27. Is Capitalism Really the Problem? - FtC Paris 2023

[Music] we'll be talking the uh the top of the panel is invisible hands uh tangible Solutions and is capitalism really the problem with us today we have Jesse Pollock creator of bass and the head of protocols at coinbase we have Lucas bogglesberg Vogelsong my apologies co-founder of centrifuge and Cassie Daley product strategy at centrifuge and she will be our modern I'll leave it to them to take it away starting we're starting easy right yeah we got to build up to this light topic for a Sunday afternoon it was super light topic um actually hopefully controversial um and we get some hot takes out of you both um and I I wanted to basically spark a little bit of conversation thoughtful uh responses maybe in the audience um afterwards and we can have discussions after but um just to start off so yeah as uh as introde I'm Cassidy joined by Jesse and Lucas I think I'd like for to start off with you both just introducing yourself so maybe Jesse you could start um on yeah yourself and also base and and what your work is there yeah um I'm Jesse I have spent the last six and a half years in the coinbase orbit uh I led all of our consumer-facing businesses on the engineering side for four and a half years so coinbase coinbase Pro coinbase wallet basically built those teams from a handful of people to about 250 and then starting in late 2021 took a step back from that and basically took on a new mandate which was figure out how to bring coinbase on chain um and so that's been what the last two years have been uh we went through a bunch of different kind of iterations of what that could mean tried a bunch of different products every single time we got stuck um being like okay we want to build this new product that's on chain where do we build it how do we build it how do we make sure that works with all of our other products and so after running into walls and seeing other teams with the company run into the same walls kind of again and again we kind of went down to the bottom of the stack and said what if what we really need is a developer platform to get started a place where we can build with confidence the place where we can build in an interconnected way with the rest of the on-chain economy and out the other side of that process came base so base is in ethereum L2 built to scale the crypto economy bringing a million developers a billion users we've been building in collaboration with optimism for the last Almost year now built on the op stack and I kind of lead that day to day inside of coinbase it's being incubated inside of coinbase and then gradually decentralized prior to coinbase I let a startup for five years that came into an acquisition and a fun fact about me and maybe relevant to the topic is I went to a quaker school from the time I was four or five years old until the time I was 18. and so that's a really big part of who I am a big part of my kind of world view and identity for those who might not know quakerism is a sack to Christianity um that uh you know the core tenant is kind of there's that of God and everyone it's not as religious but it is very Community Centric communitarian the values are Simplicity piece Integrity Community equality and stewardship and so as I think about this panel and the conversation we're going to have here my my intuition is a lot of the the thinking will flow directly from that that history nice yeah hi my name is Lucas Vogelsang I'm the co-founder of centrifuge but maybe quickly also a bit of background I had about a 10-year career in web 2 so pretty much right out of high school I started working on kind of like I mean in high school already to spend time coding left to code always wanted to do something with computers and my career kind of went from starting in like very consumer focused social media uh then e-commerce to more and more like B2B fintech and at the same time like my parents actually well now that now they're retired but they spend about 30 years building a building a business from scratch and like we're like selling selling Goods every day um and so I had always this like very different view of what how the economy Works how the world works and I think some of my friends in high school who like uh had where their parents were teachers they went on the same vacation they've got the same salary every year right or like a banker whatever else right um and so so then also in kind of working more and more in fintech I realized I while I never really cared about money and I never thought I'd spend as much time thinking about money as I do today um I just realized how important it is I always say well like it's it kind of like whether we like it or not like money is what what gives us the fuel to build stuff in this world right um so I more and more kind of started working on that and then in 2017 got into crypto seeing okay well like if we can actually program money there's so many cool things we can do that we couldn't do before and that actually trying to allow everyone access to this like new Financial system is extremely important because it actually uh going back to my fintech days it allows like the smallest businesses to compete with the largest businesses right if you have like very unequal access to money you're always at a disadvantage no matter what you do if you're if if your competitors can borrow money more cheaply uh you're gonna pay more your customers are gonna have to pay pay more to work with you right and so all of that kind of boils for me boils down to like if we can open up this financial system like we're we're doing a huge uh a huge service to the world and like give it kind of equaling these opportunities um so Center future and just maybe very briefly what we do now we started in kind of like we started working with D5 before D5 existed as a word and kind of tried to figure out how do we allow normal people to borrow against their houses against their like trade Finance assets really anything and so it's kind of we kind of stuck to that and what we now call real old assets is basically bringing these assets on chain and allowing them to be used as collateral and maker for them for people to hold these tokens and earn interest rather than for ultimately borrowers to get funded by uh investors that invest in stablecoin thanks for the intro guys um I think I love centrifuge big fan from the beginning I feel like I I remember back I remember maybe it was like 2016 or 2017. um 2017 right like I feel like Senator fuge when centrefuge launched in 2017. it was like the thing that I looked at was like oh what's gonna happen like everything's gonna come Unchained and then the whole world is gonna be mediated by this new software constructs and so I I know it's been a long journey for y'all but I it's yeah from the beginning it was like that that was really one of the things that connected the dots for me as we were starting to think about this new on-train economy emerging nice I want to get into that a little bit later in this uh conversation but I want to dive a little bit more into details first so that we could take a step back and just a question for both of you Lucas you kind of started alluding to this I want to ask you both what like getting into the details what flaws do you see in the financial system today where to start to begin yeah um I've seen so many flaws in the financial system today I I mean I think the the like broadest observation is that if you look at the financial system today um it's incredibly centralized and I think it's only becoming more centralized and that that means that you end up having a small number of players with an outsized amount of influence and control in the day-to-day lives of people across the world and so you know a few data points on this right if you look at um the the banks in the United States they're increasingly consolidating into less than 10 major financial institutions if you look at the um uh like companies uh and the shareholders of those companies it's increasingly consolidating into uh less than 10 organizations the vanguards of the world the black rocks of the world who then have outsized influence on those organizations on on the companies Downstream of them and so I think what that means is it means that we're in an economy where both from a kind of value flow perspect effective and from a control perspective the value that people are creating through their work is being concentrated and flowing to other people a small number of people who are already incredibly kind of at the top end of the kind of control and power and monetary value perspective and so I I think that shows up in a ton of ways you know one of the places that I have spent a lot of time thinking about it is in like local city contexts where you have you know tons and tons of creativity and Innovation happening in local cities but in the end of the day a lot of that value flows out of the city into those same financial institutions and so I think that from my perspective is probably the the largest kind of systemic failure in our economies today centralization what do you think Lucas I I I would agree and I think I mean to maybe I I can't really say any anything else I'll try to add a few facts and different and some different perspectives but um yes I like Financial system like it's very very dominated by the largest banks right like the largest markets we live in a world like another example of this is right like the dollar just dominate the dollar and therefore the U.S financial system actually dominates the entire world basically um which is it is one of these consequences um if so one stat that is if you find like a varying range of numbers like the lowest numbers actually U.

S estimates of their of uh GDP Financial Services percentage share of the GDP is about eight to ten percent people estimate globally at somewhere between 10 and closer to 15 so you can imagine like today we're literally spending around 10 percent of every dollar spent on like Financial Services which like are a useful uh service but I'm not sure it's quite that much right um I mean I'm betting uh an effort in the last six years on making sure on building an option where it's not 10 so I very strongly believe it shouldn't be that much um the other the other thing is like so before I before I started work working on centrifuge we worked in supply chain Finance so uh I have an invoice that's outstanding for three months I need I need to go to a bank or a lender to pay me this invoice until this until my buyer pays me so that I I can actually keep producing Goods keep paying salaries right because those actually are due no matter whether the buyer pays so supply chain Finance like factoring specifically right is is super important for businesses to be able to grow because if you can't really go outside of your production capacity with the cash that you have today you'll never be able to fulfill a bigger order um now the crazy number is that actually um so a small business would easily pay between 10 to 15 probably in the current market more like 18 interest a year if not more in the US on such an invoice um the the Toyota is the Airbus is like for Global 2000 companies their cost of financing these transactions is like risk-free rate plus 50 70 basis points so that's about today five five and a half percent used to be uh much less right so imagine this is like the the thing I'm talking about like where like because you have a few billion in in volume that you can offer to these Banks because you have a finance department of 200 people that are just there to make sure you have the cheapest access to Capital right like that gives you this huge huge discrepancy and ultimately to bring it into why crypto right um like if you look at uh the margins of D5 versus the margins of banks versus the margins of non-bank lenders like um I I have this on the slide sometimes when I give presentations but the the the extreme difference between obviously what a smart contract has to charge you in fees versus what a bank has to charging fees is like pretty apparent right so I think the more we can move towards that actually the the better we can make it ultimately for um for the smallest borrowers because and lenders because they pay the highest relative fees today right and and in automating this ideally the computer should not have um as much of an overhead yeah and I'd say two kind of like themes that I think flow from Lucas's observation there that we think about a lot of coinbases one is our systems are just really old today like if you look at the you know processes that those 200 Finance people are going through to get that much lower interest rate versus the small business it's paperwork and it's working with financial systems that were literally built 50 to 70 years ago with software that was built 30 to 40 years ago and so I think that just like the technology being old and slow and complex and Incredibly laborious and bureaucratic that is one of the things that both increases the cost and makes the cost very variable depending on how many resources you can put into kind of wrangling that Legacy system them so I think that's one aspect and the other aspect is again because those systems are so old and because in many ways they've been captured by um both both kind of Institutions and states you end up having uh like a very variable experiences across different regions right so your access to Capital your access to liquidity in the United States is radically different than if you are in you know Nigeria or Kenya and that's because all of these Financial systems even the best ones are still kind of Silo to the geography that they were built in and so I think one of the things that were um you know really optimistic about with crypto is just the the opportunity to upgrade the upgrade the system where it's like we have this 57 year old system we also have software let's take that software and build a new system that doesn't require 200 Finance people and isn't just for the United States but instead for the global audience that can run instantaneously powered by software and thereby bring down costs 100x 1000x and make it accessible to everyone in the world I think these are some really good examples of these flaws that we see in our systems today so keeping that in the back of our minds jumping into our main controversial question when people say that capitalism is the problem here do you think these flaws are representative of that statement or what do you think people really mean when they're thinking of capitalism being the root cause of this problem I feel like I've been taking home I'm happy to take it but you can also go first so when I when I think of when I try to answer the question for myself I well first of all I'm very cynical so um maybe I'm a bit too cynical for this I don't and I would say like this like capitalism is the least worst solution we have today is like to me is not quite wrong and I haven't so I go I go back and forth on whether while I try and predict what the future will look like or trying to think of like what is a better alternative I can't really think of one today and so I'm trying to think of okay well like what are the things that are good about capitalism and what are the things uh that are maybe not so good in the version of capitalism we have today because I do think as with any system I think I mean communism in in theory like you can paint a pretty interesting picture that might not sound as good but of course in practice like how it's been implemented in the past like obviously uh was was probably some of the worst ways of of trying to go about it um I mean in capitalism in the same way like what we talked about definitely comes not from maybe the fact that we're living like living in a capitalist world world but we were living in a world where actually like you don't have um really capitalism you have capitalism that's like overloaded with a bunch of rules and like systems that make it hard to really have a free market exist right like the globalist what is it called a system systemic banks in the US like this these 10 financial institutions they talked about like they get different treatment than everyone else right like uh what the US did when uh for first Republican Silicon Valley Bank and these other Banks started failing is they just said oh like all of these financial institutions we we know we liked like a couple of hundred that have access to the FED that can borrow from the Central Bank like we're going to solve all of their problems their their financial issues right that does not create a uh capitalist Market where anyone offering a service can offer and sell it and anyone can benefit and can can ensure they get actually paid a price for what they're paying right we start distorting this in a way that like I think we're really moving further further away uh to a point where today we we have mostly monopolies that maybe in some ways started in in like with good intentions right like the investor protection laws like they they started because well like you obviously don't want scammers to prey on innocent people to unknowing people that like with an investment opportunity does not make sense probably should solve that problem but like now having a gated system where like only if you can spend a couple hundred million dollars on your ice IPO not Ico um only if you can spend spend an insane amount of money on that right like on building a business to that size and like offering like like paying the compliance overhead all all of the stuff right now you're able to have access to the equity Market that doesn't doesn't seem to be like the idea that that we have when we think of like uh free markets and so I would say free Mark really free markets are good we just need to make sure we actually make them free and don't have like structures in place that prevent uh people from accessing them yeah I'm a strong believer in that as well I I don't think we need to throw out the baby with the bathwater with capitalism I think if you look at um the outcomes of the last hundred years in you know capitalist societies like the United States um but also places like Singapore places where there really has been an attempt to create a free market that can increase economic freedom um I think that you'd see pretty positive results but then I see I think like kind of Lucas is pointing out you also see that because we have these Legacy systems that are very old and that have in many ways been co-opted by a small number of centralized parties you also see kind of gradual degradation and you see as kind of new technologies emerge those things can be again co-opted by the kind of like monopolies that have started to form and so I think we are more kind of in a world where we've seen a lot of positive impact of capitalism over the last 50 years but but in the last 20 years as that form of capitalism and the systems we built around it has started to kind of interact with new technologies that allow reaching a whole new scale of people with software with with money Etc they're not quite working together right like when we build our financial systems we weren't uh anticipating that there was going to be software companies like Facebook that were reaching billions of people or the internet that was connecting you know the entire world together and so I think you know the thing that I'm most excited about is the opportunity for us to again upgrade the system and say hey like there was a lot of stuff that worked really well and has been working really well there's a lot of stuff that isn't working well because our technology is old and it started to kind of degrade let's take these new systems the systems of crypto the new on-chain kind of economic models that we're building and let's use them to reimagine some of these things and find new ways to use free markets um to increase economic freedom in the United States and in in Europe and everywhere and I think if we do that what we'll see is that there's a lot of opportunity to make the world a better place by kind of improving kind of where we are today rather than saying hey like let's throw everything out and start start from scratch so yeah you mentioned the new systems we're building today so I want to dive into that a little bit more like how do you both Envision these new systems that we're building in crypto changing Transforming Our both our financial systems but also addressing these these issues with capitalism that we see yeah I think I think the like one of the biggest changes that we'll see um I guess two big changes that we'll see one is that I think we're going to move from a world where uh the the financial systems and the economic systems that we have are primarily siled into kind of specific geographic regions or like state regions like in the United States or the Eurozone into a world where we do have a fundamentally global economy that anyone anywhere can participate in if you have a cell phone uh an internet connection I mean that's increasingly everyone in the world and I think that Foundation is going to be incredibly powerful as a kind of foundation for building other systems on top of and so that's not to say that we won't still have some components within the global system that will be you know more kind of region Centric you know for instance with like real world assets or off-chain assets you might have uh you know still having you know United States regulated offerings that are happening on chain but those offerings will be happening in the context of a global system that lets them be interoperable with other offerings from other regions and lets them kind of build on a platform of technology that is fundamentally Global accessible to everyone and so I think that that kind of shift into a like Global from day one economy is going to be probably like the most transformative thing we see so so I I folk we obviously focus a lot on on D5 and like just how to rebuild financial markets which um is of course only one sliver of the this this on-chain economy but it is obviously quite a fundamental one and and when you look at kind of the traditional Financial system today it is way too old um I I spent um the week in in New York with um with one of our our users um there and I talk to a person working at a fund they're managing 300 million dollars in assets and somehow they can't find a discrepancy of thirty dollars across five different systems of record now you you can imagine when you want to manage 300 million dollars like and they spent a week now looking and trying to talk to the bank to the custodian to the broker to the uh valuation company right trying to figure out where this is and like you start you start wondering like and they're not they're they're like professionals and they worked at Major Banks so yeah I like to see this happen all the time when I was at this bank and like yeah like we'd have to call our back office and then go looking right so like in like what I'm saying is like when we think of these like Financial systems these Global these like like institutions with thousands of employees and like trillions in assets under management and we think it's it's all like just going on like opening up your phone and like doing some things and like it's it magically works when you connect your e-bank like e-banking like no actually like behind that like this is extremely outdated infrastructure and and so like like the difference between executing a trade and settling it with the difference between like where your assets are who has reporting on it there's like five different entities involved in reporting uh which uh what what actually a fund for example has as assets and then how much you're you own of it right like this is a very different situation than when you uh go into Avid you deposit some stables and you now have a share in the oven money market uh or you go into um on to go on uni Swap and you you buy the tokens you want right there's no report like there's no thirty dollars getting lost there um and there's not five different uh intermediaries involved either and it takes a second uh maybe 15 seconds um but right it's it's basically instant like compared to anything else it's instant because those people still measure settlement times and days so so think about like think about that right like like if we can so if we can create so this this complexity of the system doesn't just create like a huge amount of work and makes it inefficient it actually does mean that unless you're you can invest a lot of money in building this Market you're not able to participate or join it so like with with um D5 I fundamentally believe that we can get to a point where many many more users will be able to use these Financial products that today or not in the US maybe in Europe we're quite used to being able to at least as consumers go install the fintech app and now put money into treasuries or borrow money right or send money to our friends using revolut but this is like actually this is just a front end the whole back end is still relying on this whole technology also if you're in a different Market you're you don't have these options I try going to um you mentioned Nigeria Nigeria like installing revolut and Robin Hood is not an option there so I think like that's like when we want to upgrade the system as you're saying uh having having these Financial Primitives exist on chain in a way that they're automated they're like audited transparent fare but then also safe to use right and we still have a lot of work to do there um then I think actually we're getting to a point where probably capitalism is less of a problem than it is today so if we're looking to you know these new systems that we're building as being part of the solution can you give me a real example for example with bass like how you're targeting this new system that you're envisioning in the future yeah um I mean I'll throw back to the um coming I met about cities earlier uh one thing that you know we're seeing uh kind of emerge this summer on bases that there's a community in Oakland that's building a local community currency uh called Oak that's a local stable coin uh and the whole concept behind it is if you look at a local city economy today and you look at the transactions that are happening in that economy um uh two things are happening one is on every transaction uh you know somewhere between two and four percent of that transaction value is seeping out into you know Mega corporations you know the squares visas MasterCards of the world um and then two uh you know on many transactions those transactions are actually happening outside of the community so you know you spend your money at your local coffee shop and then your local coffee shop goes and spends that money on Amazon and what that means is it means that uh the the money and value that flows into a community is Flowing out of the community pretty quickly and so the uh over the last 50 years you know we've seen a lot of attempts to to figure out okay how do we spur reinvestment in local communities and you know like Community Banks are one of the great examples of that where the idea is kind of you save your money in the Community Bank the Community Bank reinvests that in the community Through kind of loans to small businesses Etc and that kind of creates a regenerative cycle this idea of a local community currency is kind of that reimagined for this new on-chain economy and with these new tools now if you are kind of spending in that local currency a you're not paying the transaction fees to the Visas MasterCards of the world so right there you're saving the local business um something like two to four percent and local business margins uh General average gross margin for a local business in the United States is five percent and so if you're saving two to four percent on transaction fees that's not nothing it's like 50 of their gross margin that they're saving um so that's that's one big thing and then two is um you can actually start to design the local currency in a way where it encourages people to not just convert it out of the local currency and go spend it on Amazon but instead for that Merchant to do another payment to another local Merchant uh to get their kind of Downstream vendor needs and so I think this is a really interesting example where we're starting to see people take this new technology this new technology platform of on-chain that we're seeing emerge and apply it to local contexts and local economies where they've been seeing bad outcomes for the last many years and have had lots of people try and say hey let's fix these problems and even with the best intentions they haven't been able to I think this is one of the things that we're going to see kind of increasingly in um uh the next kind of five to ten years of building new on-chain systems is we've seen people try and solve a lot of these problems problems with capitalism for the last 50 years and there's been a lot of really smart people with a lot of really good intentions who worked really really hard to do that and yet they haven't been able to they've gotten stuck you know if you look at cities around the world today in the United States I think in particular like those cities are in many ways stuck in bad feedback loops where there's bad outcomes for local residents and I think what what I expect to happen in the next five to ten years is for the first time because we finally have a technology breakthrough that enables us to build new systems those good intentions are going to start translating into good results where we're actually able to take that technology and use it to build new systems that deliver better outcomes for the people who are in those local regions and so that's not just going to happen in cities it's also going to happen in States and it's going to happen in countries and it's going to happen globally where we basically are going to upgrade the systems that we have from things that are 50 years old that are controlled and monopolized by a handful of organizations and we're going to transform them into software powered decentralized economies that work way faster way cheaper and are fundamentally owned and operated by the people who are actually using them and I think uh it's going to be uh uh it's hard to describe how much of a positive impact I think that that will make on the world over the next decade kind of throw the same question at you I guess I mean amazing to hear about Visions for the future but is there anything tangible like this Oak example that you could point to today I I think the so so that I do want to point out because I do think it's a quite a valuable learning in in finance in general um that you made the example of the gross margin of of a business being five percent so a credit card fee of two percent is actually um right like uh forty percent of their entire profit um that that is something that is equally true in in with the cost of capital right like if they need to finance a hundred dollars worth of goods at uh 10 interest rate a year that eats into their five percent profit margin immensely and so so the example you make right like what what we've been doing is we've been helping basically fintech Originators that lend money all around the world to get access to new liquidity and ultimately actually create um like use make their debt more liquid and I think that is like the the place where I see the biggest potential for standard fusion and real world assets as a whole because a the difference when you look at um the difference between a large borrower that can sell Bonds on the bond market Google as an example right they get a relatively liquid Market they can like I can buy Google bonds and I know that prob if something bad happens and I need this liquidity I can call up a broker or I can maybe even on my app right like sell this thing right away so I get I have a reasonable expectation that I can liquidate it that means I'm actually willing to to to take a much lower interest rate than if I lend money to some small business and I know it's almost impossible to find someone that wants to buy this right now right because it's just coincidence once like it's too small right it's like it's it's hard to like sell an individual loan um unless you're you're able to chunk it up and sell a bond on the bond market so so with with crypto and with this idea of building on-chain tokenized assets right we're trying to tackle that because once we you so and and to bring in the the term what this is called This is called the liquidity premium right so assets that have liquidity they're actually cheaper than or or more you're able to charge less for borrowing money against the liquid asset versus an illiquid asset because of this because there is a market for it and you can sell it right so if we can actually make a larger part of the market of debt right from uh where today only Bond the largest bonds are liquid and everything else is kind of liquid and huge and efficient to making more and more of that liquid by making the underlying technology more efficient just making it easier for these things to trade more making them more easily understood transparent standardize them right then you're make you're creating this liquidity premium for a larger segment of the market and so that will actually benefit um like local like Real Estate Investors uh trade Finance businesses transactions right uh all these things and I think that is like where um ICD I hope Defy is going um with with what we're all building yeah I also I'll just add one more example there because I think this one gets overlooked um because we're you know we we have to build a lot of really complex systems in order to kind of replace the complex Legacy systems the financial Market but I also think they're simple ones like literally stable coin transfers right like if you look at if you look at the you know United States today and you look at um like of the very common pattern of people sending money outside of the United States the average cost for someone to do a remains to international country is forty dollars the average cost forty dollars in 2023 think about that if you are a everyday American who is earning an 850 minimum wage and you are working 40 hours a week you are earning about 320 a week and if you are paying some percentage of that back to your family in you know Guatemala or Mexico or Kenya or Venezuela wherever it is let's say you pay 30 or 10 percent you you're paying a hundred dollars you're paying forty dollar fee like that is the lived experience of tens of millions of Americans and tens of however many hundreds of millions of people and all around the world and that's just sending money to someone in a different country and so on ethereum you can do it for a dollar on base or other l2s you can do it for 10 cents and that's going to be one cent soon like we're talking about for the simplest thing which today is not simple and is actually incredibly painful and Incredibly negative for huge numbers of people all around the world we're going to see 100x or a thousand X Improvement in the quality of experience that they have and the the savings that they get in just supporting their families and it also takes like just seconds instead of days it takes seconds instead of days and so like the people whenever I see people like ask the question of like what is crypto good for it almost feels offensive to me at this point it's a it's like have you interacted with these systems and I think that you know slowly but surely the world is realizing that crypto is good for a lot and that what's going to happen is we're going to change the world and we're going to change the world for the better in a way that literally lifts up billions of people all around the world gives them increased economic freedom and then has a huge amount of positive impact Downstream of that in terms of happier families more small businesses Better Lives all because of these new on-chain systems that we're starting to rewrite and I I'm right there with you guys and seeing a lot of potential in the future that we have but would you agree that Define its current state is still perpetuating a lot of the problems that we see in tradify the centralization the lack of access to a lot of people the um the amount that's based on just trusted relationships that drives defy right now I I don't think so I mean like sure are there still some parts of D5 that are more centralized than they should be yes and does D5 magically like change the amount of wealth you know equality and wealth balance that we have in the world no like these are just new technology systems they're not wealth redistribution but if you look at the systems that exist if you look at compound or you look at Ave anyone anywhere in the world can earn an ethereum one ether whatever however much it's 0.1 each and they can go on there and they can get a loan is there a crypto non-crypto system that makes that possible anywhere anywhere in the world I don't think so right like for most people most places in the world they might have zero other way to get access to leverage or to access cash flow and so are these systems perfect absolutely not but do I look at defy and see like a centralized morass of that no I think these systems are working good they're just it's just early right you know we're on V3 you know if you look at our existing Financial systems um they took 50 years to build and ethereum was invented in 2016 2015 2016. um so we're now seven years later right the first real D5 was 2018 2019 2017. um like so I went I went live in 2017. yeah the 2017 right so we're like six years after that I'm like the rate at which these systems are improving is mind-blowing to me I feel I'm I mean I'm also just a huge optimist so if you have anything so on that note I guess how do you see defy evolving especially within the context of the broader Financial system to actually like like oh it just be Finance I I think so so me so before I before I answer that um I think I agree with with you it mostly works I think the one thing we have to be careful of this it's not a shortcut to riches and too many people think that and lose money they don't really think about D5 to just read the headlines of people getting rich and then try to follow that right and that that is like unfortunately uh not not the people that make the effort to come here and actually try to figure out how this stuff works right but it is like uh maybe maybe human nature maybe um just people's desire to gamble I don't know but um I obviously yeah that's that's uh something we should try to avoid the other thing is um it was really cool to see basically a bunch of Engineers that had a very little uh in knowledge of Finance in general in in the early days of ethereum come together and try to reinvent basically every Financial primitive we have and I think it works remarkably well like the the way compound and maker and others have gone through insane market turbulences and still somehow survived right and maker almost didn't make it once but in the end like it did and I think those doses like yeah it has been live now for six years and like the Peg's pretty good like it works actually quite well um so so I think like we can we can get there I think we have we have gotten to a point where uh D5 is understood by Finance people and there's probably interesting things we can learn from them that I actually for example don't know um that we should try to learn from because as we want to scale this there's probably a lot of mistakes that um in the two or three hundred years of the financial system as we know it that existed they've already made um But but so like so so I I think this is like the important thing to focus on with where D5 is going and and I do believe that ultimately um defy today is resembles the internet in the 90s um now like my watch today goes on the internet right so like if you think of like 10 years fast forward probably Defy is just a financial system and it is probably just going to be a back end that people access through different uh ways maybe in a hopefully in a non-custodial wallet that will like literally run on your watch or some other way yeah and to be clear I I definitely don't mean to say that D5 is perfect and we have nothing like we're still day day one day Zero um from my perspective but I think it's really I don't know I feel pretty inspired every day waking up and like looking at what we've built and being like wow it's only been six years like that's crazy right like it's yeah it blows my mind that we've built this much in six years and I think the next six years are going to probably be 10x as fast and 10x is impactful um I think by the end of the decade the whole world is going to be transformed and it's going to be running on chain and it's going to be powered by defy as we know it today but 10x better 10x more scaled and reaching you know 100x to a thousand X more people so I'm uh I'm excited to can you continue putting our heads down uh and doing that work over the next six years so that by by the time we reach the end of the decade we can look back and feel even more proud awesome unfortunately we're out of time I'd love to continue this conversation though but thank you both so much for joining this conversation I think it was really interesting at least for me help for the audience as well yeah thanks for having us this is last thanks everyone for listening all right thanks hooray we have our work cut out for us huh and just to note so this was a panel to basically kick off our real old asset track within funding the comments um and so I believe that we're gonna if anyone who wants to dive into real world Assets in particular um we're going to be breaking out into uh the cell cell room yes there's a the Sal Workshop room um it's right in the corner almost across from the corner so if you want to continue the discussion I'm really excited for this introduce to host that Workshop uh one last round of applause for our panel thank you [Music]