Leveling up DeFi | European Blockchain Convention

foreign state of the nation um life after a difficult 2022 and uh and where next from here so just to kick off with um some quick intros my name is Chanda I'm a principal at mosaic we're an early stage Venture Capital fund um based in London we've been investing in blockchain companies for a pretty pretty long time now since 2014. um and investing in D5 companies since 2017 so we've seen a few Market cycles and we wanted to take some time to pause and reflect on where we are today so maybe we've uh got a great group of panelists here so we'll start with some quick introductions and we'll go across the road give you guys a chance to introduce yourselves and uh share what it is you're working on so maybe let's start with you Ali hi I'm Ali I'm a co-founder and Technical lead at gridx we're the first fully on chain order book protocol built on ethereum and we're looking to bring the trading experience of attacks to DFI hey guys my name is Alex I'm the founder of Angel block Angel block is a protocol focused on non-custodial fundraising so we do everything that is based on chain verifiable from raising funds for crypto to essentially token distribution on-chain cap table management and verifiable launching investing and my background is in centralized exchanges and uh venture capital and Angel Investing everyone Francesco here I'm the chairman for one inch pro and also the CFO and CBD OverWatch Network one inch is a One-Stop access to D5 we are mainly known for our aggregation protocol where we had roughly 300 billion transaction uh since the creation yeah uh hi my name is Evo grigorv I'm a co-founder of credify so my background is in traditional Finance mainly risk assessment and great risk assessment so um yeah gratify is a hybrid product hybrid fintech product which aims to bridge the gap between D5 and threadfy and yeah that's about it hi everyone munir founder of Power Swap bar stop is a middleware that allows Traders and developers to access decentralized liquidity we've been since 2019 and recently also expanded for institutions to allow them to also trade on chain while still being compliant cool thank you everyone so maybe just to kick things off obviously 2022 was an interesting year um I think many people learned about the risks and limitations of centralized services within the blockchain world for obvious reasons um and a lot of commentary that came out of that was Defy is going to be the natural beneficiary of this as people learn the hard way you know not your keys not your coins Etc um so I'd be curious to hear from you guys like how that's begun to play out in your own projects and your own experiences um maybe kick off with Francesco Keen to hear kind of the one inch story in the last few months yeah it's been a tough year for for everyone and when these things happen it's not good for the overall ecosystem be it uh sex or Dax doesn't matter it's not good for anyone uh now uh you mentioned FDX um what we saw after the FDX debug uh was a huge increase in volume um I remember the day after the FTX collapse we had roughly 2 billion in volume in 24 hours and then we started having roughly 1 billion per day for the entire weeks after this we were coming from roughly 300 million per day before and then we started monitoring this trend and what we're realizing is out of the overall Market volume there is a small but constant shifts from centralized exchanges to decentral exchanges mainly um maybe to I mean too many products of like of course uh Paras warp unit swap aggregated like one inch and this is about uh one to two percent more every quarter uh that we'll be monitoring and we think this is here to stay that's the function mainly of two things in our opinion number one consumers being burned by FDX and others therefore losing coins that they think they thought they had but they didn't really have uh and therefore self-custody is leading to a move to Texas and also an overall experience which is uh getting better and better from a ux standpoint as well uh more people prefer um to use dexccer it's safer to a large extent uh and that also explains uh the overall trend and shift which I've been seeing over the last few few months since Q4 of last year curious if anyone else has noticed a similar Trend I mean munir has stuff been with Power Swap in the last few months since FDX yeah I definitely agree with Francisco we've seen a lot a huge switch from centralized exchanges to Texas some users switch for good especially that the technology right now is ready unlike three years ago where all we had is ethereum blockchain with big spikes in gas gas fees right now we have layer twos we have ZK relapse so and we have exchanges that are hybrid that look exactly like centralized exchanges similar for instance dydx so I believe users have much better choice to use divide than centralized exchanges in 2023 and 2022. can I jump in please Okay and like congrats to you guys like that's amazing that it's happening but I I think that we're in this stage where um you know we're in the bear market last year was a horrible bear market and we're kind of taking low transactional volumes and like lower liquidity than we had in Bull markets and I just don't want D5 running a Victory lap like oh we got you know ftx's volume and like a lot of that liquidity a lot of that volume is still on centralized exchanges so for example buy bit got a lot of the uh altcoin trading volume after the FDX collapse right and I think it's the trend is going our way but what's going to happen when my mom asks me you know should I buy Bitcoin because it's at 80k now right like what happens then are people going to be using dexes or is the new wave of people coming to centralized exchanges and we're just going to repeat the problem so this is kind of my thesis on this it's like great but we're doing this based on the volume of the hardcore people that stayed throughout the bear market and what happens when the next wave arrives like is D5 ready for this right because right now maybe it would be great but I doubt it just based on the last you know eight years of being in this space like it's still going to be problematic like we're still not fixing a lot of the issues we're still not fixing a lot of the uh the UI and the ux problems like it's getting better I just had a conversation with my friend um before this panel and he said you know um I tried to interact with metamask yesterday because they're being building a different product and it the user experience is horrible and in my experience I'm like yeah but it's better than it was five years ago but it's still horrible like I'm not going to tell my mom to use uh metamask right um and what happens then like people want that security well security uh quotation marks there of I want to be able to log in with an email and a password and if I forget my password I want someone to remind me of that password right and what happens then so just something to keep in mind can I jump in there so um in terms of like you use as we're launching and on Main net in a couple of weeks so we don't really have you we don't really have users yet well we will but um I completely I completely agree with you I think in in crypto we underestimate just how intimidating simple things like as simple amm like uni swap are to non-crypto people like I've got I've got friends who when first trying to use Union swap call me up nearly having an aneurysm like how do I use this this is so complicated I'm like it's literally just two tokens and you press Swap and that's it but ironically in a weird way um a complicated text where you see like an order book and a Char and you've got like limit orders and stuff that seems more homely for them so I think that D5 sort of needs a user experience Revolution and I think we need to give them what they want which is basically a KX interface but on chain and that at gridx that's what we're we're trying to do you know if you open up a front end that's that's run by gridx it looks like a kex except you've got your you you keep hold you keep custody of your assets and we really overestimate how much people know about crypto you know everyone says not your keys not your coins but that doesn't actually get through to anyone I know people who while FTX was collapsing you know well they spoke to me after it collapsed they were like you know what you know crypto's Hashem Etc I was like why didn't you when you saw the the red flags were there why didn't you just withdraw they're like what like you do know that you can you can just withdraw your assets you don't need to keep them on the exchange and that was a completely alien concept for them they're like what do you mean like it's on FTX or what can I do so I I think that we need to really just treat people we really need to ease them into into web3 and make it easier for them to actually make make that jump because right now I think I completely agree they're you know in the next bull market they're just gonna all be using Texas again and the cycle is going to repeat yeah I also agree with what you guys are saying but I think that there is a in a background story to everything else it's you know the trust issue right so uh people do find difficulties using the UI ux and sometimes they're not educated enough but at the end of the day what brings Comfort to them with sex is that you know there is some kind of a corporate structure there is some kind of a let's say a regulation and whatnot so um I think that it should be a balanced approach they should feel comfortable using taxes and not only in terms of technological know-how but also you know just being able to to trust that okay the keys are with you you own the coins and everything else but you didn't need to have this educational background in terms of how you can use them exactly got it and the theme of D5 user experiences come up a couple of times here um a couple of years ago we invested in xerion for precisely this reason that access points to D5 were just so obscure understanding what your portfolio looked like with nightmarish and creating a consumerized ux that you know fintech rather than crypto natives understand gets you a long way but it puts you in an interesting point now where you ask yourself do we try and build for the next billion who are going to come into D5 and create something that sort of consumer friendly or do we focus on serving the kind of active web 3 citizens that continue to um to interact and to deposit today so how do you guys think about that question like right now when it comes to to product roadmap for the next few months I mean it really comes down to what your what your target audience is right like are you building something like and I don't have a issue with people going for the hardcore degens right like you know 4000 apy you know yield farming pool like great like there's a there's a market for it then by all means build it but who are you addressing this to and you know uh just one one aspect of what you said all right bringing the next billion people into D5 right or into crypto like that that was literally like celsius's line right and we all know how that ended up building like uh was it onboarding the next three billion users in crypto so if you're building something for everyone you're essentially building something for no one it's the same with Communications and marketing if you're trying to get everybody to on board no one's going to on board and it's the same thing with our products it's about finding product Market fit who are you building this for uh who's actually going to use it and a lot of companies also make the mistake of especially in D5 because D5 you have you have communities like communities are super super important so like you probably have your end user is probably a multiple of what your total Community is like that's that's something that I've been seeing so are you asking them for feedback right are you are you talking with their community members because they're the hardcore users that are going to be using this are you getting um making focus groups like on telegram or or Discord or whatever um an additional thing is that sometimes when you're building you have this idea especially you've been building for a long time you kind of lose focus right because the market tends to verify your product and your service pretty quickly and are you adjusting to what your community is telling you is is one additional thing because I've seen a lot of companies that you know we uh we have our roadmap and we're building this product and we've been doing it for two years and we're not changing a thing even though the Market's screaming at us essentially that hey like you need to adjust so I have some quick thoughts on that it's very interesting and one of the complexity we have as well in one intro in general is if we are solving for current users we are not gonna solve for future users and the issue is in the s-curve the early adopters of D5 encrypto are way more advanced as you were saying before than my mom which by the way if she calls me for ATK Bitcoin I will take the code anyway but the if we keep improving what is good for existing users we will not onboard new users and we normally try to understand what are the barrier for users one of which is uh paying us and it looks silly to us but many friends were like hey I need to swap one inch for something else it didn't work it doesn't work like why tell me more if you don't have gas it doesn't work so there was no ethereum there was no gaps to be paid so we are now we launched gasless which is a way to onboard more users and give a different experience and now we start to have five percent of the volume and now one third of the volume in one inch is gasless so we are trying to listen but the difficulty again is if we listen too much to our core users we are gonna design something like a super sophisticated purse again to give to my mom and she just wants a Fiat right so the balance is very difficult to strike sometimes yeah I I actually think that in order to expand uh you know the user base and everything else as you said I do agree with you that we cannot concentrate only on the current users but we need to think of a way to attract new ones right so um to be honest in my personal opinion is that we need to find a way to interact with a real world economy I mean we're not two separate universes you know uh people the economic factors are the same everywhere so we need to think of you know bringing also institutional adoption through the infrastructure which we are offering so people need to understand that we're we're not just trading and just collecting fees but we're rather participating in the economy where uh producing something you know we're part of the GDP as well but you in order to bring on institutions need to bring on retail right that's how it's always been in crypto it's kind of like the egg and the chicken though because you know larger names are basically going to bring to masses as well like so if you know recognized companies which are entering the space then of course you know the masses would fall no no I totally agree but like the last like 12 years right it's like who was first in Bitcoin who is first in ethereum who's first right and like retail and it's retail kind of draws the short end of the stick here because I was going to say where like I still consider myself retail sometimes but we're the guinea pigs right before the institutions come so if we mess it up for retail we mess it up for everybody else and every time you know there's a bubble and uh some institution like like Michael sale is a great example like you have crypto Twitter going to town on him for basically like how are your Bitcoin buys going right like it's we can't build just for institutions if we forget about retail I would say something also is uh as any startups web 2 or 3 we cannot be everything to everyone um so in in defy we can choose either to build a PayPal memo or maybe to build a Bloomberg or any tooling that is used by professionals and professionals they can do the extra mile if there is the right incentive whether it's solving the right problems for them whether it's to bring in whatever value they are they are seeking so I don't necessarily agree that D5 has to be friendly to all to all retail because it's simply a matter of whether you're building in the first place for retail or you're building for other professionals like say take a decks like curve curve doesn't have to be built for retail curve is a protocol that it's built behind the scenes it can be used by like zerion one inch Power Swap uis and maybe also one English in Power Swap can be used only on the back end as middlewares so that we built layers of abstractions and the xerions origins and and others can build the paypals and then well doors I believe there is a Nuance in where to whom we are building yeah um I think I think we definitely need to um well people aren't exactly rushing into web3 they're still like um like it was said they're still like you know people are like oh can I trust this Etc I don't have like a login I don't have a password um but the thing is is that I think while while we need to do some level of adaptation to bring on those people D5 still needs to stay defy we still it still needs to be you connect your wallet you don't you don't do all of that login stuff and the thing is is that eventually eventually that will become the norm like I I remember in in the early 2000s if I wanted to buy something on eBay my parents would you know go go crazy they'd be like no how are you going to put our credit card details online they're going to steal it etc etc and now everyone buys stuff online but initially we all forget that you know everyone was apprehensive to buy anything online they're all like uh you know we're going to have our our account absolutely rinsed so um I think that we need to you know not we need to stick to the core principles of of defy and you know because if we if we go too much to the other side then what was the point of all of this you know if we if we just go back to you know a web to um then we've sort of like lost the the whole point of of what we've been trying to build but also defy can be leveraged by a web 2 companies like a traditional web 2 or fintech dabs that can use D5 behind the scenes as a technology yeah I know I definitely I definitely agree and that's that's the beauty of D5 that you can you put something out there and you might have one one intention for it but someone else has you know got a better idea and they can you know compose your your protocol like you were saying with curve curve doesn't need to be for um you know retail users so for us at agradex you know basically what we do is we just put order books on chain in a way that's actually viable we have you know an idea that a front-end would you know be powered by by grade X and they can use our our order books but that doesn't just mean that you know we think that okay every you know retail user Etc trading on a decks needs to use order books like these front ends will probably end up having you know our order books and also aggregating from other dexes things things like one inch and so I I think it's just about the important thing is is that you you build the infrastructure and then you know people are imaginative they'll they'll come up with ways you know to use it probably better than than we could that you wouldn't even expect yeah exactly yeah so I guess we're kind of this idea here that you know Defy is going to naturally be many things to many different people there will be institutional products there'll be retail products there'll be you know consumer facing end user applications they'll be the infrastructure that's built underneath so I guess as we look forward curious to understand like where you guys are most excited about what's going to drive adoption in the next couple of years that kind of hasn't done historically might that be new use cases you know new segments of users that you think are going to come online um any other kind of catalysts in the industry that you think are going to lead to the next you know defy summer or perhaps something more sustainable I think one of the calories won't be what we find the most exciting uh as a catalyst but it will be regulation in innocence and I know it's a very contentious point but in reality when we say we want these editions on board then we need to have regulations on board we can't have one without the other so there might be other fan turns more sexy Catalyst for adoption but I remember when in 2017 I was using beat Max or Kraken with no passport on a certain point they were like hey do you want to keep using us then you have X amounts to give us your passport or you're welcome to go so maybe at a certain point this will this will happen either because someone is forcing this or because on a voluntary basis this might be a way a way to proceed and if and when this happens then regulations will I mean the institutions will come and Banks we speak to many banks today they all like they would love to be part of D5 get the yield participate they have a lot of clients requests but they just can't so we're we're building a permission version for this reason and again this might not be the most exciting reason for uh for a hadify uh growth in the future but it's gonna be one of those the one these editions come they bring more Innovation with them for example JP Morgan is already tokenizing real asset um and they're putting the Assets in the equity pools but in order to do it they will want to do kyc and ml so this goes a bit uh one with the other it's difficult to choose one uh if we are not willing to then lean forward towards regulation a bit in a sense actually uh I also think that regulation is going to be a big part it is inevitable we cannot be a separate Universe where nobody looks into us we're living in a very highly structured Society so if we want to address the masses if we want to grow the space um sooner or later we will have to be compliant to a certain extent right so here probably the main aspect would be that we need to educate you know and probably explain to Regulators exactly what what we're doing and why we're doing it so we're trying to bring Innovation trying to bring to bring technology to to the sector but uh yeah it's not some kind of a dark magic and we're not yeah we're not doing something wrong we just need to have a structured way around it yeah just with regulation it's it's so nuanced and I definitely agree with what you guys said but like just keeping in mind that we keep saying regulation like I I did one of these panels in San Francisco uh end of last year and now I'm in Europe so when I say regulation here when I say regulation there those are two different things right and we keep saying regulation like it's uh Global encompassing regulation one-size-fits all and that that's really problematic and when you say to be compliant okay be compliant where right that's another aspect of it uh you guys probably saw what happened with staking as a service on Kraken and the SEC coming down on that right like it a lot of people wrote like oh my God the SEC band staking no they banned staking by centralizing well not really they just find there was a settlement 30 million dollar settlement with Kraken but they basically said we don't want retail investors touching staking as a service because we don't know where the apy where the yield is coming from so the actual problem for the SEC is again going back to Celsius where is the yield coming from is your deposit the yield what are they doing with that deposit and that's that's the actual problem here so when it comes to regulations um there will be some winners like this is a big part of my thesis I've been very very bullish on the EU in general because uh it's not a wait and see approach but I think it's as close to a wait and see approach as we can get especially with defy especially with Micah um and that's not what we have in the US we have regulation by litigation right like what happened with Gemini uh come to the SEC office we have a few questions and then boom they get the paperwork right they get charged like you can't regulate defy by litigation and that's exactly what we have in the U.S and that's one of the problematic things so when it comes to regulation like you just really need to understand the nuances um I know a lot of these D5 protocols uh are simply blocking uh the IPS of us users which is an interesting step and then again we're you know like we we joke sometimes and it's a sad joke it's very dark humor but if you look at a lot of terms in service you have the us next to a bunch of blacklisted sanctioned countries right like this is the world that we're living in and so is D5 going to move out of the U.S is kind of how I've been operating and a lot of a big part of the thesis that I've been formulating over the last year because we're already seeing a large Exodus of talent of capital and if this continues then you know is EU going to be the go-to D5 regulator which would be would be really exciting for us right like everyone based in the EU but just nuance and regulation super super important compliant what does it actually mean because it means something absolutely different like wherever you're based yeah exactly I think there's a lot of regulatory blunt instruments that are trying to be applied in defy like if you look at the Howie test like is a defy token a security well that's actually a very difficult question to answer and it's very context dependent stable coins now right like how does a stable coin like be USD fit into the Howie test can I just add that so the the purpose of Regulation is supposed to be to protect users right and that when when it comes to nuances I completely agree because thing is if they you know if a Regulators don't understand what what D5 is and how it works it's not going to you know whatever regulations they do put in are not going to protect users so for example I remember um vital Expo spoke about kyc on D5 front ends last year and I largely agree with him if you have you know say um you know you go to a decks and it asks you to kyc okay the malicious people using that Dex who are always probably more technical than you know a docile user they will just they won't go through the front end they'll just interact with the smart contract directly so the only people that you're impeding are you know normal normal users now there are positive ways to have regulation for example um you know the law could require that a D5 front end has information about the the audience of the smart contracts that you're using um perhaps even things like sort of like um you know some some features are gated by like knowledge based tests which I mean of course like you you know someone you can get past that as well you can just get someone else to take the test for you but the thing is is that you know just getting people you know before you use leverage do you know how leverage Works etc etc if they still decide to to go into it even though they don't know then that's on them but it's it's our responsibility just to make sure that people are aware of the risks they're aware am I you know using an or am I interacting with an audited smart contract where is the audit Etc that stuff would actually protect users but having you know send send your passport before you can use this like that's you know that that's like police tape that a criminal is just gonna you know go over so I don't think that that would actually be useful regulation there's the ideological aspect to that too right because if you have a D5 protocol and or you know D5 decentralized finance and majority like I don't think a lot is done in decentralized like there's a lot of people trying but like we haven't especially from a user experience perspective we haven't really like figured it out so whenever you're instituting kyc and AML like you're adding a centralized entity to a decentralized protocol and that's a lot of the problems too right I mean I I would say like even though I'm not in in favor of kyc on the front ends for the reasons I just face it but I think if that was to happen probably the best way to do it would be with some you know ZK proof ID solution um I think that would yeah well that would be Leaps and Bounds better than just having you know essentialized database that can get hacked and stuff but I mean that's still not optimal but I hope that if they do go with that that at least they would Embrace that technology I mean there's a conversation here around defy ideology you know is kyc and AML compatible with being fundamentally decentralized um curious to get your view on this do you think that we as an industry have just been too dogmatic about the idea of decentralization um and kind of held that up on a pedestal at the cost of building products that work for people 100 like I I think like I I talked about this very very recently like if you notice the narratives over the last few years it's also nothing is ever as decentralized as one would want like a Bitcoin maximalist is going to uh trash you know ethereum because oh there was a pre-mine oh like how do you function with the network that is fully based on AWS right so nothing is ever decentralized as we would like and at the end of the day it's about the user like are are you using this like I much rather use a network that's less decentralized than Bitcoin but still more decentralized than the centralized institution such as a bank right I think that the middle ground here is super important because if we look at the narratives over the last few years like the a lot of the internal struggles that we have in crypto uh come from tribalism and maximalism and one Camp you know not working towards a common goal like I remember in 20 like 16 17 when I really got into the space like we were it was much more ideology based than it is now like we're improving the world and you know it's like that Meme it's like uh the woe Jack with the brain and he's like we figured out the Byzantine General problem and crypto today is like oh dog you know coin has dog on it gotta buy it you know and that's kind of how it's working so nothing is ever going to be as decentralized as we would like but what does it mean it's like a unicorn it's Elusive and it's never going to happen and there's always going to another Cam that says like oh it's centralized and I'm not going to use it so user experience uh scalability uh high throughput low cost those are the things that we should be focusing on and there's a lot of projects that are focusing on that right now and yeah for maximalist it's not going to be decentralized enough but if you're still going to get hundreds of thousands of users and you're onboarding new users with phenomenal user experience I think that's what we should be focusing on right now do you think is going to be fine if we are if we still do okay with CML and we Remain the centralizer would you say that it doesn't work for ideologic and or business Commercial reasons again it's uh what's your customer base and what's your product right because again it's it's the new ones aspect right so if it's um something like what we're doing like which is Unchained raises like yeah you need kyc like like I've talked to startups like we're figured when we were figuring around Angel block we're like okay like how decentralized are we taking this so we built version one on ethereum but we're multi-chained by Design but we were figuring it out and we talked to startups that want to raise with us we're like so how important is kyc2 it's like very like we're not letting anyone on without kyc because then if you're uh if you're not Incorporated in Discord where you're Incorporated in a real country like many of these crypto startups are then you know you want to open a bank account it's like okay cool where do you have the 10 million dollars from right and if you you don't have kyc if you don't have signed shafts that becomes a problem even though in theory from a technological standpoint what we're doing is totally doable without Sapps and kyc right because it's all on chain but it's a whole other sleuth of problems that arise for our customer base which is a startups right so I I think it really depends what your product is but I think a lot of the regulatory Crackdown will come with the institution of kyc but as you said like there's always the back end there's always the API there's always the blockchain there's other ways of interacting with this so it's not going to stop everything but it might make it a bit better uh actually I was speaking about user base and how we can adopt like the technology within within the space you can use it in many many different ways right so for example in our user base yeah we do need kyc it's normal well we do want to you know operate also in the real world segment we do want to fund smes which are you know comprising 95 of of the economy as a whole so right if you want to interact with the economy if you want to make you know Bank transfers and everything else you do need kyc you do need to explain how how the funds are being there what is financed and everything else so if if you want to gain access to the public and actually be part of the of the gdpa let's say you do need to have it I think ideologically um in terms of kyc and DFI I think maybe you can separate it into is this DFI being used by institutions or by retail users I think if for example you have something like one inch pro where it's like geared towards institutions institutions are you know or already in charge value so kyc for them isn't isn't as big of a deal we what's worrying is kyc you know for for a normal person who you know has not done anything wrong um but they're being restricted from having the you know control over their money but you know at institutions regulated anyway so UK wise see them that's not that big of an an issue like it's not like they're Anonymous or anything like that so I think that um if kyz was to come I think it would make it would make sense to have regulations for things that are geared towards institutions that are separate from things that are geared to that are geared towards retail so maybe we might start seeing protocols have you know like a version for institutions and a version for everyone else yeah this is the case already in multiple protocols metamask and many others I think what you said before is what's gonna happen or what I hope is going to happen which is a ZK based um kosc which might be a compromise between the need to still prove who you are and the human needs not to be known by everyone at the same time so that ZK based system not sure which one will win but that might be the solution to this yeah and I I think that because that would be on chain as well then that's the only feasible way that would fix the problem of people just going straight to the back end and and and doing it and doing it that way and I mean yeah that that would that would make sense like if you just want to check is this person an American or are they not then yeah you just have a ZK approved for that I think coming back also to First principles it all depends on what we're building if it's a base layer protocol like a curve or an amm I don't believe it's even efficient um in a product perspective or a technology perspective to have native koac but if if it's a customer facing product or if it's an Institutional facing products bringing koac's Parts maybe of the solution that the customer or the end user is asking for so if we're building a product for institutions well what we're solving maybe uh is not tactical icms is just a tool to onboard these guys but we're bringing instant settlements we bring we're removing the counterparty risk and to onboard these guys we have KOA so I think it has to be contextual and maybe you can have a parallel with the streaming industry where it started with bittorrents Napster and it was the wild west and everything was the whole internet was downloadable legally or integrity that's a matter of ideology as well but well officially it wasn't illegal but it led to having Netflix uh led to having Spotify in all this industry but the base layer still exists like we can still now use torrents for legitimate illegitimate cases in BitTorrent doesn't have to be koic that doesn't have to be a regulated percent and one important thing is like if one thing crypto has taught us and it's the old Bitcoin Mantra if you don't like it Fork it right so if we all Institute kyc AML here right then there's going to be a whole array of competing Products Incorporated in the middle of nowhere with a similar UI similar ux maybe even better that don't require that and that's how crypto is always functioned so it's important like not to over regulate not go overboard here because there's always going to be someone that offers a really similar service might even be better that doesn't require the same uh Regulatory Compliance as as we're talking about right here that you know if you don't like it Fork it is dangerous I mean in a way it's one of the founding principles of all blockchain Technologies right the ability the native composability of everything um but if we move towards the world there is more regulated at the consumer end that has some protective Provisions built in but then we also have a long tail of folks building on the side who are continuing to potentially bypass regulation as quickly as it's instituted do you think that potentially introduces fragility into the system I mean if crypto has shown anything it's that it's anti-fragile right like I know they seem to let block me on Twitter but like I'm still a big fan anti-pragile great book but basically I I think it's um I'd like to think that we're all like you know free market economists in the way that we think because we're sitting on a defy panel so I think it's always up to the market to decide like if if the market wants it great if it doesn't it's not going to support it and uh since we're in the the topic of Bitcoin and the defy panel which I think is really cool personally um what happened with the bsv right like the market it took it like two three years but the market verified let no sorry you're not the real Bitcoin same with Bitcoin cash like Bitcoin is Bitcoin and if you don't like it Fork it cool we forked it didn't really work so I think the Market's always going to verify and I think that's the that's the beauty of this space I think I think D5 in in a lot of ways is sort of similar to to stem in that say you you make you make a protocol you you put it out there you know someone can Fork it modify it Etc that's that's a good thing it's just the the same thing with science someone might you know write a paper that no one cares about 50 100 years later someone comes along it's like oh I need this bit of Maths for my physics theory or this piece of physics you know we'll have this application in chemistry so the thing is and that that's how that's how we have evolved as as humans because science is composable so if we apply that same thing to defy that will allow us to to move forward um I mean it's worked it's worked before so why not now with with Finance the thing is I do agree with what you guys are saying but when you think about it okay Fork it you're gonna incorporate in some country which doesn't require kyck AML and whatnot but uh at the end of the day the user still needs to interact with the economy right so at a certain point at a certain level they will need to cash out and they will need to you know pay for something right so at the end of the day when you think about it um it will become more difficult for them if they use this protocol which is in some really really difficult different country which doesn't require anything and here comes also the question of Taxation and you know like what do you do with your profits and whatnot like this cannot go on for a really sustainable time you know for a long time it it's just not sustainable if you wanna I don't know buy a coffee at a certain point somebody is going to ask you where's the money coming from right so even if you're using a protocol which is registered somewhere in a very very uh less regulated parts of the world then it's still a problem right well it's there's a difference between you know money laundering and kyc that's that's another thing so where is the money from still happens if you have kyc instituted into your uh whatever service that you're providing right so that's one thing and I'm not sitting here uh trying to argue for the fact that D5 should stay totally you know outside of Regulatory Compliance I'm simply stating the fact that over the course of the last few years in crypto we've seen that if a institution whether it's you know a centralized exchange or it's a protocol if they take something a route that their user base doesn't agree with they're always going to find an alternative that's that's all I'm saying and like yeah I I think we're coming to that point but you know right now with like not to get too philosophical but what's going on right now with globalization and everything else there's a great book The the sovereign individual and basically states that the Don Quixote of the 21st century will not be a night errand fighting for chivalrous values it will be a bureaucrat and a brown suit looking for someone to audit right so we do have this increased mobility and like what's going on in the US right now you have a bunch of you know Bitcoin and crypto millionaires who are saying like I do not want to be a part of the system and this is another thing that Andreas Antonopoulos said you vote in two ways you can either vote with your actual casting a vote with a ballot or you vote with your money and if you don't agree with a system you can always exit right so you can either Vote or you can exit those are two kinds of votes so if you're if you don't really like the direction Something is taking in the jurisdiction that you currently are in you can always exit so I agree that yeah we're coming to that point but there's always going to be an alternative always yeah of course I mean globalization is a certain part of it but I mean after all there is so many countries which you can exit to and if you don't like it I do agree with that but at the end of the day you need we're part of a society right I mean how many people are using Bitcoin or you know as whole cryptocurrency it's like out of 7 billion what like 10 20 million maybe I don't know even maybe a bit more I don't know but still it's small percentage so if we want to have a structured uh you know and really be part of the global economy if we want to hear about this institutional adoption and overall adoption we do need to figure out a way where people who are will feel comfortable and drink the space and will be able to interact with the rest of the business as well one thing that I think I'd like to you know since we're running short on time is like one one thought that I like to meet people with and it's an open-ended question um but it's basically what's the threshold between decentralization and US turning into a centralized Bank currency right like there is that threshold so I'm not saying that this or you're saying is not going to happen right like like yeah I would like regulation I like good regulation I'd like people to not have problems with kyc and maybe if it's EK based and then it's going to make more sense but where's that threshold between yeah we're a decentralized system but kycml and everything else and we're essentially just as regulated and invasive as the centralized Bank currencies that are going to be introduced um for me personally at least in my opinion the technology and the effectiveness you know fast transactions low costs like this is more than enough to attract people really just stands as we break things towards clouds it'd be good to kind of think a little bit more pragmatically about the environment that we're in I mean obviously everyone in this room continues to build through a bear Market curious to kind of from each of you just here what is the one piece of advice that you have for other Founders other builders at this point in time [Music] you only go the rule we had is cash is King nothing has mattered so we see many amazing companies building things but then they run all the cash because we did amazing wrong day you're precede in a bull market then you spend it in uh Sushi and uh in both and then you run out of money because you think the bull market is forever so I would say number one is uh State cash uh think like you have two years of no Revenue are you able to survive you've seen many of those who didn't think enough three years already monsters and and this Agony is they'll think that people want we see every day amazing application for programs or or money and they are solutions to something which we don't see as a problem so a big problem first what do people really want and then spend money accordingly building something which is fixing a real issue be it's ft speed ux uh whatever but find I mean find a problem for your solution before you spend the money stay away from AI like I I know you guys want to add up your building right now if you want to add AI to whatever you're building don't do it trust me um but in general if we're on a bear market right now there's less money there's less hype there's less everything going on right now the people that are with you your users that are using your product right now the community that's in your telegram chat right now or on Discord wherever you have it those are your hardcore users you should be listening to uh bear markets are wonderful for building a community because it's the people that actually care that stay with you so if you can build a community in a bear Market if you can ask for their feedback on the bear Market I think that's one of the coolest things because those are the people that like yeah they're going to stay with you uh during the bowl and just in general from a personal standpoint like this is the best time not Financial advice obviously all that good stuff but like you should be allocating in a bear like if you're coming in you know when Bitcoin is at 100K again and you're like oh my God this is the next you know 100 000 X coin like no it's not sorry it's it's really not it's like this is a great time to reassess reevaluate um make sure that you're building something that people want if you achieve product Market fit in a bear like trust me you're going to have a product Market fit in a bowl so just take it easy build as quick as you can ask for your for feedback from your community as often as possible and just make sure that you incentivize and that you appreciate the people who stood with you when everything you know One South yeah I think it's it's actually a blessing to start in a better Market rather than in a bull market because in in a bear Market you don't have well you you get some narratives but nowhere near as much as in in the bull market so instead of sort of just being taken along with the stream you're more likely to actually build something that's needed well in well in a bull market and you you can see this with like lots of projects I started doing one thing the narrative comes along okay we're going to Pivot this way and then that narrative dies and okay we're going to Pivot this way and the thing is is that as soon as something successful in the bear Market sorry in the bull market the next day there's 200 copycats um and I think it's it's much healthier to have all of this stuff flushed out like I like thing of like Market cycle the market is like a body all these like copycraft deadweight projects are like toxins eventually it builds up such a level that the body gets sick and needs to like Purge you Splash all of these out and the only thing the things I really need to remain there will remain there so I think you're much more likely to build something that's actually good in a bear Market than in a bull market even though you can get a lot of funding in a bull market it's sort of like the curse of winning the lottery like you you want you want more money than you need more money than you deserve now it and then it just backfires I think I think it's a an interesting time in the cycle we're now learning where the real value is getting created and where the noise is um and for those who are building keep the faith for those who are investing how is the time to complete capital's work thank you everyone [Applause]