh the places that get it right uh will do very well from it and the places that get it wrong will will lose money and investment right so over time it's it's a losing uh it's a losing trade to like try and limit things

because what will happen is that people will leave a particular place and they'll go to another place and that other place will do very well they'll make a bunch of money they'll have no people uh employment and so on um and uh and the other place won't so i think the hand will be forced at some stage whereby crypto's not going away um you know some places will get it right and it continues to boom and they're doing really well from it so the people that are limiting things you know might go hey maybe we should be like that maybe we should be opening um maybe we can get some of that money and we can do well as well uh so yeah i think ultimately you know the the the decentralized movement will win out um but there's going to be some turbulence on the waters you know before

we get there yeah i'm kind of curious what you think about um the the current state of wealth inequality in america and i guess the world but like also more more like more relevant to our listeners it's like how do we feel about this new uh era of crypto elite right like if you think about it now there are more millionaires and perhaps billionaires from crypto uh than ever before in the world and i think the trend is going to keep uh you know keep in that direction and here we are with this world of covet and people losing their jobs and inflation and all that stuff's happening but

we've got a bunch of these crypto degens who you know like us are trying to add diet to the world but basically you're at the right place at the right time and all of a sudden you've got people that are you know just on top of large sums of money um and almost making up a new class of uh of of wealth like i'm curious what you think about how this wealth is going to be distributed into the world kind of what what some uh advice is for anybody who's listening who has been doing very well in crypto and i mean just overall like what you see as as the uh as the impacts and the residual effects of of kind of this new upbringing of crypto wealth happening yeah you know there's a there's a good

saying i like on this one i can't remember if it was so there's a there was a eastern philosopher called i think laosu or it was a confucius and they said or one of them said um the biggest inequality is to try to make unequal things equal and i think that's that's really important to understand so like with the growth of crypto and and you know people getting rich and these sorts of things that's great um you know we want more of that and we want we want to lift everyone up rather than use a hammer to to hammer some people down because i think what we all want is we want everyone to be uplifted and and to get richer and and what that means is maybe they can pay for different things in their life or improve their socioeconomic

circumstances something like that um you know it is a pathway to having greater freedom i think so i think ultimately like you can have equality um south sudan has equality everyone's equally poor um that's that's not equality is not the goal um the goal is freedom so what you want is you want to have maximize freedom maximize the ability for anyone to be able to go and start anything that they want in say the crypto world or something like that and d5 i think is a good example of that is you have all these financial applications where you've got lending protocols and people giving loans like imagine trying to do that in the real world you can't even turn up to to that discussion without 50 million dollars in

your pocket to buy a lending license and even then you know you've got to have all of these different things whereas you can spin up that in in d5 like you know in a day so um so i think it's it's very liberating um and i think that's great and it enhances freedom around the world and certainly for people around the world that might not have um you know the ability to do that they can now do it in a way more cost efficient way a way more scalable way um and and that just opens up more opportunities and more opportunities equals good um so yeah that's what i think you see it kind of more as yeah more as a freedom for um the like just the entire world if you will like sure you know of course there's people that have made a lot of money from

crypto up to this point you know there's going to be a lot of people who make and lose the money right but we're regardless of all this talk about equality the goal yeah you know ultimately is freedom and i think crypto gives you kind of that choice out um you know of the current which is the ultimate freedom um you know and yeah i mean it's it's just interesting in these times right now where it feels like that wealth gap is ever growing um sometimes you can feel a little bit guilty as far as how easy you've you've been doing and how well you've been able to you know keep your business going and yourself because of crypto in a huge bull market you know when a lot of the world is struggling and perhaps i'm just i'm projecting a bit here but you know

sometimes there is some guilt that hits it's like wow like like we just got kind of lucky and boom right and so you know at the end of the day i i align with your thesis as far as um where the freedom lies and yeah i mean the the best part about it is you know we we started in d5 early you know earlier than most but the thing is it's not like we we had any more of an opportunity than anybody else sure other people started with more cash or less cash or more knowledge or or less knowledge but i think to you your point about the freedom is anybody can get in here and and do these things you and i mean that in of itself is as liberating as it can get

as it can be yeah i mean you've got a level playing field now right so before you didn't have a level playing field right now you can go and make a whole new d5 project just with a laptop that's all you need you don't need a 50 million dollar license and a stamp from a government and 10 people working in compliance and two years waiting for this and that you can just go and do it so i think that um you know that that in and of itself is is great and and also when we're talking about um you know people getting richer or or something like that i think it's think of it this way like it's it's kind of more people now have access to the level of wealth which was perhaps contained with fewer people previously

so previously like i said you had to have a banking license or something like that in order to to be a bank or to be able to send transfers right so there was a very small number of people in the world that could ever achieve anything like that um whereas now it's it's a much bigger and an open uh playing field for anyone so really the wealth that you're seeing is kind of just being unleashed from what was what was previously locked uh you know behind these gates and these gatekeepers and these these gatekeepers can no longer you know it's kind of like a dam a dam that's breaking you know they can't really keep it in anymore uh you know this d5 thing is crypto thing it's going to continue to grow and more people around the world are going to experience some of this wealth

which perhaps you know with central banks printing money willy nilly and giving it to uh you know other banks at zero percent rates like well how come everyone is paying 18 on their credit card so can we have some of that like so i think yeah it's it's it's unleashing a lot of the the the stored economic value which um which is great for the world so um yeah yeah and uh i i mean i've seen this whether it's the efficient market hypothesis or just kind of a phenomenon in crypto markets um we continue to see inefficiencies exploited and uh the banks and the intermediaries for lending and borrowing were a huge

inefficiency and now kind of the innovation of crypto has led to a more efficient market and and capital is able to flow more freely um you know between lenders and borrowers and it's not locked uh behind the bank's walls like like you're saying um you know i think that this is great like like talking about kind of uh you know philosophy behind each of our perspectives and and crypto as a whole um but i realized that we haven't really gotten into uh your story george and kind of uh how you got into crypto and and what enthralled you about d5 specifically and then kind of how you navigated um what was out there

um and ultimately found you know your niche in d5 and step um can you kind of give us uh you know the the elevator pitch on on your your story and kind of how your journey has led you here yeah sure so um i've been in crypto for over 10 years now um and uh back in well when i was early 20s i think 21 22 i was a student in australia had no money i was working in a supermarket i was doing my degree at the side by the way never finished my degree um so um but by this i heard about this thing on the internet i had a um yeah i liked electronics engineering i was studying electronics engineering

at the time uh i liked that and i was sort of dabbling with computers and graphics cards and overclocking and that sort of thing anyway i saw on one of these you know computer forums hey you know you can you can make money with your computer hardware how that that sounds good mining what's that um so in uh in 2011 there i got into into mining and basically i was buying uh graphics cards off ebay and then just building them uh in my room to to mine bitcoin and uh it kind of doubled as a heater so it was kind of like a heater which made money and that's the best kind of heater you want right so um so yeah so that was good uh and from there i just sort of i i didn't know anything about finance right finance was this topic that you

hear about on the news that sounded kind of boring and i just had no sort of interest in it but from from bitcoin i was able to learn about sort of what is money where does it come from how does it work um all of these different things through the various schools of thought that were involved in bitcoin at the time so yeah from that i um you know i was one of the first to get a fpga um you know miners uh fpga miners were like the next step up from gpus i was the the first batch of asics as well um there was a company in kansas city which made these asics and i again like i hadn't really made too much money but i went to the bank and i got a

loan that i couldn't afford so at the time i went and got like a 25k australian dollar loan and that was like the max that i could get them to give me and it was at some crazy interest rate like 18 or 20 or something but i'm like hey i'm gonna get this loan and i'm gonna just make sure that i'm in the first batch of these miners and i'm gonna do it and then eventually you know it was delayed six months i ended up flying to kansas city to see this company you might um remember them or heard about them butter for laps um and to go and see if it's legit or not i went there it seemed pretty legit at the time i met the team um you know they took me around so anyway it was um it was good and uh and i learned a lot

and luckily the miner did come uh and it did very well for a while but after that um you know i was doing krypton trading on the side for quite a few years uh in in my in my job which was working for a mining company um 2014 decided to quit my job uh moved to hong kong i decided hong kong's where it's at a lot of finance stuff happening there um and they seem very welcome to entrepreneurs uh co-founded a company uh with a friend there and yeah we started the first uh bitcoin remittance company in the world um and that's sort of you know where uh if you google me or you'll find a whole bunch of stuff talking about remittance right so i sort of done that six different countries uh you know based in hong kong there and and

you know that was that was a good part of of life and learning but um in in 2020 uh you know when when covert hit and all these things happened uh we decided to to close the business because basically all of our customers uh had to close themselves uh so we were providing physical cash shops the ability to exchange crypto cash and cash out but pretty much all shops were closed for most of the year in hong kong so um so we decided to close close the business return the money to shareholders and uh go on to the next thing and that's where i sort of i really got interested in in d5 probably um you know 2019 2018 i was dabbling a little bit with george it says here in the in this headline

that you were as interested in d5 as your first ever uh bitcoin being mined yes it does it does and it's true 100 um so like you know when last year when d5 really started to take off i was like wow this thing is awesome like you mean i can pay my rent uh by taking a loan which i'm paid to take and then basically i'm getting paid to pay my rent like that's insane um so yeah you know it was a really exciting time uh and i was just sort of you know doing things myself personally um you know when when i've lockdown hit and everyone's sort of at home doing stuff like most of us were in d5 summer um but uh yeah sort of at the end of

2020 um uh i sort of got together a couple of friends of mine uh who i'd known again for for quite a while and been in crypto for a while and we're like hey let's do like a dca contract on ethereum dca is in dollar cost averaging right so uh you put some money in a contract and then it goes and buys you know ethereum for you every day or every week or every month or whatever time schedule you you set it the problem was that doing that on ethereum at ethereum at fifteen hundred bucks guy at fifty um it was gonna be a hundred and eighty dollars if you per transaction if you just had six users so that's insane right now we're at four thousand dollar ethereum and like three hundred grey right so

forget it's probably like a thousand dollars a transaction now for six people so you can you couldn't build anything scalable like a dca contract and that's probably why there just hasn't been one on on ethereum yet um we we looked at the side chains right x die and matic um they didn't have the liquidity uh you know started this year so we built out a prototype there as well for this dci thing we started looking at uh okay people want to buy these these d5 coins if you can't do it on ethereum and you can't do it on side chains and how you're going to do it um and that's where sort of solana came up and solana has a lot of these wrapped uh d5 coins you've got your wi-fi you've got your rv um you know crv everything that's listed on ftx basically

it's all there on solana you can buy it it costs literally nothing and you can deploy a contract to do exactly that so we entered a hackathon that was earlier this year that was with step finance the initial iteration was just a dca contract went great but you know what like we found at the end of the hackathon that well we could just be another platform out there that's like hey guys come use our product it's cool trust me um and then you're just like you're just promoting this dca thing the problem was that solana uh lacked a central place to bring everything together right ethereum has a few dashboards right you got your zapper zerion um d bank there's a couple of these ones right where you they integrate a lot of projects bring

it all together on a dashboard maybe they have some value ads like swaps or they can help you yield farm or whatever but like that didn't exist on solana so we we pivoted at that stage to to to go and build that and that that's what step has become it's been this this portfolio manager this place to aggregate transactions across the entire salinar ecosystem and we really think that defy the multi-chain world is here everything will be multi-chain in the future there's it's not going to be a binary thing it's only going to be this chain or only that chain there will be other changes like there's thousands of coins and many of those chains will do d5 and we think that solana is well placed to capture a lot of that growth um you know d5 last year was at 1

billion tbl and now we're way over 100 billion tbl so i think that's just going to continue to grow and maybe 40 of that might end up on solana at the end of the day so yeah you know we're really excited being this this one one location that brings everything together we have a bunch of value-add stuff uh thrown in there that just makes people's lives easier and and you know we went through the demo as well uh you know yield farming and so on so so that that's that's what we want to do that's what we want to be um and uh yeah that's sort of how i i got here great yeah i mean you hit on a lot of stuff and um kind of how how your own journey has uh taken you all the way through bitcoin

and when it started with mining um through to ethereum when you discovered d5 and then now after realizing some of the limitations of d5 on ethereum um d5 on solana uh which you know for for our listeners who maybe haven't used solana but but ethereum just a bit um solana is it has much more throughput uh which means that the network is uh less congested and it takes a lot more transactions uh to get congested and you're looking at um gas fees that what i've heard are about a thousand times cheaper um and transactions that take um you know only only a seconds to a minute

rather than sometimes a few hours to confirm um so so the throughput of solana is much higher um and can handle a lot more transactions per second which which gives it some more utility um so we're seeing you know a lot of different protocols on ethereum get kind of bogged down by the different um you know protocols really really exploding in volume and it's a good problem to have because these protocols are are seeing so much activity um that it can't really it almost can't handle uh how much demand is flowing through these systems and that's where other other layer ones come in so platforms like solana

or binance well finance smart chain is kind of a different animal because it does run on ethereum but but layer ones like solana uh can kind of uh silo a lot of this liquidity and a lot of these transactions that might have been happening on ethereum but you know have more concentrated protocols uh for solana specifically so i i'm curious and um this has kind of been echoed in our chat uh especially recently with with all the development of layer twos um kind of kind of what the future looks like for you and your understanding of defy um and the narratives that are taking shape

in d5 right now how do you think these narratives are going to evolve around transaction fees um you know even if eth 2.0 goes off without a hitch you know how will that impact uh the ecosystem and how might we see layer twos kind of uh throttle the the ethereum ecosystem and what impact that might have on other layer ones yeah i mean they're all good questions right so i think that the basic premise is that d5 will continue to grow okay cool now if it does that um how are we going to scale the system right now ethereum it doesn't have f2 deployed yet in you know proof of

stake and all this kind of stuff it will at some stage in the future that's great um but right now the realities are that you know i went to i went to sushi yesterday or was it today i can't remember to do a swap it was 50 to approve that swap and then it was 176 to actually go and do it so the problem is that you know you're never going to be able to attract new people to the system um if you have to your buy-ins like 220 dollars to to just swap something you know and what if what if you're only swapping like two hundred dollars right you know so it's completely unviable in its current state to be able to do that now there are a number of solutions right and we can look at them right so you've got uh you've got other l1s

like solana like bsc like anything else that will come along i think they will uh they will be always there um and new people new retail like they don't want to pay 200 to swap so they're just going to go to the location which allows them to be able to do that um so i think a lot of what you're seeing right now with new uh new people to the to the crypto world you know i made a comment on twitter actually uh like last week i think was that actually a lot of people are coming to solana that have never used ethereum and a lot of people are being like uh what's uni swap uh you know what's curve what's wi-fi never heard of that you know all i know is pancake or solano right so

people are coming to it from the perspective of they've never actually interacted with with the expensive system um and that that's fascinating to see because it means that it means that this narrative of fees are preventing people from transacting is real and it is making a definite impact on these other l1 so i think you know number one you'll see these these other l1s continue to grow and get traction um and more stuff will happen there and then once that happens like do you need to go back to ethereum that's that's that's the question right is that once all of these other l1s have everything that ethereum has apparently they're still sort of building out their communities that's still kind of new but once it does like what's the incentive

like if i can go and get a loan on some other platform well why would i bother going back to using metamask and you know ethereum and all that kind of stuff so that's one question i don't know the answer to that um but then you have uh you've got f2 and you've got l2s as well so layer twos on ethereum are they going to solve the problems are they going to bring people back to ethereum are they going to smash all of these other l1s that are taking all of these users um i don't think so the reason is that well firstly l2s right l2s we've had on ethereum for a while they haven't really garnered too much traction like i was hey i was an early advocate of loot ring i was telling everyone to buy it at five

cents or whatever um loot ring does a great job on ethereum there are decks and they're on an l2 as ek roll up and that's that's great um but you haven't seen a massive adoption of them just yet because they're kind of walled gardens right 1l2 is not really interoperable with another and in order to make them interoperable you have all of these different proxies and weird different things that you have to do you either have like a middleman in in between the contracts or maybe the contracts need to implement some sort of technical solution so they can talk to each other so like you you might have you know uni swap or sushi or something on an l2 on ethereum and maybe it's super fast but nothing else can really talk to that contract unless it first has to get into

that l2 you know walled garden so i think that's going to be a problem um and we'll sort of see how that plays out now maybe you know ethereum two will help a lot with the scalability issues i'm sure it will um you know it certainly increases throughput you'll see fees drop really low uh but the question is then okay cool uh are people gonna flow back to to ethereum uh that's kind of where the genesis of a lot of these d5 stuff first happened was on ethereum that's why we talk about it um i don't know i don't think so i i don't see that there's like going to be some massive draw card if everything exists everywhere else so i think yeah i i talk about the multi-chain future a little bit and what i see it like

is kind of like medieval cities so medieval cities back in the day you know you had the dark ages right in quotation marks that was where nobody really traded with each other and everyone was kind of insular and you had the king in their castle and they were in their castle and that was it and all of the serfs had to go and you know work the lands and pay the king um but eventually you had the renaissance uh that led to the industrial revolution and so on and and you had the age of discovery and explorers you actually what what happened was that you had new technologies arise which enabled people to connect with each other and trade with each other and you saw that there was lots of different trade cities popping up around the world like venice um you know or you know portugal and 14

1500s lots of trading nations set up and that benefited them greatly so i see the same thing with the multi-chain world whereby currently we're kind of wooled off in these different ecosystems and what will actually bring a massive you know flourishing in liquidity in use cases in everything will be when you can link a lot of these blockchains together and transact across them like if you could share liquidity pools not only across contracts but across blockchains that would unlock a lot of cool stuff like what if you could transact on solana but use the liquidity from ethereum or bsc or something like that wow that'd be amazing now you've just opened up billions of more dollars of you know cool new things which which

people can use so that's how i kind of see things playing out is there will be this tendency to uh you know d5 will grow there will be a lot of these chains there will be a lot of solutions but ultimately interoperability is the important thing and that's what's going to really see a flourishing in in this whole ecosystem and massive continued growth yeah that was the big thing about a lot of these um all all the roll-ups and then the evm compatible versus evm non-compatible chains was basically ethereum is like is like the the home base for everything um you know all all transactions are all defined then you've got all these all these other layers as you're

explaining that are basically working as best as they can to be composable with ethereum because if they're not composed with ethereum then it's going to be very tough for them to basically attract any of the network share now i do totally agree and understand that people are are going to join um say a new chain like uh like um avax or solano without using ethereum but i think for the for the majority a lot of people know and use ethereum or binance smart chain or or some sort of an evm compatible chain as their home base so what we end up getting is all of these all these different layers um and and side chains and and um and roll up solutions that all kind of

go into basically taking the congestion out of theorem and putting it elsewhere which in of itself basically just creates a theorem as a stronger chain um as one of being able to kind of um have all these other bridges to all these other different kind of cities as you're saying um all kind of leads back to ethereum which which is definitely like the bull thesis for a few min it kind of goes both ways in terms of oh but then ethereum kind of loses all of its market share if that's the case right but you know like the way that i like to see it dude to my bias is basically you know it's like it is like the home base and it's the it's where all all the bridges lead back to right um and so with that being said that the topic of composability with all this as

you as you kind of closed up there with is you know just ultimately of the utmost importance um you know so i'm i'm definitely interested to hear your thoughts kind of like on on the existing um layer two solutions that are supposed to be coming out so arbitrary optimism right and then we we currently have polygon and phantom right so i'm just kind of curious what you think about um you know like the current extent of adoption with these um you know specifically with uh polygon um and solana and phantom and then kind of what your like what you're expecting um from arbitrum and optimism and then i'd like to kind of get to some predictions about gas prices after we uh

get into this a bit so kind of what do you think about your the current adoption of l2 on polygon um on solana on phantom and then what are you expecting from arbitrary and optimism um in terms of adoption and composability for d5 yeah so i might actually start with the stuff about rollups actually because i have some some comments to add there i i think that optimistic rollups i don't think are going to make it long term i think everything will probably converge to a zk roll up zk is pretty much superior in every single way um and this you know vitalik went into a blog post about this right so the way that optimism works is that you have a bunch of transactions which happen

in this thing called a roll up and then you publish it to the l1 chain or the main chain and then uh you have a week period there for anyone to dispute it so you're basically hoping on or you're hoping that if somebody did something bad like you know tried to scam or some way within the roll-up it will be noticed and disputed and that can be resolved before the money is actually allowed to be withdrawn to the l1 chain and it's out there and and you can you can take your money so basically there's a one week period to withdraw money from an optimistic roller um now there are some solutions which are looking to reduce that via different proxies and middlemen but

ultimately the the security of the optimistic roll-up is just hoping that people come along and are reading things and can dispute something which i think is uh i mean it's a solution to scalability but it's not really that great compared with say a zk roll up where you actually know that um everything is uh consistent at the time of publishing the proof to the blockchain and i think that itself is a fundamentally better model so it means that you get in and out of a zk roll up without a one week lead time you can just go in and out it's just a transaction you know you see that loop ring um so i think that's great and you know but the problem is that optimism seems a little bit more composable at least at the current

stages but you have things like i think aztec protocols ek sync a couple of these other projects which are trying to make zk roll ups a lot more composable um you know using solidity or you know some other language often the zk roll ups are done in you know some other other uh language or or compilers so um so yeah just making them easier to be composable as a zk roll up i think is where the future's going to be at and then everyone will just be on a zk whether they'll be on one or whether all of the zk's will talk to each other don't know um but i think it will probably tend towards a zk roll up um okay and then once you've got that it's it's like okay well what about um you

know these other side chains uh so yeah it might be polygon or x die or something like i said in uh previously like we looked at side chains we we built a dca contract on them but the thing is a side chain is not a main chain the side chain is an alternate blockchain it derives its security it's underlying security um via a different set of nodes and validators so it can't really be construed as to being the same as a roll-up a roll-up derives its security from the the validators that are on the main chain um so i would say that a side chain i put in the same basket as like another l1 um sure maybe it's easier to bridge but ultimately it's kind of the same thing

right so you're still going over a bridge your network security's defined by a different way that's not the same as the main chain um so it's kind of a different thing so i don't think the side chains have too much longevity in my opinion i think either l ones will get massively more scalable uh and then nobody needs a side chain uh or you know people will find solutions for l2s to talk to each other better in both circumstances you don't need side chains um so then you've got you know things like solana and bsc and these other guys like i said before like they're going to continue to grow they're going to continue to get more retail uh you know customers in just because of the cheap fees right now that's going to enhance a lot of you

know it's going to bring a lot of traction it already is there's still billions flowing into these chains um they are pushed by big companies um who are looking to to use them for various reasons in case of solana you know alameda is the market maker on all of these different markets or you know one of the market makers rather anyone can be a market maker but alameda has a bunch of money basically market making there so that is that is good for liquidity um and i think that people will follow the money uh if the money is there then that's where people that's where capital will flow uh if you have the greatest invention in the world but there's no money there's no ecosystem or anything nobody cares um and i don't think anyone will care so i think solving a liquidity problem is has been

you know that's why we have thousands of different blockchains that claim to do all sorts of cool stuff but people only really care about like three or four in the d5 world and not the thousands right and it's because none of these other chains have the traction the liquidity and the community so i think yeah it's up to these other l ones to to prove that um that they can continue to attract uh new users uh continue to compete and like the medieval cities like what happens is that every one of the level the playing field is leveled and then everyone just has to compete on their merits and then the best person will win um well i mean everyone will win but some might win more than others uh so yeah i think that's what we'll see and it's basically just going to be

bullish for d5 anyway and you see some some d5 protocols like sushi which they're not um like sushi's already on five different protocols at the moment uh or maybe even more now i haven't kept up but uh you know they certainly see that their dap is bigger than just ethereum um and i think that you'll see these other protocols going hey uh there's a wide world out there why don't we get a piece of that other world and uh let make our dap cross chain use a bridge whatever it might be um to to yeah to bring whatever they're doing to more people and i think that's great yeah and ultimately um you know like you said to

to allow those uh adapts to traverse different worlds different l1 um there needs to be interoperability and and i think we're seeing that uh start to kind of evolve um you know very very soon we should see direct fiat to l2 on-ramps um that's something that d-gate is working on and polygon is working on um and i think that is going to be a pretty significant uh stimulus to retail that that they now have uh an on-ramp directly to l2 that that they don't ever have to get onto l1 um and and pay those high gas fees the the other thing is

bridges between different layer twos um i think the composability there is gonna allow um you know even even more experienced farmers and and uh you know defy uh investors um to to kind of navigate between different worlds while still staying on l2 um because even if someone is more experienced kind of going back and forth between different bridges uh can get time consuming and uh gas consuming so as we see uh more interoperability um between fiat custody and d5 in addition to composability between different l2s you

know that that is really going to scale the entire ecosystem quite a bit and i think we'll we'll be able to see uh kind of at the not not quite the max of uh demand being satisfied but i think uh we're certainly on our way there to fulfilling a lot more of the demand that's out there yeah and with that said uh as far as the demand goes clearly it's outweighing any sort of um of block space that ethereum has currently uh just by means of gas price right now is like 330 and prices aren't even that volatile they're in a decent little range right here um you know george i'm curious what you think the average gas prices are going to be on ethereum you know in say august or

september that's a good question i think that until ethereum 2 is deployed you're still going to see really high gas fees you know maybe in the 100 to 300 way range you know as an average um sure these l2s will come along but i don't know i don't see them picking up hugely in the short term it'll take some time so i think gas fees are going to be with us for a while and that's that's just a it's just a drag on on on ethereum development right now like you know we we tried to build our product on ethereum the dca contract literally couldn't be done uh 180 dollars per transaction for six

users at an f price that's a third of what it is currently like it's not viable right so you have to have some sort of other solution um and they will come but um yeah i just think it's it'll it's gonna take some time um so we might be talking like a year from now uh or maybe even longer um until it's really down to a level where everything can scale really well on ethereum and it's nice and juicy yeah it makes sense it's it's gonna be a while it's it's just it's just such a yeah it is a drag um it makes you just kind of wonder what could be uh with it honestly it makes me want to stick around in d5 for long because if the if

we could have d5 right now uh like without the gas but with the with the level of network security um the ethereum and bitcoin bring like oh my goodness man like wow like that would be something to frickin you know to fight for but right now it's like these gas fees just turn everybody away um and it's something that the retail doesn't like so i guess guys check out salon and check out um you know other other side chains um if you're if you get into it and uh yeah george it's been an absolute pleasure rob um do you have any closing thoughts man i i think we covered so much um i really enjoy when these conversations kind of steer their way towards more the philosophical route because we can always kind of tie it

back to you know the more practical conversation on um you know which farms are going well and and uh kind of the technicalities of how different uh d5 mechanisms work but i i think really more valuable information is is understanding the different narratives that play um the different uh perspectives that people have in the market and and generally the the philosophy that comes with uh crypto and d5 uh to me provides a lot more value in a investing standpoint as well as um just like a community member of d5 and crypto um so yeah that's really my closing thoughts uh i don't really have any more questions i i really appreciate it

coming on george oh thanks so much guys you know it was it was great fun i i think yeah to to really understand crypto there's a couple of things that you've got to do you know number one you've got to understand the philosophy behind it you know why people do the things they do why is this important how does it compare what are the questions and and the problems that are being solved here really think about the philosophy behind it but also you've got to think of are you a trader or are you an investor they're two different things and i think that if you can identify the narratives and formulate a thesis on what you think the future is going to look like that's more like an investor and that's someone that's you know not looking for the next you know pump or whatever it's more sort

of okay i have a thesis i'm gonna follow it through and uh yeah i think that's that's probably a good way to be at the moment but uh yeah you know it's been a great discussion guys thanks a lot for coming on george and uh i'm sure we will stay in touch appreciate the time and let's keep crushing it brother