DeFi For Normal People by Mike Silagadze aka @MikeSilagadze

Transcript

uh okay well thanks for uh thanks for listening to me um uh I'm going to talk about uh a topic that's kind of near and dear to me which is uh how to make dii accessible to uh normal people rather than just the relatively small handful of uh weirdos like ourselves uh that are super uh you know technical and and perhaps financially oriented um so first uh maybe by a show of hands uh how many people here use def fairly regularly all right so a fair number looks like it's uh it's most people um uh and so another question uh when you use defi whether you're using metamask Hardware wallet you know however you use it do you feel safe and comfortable do

you like do you feel like you press that button and you're like yeah I know I'm I'm not going to get rugged wow almost almost nobody all right uh yeah and that's that's typical I mean that's how I feel every time I you know I use any kind of Def app uh you know I I click the random hex transaction that shows up on the wallet uh and uh you know and hope I don't get rugged I mean if you're you know if you're putting thousands of dollars in May maybe it's you know not the end of the world but you know can you imagine uh the stress of uh you know deploying millions of dollars or hundreds of millions of dollars you know by by clicking uh buttons that way um uh you know suffice it to say defi is not a very comfortable place for normal people

um you know when even fairly technical people like you know like ourselves uh don't really feel safe and comfortable uh using it so so uh what I'm going to do is first of all walk through uh a 100% real conversation and interaction I had in trying to help somebody on board onto Defi and on board onto uh crypto uh so what what happened recently is uh uh you know I was I was talking to a friend who is a a fellow startup founder uh about all the great things that ethery is doing with you know liquid staking and all the you know dgen stuff that you can do uh in uh you know in crypto with with the various uh uh uh you know investment strategies Loosely speaking

that that are available out there and uh you know and this is a pretty sophisticated person so he's about my age so not you know not super old um he ran a software company he sold it made tens of millions of dollars so like this is a pretty smart sophisticated person uh he's a developer like he spends most of his time uh coding like this isn't like a this is probably is outside of the category of a normal person um but even with this person you know the journey that I went through with him trying to get him to deploy Capo into you know into ethery um I think was very illustrative of the challenge that a normal person would would have in trying to trying to participate in this ecosystem so so I'm going to walk you

through you know what uh uh what that looked like um hopefully that's not too small so step one um so he's excited he says all right I want to deploy a bunch of capital step one he has to take his Fiat uh and uh you know convert it into crypto so the only you know feasible way to to do that is to get it onto an exchange so step one he sends it to Kraken and this isn't a single Kraken out frankly it's probably one of the better ones but he sends it to Kraken a week later nothing the funds haven't showed up uh he emails them no response doesn't know what's going on so he sends me a message being like hey did I just get rugged for $5,000 you know what like is this the crypto

experience uh uh so he naturally what he does he looks at another exchange he's Canadian so wealth simple is you know is a famous you know Canadian thing that that people use uh so he said right I'm going to try another one so he goes to wealth simple uh and tries to buy eth there thankfully he's able to get his his money into that exchange more uh more easily but he's as soon as he does that he um uh he says okay well once I get it into well simple can I you know how do I get it into metamask like what's the process of actually uh uh you know connecting metamask to this Hardware wallet which I told him that he you know he ought to use so he starts you know trying to figure out that whole

uh process at which point he realizes that with wealth simple they charge a 2% transaction fee which which was not you know obviously advertised when he uh when he signed up on it so he realized all right if he wants to deploy $50 or $100,000 like like it it it kind of becomes ridiculously expensive like it's not really practical for him to uh to deploy more Capital so now he's like all right well probably I can't use wealth simple uh anymore because it's not really feasible for large uh amounts of money so after then getting going back to Kraken getting on the phone trying to figure out what's going on finally the money showed up only to realize that now he's been charged 150 bucks uh transaction fees wires fees whatever whatever random buit fees are attached

to trying to send money somewhere so even before getting into crypto he's been you know hacked and slashed uh by random fees and money getting delayed uh and even trying to connect into this you know this defi ecosystem uh that alone for most normal people would be enough to kind of stop them uh from uh from continuing so great now he's uh he's figured out he got he's got he's got his crypto he uh purchased his eth um and then he's trying to figure out all right how do I transfer it from metamask into treaser which is the hardware wallet that uh that he purchased so that sounds like almost like a weird question well no treasure is just you can use it with

metamask but that's not obvious right these to a normal person that's trying to figure this out uh they look at metamask they look at Treasure these these are like two different things if it's in Treasure well then it's probably not in metamask so that was a a whole other source of uh source of confusion for him finally all right he's he's figured it out he's like oh so metamask is still the thing that I can use with my Hardware wallet he's he's got the crypto in the right place where he can now at least begin to deploy an ether F and I'm using ether deliberately as an example because I don't want to you know talk about other protocols but honestly ethery I think is is generally known as being relatively easy to use um uh imagine if if you guys are familiar with

some of the more exotic protocols out there like let's say pendo or something like that you know multiply this complexity by you know by 10 so he connects his metamask to uh to the treasure and then deploys one eth onto uh onto ether and so you know I guess a UI issue on our end in terms of uh communicating what what is actually going on to a user he thinks okay so I took my eth I put it into liquid um which is our defi strategy Vault so in order to do that I had to pay two trans I had to do two transactions and pay you know $5 and then $10 to actually deploy this seems like kind of uh you know kind of so that's just the the the fact that you even have to do two

transactions one to approve and then one to actually do the deposit is like this kind of weird and confusing thing like you don't do that with you know if you're trying to like buy a cup of coffee right or or even make an investment you're not like okay approve to use my credit card and now approve to actually buy the the coffee uh then uh another UI issue uh he he deployed into this liquid def strategy Vault and so he's like oh but it's not staked anymore because I you know I I took it from staking and I put it into liquid so it's not obvious to him that it's actually staked so I I'm explained to him no no it's still Stak don't worry about it um so again imagine if someone is taking like a a yield bearing thing

and puts it into a they're like whoa did I lose it now it's an a like what what what has it been transformed into so the fact that anytime you do something it gets transformed into something else is a whole other source of uh uh you know confusion for users so okay so now uh great he's he's invested $5,000 he's looking to deploy more you know more uh real Capital uh how do you track performance like you deploy the capital how do you actually figure out like is this thing working is it doing what it's supposed to be doing um it's like yeah good question how do you how do how do you track performance you make a spreadsheet and you like manually copy down the numbers every day and then you sort of you know make a graph of it that's how you track

performance for the most part so I told them okay look at dbank um dbank is a good source to figure out you know what what your stuff is is worth um um but but then he's like all right well that tells me what it's worth but like how much did I earn because like I have to you know he's in Canada uh uh so he has to pay taxes um so uh how do I report this stuff like is it income is it capital gains like what do I send to the CRA How do I explain a defi strategy Vault to the CRA and what source of income that is um so all of these steps if you think about the amount of context that a person needs to have a normal person in order to go through the sequence of steps of onboarding to

crypto putting it into some sort of wallet thing deploying it into a defi app and then tracking what's going on with it there's probably a sequence of five or 10 different steps each one of which requires a tremendous amount of context that most normal people justifiably are never going to get because it's just it's not worth it it's too complicated um it it needs to be a lot simpler and so ethery is uh started off as a liquid staking protocol and that that was the beginning of what we were uh trying to do our ultimate goal is to create a suite of apps that make it easy for people for normal people to use uh D5 um uh because defi as it stands is pretty much incomprehensible to uh

normal people uh so what does a normal person need to be able to do in their financial lives uh for the most part a person typically needs to be able to save their money so they earn money from some sort of income or business activity they need to be able to save it they need to be able to invest it and then they need to be able to spend it day-to- day and so ether's product road map what we're actually uh aiming to do Beyond just the liquid staking uh you know functionality that that we started off with is a suite of three products that serve those needs to save invest and spend Capital the first two products are Stak and liquid which you know we launched fairly recently um and then the third product is cash that I'll I'll talk about u in a

little bit staking is uh pretty straight forward it's a liquid raking protocol you take your eth you deposit it it stakes and reakes it on your behalf so you get all the great uh uh staking rewards reaking rewards points and and all that and that's uh you know would been pretty successful uh about three and a half billion in in a in tvl these days uh ethery liquid is a product that we launched about uh just over a month ago uh which is an automated defi strategy Vault because as soon as you stake your eth uh the question becomes well great what do I do with this I have this liquid you know staking token uh what can I do with it well for most people it's they're not willing to spend you know hours and hours researching 100

different defi protocols what they want is an easy button that automatically deploys their capital in a non-custodial transparent way and so that's what liquid is it's a it's a non-custodial defi strategy Vault and that also has been pretty successful it's now the largest uh uh yield aggregator protocol uh in uh in crypto it's about I think 450 million in TVO and in growing and then the last product is ethery Cash which connects uh these two and allows users to be able to actually spend their assets their crypto assets in real life uh what it looks like is is a non-custodial uh wallet that uh then allows that's connected to a credit card like an actual Visa credit card that

allows a user to uh then spend or borrow against their their crypto assets and the the gimmick of this uh credit card is it's a card that pays off itself using your your crypto yields uh the process of uh onboarding onto this product is also pretty straightforward you deposit your eth you buy it stake it and then you have your card that you can uh you can spend with um and so with this we hope that we can now open up this world of defi to uh uh people that don't want to deal with complex financial instruments but still want to benefit from the transparency the Simplicity the the higher yields rewards that are available in uh uh in Defi and crypto um and uh and therefore on board the next uh you know couple

hundred million users into crypto with the ultimate goal that you will never have to off-ramp again you'll be able to deploy into crypto and then just live your life without having to deal with the pain of Banks and uh you know a lot of trafi Institutions uh and that's it thank you all right