The next billion users in DeFi panel with Vineet Budki & ‘Ram’ Ramachandran

Welcome to the panel for how can we get the next billion users. All right, I know everybody's almost asleep. We have really three different people over here. Me, I'm just a user. I use I'm a DGEN.

I use everything crypto. I invest everything crypto. Not a VC, not a fund, just an ordinary guy out there. I'm going to I'm going to let my co-panelists introduce themselves, but then I will tell something about them. So we'll start with Ram over here.

This is Cryptoman Ram on Twitter. Thank you. Thank you Nathan. My name is Ram. I uh run router protocol which is a crosschain messaging infra layer and uh my team also works on define which is an AMM and polygon.

We just launched uh truly onchain limit order book and uh Nathan thank you for having me on the panel. Ven good evening guys this is Venin here I run a cipher capital out of Dubai uh we've been uh this is our fund too in fact we're coming up with a third fund invested in over 200 plus projects across uh different spaces we've invested in DeFi uh play to earn layer once and uh uh you know here to talk about D5 and the next billion users around all right guys for those of you who are not really listening I'll tell you something. Okay, so Venith runs Cipher Capital. Cipher Capital Fund 2 is a $100 million fund and he has already decided to deploy to 15 projects this ETH Denver. After seeing 15 projects in the last few days, he has decided to put money there.

So if you're raising money, you want to be here, listen to him, try to impress him, attract his or get his some kind of attention. All right. So interestingly I go to a lot of events in E10 but I think the quality of projects that came here was quite you know I go to consensus I go to token ready 49 but I think the projects that we saw here who have actually developed something and the quality of the founders is amazing. So uh that number is actually true we I've already met uh 8 nine investments that we will be doing the investments. Think about it.

A VC getting to invest in 15 projects at one event. That's big. Now Ram over here with both of his projects, he's hiring big time. So if you guys are trying to get into the space, you would want to talk to Ram after this. All right.

Now, first thing I want to ask them is what do they like about the space? What are the things they like in the space? I'll start with Ram though. About crypto in general or DeFi specific? Defi and crypto in general.

Okay. I mean you all like crypto. I mean not much to talk about there but DeFi I guess the especially personally I I came from finance and you know the ability to sort of do a lot of things in a far more efficient manner and and in a manner that sort of is you know more free I would say. I mean it's it's got its own connotations but you know without paying a commission to a bank or to a middleman I think that that's super powerful right and then I guess from a broad vision perspective uh you truly sort of defies what truly captures the potential of crypto in the sense that it democratizes democratizes the overall global finance financial situation. It's a bit of a pipe dream right now, but eventually if you look at how banks are upping their game and you know, we're going to get to we're going to get there.

So, I think a lot of those things near-term, farm appeal to me as a uh DeFi as a D5 builder. How about you, Ven? What are some things that you really like in DeFi and crypto at the moment where you think that will attract people to the space? So, you know, when I invest in projects, I look at the use case as such. So decentralized finance has been something that is really up there on my list always because you know when you look globally when you look at places in Argentina where the PISO has depreciated 95% when you look at Zimbabwe Lebanon where currencies went off people actually cannot take money out of their banks.

So I don't really believe in centralized banks and centralized agencies controlling how you are going to use your money. So for me DeFi becomes interesting because it gives people the power to uh manage their finances, lend and borrow stuff. In fact, one of the examples that I always give is uh you know if you have a house and it takes you you need a loan on it, it takes you two to three months in some countries to get it and that to on dependent on whether the banker will say agree to that but when it comes to you having a million dollar of a bitcoin it's a 5 minute job on a a compound. So for me what excites me is that the use case of it where actually people can end up uh you know using it as an alternative to a bank and uh that's where I think uh we have not even started in D5 people look at those 90 80 90 billion uh in TVL that's nothing you know we not even started yet got it okay over here guys who had money on FTX Celsius or Voyage out here any hands okay at least Somebody raised their hands to really show they lost. Okay, I'm over here.

Okay, now I put money on Celsius. You know why? Because it started by an American living in New York. There's there's no chance he's going to run away with money knowing the laws in this country. Right.

Sorry. That's exactly why I moved all my balance from Vance to FTX2. There you go. So now when I look back in future everything that I do with regards to borrowing and lending I should have done it on our way right I shouldn't have been if I believe in the space I shouldn't have done it on a centralized exchange but how are we going to attract all these people we still how many people really use DeFi in the world how do we get them there what are your thoughts vene on that one so I'll first tell you a funny one I was told about anchor protocol and the 20% you get there and as well as these FTXs. I'm not in the 20% a year business.

My last one did a 50x. So, luckily I never used those D5 platforms, not C5 platforms. But again, how do we get users on board? Again, when I you know, we've been investing in a lot of D5 uh platforms as well. And every time you're talking to a founder, his whole story is that I'll do a marketing push and I'll target UNISOP users and I'll target these guys.

I think that's not how the next billion users are going to come. Someone has to land up in Lebanon and give them a solution where you can deposit and earn on an ae which is attached to a credit card or a debit card that you can use it on ground and suddenly whole of Lebanon is along with you. Someone with a stable coin needs to land up in Zimbabwe and see to it that rather than the US dollar the USDT starts getting used to do transactions over there. So I think the next billion dollar the next billion users will come from adoption where it is needed you know there's no need like people always say until I don't give you a 15% on a lending platform who is going to come to crypto you really don't need to do that you just need to go to Argentina and give them a 3% which is equivalent to what they get in the US they just need stability there you really need don't need to do those 15 20 and there's a huge addressable market uh problem is founders have been too focused on tokconomics and uh pumps. They need to come down and build products for the people and that's what I think the next cycle is all about.

How about you Ram? How do you think you define and router together are trying to get uh trying to bring the next billion users on DeFi or crypto? Sure. So I mean I I if you'll indulge me I'll sort of give you my perspective which is slightly long which is you know if you go back 20 years u if you looked at uh you know you had Microsoft and Apple and Palm Pilot and you know Suns Solaris for those of us that remember all these operating systems and interfaces and if somebody sent you a word doc from their MacBook and if you happen to be on a Microsoft system you couldn't open it the formatting would be off it'd be completely messy. stuff and you sort of talk to it and ask them to format it for you, resend it for you, right?

And as a developer of applications, you had to sort of specifically develop for each of these individual operating systems, right? Now, crypto DAPs are exactly where Web2 was 20 years ago, right? I mean you have developers developing for Polygon and Ethereum and Cosmos and Algorand and you know and each of this is a silo right and and as an end user right you need MetaMask a certain wallet certain RPC formatic something else for uh something and for Cosmos you have a whole Kepler wallet and all those things right so it's a fragmentation of experience both from a developer perspective and a user perspective right and in web 2 it is solved by two One was Google Sheets, Google Docs, the cloud basically, right? And so once you had a Google doc link, it opened up fine irrespective of which operating system it was, right? As a developer, you just need to worry about deploying a AWS, right?

Obviously, there's some UI tweaks, but you don't need to individually develop for each operating system, right? So, I think web 3 is getting there. So especially with what we are building at router the whole crosschain messaging in for our piece what we're aiming to do is abstract out blockchains for the end user. Let me give you another analogy. If you want to go book a ticket from here to New York where you where you live, right?

So you don't sort of go to Expedia and say you know I want a business class seat or whatever. But then you don't end up sort of deciding which flight or where your layover is or what interchange fee you pay if you have a stopover at Chicago or the gate fee. You don't need to worry about anything. You just put in stuff into Expedia. It throws back a bunch of options, right?

I think eventually the web 3 DAP experience should mirror that, right? I want to swap USDT for Ethereum and that's all I should worry about. I don't need to worry about whether it's the best rates on unis swap and ethereum or pangalon or avalanche or whatever pancake swap or this thing or define or polygon. You should not need to worry about that. You should just have you know just what you want and all the complexity of the underlying chains in the app should be abstracted away.

I think and that I think that's a key part of our vision at router and I think that's going to be important in terms of you know the crosschain connectivity as well as elements around account abstraction which is I think is a huge growing phen uh area of this thing especially after the latest uh EIP I forget the number that that went through. So guys, so here you hear two of a VC telling how they he is expecting people to come on board and how a developer is working towards that goal making interoperability possible. From a user perspective, I believe that it's education people like whether it's the funds and the companies, they have to put a lot more effort into education so that they go around the world either them or they fund the companies or educators around the world trying to explain to common people how to use these systems because there is a difference. They they are not used to it either through gamification or you know how you can get crypto to common people. That's one way you can get there.

Let me ask something Vinnie. What are you scared in the D5 space? Would you say you're scared of regulations or anything something like that or are you scared of the scamsters and fraudsters out there? So again, uh as a VC I know that 95% of my investments are can fail. So scare is something that I don't think I have in my dictionary much.

Yes, looking at it from a user perspective, you know, the hacks that are happening, the regulations that are coming in, those are the key concerns. You know, today uh in the US, if you don't want to end up going through a centralized exchange, you can land up on a unis swap and do a transaction without anyone knowing it because you and then don't want to pay up 60% tax on uh a purchase. So my point is that you know when regulations come and when there is a lot of blocking that would come to these exchanges if they don't follow the KYC parameters it can really affect it but uh I just recently spoke on one of the podcasts and my whole thing is that it's good that regulations are coming it's good that US is stopping this because crypto is shifting globally so at least I will be not uh influenced by US market rates always because crypto will be big in Africa crypto will be big in Latin America and Asia. So for me these are scary points but like regulation scammers definitely they have always been there. So you know we need intelligent people to come on board and actually educate a lot more people and uh crypto is here to stay.

It's not nothing to get scared on I would say. How about you Ram? What keeps you sleepless at night? Something that can is it the honeypot the hacks onto your protocol or something else? Yeah, I mean we are in the bridging business.

So I think it's it's always a sleepless night. I mean whenever a hack happens you you're worried but I think touchwood so far so good. But I think more broadly regulation is key and you know also you know while we believe that crypto's be all and I mean it's you know the if you look at the macro picture I mean crypto is still a very very small portion of the overall economy and and yet the irony is um you know the bitcoin white paper came out in 2009 and and sort of it referenced the uh uh UK that the British uh the English governor Mvin King sort of uh announcing another monetary you know money printing uh effort and and you know crypto is sort of an antidote to that. It sort of rails against inflation and and and fiat inflation by politicians and policy makers. The irony is even today all crypto markets are driven by the US Fed and other feds opening up the money printer.

I mean DeFi summer how did that happen? Right? I mean there was uh a loosening of interest rates. I mean even right now what's I mean irrespective of the narrative and irrespective of all the Kool-Aid that every project including myself tells the market and ourselves the reality is for a bull market to happen you need the money printer to go burber again right so that's that's that's the biggest worry for me how do we sort of transcend that macro maybe we don't but at least we should become as pretty big as big as you know at least commodities or you know at the moment we still not a standalone asset class that is as important as you know the as the currencies commodities fixed income equities right so maybe we get there and then our dependence on the money printer goes down but ultimately we're very macrodriven and very mimeic so generally when I go go around the globe I do a lot of uh seminars and educative educational stuff people ask me you know should I be scared about regulation what will happen you know I always ask him this question when you want to drink are you afraid that prohibition is going to make you stop drinking If you have planned to drink, do you think the uh prohibition in any place is going to make you stop? No.

If you plan to drink, you're going to drink because as a drinker, you're not going to jail, right? So I always think in that way because and I used to tell people I used to travel from 2016. I was traveling to India and I used to say you got to buy Bitcoin or Ethereum and they would say or what would happen you know the government has the government allowed it or not? Well, they just kept watching Bitcoin go or Bitcoin or Ethereum go from $30 to $4,000 or $200 to 20,000? They never bought it because has the government approved this?

So, regulations are scary for a lot of people. But when you're buying assets, do you have to worry so much? That being said, I don't want you guys to sleep. I'm going to give it the floor the mic open to you guys. You can ask these two guys questions that you want.

All right. If you raise your hands, there's uh guys, can you give the mic over here? All right, I'll give mine. All right, thanks. Appreciate it.

Okay. Uh, yeah. I was just curious in the topic of regulation. There we go. In the topic of regulation, do you ever feel worried that while regulation can help onboard more users, it can diminish innovation from industry leaders and, you know, people who have been here from the beginning?

Uh so again uh when it comes to regulation I personally feel government start regulating something strictly after a major a lot of people have come on board like in in India we had the stock markets that started in ' 80s highly unregulated people made millions we had two scams and finally in the '90s you started regulating it up and today it's a stock market that is used by the masses. So regulation also has an advantage that people start becoming more secure about certain investing. Uh the second concern is that pe US stopping crypto as such. Again for me it's advantageous because I want people in Africa to adopt it. People in uh Latin America to adopt it and in Asia to adopt it.

People who are not speculating on crypto but using it. When I look talk to people in US for example have you bought bitcoin? Yes. For what? Because it will go up in price.

This is not use case. Use case means using these platforms to lend, borrow. Use case means using stable coins to actually pay for your transactions. That's I haven't seen that a lot in the US, but I'm seeing that a lot happening in Nigeria, for example. If you go there, people are actually using these cards to do transactions.

So I I don't think there's major concerns here, but we are evolving. We are less than 3% of the world population right now. questions, guys. Hands I thought Okay. Uh there's a hand over here.

Quick question uh based on uh what you said. Yeah. No, just just hold it closer. Okay. Yeah.

To what you said was uh education is a big component as a UX designer, someone who might be an advocate of financial education is really a fail safe, right? like you can teach a low-income person to try to build credit or use credit properly, but you cannot force that behavior on them. So, thinking about the future of DeFi users, how do you enable that education through experience and like regulation is an aspect of it, but I think it's the use case as you said as well. It's not a proper question, but uh Okay. So, you can't force somebody.

Education is not about forcing somebody. Okay. So you look at these ads you know cigarette smoking is injurious to health you write that multiple times it it comes there and then it becomes subconsciously there on your mind right so if you are educating people around you they see that okay somebody else let's say he said the case in Argentina okay they you know your friends who are getting paid in pesos who converted quickly to USDT are getting every day they their value their purchasing power has not gone down okay initially somebody tried to educate you you didn't believe it. Now they are seeing it with your friends or people in your community and at that time you are also going to be part of it. Okay?

Because somebody started doing it then they're sharing their story with you. All right? That's how it works. It's it's not by a force. You are you're you are sending the message out.

Make sense? So uh just to add on this education also runs on uh what value does it derive for you. When JackMarma sent Alibaba people around China's interiors to tell them that whatever you make here will be sold to the world. This was educating them or getting them on a system. When you look at India, you know, people said e-commerce will never happen and a lot of education was uh done through Amazon.

coms of the world where people actually started buying it. Once they see the value of it, it really helps. And if you have some global factor like you know e-commerce spread uh electronic payment spread in India just because covid came but in China it has been around. So education is also what value does it get get you tomorrow when people start seeing it that you know I can save in US dollars and earn in US dollars they will start using it just that someone needs to land up over there like a missionary and convert them. So you know initially when this whole bitcoin movement or the cyberpunk movement during 2009 to 20145 15 there used to be people who go to these conferences and give you 1 to 10 bitcoins.

Okay they were giving 10 20 like I know Jeff Garzik and all he's given more than 15,000 bitcoins away in his lifetime. All right now I'm not saying all the guys who got it really saved it. they didn't understand it maybe but that 15,000 that or those many of those guys gave away made their bitcoins more valuable today because they brought more people into the network right so that always is going to help no matter everything that you give out you know and you try to educate the person next to you things in your hand it's going to get more in value so just for that you can do that questions guys there's a question over there please hello Hello. Hello. Hello.

What role does design and user research play in onboarding more users onto DeFi? Look, I mean it's you mean the answer lies in the question, right? I mean it it is probably the single most important thing that will enable users to come on board, right? And I think that's why things like account abstraction etc. are so incredibly excite incredibly exciting.

Um I think uh we're also getting to a space where we can actually identify users uh not in a way that that identities can be misused like in web two but you know you can do targeted uh you can derive or abstract targeted information around your user demographics and and I think it's an ongoing process but I think user design is super important right and imagine imagine an app that's like chat GPT right and then you go in and it's sort of can I read your metam mask wallet or so maybe you first state your problem listen I've got $100,000 I want to deploy it on the ch some chain and get the maximum yield right and then uh so chat on the back end you do all the processing and then you feed that to the interface then and and sort of imagine such an interface that sort of abstracts out the current experience which is you know I click on metam mask approve on transaction sign the transaction you know just to get a token from one chain to another chain So the short answer yes user design is super super important but uh eventually it's going to mirror web 2 fintech platform experience where when you venmo somebody money just literally a swipe from uh your account to their account right so I think we'll get there maybe 2 years maybe 5 years but we have to get there to get the remaining 90 million sorry the 90% 91%. Just like great companies got great people just because of their UI. Same thing here. People who build great UIs are going to capture the audience. No doubt.

And it is going to be extremely extremely important. The UI and UX and I guess the marketing is also going to be important, right? All right guys, they have signaled us to cut this out but they're over here. You can talk to them after this. I hope you enjoyed the talk uh the given by both of them.

Give them a big round of applause. Thank you guys. Thank you. just you know we three studied in a place just one hour next to each other in India but we meet in US one guy's in India the guy's in Dubai and I'm in New York [Music]